MEMORANDUM DECISION GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

Irving H. Picard, as trustee (“Trustee”) for the liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”) under the Securities Investor Protection Act, 15 U.S.C. §§ 78aaa et seq. (“SIPA”), commenced this adversary proceeding to avoid and recover transfers by BLMIS to certain initial and subsequent transferees. Following the disposition of motions to dismiss, see Picard v. Merkin (In re BLMIS), 515 B.R. 117 (Bankr. S.D.N.Y. 2014) (“Dismissal Decision”) and settlements by two defendants, only a few claims remain.

Currently before the Court are motions for summary judgment (the “Motions”) by defendants (i) J. Ezra Merkin (“Merkin”) and Gabriel Capital Corporation (“GCC,” and together with Merkin, the “Merkin Defendants”) and (ii) Ralph C. Dawson, as receiver for Ascot Partners, L.P. (“Ascot Partners”) and Ascot Fund Ltd. (“Ascot Fund,” and together with Ascot Partners, the “Ascot Entities,” and collectively with the Merkin Defendants, the “Defendants”). For the reasons that follow, Ascot Partners is entitled to summary judgment dismissing Count Nine, but the Motions are otherwise denied.

BACKGROUND

The essential facts regarding Bernard Madoff s Ponzi scheme have been recounted in numerous decisions of the Second Circuit, the District Court and this Court, including the Dismissal Decision. Beginning in the early 1990s1, Madoff implemented his split-strike conversion strategy under which he purported to purchase a basket of stocks in the S&P 100 Index and sell call options and buy put options on the index (“SSC Strategy”). In fact, he did not engage in any trading, and instead, conducted a massive Ponzi scheme. He was arrested on December 11, 2008 (the “Fil*740ing Date”) for criminal violations of federal securities laws, the Securities and Exchange Commission (“SEC”) commenced a fraud action against Madoff and BLMIS, the Securities Investor Protection Corporation (“SIPC”) filed an application in the District Court seeking the protections afforded by SIPA for BLMIS’ customers, and the District Court granted SIPC’s application, appointed the Trustee to liquidate BLMIS, and removed the SIPA liquidation to this Court. Madoff pleaded guilty on March 12, 2009 to an eleven count criminal information at which time he admitted that he operated a Ponzi scheme through the investment advisory side of BLMIS, and was sentenced to a prison term of 150 years. On April 13, 2009, an involuntary bankruptcy petition was filed against Madoff, and a consent order substantively consolidating Madoffs estate and the BLMIS estate was entered by the Court on June 9,2009.

The Trustee commenced this adversary proceeding on May 7, 2009, and filed his Third Amended Complaint, dated Aug. 30, 2013 (“TAC’) (ECF Doc. # 151)2 against the Merkin Defendants, the Ascot Entities, and two other Merkin managed funds— Gabriel Capital, L.P. (“Gabriel”) and Ariel Fund Ltd. (“Ariel”), The TAC asserted claims to avoid and recover preferential and fraudulent transfers under the Bankruptcy Code and state law from initial and subsequent transferees, recover from Mer-kin as general partner of Ascot Partners and Gabriel, and disallow and/or equitably subordinate certain BLMIS customer claims filed by some of the defendants.

The defendants moved to dismiss the TAC. As described in the Dismissal Decision, the Court concluded that the Trustee had failed to allege that Merkin had actual knowledge of Madoffs fictitious trading, but did allege that he willfully blinded himself to that fact. Based upon the lack of actual knowledge, the Court dismissed all of the avoidance claims other than Count Two, which alleged actual fraudulent transfers under 11 U.S.C. § 548(a)(1)(A). Dismissal Decision, 515 B.R. at 137-41. The Court also dismissed the equitable disallowance claims alleged in Counts Eleven and Twelve, id. at 153-57, but denied the branch of the motions seeking dismissal of the portion of the subsequent transfer claims that corresponded to the surviving fraudulent transfer claims, under § 548(a)(1)(A), id. at 149-53, the general partner liability claims against Merkin, id. at 153, and the equitable subordination of claims. Id. at 157-61. The Trustee subsequently settled with and dismissed his claims against Gabriel and Ariel. (See Stipulation of Dismissal and Consent Order, dated Sept. 8, 2015 (ECF Doc. # 282).) As a result, the following Counts and Defendants remain:

*741[[Image here]]

The Defendants have now moved for summary judgment on the TAC’s remaining counts.3 In the main, they assert that Merkin did not willfully blind himself to the fraud perpetrated by Madoff and BLMIS because he did not suspect that such fraud existed. He conducted extensive due diligence of BLMIS that did not indicate anything untoward, (Merkin Brief at 7-13 & 19-20; Ascot Brief at 14-19), and the Trustee points to red flags that were widely-known but dismissed by investors, auditors and regulators, all of whom were duped by Madoff. (Merkin Brief at 20-21; Ascot Brief at 2-3, 32-34; Merkin Reply at 6; Ascot Reply at 9-14.) The Trustee responds that summary judgment is not appropriate when, as here, the central issue is Merkin’s state of mind. (Trustee’s Memorandum of Law in Opposition to Defendants’ Motions for Summary Judgment, dated Nov. 25, 2015 (“Trustee Brief), at 42-45 (ECF Doc. # 289).) Further, the Trustee provides evidentiary support for his allegations that Merkin was aware of red flags but purposely ignored them. (Id, at 46-54.)

