Full opinion text
MEMORANDUM AND ORDER McKENNA, District Judge. Table of Contents 1. Factual Background........................................................298 A. The Adelphia Fraud.....................................................298 B. Overview of the Co-Borrowing Facilities.................................298 C. The UCA/HHC Co-Borrowing Facility ...................................299 i. The UCA/HHC Term Sheet Was Prepared by the Defendants ..........300 ii. The UCA/HHC Term Sheet Contained Omissions and Misstatements...................................................300 iii. The UCA/HHC Term Sheet Defects were known To the Defendants......................................................301 D. The CCH Co-Borrowing Facility.........................................301 i. The CCH Term Sheet Was Prepared by the Defendants................301 ii. The CCH Term Sheet Contained Omissions and Misstatements........302 iii. The CCH Term Sheet Defects were known to the Defendants..........302 E. The Olympus Credit Facility.............................................303 i. The Olympus Term Sheet Was Prepared by the Defendants............303 ii. The Olympus Term Sheet Contained Omissions and Misstatements...................................................304 iii. The Olympus Term Sheet Defects were known to the Defendants.....304 2. Procedural Background.....................................................305 A. Proceedings in the Bankruptcy Court....................................305 B. Proceedings before this Court ...........................................306 3. Standard of Review .........................................................307 A. Substantive Law is Pennsylvania State Law ..............................307 B. Procedural Law used is that of the Southern District of New York .........307 C. Pleading Standard under Fed.R.Civ.P. 8(a)................................308 D. Pleading Standard for Fraud under Fed. R. Civ. P. 9(b)....................308 4. Discussion..................................................................308 A. Claim 38 — Aiding and Abetting Fraud against the Agent Banks and Their Affiliated Investment Banks is not Dismissed.....................308 i. Background of Claim ..............................................309 ii. Aiding and Abetting Fraud is a Valid Claim under Pennsylvania State Law.......................................................309 iii. Aiding and Abetting Fraud is Plead with Particularity................312 iv. Group Pleading of the Agent Banks and Their Affiliated Investment Banks Is Permitted...................................315 v. Co-Borrowing Term Sheets Do Not Contradict the Amended Complaint.......................................................317 B. Claim 37 — Aiding and Abetting a Breach of Fiduciary Duty against the Agent Banks and Their Affiliated Investment Banks ....................318 i. Background of Claim ..............................................318 ii. Aiding and Abetting a Breach of Fiduciary Duty is Pled with Enough Particularity ............................................319 iii. Pleadings Related To the Three Facilities............................320 C. Claim 54 — Fraudulent Concealment against the Investment Banks Is Dismissed............................................................320 i. Background of Claim ..............................................320 ii. Elements of Fraudulent Concealment...............................321 iii. The Investment Banks Did Not Have an Affirmative Duty to Speak Based on a Fiduciary Duty or Unique Knowledge.............322 D. Claim 55 — Fraud against the Agent Banks and their Affiliated Investment Banks Is Dismissed In Part.................................324 i. Background of Claim ..............................................325 ii. Elements of a Fraud Claim................................... 325 iii. Claim 55 Sub-Claims which are not pled with the Necessary Particularity ....................................................326 iv. The Following Sub-Claims Meet Pleading Requirements..............328 E. Claim 31 Avoidance and Recover of Intentionally Fraudulent Obligations and Transfers Under 11 U.S.C. §§ 548 and 550 against the Margin Lenders......................................................332 i. Claim 31 Background..............................................332 ii. SSB Moves For Dismissal of Claim 31 on the Basis it is Untimely.....333 iii. Goldman Sachs Moves for Dismissal of Claim 31 on the Basis That It Had Not Been Plead With Particularity....................334 5. Order......................................................................336 This action arises from the bankruptcy of Adelphia Communications Corporation (“Adelphia”) following the disclosure of $2.2 billion in liabilities that had not previously been reported on its balance sheet. The liabilities at Adelphia stemmed in part from Adelphia’s participation in Co-Borrowing Loan Facilities (“Co-Borrowing Facilities”). Beginning in 1999 Adelphia participated in three such Co-Borrowing Facilities. The Rigas family which was the prior management of Adelphia had Rigas family entities (“RFEs”) enter into Co-Borrowing Facilities with public Adelphia subsidiaries. This arrangement allowed the RFEs controlled by the Rigas family to borrow billions of dollars guaranteed almost exclusively by Adelphia’s assets. The Rigas family used the Co-Borrowing Facilities to draw down billions of dollars for their own purposes. Adelphia was left to pay the bill. Adelphia’s disclosure of billions of dollars in liabilities connected to the Co-Borrowing Facilities led to a precipitous chain of events concluding with Adelphia. filing for bankruptcy. The Adelphia Recovery Trust (“ART”) was formed to prosecute Adelphia’s claims against numerous .entities that allegedly assisted the Rigas family in perpetrating a massive financial fraud against Adelphia. This order addresses ART’s claims against 26 Banks and 22 affiliated Investment Banks. ART alleges these Banks and their affiliated Investment Banks helped to structure the Co-Borrowing Facilities which played a role in the collapse of Adelphia. This Court previously addressed some of Defendants’ motions to dismiss ART’s claims pursuant to Rule 12(b)(6). This order addresses the various Agent Banks and Investment Banks motions’ to dismiss the October 31st 2007 Amended Complaint Claims 37, 38, 54 and 55 (collectively, the “Tort Claims”). In addition, this order addresses the motions for dismissal of Claim 31 against Salomon Smith Barney (“SSB”) and Goldman Sachs (“GS”). This Court DENIES the various Defendants’ motions for dismissal of Claims 31, 37 and 38. This Court GRANTS Defendants’ motions for dismissal of Claim 54 against the Investment Bank Defendants. This Court GRANTS in part and DENIES in part Defendants’ motions to dismiss Claim 55. 