Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 1 of 7 PageID #: 2095
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1 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 1 of 7 PageID #: 2095 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION ) UNITED STATES SECURITIES ) AND EXCHANGE COMMISSION, ) ) Plaintiff, ) ) v. ) Case No. 1:15-cv-659-JMS-MJD ) VEROS PARTNERS, INC, ) MATTHEW D. HAAB, ) JEFFERY B. RISINGER, ) VEROS FARM LOAN HOLDING LLC, ) TOBIN J. SENEFELD, ) FARMGROWCAP LLC, ) PINCAP LLC, and ) ) Defendants, ) ) PIN FINANCIAL LLC, ) ) Relief Defendant. ) ) RECEIVER S AMENDED MOTION FOR AUTHORITY TO SETTLE ILLINOIS LITIGATION William E. Wendling, Jr., the Receiver herein, by counsel, respectfully requests authority to settle litigation filed on behalf of FarmGrowCap LLC, a Receivership entity, which presently is pending (but stayed) in the state of Illinois and in support thereof, states: 1. On February 3, 2015 (before the Receiver was appointed), FarmGrowCap, LLC ( FGC ), by and through its attorneys, filed a Complaint for Breach of Contract and Other Specified Relief in the Circuit Court of the Sixth Judicial Circuit in Piatt County, Illinois against RJW Williams Farms, Inc., James R. Williams, Robert Williams (hereinafter all Williams are
2 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 2 of 7 PageID #: 2096 referred to jointly and severally as Williams ), First Farmers Bank & Trust, Gifford State Bank and Non-Record Claimants. 2. On May 1, 2015, this Court entered its Agreed Order appointing William E. Wendling, Jr., as the Receiver over FGC and other defendants herein [Filing No. 34]. 3. Pursuant to the general powers and duties of the Receiver set forth in Section II, paragraphs 5 through 8(k) of Agreed Order, the Receiver has the authority to act on behalf of FGC in the Piatt County, Illinois lawsuit [Filing No. 34, at ECF pp. 3-5]. 4. Pursuant to Section VIII, paragraphs 33 through 35 of said Agreed Order [Filing No. 34, at ECF pp ], all civil legal proceedings involving the Receivership Defendants (FGC), including the Piatt County, Illinois litigation, are stayed in their entirety and all Courts having any jurisdiction thereof are enjoined from taking any action until further order of this Court. 5. Since his appointment on May 1, 2015, the Receiver has reviewed all of the pleadings, background and supporting documents related to the Piatt County, Illinois litigation, has researched the loans involved and payments received thereon, has had numerous discussions with all involved parties, including legal counsel previously retained by FGC. 6. The Receiver has concluded that it would best serve the interests of FarmGrowCap s investors to settle the Piatt County, Illinois litigation. Attached hereto and incorporated herein by reference as Exhibit A for the Court s review is a copy of the proposed Settlement Agreement. 7. The Receiver respectfully requests the Court to enter an Order granting a relief from the stay of litigation for the Piatt County, Illinois litigation for the purposes of settling this matter pursuant to the terms and provisions of the proposed Settlement Agreement and granting Page 2 of 7
3 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 3 of 7 PageID #: 2097 the Receiver authority to execute the Settlement Agreement and associated documents referenced therein, and thereafter to enter into a Stipulation of Dismissal of the Piatt County, Illinois litigation. 8. In support thereof, the Receiver states: a. The Receiver had several meetings and conferences with FGC s counsel from Kroger, Gardis & Regas regarding the status of the litigation and the future legal strategy in pursuing the same. b. At the onset of the Receivership, the Receiver requested a conference with all of the parties involved in the litigation. During that meeting, it was apparent that the best interest of all the parties would be served if a compromise could be reached. c. Since that time, the Receiver has been working diligently to resolve the issues in dispute and propose a settlement of this matter. The Receiver has reviewed the probability of prevailing in this litigation, and collecting on any judgment, and compared that to the time, expense and uncertainties that would be involved in protracted litigation. In addition, the Receiver has considered the counterclaims asserted against FGC by certain defendants. The Receiver believes that the resolution of this matter pursuant to the proposed settlement agreement is in the best interest of the FGC investors. d. As a result of the Receiver s meetings with the Illinois litigation Defendants, Williams agreed to make several payments to the Receiver from proceeds of the 2014 crop sales. From May 19, 2015 through December 31, 2015, William paid the Receiver a total of $1,191,429.63, all of which has been credited against the balance owed by Williams to FGC related to the Illinois litigation. Pursuant to the terms of the Settlement Agreement, Williams will make an additional cash payment to the Receiver of no less than $306, upon Page 3 of 7