• The Defendants raise other arguments as well. Ascot Fund contends that Mer-kin’s knowledge should not be imputed to it, (Ascot Brief at 34-36; Ascot Reply at 20-22), Ascot Partners maintains that the Trustee has failed to identify any subsequent transfers that it received, (Ascot Briefed 36-37; Ascot Reply at 19-20), and the Merkin Defendants argue that the subsequent transfer and partner liability claims in Count Nine and Count Ten should be dismissed because Ascot Partners—the only initial transferee—will have sufficient assets to satisfy the judgment. (Merkin Briefed 27-28; Merkin Reply 19-22.) Lastly, Ascot Partners seeks the dismissal of the equitable subordination claim *742because Merkin’s conduct was not inequitable. (Merlán Brief at 29-3Í; Ascot Brief at 37-43.)

DISCUSSION

Rule 56 of the Federal Rules of Civil Procedure, made applicable to this adversary proceeding by Fed. R. BaNKR. P. 7056, governs motions for summary judgment. Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving-party bears the initial burden of showing that the undisputed facts entitle it to judgment as a matter of law. Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995). If the movant carries this initial burden, the nonmoving party must set forth specific facts that show triable issues, and cannot rely on pleadings containing mere allegations or denials. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where, as here, the defendant is the movant, it is entitled to summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

A court’s function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (“at the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial”). In deciding whether material factual issues exist, all ambiguities must be resolved and all reasonable inferences must be drawn in favor of the nonmoving party. Matsushita Elec., 475 U.S. at 587, 106 S.Ct. 1348; accord Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (“Thus, although the court should review the record as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe.”).

A. The Defendants’ Case 4

Merkin was a money manager and partner in several investment funds, and occasionally conducted his business through his wholly-owned corporation, GCC. (See Ariel Offering Memorandum5 at GCC-P 0335720.) Ascot Partners and Ascot Fund were formed in 1992 as a Delaware limited partnership and a Cayman Islands corporation, respectively. (See Ascot Partners Offering Memorandum6 at GCC-P 0335405; Ascot Fund Offering Memorandum 7 at GCC-P 0335118.) Each Ascot Entity had its own BLMIS account, (see An*743swer of Ralph C. Dawson, as Receiver of Ascot Partners, L.P., and Ascot Fund Ltd. to the Third Amended Complaint of Irving H. Picard, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, dated Feb. 5, 2015, ¶¶ 64, 65 (ECF Doc # 260)), until January 2003 when they were reorganized into a “master-feeder” structure. Following the reorganization, Ascot Fund invested all of its assets in Ascot Partners, which, in turn, invested substantially all of its assets in BLMIS. (Id., ¶ 55.) Hence, from their inception to the Filing Date, the Ascot Entities invested virtually all of their assets directly or indirectly in BLMIS. (See Hoang Deel., Ex. 16.)

Merkin was the general partner of Ascot Partners and had the ultimate responsibility for its management, operations and investment decisions. (See Ascot Partners Offering Memorandum at GCC-P 0335405.) GCC served as Ascot Fund’s investment advisor until the 2003 master-feeder reorganization, (see Termination Agreement8 at AF00000187), but ceased to serve in that capacity thereafter.

The principal issue raised by the Motions is whether the Trustee can demonstrate at trial that Merkin willfully blinded himself to the fact that Madoff was not engaged in the actual trading of securities. Willful blindness consists of two elements or prongs: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 131 S.Ct. 2060, 2070, 179 L.Ed.2d 1167 (2011). The substance of the Motions focuses on the first prong; it contends that Merkin conducted appropriate due diligence of BLMIS and Madoff, and did not suspect that Madoff was running a Ponzi scheme. In that event, he could not have consciously avoided learning the true state of facts as required by the second prong.

The Defendants identify several categories of facts in support of their Motions. First, Madoff had a “sterling reputation.” (Transcript of Feb. 24-25, 2015 Deposition of Merkin (“Merkin Dep. Tr.”)9 at 157:16-17.) Merkin met with Madoff in the late 1980s, (id. at 147:9-19, 153:17-22), and initially invested in BLMIS through an account held by an entity known as 61M Associates managed by the Scheuer family office. (Id. at 152:3-153:16.) Merkin’s father—who was a businessman and investor—had a “very constructive opinion of Mr. Madoff and his investing abilities.” (Id. at 147:20-150:7.) Merkin knew that Madoff was the chairman of NASDAQ, (id. at 157:20), that the SEC had investigated Madoff on several occasions, including in connection with the liquidation of BLMIS feeder fund Avellino & Bienes, without finding fraud, (id. at 214:1-18, 188:20-189:13), that Madoff had testified before Congressional committees on securities-related matters, (id. at 213:7-18), and that Madoff had a substantial market-making business constituting a significant share of trading in certain large cap stocks. (Transcript of Jan. 30, 2009 Deposition of Mer-kin10 at 128:25-130:18, 131:22-132:4.) Mer-kin spoke to clients of Madoffs market-making business, and they had “very positive things to say.” (Merkin Dep. Tr. at 174:12-17.) He also spoke to several clients of Madoffs investment advisory business who spoke highly of Madoff. (See Supple*744mental Responses to Interrogatories & Requests for Admission (“Supplemental Responses”)11 at'2-3,)

Second, once Merkin’s funds began investing directly with BLMIS, employees of GCC entered each BLMIS trade confirmation into GCC’s portfolio management system. (Transcript of Aug. 9, 2011 Deposition of Michael J. Achilarre12 at 32:8-33:6.) GCC was not able to input trade information on the day of the trade because BLMIS trade confirmations did not arrive at GCC for several days. (Transcript of Oct. 19, 2011 Deposition of Michael E. Autera13 at 84:2-18.) After the BLMIS trades were inputted into GCC’s portfolio system for the month, GCC employees reconciled them with BLMIS monthly statements. (Transcript of Aug. 16, 2011 Deposition of Andrew Gordon (“Gordon Dep. Tr.”)14 at 36:21-37:1.) If there was a discrepancy between the BLMIS trade confirmations and the BLMIS monthly statement, GCC employees contacted Frank DiPascali at BLMIS, and BLMIS would send supplemental trade confirmations to “make the numbers tie.” (Id. at 44:4-46:7.)

