Securities and Exchange Commission v. Nadel et al

Filing 1423

RESPONSE to Motion re 1419 Verified MOTION for miscellaneous relief, specifically to Authorize The Receiver to Retain a $100,000 Earnest Money Deposit Due to the Purchaser's Failure to Close the Court-Approved Sale of Quest Assets Memorandum of Points and Authority filed by Archer Petroleum. (Attachments: # 1 Appendix Index of Exhibits A-G, # 2 Exhibit A-Asset Purchase Agreement, # 3 Exhibit B-Email from Wiand, # 4 Exhibit C-Wire Transfer Receipts, # 5 Exhibit D-Emails Exchanged Wiand and Hudson, # 6 Exhibit E-Affidavit of Andrew Hudson, # 7 Exhibit F-Letter from Archer Petroleum to Wiand Cancelling Asset Purchase Agreement, # 8 Exhibit G-Order Granting Approval of Sale)(Krieger, Edwin)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.

CASE NO.: 8:09-cv-0087-VMC-CPT

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.

INDEX OF EXHIBITS IN SUPPORT OF ARCHER PETROLEUM’S RESPONSE
IN OPPOSITION TO THE RECEIVER’S VERIFIED MOTION (Dkt #1419) TO
AUTHORIZE THE RETENTION OF EARNEST MONEY AND APPLICATION
FOR DECLARATORY RELIEF
AFFIDAVIT OF ANDREW HUDSON
COUNTY OF COLLIN
STATE OF TEXAS

§
§
§

BEFORE ME, the undersigned authority, on this day personally appeared the
undersigned affiant, who, first duly sworn upon his oath did state:
1.

“My name is Andrew Hudson.

I am of majority age and I am legally

AFFIDAVIT OF ANDREW HUDSON IN SUPPORT OF ARCHER PETROLEUM’S
MEMORANDUM AND POINTS OF AUTHORITIES IN SUPPORT OF ARCHER
PETROLEUM’S RESPONSE IN OPPOSITION TO THE RECEIVER’S VERIFIED
MOTION TO AUTHORIZE THE RETENTION OF EARNEST MONEY

Page 1

competent to make this affidavit. I have never been convicted of a felony
nor a crime involving moral turpitude, including, but not limited to perjury.
I am fully aware of the legal consequences of committing perjury.
2.

I make this affidavit based on my personal knowledge.

3.

I am the President of Archer Petroleum.

4.

On April 1, 2019, during my negotiations with Mr. Wiand, I received an
email from Mr. Rizzo, Mr. Wiand’s paralegal, stating “…if there any
remaining concerns we should be able to resolve them within the next two
days so that we can have the signed APA to take to the court.”

5.

On April 11, 2019, I received another email from Mr. Rizzo stating that they
were “…working on preparing a final version so that we can present the
agreement to the Court for approval.”

6.

On April 22, 2019, I received an email from Mr. Rizzo stating “…please
sign and return the APA to me via email and we will move forward with
presenting it to the court for approval.” This was one of many statements
and representations, both by phone and email, that Wiand Guerra King was
ready to take a signed APA to the Court.

7.

On May 5, 2019, I executed the Asset Purchase Agreement (APA) for
Archer Petroleum. Mr. Wiand executed the APA and returned it to me on
May 8, 2019.

I relied on Burton Wiand’s representations that this

transaction would close within a reasonable time period.

AFFIDAVIT OF ANDREW HUDSON IN SUPPORT OF ARCHER PETROLEUM’S
MEMORANDUM AND POINTS OF AUTHORITIES IN SUPPORT OF ARCHER
PETROLEUM’S RESPONSE IN OPPOSITION TO THE RECEIVER’S VERIFIED
MOTION TO AUTHORIZE THE RETENTION OF EARNEST MONEY

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8.

