Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 1 of 13

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1 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 1 of 13 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: ) Chapter 7 ) Case No PEREGRINE FINANCIAL GROUP, INC., ) Hon. Carol A. Doyle ) Debtor. ) Hearing Date: August 7, 2014 ) Hearing Time: 11:00 a.m. NOTICE OF MOTION TO: Attached Service List PLEASE TAKE NOTICE that on August 7, 2014 at 11:00 a.m. or as soon thereafter as counsel may be heard, I shall appear before the Honorable Carol A. Doyle, Bankruptcy Judge, in the room usually occupied by her as a Courtroom in the U.S. Courthouse, 219 South Dearborn Street, Room 742, Chicago, Illinois, or in her absence, before such other Judge who may be sitting in her place and stead and hearing bankruptcy motions, and shall then and there present the Trustee s Motion To Approve Compromise With Tom and Kay Herrmann, a copy of which is attached and herewith served upon you, and shall pray for the entry of an order in conformity with the prayer of said pleadings. AT WHICH TIME AND PLACE you may appear if you so see fit. Ira Bodenstein, not personally, but as chapter 7 trustee for the bankruptcy estate of Peregrine Financial Group, Inc. Dated: July 16, 2014 By: /s/ Peter J. Roberts One of his attorneys Robert M. Fishman (# ) Peter J. Roberts (# ) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street, Suite 800 Chicago, IL (312) { MOT A DOC 4}

2 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 2 of 13 CERTIFICATE OF SERVICE Peter J. Roberts certifies that he caused to be served a true copy of the above and foregoing Notice of Motion and Trustee s Motion To Approve Compromise With Tom and Kay Herrmann upon the attached Electronic Mail Notice List through the ECF System and on the attached Service List in the manner so indicated on this 16 th day of July, /s/ Peter J. Roberts Mailing Information for Case Electronic Mail Notice List Gregory C Armstrong gregory.armstrong@armstronglawgroup.com Terence G Banich tbanich@shawfishman.com, kbobb@shawfishman.com Lawrence M. Benjamin lbenjamin@ngelaw.com, rwills@ngelaw.com Stephen T. Bobo sbobo@reedsmith.com Ira Bodenstein iratrustee@shawfishman.com, IL29@ecfcbis.com;cowens@shawfishman.com Ira Bodenstein ibodenstein@shawfishman.com, cowens@shawfishman.com Paul Catanese pcatanese@mcguirewoods.com, docket@mcguirewoods.com David E Cohen dcohen@fishercohen.com Brooke E Conner bconner@vedderprice.com, ecfdocket@vedderprice.com;cpotter@vedderprice.com Jerome F Crotty jcrotty@rieckcrotty.com, bhenry@rieckcrotty.com Carrie E Davenport cdavenport@shawfishman.com, kbobb@shawfishman.com Michael C Dell'Angelo mdellangelo@bm.net, rwalton@bm.net David R Doyle ddoyle@shawfishman.com, kjanecki@shawfishman.com Michael M. Eidelman meidelman@vedderprice.com, ecfdocket@vedderprice.com Joseph O Enright joenright@ohfdlaw.com Robert M Fishman rfishman@shawfishman.com, kjanecki@shawfishman.com Robert M Fishman rfishman@shawfishman.com, kjanecki@shawfishman.com Geoffrey S. Goodman ggoodman@foley.com, egreen@foley.com;khall@foley.com Geoffrey S. Goodman ggoodman@foley.com, egreen@foley.com;khall@foley.com Ava Gould agould@cftc.gov Gordon E. Gouveia ggouveia@shawfishman.com, mwestbrook@shawfishman.com; kjanecki@shawfishman.com Gordon E. Gouveia ggouveia@shawfishman.com, mwestbrook@shawfishman.com;kjanecki@shawfishman.com Joshua M Grenard jgrenard@mayerbrown.com, courtnotification@mayerbrown.com Allen J Guon aguon@shawfishman.com, cowens@shawfishman.com Allen J Guon aguon@shawfishman.com, cowens@shawfishman.com John W Guzzardo jguzzardo@shawfishman.com, jhampton@shawfishman.com John W Guzzardo jguzzardo@shawfishman.com, jhampton@shawfishman.com Bernard A Henry bhenry@rieckcrotty.com { MOT A DOC 4} 2

