Anda di halaman 1dari 18

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 1 of 18

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 1:11-cv-02971-WYD-KMT TOUCHSTONE GROUP, LLC, MARGRET GREENSPAN, AND RONALD GREENSPAN on behalf of themselves and all others similarly situated, Plaintiffs, v. DANIEL J. RINK; TATUM, LLC; ASTOR, WEISS, KAPLAN & MANDEL; CHRISTOPHER FLANNERY, ESQ; STEVEN GRANOFF; KRASSENSTEIN & UNGER, LLC ESTILL & LONG, LLC; CARBON DIVERSION, INC.; TRACS GROWTH INVESTMENT; AND JOHN DOES 1 - 100, Defendants. PLAINTIFFS MOTION TO ENFORCE TERMS OF DECEMBER 1, 2012, AGREEMENT WITH INTERESTED PARTY/RECEIVER, JOHN PAUL ANDERSON, CPA PLEASE TAKE NOTICE that Plaintiffs, Touchstone Group, LLC, Margret Greenspan, and Ronald Greenspan, on behalf of themselves and all other similarly situated, move for an order enforcing the terms of the December 1, 2012, Agreement (December 1 Agreement) between Class Counsel1 and the Court-appointed Receiver2 for division of settlement proceeds.

On May 15, 2013, the Court appointed named Plaintiff Touchstone Group, LLC as lead plaintiff pursuant to 15 U.S.C. 78u-4(a)(3)(B) and the law firms of Saltz, Mongeluzzi, Barrett & Bendesky, P.C. and Hagens Berman Sobol & Shapiro LLP as Class Counsel pursuant to 15 U.S.C. 78u-4(a)(3)(B)(v). (ECF No. 152).
2

The Receiver is represented by Peter J. Korneffel, Jr. and Kathryn DeBord of Bryan Cave, LLP, who entered their appearance on behalf of the Receiver in the investors class action as interested parties. (ECF No. 40-41). References to the Receiver in this motion are intended to include discussions and exchanges with both John Paul Anderson and his counsel.

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 2 of 18

PLEASE TAKE FURTHER NOTICE that Plaintiffs bring this motion pursuant to Section 4.3 of the August 16, 2013, Settlement Agreement3 between the investors, the Receiver, and defendants Astor, Weiss, Kaplan & Mandel, LLP / Christopher Flannery / Krassenstein & Unger LLC / and Steven Granoff, and in conjunction with the Motion for Preliminary Approval of Partial Class Action Settlement, which is being concurrently filed. I. PRELIMINARY STATEMENT

The December 1, 2012 Agreement (December 1 Agreement) between Class Counsel and the Receiver reflects an unambiguous meeting of the minds on how to divide settlement proceeds from the common defendants between the two actions. On December 1, 2012, the Receiver agreed to dismiss his third-party claims against Mantrias accountants (Krassenstein, Granoff) and financial advisors (Tatum / Rink), in exchange for a larger percentage of any settlement proceeds and attorneys fees recovered from Mantrias lawyers (Astor, Weiss). After reaching the agreement, both the Receiver and Class Counsel acted on its clear terms. It was not until this Court issued its December 21, 2012, Opinion denying defendants Tatum and Rinks motions to dismiss that the Receiver reneged. Put simply, the December 1 Agreement is a valid written contract supported by legal consideration; and the Receivers later dissatisfaction with its terms is not grounds to set it aside. Siribuor v. UHS of Denver, Inc., 2012 U.S. Dist. LEXIS 102421 at *9 (D. Colo. July 23,
3

Section 4.3 of the Settlement Agreement reads in pertinent part, In conjunction with the filing of the Preliminary Approval Motion, Class Plaintiffs will file with the Class Settlement Court a motion to enforce an alleged December 1, 2012, agreement between the Class Plaintiffs and the Receivership related to the division of the proceeds paid by the Astor Parties and the Krassenstein Parties, and the Receiver shall respond to that motion. The Courts order on that motion shall determine the division of the proceeds paid by the Astor Parties and the Krassenstein Parties to the Receivership (the Receivership Portion of the Settlement Fund) and the amount of proceeds paid to the Class (the Class Portion of the Settlement Fund), as well as the appropriate allocation of attorneys fees payable to the Receiverships counsel and the Class counsel, respectively. 2

