Touchstone Group, LLC v. Rink et al

Filing 227

ORDER granting 220 MotMotion for Preliminary Approval of Settlement; Preliminary Certification of the Settlement Class; and Authorization to Disseminate Class Notice by Judge Christine M. Arguello on 3/21/14. The Fairness Hearing is set for 7/18/2014 at 09:00 AM before Judge Christine M. Arguello. (dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 11-cv-02971-CMA-KMT
TOUCHSTONE GROUP, LLC,
MARGRET GREENSPAN, and
RONALD GREENSPAN, on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
DANIEL J. RINK,
TATUM, LLC,
ASTOR, WEISS, KAPLAN & MANDEL,
CHRISTOPHER FLANNERY, ESQ.,
STEVEN GRANOFF,
KRASSENSTEIN & UNGER, LLC,
ESTILL & LONG, LLC,
CARBON DIVERSION, INC.,
TRACS GROWTH INVESTMENT, and
JOHN DOES 1-100,
Defendants.

ORDER GRANTING PRELIMINARY APPROVAL OF CLASS SETTLEMENT,
AUTHORIZING DISSEMINATION OF CLASS NOTICE, AND SETTING A HEARING
ON FINAL APPROVAL

WHEREAS, Plaintiffs Touchstone Group LLC, Margret and Ronald Greenspan,
and the Released Parties: (1) Astor, Weiss, Kaplan & Mandel, LLP and Christopher P.
Flannery; (2) Krassenstein & Unger, LLC and Steven L. Granoff; (3) Estill & Long, LLC;
(4) Daniel Rink (“Rink”); and (5) Tatum, LLC (“Tatum”) (collectively “Released Parties”)
have entered into Settlement Agreements between Plaintiffs, the Settlement Class, and
the Released Parties to resolve the Mantria investor class action.
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WHEREAS, Plaintiffs have filed their Motion for Preliminary Approval of
Settlement; Preliminary Certification of the Settlement Class; and Authorization to
Disseminate Class Notice and the Court has reviewed and considered the Motion,
the supporting brief, the Settlement Agreements, and all exhibits thereto including
the proposed class notice (the “Class Notice”), and finds there is a sufficient basis for
granting preliminary approval of the Settlement Agreements, preliminarily certifying the
Settlement Class, authorizing Class Notice to be disseminated to the Settlement Class,
and setting a hearing at which the Court will consider whether to grant final approval of
the settlement;
IT IS HEREBY ORDERED as follows:
1.

Pursuant to the Plaintiffs’ Motion for Preliminary Approval of the

Settlement Agreements, the Court finds preliminarily and conditionally that the
necessary prerequisites for certifying the Settlement Class under Fed. R. Civ. P.
23(a)(1-4) and (b)(3) are satisfied; and the Settlement Class shall be preliminarily and
conditionally defined as:
ALL PERSONS OR ENTITIES WHO INVESTED IN ANY
SECURITIES ISSUED OR PROMOTED BY MANTRIA
CORPORATION OR SPEED OF WEALTH, LLC, OR ANY
OF THEIR SUBSIDIARIES OR AFFILIATES SINCE
SEPTEMBER 2007 AND INCURRED A NET LOSS OF
THEIR INVESTMENTS (THE “SETTLEMENT CLASS”).
EXCLUDED FROM THE SETTLMENT CLASS ARE
DEFENDANTS, MANTRIA CORPORATION, SPEED OF
WEALTH LLC AND ANY OF THEIR OFFICERS,
EMPLOYEES, OR AFFILIATES.
2.

The Court preliminarily approves the proposed settlement, finding that the

terms of the July 10, 2013, and the February 14, 2014, Settlement Agreements between
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Plaintiffs, the Settlement Class and the Released Parties are reasonable, just, fair, and
adequate to warrant dissemination of the Class Notice to the Settlement Class. The
Court finds that the Settlement Agreements contain no obvious deficiencies; are within
the range of possible approval; and that the parties entered into the Settlement
Agreements in good faith, following arm’s length negotiations over the course of many
months, and with the assistance of an independent mediator, The Hon. Richard W.
Dana (Ret.).
3.