3 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 3 of 13 David Paul Holtkamp dholtkamp@wfactorlaw.com, gsullivan@wfactorlaw.com; gsullivan@ecf.inforuptcy.com;dholtkamp@ecf.inforuptcy.com Stephanie K. Hor-Chen schen@vedderprice.com, ecfdocket@vedderprice.com Allison Hudson ahudson@shawfishman.com, jhampton@shawfishman.com Kevin M Hyde khyde@shawfishman.com Cindy M. Johnson cjohnson@jnlegal.net, KLindsey@jnlegal.net Thomas S Kiriakos tkiriakos@mayerbrown.com, Courtnotification@mayerbrown.com James C. Koutoulas jk@typhoncap.com Vincent E. Lazar vlazar@jenner.com, lyap@jenner.com;docketing@jenner.com;thooker@jenner.com Vincent E. Lazar vlazar@jenner.com, lyap@jenner.com;docketing@jenner.com;thooker@jenner.com Randall M Lending rlending@vedderprice.com, trobinson@vedderprice.com;ecfdocket@vedderprice.com Kyle A Lindsey klindsey@jnlegal.net, cjohnson@jnlegal.net James J McNamara jmcnamara@srcattorneys.com Michael C. Moody mmoody@orourkeandmoody.com, firm@orourkeandmoody.com,morourke@orourkeandmoody.com Michael C. Moody mmoody@orourkeandmoody.com, firm@orourkeandmoody.com, morourke@orourkeandmoody.com Michael J O'Rourke morourke@orourkeandmoody.com, firm@orourkeandmoody.com Michael J O'Rourke morourke@orourkeandmoody.com, firm@orourkeandmoody.com James A Pope jpope@popelegal.com Mark L Radtke mradtke@shawfishman.com, bharrington@shawfishman.com Mark L Radtke mradtke@shawfishman.com, bharrington@shawfishman.com Jack A Raisner JAR@outtengolden.com Marc S Reiser mreiser@shawfishman.com, jhampton@shawfishman.com Steven Robinson steven.robinson@sidley.com, steve.robinson@gmail.com Mark J Rose mjroseesq@aol.com Rene S Roupinian rsr@outtengolden.com, jxh@outtengolden.com;cbrann@outtengolden.com;kcarter@outtengolden.com Rene S Roupinian RSR@outtengolden.com, jxh@outtengolden.com;cbrann@outtengolden.com;kcarter@outtengolden.com Richard A. Saldinger rsaldinger@shawfishman.com, msalazar@shawfishman.com Jessica M Scheller jscheller@atg.state.il.us Vincent Paul Schmeltz III vschmeltz@btlaw.com, jzipfel@btlaw.com;jlennon@btlaw.com Sean T Scott stscott@mayerbrown.com, mlotito@mayerbrown.com Scott A Semenek scott.semenek@faegrebd.com, droberg@faegrebd.com Brian L Shaw bshaw100@shawfishman.com, bharrington@shawfishman.com Peter A Siddiqui peter.siddiqui@kattenlaw.com Anne W Stukes astukes@cftc.gov, ogcecf@cftc.gov William W Thorsness wthorsness@vedderprice.com, ecfdocket@vedderprice.com; ahesla@vedderprice.com Rue K Toland rtoland@mayerbrown.com John Edward Waters john.waters@iowa.gov { MOT A DOC 4} 3