1. Factual Background It is useful to summarize the factual history of the Rigas family fraud owing to the complexity of this case. On a 12(b)(6) motion for dismissal a court will take factual allegations in the Amended Complaint as true. “For purposes of reviewing the dismissal of a complaint for failure to state a claim, we accept the complaint’s factual allegations ... as true.” Roth v. Jennings, 489 F.3d 499, 501 (2d Cir.2007); see also Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993). A. The Adelphia Fraud Adelphia was a cable company founded in 1952 by John Rigas. By the late 1990’s Adelphia had grown to be the sixth largest cable-television provider in the United States. However, beginning in the late 1990’s the Rigas family needed access to billions of dollars of capital to acquire cable businesses, purchase stock to maintain their majority stockholder status at Adelphia, and finance an extravagant lifestyle. (Am. Cmpl. ¶ 807.) The Rigas family did not have enough personal capital or available credit to finance these expenditures. Lacking in capital or credit, the Rigas family turned to the balance sheet of Adelphia to finance their acquisitions, stock purchases, and lifestyle. The Rigas family caused Adelphia to enter into a series of financial transactions whereby RFEs could borrow hundreds of billions of dollars against the balance sheet of Adelphia under Co-Borrowing Facilities. The Rigas family was not entitled to use Adelphia as a source of credit or capital for their own ends because Adelphia was a public company. (Am. Cmpl. ¶¶ 802-04.) The Rigas family worked with the Agent Banks and their affiliated Investment Banks to create the Co-Borrowing Facilities. (Am. Cmpl. ¶¶ 825-30.) B. Overview of the Co-Borrowing Facilities Co-Borrowing Facilities allowed the Rigas family to gain access to the credit and capital of Adelphia. According to the Amended Complaint, the Co-Borrowing Facilities were structured primarily with this purpose in mind. All Co-Borrowing Facilities were set up so both Adelphia and the RFEs could borrow up to the entire amount of the Co-Borrowing Facility. (Am. Cmpl. ¶ 826.) The impact of this arrangement was that Adelphia was liable for the entire amount borrowed by the RFEs. Further, the Co-Borrowing Facilities were capitalized in a lopsided manner. Adelphia pledged significant assets to the Co-Borrowing Facilities, while the RFEs pledged a minute share of assets. The Co-Borrowing Facilities were unprecedented. They pledged the credit and assets of a publicly-held company for the benefit of private enterprises owned by the public company’s senior management. To put each Co-Borrowing Facility into operation the Rigas family needed the approval of Adelphia’s independent directors. To win the approval of the Adelphia independent directors, the Rigas family worked with the Agent Banks and their affiliated Investment Banks to prepare deceptive term sheets. (Am. Cmpl. ¶¶ 6, 10, 827.) At board meetings the Adelphia independent directors relied on these term sheets and misrepresentations made by the Rigas family to approve the Co-Borrowing Facilities. Yet the Adelphia independent directors did not know that the information supplied to Adelphia was misleading. (Am. Cmpl. ¶ 10.) The actual terms of the Co-Borrowing Facilities later memorialized in the credit agreements were materially different than the terms in the term sheets. (Am. Cmpl. ¶¶ 827, 879, 947.) After the Co-Borrowing Facilities were approved, the RFE Co-Borrowers began to withdraw significant amounts of money from the facilities. According to the Amended Complaint, by the time the full amount of money borrowed was disclosed, the RFEs had-withdrawn roughly 3.4 billion dollars. (Am. Cmpl. ¶ 11.) The money withdrawn from the Co-Borrowing Facilities was used to purchase Adelphia securities for Rigas family accounts, purchase cable companies controlled by the Rigas family, build a private golf course, and for numerous other personal purposes. (Am. Cmpl. ¶ 7.) The Amended Complaint alleges three Co-Borrowing Facilities were used to perpetuate the Rigas family’s fraud: the UCA/HHC Facility, the CCH Facility, and the Olympus Facility. (Am. Cmpl. ¶ 825.) The extent to which the Co-Borrowing Facilities are described in the Amended Complaint is critical in determining the adequacy of the pleadings. The following focuses on the three Co-Borrowing Facilities whose creation the Plaintiffs allege was critical to the fraud. C. The UCA/HHC Co-Borrowing Facility The UCA/HHC Co-Borrowing Facility was approved at the April 22, 1999 board meeting by the Adelphia independent directors. (Am. Cmpl. ¶ 848.) Wachovia, BMO, and PNC Bank acted as Agent Banks (collectively, the “UCA/HHC Agent Banks”). The Investment Banks affiliated with these Agent Banks were Wachovia Securities, BMO ND, and PNC Capital Markets. (Am. Cmpl. ¶ 1037.) The UCA/ HHC Agent Banks and their affiliated Investment Banks structured the facility and assisted in drafting documentation. (Am. Cmpl. ¶ 843.) At the board meeting the independent directors were presented with a summary term sheet which described the terms and conditions of the UCA/HHC Co-Borrowing Facility (“UCA/HHC Term Sheet”). (Am. Cmpl. ¶¶847, 861, 862, 864.) However, the credit agreement for the UCA/HHC Co-Borrowing Facility (which memorialized the actual terms of the facility) was finalized two weeks later on May 6, 1999 and was not shown to the independent directors at the time they approved the transaction. (Am. Cmpl. ¶ 842.) By the time of the petition date, 831 million dollars was outstanding under the UCA/HHC Facility. (Am. Cmpl. ¶ 877.) ART argues the UCA/HHC Term Sheet was prepared by the UCA/HHC Agent Banks and their affiliated Investment Banks. The UCA/HHC Term Sheet contained omissions and misstatements which the UCA/HHC Agent Banks and their affiliated Investment Banks were aware of. This allegation forms the basis for the Plaintiffs’ claims of aiding and abetting fraud, aiding and abetting a breach of fiduciary duty, fraudulent concealment, and fraud. i. The UCA/HHC Term Sheet Was Prepared by the Defendants In furtherance of the Rigas family fraud in early 1999, the Rigas family worked with UCA/HHC Agent Banks and their affiliated Investment Banks to prepare and approve a summary term sheet describing the terms and conditions of the UCA/HHC Co-Borrowing Facility. (Am. Cmpl. ¶¶ 847, 861, 862, 864.) On April 22, 1999, the UCA/HHC Term Sheet was presented by Timothy Rigas and James Brown at a meeting of the Adelphia board of directors. Present at this meeting were the Adelphia independent directors. (Am. Cmpl. ¶ 848.) Timothy Rigas and James Brown presented the UCA/HHC Term Sheet and made verbal misrepresentations about the UCA/ HHC Facility based on the information set forth in the term sheet. (Am. Cmpl. ¶¶ 850-52.) ii. The UCA/HHC Term Sheet Contained Omissions and Misstatements The Amended Complaint alleges the UCA/HHC Term Sheet portrayed the Co-Borrowing Facility as being restrictive and significantly limiting of affiliate transactions. (Am. Cmpl. ¶ 860.) During the same period the UCA/HHC Term Sheet was being drafted the UCA/HHC Agent Banks and Investment Banks were aware that the Rigas family was planning to engage in conduct and affiliate transactions in violation of those restrictions. (Am. Cmpl. ¶ 861.) Had the actual terms of the UCA/HHC Facility (which appeared in the credit agreement, not the UCA/HHC Term Sheet) been disclosed to the independent directors or had the intentions of the Rigas family (which were known by the Investment and Agent Banks) been disclosed, the UCA/HHC Facility would not have been approved. (Am. Cmpl. ¶¶ 860, 864, 866-68.) iii. The UCA/HHC Term Sheet Defects were known To the Defendants The Agent Banks and Investment Banks were made