Securities and Exchange Commission v. Nadel et al

Filing 1186

Unopposed MOTION for Settlement re: Branch Banking and Trust Company (BB&T) by Burton W. Wiand. (Attachments: # 1 Exhibit A)(Morello, Gianluca)

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 UNOPPOSED MOTION TO APPROVE SETTLEMENT
Burton W. Wiand, as Receiver, moves the Court for an order approving a settlement
relating to the Court’s order (Doc. 1174) denying the motion for turnover of sale proceeds
filed by Branch Banking and Trust Company (“BB&T”) in this action on March 5, 2015
(Doc. 1159) and BB&T’s subsequent appeal (Doc. 1178) on the basis of the Agreement
attached hereto 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 (Dkt. 984), 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.

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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 . . . .”
By a motion filed November 17, 2014 (Doc. 1150), the Receiver asked the Court to
approve the sale of residential real property located at 131 Garren Creek Road, Fairview,
Buncombe County, North Carolina (the “Fairview Property”), which was part of the
Receivership Estate pursuant to an order of this Court dated March 30, 2009 (Doc. 146).
BB&T ostensibly held a lien on the Fairview Property in connection with a mortgage it
issued to Nadel, but the Receiver asked the Court to transfer it to the sale proceeds and to
resolve the parties’ respective claimed entitlements to those proceeds after granting the
motion to approve the sale to ensure a timely closing. On November 18, 2014, the Court
granted the Receiver’s motion (Doc. 1151), and the sale of the Fairview Property promptly
closed, which resulted in net sale proceeds of $267,270.59. On March 5, 2015, BB&T filed a
motion for turnover of the sale proceeds. Doc. 1159. The Receiver opposed the motion on
the ground that BB&T had failed to file a claim for the Fairview Property in this
proceeding’s claims process. See Doc. 1163. On April 15, 2015, the Court denied BB&T’s
motion for turnover. Doc. 1174. On May 12, 2015, BB&T filed a notice of appeal. Doc.
1178.
As shown by the attached Agreement, the Receiver and BB&T, subject to the
approval of this Court, have agreed to the Receiver paying BB&T a total of $10,000.00 to
resolve BB&T’s pending appeal and its claim to any other portion of the sale proceeds for the
Fairview Property. The remainder of the sale proceeds – $257,270.59 – will be contributed

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to the Receivership Estate. As noted in paragraph 9 of the Agreement, this settlement does
not affect BB&T’s Claim No. 482, which was timely submitted and allowed in part and
which pertains to a different parcel of real property that is still part of the Receivership
Estate.

In reaching the Agreement, the Receiver’s primary considerations involved

conservation of legal fees and avoidance of doubt. The settlement amount represents an
amount that is lower than the Receiver’s estimate of the legal fees he would incur defending
BB&T’s appeal, and while the Receiver assigns a high probability to prevailing on appeal,
this settlement with BB&T will eliminate any uncertainty and ensure the remainder of the
sale proceeds can be immediately contributed to the Receivership Estate. 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 Agreement is in the best
interests of the Receivership, the investors in the Receivership Entities, and BB&T, because
resolution of BB&T’s appeal and purported claim conserves Receivership assets and judicial
resources.
WHEREFORE, the Receiver moves the Court to approve the settlement reflected by
the attached Agreement.
LOCAL RULE 3.01(g) CERTIFICATE OF COUNSEL
Counsel for the Receiver is authorized to represent to the Court that the SEC has no
objection to the Court’s granting this motion.

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on July 28, 2015, 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: [e-mail]
Michael S. Lamont, FBN 0527122
Email: [e-mail]
WIAND GUERRA KING P.A.
5505 West Gray Street
Tampa, FL 33609
Tel: [phone]
Fax: [phone]
Attorneys for the Receiver, Burton W. Wiand

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