Third, Merkin hired the accounting firm of BDO Seidman, LLP (“BDO”) to perform yearly audits of his funds, including the Ascot Entities. (Transcript of Oct. 10, 2012 Deposition of Robert Castro (“Castro Dep. Tr.”)15 at 26:7-9.) Among the tasks performed by BDO was confirmation that the year-end balances on the funds’ financial statements agreed with amounts due from its clearing brokers.16 BDO reviewed statements provided by the brokers and also tested the price of the securities’ positions with an independent source such as Bloomberg. (Id. at 88:12-91:16.) In addition to confirming the funds’ year-end balances, BDO confirmed the existence of a “handful” of the funds’ positions by comparing them with the amount and quantity set forth in BLMIS brokerage statements and trade confirmations. (Id. at 91:17— 92:17,104:6-105:7,117:4-11.)

Merkin points to several other facts in support of his contention that he did not suspect Madoff s fraud or have any reason to: he spoke to Madoff roughly once a month over the course of many years, (Merkin Dep, Tr. at 186:13-17, 212:6-213:6, 428:18-431:7); he was comforted by the ease with which his funds received redemptions from BLMIS noting that “it was always easier to get money out than to put money in and that to me is a very positive sign,” (id. at 217:13-15); he maintained a file (the “Madoff File”)17 that, among other things, contained articles about Madoff and notes from meetings, (Supplemental Responses at 3-4); and he and his family lost over $110 million through their investment in his funds. (Merkin Dep. Tr. at 635:23-650:8.)

*745Finally, the Merkin Defendants submitted the reports of their expert, Jeffrey M. Weingarten, who opined that “[t]aken on the whole, the Merkin Defendants, in [his] opinion, pursued what would certainly be described as adequate due diligence on Madoff, his investment strategy and his operations.” (Expert Report of Jeffrey M. Weingarten,18 at 6.) According to Weingar-ten, adequate due diligence for an investment manager involves determining five characteristics about a potential investment: philosophy, process, procedures, people and performance. (Id. at 3.) With respect to Madoff and BLMIS, Weingar-ten concluded that Merkin’s diligence satisfied these criteria because he (i) understood that Madoff sought to achieve steady gains with below average risk, (ii) understood that Madoff achieved his results by implementing the SSC Strategy, (iii) received and reviewed trade confirmations, (iv) knew that Madoff was highly regarded, and (v) observed that the investment’s performance was consistent with the strategy. (Id. at 3-5.)

B. Trustee’s Evidence of Merkin’s Willful Blindness

1. The First Prong

The Trustee submitted evidence that Merkin learned about the possibility of fraud at BLMIS and also voiced his own concerns. Merkin was cautioned about Ma-doff as early as 1992 by Victor Teicher—a money manager for Gabriel and Ariel. Teicher warned Merkin that Madoff s returns were too consistent, (Transcript of Feb. 9, 2009 Deposition of Victor Teicher (“Teicher Dep. Tr.”)19 at 41:2-45:15), he expressed concerns that BLMIS self-cleared its own trades, (id. at 44:18-45:7; Errata Sheet20 for Victor Teicher’s Feb. 9, 2009 Deposition at 2 (stating that Teicher specifically remembered discussing self-clearing issues with Merkin)), and he suggested that Merkin not invest with Madoff. (Teicher Dep. Tr. at 48:6-12.) Jack Mayer, who worked for Teicher, recalled a conversation with Merkin from the early 90’s in which Teicher “expressed the concern that [BLMIS] could be a Ponzi scheme.” (Transcript of Oct. 11, 2011 Deposition of Jack N. Mayer21 at 64:14-65:4.) Teicher did not specifically recall that conversation but stated that “it wouldn’t surprise [him] if a conversation like that happened.” (Transcript of Oct. 29, 2013 Deposition of Victor Teicher22 at 119:8-21.)

During the same timeframe, Merkin suggested to investor Joel Ehrenkranz that he consider investing with BLMIS. Ehrenkranz was concerned that BLMIS self-cleared its own trades instead of clearing trades through a third-party such as Merrill Lynch, Morgan Stanley or Goldman Sachs, (Transcript of Mar. 20, 2014 Deposition of Joel Ehrenkranz23 at 48:4-49:7), and expressed his anxieties to Mer-kin. (Id. at 55:16-25.) Around the time he created the Ascot Entities, Merkin encouraged Ehrenkranz’s investment assuring him that he would provide the independent verification of BLMIS that Ehrenkranz had previously found to be lacking. (Id. at 58:1-20.) Ehrenkranz invested in an Ascot Entity but redeemed his investment by the end of 1995 because Madoffs ability to achieve consistently positive returns “belied logic” and made Ehrenkranz “very *746uncomfortable.” (Id. at 64:22-65:18.) Eh-renkranz had many discussions with Mer-kin opining that it was “almost impossible” for Madoff to achieve his returns. (Id. at 65:19-25.)

Merkin was aware that BLMIS employed Friehling & Horowitz—a small firm with one active accountant—as its independent auditor. (Transcript of Feb. 9, 2009 Deposition of Merkin24 at 165:12-14.) A Gabriel investor, Joshua Nash, saw BLMIS’ lack of a major accounting firm to audit BLMIS as a red flag and shared that opinion with Merkin. (Transcript of Oct. 18, 2012 Deposition of Joshua L. Nash25 at 51:10-52:8.)