aware of the violative plans of the Rigas family on or about February 1999 “in a request for proposal that [the Rigas’s] sent to the Agent Banks and to 25 to 30 other banks seeking participation in this facility”. (Am. Cmpl. ¶ 862.) On February 23, 1999, Wachovia (“Lead Agent Bank”) was informed via email by Adelphia’s Director of Finance that the Rigas family intended to use the UCA/HHC Facility to borrow money for personal use. (Am. Cmpl. ¶ 863.) A similar email was sent on the same date to Bank of America. (Am. Cmpl. ¶ 863.) At no time prior to March 27, 2002 did Adelphia disclose the enormous “contingent liabilities it had amassed as a result of the RFE’s draws from the UCA/HHC Co-Borrowing Facility.” (Am. Cmpl. ¶ 875.) D. The CCH Co-Borrowing Facility The Rigas family went back to the trough less than a year after the UCA/ HHC Facility was approved. “Once again, the Rigas family made use of Adelphia’s access to bank debt and the public capital markets for their own benefit.” (Am. Cmpl. ¶ 878.) The Rigas family worked with a set of Agent Banks and their affiliated Investment Banks to design another Co-Borrowing Facility, based on the UCA/ HHC Facility blueprint. This facility was named the CCH Facility. The CCH Co-Borrowing Facility was approved at the March 9, 2000 board meeting by the Adelphia independent directors. (Am. Cmpl. ¶ 879.) The CCH Facility was a Co-Borrowing Facility with the following banks acting as Agent Banks: BofA, Chase, CIBC, BAS, TDI, Barclays, BMO, Wachovia, Citibank, ABN AMRO, BNS, BONY, Credit Lyonnais, CSFB, DLJ, Fleet, Merrill Lynch, Mitsubishi Trust, Morgan Stanley, Rabobank, and SunTrust (collectively, the “CCH Agent Banks”). (Am. Cmpl. ¶ 881.) The Investment Banks affiliated with the CCH Agent Banks are identified in paragraph 1037 of the Amended Complaint (Am. Cmpl. ¶ 1037.) At the Board Meeting, the independent directors were presented with a summary term sheet which described the terms and conditions of the CCH Co-Borrowing Facility (“CCH Term Sheet”). (Am. Cmpl. ¶ 903.) However, the credit agreement for the CCH Co-Borrowing Facility (which memorialized the actual terms of the facility) was prepared a month later on April 14, 2000 and was not shown the independent directors at the time they approved the transaction. (Am. Cmpl. ¶¶ 879, 886, 901.) By the petition date, the CCH Facility had approximately 2.5 billion dollars outstanding. (Am. Cmpl. ¶ 923.) ART alleges the CCH Term Sheet was prepared by the CCH Agent Banks and their affiliated Investment Banks. The CCH Term Sheet contained omissions and misstatements which the CCH Agent Banks and their affiliated Investment Banks were aware of. This allegation forms the basis for ART’s claims of aiding and abetting fraud, aiding and abetting breach of fiduciary duty, fraudulent concealment, and fraud. i. The CCH Term Sheet Was Prepared by the Defendants The CCH Agent Banks were deeply involved in drafting documents related to the CCH Facility. The CCH Agent Banks and Investment Banks conducted significant due diligence, prepared an offering memorandum with the assistance of Adelphia, and received compliance certificates from Adelphia. (Am. Cmpl. ¶ 882.) The CCH Agent Banks and their affiliated Investment Banks worked closely with the Rigas family to prepare a summary term sheet describing the terms of the CCH Co-Borrowing Facility. (Am. Cmpl. ¶ 885.) ii. The CCH Term Sheet Contained Omissions and Misstatements The Amended Complaint catalogs three areas of omissions and misstatements in the CCH Term Sheet. (Am. Cmpl. ¶¶ 891-97). First, provisions in the CCH Term Sheet implied affiliate transactions would be restricted. The CCH Term Sheet contains a clause prohibiting transactions not on the same terms as could be obtained in transactions with 3rd parties. (Am. Cmpl. ¶ 893.) The CCH Term Sheet contained a clause which led the independent directors to believe that the proceeds of the CCH Facility would be used in specific ways which would be to the benefit of Adelphia. (Am. Cmpl. ¶ 891.) The CCH Term Sheet represented the CCH Facility would contain a restrictive investments clause which would place substantial limits on affiliated transactions. (Am. Cmpl. ¶¶ 894, 895.) Second, the CCH Term Sheet did not define whether the leverage ratio (the amount which each borrower could borrow in relation to assets) was calculated on a combined basis or individual basis. The failure to define the leverage ratio was a material omission. If the leverage ratio was defined as being individualized then each borrower was limited to only borrowing under the CCH Facility the amount of assets and collateral which that borrower pledged to the CCH Facility. (Am. Cmpl. ¶ 889.) If the leverage ratio was calculated on a combined basis then each borrower could borrow up to the total value of all assets pledged to the facility. In the Adelphia board meeting of March 9, 2000 the leverage ratio was described by Rigas and Brown as being individualized against each borrower. The CCH Term Sheet could be taken to support these oral contentions because the CCH Term Sheet was ambiguous and did not define the leverage ratio. Id. However, the final CCH Credit Agreement (which was finalized after the March 9, 2000 board meeting) explicitly stated that, “[Beverage ratio means, with respect to the Companies on a combined basis.” (Am. Cmpl. ¶ 901.) Third, the CCH Term Sheet did not disclose that each borrower would be permitted to draw down the entire amount available under the facility (without regard to the amount of capital they had pledged). This was a material omission. As an exemplar, Highland Prestige, an RFE and Co-Borrower in the facility, would be able to borrow up to the total amount of the CCH Facility even though it had pledged a relatively small amount of collateral. (Am. Cmpl. ¶¶ 902, 914.) iii. The CCH Term Sheet Defects were known to the Defendants The CCH Agents Banks and their affiliated Investment Banks knew or should have known that the statements in the CCH Term Sheet were false and/or misleading. First, the structure of the CCH Facility was so unprecedented that it should have raised red flags. According to the Amended Complaint the CCH Agent Banks were sophisticated parties who knew or should have known the CCH Term Sheet was misleading. (Am. Cmpl. ¶¶ 4, 826.) The CCH Agent Banks and their affiliated Investment Banks knew that despite the representations made to the independent directors, “the true terms and conditions of the CCH Co-Borrowing Facility provided no benefit to Adelphia and were not in Adelphia’s interests.” (Am. Cmpl. ¶ 917.) Second, a Confidential Information Memorandum prepared in March 2000 indicates the CCH Agent Banks and their affiliated Investment Banks knew the CCH Term Sheet contained misstatements and omissions. The Confidential Information Memorandum was prepared by the CCH Agent Banks and affiliated Investment Banks and was sent to CCH Lenders. The Memorandum “made clear that the collateral put up by the ACC co-borrowers was significantly greater than the collateral put up by Highland Prestige.” (Am. Cmpl. ¶ 905.) “This information was not stated in the CCH Term Sheet presented to the Independent Directors and was not disclosed to them at the March 9, 2000 Board of Directors Meeting.” Id. Third, the Agent Banks and Investment Banks