Securities and Exchange Commission v. Nadel et al

Filing 1088

Unopposed MOTION for Settlement re: Wiand, as Receiver v. Donald Rowe, et al. (8:10-cv-245), specifically, settlement with Band Weintraub, P.L. by Burton W. Wiand. (Attachments: # 1 Exhibit A - Executed Settlement Agreement)(Morello, Gianluca)

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UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. Case No. 8:09-cv-87-T-26TBM ARTHUR NADEL, SCOOP CAPITAL, LLC, SCOOP MANAGEMENT, INC. Defendants, SCOOP REAL ESTATE, L.P. VALHALLA INVESTMENT PARTNERS, L.P., VALHALLA MANAGEMENT, INC. VICTORY IRA FUND, LTD, VICTORY FUND, LTD, VIKING IRA FUND, LLC, VIKING FUND, LLC, AND VIKING MANAGEMENT, Relief Defendants. / RECEIVER’S MOTION TO APPROVE SETTLEMENT Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of certain specific disputes that have arisen from the Receiver’s garnishment and other collection efforts relating to a judgment entered in the Receiver’s favor in Burton W. Wiand, as Receiver v. Donald Rowe et al., Case No.: 8:10-cv-245-T-17MAP (M.D. Fla.) (the “Rowe Action”), on the basis of the Settlement Agreement attached as Exhibit A. MEMORANDUM IN SUPPORT The Securities and Exchange Commission (the “Commission” or “SEC”) instituted this action to “halt [an] ongoing fraud, maintain the status quo, and preserve investor assets . . . .” (Dkt. 1, Compl., ¶ 7.) Burton W. Wiand was appointed by this Court as the Receiver for Defendants other than Arthur Nadel and for Relief Defendants. (See Order Reappointing Receiver (Dkt. 140).) Additionally, the Receivership was expanded to include Venice Jet Center, LLC and Tradewind, LLC (Dkt. 17); Laurel Mountain Preserve, LLC, Laurel Preserve, LLC, the Marguerite J. Nadel Revocable Trust UAD 8/2/07, and the Laurel Mountain Preserve Homeowners Association, Inc. (Dkt. 44); The Guy-Nadel Foundation, Inc. (Dkt. 68); Lime Avenue Enterprises, LLC, and A Victorian Garden Florist, LLC (Dkt. 81); Viking Oil & Gas, LLC (Dkt. 153); Home Front Homes, LLC (Dkt. 172); Traders Investment Club (Dkt. 454); Summer Place Development Corp. (Dkt. 911); Respiro, Inc. (Dkt. 916); and Quest Energy Management Group, Inc. (Dkt. 1024). All of the entities in receivership are collectively identified herein as the Receivership Entities. Pursuant to the Order Reappointing Receiver (Doc. 493), the Receiver has the duty and authority to: 2. Investigate the manner in which the affairs of the Receivership Entities were conducted and institute such actions and legal proceedings, for the benefit and on behalf of the Receivership Entities and their investors and other creditors as the Receiver deems necessary . . . against any transfers of money or other proceeds directly or indirectly traceable from investors in the Receivership Entities; provided such actions may include, but not be limited to, seeking imposition of constructive trusts, disgorgement or profits, recovery and/or avoidance of fraudulent transfers under Florida Statute § 726.101, et. seq. or otherwise, rescission and restitution, the collection of debts, and such orders from this Court as may be necessary to enforce this Order. 2 Further, the Order Reappointing Receiver (at paragraph 6) authorizes the Receiver to “[d]efend, compromise or settle legal actions ... in which the Receivership Entities or the Receiver is a party ... with authorization of this Court ....” The Receiver sued Donald Rowe, individually (“D. Rowe”) and as Trustee of The Wall Street Digest Defined Benefit Pension Plan (the “Plan”); Joyce Rowe (“J. Rowe,” and collectively with D. Rowe, the “Rowes”); and one of the Rowes’ entities, Carnegie Asset Management, Inc. (“CAM”), to recover sums received from the Receivership Entities with a view to marshaling assets for an eventual distribution to investors with verifiable claims in an equitable and appropriate manner (the Rowes, the Plan, and CAM are collectively referred to as “Defendants” or “Judgment Debtors”). The Receiver and the Defendants entered into a settlement agreement, which was approved by the Court on February 5, 2013 (Doc. 963). As part of that settlement, the Defendants consented to the entry of a joint and several judgment in the Rowe Action in the amount of $4,028,385.00 (the “Judgment”), which was entered by the Court on February 25, 2013. See Rowe Action (Doc. 124). The Receiver then conducted discovery in aid of execution wherein he learned, inter alia, that the Judgment Debtors transferred some of their assets to third parties, including Band Weintraub, P.L. (“Transferee” or “Band Weintraub”). Before filing suit, on October 22, 2013, the Receiver provided a copy of a draft complaint to counsel for Transferee, which set forth the specific transfers the Receiver was seeking to recover from Transferee under the Florida Uniform Fraudulent Transfer Act (“Draft Complaint”).1 As shown by the attached 1 Transferee received a total of approximately $2.4 million in transfers from Judgment Debtors from December 2010 to April 2013. Some of these monies were subsequently transferred to other third parties, and the Receiver has pursued and will continue to pursue those funds. 3 Settlement Agreement, the Receiver and Transferee, subject to the approval of this Court, have agreed to settle the claim asserted in the Draft Complaint for a total payment of $943,526.98, which is to be paid within 20 days after approval of this settlement. In reaching this agreement, the Receiver considered the risks and expense of further efforts to recover the monies transferred to Transferee. The Receiver believes that the settlement provides a practical solution which results in the maximum benefit to the Receivership. Further, the settlement reflected by the Settlement Agreement is in the best interests of the Receivership, the investors in the Receivership Entities, and Transferee, because resolution of the claim avoids protracted litigation, conserving Receivership assets and judicial resources, and avoids the cost of litigation to Transferee. WHEREFORE, the Receiver moves the Court to approve the settlement reflected by the attached Settlement Agreement. LOCAL RULE 3.01(g) CERTIFICATE OF COUNSEL The undersigned counsel for the Receiver is authorized to represent to the Court that the SEC has no objection to the Court’s granting this motion. 4 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on November 25, 2013, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system. s/ Gianluca Morello Gianluca Morello, FBN 034997 Email: Michael S. Lamont FBN 0527122 Email: WIAND GUERRA KING P.L. 5505 West Gray Street Tampa, FL 33609 Tel: (813) 347-5100 Fax: (813) 347-5198 Attorneys for the Receiver, Burton W. Wiand 5

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