While the movants tout Merkin’s Madoff File as evidence of his due diligence, the Trustee argues that at least some of the documents in it raised suspicions of fraud at BLMIS. For example, the Madoff File contained a February 1996 document titled “Comparing Promeo [sic] Manager Series B and the S&P500” (“Primeo Analysis”).26 Merkin thought that the Primeo Analysis described the performance of a Madoff feeder fund. (Merkin Dep. Tr. at 286:19-22; id. at 290:28-24.) The Primeo Analysis contained several charts that compared the performance of the S&P500-with the performance of Primeo between June 1989 and December 1995, including charts showing Primeo’s performance during months in which the S&P500 index was down. The Primeo Analysis concluded that Primeo “achievefd] consistent results, whether the S&P500 trend[ed] up or down” and that the “performance of [Pri-meo was] to a large degree independent of the gyrations of the S&P500.” (Primeo Analysis at GCC-P 0393213, GCC-P 0393219.)

The Madoff File also contained a typewritten transcript of a part of a January 14, 2002 conversation between Merkin and Madoff (“Jan. 2002 Tr.”)27 that included some curious exchanges. First, Merkin raised the issue of transparency and scalability. Investors generally know or can find out how much money their money manager is overseeing. In Madoffs case, Merkin acknowledged that neither he nor anyone else knew the amount invested with BLMIS, and that he had “given up guessing.” Madoff then asked why people cared about the amount he managed, and Merkin raised scalability, observing that “one of the tenets of the investment business” was that there was “some basic connection between size and profitability.” Merkin added that he couldn’t tell if he was one of Madoffs top clients, but conceded that “I don’t really care, because I’ve made my peace with Bernie.” (Jan. 2002 Tr. at GCC-P 0393364.)

Merkin also questioned BLMIS’ uncanny consistency. He told Madoff that “nobody really knows of anybody who does what you do who is competitive with you, at least that’s available to the investing public. ... I don’t know anybody who has a strategy just like yours and who have your returns, but not adjusted to volatility.” (Id. at GCC-P 0393365.)

The conversation also covered Madoffs unusual fee structure. Merkin’s initially guessed that Madoff charged “somewhere between 3% and 4%” of principal investment to which Madoff replied: “What would you say if I told you I don’t make *7471.5%?” (Id. at GCC-P 0393368; Merkin Dep. Tr. at 479:15-480:24.) After discussing BLMIS’ low investment fees further, Merkin finally commented, “I know why you don’t do it. Because you’re Bernie. Because that’s not the way the good Lord made you. If he made you a little differently) you would.” (Jan. 2002 Tr. at GCC-P 0393369.)

Subsequently, in June 2003, Merkin expressed his concerns about BLMIS to two representatives of “Research Company A”—a company engaged to perform ongoing due diligence for third-parties’ investments in the Ascot Entities. Since the funds had substantial exposure to BLMIS, due diligence involved analyzing BLMIS. Research Company A’s founder and its research director participated on a call with Merkin. According to the research director, (1) Merkin lacked a good explanation on the scalability of BLMIS’ option trades, and had “come to accept” that there were “things that [he didn’t] understand,” (Transcript of Nov. 22, 2013 Deposition of research director28 at 46:3-23), (2) Merkin advised to “[n]ever go long in a big way” in its BLMIS investment, and stated that “Charles Ponzi would lose out because it would be called the Madoff scheme,” (id. at 53:3-53:23; see also id. at 65:3-8), and (3)there “seem[ed] to be some probability even in [Merkin’s] mind that this could be a fraud.” (Id. at 76:1-14; see also id. at 82:13-16 (“Q. During the June 2003 call did Mr. Merkin speculate that BLMIS may be a Ponzi scheme? A. Yes.”).)29

Perhaps the most compelling piece of evidence supplied by the Trustee concerned Merkin’s reaction to the revelation of another, similar fraudulent scheme. In August 2005, a group of Connecticut investment funds known as the “Bayou Group” was exposed as a Ponzi scheme. The principals were arrested and pleaded guilty to various fraud charges. See Adams v. Marwil (In re Bayou Grp., L.L.C.), 363 B.R. 674, 677-78 (S.D.N.Y. 2007), aff'd, 564 F.3d 541 (2d Cir. 2009). In the wake of the Bayou Group Ponzi scheme, Merkin circulated an email on September 7, 2005 to himself, Rick Annis, Launny Steffens, Greg Ho and David S. Gottesman.30 The subject of the email was, “Issues we should of [sic] asking each of our money managers,” and listed the following “issues”:

(1) Clearing firm

(2) Unusual, unconventional, or self-owned broker-dealer relationships

(3) Auditing firm

(4) Law Firm

(5) Use of leverage

(6) Pricing of Fund (level of marketable securities, marketable but thin, and privates)

(Hoang Deck, Ex. 49.)

Merkin knew that BLMIS met three of these criteria. It cleared its own trades (a subject of numerous warnings in the past), it used a small accounting firm that could not possibly handle BLMIS’ auditing work (also the subject of a past warning) and *748BLMIS used an unusual fee structure that deprived it of substantial revenue (which perplexed Merkin).

Merkin also recognized that the Bayou debacle would trigger questions about Ma-doff. Madoff and Merkin had a conversation about the Bayou Group fraud after it was exposed:

[Merkin]: We got our share of a couple of questions about Bayou, which I’m sure you got one too, and ...

[Madoff]: Questions from who?

[Merkin]: You know, I always tell people, as soon as there is a scam in the hedge fund industry, someone’s gonna call about Bernie. ... It’s guaranteed.

(Hoang Deck, Ex. 21 at 3:1-9.)