knew in March 2000 that the collateral pledged by the RFEs was de minimis in comparison to the amount which would be withdrawn by the RFEs. (Am. Cmpl. ¶ 908, 1036.) The Investment Banks and Agent Banks knew the Rigas family “intended to engage in conduct and affiliate transactions that violated these restrictions.” (Am. Cmpl. ¶ 908.) E. The Olympus Credit Facility Roughly a year after opening the CCH Credit Facility the Rigas family sought to raise additional funds. (Am. Cmpl. ¶ 924.) The Olympus Credit Facility was structured in much the same way as the CCH and UCA/HHC Facilities had been structured. (Am. Cmpl. ¶ 930.) The Olympus Credit Facility was a Co-Borrowing Facility with both RFEs and Adelphia contributing capital. (Am. Cmpl. ¶ 952.) The Olympus Co-Borrowing Facility was approved at the August 7, 2001 board meeting by the Adelphia independent directors. (Am. Cmpl. ¶ 932.) The Olympus Facility was a Co-Borrowing Facility with the following banks acting as Agent Banks: BMO, Wachovia, BNS, Fleet, BONY, BofA, Bankers Trust Company, Citicorp, TDI, Chase, Deutsche Bank, CSFB, Credit Lyonnais, Royal Bank of Scotland, Societe Generale, and Fuji Bank (collectively, the “Olympus Agent Banks”). (Am. Cmpl. ¶ 927.) The Investment Banks associated with the Olympus Agent Banks are identified in paragraph 1037 of the Amended Complaint. (Am. Cmpl. ¶ 1037.) At the board meeting the independent directors were presented with a summary term sheet describing the terms and conditions of the CCH Co-Borrowing Facility (“Olympus Term Sheet”). (Am. Cmpl. ¶ 933.) However, the credit agreement for the Olympus Co-Borrowing Facility (which memorialized the actual terms of the facility) was finalized after the board meeting and was not shown to the independent directors at the time they approved the transaction. (Am. Cmpl. ¶¶ 947, 951.) As of the petition date approximately 1.3 billion dollars was outstanding under the Olympus Credit Facility. (Am. Cmpl. ¶ 969.) ART alleges the Olympus Term Sheet was prepared by the Olympus Agent Banks and their affiliated Investment Banks. The Olympus Term Sheet contained omissions and misstatements the Olympus Agent Banks and their affiliated Investment Banks were aware of. This allegation forms the basis of ART’s claims of aiding and abetting fraud, aiding and abetting breach of fiduciary duty, fraudulent concealment, and fraud. i. The Olympus Term Sheet Was Prepared by the Defendants The Agent ÍBanks and their affiliated Investment Banks in concert with the Rigas family drafted a summary term sheet for the Olympus Facility (“Olympus Term Sheet”). (Am. Cmpl. ¶¶ 928, 931.) ii. The Olympus Term Sheet Contained Omissions and Misstatements The Amended Complaint alleges three defective areas in the Olympus Term Sheet. The alleged defects in the Olympus Term Sheet mirror the defects in the CCH and UCA/HHC Term Sheets. First, the Olympus Term Sheet contained clauses preventing participants in the Co-Borrowing Facility from engaging in transactions which do not benefit Adelphia. The Olympus Term Sheet prohibited transactions which were “not on the same terms as could be obtained by third parties.” (Am. Cmpl. ¶ 939.) The restricted investments clause in the Olympus Term Sheet claimed to place limits on affiliated transactions. (Am. Cmpl. ¶¶ 940, 941.) Second, the Olympus Term Sheet did not define whether the ‘leverage ratio’ was to be calculated on a combined or individual basis. (Am. Cmpl. ¶ 942, 945.) The omission of a definition for the ‘leverage ratio’ is a material omission according to ART’s pleadings. The leverage ratio (as in the CCH Facility) was critical in determining how much each of the borrowers could borrow from the facility. (Am. Cmpl. ¶ 942^47.) Third, the Olympus Term Sheet failed to disclose that an RFE- could pledge de minimis capital compared to the amount which it intended to borrow from the facility. (Am. Cmpl. ¶ 948.) The omission of this fact from the Olympus Term Sheet was material. If the RFEs’ intended use under the facility had been exposed to the independent directors the Olympus Facility would not have been approved. (Am. Cmpl. ¶¶ 949, 950.) iii. The Olympus Term Sheet Defects were known to the Defendants The Olympus Agents Banks and their affiliated Investment Banks knew or should have known that the statements in the Olympus Term Sheet were false and/or misleading. The Amended Complaint lists three independent grounds for actual or constructive knowledge. First, according to the Amended Complaint the structure of the Olympus Facility was highly unusual. The Olympus Agent Banks should have disclosed the unusual arrangement in the Olympus Term Sheet and called attention to its risks. (Am. Cmpl. ¶¶ 961, 962.) Second, the Olympus Agent Banks and their affiliated Investment Banks knew or should have known that the Olympus Term Sheet was defective based on the Rigas family’s use of the CCH and UCA/HHC Facilities in the preceding two years. Many of the Olympus Agent Banks assisted in the structuring and management of the previous Co-Borrowing Facilities. By the time the Olympus Term Sheet was drafted by the Olympus Agent Banks the Rigas family had withdrawn hundreds of millions of dollars from the CCH and UCA/HHC Facilities. This money was used for the benefit of the Rigas family. (Am. Cmpl. ¶¶ 956, 965,1036.) Third, a Confidential Information Memorandum prepared by the Olympus Agent Banks and their affiliated Investment Banks demonstrated the Banks were aware the Olympus Facility was going to be used in ways contravening the Olympus Term Sheet. The Confidential Information Memorandum prepared in August of 2001 stated, “the collateral put up by the ACC co-borrowers would be significantly greater than the collateral put up by the RFE co-borrowers.” (Am. Cmpl. ¶¶ 951, 952.) 2. Procedural Background The collapse of Adelphia led to numerous civil, criminal, and bankruptcy proceedings. This particular case was part of an original case filed six years ago in the Southern District of New York Bankruptcy Court before Judge Robert E. Gerber. From 2003 until 2006 the case proceeded in the Southern District of New York Bankruptcy Court. On February 9, 2006, this Court withdrew the reference to the Bankruptcy Court, pursuant to 28 U.S.C. 157(d), and assigned to the undersigned as related to the Adelphia multidistrict litigation (03 MDL 1529). The background of the case is complex and impacts this decision so an overview of the proceedings in the Southern District of New York Bankruptcy Court and before this Court is appropriate. A. Proceedings in the Bankruptcy Court On July 6, 2003 Adelphia’s Official Committee of Unsecured Creditors filed a complaint (“Creditors Complaint”) in the Southern District of New York Bankruptcy Court before Judge Gerber. The Creditors Complaint alleged fifty-two claims against hundreds of Defendants. The Creditors Complaint divided the Defendants into four categories: Agent Banks, Investment Banks, Non-Agent Banks and Assignees. The Creditors Complaint alleged the Defendants benefited from the Rigas’s fraud and in some cases aided in its perpetration. On July 31, 2003 the Official Committee of Equity Security Holders filed an intervenor complaint (“Intervenor Complaint”) in the Southern District of New York Bankruptcy Court (also before Judge Gerber). The Intervenor