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 3 of 18

2012)(later dissatisfaction with the terms of a[n]agreement is not sufficient grounds to set it aside.). The Court should enforce the December 1 Agreement; divide the settlement proceeds accordingly, and require the Receiver to dismiss his claims against Mantrias accountants and financial advisors in favor of Mantrias investors, as he agreed to do. II. A. FACTUAL BACKGROUND

The SEC Litigation and the Receivership Order

As part of the SEC litigation involving Mantria Corporation, on April 30, 2010, the court appointed John Paul Anderson, CPA, CFA, of Alvarez & Marsal as an equity receiver (Receiver). SEC v. Mantria Corp., Civil No. 09-cv-02676-CMA-MJW (D.Colo.) (ECF No. 82). In such instances, the role of a receiver is to safe guard disputed assets, to suitably administer the receivership property, and to assist the district court in achieving final, equitable distribution of assets. Liberte Capital Group, LLC v Capwil, 248 Fed. Appx. 650, 655 (6th Cir. 2007). The courts Receivership Order enjoined all litigation against any of the Mantria and Speed of Wealth entities, as well as any of their past or present officers or agents in connection with any action taken while acting for Mantria or Speed of Wealth. Mantria Corp., Civil No. 09cv-02676-CMA-MJW (D.Colo.) (ECF No. 82 at 17, 31). Thus, the courts order effectively prevented the defrauded investors from suing any third party who acted negligently and/or aided in the scheme. On September 13, 2011, the SEC, on behalf of the investors, petitioned the district court to modify the Receivership Order and lift the stay of litigation. Id., (ECF No. 216). The Court held a hearing on September 20, 2011, where the SEC, the Receiver, and certain investors discussed the requested modification. Id., (ECF No. 220). During the hearing, the Court noted that it never, in any way, intended to preclude the investors from proceeding [with litigation] against third parties [to recover their losses]. Ex. A (Mantria Corp., Civil No. 09-cv-026763

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 4 of 18

CMA-MJW, ECF No. 220, Tr., 9/20/11, at 9:14-16). Without objection from the Receiver, the Court then modified the Receivership Order permitting the investors to proceed with their claims. Mantria Corp., Civil No. 09-cv-02676-CMA-MJW, (ECF No. 223); see also Liberte Capital Group, LLC, 248 Fed. Appx. at 658 (fraud on investors that damages those investors is for those investors to pursue- not the receiver.) (citations and internal quotations omitted). B. Investors And Receivers Third-Party Litigation

On November 15, 2011, Touchstone Group filed its class action complaint on behalf of the defrauded investors in the District of Colorado against Mantrias financial advisors, attorneys and accountants. Touchstone Group, LLC, v. Rink, et al., Case No., 11-cv-02971-WYD-KMT (ECF No. 1). The Receiver then filed his own action on February 25, 2012, against nearly the same defendants named in the investors complaint.4 See Anderson v. Rink, et al., Case No., 12CV-00488-RM (D. Colo.)(ECF No. 1). The Receiver later entered the Touchstone matter as an interested party and, without objection from Class Counsel, moved to consolidate the two cases. Touchstone Group, LLC, Case No., 11-cv-02971-WYD-KMT (ECF Nos. 41-42). This Court denied that motion on July 16, 2012, without prejudice, recognizing that the two cases involve different plaintiffs bringing different legal claims and representing different interests. Id. (ECF No. 125 at 5); see also Liberte Capital Group, LLC, 248 Fed. Appx. at 656 (when a receiver is appointed over a

The Receivers Action did not assert claims against Estill & Long, LLC or Tracs Growth Investment. Additionally, the Receivers Action against Defendant, Tatum, LLC, is subject to an arbitration agreement, which Tatum moved to enforce on April 5, 2012. Anderson, 12-cv00488-RM (ECF No. 18). On May 31, 2013, the Receiver and Tatum stipulated to a stay of the litigation and agreed to proceed with arbitration. Id. (ECF No. 54). Importantly, Tatums arbitration agreement with Mantria contains a cap that limits any recovery to the actual fees paid by [Mantria] to Tatum over the previous one year of the agreement. 4

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 5 of 18

corporation, the receiver may only assert claims that could have been asserted by the corporation, and the receiver lacks standing to institute action on behalf of investors in the corporation.). C. The December 1, 2012, Agreement

