Case 2:11-cv-01165-BSJ Document 2203 Filed 11/20/14 Page 1 of 5 David K. Broadbent (0442) Cory A. Talbot (11477) HOLLAND & HART LLP 222 S. Main Street, Suite 2200 Salt Lake City, UT 84101 Telephone: (801) 799-5800 Fax: (801) 799-5700 Attorneys for Gil A. Miller as Court-Appointed Receiver IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION SECURITIES AND EXCHANGE COMMISSION, vs. Plaintiff, MANAGEMENT SOLUTIONS, INC., a Texas Corporation; WENDELL A. JACOBSON; ALLEN R. JACOBSON, STIPULATED MOTION FOR ORDER APPROVING SETTLEMENT OF CLAIMS BY ST&H MANAGEMENT COMPANY, S.A.L. RENTALS, INC., AND GOODFELLOW HOUSING PARTNERSHIP, LTD. Civil Action No. 2:11-cv-01165 Judge Bruce S. Jenkins Defendants. Gil A. Miller, the Court-appointed receiver in this matter (the Receiver ), and intervenors ST&H Management Company, Inc. ( ST&H ) and S.A.L. Rentals, Inc. ( S.A.L. ) submit this stipulated motion requesting approval of a settlement: 1. The Receivership entity Volente City, LLC ( Volente City ) owns a 59% limited partner interest (the LP Interest ) in Goodfellow Housing Partnership, Ltd. ( Goodfellow Housing ) and claims ownership of S.A.L., the sole general partner of Goodfellow Housing. ST&H also claims ownership of S.A.L.
Case 2:11-cv-01165-BSJ Document 2203 Filed 11/20/14 Page 2 of 5 2. As part of the Receivership claims process, Goodfellow Housing and its general and limited partners filed a claim (the Claim ) against the MSI Receivership, asserting that Goodfellow Housing made loans totaling one million dollars ($1,000,000) to various MSIrelated entities and that Goodfellow Housing is still owed that money along with all interest accrued thereon, and all costs of collection, filing fees, late charges, penalties, default interest, attorneys fees, court costs, and any and all other amounts of costs, damages, and loss related to its loss of use of said amounts. 3. S.A.L and ST&H also filed a Motion to Intervene and Motion for Relief from the Court (CM/ECF No. 2107) (the Motion to Intervene ) requesting the following relief: a. that the Court enter an order permitting ST&H and S.A.L. to intervene in this action; b. that the Court enter an order adjudging and declaring that ST&H is 100% owner of S.A.L. and that S.A.L. is the sole general partner of Goodfellow Housing; c. that the Court enter an order releasing Goodfellow Housing, and all of its property and assets, from the Receivership Estate; d. that the Court enter an order requiring the Receiver (a) to account for all funds and other property of Goodfellow Housing seized and/or collected by the Receiver upon or subsequent to his appointment, and (b) to turn over to S.A.L. all of the property of Goodfellow Housing, including all such funds, to permit S.A.L. appropriately to manage Goodfellow Housing and to make distributions to the limited partners of Goodfellow Housing; e. that the Court acknowledge ST&H s lien against the LP Interest; 7322379_1.doc 2
Case 2:11-cv-01165-BSJ Document 2203 Filed 11/20/14 Page 3 of 5 f. that the Court enter an order lifting all stays and injunctions previously entered in this case for the limited purpose of permitting ST&H to exercise its lien rights and to foreclose upon the LP Interest; and g. that the Court enter an order permitting ST&H and/or S.A.L. to submit a claim, on behalf of Goodfellow Housing, against the Receivership Estate relating to the funds of Goodfellow Housing that were loaned and/or transferred to other entities controlled by the Receiver. 4. In lieu of costly litigation or other disputes regarding the Claim and Motion to Intervene, the Receiver, ST&H, S.A.L., and Goodfellow Housing have now reached an agreement for settlement of all claims between them as follows: a. Goodfellow Housing or its related entities will pay $2,950,000 to the Receiver; b. The Receiver will assign Volente City s LP Interest to Glenn W. Lynch (a principal of ST&H and S.A.L.) effective as of October 31, 2014; c. The Receiver will be entitled to keep the operating funds associated with the operation of Goodfellow Housing s multifamily housing property (the Property ) as of October 31, 2014. This will include all funds previously obtained by the Receiver or his predecessor in connection with the Property; d. Goodfellow Housing will be entitled to keep all reserves held by the lender on the Property; e. The Receiver, on the one hand, and Goodfellow Housing, Glenn W. Lynch, Great Commissions Ministries, S.A.L., ST&H, and any persons or entities 7322379_1.doc 3