4 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 4 of 13 Thomas C. Wolford twolford@ngelaw.com, ecfdocket@ngelaw.com;mmirkovic@ngelaw.com Jonathan Zinman jzinman@soluslp.com Parties Served Via U.S. Mail CRT Special Investments LLC Attn: Joseph Sarachek 262 Harbor Drive Stamford, CT Thomas and Kay Kerrmann 190 Montclair Sherman, TX Parties Served Via Gaivesville Coins, Inc. c/o Stephanie C. Lieb, Esq. 101 E. Kennedy Blvd., Ste Tampa, FL rcolton@trenam.com slieb@trenam.com John B. Connor John B. Connor, P.L.C N. Fairfax St., Ste. 310 Alexandria, VA jack@johnbconnor.com Joseph M. Russell JP Morgan Chase Bank NA 10 S. Dearborn Street Chicago, IL Joe.russell@jpmchase.com Outten & Golden LLP Attn: Jack Raisner/Rene Roupinian 3 Park Ave., 29 th Floor New York, NY rsr@outtengolden.com jar@outtengolden.com Gilbert B. Weisman Becket & Lee LLP 16 General Warren Blvd. Malvern, PA Notices@becket-lee.com Stephen Mertz Michael Stewart Faegre Baker Daniels LLP 90 South 7 th St., Ste Minneapolis, MN stephen.mertz@faegrebd.com Michael.stewart@faegrebd.com Alicia Martin Attn: Steven R. Lehr, Esq. Steven R. Lehr, P.C. 33 Clinton Road, Ste. 100 West Caldwell, NJ slehr@lehrlaw.com William L. Wallander John Paul K. Napier Vinson & Elkins L.L.P Ross Avenue, Ste Dallas, TX jnapier@velaw.com bwallander@velaw.com Larry Lefoldt Lefoldt & Co., P.A. 690 Towne Center Blvd. Ridgeland, MS mllefoldt@lefoldt.com { MOT A DOC 4} 4

5 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 5 of 13 Lazonia Clark Chase Paymentech Solutions, LLC Dallas Parkway, Building II Dallas, TX Lazonia.clark@chasepaymentech.com Vivian Drohan Drohan Lee LLP 489 Fifth Avenue New York, NY vdrohan@dlkny.com Andrea M. Momnie Philip J. Hendel Hendel & Collins, P.C. 101 State Street Springfield, MA amomnie@hendelcollins.com Scott Williamson Deputy Regional Counsel 525 W. Monroe St., Ste Chicago, IL swilliamson@cftc.gov Rosemary Hollinger Regional Counsel CFTC 525 W, Monroe, Ste Chicago, IL rhollinger@cftc.gov Pat DiMaria PFG Best 10 S. Riverside Plaza, Ste Chicago, IL pdimaria@pfgbest.com Robert Wasserman Chief Counsel CFTC st St. N.W. Washington, D.C rwasserman@cftc.gov Joseph Corrigan Iron Mountain Information 745 Atlantic Avenue Boston, MA bankruptcy2@ironmountain.com Mark D. Sherrill Sutherland Asbill & Brennan LLP 1275 Pennsylvania Avenue NW Washington, DC mark.sherrill@sutherland.com Roy Thompson SW Quarry Rd., Ste. B-6 Lake Oswego, OR roythompson@comcast.net Gretchen M. Silver Office of US Trustee 219 S. Dearborn, Ste. 873 Chicago, IL Gretchen.silver@usdoj.gov Thomas Hagemann Gardere Wynne Sewell LLP 1000 Louisiana, Suite 3400 Houston, TX thagemann@gardere.com { MOT A DOC 4} 5