The parties to both actions engaged in a mediation session on November 1, 2012, before the Honorable Richard Dana (Ret.). After the mediation, Class Counsel wrote to the Receiver on November 27, 2012, stating that it ma[kes] sense to try and reach agreement...on how the case going forward would be litigated as well as the division of monies both to the investors and attorneys. Ex. B (Email from Patrick Howard to Receiver, Nov. 27, 2012). Class Counsel then made a proposal based on information the Receiver provided estimating the total losses from Mantria as $41,655,174, which comprises of investor losses $37,031,035 (89%), creditor losses $4,225,815 (10%), and employee losses $398,324 (1%). Ex. C (Email from Receiver to Patrick Howard, July 24, 2012). Class Counsels proposal suggested that any settlement with defendant Astor, Weiss be divided 89% to investors through the class action and 11% to the remaining creditors (creditors / employees) through the receivership estate. See Ex. B. Additionally, the Receiver would dismiss his claims against defendants Tatum, LLC / Daniel Rink / Krassenstein, Unger/ and Granoff. Attorneys fees would be divided from the Astor, Weiss settlement 70% to Class Counsel; 30% to Receivers counsel. Id. Two days later, on November 29, 2012, the Receiver responded that the percentage for the creditors/employees should likely go up and we need to come up with a different percentage for the [attorneys] fees. Ex. D (Email from Receiver to Patrick Howard, Nov. 29, 2012). The Receiver did not, however, take issue with the request that he dismiss certain defendants in favor of the investors. Class Counsel requested a counter proposal from the Receiver on the percentages. See Ex. E (Email from Patrick Howard to Receiver, Nov. 29, 2012). Instead of a 5

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 6 of 18

counter, on November 30, 2012, the Receiver suggested that the parties begin negotiations with Astor, Weiss by making a provisional settlement offer of $2.2 million while they continue to work on a distribution agreement. See Ex. F (Email from Receiver to Patrick Howard, Nov. 30, 2012). Class Counsel responded that the issue regarding the split may impact our approach to settlement and the case in generalWe put a proposal out to [the Receiver] on August 7.[5] Our November 26 [sic] email revised the August 7 proposal without a counter proposal. Wed like to get some numbers from [the Receiver] on the split for our clients as well as fees before approaching Judge Dana with a number. Ex. G (Email from Patrick Howard to Receiver, Nov. 30, 2012). The parties then held a telephonic conference to discuss an agreement. Ex. I (Email exchange between Patrick Howard and Receiver, Nov. 30- Dec.1, 2012). Afterward, Class Counsel sent the following offer to the Receiver:

Class Counsel made an initial proposal to the Receiver for the division of proceeds between the two actions on August 7, 2012. The Receiver never responded. See Ex. H (Email from Patrick Howard to Receiver with proposed Litigation Proceeds Distribution Agreement, Aug. 7, 2012). 6

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 7 of 18

See Ex. I. This proposal acquiesced to the Receivers request for a higher percentage (an increase of 9%) of any recovery from Astor, Weiss for the creditors/employees, which now called for a split between investors and creditors, 80/20 as requested. See above, 1; see also Ex. I. The Receivers counsel would also get 50% of the total attorneys fees awarded by the Court from the Astor, Weiss settlement, as opposed to only fees from its share of the settlement proceeds for the creditors. Id., 2. In consideration, however, the Receiver would dismiss his claims against Krassenstein, Granoff (accountants), Tatum, and Rink. Id., 3,4. The proposal also contemplated reasonable cooperation from the Receiver in the investors litigation. Id., 5 The next day, December 1, 2012, the Receiver accepted the proposal as-is:

Ex. I. Afterward, the Receiver sent an email to Judge Dana letting him know [the parties] have an agreement and authorizing Class Counsel to begin negotiations on a global settlement with Astor, Weiss. See Ex. J (Email exchange between Patrick Howard and Receiver, Nov 27 Dec 3, 2012). The Receiver then left the negotiations solely to Class Counsel; inquiring only once during the month of December about where the parties st[oo]d on the settlement discussions[.] Ex. K (Email exchange between Patrick Howard and Receiver, Dec. 17, 2012). D. Class Counsel Acted in Reliance on the December 1, 2012, Agreement

