Case AJC Doc 302 Filed 06/05/12 Page 1 of 1 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION

Transcription

1 Case 0--AJC Doc 0 Filed 0/0/ Page of UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION In re: MERENDON MINING (Nevada, INC. a/k/a Milowe Brost, Debtor. / Case No. 0--AJC Chapter NOTICE OF FILING UNOPPOSED MOTION TO TRANSFER FUNDS IN U.S. DISTRICT COURT CASE OF SECURITIES AND EXCHANGE COMMISSION V. MERENDON MINING (NEVADA INC., ET AL., DATED JUNE, 0 NOTICE IS HEREBY GIVEN of the filing of the attached Unopposed Motion to Transfer Funds in U.S. District Court Case of v. Merendon Mining (Nevada Inc., et al., dated June, 0. Dated: June, 0 Respectfully submitted, GRAYROBINSON, P.A. Attorneys for Plaintiff, Marcia Dunn, Chapter Trustee 0 E. Las Olas Boulevard, Suite 0 Fort Lauderdale, FL 0 Phone --/Fax -- By: /s/ Ivan J. Reich Ivan J. Reich, Esq. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing was served on the th day of June, 0 to all parties registered to receive service via the Court s CM/ECF system and in accordance with the Court s Order of December 0, 00 [D.E. # in the main case], shall be posted to /s/ Ivan J. Reich Ivan J. Reich, Esq.

2 Case Case :-cv-00-raj 0--AJC Document 0- Filed Filed 0/0/ 0/0/ Page Page of of HONORABLE RICHARD A. JONES 0 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE CASE NO. C-RAJ SECURITIES AND EXCHANGE COMMISSION, Plaintiff UNOPPOSED MOTION TO TRANSFER FUNDS v. MERENDON MINING (NEVADA INC, et al. NOTED FOR CONSIDERATION Defendants June, 0 Plaintiff moves for an order directing the Clerk of the Court to transfer the disgorgement paid in this case by relief defendant Laura Sorenson to an account currently held in connection with In re Merendon Mining (Nevada, Inc. (Case No. 0- in the Bankruptcy Court for the Southern District of Florida (the Bankruptcy Case, including any interest on those funds, to be distributed by the bankruptcy trustee to investors. As grounds therefor, the Commission states as follows: Page 0 California St., Ste. 00 Case No. :-cv-00-raj Denver, CO 00 Telephone (0-00

3 Case Case :-cv-00-raj 0--AJC Document 0- Filed Filed 0/0/ 0/0/ Page Page of of 0 I. INTRODUCTION The SEC brought this action claiming that Laura Sorenson received the proceeds of a fraudulent scheme. Mr. Sorenson consented to be ordered to disgorge a portion of the proceeds. The Court s Order regarding Laura Sorenson, entered on April, 0, required her to pay disgorgement of $0,000. Ms. Sorenson paid the ordered funds to the Court Registry Investment System where they are presently held. On February, 00, several investors filed a Chapter Involuntary Petition for Bankruptcy against Merendon Mining (Nevada Inc. ( MMNI, one of the defendants in this case. On June, 00, Bankruptcy Judge A. Jay Cristol entered an Order for Relief against MMNI and on June, 00, Marcia Dunn was appointed as the Chapter Trustee over MMNI s Estate. On December, 00, the Trustee commenced an adversary proceeding against Milo Brost, Gary Sorenson, and Larry Adair, who are defendants in this action, other individuals and forty-two of MMNI s interrelated entities that were used to perpetuate the fraudulent scheme alleged in the Commission s Complaint. These entities included Institute for Financial Learning Group of Companies, Inc. ( IFFL, Syndicated Gold Depository, Inc. ( SGD, and Merendon Mining Corp. Ltd. ( Merendon who were also defendants in this matter. The Adversary Complaint requested that the Bankruptcy Court pierce the corporate veil and substantively consolidate the entities, and their assets, into MMNI s Chapter Bankruptcy Estate ( the Bankruptcy Estate. On January, 0, the Bankruptcy Court entered an Order substantively consolidating, among other entities, SGD, Merendon, and IFFL. The SEC now requests that the Court enter an order directing that the $0,000 of disgorgement paid by Ms. Sorenson in connection with the above captioned action, plus any Page 0 California St., Ste. 00 Case No. :-cv-00-raj Denver, CO 00 Telephone (0-00

