Securities and Exchange Commission v. Nadel et al

Filing 882

MOTION to Approve Settlement by Burton W. Wiand. (Attachments: # 1 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 M I D D L E D I S T R I C T OF F L O R I D A 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, AND VIKING MANAGEMENT, Relief Defendants. 1 R E C E I V E R ' S MOTION T O A P P R O V E S E T T L E M E N T Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of a claim against Geofco Holdings, Inc., Michael G. Edgecombe, and Barbara Edgecombe (collectively the "Defendants") for recovery of sums received from one or more of the Receivership Entities in excess of Geofco Holding's investment ("false profits") 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., f 7.) Burton W. Wiand was appointed by this Couit 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, L L C 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). 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. 2 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. . . . " The Receiver's investigation revealed a number of investors who received "false profits" (i.e., investors who received returns greater than their investments) ("profiteers") to the detriment of those investors who lost money as a result of their investment. Here, Defendants received a total of $300,000 in false profits in connection with Geofco Holding's investment. As shown by the attached Settlement Agreement, the Defendants have agreed to pay a total of $150,000 in full settlement of the Settled Claims to be paid in accordance with a set payment schedule. In reaching this agreement, the Receiver considered Defendants' financial situation, the risks and expense of litigation, and the risk associated with collecting on any eventual judgment, including that Defendant Geofco Holdings, Inc. is defunct. The Receiver believes that the settlement provides a practical solution which maximizes the 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 Defendants, 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. L O C A L R U L E 3.01(g) C E R T I F I C A T E OF C O U N S E L 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 12, 2012, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system. s/ Michael S. Lamont Gianluca Morello, FBN 034997 Email: Michael S. Lamont FBN 0527122 Email: Wiand Guerra King PL 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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