Astor, Weisss insurance coverage for both actions was limited to a self-depleting $1 million policy subject to a reservation of rights. Class Counsel researched Astor, Weisss available tangible assets, including investigating the partnerships personal assets and hiring a

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 8 of 18

company to determine the availability of any excess insurance coverage. See Ex. J. Based on the limited assets available from Astor, Weiss, on December 7, 2012, Class Counsel notified the Receiver, and then issued an initial $2.5 million global settlement demand. Ex. K (Patrick Howard email to Receiver, Dec. 6, 2012). In response, on December 19, Astor, Weisss counsel telephoned Class Counsel to discuss settlement and confirmed the limited personal assets of the partnership; the lack of excess insurance coverage; and explained that the self-depleting $1 million insurance policy had less than $850,000 available. After leaving telephone messages, Class Counsel sent a high importance email to the Receiver explaining that running through litigation [against Astor Weiss] to try and squeeze a couple hundred grand out of them is likely not worth it considering the limited, self-depleting insurance proceeds and available personal assets. Ex. M (Email from Patrick Howard to Receiver, Dec. 21, 2012) Class Counsel requested the Receivers consent to presenting Astor, Weiss with a concrete $1 million global settlement offer. Id. The Receiver never responded to Class Counsels proposal. In the meantime, pursuant to the terms of the December 1 Agreement and with the assistance of Judge Dana, Class Counsel negotiated a settlement for the investors with Mantrias accountants for their entire insurance policy limit ($100,000) as well as cooperation in prosecuting the litigation against the remaining defendants.6 Ex. N (Patrick Howard email to Receiver, Dec. 22, 2012).

Class Counsel advised the Receiver in writing of the settlement with the accountants on December 22, 2012. See Ex. N. Class Counsel later negotiated a $100,000 settlement with the law firm Estill & Long, which represents its remaining insurance coverage as well as a personal cash contribution. The Receiver did not sue Estill & Long. 8

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 9 of 18

E.

After this Court Denied Defendants Tatum, LLC and Daniel J. Rinks Motions to Dismiss, the Receiver Breached the December 1 Agreement.

On December 21, 2012, this Court denied Defendants Rink and Tatums motions to dismiss nearly in-total. Touchstone Group, LLC, Case No. 11-cv-02971-WYD-KMT (ECF No. 127). The Court concluded that Touchstones allegations suggested that Rink possessed the power to direct or cause the direction of [Mantrias] management and policies and that he knew that [Mantrias] alleged statements to investors were false or w[as] reckless in not knowing as much. Id. at 29, 25. The Court also rejected Tatums arguments that Rink was not acting in the course and scope of his employment with Tatum while at Mantria or that an adverse interest exception applied. Id. at 25-26. Instead, the Court found that Rink served as Mantrias CFO pursuant to Tatums professional services agreement with Mantria; and that Tatum held itself out as a provider to companies in need of a short-term CFO. Id. Although the Court found it had personal jurisdiction over Defendant Rink due to nationwide service of process under the Securities Exchange Act, the Court dismissed Astor, Weiss and Mantrias accountants (Krassenstein, Granoff) for lack of personal jurisdiction under Colorados long-arm statute. Id. at 11. While Class Counsel later re-filed the investors claims against Astor, Weiss in Philadelphia Common Pleas Court on January 4, 2013; Mantrias accountants agreed to honor their earlier commitment to settle. See Greenspan, et al. v. Astor, Weiss, Kaplan & Mandel, LLP, Case No. 121204284-2013 (Phl. Cty. Jan. 4, 2013). On January 8, 2013, Judge Dana circulated a proposed MOU to Class Counsel and the Receiver outlining the terms of the investors settlement with Mantrias accountants. See Ex. O. On January 14, 18, and 25, there were additional emails exchanged between the accountants counsel, Class Counsel, Judge Dana and the Receiver regarding the need to add language to the MOU recognizing the December 1 Agreement and the Receivers commitment to dismiss his