4 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 4 of 7 PageID #: 2098 the Court s approval of this Settlement, which will result in a total of approximately $1,498, in cash payments received from Williams since the Receiver s appointment. e. In addition, as a result of the Receiver s efforts FFB&T has agreed to make a cash payment of $300,000, which will further benefit FGC s investors and reduce the balance owed by Williams. f. Accordingly, the anticipated balance owed by Williams pursuant to this settlement agreement will be no more than $2,523, to be paid at $500,000 (principal and interest) per year commencing December 30, 2016, with a simple interest rate of five percent (5%). Under the Settlement Agreement, this remaining balance, with interest, will be paid in full within six years, or by December 30, 2021, for a total amount of $2,971, Counsel for the United States Securities and Exchange Commission and the Defendants herein have been provided with the proposed Settlement Agreement and do not object. 10. The Receiver will communicate with FGC s investors about the proposed Settlement Agreement, and the anticipated benefits of that agreement to FGC s investors. At this time the Receiver is not aware of any objection to the proposed Settlement Agreement. However, if the Receiver becomes aware of any such objection within fourteen (14) days of filing of this motion, he will inform the Court so the objection can be considered. 11. In addition, the Receiver is prepared to discuss the merits of the proposed Settlement Agreement, with the Court or any interested party, at a hearing if the Court deems it advisable. 12. As set forth above, the Illinois lawsuit against Williams was initiated prior to the Receiver s appointment herein, and the law firm of Kroger Gardis & Regas, LLP was hired to Page 4 of 7
5 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 5 of 7 PageID #: 2099 represent FGC. Jeffrey D. Richardson of Richardson & Erickson in Decatur, Illinois was hired as local counsel for FGC and the two firms have represented FGC in said lawsuit since its initiation. Attached hereto as Exhibit B are copies of correspondence and invoices from Jeffrey D. Richardson showing a balance due to Mr. Richardson for fees and expenses in the total amount of $1, Attached hereto as Exhibit C is the invoice from Kroger Gardis & Regas, LLP showing a current balance due for fees and expenses in the total amount of $30, The Receiver believes that the services performed by the FGC Indiana counsel and local Illinois counsel were necessary and essential to the success of the Illinois litigation. Said counsel assisted the Receiver after his appointment to understand the status of the litigation and the legal strategy involved therewith, and from time to time, the Receiver and counsel for FGC have had to participate in status conferences with the Piatt Circuit Court to update the Court as to the status of the Receivership and the potential settlement of the lawsuit. The Receiver believes the FGC counsels fees are reasonable and requests authority to pay the same from funds collected in this matter. WHEREFORE, William E. Wendling, Jr., Receiver, by counsel, respectfully requests the Court to enter an order that: 1. The Settlement Agreement, in the form attached hereto and incorporated herein by reference as Exhibit A, is approved; 2. The Receiver is authorized to execute the Settlement Agreement and the associated documents referenced therein; 3. The Piatt County, Illinois litigation is hereby released from stay of litigation for the purposes of completing the settlement and subsequent dismissal of said litigation; Page 5 of 7
6 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 6 of 7 PageID #: The Receiver is authorized to pay Jeffrey D. Richardson the sum of $1, and to pay Kroger Gardis & Regas the sum of $30, from funds collected in this matter. 5. For such other and further relief as this Court may deem just and proper. Respectfully submitted, By s/anne Hensley Poindexter. Anne Hensley Poindexter, # Rodney T. Sarkovics, # CAMPBELL KYLE PROFFITT LLP One Penn Mark N. Meridian St., Suite 701 Carmel, IN Telephone: (317) Fax: (317) apoindexter@ckplaw.com rsarkovices@ckplaw.com Counsel for the Receiver Page 6 of 7
7 Case 1:15-cv JMS-MJD Document 185 Filed 02/17/16 Page 7 of 7 PageID #: 2101 Certificate of Service I hereby certify that on February 17, 2016, a copy of the foregoing Receiver s Amended Motion for Authority to Settle Illinois Litigation was filed electronically. Notice of this filing will be made on all ECF-registered counsel by operation of the Court s electronic filing system. Parties may access this filing through the Court's system. s/anne Hensley Poindexter. Anne Hensley Poindexter, # Rodney T. Sarkovics, # CAMPBELL KYLE PROFFITT LLP One Penn Mark N. Meridian St., Suite 701 Carmel, IN Telephone: (317) Fax: (317) apoindexter@ckplaw.com rsarkovices@ckplaw.com Page 7 of 7
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107 Case 1:15-cv JMS-MJD Document Filed 02/17/16 Page 1 of 4 PageID #: 2201 EXHIBIT B
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111 Case 1:15-cv JMS-MJD Document Filed 02/17/16 Page 1 of 9 PageID #: 2205 EXHIBIT C
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