4 Case Case :-cv-00-raj 0--AJC Document 0- Filed Filed 0/0/ 0/0/ Page Page of of interest earned, be transferred to an account currently held in connection with the related Bankruptcy Case and be distributed to investors through the Bankruptcy Estate. II. PROPOSAL FOR PAYMENT TO THE BANKRUPTCY ESTATE 0 A. The District Court Has Broad Equitable Discretion Regarding Disgorgement The district court has broad equitable discretion to fashion remedies in cases brought pursuant to the federal securities laws. See SEC v. First Pacific Bancorp, F.d, (th Cir., citing SEC v. Fischbach Corp., F.d 0, (d Cir. N.Y. ; and SEC v. First Jersey Securities, Inc., F.d 0, (d Cir., cert. denied, L. Ed. d, S. Ct. (; see also SEC v. Wang, F.d 0, (d Cir.. Once disgorgement has been ordered, it remains within the Court s discretion to determine how and to whom the money will be distributed, and the district court s directive will not be disturbed on appeal unless that discretion has been abused. See Fischbach Corp., F.d 0 at ; Wang, F.d at. B. The Disgorgement Funds Should Be Paid to the Bankruptcy Estate Although disgorged money is often distributed to victims of the violation in accordance with a plan proposed by the SEC and approved by the court, such a distribution may be impracticable. SEC v. Lorin, F. Supp., (S.D.N.Y. (citations omitted; see also SEC v. Drexel Burnham Lambert, Inc., F. Supp. 0, 0 (S.D.N.Y., aff d sub nom. SEC v. Fischbach, F.d 0 ( nd Cir.. Given the facts and circumstances of this case, distribution of the funds through the Bankruptcy Estate will yield a better return to investors. Ms. Sorenson was ordered to pay and has paid the relatively small amount of disgorgement of $ $0,000. Distributing that disgorgement though the Bankruptcy Estate will Page 0 California St., Ste. 00 Case No. :-cv-00-raj Denver, CO 00 Telephone (0-00

5 Case Case :-cv-00-raj 0--AJC Document 0- Filed Filed 0/0/ 0/0/ Page Page of of constitute an equitable method of distribution that is fair and reasonable. The majority of claimants in the bankruptcy are defrauded investors. Transferring the disgorgement paid by Ms. Sorenson to the Bankruptcy Estate would increase the recovery by victims of the fraud. The additional administrative costs of distributing the disgorgement in the bankruptcy would be negligible and would result in more money being returned to harmed investors. Therefore, the SEC respectfully requests that the Court grant its motion to pay defendant s disgorgement, plus any interest earned, to the Bankruptcy Estate for distribution to victims. III. CONCLUSION For the foregoing reasons, the SEC requests that the Court order that the disgorgement paid by Ms. Sorenson in this action, plus any interest thereon, be transferred to an account currently held for the Bankruptcy Estate in connection with the Bankruptcy Case for distribution to defrauded investors through the Bankruptcy Estate. Respectfully submitted this th day of June, 0 0 s/ Polly Atkinson Leslie J. Hughes, Colo. Bar No. 0 Polly A. Atkinson, Colo. Bar No. 0 Attorneys for Plaintiff 0 California Street, Suite 00 Denver, CO 00 Telephone (0-00 Fax (0 - HughesLJ@sec.gov AtkinsonP@sec.gov Page 0 California St., Ste. 00 Case No. :-cv-00-raj Denver, CO 00 Telephone (0-00

6 Case Case :-cv-00-raj 0--AJC Document 0- Filed Filed 0/0/ 0/0/ Page Page of of CERTIFICATE OF SERVICE I certify that on June, 0, I electronically filed the with the Clerk of the Court using the ECF system, which will send notification of such filing to all parties of record herein: Ivan Reich, Esq. Gray Robinson, P.A. Attorney for the Bankruptcy Trustee for Merendon Mining (Nevada, Inc. and Sub Con Entities Stanton P. Beck Attorneys for Marcia Dunn, Chapter Trustee Of Merendon Mining (Nevada Inc. and Sub Con Entities Larry L. Adair, Esq. Appearing Pro Se I hereby certify that on June, 0, I caused to be mailed true and correct copies of the to: 0 Ward Capstick 0 th Avenue SE Snohomish, WA - Appearing Pro Se Bradley Dean Regier Kernaghan Close Langdon, AB T0J X Canada Appearing Pro Se Martin Werner, Esq. NE nd Street # Boca Raton, FL Appearing Pro Se s/ Polly Atkinson Page 0 California St., Ste. 00 Case No. :-cv-00-raj Denver, CO 00 Telephone (0-00

7 Case Case :-cv-00-raj 0--AJC Document 0-0- Filed 0/0/ Filed 0/0/ Page Page of of HONORABLE RICHARD A. JONES 0 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE CASE NO. C-RAJ SECURITIES AND EXCHANGE COMMISSION, Plaintiff v. ORDER TO TRANSFER FUNDS MERENDON MINING (NEVADA INC, et al. Defendants Plaintiff moved for an order directing the Clerk of the Court to transfer the disgorgement paid in this case by relief defendant Laura Sorenson to an account currently held in connection with In re Merendon Mining (Nevada, Inc. (Case No. 0- in the Bankruptcy Court for the Southern District of Florida, including any interest on those funds, to be distributed by the bankruptcy trustee to investors.

8 Case Case :-cv-00-raj 0--AJC Document 0-0- Filed 0/0/ Filed 0/0/ Page Page of of The Motion is granted and the Clerk of the Court is directed to transfer the disgorgement paid in this case by relief defendant Laura Sorenson, including any interest on those funds, to an account currently held in connection with In re Merendon Mining (Nevada, Inc. to be distributed by the bankruptcy trustee to investors. Dated 0