Complaint joined in the bulk of the claims which had been filed by the Creditors Committee and asserted claims against the Investment Banks for fraudulent concealment; and against the Agent Banks and Investment Banks for fraud and RICO violations. The Defendants raised two lines of attack to the claims made against them in the Creditors Complaint and the Intervenor Complaint. First, the Defendants alleged the Creditors Committee and Equity Committee lacked Article III standing to bring their claims. Second, the Defendants brought various 12(b)(6) motions to dismiss the claims in the two complaints. Judge Gerber of the Bankruptcy Court issued three decisions addressing the issues raised by the Defendants. In the first decision, Judge Gerber held both the Equity and Creditor Committees had standing to bring their claims. In re Adelphia Commc’ns Corp., 330 B.R. 364, 377 (Bankr.S.D.N.Y.2005). In the second decision, Judge Gerber examined the various Defendants’ 12(b)(6) motions to dismiss the Creditors Complaint claims. In re Adelphia Commc’ns Corp., 365 B.R. 24 (Bankr.S.D.N.Y.2007). Judge Gerber in an extensive opinion dismissed some of the claims and sustained others. In the third decision, Judge Gerber considered the various Defendants’ 12(b)(6) motions to dismiss the claims made in the Intervenor Complaint. In re Adelphia Commc’ns Corp., Adversary N. 03-04942(REG), 2007 WL 2403553 (Bankr.S.D.N.Y. Aug. 17, 2007). Judge Gerber dismissed the claims asserted in the Intervenor Complaint, but granted leave to replead the claims for fraud and fraudulent concealment. Concurrent with the Bankruptcy Court issuing these three decisions a Chapter 11 reorganization of Adelphia was proceeding. The First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of Adelphia Communications Corporation and Certain Affiliated Debtors was confirmed and became effective on January 17, 2007 (“Joint Chapter 11 Plan”). The confirmation of the Joint Chapter 11 Plan led to the consolidation of the Creditor’s Complaint and Intervenor Complaint. The consolidated claims were transferred to the Adelphia Recovery Trust (ART) to prosecute. B. Proceedings before this Court The Defendants sought leave to appeal all of the claims which Judge Gerber had failed to dismiss. This Court granted leave to appeal with respect to particular discreet areas of law. Adelphia Recovery Trust v. Bank of Am., N.A., No. 05 Civ 9050, 2007 WL 2585065 (S.D.N.Y. Sept.05, 2007); Adelphia Recovery Trust v. Bank of Am., N.A., No. 05 Civ 9050, 2007 WL 2890220 (S.D.N.Y. Sept.28, 2007). ART filed an Amended Complaint on October 31, 2007. (Adversary Proceeding Amended Complaint (“Am. Cmpl.”)). The Amended Complaint consolidated the Creditors’ Complaint and Intervenor Complaint. ART also made revisions to the claims. The Amended Complaint is in excess of 500 pages, naming many hundreds of defendants, and provides additional details to various claims. This Court on January 17, 2008, issued an order based on the legal issues which it had granted review of in the Sept 5, 2007 and September 28, 2007 decisions. Adelphia Recovery Trust v. Bank of Am., N.A., 390 B.R. 64 (S.D.N.Y.2008). This Court held Claim 37 for aiding and abetting a breach by the Rigas family, Michael Mulcahey, and James R. Brown of their fiduciary obligations to Adelphia would be governed by Pennsylvania state law. This Court also held aiding and abetting a breach of fiduciary duty was a valid tort under Pennsylvania state law. In addition, this Court held the doctrine of in pari delicto would not lead to the dismissal of a claim on a 12(b)(6) motion. Adelphia Recovery Trust, 390 B.R. at 78-79. This Court concluded the Adelphia Recovery Trust had Article III standing to bring its claims. Adelphia Recovery Trust, 390 B.R. at 71. Lastly, the court dismissed the Bank Holding Company Act Claim (Claim 32) with leave to replead to cure ambiguity in the original allegations. Id. This Court next turned its attention to the Defendants’ various 12(b)(6) motions for dismissal of the Amended Complaint’s claims 1 to 16; 33; 41 to 44; and 49 to 52. This Court entered an order on these issues on June 17, 2008. Adelphia Recovery Trust v. Bank of America, N.A., 390 B.R. 80 (S.D.N.Y.2008). The claims comprised the statutory bankruptcy avoidance claims and the equitable subordination and equitable disallowance claims; collectively known as the ‘Bankruptcy Claims’. The Court issued a memorandum and order dismissing the Bankruptcy Claims. On December 8, 2008, this Court entered a stipulation and order of a final judgment whereby claims 1-16, 33, 41-44, and 49-52 of the Amended Complaint were dismissed as to the Non-Agent Lenders. On March 5, 2008, this Court entered an order severing and transferring ten of the claims in the Amended Complaint. Adelphia Recovery Trust v. Bank of America, N.A., No. 05 Civ. 9050, 2009 WL 636719 (S.D.N.Y. March 5, 2009). The ten claims transferred were factually and legally distinct from other claims in the Amended Complaint and were collectively known as the Sabres Claims. Id. The Sabres Claims (claims 17-24 and 56-57) alleged the Rigas family had fraudulently conveyed roughly 30 million dollars to three banks in a series of transactions which allowed the Rigas family to assume control of the Buffalo Sabres Hockey Team. These claims were transferred to the Western District of New York. 3. Standard of Review A. Substantive Law is Pennsylvania State Law Claims in this case will be decided using the substantive law of the State of Pennsylvania. At this stage no parties are challenging the choice of Pennsylvania state law as the substantive law of the case. Pennsylvania state law was used repeatedly as the basis to resolve claims in this case. Judge Gerber used Pennsylvania state law in his opinion addressing the Defendants’ 12(b)(6) motions to dismiss the Equity Committee’s Complaint. In re Adelphia Commc’ns Corp., 365 B.R. at 39. This Court used Pennsylvania state law for evaluating other claims in the Amended Complaint. Adelphia Recovery Trust, 390 B.R. at 76. B. Procedural Law used is that of the Southern District of New York The procedural law governing this case is that of the Southern District of New York. Courts have a compelling reason to adopt the procedural law of their local court for deciding the sufficiency of pleadings on a 12(b)(6) motion to dismiss. In Texaco Inc. v. Pennzoil Co., the Second Circuit Court of Appeals reasoned that a forum had compelling reasons for applying its own procedural rules and enormous burdens were avoided when a court applied its own rules, rather than the rules or interpretations of another jurisdiction. Texaco Inc. v. Pennzoil Co., 784 F.2d 1133, 1156 (2d Cir.1986). “A court usually applies its own local law rules prescribing how litigation shall be conducted even when it applies the local law rules of another state to resolve other issues in the case.” Restatement (Second), Conflict of Laws, § 122 (comment a) (1971). C. Pleading Standard under Fed. R.Civ.P. 8(a) This memorandum and order responds to various defendants’ motions to dismiss the tort claims against them under Rule 12(b)(6). For ART to avoid dismissal of claims under Rule 12(b)(6) ART must plead “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). However, adequate pleadings must raise a right to relief above the speculative level. “[A] plaintiffs obligation to provide the ‘grounds’ of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007). D. Pleading Standard for Fraud under Fed.R.Civ.P. 9(b) There is a heightened pleading requirement when a claim is grounded in fraud. Fed.R.Civ.P. 9(b) requires that fraud be pled with particularity. Harsco Corp. v. Segui 91 F.3d 337, 347 (2d Cir.1996). “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. We have explained that in order to comply with Rule 9(b), ‘the complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.’ ” Rombach v. Chang, 355 F.3d 164, 170 (2d Cir.2004) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993)). Under Rule 9(b), “[m]alice, intent, knowledge, and other condition of mind of a person may be averred generally.” Fed. R.Civ.P. 9(b). But, “we must not mistake the relaxation of Rule 9(b)’s specificity requirement regarding condition of mind for a license to base claims of fraud on speculation and conclusory allegations!,] ... plaintiffs must allege facts that give rise to a strong inference of fraudulent intent.” Acito v. IMCERA Group, Inc., 47 F.3d 47, 52 (2d Cir.1995) (internal quotation marks and citation omitted). “The requisite ‘strong inference’ of fraud may be established either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.” Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir.1994). (citing Lemer v. Fleet Bank, N.A., 459 F.3d 273, 278-91 (2d Cir.2006)). 4. Discussion A. Claim 38 — Aiding and Abetting Fraud against the Agent Banks and Their Affiliated Investment Banks is not Dismissed Claim 38 in the Amended Complaint alleges that the Agent Banks and their affiliated Investment Banks aided and abetted the Rigas family’s fraud. Claim 38 alleges the Agent Banks and their affiliated Investment Banks drafted deceptive term sheets which misrepresented or omitted key provisions concerning the UCA/HHC, CCH, and Olympus Co-Borrowing Facilities. The preparation and approval of these term sheets aided and abetted the Rigas family’s fraud. The Defendants have filed various memorandums of law in support of their motions to dismiss Claim 38. Four primary arguments for dismissal are laid out in the memorandums of law: aiding and abetting fraud is not recognized under Pennsylvania state law, the elements of aiding and abetting fraud are not pled with particularity, the Amended Complaint uses impermissible group pleading (the lumping of defendants together), and the term sheets prepared by the Defendants affirmatively disclosed problems with the Co-Borrowing Facilities. The Defendants’ motions for dismissal of Claim 38 are DENIED. i. Background of Claim 38 Claim 38 was first pled in the Creditors Complaint. The Creditors Complaint alleged the Agent Banks and their affiliated Investment Banks aided and abetted the Rigas family’s fraud. (CC ¶ 868.) Judge Gerber dismissed Claim 38 with leave to replead. Gerber ruled the pleadings in the Creditors Complaint ‘lack the requisite particularity’ required for a fraud claim. In re Adelphia Commc’ns Corp., 365 B.R. at 61. Judge Gerber did not address whether Pennsylvania courts would recognize a tort for aiding and abetting fraud. “The Court does not need to decide, and does not now decide, whether Pennsylvania would recognize the tort of aiding and abetting fraud, as a general matter.” Id. Claim 38 was repled in the Amended Complaint which is now before this Court. ii. Aiding and Abetting Fraud is a Valid Claim under Pennsylvania State Law The Defendants urge this Court to dismiss Claim 38 on the basis that Pennsylvania state law does not recognize the tort of aiding and abetting fraud. The Defendants’ argument is rejected. This Court’s January 17, 2008 decision recognized the tort of aiding and abetting a breach fiduciary duty but did not address directly whether Pennsylvania state law would recognize a tort for aiding and abetting fraud. Adelphia Recovery Trust, 390 B.R. at 77. However, the analysis underlying this Court’s earlier recognition of a tort for aiding and abetting a breach of fiduciary duty leads this Court to conclude the Pennsylvania Supreme Court would also recognize a tort for aiding and abetting fraud. The Pennsylvania Supreme Court has not directly ruled on whether it recognizes a tort of aiding and abetting fraud. Klein v. Boyd, No. 95-5410, 1996 WL 675554, at *33 (E.D.Pa. November 19, 1996). In cases where it is unclear if a cause of action is allowed by a state supreme court, “[t]he federal court may not impose its view of what the state law should be, but must apply existing state law as interpreted by the state’s highest court in an effort to determine how the state court would decide the precise legal issue before the federal court.” Walsh v. Strenz, 63 F.Supp.2d 548, 551 (M.D.Pa.1999) (citing Koppers Co., Inc. v. Aetna Cas. & Sur. Co., 98 F.3d 1440, 1445 (3d Cir.1996)). “In the absence of a reported decision by the state’s highest court addressing the precise issue before it, a federal court applying state substantive law must predict how the state’s highest court would rule if presented with the case.” Carrasquilla v. Mazda Motor Corp., 197 F.Supp.2d 169, 172 (M.D.Pa.2002). In the Second Circuit, a federal district court will “conclusively defer to a federal court of appeals’ interpretation of the law of a state that is within its circuit.” Booking v. General Star Management Co., 254 F.3d 414, 421 (2d Cir.2001), see also Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 157 n. 4 (2d Cir.2003). Four factors lead this Court to conclude the Pennsylvania Supreme Court would recognize a tort for aiding and abetting fraud. First, the adoption of Section 876 of the Restatement (Second) of Torts by the Pennsylvania Supreme Court is strongly indicative that it would recognize a tort for aiding and abetting fraud. The Pennsylvania Supreme Court held when adopting Section 876 of the Restatement (Second) of Torts that, “[t]his theory provides in pertinent part that ‘[f|or harm resulting to a third person from the tortious conduct of another, one is subject to liability if he (a) does a tortious act in concert with the other or pursuant to a common design with him ... ’ ” Skipworth by Williams v. Lead Industries Ass’n, Inc., 547 Pa. 224, 690 A.2d 169, 174 (1997) (quoting Restatement (Second) of Torts, § 876.) Pennsylvania state courts have relied on the holding in Skipworth to conclude that the entirety of Section 876 was adopted under Pennsylvania state law. “Our Supreme Court addressed Section 876 in Skipworth by Williams v. Lead Industries Association, Inc., and this Court is convinced by this language in Skipworth that Section 876 is a viable cause of action in Pennsylvania.” Koken v. Steinberg, 825 A.2d 723, 732 (Pa.Cmwlth. 2003) (citations omitted). The opinion in Koken cites the entirety of Section 876 in finding that Skipworth leads to viable claims under all of Section 876. The Superior Court of Pennsylvania has also explicitly adopted all of Section 876. “In the alternative, a defendant must render substantial assistance to another to accomplish a tortious act. As specifically stated in comment (d) to § 876(b), ‘in determining liability, the factors are the same as those used in determining the existence of legal causation when there has been negligence.’ ” Cummins v. Firestone Tire & Rubber Co., 344 Pa.Super. 9, 21-22, 495 A.2d 963 (Pa.Super.1985). Other courts in Pennsylvania have similarly found the adoption of Section 876 makes aiding and abetting a viable cause of action. “[A]s set forth in Section 876 of the Restatement (Second) of Torts, [aiding and abetting] is a recognized civil cause of action under Pennsylvania law.” Sovereign Bank v. Valentino, 914 A.2d 415, 416 (Pa.Super.2006). “[Defendants aver that Count XX fails to state a claim upon which relief can be granted for tortious aiding and abetting. Pennsylvania courts have declared that such a claim, based upon section 876 of the Restatement (Second) of Torts, is a viable cause of action in the Commonwealth....” Cruz v. Roberts, 70 Pa. D. & C.4th 225, 234-235 (Pa.Com.Pl.2005) (concluding that although Section 876 has been adopted the defendant did not state a claim on which relief could be granted due to insufficient pleading of facts). Federal courts from around the country have taken a state court’s adoption of Section 876 of the Restatement (Second) of Torts to mean that a state supreme court would recognize common law aiding and abetting fraud. This Court’s review of various federal court opinions has found broad agreement that where a state has adopted Section 876 of the Restatement aiding and abetting fraud is a valid cause of action under the law of that state. This Court is not bound by the holdings of these other federal courts. However, this Court finds the broad agreement between federal courts on this issue to be persuasive. In Cope v. Price Waterhouse the Ninth Circuit Court of Appeals reasoned, “[t]he Second Restatement of Torts also supports a finding that actual knowledge is the proper standard for a claim of aiding and abetting fraud. Section 876(b) provides for secondary liability for tortious conduct if a party ‘knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself.’ ” Cope v. Price Waterhouse, No. 92-15901, 1993 WL 102598, at *6 (9th Cir.1993) (citing Restatement (Second) of Torts, § 876(b)); see also Pathe Computer Control Systems Corp. v. Kinmont Industries, Inc., 955 F.2d 94, 98 (1st Cir.1992) (citing Norman v. Brown, Todd & Heyburn, 693 F.Supp. 1259, 1264 (D.Mass.1988) (recognizing a cause of action under Massachusetts law for aiding and abetting fraud by looking to Section 876)); El Camino Resources, Ltd. v. Huntington Nat. Bank, No. 1:07-cv-598, 2009 WL 427278, at *3 (W.D.Mich. February 20, 2009) (looking to Section 876 of the Restatement to define the elements for, aiding and abetting fraud); In re Enron Corporation Securities, Derivative & “ERISA” Litigation, 540 F.Supp.2d 800, 811 (S.D.Tex.2007) (examining Section 876 and Aetna Casualty and Surety Co. v. Leahey Construction Co., Inc., 219 F.3d 519, 532-33 (6th Cir.2000) to determine the elements for aiding and abetting common law fraud.); Neilson v. Union Bank of California N.A., 290 F.Supp.2d 1101, 1119-1120 (C.D.Cal.2003) (looking to Section 876 to define the elements for common law fraud). A federal court in the Southern District of Mississippi looked at twenty-eight cases (dealing with state court adoption of Section 876 prior to 2002) and concluded, “the majority of jurisdictions that have addressed the validity of a claim for aiding and abetting under § 876(b) have held that such a claim exists. Therefore, Mississippi’s adoption of the related and analogous tort of civil conspiracy, coupled with the majority rule regarding 876(b), persuades this Court that Mississippi would recognize a claim of aiding and abetting fraud, foreclosing dismissal for failure to state a claim.” Dale v. Ala Acquisitions, Inc., 203 F.Supp.2d 694, 700-701 (S.D.Miss.2002). The Pennsylvania Supreme Court’s adoption of Section 876 of the Restatement Second of Torts in Skipworth is a significant factor in concluding the Pennsylvania Supreme Court would recognize a tort for aiding and abetting fraud. Second, lower courts in Pennsylvania have recognized the broad tort of civil aiding and abetting. Pennsylvania state courts’ recognition of aiding and abetting claims is a strong indicium that the Supreme Court would recognize the subset tort of aiding and abetting fraud. As noted above a number of lower courts in Pennsylvania have recognized aiding and abetting based on Section 876 of the Restatement. See Koken, 825 A.2d at 732; Cummins, 344 Pa.Super. at 21-22, 495 A.2d 963; Sovereign Bank, 914 A.2d at 416; Cruz, 70 Pa. D. & C.4th at 234-35. Third, several federal courts have recognized the broad tort of civil aiding and abetting under Pennsylvania state law. “The tort of civil aiding and abetting, which is also known as concerted tortious conduct, has recently been recognized as ‘a viable cause of action’ under Pennsylvania common law.” Nelson v. DeVry, Inc., No. 07-4436, 2008 WL 2845300, at *4 (E.D.Pa. July 22, 2008) (quoting Koken, 825 A.2d at 731); Thompson v. Glenmede Trust Co., 1993 WL 197031 (E.D.Pa. June 8, 1993) (recognizing aiding and abetting a breach of fiduciary duty is a tort under Pennsylvania Law and that the tort does not require actual harm to be shown). In Huber v. Taylor the Court of Appeals for the Third Circuit held Pennsylvania state law recognizes a tort for aiding and abetting a breach of fiduciary duty. Huber v. Taylor, 469 F.3d 67, 79 (3d Cir.2006) (recognizing there is no conflict of law between Texas and Pennsylvania law regarding aiding and abetting a breach of fiduciary duty since both states do not require a party to show actual harm or injury to state a claim). The federal district court cases and the case from the Third Circuit Court of Appeals all cite the Commonwealth Court of Pennsylvania’s decision in Koken to find a tort for aiding and abetting. As analyzed above the reasoning behind the decision in Koken (the adoption of Section 876 of the Restatement (Second) of Torts by the Pennsylvania Supreme Court) leads this Court to recognize aiding and abetting fraud as a viable cause of action. Fourth, recognizing the tort of aiding and abetting fraud would be a natural extension of this Court’s earlier holding recognizing a tort for aiding and abetting a breach of fiduciary duty. This Court’s January 17, 2008 order recognizing aiding and abetting a breach of fiduciary duty was in part based on the Third Circuit Court of Appeals recognizing of the tort under Pennsylvania state law. Adelphia Recovery Trust, 390 B.R. at 77. This Court also held aiding and abetting a breach of fiduciary duty was a valid tort because the Pennsylvania Supreme Court had adopted Section 876 of the Restatement. Id. As discussed above the adoption of Section 876 leads not only to recognizing a tort for aiding and abetting a breach of fiduciary duty but also one for aiding and abetting fraud. iii. Aiding and Abetting Fraud is Plead with Particularity The Defendants argue the elements of aiding and abetting fraud have not been pled with the needed particularity to meet the requirements of Fed.R.Civ.P. 9(b). Aiding and abetting fraud has three elements: “(1) that an independent wrong exist; (2) that the aider or abettor know of that wrong’s existence; and (3) that substantial assistance be given in effecting that wrong.” Landy v. Federal Deposit Ins. Corp., 486 F.2d 139, 162-163 (3d Cir.1973); Rochez Bros., Inc. v. Rhoades, 527 F.2d 880, 886 (3d Cir.1975) (defining