Securities and Exchange Commission v. Nadel et al

Filing 880

MOTION to Approve Settlement by Burton W. Wiand. (Attachments: # 1 Exhibit Exhibit A - Settlement Agreement)(Lamont, Michael)

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UNITED S T A T E S D I S T R I C T C O U R T MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, V. CaseNo. 8:09-cv-87-T-26TBM ARTHUR NADEL, SCOOP CAPITAL, LLC, SCOOP MANAGEMENT, INC. Defendants, SCOOP REAL ESTATE, L.P. V A L H A L L A INVESTMENT PARTNERS, L.P., V A L H A L L A MANAGEMENT, INC. VICTORY IRA FUND, LTD, VICTORY FUND, LTD, VIKING IRA FUND, LLC, VIKING FUND, LLC, A N D VIKING MANAGEMENT, Relief Defendants. I R E C E I V E R ' S MOTION T O APPROVE S E T T L E M E N T Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of claims against Girls, Inc. of Sarasota County ("Girls, Inc.") for recovery of sums received from one or more Receivership Entities as "charitable contributions" on the basis of the Settlement Agreement attached as Exhibit A. MEMORANDUM I N 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., If 7.) Burton W. Wiand was appointed by this Court as the Receiver for Defendants and 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); and Home Front Homes, LLC (Dkt. 172); and Traders Investment Club (Dkt. 454). A l l 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: 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 ยง 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. The Receiver's investigation has revealed several organizations that received "charitable contributions" which consisted of proceeds of the scheme underlying this case. 2 Those organizations' receipt of those funds operated to the detriment of investors in the scheme underlying this case who lost money as a result of their investment. Girls, Inc. was not an "investor" in the hedge funds used to perpetrate the scheme, but is a charitable organization that received contributions which consisted of funds obtained through the scheme. Specifically, Girls, Inc. received a total of $472,839.33 in charitable contributions which consisted of such funds. As shown by the attached Settlement Agreement, Girls, Inc., subject to the approval of this Court, has agreed to pay $100,000.00, to be paid in accordance with a set payment schedule. In reaching this agreement, the Receiver considered the risks and expense of litigation, and Girls, Inc.'s financial ability to pay. Specifically, the Receiver considered Girls, Inc.'s current financial situation, its other existing financial obligations, and the fact that a judgment against Girls, Inc. would in all likelihood be uncoUectable. The Receiver believes that the settlement provides a practical solution which resuhs in the maximum benefit to the Receivership. Further, the settlement reflected by the Settlement Agreement is in the best interests of the Receivership, the investors in the Receivership Entities, and Girls, Inc., because resolution of the claims avoids protracted litigation, conserving Receivership assets and judicial resources, and avoids the cost of litigation to Girls Inc. WHEREFORE, the Receiver moves the Court to approve the settlement reflected by the attached Settlement Agreement. L O C A L R U L E 3.01(g) C E R T I F I C A T E O F 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. 3 CERTIFICATE OF SERVICE I H E R E B Y C E R T I F Y that on July 5, 2012,1 electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system. s/ Michael Lamont Gianluca Morello, FBN 034997 Email: Michael S. Lamont, FBN 0527122 Email: mlamont(g), 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 4

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