6 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 6 of 13 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: ) Chapter 7 ) Case No PEREGRINE FINANCIAL GROUP, INC., ) Hon. Carol A. Doyle ) Debtor. ) Hearing Date: August 7, 2014 ) Hearing Time: 11:00 a.m. TRUSTEE S MOTION TO APPROVE COMPROMISE WITH TOM AND KAY HERRMANN Pursuant to 11 U.S.C. 363 and Fed. R. Bankr. P. 9019, Ira Bodenstein, not personally, but as chapter 7 trustee ( Trustee ) of Peregrine Financial Group, Inc. ( Debtor or PFG ) hereby requests that this Court enter an order authorizing the Trustee to compromise claims against Tom and Kay Herrmann (collectively, the Herrmanns ) in exchange for their payment of $7.25 million in accordance with the Settlement Agreement and Mutual Release ( Settlement Agreement ) attached hereto as Exhibit A. In support of this Motion, the Trustee respectfully represents as follows: I. INTRODUCTION 1. During the course of his investigation of the fraud perpetrated by PFG s founder, Russell Wasendorf, Sr. ( Wasendorf ), the Trustee discovered that, between October 1994 and July 10, 2012 ( Petition Date ), one or both of the Herrmanns received transfers in excess of $30 million (the Transfers ) from segregated PFG customer fund accounts while also having invested funds with Wasendorf-related entities. After further investigation, including an assessment of the potential claims that the Debtor s estate ( Estate ) holds against the Herrmanns in connection with the Transfers and the potential defenses that the Herrmanns have against those claims, the Trustee engaged in extensive settlement discussions and negotiations with the Herrmanns through counsel. Those discussions and negotiations have resulted in a { MOT A DOC 4}

7 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 7 of 13 proposed compromise (the Proposed Compromise ) that will resolve all of the Estate s claims ( Trustee Claims ) against the Herrmanns. 2. The terms of the Proposed Compromise are memorialized in the Settlement Agreement. The Settlement Agreement sets forth an agreement for the release of the Trustee Claims in exchange for the Herrmanns aggregate payment of $7.25 million to the Trustee. The Trustee requests this Court s approval of the Proposed Compromise as set forth in the Settlement Agreement. II. FACTUAL BACKGROUND A. The Debtor s Case 3. On the Petition Date, the Debtor filed a voluntary case under Chapter 7 of Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code ), thereby commencing the above-entitled case (the Case ). On July 11, 2012, the Trustee was appointed as the successor Chapter 7 Trustee of the Debtor by the U.S. Trustee, has accepted his appointment, and is acting, duly qualified, as Trustee of the Debtor. 4. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and 1334 and Local Rule of the United States District Court for the Northern District of Illinois ( District Court ). Venue is proper pursuant to 28 U.S.C and This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2)(A) and (O). The statutory predicates for the relief sought herein are 363 of the Bankruptcy Code and Fed. R. Bankr. P B. Overview of the Debtor s Business 5. Prior to the Petition Date, the Debtor was a futures commission merchant ( FCM ) and was registered as such with the CFTC. The Debtor conducted a futures brokerage customer business and forex customer business pursuant to its FCM registration, and also { MOT A DOC 4} 2

8 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 8 of 13 covered other separate business lines. As of the Petition Date, the Debtor had more than 24,000 aggregate customer accounts over all of its lines of business, including approximately 17,000 futures customer accounts. 6. As an FCM, the Debtor was required to maintain at least one segregated account for its customers funds. Prior to the Petition Date, PFG maintained a segregated account, with an account number ending 1845 (the Customer Seg. Account ), at U.S. Bank, N.A. 7. Shortly before the commencement of this case, the CFTC filed a lawsuit in the District Court alleging that the Debtor and its founder, Russell Wasendorf, Sr., misappropriated more than $200 million of customer funds from the Customer Seg. Account and concealed such theft by submitting false reports to the CFTC, all in violation of various provisions of the Commodity Exchange Act (the Lawsuit ). In connection with the Lawsuit, on July 10, 2012, the District Court entered an Order Appointing a Temporary Receiver. Shortly thereafter, the Debtor commenced the above-captioned case a commodity broker liquidation under subchapter IV of chapter 7 of the Bankruptcy Code. C. The Herrmann Transfers 8. In the early 1990 s, Wasendorf approached the Herrmanns about investment opportunities, including possible investments in a trading program ( LIT Program ) involving a company called LIT America, Inc. ( LIT America ). Wasendorf stated that one of his companies Wasendorf & Son Company, Inc. ( Wasendorf & Son ) was an introducing broker for LIT America, and that LIT America was an investment entity that purchased treasury bills ( T-Bills ) and other government securities on behalf of its clients. 9. In order to entice the Herrmanns into investing in the LIT Program, Wasendorf represented that they would receive the stated rate of return on the T-Bills purchased through LIT America, plus additional amounts that Wasendorf agreed to subsidize. The Herrmanns { MOT A DOC 4} 3