the elements for aiding and abetting using Restatement of Torts Section 876). To meet the pleading requirements, “a claim for aiding and abetting fraud requires plaintiff to plead facts showing, the existence of a fraud, defendant’s knowledge of the fraud, and that the defendant provided substantial assistance to advance the fraud’s commission.” Wight v. BankAmerica Corp., 219 F.3d 79, 91 (2d Cir.2000). In analyzing the sufficiency of the pleadings for aiding and abetting fraud this Court looks to the following: the elements of an aiding and abetting fraud claim, the section of the Amended Complaint which lays out Claim 38 for aiding and abetting fraud, and facts which are pleaded elsewhere in the Amended Complaint (with regards to the three Co-Borrowing Facilities). Hertz Corp. v. City of New York, 1 F.3d 121, 125 (2d Cir.1993) (in analyzing the sufficiency of pleadings a court is to look at all pleaded facts in a complaint). The Amended Complaint has a Byzantine-like structure. Judge Learned Hand described digging through a voluminous complaint as requiring “a 'great deal of archeology”. Judge Augustus Hand, ‘Trial Efficiency,’ dealing with antitrust cases, Business Practices Under Federal Antitrust Laws, Symposium, New York State Bar Assn. (C.C.H., 1951) 31-32. This is such a case. Paragraphs 1421 to 1433 of the Amended Complaint lay out aiding and abetting fraud by the Agent Banks and their affiliated Investment Banks across the three Co-Borrowing Facilities. The allegations in paragraphs 1421 to 1433 are not specific enough of themselves to meet the requirements of Fed.R.Civ.P. 9(b). However, Claim 38 references the preceding paragraphs 1 to 1078 of the Amended Complaint. (Am. Cmpl. ¶ 1434.) The preceding paragraphs of the Amended Complaint plead sufficient facts related to the Co-Borrowing Facilities to sustain the aiding and abetting fraud claim with regards to the .UCA/HHC, CCH, and Olympus Co-Borrowing Facilities. This Court concludes that the elements of aiding and abetting fraud have been pled with the necessary particularity to sustain the claim in regards to the following defendants and associated Co-Borrowing Facilities: the UCA/HHC Agent Banks and their affiliated Investmént Banks in connection with the UCA/HHC Co-Borrowing Facility; the CCH Agent Banks and their affiliated Investment Banks in connection with the CCH Co-Borrowing Facility; the Olympus Agent Banks and their affiliated Investment Banks in connection with the Olympus Co-Borrowing Facility. a. Aiding And Abetting Fraud Related to the UCA/HHC Facility is Pled with Particularity The Amended Complaint pleads with particularity the elements necessary to sustain a claim for aiding and abetting fraud by the UCA/HHC Agent Banks and their affiliated Investment Banks related to the UCA/HHC Co-Borrowing Facility. First, the Amended Complaint pleads the Rigas family was involved in fraud related to the UCA/HHC Facility. The fraud conducted by the Rigas family occurred when the Rigas family made fraudulent misstatements and omissions regarding the UCA/HHC Facility at the April 22, 1999 board meeting. (Am. Cmpl. ¶ 863.) The Rigas family used the UCA/HHC Facility to loot Adelphia of hundred of millions of dollars for personal' gain. (Am. Cmpl. If-877.) Second, the UCA/HHC Agent Banks and their affiliated Investment Banks had knowledge of the fraud. UCA/HHC Agent Banks and their affiliated Investment Banks knew at the time they provided the UCA/HHC Term Sheet that the “Rigas family intended to engage in conduct' ... that violated those restrictions” and engage in fraud. (Am. Cmpl. ¶ 861.) Banks were aware prior to presenting the UCA/HHC Term Sheet that the Rigas family was planning on borrowing extensively from the facility and using the funds for their personal benefit. (Am. Cmpl. ¶ 862.) Emails between the parties establish the Banks knew the Rigas family intended to use the UCA/HHC facility for their personal gain. (Am. Cmpl. ¶ 863.) The Banks involved in the UCA/HHC Facility had ongoing knowledge that the facility was being used in violation of the Rigas family, Brown and Mulcahey’s fiduciary obligations — as hundreds of millions of dollars were withdrawn from the facility over the coming years and used for the personal benefit of the Rigas family. (Am. Cmpl. ¶¶ 873-75.) The Defendants assert ART has not pled knowledge with the requisite particularity to satisfy Rule 9(b). However, this Court in its January 17, 2008 decision, held knowledge may be averred generally. Adelphia Recovery Trust, 390 B.R. at 64. The Second Circuit has held, “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Rombach v. Chang, 355 F.3d 164, 171 (2d Cir.2004). “We apply the more general standard to scienter for the simple reason that ‘a plaintiff realistically cannot be expected to plead a defendant’s actual state of mind.’ ” Wight v. BankAmerica Corp., 219 F.3d 79, 91-92 (2d Cir.2000) (citing Connecticut Nat'l Bank v. Fluor Corp., 808 F.2d 957, 962 (2d Cir.1987)). The Defendants argue Lerner v. Fleet Bank, N.A. overruled the Second Circuits’ earlier decisions and requires the Plaintiff to plead facts showing actual knowledge of the fraud by the Defendants. (Investment. B. Mem. at 17 (citing Lerner v. Fleet Bank, N.A., 459 F.3d 273, 293 (2d Cir.2006))). The Defendants’ argument overstates the holding in Lemer. Lemer does not overrule Wight (and earlier Second Circuit cases). Instead, Lemer incrementally heightens the pleading standard for knowledge. Lerner, 459 F.3d at 293. Lemer stands for the proposition that one can plead facts which give rise to a strong inference that the defendant had knowledge of the fraud. The inference “may be established either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.” Id. at 290-91. Lemer does not require the plaintiff to plead actual knowledge on the part of a defendant; if a party pleads facts leading to a “substantial inference” that will be enough. Id.; see also M-101, LLC v. iN Demand L.L.C., No. 06 Civ. 12938, 2007 WL 4258191, at *2 (S.D.N.Y. Dec. 03, 2007), Oh v. Imagemark, Inc., No. 06 Civ. 10187, 2007 WL 2962381, at *3 (S.D.N.Y. Oct. 10, 2007). In this case ART has met the burden laid out in Lemer. ART has pled facts (emails, meetings, correspondence, and conduct) which constitute strong circumstantial evidence that the UCA/HHC Agent Banks and Investment Banks were aware of the fraud related to the UCA/HHC Co-Borrowing Facility. Third, the UCA/HHC Agent Banks and their affiliated Investment Banks (involved in the UCA/HHC Facility) provided substantial assistance to advance the commission of the fraud. The UCA/HHC Agent Banks and Investment Banks worked together to draft and approve the UCA/ HHC Term Sheet. (Am. CmplJ861.) The UCA/HHC Term Sheet omitted key terms and made specific misstatements. These misstatements included: presenting the UCA/HHC Facility as being in the best interest of Adelphia, that the proceeds would only be used for specific purposes, the UCA/HHC Facility would be restricted in its work with RFEs, transactions with affiliates would be prohibited, and the restricted investments clause placed substantial limits on the type of transaction permitted. (Am. Cmpl. ¶¶ 853-61.) The_ Amended Complaint alleges that-but for-the omissions and misstatements in the UCA/HHC Term Sheet the UCA/HHC Facility would not h