The two Settlement Agreements propose to create a total Class

Settlement Fund of $6,050,000 to be distributed exclusively to Mantria’s investors after
deduction of Court approved attorneys’ fees, expenses, and any incentive payments to
the Class Representatives. The Released Parties have agreed to fund the Class
Settlement Fund with the following payments: (1) Tatum, LLC and Daniel J. Rink $5,100,000; (2) Astor, Weiss, Kaplan & Mandel, LLP and Christopher P. Flannery $750,000; (3) Krassenstein, Granoff and Unger and Steven L. Granoff - $100,000; and
(4) Estill & Long, LLC - $100,000.
4.

As described during the March 18, 2014, Court hearing, the Court-

appointed Mantria Receiver also reached a settlement for a mutual release with Tatum,
LLC and Daniel J. Rink for a separate payment of $800,000. The Receivership will
include these proceeds in the Receivership Estate for distribution to Mantria’s investors,
creditors and employees after the Receiver obtains Court approval of the settlement
and proposed distribution plan. In exchange for this payment, and in conjunction with
an agreement reached amongst the parties, the Receiver has agreed to dismiss his
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claims against Astor, Weiss, Kaplan & Mandel, LLP, Christopher P. Flannery,
Krassenstein, Granoff and Unger and Steven L. Granoff.
5.

The Court appoints Saltz Mongeluzzi Barrett & Bendesky, P.C. and

Hagens Berman Sobol Shapiro LLP as Class Counsel under Rule 23(g) and
Touchstone Group, LLC, Margret and Ronald Greenspan as Class Representatives.
6.

The Court hereby approves the form and procedures for disseminating the

Class Notice of the proposed settlement to the Settlement Class as set forth in the
Settlement Agreement. The Court finds that the notice to be given constitutes the best
notice practicable under the circumstances, and constitutes valid, due, and sufficient
notice to the Settlement Class in full compliance with the requirements of applicable law
and due process.
7.

Strategic Claims Services is hereby appointed as the Settlement

Administrator and shall be responsible for administering the settlement in accordance
with the provisions of the Settlement Agreement. The Settlement Administrator shall
mail by standard first-class mail the Class Notice and post the Class Notice on a
designated Class Website (www.mantriaclasssettlement.com). The Court reserves the
right to amend the Class Notice approved by this Order as may be required to be
consistent with the Settlement Agreement and any subsequent orders that the Court
may enter in connection with the notice, opt-out, and objection procedures, Settlement
Administration, or other matters related to the Settlement Agreement.
8.

Any Settlement Class Member shall have the right to opt out of the

Settlement Class and the settlement by sending a written request either by letter or
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email requesting exclusion from the Settlement Class to the Settlement Administrator as
set forth in the Class Notice. If sent by regular mail, it must be postmarked no later than
the deadline provided for such exclusions stated in the Class Notice. To be effective,
the letter or email requesting exclusion from the Settlement Class must include the
Settlement Class Member’s full name, address, telephone number, date of birth,
signature, estimated amount of losses sustained from the Scheme, and state his or her
desire to be excluded from the Settlement Class. Any Settlement Class Member who
does not submit a timely and valid request for exclusion shall be subject to and bound
by the Settlement Agreement and every order or judgment entered concerning the
Settlement Agreement.
9.

Any Settlement Class Member who objects to final approval of the

Settlement Agreement and/or the amount of attorneys’ fees must send a letter to the
Settlement Administrator and the Clerk of Court as set forth in the Class Notice no later
than the deadline provided for such objections in the Class Notice. Each objection must
include the Settlement Class Member’s full name, address, telephone number, date of
birth, estimated amount of losses sustained from the Scheme, and signature, and it
must state all the reasons why the Settlement Class Member objects to the settlement.
If the Settlement Class Member has objected to any other class action lawsuit during
any time within the last five years, he/she must identify each lawsuit and describe the
outcome of the objection.
10.