9 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 9 of 13 subsequently invested in the LIT Program until sometime in The Herrmanns believe that their total investments with Wasendorf, including investments in the LIT Program, totaled around $30.8 million. They also believe that their returns or transfers received from those investments totaled around $38.6 million, resulting in a net gain of around $7.8 million. 10. In the course of his investigation after the Petition Date, the Trustee and his professionals discovered that PFG had directly transferred approximately $31.5 million to the Herrmanns between October 1994 and January 13, 2011, virtually all of which was transferred from the Customer Seg. Account. The Trustee discovered no evidence that Wasendorf or Wasendorf & Son ever actually invested anything on the Herrmanns behalf in the LIT Program. Rather, the Trustee s investigation revealed that Wasendorf used the funds sent by the Herrmanns for their intended investments in the LIT Program in order to help perpetuate his fraud and that he never actually made an investment in the LIT Program on behalf of the Herrmanns. When it was time to pay the Herrmanns for their investments in the LIT Program, Wasendorf simply (and improperly) withdrew funds from the Customer Seg. Account. 11. After his initial discovery of the Transfers from the Customer Seg. Account to the Herrmanns, the Trustee notified the Herrmanns through counsel of his desire to arrange a meeting to discuss the matter. At the subsequent meeting and in related correspondence, the Trustee expressed his position that the Transfers from PFG to the Herrmanns constituted fraudulent transfers, and that the Estate had the Trustee Claims against the Herrmanns for the avoidance and recovery of those Transfers under 11 U.S.C. 544, 548, 550. In response, the Herrmanns expressed their position that they had substantial defenses to any fraudulent transfer liability, including defenses under 11 U.S.C. 546(e), the in pari delicto doctrine, and applicable statutes of limitations. { MOT A DOC 4} 4

10 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 10 of 13 III. PROPOSED COMPROMISE AND SETTLEMENT AGREEMENT 12. In order to permit a meaningful attempt at resolving the Trustee Claims without the commencement of litigation, the Trustee and the Herrmanns executed a tolling agreement that was extended from time to time. They also engaged in a series of negotiations regarding a consensual resolution of the Trustee Claims. 13. As a result of their negotiations, the Trustee and the Herrmanns have agreed, subject to this Court s approval, to a compromise of the Trustee Claims through the Proposed Compromise set forth in the Settlement Agreement. In a nutshell, the Settlement Agreement provides for (i) the Herrmanns to pay the aggregate amount of $7.25 million ( Aggregate Settlement Amount ) to the Trustee through four payments commencing the week after Court approval and ending on October 31, 2014, and (ii) the Trustee and the Herrmanns to exchange mutual general releases that cover the Trustee Claims but preserve Tom Herrmann s $11, commodity futures account claim against PFG. 1 The Settlement Agreement also provides for an increase in the Aggregate Settlement Amount and the entry of a consent judgment in the Trustee s favor under certain conditions in the event of a payment default. IV. THE PROPOSED COMPROMISE SHOULD BE APPROVED 14. Subject to this Court s approval, the Trustee is authorized to compromise the Trustee Claims pursuant to section 363(b) of the Bankruptcy Code, which provides that trustees may use, sell or lease, other than in the ordinary course of business, property of the estate. 11 U.S.C. 363(b). The use, sale, or lease of property of the estate, other than in the ordinary course of business, is generally authorized when the transaction makes good business sense and preserves the priorities among creditors. See, e.g., United Retired Pilots Benefits 1 This summary is qualified by the more specific terms of the Settlement Agreement. To the extent of any discrepancy, the Settlement Agreement controls. { MOT A DOC 4} 5