2. The Second Prong

The Trustee also provided evidence supporting the inference that Merkin consciously avoided confirming his suspicions about BLMIS’ fraudulent operations. In fact, Merkin admitted that he stopped asking Madoff questions. While discussing issues going to the scalability of BLMIS’ investment operation in 2002, Merkin proclaimed that “you could stop caring” because Madoff had “been defying gravity for long enough,” and, in fact, “[he didn’t] really care, because [he’d] made [his] peace with Bernie.” (Jan. 2002 Tr. at GCC-P 0393864.)

Merkin also advised others to avoid asking about BLMIS:

I can always tell when people are going to ask me about Bernie, because when people come to the office, ask me what we’re doing and I give them a little sense of it, and they look around and say I know I’m not supposed to talk about this, but can I ask you the following question? So I told one person, look, you can ask me how Bernie does it and that’s fine, but when are you going to ask Bernie? So he said, if I asked him, he’d throw me out. I said,, look, all I can tell you is don’t ask so many questions. Sit tight. And that’s'what I tell everybody.

{Id. at GCC-P 0393371—GCC-P 0399372 (emphasis added).)

His post-Bayou conduct may be the most puzzling. As set forth above, Merkin sent an email to other fund managers listing indicia of fraud that they should be asking their money managers about. Mer-kin knew that several of the red flags he identified applied to BLMIS, but there is no evidence that he did anything to confirm that BLMIS was a legitimate operation and not a Ponzi scheme like Bayou.

Finally, according to the Trustee’s expert Dr. Steve Pomerantz, due diligence consistent with industry norms would have revealed numerous red flags related to the Merkin funds’ BLMIS accounts. (Initial Expert Report of Dr. Steve Pomerantz,31 at ¶¶2, 375.) He explained that on-going diligence of an investment requires a money manager to investigate indicia of fraud. (Id. at ¶¶ 66-73.) As noted, there is evidence implying that Merkin did not conduct that investigation despite his suspicions.

C. Count Two (Avoidance of Intentional Fraudulent Transfers)

With this background, I turn to the remaining Counts that the Defendants ask me to dismiss. Count Two of the TAC seeks to avoid and recover withdrawals made within two-years of the Filing Date from BLMIS to Ascot Partners’ BLMIS account in the amount of $280,000,000 (the “Transfers”) as intentional fimidulent transfers pursuant to 11 U.S.C. *749§ 548(a)(1). Such claims are subject to a defense to the extent that the transferee took “for value and in good faith.” 11 U.S.C. § 548(c). The District Court has ruled that the Trustee must plead and prove the inapplicability of this defense. SIPC v. BLMIS (In re BLMIS), 516 B.R. 18, 24 (S.D.N.Y. 2014) (“Good Faith Decision”) (“[T]he Court concludes that, in a SIPA proceeding such as this, a defendant may succeed on a motion to dismiss by showing that the complaint does not plausibly allege that that defendant did not act in good faith.”). Here, Ascot Partners gave “value” because the Transfers constituted the return of principal. Hence, the sole factual issue is whether Ascot Partners took the transfers in “good faith.” Picard v. Katz, 462 B.R. 447, 453 (S.D.N.Y. 2011).32

In the context of the BLMIS SIPA case, “ ‘good faith’ means that the transferee neither had actual knowledge of the [BLMIS] fraud nor willfully blinded himself to circumstances indicating a high probability of such fraud.” Good Faith Decision, 516 B.R. at 23. In the Dismissal Decision, the Court ruled that the Trustee failed to plead “actual knowledge,” 515 B.R. at 140-41, so the remaining inquiry for purposes of Count Two is whether Merkin, as the general partner of Ascot Partners, willfully blinded himself to the BLMIS fraud.33

The willful blindness inquiry asks whether an individual took deliberate action to avoid confirming a fact after learning that there was a high probability that such fact was true. Global-Tech, 563 U.S. at 769, 131 S.Ct. 2060; accord Meoli v. Huntington Nat'l Bank (In re Teleservices Grp., Inc.), 444 B.R. 767, 814-15 (Bankr. W.D. Mich. 2011) (“Including willful blindness as a substitute for actual knowledge, though, adds a temporal aspect to the analysis.”); cf. Woodman v. WWOR-TV, Inc., 411 F.3d 69, 84 n.14 (2d Cir. 2005) (The doctrine of conscious avoidance “does not tolerate a person shutting his eyes to a fact .., after realizing its high probability. ... ”) (emphasis in original). Although Merkin has proffered evidence of early and in some cases pre-investment due diligence, the question is what did he learn about BLMIS as the years passed, and what did he do with that information.

As noted, the evidence supports the inference that Merkin strongly suspected that Madoff was running a Ponzi scheme based upon what he learned, what he was told and what he said. Merkin was warned by Teicher, Ehrenkranz and Nash of BLMIS red flags including the impossibly consistent returns, the self-clearing of trades and the use of a too-small accounting firm to conduct audits. Merkin also learned that BLMIS’ returns were inconsistent with the expected returns of an investor employing the SSC Strategy, Ma-doff s investment strategy lacked scalability, the amount of assets BLMIS had under management was unknown and BLMIS charged management fees that were significantly below market. In addition, Mer-kin advised two representatives of Research Company A during a 2Ó03 meeting not to make BLMIS a large part of their portfolio despite the consistent returns and alluded to BLMIS being a Ponzi scheme.34

*750The Defendants point to inconsistent statements by Teicher suggesting that Merkin was fo.oled like everyone else, (Merkin Brief at 16), and inconsistent versions of the June 2003 telephone call given by the two Research Company A representatives, (Merkin Brief at 16-17; Ascot Brief at 11), but these inconsistencies manifest the inherent factual disputes regarding the question of Merkin’s state of mind. In addition, Merkin testified that he was reassured by the ease with which investors could redeem their funds from BLMIS, but when the Ascot Entities received redemption requests from their investors and needed to draw funds from BLMIS, Madoff called GCC apparently to question the redemptions and complain. Merkin returned Madoff s call and eventually “apologized, and smoothed things over.” (Hoang Deck, Ex. 22.)

