Securities and Exchange Commission v. Nadel et al
MOTION to continue Hearing Scheduled for March 2, 2012 on Pending Motions by Wells Fargo Bank, N.A.. (Shaheen, Louis)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
SECURITIES AND EXCHANGE
SCOOP CAPITAL, LLC,
SCOOP MANAGEMENT, INC.,
CASE NO.: 8:09-0087-T-26TBM
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, LLC.
MOTION OF WELLS FARGO BANK, N.A. FOR THE COURT TO CONTINUE
THE HEARING SCHEDULED FOR MARCH 2, 2012 ON PENDING MOTIONS
Pursuant to Local Rule 3.09 of the United States District Court for the Middle District of
Florida, Wells Fargo Bank, N.A. ("Wells Fargo") respectfully moves this Court to continue the
hearing scheduled for Friday, March 2, 2012 at 9:00 a.m. in the interest of judicial resources and
for good cause (the "Hearing"). Contemporaneous with this motion for continuance, Wells
Fargo has filed a motion seeking (1) to disqualify Burton W. Wiand as Receiver, (2) to disqualify
the law firm of Wiand Guerra King P.L. ("WGK") as counsel to the Receiver, and (3) to
disallow, at minimum, all fees payable to the Receiver and the law firm of WGK for any work
related to Wells Fargo in this case (the "Disqualification Motion").
In the Disqualification
Motion, Wells Fargo contends that the Receiver and WGK violated the Florida Rules of
Professional Conduct by taking materially adverse positions against Wells Fargo in this case,
while WGK was representing both Wells Fargo and Wells Fargo Advisors, LLC, an affiliate of
Wells Fargo, in a number of significant matters, for which WGK had received over one million
dollars in legal fees. Wells Fargo respectfully asks this Court to continue the Hearing so that the
serious ethical issues raised in Wells Fargo's Disqualification Motion can be resolved, and for the
reasons more fully set forth in the Memorandum below.
Pursuant to Local Rule 3.09(a), Wells Fargo moves this court for a continuance of the
Hearing in this case in the interest of judicial resources and for good cause.
Disqualification Motion filed contemporaneously herewith, Wells Fargo contends that the
Receiver and WGK violated the Florida Rules of Professional Conduct by taking materially
adverse positions against Wells Fargo in this case, while WGK was representing both Wells
Fargo and Wells Fargo Advisors in a number of significant matters, for which WGK had
received over one million dollars in legal fees. Wells Fargo believes the Receiver and WGK's
failure to disclose these representations while taking materially adverse positions against Wells
Fargo is a violation of (i) the Florida Rules of Professional Conduct, (ii) Wells Fargo's policy on
conflicts of interest, and (iii) the Receiver's fiduciary responsibilities as a court appointed
receiver. Wells Fargo therefore has moved that the Receiver and WGK be disqualified from the
Wells Fargo regrets bringing this motion for continuance to the Court's attention at this
late date. The Disqualification Motion is a serious motion and Wells Fargo and undersigned
counsel could not file this motion until all issues were carefully considered. Moreover, this issue
has required consultation of a number of different departments and persons at Wells Fargo. It
also directly affected several pending litigations which WGK was handling for Wells Fargo
entities, at least one of which has an upcoming trial date. In light of the seriousness of the
Motion and the effect on other cases being handled by WGK for the Wells Fargo entities, it
simply took time to address these issues.
This Court has scheduled the Hearing for Friday, March 2, 2012 commencing at 9:00
a.m. (Doc. No. 733) on the Receiver's Motion to (1) Approve Determination and Priority of
Claims, (2) Pool Receivership Assets and Liabilities, and (3) Establishing an Objection
Procedure (the "Claims Determination Motion"). TRSTE, Inc. and Wells Fargo both filed
objections to the Claims Determination Motion (Doc. Nos. 689, 690). TRSTE, Inc. and Wells
Fargo also filed objections to the Receiver's motion raising jurisdictional issues (Doc. No. 745),
and those issues have been briefed for the Court. Pursuant to the Court's Order on February 6,
2012 (Doc. No. 735), the Court will also entertain oral argument at the Hearing on "all other
objections to the Receiver's Motion to (1) Approve Determination and Priority of Claims, (2)
Pool Receivership Assets and Liabilities, and (3) Establish Objection Procedure."
With all due deference and respect to this Court in its efforts to move this case forward,
so that assets may be recovered, and the victims of Arthur Nadel's scheme may be compensated,
Wells Fargo respectfully contends that ethical issues raised in its Disqualification Motion are of
such significance that the Court should consider and rule on the Disqualification Motion prior to
hearing argument on the pending motions relating to the administration of the receivership estate.
The issues set for the Hearing involve fundamental issues relating to the disposition of claims.
Wells Fargo respectfully submits that these matters should be handled by a Receiver who is not
in violation of the Florida Rules of Professional Conduct. Wells Fargo and undersigned counsel
submit that this motion is filed in good faith for the concerns articulated herein, and not with the
intent of unnecessarily delaying these proceedings, or prejudicing any party.
WHEREFORE, Wells Fargo respectfully requests that this Court enter an Order to
continue the hearing currently scheduled for Friday, March 2, 2012 at 9:00 a.m. for good cause
shown so that Wells Fargo's Disqualification Motion can be briefed and argued prior to the Court
hearing argument on any of the pending motions currently scheduled.
Dated this 29th day of February, 2012 in Tampa, Florida.
/s/L. Joseph Shaheen, Jr.__________
L. Joseph Shaheen, Jr.
Florida Bar No.: 212385
Steven R. Wirth
Florida Bar No.: 170380
401 East Jackson Street, Suite 1700
Tampa, Florida 33602
Telephone: (813) 223-7333
Facsimile: (813) 223-2837
Counsel for Wells Fargo, N.A.
LOCAL RULE 3.01(g) CERTIFICATION
Counsel for Wells Fargo has conferred with counsel for the Receiver and counsel for the
Securities and Exchange Commission, and each indicated that they objected to and would oppose
the relief requested in this Motion.
CERTIFICATE OF SERVICE
I hereby certify that on February 29, 2012, I electronically filed the foregoing with the
Clerk of the Court by using the CM/ECF system.
I further certify that I mailed the foregoing document and the notice of electronic filing
by first-class mail to the following:
Arthur G. Nadel
FCI BUTNER LOW
Federal Correctional Institution
P.O. Box 999
Butner, NC 27509
/s/L. Joseph Shaheen, Jr._________
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