Securities and Exchange Commission v. Nadel et al

Filing 693

Unopposed MOTION for leave to file Reply To Wells Fargo Bank, N.A.'s (as Successor To Wachovia Bank, N.A.) Objection Relating To Claim Relating To Loan On Graham, N.C. Building by Burton W. Wiand. (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 FOR LEAVE TO RESPOND
TO WELLS FARGO BANK, N.A.’S OBJECTION TO RECEIVER’S MOTION
TO (1) APPROVE DETERMINATION AND PRIORITY OF CLAIMS, (2)
POOL RECEIVERSHIP ASSETS AND LIABILITIES, (3) APPROVE PLAN
OF DISTRIBUTION AND (4) ESTABLISH OBJECTION PROCEDURE
Burton W. Wiand, as Receiver (the “Receiver”), recently filed a motion relating to
claims determinations and the claims process (the “Motion”) (Doc. 675). Among the claims
addressed in that motion was one submitted by Wells Fargo Bank, N.A. (“Wells Fargo”) as
successor to Wachovia Bank, N.A. (“Wachovia”), relating to real estate located at 841 South
Main Street, Graham, North Carolina, which houses a Rite Aid drugstore (the “Rite Aid

Property”).

As the Motion details, this claim relates to a loan Wachovia made to

Receivership Entity Scoop Real Estate, L.P. , and it should be denied for several reasons. See
Mot. at 55-59.
Wells Fargo filed an objection to the Motion (the “Objection”) (Doc. 689). 1 It
objected to various items, only one of which, although lacking any merit, was properly
lodged at this time. That objection is to the Proposed Objection Procedure. The rest of its
objections target the merits of the Receiver’s (i) claim determination and (ii) claim priorities,
and thus should be made as part of the objection procedure ultimately adopted by the Court,
and not now in piecemeal fashion. Indeed, addressing these two objection categories in an
efficient manner is part of the very reason for a formal objection process like the Receiver’s
Proposed Objection Procedure.
The Receiver seeks leave to file a reply to address various issues raised by the
Objection because he believes additional briefing will assist the Court with resolving it. The
issues he seeks to address include Wells Fargo’s:

1

Despite ample notice and opportunities to file claims, Wells Fargo concedes it never
filed a claim relating to loans it made on (1) land near Asheville, North Carolina (the
“Laurel Mountain Property”); (2) 30393 Upper Bear Creek Road, Evergreen, Colorado;
and (3) 464 Golden Gate Point, Unit 703, Sarasota, Florida, all of which are under the
Receiver’s control. See Obj. n.2. Despite failing to file claims, Wells Fargo improperly tries
to reserve its rights with respect to those properties. The Receiver intends to address this
issue in the reply that is the subject of this motion for leave.
Separately, Wells Fargo’s contention regarding purported forfeiture of the Laurel
Mountain Property ignores the law and the facts, including an arrangement between federal
prosecutors and the Receiver. Because Wells Fargo is represented by a different law firm
with respect to that property, and that firm has also filed an objection (see Doc. 690), the
Receiver is seeking leave to address this issue (as well as others) in a reply to that objection.

2

(1) misunderstanding of the Proposed Objection Procedure, its efficiency, and
that if the Receiver and a claimant cannot resolve an objection, it will be
submitted to the Court, and the Court can then set tailor-made procedures before
adjudicating it;
(2) incorrect contention that the Proposed Objections Procedure violates due
process;
(3) incorrect contention that the priority of payments is “illogical, unfair, and
inequitable,” and the fact that it improperly relies on bankruptcy law rather than
receivership law;
(4) incorrect contention that the Receiver’s claims against it relating to the
“shadow accounts” are asserted on behalf of investors, when, in reality, they are
plainly asserted on behalf of Receivership Entities, and caselaw establishes the
Receiver has standing to assert those claims;
(5) incorrect representations about the law governing the in pari delicto defense
for claims asserted by equity receivers, and that, in reality, applicable law
precludes application of that doctrine here for several reasons; and
(6) incorrect representations that it has no liability for the Receiver’s claims
relating to the “shadow accounts”, and its failure to recognize caselaw
establishing the viability of those claims.
WHEREFORE, the Receiver respectfully seeks leave to file a ten-page reply within
seven days of an order on this motion.
LOCAL RULE 3.01(g) CERTIFICATION
Counsel for the Receiver has conferred with counsel for Wells Fargo. Wells Fargo
does not object to the Receiver having leave to reply.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on December 23, 2011, I electronically filed the
foregoing with the Clerk of the Court by using the CM/ECF system.
I FURTHER CERTIFY that on December 23, 2011, I mailed the foregoing
document and the notice of electronic filing by first-class mail to the following non-CM/ECF

3

participants:
Arthur G. Nadel
Register No. 50690-018
Butner Low
Federal Correctional Institution
P.O. Box 999
Butner, NC 27509
s/Gianluca Morello
Gianluca Morello, FBN 034997
Email: [e-mail]
Michael S. Lamont FBN 0527122
Email: [e-mail]
Jared J. Perez, FBN 0085192
Email: [e-mail]
Wiand Guerra King P.L.
3000 Bayport Drive
Suite 600
Tampa, FL 33607
Tel: [phone]
Fax: [phone]
Attorneys for the Receiver, Burton W. Wiand

4