The Court shall hold a Fairness Hearing addressing the final approval of

the Settlement Agreement, an award of fees and expenses to Class Counsel, and
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incentive payments to the Class Representatives, in Courtroom A602, for the United
States District Court for the District of Colorado, Alfred A. Arraj United States
Courthouse, 901 19th Street, Denver, CO. At the Fairness Hearing, the Court will
consider: (i) whether the settlement should be finally approved as fair, reasonable, and
adequate for the Settlement Class; (ii) whether a judgment granting approval of the
settlement and dismissing the lawsuit with prejudice as to Released Parties should be
entered; and (iii) whether Class Counsels’ application for attorneys’ fees and expenses
and incentive awards for the Class Representatives should be granted.
11.

Any Settlement Class Member wishing to speak at the Fairness Hearing

must send a letter stating his or her desire to appear in person, or through counsel, at
the Fairness Hearing to the Clerk of Court and the Settlement Administrator no later
than the deadline for such notice of intention to appear as set forth in the Class Notice.
Such notice of intention to appear must include the Settlement Class Member’s full
name, address, telephone number, and signature.
12.

The following schedule shall govern these settlement proceedings:
(i)

Within fourteen (14) days of this Order, and pursuant to the Section

10.8 of the February 14, 2014, Settlement Agreement between the Plaintiffs, Settlement
Class, Tatum, LLC, Rink, and the Receiver, the Receiver shall provide the presently
available investor/investment loss information and documents to Class Counsel and to
Counsel for Rink and Tatum to aid in determining the amount of distributions to
individual investors and to confirm the amount of any claim by an investor opting out of
the class settlement.
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(ii)

The Settlement Administrator must cause individual notice,

substantially in the form attached to the Declaration of Anthony D. Shapiro dated March
20, 2014, as Exhibit A, to be mailed via first-class mail to all reasonably identifiable
Settlement Class Members, and posted to the Class Website on or before April 4,
2014.
(iii)

The parties to the Settlement Agreement shall submit any motions

for final approval of the proposed settlement, including any for the approval of attorneys’
fees and expenses for Class Counsel and incentive awards of Named Plaintiffs, prior to
the Final Approval Hearing on or before June 9, 2014.
(iv)

Settlement Class Members must postmark any letter objecting to

the proposed settlement, or requesting exclusion from the proposed settlement, or
stating they wish to appear at the Fairness Hearing on or before June 30, 2014;
(v)

any reply memorandum in support of the Settlement or attorneys’

fees shall be filed seven (7) days before the Fairness Hearing or before July 11, 2014;
(vi)

the Fairness Hearing shall be held on July 18, 2014, at 9:00 AM;

(vii)

All Claim Forms shall be postmarked by Settlement Class Members

and

no later than 75 days following the Court’s order granting final approval of the
settlement.
13.

Non-substantive changes and changes necessary to correct any

inconsistency between the approved forms and the Settlement Agreements may be
made by the mutual agreement of Class Counsel and counsel for the Released Parties.
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14.

All costs incurred in connection with distribution and publishing the Class

Notice (“Notice and Administration Costs”), as well as administering the settlement,
shall be paid out of the Settlement Class Fund as provided by the terms of the
Settlement Agreements.
15.

The Court reserves the right to adjourn the date of the Final Fairness

Hearing without further notice to the Class, and retains jurisdiction to consider all further
applications arising out of or in connection with the proposed settlement. The Court
may approve the settlement, with such modification as may be agreed to by the Parties,
if appropriate, without further notice.
SO ORDERED this

21st

day of March, 2014.
BY THE COURT:

_________________________________
CHRISTINE M. ARGUELLO
United States District Judge

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