11 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 11 of 13 Protection Assn. v United Airlines, Inc. (In re UAL Corp.), 443 F.3d 565, 572 (7th Cir. 2006) ( the criteria for approval [under 363(b)(1) is] whether the transaction makes good business sense and does not disturb creditors rights ); In re Schipper, 933 F.2d 513, 515 (7th Cir. 1991) (sale under 363 involves exercise of fiduciary duty and requires an articulated business justification ). 15. Bankruptcy Rule 9019(a) allows the Court, after a hearing on such notice as the Court directs, to approve a compromise or a settlement. Fed. R. Bankr. P. 9019(a). The Court has broad discretion under Rule 9019(a) to approve the proposed compromise provided that it is in the best interests of the bankruptcy estate. In re Energy Coop, Inc., 886 F.2d 921, 927 (7th Cir. 1989) ( The benchmark for determining the propriety of a bankruptcy settlement is whether the settlement is in the best interests of the estate. ). In order to make that determination, a court must compare the value of the settlement with the probable costs and benefits of litigating. In re Doctors Hosp. of Hyde Park, Inc., 474 F.3d 421, 426 (7th Cir. 2007). Specifically, the Court should consider: (i) the estate s probability of success in the underlying litigation; (ii) the cost of the litigation; (iii) the complexity of the litigation; (iv) the inconvenience and delay that a continuation of the litigation will cause; and (v) creditors views on the settlement though such views are not controlling. See In re American Reserve Corp., 841 F.2d 159, (7th Cir. 1987); In re Apex Oil Co., 92 B.R. 847, 867 (Bankr. E.D. Mo. 1988); In re Central Ice Cream Co., 59 B.R. 476, 487 (Bankr. N.D. Ill. 1985), appeal dismissed, 62 B.R. 357 (N.D. Ill. 1986). 16. The Court need not, however, conclusively determine claims subject to compromise, nor find that the settlement constitutes the best result obtainable. Apex Oil, 92 B.R. at 867 (citing In re W.T Grant Co., 699 F.2d 599, 613 (2d Cir.) cert. denied, 464 U.S. 822 (1983)). All that is required is for the Court to canvass the issues to determine the { MOT A DOC 4} 6

12 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 12 of 13 settlement does not fall below the lowest point in the range of reasonableness. Apex Oil, 92 B.R. at 867. Compromises are tools for expediting the administration of the case and reducing administrative costs and are favored in bankruptcy. See Fogel v. Zell, 221 F.3d 955, 960 (7th Cir. 2000). 17. The Trustee Claims revolve around the avoidability of the Transfers under 11 U.S.C. 544, 548. Though the Trustee believes that he has a high probability of success in establishling a prima facie case against the Herrmanns for fraudulent transfer liability in connection with the Transfers, the defenses that the Herrmanns may be able to marshal present potentially substantial challenges. 18. Therefore, after assessing (i) the viability of the Trustee Claims, (ii) the limited resources available in the Estate, (iii) the anticipated litigation costs and corresponding risks involved in prosecuting the Trustee Claims and attempting to refute the Herrmanns anticipated defenses, and (iv) the immediate value that can be achieved for the Estate through the Proposed Compromise, the Trustee has concluded that the Proposed Compromise is fair in all respects and represents a favorable resolution of the Trustee Claims in a manner that is consistent with the best interests of the Estate. The Trustee consequently requests that the Proposed Compromise be approved accordingly and that the Trustee be authorized to implement the Proposed Compromise as set forth in the Settlement Agreement. V. NOTICE 19. Rule 2002(a)(3) of the Federal Rules of Bankruptcy Procedure generally requires at least twenty-one (21) days notice by mail of a hearing on approval of a compromise, unless the court for cause shown directs that notice not be sent. Fed. R. Bankr. P. 2002(a)(3). In addition, Bankruptcy Rule 9006(c)(1) of the Federal Rules of Bankruptcy Procedure provides that when an act is required or allowed to be done at or within a specified time by these rules { MOT A DOC 4} 7