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 10 of 18

claims. Ex. O (Email exchanges regarding proposed settlement, Jan 14-30, 2013). The Receiver did not respond to any of these emails nor did he raise an issue about the December 1 Agreement with Class Counsel or Judge Dana. See Ex. O It was not until more than a month later, February 11, 2013, that the Receiver advised Class Counsel during a telephone call that he refused to dismiss his claims against Mantrias accountants or sign the MOU as called for by the December 1 Agreement. Ex. P (Ltr. from Patrick Howard to Receiver, Feb. 15, 2013). For the first time, the Receiver claimed that the December 1 Agreement was contingent on a $2.2 million settlement with Astor, Weiss and without it, he would not honor the agreement. Ex. Q. (Ltr. from Peter Korneffel to Patrick Howard, Feb. 22, 21012). In reality, this alleged contingency was never discussed amongst the parties; the contingency is nowhere in the text of any email exchange leading-up to the agreement; and the contingency was never raised by the Receiver in any subsequent writings or exchanges throughout the months of December and January. In fact, on November 30, the Receiver suggested opening the negotiations with Astor, Weiss at $2.2 million, not settling for $2.2 million. See Ex. F (provisional settlement offer of $2.2 million). It was only after the Court sustained the investors claims against Tatum and Rink that the Receiver became dissatisfied with the terms of the December 1 Agreement and devised this alleged contingency to backpeddled out of it. F. The Astor, Weiss Settlement

As of February 22, 2013, the district court overseeing the Receivers litigation had yet to rule on the defendants motions to dismiss. The court, however, set an evidentiary hearing for March 29, 2013, on defendants Astor, Weisss, Krassenstein, Granoffs, and Daniel Rinks motions to dismiss for lack of personal jurisdiction. See Anderson, Civil No. 12-00488-RM (ECF 10

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 11 of 18

No. 83). Specifically, the court ordered the parties to present evidence and argument concerning jurisdiction, including the distinction, if any, that exists with respect to Judge Daniels decision dismissing certain defendants for lack of personal jurisdiction under Colorados long-arm statute. Id. (emphasis added). After that order, and faced with the cost of an evidentiary hearing and potential dismissal, the Receiver contacted Class Counsel to discuss a settlement with Astor, Weiss, as well as the investors earlier settlement with the accounting defendants. In an effort to finalize these settlements (one outstanding since December 2012) Class Counsel agreed that all settlement proceeds could be paid into escrow until the Court could decide on the enforceability of the December 1 Agreement. See Ex. R. (Email between Patrick Howard, Esquire and Receiver, April 9-11, 2013). The parties then reached a settlement with Astor, Weiss on April 5, 2013, for the remaining balance of its insurance policy: $750,000.7 The joint Settlement Agreement between the investors, the Receiver, and the settling defendants requires Class Counsel file this motion to enforce the December 1 Agreement. As depicted in the chart below, there are two scenarios for dividing the settlement proceeds: (1) by the terms of the December 1 Agreement; or (2) by the percentage of loss. The December 1 Agreement grants the Receiver exactly what he bargained for: a higher percentage of the Astor, Weiss settlement proceeds and attorneys fees in consideration for his dismissal of certain defendants.

The Receiver has subsequently sought two additional stays of litigation (April 11 and September 11) in an attempt to reach a settlement with defendant Rink prior to the Courts ruling on his motion to dismiss for lack of personal jurisdiction. See Anderson, Civil No. 12-00488-RM (ECF No. 89, 98). As it stands, the Receiver has not reached a settlement and the current stay of litigation is set to expire on November 25, 2013. 11

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 12 of 18

SETTLEMENT

RECEIVER Dec. 1 Agreement

INVESTORS Dec. 1 Agreement $600,000

RECEIVER 11% for creditors

INVESTOR (89%) 89% for investors

Astor, Weis / Christopher Flannery ($750,000) Krassenstein & Unger LLC / and Steven Granoff ($100,000) Estill & Long, LLC ($100,000) (not in dispute) TOTALS:

$150,000

$82,500

$667,500

$0 (dismissal) $0

$100,000

$11,000

$89,000

$100,000

$0

$100,000

$150,000

$800,000

$93,500

$856,500

A.

