Filing # E-Filed 09/10/ :11:32 PM

Transcription

1 Filing # E-Filed 09/10/ :11:32 PM IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA CIRCUIT CIVIL DIVISION ARSHAN BORHAN, SIMON AMINI CASE NO.: CA 01 and SCOTT BRANDON, v. Plaintiffs, NRAC SPONSOR I LLC, INTERSPAC, LLC, GOLD HILL MINERALS, INC., NATURAL RESOURCES ACQUISITION CORP., and UNKNOWN INDIVIDUAL as personal representative of THE ESTATE OF DAVID BADNER Defendants. / MOTION TO CLARIFY RECEIVERSHIP AND ASSET FREEZE ORDERS Andrew Levi (the Receiver ), as the court-appointed receiver for Defendants NRAC SPONSOR I LLC, INTERSPAC LLC, GOLD HILL MINERALS, INC., and NATURAL RESOURCES ACQUISITION CORP. (collectively, the Defendant Entities ), by and through undersigned counsel, seeks clarification that the personal property of the now-deceased Defendant DAVID BADNER (with the Defendant Entities, the Defendants ) is part of the receivership, under the Receiver s jurisdiction, and subject to an asset freeze and states: 1. On July 16, 2015, the Plaintiffs initiated this action against the Defendants by filing a verified complaint (the Verified Complaint ) seeking, among other things: (i) the appointment of a receiver over the Defendant Entities to marshal their assets, assess outstanding claims, recover funds due and owing, and distribute them equitably; and (ii) imposition of a constructive trust over all of the Defendants assets. As alleged in the Verified Complaint, underlying these causes of

2 action was the fact that David Badner used the Defendant Entities as his alter-egos to operate a Ponzi scheme, using the funds invested in the Defendant Entities to pay off earlier investors where necessary and otherwise fund David Badner s personal expenses. See Verified Complaint at On July 17, 2015, the Plaintiffs filed their Emergency Motion to Appoint a Receiver (the Receiver Motion ) over the Defendant Entities, alleging that the Defendant Entities all served as fronts for a complex Ponzi scheme orchestrated by decedent David Badner, who used his control over the Defendant Entities to defraud investors out of millions of dollars. See Receiver Motion at 2. The Plaintiffs alleged that the immediate appointment of a receiver is necessary to prevent ongoing diversion of investor funds through the Defendant Entities, preserve whatever investor funds currently remain in escrow and/or within the Defendant Entities, marshal the Defendants assets, assess outstanding claims, recover funds due and owing, and distribute such assets equitably to all claims. See id. 3. On July 24, 2015, the Court held an evidentiary hearing on the Receivership Motion. On July 27, 2015, the Court entered an order (the Receivership Order ) appointing the Receiver as receiver over all of the Defendant Entities. Therein, the Court directed the Receiver to: assess the status of the Defendant Entities, manage the Defendant Entities appropriately, investigate ongoing fraud, trace Plaintiffs and other investors financial contributions through the Defendant Entities, recover assets with which to satisfy claims, ensure that the Defendant Entities pay over to each Plaintiff and all other similarly situated investors, lenders, and contributors (collectively, Claimants ), all amounts contributed by each Claimant to the Defendant Entities and/or David Badner, or paid for the Defendant Entities benefit, whether paid to the Defendant Entities... and take all such further actions as Receiver deems necessary to accomplish the foregoing. Id. at 2, 4. The Receivership Order also authorized the Receiver to establish a claims process by which Claimants may seek compensation from the Defendant Entities and the Estate of David 2

3 Badner... No amounts may be distributed to any claimant until Receiver has completed his investigation to determine the identify of all claimants and has verified all claims, to ensure that any and all claimants may have the opportunity to hear and object to the process and the proposed distribution. Id. at 3, 5 (emphasis supplied). The Receivership Order also provides that the Receiver is authorized to generally do such other things as may be necessary or incidental to the foregoing specific powers, directions, and general authorities, and to take all such further actions as may be necessary in order to ensure that amounts due and owing are paid to Plaintiffs, beyond the scope contemplated by the provisions set forth above, provided the [R]eceiver obtains prior approval of this Court for any actions beyond the scope contemplated herein. Id. at p. 6, On August 21, 2015, the Court entered the Order Granting Motion for Freeze of Defendant Entities Assets (the Asset Freeze Order ). Therein, the Court froze all of the Defendant Entities assets and prohibited the Defendant Entities officers, directors, agents, and others from alienating or otherwise impairing the Defendant Entities Assets. 5. Upon information and belief, David Badner passed away on July 2, The Receiver is unaware whether the Estate of David Badner has been submitted to probate. However, a search of public records reflects that David Badner had substantial assets. Assets now held by the Estate of David Badner should be frozen by this Court and administered by the Receiver to allow the Receiver to comply with this Courts order to establish a claims process. 6. In light of the allegations in the Verified Complaint and the Court s Receivership Order, the Receiver believes that the assets of the Estate of David Badner were intended to be included in the receivership estate. In an abundance of caution, the Receiver requests that this Court clarify the authority of the Receiver to marshal the assets of the Estate of David Badner 3

4 (along with the assets of the Defendant Entities) when administering the claims process described in the Receivership Order. 7. Additionally, the Receiver seeks a revised Asset Freeze Order that freezes the assets of the Estate of David Badner to prevent wasting of assets. WHEREFORE, the Receiver respectfully requests the entry of an Order of the Court (i) amending and re-issuing the Receivership Order to clarify that the assets of the Estate of David Badner are included within the receivership; (ii) amending and re-issuing the Asset Freeze Order to clarify that the assets of the Estate of David Badner are frozen until administration of the receivership; (iii) authorizing the Receiver to record or otherwise circulate or publish the amended and re-issued Receivership Order and Asset Freeze Order in the public records or otherwise; and (iv) for all further relief the Court deems just and equitable. Dated: September 10, 2015, O QUINN STUMPHAUZER & SLOMAN SunTrust International Center One SE Third Ave., Suite 1820 Miami, FL Tel./Fax: (305) / (305) By: /s/ Elan A. Gershoni Ryan D. O Quinn, Esq. Fla. Bar No roquinn@osslaw.com Elan A. Gershoni, Esq. Fla. Bar No egershoni@osslaw.com Attorneys for Receiver 4

5 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to all counsel of record on the attached services list via electronic mail on this 10th day of September, By: /s/ Elan A. Gershoni Elan A. Gershoni, Esq. BORHAN SERVICE LIST Joe M. Grant, Esq. Bruce H. Lehr, Esq. Stephen J. Leary, Esq. LEHR, LEVI & MENDEZ, P.A. MARSHALL SOCARRAS 1401 Brickell Avenue GRANT, P.L. Suite S. Federal Highway Miami, FL Suite 300 Tel.: (305) Boca Raton, FL Tel.: Attorneys for Receiver Fax: jgrant@msglaw.com sleary@mslaw.com Attorneys for Plaintiffs 5