The Merkin Defendants also claim that the maintenance of the Madoff File evidences Merkin’s diligence. (Merkin Brief at 9.) They cite to their Supplemental Responses to interrogatories for support, (see Supplemental Responses at 3^4 (supplemental answer to interrogatory nos. 1,2,3,7,8,9,10,11, and 13)), but the Supplemental Responses were signed only by the attorney and not Merkin as required under Federal Civil Rule 33(b)(5). See 7 Claudia WlLKEN & ROBERT M. BLOOM, MOORE’S FEDERAL PRACTICE § 33.104 (3d ed. 2016) (“[D]espite counsel’s substantial assistance, it is not proper or acceptable for the attorney alone to sign or verify responses.”). Thus, they are not entitled to any weight for purposes of the Motions but even if they were, the fact that Merkin kept a file on Madoff, including a transcript of a part of the January 2002 phone conversation with Madoff,35 raises more questions than it answers.

The Defendants point out as well that Merkin and his family lost $110 million from their personal investment in his funds. (Merkin Dep. Tr. at 636:1-7 (stating that he and his family had exposure of roughly $110 million across the funds).) They ask the Court to infer that Merkin would not have put his and his family’s money at risk if he was highly suspicious of BLMIS. However, Merkin’s deposition testimony as to the losses was imprecise, (e.g., id. at 639:22-640:5 (thinks amounts invested by entity called JEM 2000 Trust was associated with him); id. at 640:18-641:2 (did not know whether investments by entities called .Merkin Trusts and Mer-kin Trusts 2 were included in the loss total); id. at 641:14-19 (stating that amount invested by his mother-in-law “[m]ight have been” included)), and any favorable inference is undercut by the $685 million in fees Merkin received through 2007 for managing the same funds in which he and his family invested. (Hoang Decl., Ex. 17 at 23.)

Despite the knowledge that Madoff was likely operating a fraudulent enterprise, the evidence supports the inference that Merkin did nothing to allay his suspicions. His ongoing due diligence relied on GCC’s reports and BDO’s audits to alleviate his concerns but (i) GCC’s monthly process consisted of matching the BLMIS trade confirmations against the BLMIS monthly *751statements (or as it turned out, comparing one set of fraudulent documents with another), (Gordon Dep. Tr. at 36:21-37:1), and (ii) BDO’s audits were limited to Mer-kin’s funds and did not extend to confirming BLMIS’ trading activity. (Castro Dep. Tr. at 116:12-22.) Moreover, the evidence indicates that Merkin gave up seeking answers from Madoff. During his January 2002 conversation with Madoff, Merkin stated that he had “given up guessing” about the scalability of Madoffs investment advisory operation, and admitted, “I don’t really care, because I’ve made my peace with Bernie.” (Jan. 2002 Tr. at GCC-P 0393364.) Merkin advised others to follow suit telling them to “[s]it tight” and to not “ask so many questions.” (Id. at GCC-P 0393371.) Finally, after the Bayou Ponzi scheme was discovered, Merkin warned others to advise their money managers to be wary of certain indicia of fraud that he knew applied to BLMIS, but there is no evidence that he followed-up with BLMIS and there is evidence that he gave up asking Madoff.

“Summary judgment is notoriously inappropriate for determination of claims in which issues of intent, good faith and other subjective feelings play dominant roles.” Krishna v. Colgate Palmolive Co., 7 F.3d 11, 16 (2d Cir. 1993) (citation and internal quotation marks omitted); Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.) (recognizing that “summary judgment is ordinarily inappropriate where an individual’s intent and state of mind are implicated”), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985). While summary judgment may nonetheless be granted on a “state of mind” issue when the non-movant fails to come forward with contrary evidence, Meiri, 759 F.2d at 998 (“The summary judgment rule would be rendered sterile, however, if the mere incantation of intent or state of mind would operate as a talisman to defeat an otherwise valid motion.”), the Trustee has adduced evidence supporting the inference that Merkin was aware of the high probability that BLMIS was a Ponzi scheme and turned his back. In short, Merkin’s state of awareness and what he did present disputed issues of fact.

Accordingly, the motion for summary judgment dismissing Count Two is denied.

D. Count Nine (Recovery of Subsequent Transfers)

Count Nine seeks to recover subsequent transfers of the avoided initial transfers pursuant to Bankruptcy Code § 550(a)(2) from GCC and Ascot Fund, as well as subsequent transfers to Merkin or for his benefit.36 The Trustee offered evidence that these Defendants received subsequent transfers. The Trustee’s expert opined that the Defendants commingled their bank accounts with BLMIS funds and funds from other sources. (Expert Report of Lisa M. Collura, CPA, CFE, CFF,37 at ¶ 62.) As a result, she applied five tracing methods to determine the amounts subsequently transferred to each subsequent transferee, and amounts further subsequently transferred to or for the benefit of Merkin. (Id. at ¶¶ 80-133.) The Defendants’ expert responded that only two of the tracing methodologies were appropriate in this case. (Expert Rebuttal Report of Paul K. Meyer TM Financial Forensics, LLC,38 at ¶¶ 36-45.) Thus, the amounts of the transfers *752and the appropriate methodology for their calculation are disputed issues for trial, although it does not appear that the fact of the subsequent transfers is.

