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)

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.

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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 § 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.

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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.

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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: [e-mail]
Michael S. Lamont FBN 0527122
Email: [e-mail]
Wiand Guerra King PL
3000 Bayport Drive
Suite 600
Tampa, FL 33607
Tel: [phone]
Fax:[phone]
Attorneys for the Receiver, Burton W. Wiand

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