Securities and Exchange Commission v. Nadel et al
MOTION to Approve Settlement re: John Grier Construction Co. and Joseph S. Terrell, Jr., et al. by Burton W. Wiand. (Attachments: # 1 Exhibit A - Executed Settlement Agreement)(Morello, Gianluca)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
SECURITIES AND EXCHANGE
Case No. 8:09-cv-87-T-26TBM
SCOOP CAPITAL, LLC,
SCOOP MANAGEMENT, INC.
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
RECEIVER’S MOTION TO APPROVE SETTLEMENT
Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of
Burton W. Wiand, as Receiver v. John Grier Construction Co., Case No.: 8:10-cv-111-T17MAP (M.D. Fla.) (the “Company Action”), and Burton W. Wiand, as Receiver v. Joseph S.
Terrell, et al., Case No.: 8:10-cv-238-T-17MAP (M.D. Fla.) (the “Terrell 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. 493).) 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.
79); Viking Oil & Gas, LLC (Dkt. 153); Home Front Homes, LLC (Dkt. 172); and Traders
Investment Club (Dkt. 454). All of the entities in receivership are collectively identified
herein as the Receivership Entities.
Pursuant to the Order Reappointing Receiver (Dkt. 493), the Receiver has the duty
and authority to:
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.
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 . . . .”
On January 14, 2010, the Receiver sued John Grier Construction Co. in the Company
Action 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. Specifically, the Receiver sought recovery of “false profits” (as defined
in the complaint) of $107,856.95.
Similarly, on June 16, 2010, the Receiver sued Joseph S. Terrell, Jr., individually, as
Executor of the Estate of Joseph S. Terrell, as Trustee of the Joseph S. Terrell Revocable
Trust, and as Trustee of the Essie G. Terrell Family Trust; Nancy Grossman; Thomas Grier
Terrell; and John Todd Terrell in the Terrell Action 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. Specifically, the
Receiver sought recovery of “false profits” (as defined in the amended complaint) of
As shown by the attached Settlement Agreement, the Receiver and the defendants in
the Company Action and in the Terrell Action, subject to the approval of this Court, have
agreed to the following monetary terms in full settlement of all claims asserted in those
Payment of $12,750.00 by the Estate of Joseph S. Terrell, Sr., to the Receiver,
to be paid within 30 days after approval of this Settlement Agreement by the Receivership
Payment of $74,771.50 by the Essie G. Terrell Family Trust to the Receiver,
to be paid within 30 days after approval of this Settlement Agreement by the SEC
Payment of $12,478.50 by John Grier Construction Co. to the Receiver, to be
paid within 30 days after approval of this Settlement Agreement by the SEC Receivership
Payment of $60,000.00 plus simple interest at the statutory rate of 6% by the
defendants, jointly and severally, to the Receiver as follows:
seven (7) payments of
$7,896.59 to be made on or before the 1st day of each of May 2011, August 2011, November
2011, February 2012, May 2012, August 2012, November 2012, and one (1) payment of
$7,896.61 to be made on or before February 1, 2013.
The settlement reflected by the Settlement Agreement is in the best interests of the
Receivership, the investors in the Receivership Entities, and defendants because: it avoids
protracted litigation, conserving Receivership assets and judicial resources; it avoids the cost
of litigation to Defendants; and it eliminates the risks of litigation, including the risk of not
collecting on any future judgment.
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.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on June 3, 2011, I electronically filed the foregoing with
the Clerk of the Court by using the CM/ECF system.
I FURTHER CERTIFY that on June 3, 2011, I mailed the foregoing document and
the notice of electronic filing by first-class mail to the following non-CM/ECF participants:
Arthur G. Nadel
Register No. 50690-018
FCI BUTNER LOW
Federal Correctional Institution
P.O. Box 999
Butner, NC 27509
s/ Gianluca Morello
Gianluca Morello, FBN 034997
Michael S. Lamont FBN 0527122
WIAND GUERRA KING P.L.
3000 Bayport Drive
Tampa, FL 33607
Tel: (813) 347-5100
Fax: (813) 347-5198
Attorneys for the Receiver, Burton W. Wiand
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