The more difficult issue relates to the imputation of Merkin’s willful blindness to the Ascot Fund. Bankruptcy Code § 550(b)(1) provides a complete defense to a subsequent transferee to the extent he “takes for value ... in good faith, without knowledge of the voidability of the transfer.” Accord Picard v. Legacy Capital Ltd. (In re BLMIS), 548 B.R. 13, 37-39 (Bankr. S.D.N.Y. 2016) (describing application of the section 550(b)(1) defense to BLMIS subsequent transfer claims). The “good faith” requirements in Bankruptcy Code §§ 548(c) and 550(b)(1) are the same—ie. the subsequent transferee must not know or willfully blind himself to the fact that BLMIS was not engaged in the actual trading of securities. Good Faith Decision, 516 B.R. at 23.

While the Court observed in the Dismissal Decision that it did not appear Merkin’s knowledge could be imputed to Ascot Fund, 515 B.R. at 151, the evidence submitted with the Motions shows otherwise. From February 20, 1992 until December 31, 2002, GCC served as the Ascot Fund’s investment advisor. (Termination Agreement39 at AF00000187.) The formal termination of GCC’s role as Ascot Fund’s investment advisor coincided with the reorganization of Ascot Fund to become a feeder-entity for Ascot Partners. Merkin, as GCC’s president, sent a letter on November 11, 2002 to Ascot Fund investors informing them that the new master-feeder structure would make the investing process “cheaper and more efficient.” (GCC Letter to Ascot Fund Investors40 at GCC-NYAG 0031102.) Merkin also informed Ascot Fund investors that with GCC’s termination, investment advisory fees would instead be paid to Ascot Partners—where Merkin served as general partner. (Id.)

Despite the changes, Merkin “assured” Ascot Fund investors that he would “continue to direct the management and investing of Ascot Partners as its sole General Partner, [and Merkin did not] anticipate that these changes [would] have any substantive impact on investors in either the offshore [ie. Ascot Fund] or domestic [ie. Ascot Partners] fund.” (Id. (emphasis added).)41 The letter further promised delivery of a revised prospectus, (id. at GCC-NYAG 0031103), which was sent in January 2003 and provided, inter alia:

• Shareholders in Ascot Funds held non-voting shares, and all voting shares were held by GCC, (Ascot Fund Prospectus42 at BS00020961 & BS00020973) (emphasis added);

• The “general purpose” of Ascot Fund was to achieve above average returns through its investment in Ascot Partners while reducing risk as deemed appropriate by Merkin, (id, at BS00020961); and

• Merkin implemented Ascot Partners’ investment policies and objectives, and could alter investment strategies in his discretion. (Id. at BS00020962 & BS00020970.)

Deposition testimony of Ascot Fund directors corroborated the prominent role Merkin—through his role as general part*753ner of Ascot Partners (the master fund) and president of GCC (holding all Ascot Fund voting shares)—had in Ascot Fund. (Transcript of Jan. 13, 2015 Deposition of Don M. Seymour43 at 77:17-23 (“The governance of [Ascot Partners] is by [Merkin], I was not the general partner of Ascot Partners. I was a director of Ascot Fund. [Ascot Fund] invested in the general partner, of which I have no responsibility for. And that was under the complete discretion of Mr. Merkin, as the general partner.”); id. at 92:5-9 (“The voting shares of [Ascot Fund] was held by [Merkin], And the voting shares actually controlled [Ascot Fund], including the board.”); (Transcript of the Jan. 14, 2015 Deposition of Aldo Ghisletta44 at 79:17-80:2 (“Q: Could the Board of Directors of Ascot Fund have decided to change Ascot Fund’s investment strategy without the approval of Mr. Merkin? ... A: No.”).) Thus, there are disputed issues of material fact pertaining to the imputation of Merkin’s knowledge to Ascot Fund.

The Merkin Defendants argue that subsequent transfer claims against them should be dismissed for a separate reason. (Merkin Brief at 27-28; Merkin Reply at 19-22.) They maintain that Ascot Partners has or will have an allowed net equity claim of $506 million consisting of (1) a $226 million customer claim (the “SIPA Claim”), and (2) a $280 million claim under Bankruptcy Code § 502(h). The Trustee has already distributed 55.685% (as of the filing of the Merkin Brief45), but has not distributed anything to Ascot Fund because the allowance of the SIPA Claim is disputed for the reasons discussed shortly. The Merkin Defendants compute that Ascot Partners will recover at least $281 million on their SIPA Claim and 502(h) claim which will be sufficient to satisfy the Trustee’s judgment. In fact, with the latest interim distribution, the combined value of the SIPA Claim and section 502(h) claim is worth approximately $303 million.

This argument fails as a matter of law for several reasons. First, the Trustee may recover avoided transfers from an initial transferee or a subsequent transferee, 11 U.S.C. § 550(a)(1)—(2), and need not seek recovery first from the initial transferee. IBT Int’l, Inc. v. Northern {In re IBT Int’l Admin. Servs., Inc.), 408 F.3d 689, 706 (11th Cir. 2005) (“In short, once the plaintiff proves that an avoidable transfer exists he can then skip over the initial transferee and recover from those next in line.”); see SIPC v. BLMIS (In re BLMIS), 501 B.R. 26, 31 (S.D.N.Y. 2013) (“[T]here is no basis in the language of either section 550(a) or in the Bankruptcy Code’s avoidance provisions to assume that avoidance actions must be brought—or fully adjudicated—against an initial transferee for recovery proceedings to go forward against a subsequent transferee.”); 5 Alan N. Resnick & Henry J. Sommer, CollieR on BANKRUPTCY ¶ 550.02[1] at 550-6 (16th ed. 2016) (“The better view, adopted by the majority of courts, is that a transfer may be found avoidable and a recovery may be had from a subsequent transferee without suing the initial transferee.”).

