Securities and Exchange Commission v. Nadel et al
Filing
648
MOTION to Approve Settlement re: Mayfair Associates (179) and Betty Bry Schwab, as Trustee of the Betty Bry Schwab Revocable Trust (226) by Burton W. Wiand. (Attachments: #1 Exhibit A - Executed Settlement Agreement)(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 MOTION TO APPROVE SETTLEMENT
Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of
Burton W. Wiand, as Receiver v. Mayfair Associates, Case No.: 8:10-cv-179-T-17MAP
(M.D. Fla.) (the “Mayfair Action”) and Burton W. Wiand, as Receiver v. Betty Bry Schwab,
as Trustee of the Betty Bry Schwab Revocable Trust, Case No. 8:10-cv-226-T-17MAP (M.D.
Fla.) (the “B. Schwab Trust 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 and 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. 79); Viking Oil & Gas,
LLC (Dkt. 153); and 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. 140), 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 Complaint filed January 19, 2010, the Receiver sued Mayfair Associates in the
Mayfair 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. Similarly, by an Amended Complaint filed March 17,
2010, the Receiver sued Betty Bry Schwab, as Trustee of the Betty Bry Schwab Revocable
Trust in the B. Schwab Trust Action to recover sums received from the Receivership Entities.
The Defendants in these cases collectively received $85,579.93 from the Receivership
Entities in excess of their investment.
In addition to the Defendants, Roger Schwab, as Trustee of the James Schwab
Revocable Trust and as Trustee of the Gella Schwab Revocable Trust (collectively referred
to as “J. and G. Schwab Trusts”), also invested in one or more Receivership Entities and
incurred a loss of approximately $172,750.00 and $107,750.00, respectively.
As shown by the attached Settlement Agreement, the Receiver, the Defendants and
the J. and G. Schwab Trusts, subject to the approval of this Court, have agreed to settle the
Mayfair and B. Schwab Trust Action for $35,000.00, in full settlement of the claims, to be
paid within 14 days after approval of this settlement by the SEC Receivership Court, and a
waiver by the J. and G. Schwab Trusts of any and all claims any of them has or may have
against the Receiver and/or Receivership Entities.
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Although it is the Receiver’s position that as a matter of law the Defendants and the J.
and G. Schwab Trust’s investments in Receivership Entities do not have to be considered
collectively, the Receiver believes the settlement reflected by the Settlement Agreement,
which includes payment of a sum of money and wavier of claims, is in the best interests of
the Receivership, the investors in the Receivership Entities, the Defendants, and the J. and G.
Schwab Trusts because resolution of the claim avoids protracted litigation, conserving
Receivership assets and judicial resources, and avoids the cost of litigation to Defendants.
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.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on August 12, 2011, I electronically filed the foregoing
with the Clerk of the Court by using the CM/ECF system.
I FURTHER CERTIFY that on August 12, 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
Email: gmorello@wiandlaw.com
Michael S. Lamont, FBN 0527122
Email: mlamont@wiandlaw.com
Wiand Guerra King P.L.
3000 Bayport Drive
Suite 600
Tampa, FL 33607
Tel: (813) 347-5100
Fax: (813) 347-5198
Attorneys for the Receiver, Burton W. Wiand
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