13 Case Doc 2776 Filed 07/16/14 Entered 07/16/14 14:36:39 Desc Main Document Page 13 of 13 the court for cause shown may in its discretion with or without motion or notice order the period reduced. Fed. R. Bankr. P. 9006(c). 20. The Trustee has provided 21 days notice of this Motion to the Master Service List in accordance with the Court s Order Establishing Notice Procedures dated August 7, The Trustee submits that that the length and extent of such notice is appropriate under the circumstances and that any further notice be waived for cause shown pursuant to Fed. R. Bankr. P. 2002(a)(3), 9006(c), and WHEREFORE, the Trustee requests that this Court enter an order substantially in the form attached hereto: (i) approving this Motion; (ii) approving the terms of the Proposed Compromise as set forth in the Settlement Agreement; (iii) authorizing the Trustee to take such actions and execute such documents as may be necessary to evidence the Proposed Compromise; (iv) approving the notice of the Motion; and (v) providing such other and further relief as is just and to which the Trustee may be entitled under the circumstances. Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the bankruptcy estate of Peregrine Financial Group, Inc. Dated: July 16, 2014 By: /s/ Peter J. Roberts One of his attorneys Robert M. Fishman (# ) Peter J. Roberts (# ) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street, Suite 800 Chicago, IL (312) { MOT A DOC 4} 8

14 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS Eastern Division In Re: ) BK No.: PEREGRINE FINANCIAL GROUP, INC., ) ) Chapter: 7 ) Honorable Carol A. Doyle ) ) Debtor(s) ) ORDER APPROVING TRUSTEE S COMPROMISE WITH COMPROMISE WITH TOM AND KAY HERRMANN Upon consideration of the motion (the Motion ) of Ira Bodenstein, not personally, but as chapter 7 trustee ( Trustee ) of Peregrine Financial Group, Inc. ( Debtor or PFG ), requesting this Court s approval of the Trustee s proposed compromise (the Proposed Compromise ) of claims against Tom and Kay Herrmann (collectively, the Herrmanns ) in exchange for their payment of $7.25 million in accordance with the Settlement Agreement and Mutual Release ( Settlement Agreement ) attached to the Motion as Exhibit A; having found that adequate and sufficient notice of the Motion has been given and that sufficient cause appears therefor; it is hereby ORDERED: 1. The Motion is hereby granted. 2. For cause shown, further notice of the Motion, the hearing in connection with the Motion, and the Proposed Compromise set forth therein is hereby waived pursuant to Fed. R. Bankr. P. 2002(a) (3), 9006(c), and The Proposed Compromise upon the terms and conditions set forth in the Motion is fair and reasonable, and approval of the Proposed Compromise is in the best interests of the Debtor s estate and creditors. Consequently, the Proposed Compromise is hereby approved and authorized. 4. The Proposed Compromise having been approved, the Trustee is hereby authorized to take such further actions and execute or ratify such documents, including the Settlement Agreement, as may be necessary to evidence and effectuate the Proposed Compromise. 5. This Order shall be effective and enforceable immediately upon entry, and it shall not be stayed under Fed. R. Bankr. P. 6004(h) or any other applicable rule. 6. The Court reserves its jurisdiction over all matters arising from or related to the implementation of this Order and the Proposed Compromise. Enter: Dated: United States Bankruptcy Judge Prepared by: Robert M. Fishman (# ) Rev: _bko

15 Peter J. Roberts (# ) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street, Suite 800 Chicago, IL (312) Rev: _bko

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