Second, the Merkin Defendants ignore Bankruptcy Code § 502(d). Section 502(d) *754of the Bankruptcy Code provides that “the court shall disallow any claim of any entity from which property is recoverable under section ... 550 ,. of this title or that is a transferee of a transfer avoidable under section ... 548 ... of this title, unless such entity or transferee has paid the amount, or turned over any such property, for which such entity or transferee is liable under section ... 550 ... of this title.” If the Trustee avoids the transfers, Ascot Partners’ SIPA Claim will be automatically disallowed. Because of this possibility, the Trustee has held back the distributions that would otherwise be payable to Ascot Partners. In order to receive any distribution, Ascot Partners must first return the transfers, ie., write a $280 million check to the Trustee. Obviously, it cannot pay the Trustee with a distribution it will not receive unless it first makes that payment.

Third, and for like reason, Bankruptcy Code § 502(h) will give Ascot Partners a claim only to the extent the Trustee recovers the avoided Transfers from Ascot Partners. Bankruptcy Code § 502(h) provides that

[a] claim arising from the recovery of property under section ... 550 ... of this title shall be determined, and shall be allowed under subsection (a), (b), or (c) of this section, or disallowed under subsection (d) or (e) of this section, the same as if such claim had arisen before the date of the filing of the petition.

11 U.S.C. § 502(h) (emphasis added). Furthermore, unless Ascot Partners returns the entire Transfer, its § 502(h) claim will be disallowed under § 502(d).

Accordingly,' the motion for summary judgment dismissing Count Nine is granted as to Ascot Partners but is otherwise denied.

E. Count Ten (General Partner Liability)

Count Ten seeks to impose general partner liability against Merkin for the debts of Ascot Partners, a Delaware partnership. See Dismissal Decision, 515 B.R. at 153. The Merkin Defendants argue that general partner liability cannot serve as a basis for recovery of an avoidance claim under the Bankruptcy Code. (Merkin Brief at 27 n.7; Merkin Reply at 22.) The Merkin Defendants previously made this argument in connection with their first motion to dismiss and lost it. Judge Lif-land, then presiding over the BLMIS liquidation, held that the Trustee “is empowered under section 550(a) of the Code to recover avoided transfers from a partnership as initial transferee, or from the general partner of a partnership under applicable state partnership law.” Picard v. Merkin (In re BLMIS), 440 B.R. 243, 269 (Bankr. S.D.N.Y. 2010), leave to appeal denied, No. 11 me 0012 (KMW), 2011 WL 3897970 (S.D.N.Y. Aug. 31, 2011); accord Shubert v. Stranahan (In re Penn. Gear Corp.), Adv. P. Nos. 03-940, 03-0942 (DWS), 2008 WL 2370169, at *9 (Bankr. E.D. Pa. Apr. 22, 2008). That ruling is law of the case, and the Merkin Defendants have not explained why it should be reconsidered.46

The Merkin Defendants also argue that the Trustee could not execute a judgment against Merkin as a general partner of Ascot Partners because the Trustee cannot *755meet the criteria set forth under Delaware law. (Merkin Reply at 22-23.) According to Title 6, § 17-403(d) of the Delaware Code:

A judgment creditor of a general partner of a limited partnership may not levy execution against the assets of the general partner to satisfy a judgment based on a claim against the limited partnership unless:

(1) A judgment based on the same claim has been obtained against the limited partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;

(2) The limited partnership is a debtor in bankruptcy;

(3) The general partner has agreed that the creditor need not exhaust the assets of the limited partnership;

(4) A court grants permission to the judgment creditor to levy execution against the assets of the general partner based on a finding that the assets of the limited partnership that are subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of the assets of the limited partnership is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers; or

(5) Liability is imposed on the general partner by law or contract independent of the existence of the limited partnership.

Del. Code Ann. tit. 6, § 17-403(d)(l)—(5) (West 2016).

The Merkin Defendants’ raised this argument for the first time in their reply brief, and the Court will not consider it. Knipe v. Skinner, 999 F.2d 708, 711 (2d Cir. 1993) (“Arguments may not be made for the first time in a reply brief’).47 Furthermore, the argument rests, in part, on the debunked notion that Ascot Partners will be able to satisfy the Trustee’s judgment. At a minimum, questions of fact exist as to whether Ascot Partners’ assets are insufficient to pay the judgment (and the Court therefore grants permission to execute the judgment against Merkin’s assets) or the Trustee’s writ of execution against Ascot Partners will be returned unsatisfied. In either case, Merkin will be liable under Delaware law.

Accordingly, the motion for summary judgment dismissing Count Ten is denied.

F. Count Thirteen (Equitable Subordination)

Count Thirteen seeks to equitably subordinate Ascot Partners’ customer claim pursuant to section 510(c) of the Bankruptcy Code. The Court discussed equitable subordination in detail in the Dismissal Decision, and denied dismissal because the TAC had adequately pled inequitable conduct. 515 B.R. at 157-61. As with the willful blindness inquiry, there are triable issues of fact regarding Mer-kin’s inequitable conduct, and summary judgment is thus inappropriate. Katz, 462 B.R. at 456 (the Trustee may subordinate claims by “proving that the defendants invested with Madoff Securities with knowledge, or in reckless disregard, of its fraud”).

Accordingly, the motion for summary judgment dismissing Count Thirteen is denied.

*756CONCLUSION

For the reasons stated, the Motions are denied except with respect to the portion of Count Nine seeking to recover subsequent transfers from Ascot Partners. The Court has considered the Defendants’ remaining arguments and concludes that they lack merit. The parties are directed to submit a consensual order, or in the- absence of consent, to settle an order on notice. The parties should also draft a pretrial order using the form linked to the Court’s chambers rules, and schedule a final pre-trial conference.