III. ARGUMENT December 1 Agreement is a Valid Enforceable Contract

The December 1 Agreement is a valid enforceable contract between Class Counsel and the Receiver establishing the division of settlement proceeds and how the respective litigations were to proceed. Greater Service Homebuilders' Inv. Ass'n v. Albright, 293 P. 345, 348 (Colo. 1930)(A contract is an agreement to do or not to do a particular thing.). Under Colorado law, the essential elements of a contract include mutual assent to an exchange, between competent parties, with regard to a certain subject matter, for legal consideration. Joseph Brazier, Ltd. v. Specialty Bar Prods. Co., 2009 U.S. Dist. LEXIS 20487, 7-9 (D. Colo. Mar. 12, 2009)(quoting Indus. Prod. Int'l v. Emo Trans., Inc., 962 P.2d 983, 988 (Colo. Ct. App. 1997) (citation omitted). An offer is a manifestation by one party of a willingness to enter into a bargain and an acceptance is a manifestation of assent to the terms of the offer. Id. (citing Restatement (Second) of Contracts 24, 32 (1979)). To form an enforceable agreement, an offer must be accepted as-is, that is, the terms of the acceptance must be identical to the terms of the offer, without any changes. Id. (citations omitted). Here, Class Counsels November 30, 2012, email was a valid offer as it plainly manifests the intent to enter into a bargain. See Ex. I. The Receivers December 1 email accepted Class 12

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 13 of 18

Counsels proposal in writing as-is. Id. And afterward, the Receiver notified Judge Dana in writing of the agreement and Class Counsels authority to negotiate on his behalf and stood-by while the investors negotiated a settlement with Mantrias accountants. See id. The December 1 Agreement was also supported by valid consideration. The Receiver got a larger percentage share of the Astor, Weiss settlement proceeds for the creditors (80% - 20% as opposed to 89% - 11%) and the Receivers counsel would receive 50% of the attorneys fees, rather than drawing a fee only from their respective share of the settlement proceeds. Id. The investors provided this consideration in exchange for the Receivers agreement to dismiss his claims against Krassenstein, Unger, Granoff, Tatum and Rink. Id.; Hakim v. Payco-General Am. Credits, 272 F.3d 932, 935 (7th Cir. Ill. 2001)(Forbearance of a right to a legal claim constitutes valid consideration.). B. The December 1 Agreement is an Unambiguous, Undeniable Meeting of the Minds That Should Be Enforced.

The Court should enforce the December 1 Agreement because the parties had a meeting of the minds about the division of settlement proceeds, supported by legal consideration. Siribuor v. UHS of Denver, Inc., 2012 U.S. Dist. LEXIS 102421, at *9 (D. Colo. July 23, 2012). The Receivers efforts to avoid the agreement should not be rewarded. A district court has the power to summarily enforce an agreement entered into by litigants while the litigation is pending before it. U.S. v. Hardage, 982 F.2d 1491, 1496 (10th Cir. 1993)(citations omitted). An agreement may be enforced so long as its terms are clear, unambiguous, and capable of enforcement. Denver v. Adolph Coors Co., 813 F. Supp. 1476, 1479 (D. Colo. 1993). The agreement to terms may be inferred from either the conduct of the parties or even oral statements. I.M.A., Inc., v. Rocky Mountain Airways, Inc., 713 P.2d 882, 888 (Colo. 1987).

13

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 14 of 18

The terms of the December 1 Agreement constitute an unambiguous, undeniable meeting of the minds on an agreement to divide settlement proceeds and attorneys fees amongst the respective actions; and the Receivers conduct after December 1, 2012, evidences the existence of an agreement. See Ex. I. After the agreement was reached, the Receiver emailed Judge Dana to advise that the parties had reached an agreement and to authorize Class Counsel to negotiate on his behalf. See Ex. J. And after that, the Receiver only inquired once about where the parties st[oo]d on the settlement discussions[.] See Ex. L. The Receiver also never raised any issues or concerns with the investors settlement with the accounting defendants. Instead, after being notified of the settlement on December 22, 2012, the Receiver stood by quietly, while drafts of a proposed MOU were traded, including adding specific language reflecting the terms of the December 1 Agreement. See Exs. N-O. It was not until weeks later that he finally advised he would not honor the agreement. See Ex. P. The Receivers argument about a phantom contingency in the December 1 Agreement is not supported by the plain text of the agreement itself; or any of the writings prior to or after its consummation. See Exs. I O. Indeed, this purported contingency was devised solely as a basis to try and avoid the agreements unambiguous terms. Plainly, the Receiver at the timesaw Astor, Weiss as the soundest and most expeditious path to recovery. While Class Counsel was prepared to bare the risk and cost to litigate against all the defendants, including those the Receiver was willing to dismiss. After this Court denied Tatum and Rinks motions, the Receiver realized the potential for additional recoveries and attorneys fees. It was only then he changed course. However, the fact that the Receiver has buyers remorse is in no way grounds for setting the December 1 Agreement aside. See Siribuor, 2012 U.S. Dist. LEXIS 102421, at *9

