Securities and Exchange Commission v. Nadel et al
Second MOTION to Approve Settlement re: Steven Settlage by Burton W. Wiand. (Attachments: # 1 Exhibit A - Amended Settlement Agreement)(Lamont, Michael)
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 SECOND MOTION TO APPROVE SETTLEMENT
Burton W. Wiand, as Receiver, moves the Court for another order approving
settlement of Burton W. Wiand, as Receiver v. Steven Settlage, Case No.: 8:10-cv-136-T17MAP (M.D. Fla.) (the “Settlage Action”) on the basis of the Amended Settlement
Agreement attached as Exhibit A.
On October 5, 2011, the Receiver filed a Motion to Approve the Settlement
between the Receiver and the defendant in the Settlage Action, Steven Settlage. See Doc.
On October 6, 2011, this Court entered an Order which “specifically
approve[d] the written settlement agreement attached to the motion entered into between the
Receiver and Steven Settlage…” See Doc. 659.
After the entry of this Order, the parties agreed to slightly amend the language
(but not the terms) of the settlement agreement to enable the defendant to make payment
directly from his IRA account to the Receiver. The Amended Settlement Agreement is
identical to the original agreement, except that it adds the following provision: “The parties
understand and agree that the Settlement Payment is satisfying a debt owed by an IRA
account and therefore intend for the Settlement Payment to be a non-taxable distribution
from the debtor IRA account.” See Exhibit A, p. 2.
In light of the fact that the Amended Settlement Agreement has been amended
and in the abundance of caution, the Receiver moves the Court to approve the settlement
reflected by the attached Amended Settlement Agreement.
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 . . . .”
By a Complaint filed January 14, 2010 (the “Settlage Action”), the Receiver sued
Steven Settlage (the “Defendant”), 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 $80,024.73.
On December 30, 2010, Defendant filed in the United States Bankruptcy Court for
the Eastern District of Virginia, Richmond Division, Case No. BK 10-388848-DOT
(“Bankruptcy Court”), a voluntary petition in bankruptcy pursuant to Chapter 7 of Title 11 of
the United States Code. The Bankruptcy Court granted the Defendant (in his individual
capacity) a discharge from bankruptcy, pursuant to 11 U.S.C. § 727. The Receiver filed an
Objection to a Certain Claimed Exemption (“Bankruptcy Objections”) in the Bankruptcy
Court relating to the false profits received by Defendant in his IRA. The Receiver also filed
a Motion for Relief from Stay in order to pursue the res in the Settlage Action.
As shown by the attached Settlement Agreement, the Receiver and the Defendant,
subject to the approval of this Court, have agreed to settle the Settlage Action and the
Bankruptcy Objections for $40,012.00 in full settlement of the claims. In reaching this
agreement, the Receiver considered Defendant’s financial situation, the risks and expense of
litigation, including proceeding in bankruptcy court, and the risk associated with collecting
on any eventual judgment.
The settlement reflected by the Settlement Agreement is in the best interests of the
Receivership, the investors in the Receivership Entities, and Defendant, because resolution of
the claim avoids protracted litigation, conserving Receivership assets and judicial resources,
and avoids the cost of litigation to Defendant.
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 October 18, 2011, I electronically filed the foregoing
with the Clerk of the Court by using the CM/ECF system.
I FURTHER CERTIFY that on October 18, 2011, I mailed the foregoing document
and the notice of electronic filing by first-class mail to the following non-CM/ECF
Register No. 50690-018
Federal Medical Center
P.O. Box 1600
Butner, NC 27509
s/Michael S. Lamont
Gianluca Morello, FBN 034997
Michael S. Lamont FBN 0527122
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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