At that time I executed the Asset Purchase Agreement, I was aware that Mr.
Wiand had not paid certain Quest taxes for several years, but was not aware
that preparing the assets for sale with clean title would require such
significant additional negotiations with the tax authority and with
significant additional creditors with complex claims as to delay his timely
filing of the Motion to approve the transaction.

9.

I was told prior to executing the APA that the legal issues with the Albany
bank were related to a residential property, which was not relevant to my
proposed acquisition. I relied on statements and representations that a
Motion to approve the transaction had already been drafted and would be
filed upon or shortly after my execution of the Asset Purchase Agreement.
However, in or around May or June, 2019, Mr. Wiand informed me that his
office had recently taken on a new Receivership and that his associates had
been too busy to finish the Motion for filing (presumably the same new
receivership referenced in the April 19, 2019 email from Mr. Rizzo of
Wiand Guerra King stating that “Mr. Wiand was appointed receiver in
another case this week and the matter has taken up all of our time…”.)

10.

Mr. Wiand was authorized to expand the Receivership to include Quest
Energy Management Group on May 24, 2013, and then assumed
management of the Quest assets. According to public record, during the
7.5-year period from August 2013 through May 2019 (the month in which
I executed the Asset Purchase Agreement), oil production from the

AFFIDAVIT OF ANDREW HUDSON IN SUPPORT OF ARCHER PETROLEUM’S
MEMORANDUM AND POINTS OF AUTHORITIES IN SUPPORT OF ARCHER
PETROLEUM’S RESPONSE IN OPPOSITION TO THE RECEIVER’S VERIFIED
MOTION TO AUTHORIZE THE RETENTION OF EARNEST MONEY

Page 3

Musselman Caddo Unit (“MCU”, Quest’s most significant asset) averaged
325 barrels per month, with relatively minimal variance. In the month
immediately following my execution of the APA (June 2019), production
from MCU decreased to only 46 barrels for the entire month, an 11-year
low and a sudden decrease of over 80%.
11.

I was also perplexed by Mr. Wiand’s failure to timely file the Motion as
promised upon my execution of the APA because he previously had taken
an urgent approach by telephone and email in reaching an agreement for a
sale of the assets. For example, his email to me on April 30, 2019, stated
“Drew – I am losing patience,” and “This needs to happen now. We will
talk at 11 am (w or with out your lawyer) and we will go forward or not.”
This was another reason I became concerned about the failure of Mr. Wiand
to file a Motion with the Court.

12.

On May 28, 2019, I received an email from Mr. Wiand stating “We should
be filing the motion this week,” with no mention of the additional ongoing
creditor and tax negotiations. It was not filed that week.

13.

Two weeks later, on June 11, 2019, I received an email from Burton Wiand
informing me that he had reached an agreement with the remaining
creditors, including all taxing authorities and stating that I should have no
worries with respect to taxes. He also stated that he would hopefully be
filing the motion for approval that week and closing in the coming weeks.
Yet again it was not filed that week.

AFFIDAVIT OF ANDREW HUDSON IN SUPPORT OF ARCHER PETROLEUM’S
MEMORANDUM AND POINTS OF AUTHORITIES IN SUPPORT OF ARCHER
PETROLEUM’S RESPONSE IN OPPOSITION TO THE RECEIVER’S VERIFIED
MOTION TO AUTHORIZE THE RETENTION OF EARNEST MONEY

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14.

After yet another six weeks, I was informed via email on July 24, 2019, by
Jeffrey Rizzo of Wiand Guerra King that the Motion was filed on that day
This was 80 days after my execution of the asset purchase agreement."

Printed Name:

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AFFIDAVIT OF ANDREW HUDSON lN SUPPORT OF ARCHER PETROLEUM'S
MEMORANDUM AND POlNTS OF AUTHORITIES IN SUPPORT OF ARCHER
PETROLEUM'S RESPONSE IN OPPOSITION TO THE RECEIVER'S VERIFIED
MOTION TO AUTHORIZE THE RETENTION OF EARNEST MONEY

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