14

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 15 of 18

(later dissatisfaction with the terms of a[n]agreement is not sufficient grounds to set it aside.) The Receiver should be compelled to abide by the terms of December 1 Agreement and dismiss his claims against Mantrias accountants and financial advisors in favor of the investors; and the monies from the Astor, Weiss settlement should be divided 80% to investors / 20% to the receivership. See Liberte Capital Group, LLC, 248 Fed. Appx. at 658 (fraud on investors that damages those investors is for those investors to pursue- not the receiver.) IV. CONCLUSION

For the reasons stated above, the Court should grant Plaintiffs motion to enforce the December 1 Agreement, dividing the Astor, Weiss settlement of $750,000, 80% to the investors class action and 20% to the Receivers estate and the award of attorneys fees from that settlement 50/50. The Receiver shall also dismiss his claims against Krassenstein, Granoff; Tatum, LLC; and Daniel J. Rink. Respectfully submitted, Dated: October 22, 2013 By s/ Patrick Howard Simon B. Paris Patrick Howard SALTZ, MONGELUZZI, BARRETT & BENDESKY, P.C. One Liberty Place, 52nd Floor 1650 Market Street Philadelphia, PA 19103 Tel (215) 575-3986 Fax (215) 575-3894 sparis@smbb.com phoward@smbb.com

15

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 16 of 18

Anthony D. Shapiro Karl P. Barth HAGENS BERMAN SOBOL SHAPIRO LLP 1918 Eighth Avenue, Suite 3300 Seattle, WA 98101 Telephone: (206) 623-7292 Facsimile: (206) 623-0594 ony@hbsslaw.com karlb@hbsslaw.com Interim Class Counsel

16

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 17 of 18

CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on October 22, 2013, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses: John Paul Anderson Katie.Debord@bryancave.com Peter Korneffel Peter.Korneffel@btyancave.com Karl P. Barth karlb@hbsslaw.com,shelbys@hbsslaw.com Scott Mark Browning sbrowning@rothgerber.com,phenke@rothgerber.com Richard C. Cornish cannfitz@aol.com Kathryn Reed DeBord Katie.Debord@bryancave.com Kelley Allison Duke kbergelt@irelandstapleton.com,s Victoria Elena Edwards victoria.edwards@akerman.com, Carolyn J. Fairless fairless@wtotrial.com,hart@wtotrial.com,sun@wtotrial.com Alan S. Fellheimer alan@fellheimer.net Leif Garrison leifg@hbsslaw.com,chrism@hbsslaw.com,GordonB@hbsslaw.com Tamara F. Goodlette tgoodlette@rothgerber.com,kdaily@rothgerber.com Mark E. Haynes mhaynes@irelandstapleton.com,strujillo@irelandstapleton.com,bmoore@irelandstapleto n.com,kchristiansen@irelandstapleton.com

Case 1:11-cv-02971-WYD-KMT Document 189 Filed 10/22/13 USDC Colorado Page 18 of 18

John Joseph Jacko , III john@fellheimer.net Michael T. McConnell mmcconnell@mfhlegal.com,vgonzales@mfhlegal.com,rsteinmetz@mfhlegal.com,mmill er@mfhlegal.com,djohnson@mfhlegal.com,hbishop@mfhlegal.com Simon B. Paris sparis@smbb.com,pdurkin@smbb.com Ryan Alan Roman ryan.roman@akerman.com,dorothy.matheis@akerman.com Robert James Zavaglia , Jr zavaglia@tamlegal.com,vreimche@tamlegal.com

Dated: October 22, 2013

By:

s/Patrick Howard Patrick Howard SALTZ, MONGELUZZI, BARRETT & BENDESKY, P.C. One Liberty Place, 52nd Floor 1650 Market Street Philadelphia, PA 19103

18