Case 2:11-cv-01165-BSJ Document 2203 Filed 11/20/14 Page 4 of 5 claiming by, through or under them, on the other, will release and waive all claims they may have against the other in connection with Goodfellow Housing, the Property, and the Receivership, including, without limitation, the claims asserted in the Claim and Motion to Intervene. f. The Claim and the Motion to Intervene will be withdrawn with prejudice. 5. The Receiver believes this resolution to be in the best interests of the Receivership Estate and has accepted the foregoing settlement proposal, subject to Court approval. 6. The Receiver requests the Court s permission to accept the settlement and enter into the Settlement Agreement, the form of which is attached as Exhibit A (the Settlement Agreement ). 7. The parties request that the Court grant this Motion and enter the proposed Order Approving the Settlement submitted herewith. RESPECTFULLY SUBMITTED this 20th day of November, 2014. HOLLAND & HART LLP /s/ Cory A. Talbot David K. Broadbent Cory A. Talbot Attorneys for Gil A. Miller as Court-Appointed Receiver 7322379_1.doc 4
Case 2:11-cv-01165-BSJ Document 2203 Filed 11/20/14 Page 5 of 5 LEWIS & KLEINMAN, LC /s/ Christopher F. Lewis (Signed by filing attorney with permission of Christopher F. Lewis) Christopher F. Lewis Craig R. Kleinman Attorneys for ST&H Management Company, Inc. and S.A.L. Rentals, Inc. 7322379_1.doc 5
Case 2:11-cv-01165-BSJ Document 2203-1 Filed 11/20/14 Page 1 of 3 David K. Broadbent (0442) Cory A. Talbot (11477) HOLLAND & HART LLP 222 S. Main Street, Suite 2200 Salt Lake City, UT 84101 Telephone: (801) 799-5800 Fax: (801) 799-5700 Attorneys for Gil A. Miller as Court-Appointed Receiver IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION SECURITIES AND EXCHANGE COMMISSION, vs. Plaintiff, MANAGEMENT SOLUTIONS, INC., a Texas Corporation; WENDELL A. JACOBSON; ALLEN R. JACOBSON, ORDER GRANTING STIPULATED MOTION FOR ORDER APPROVING SETTLEMENT OF CLAIMS BY ST&H MANAGEMENT COMPANY, S.A.L. RENTALS, INC., AND GOODFELLOW HOUSING PARTNERSHIP, LTD. Civil Action No. 2:11-cv-01165 Judge Bruce S. Jenkins Defendants. Having considered the Stipulated Motion for Order Approving Settlement of Claims by ST&H Management Company, Inc., S.A.L. Rentals, Inc., and Goodfellow Housing Partnership, Ltd. ( Goodfellow Housing ), and good cause appearing, the Court FINDS and ORDERS: 1. The Settlement Agreement is necessary for the preservation of Receivership Property, is appropriate relief, and is in the best interests of the Receivership Estate. 2. The Settlement Agreement is approved and the Receiver is authorized to execute and perform the Settlement Agreement.
Case 2:11-cv-01165-BSJ Document 2203-1 Filed 11/20/14 Page 2 of 3 3. Within five (5) days after paying the final settlement amount set out in the Settlement Agreement (the Settlement Payment ), ST&H Management Company, Inc. and S.A.L. Rentals, Inc. shall dismiss with prejudice their Motion to Intervene and Motion for Relief from the Court (CM/ECF No. 2107), each party to bear its own costs and attorneys fees. 4. The claim asserted by Goodfellow Housing as part of the claims process in this Receivership is deemed withdrawn with prejudice, each party to bear its own costs and attorneys fees. 5. Upon receipt of the Settlement Payment by the Receiver, (a) Goodfellow Housing and all its real property, income and other assets (except only the assets that the Settlement Agreement specifies shall be retained by the Receiver) shall be, and hereby are, released, discharged and removed from the Receivership Estate and from the supervision of the Court in this case, and (b) all injunctions, stays, attachments and other legal processes and impediments imposed in this case and/or applicable under the prior orders of the Court as to Goodfellow Housing and its assets shall be, and hereby are, lifted, set aside, terminated and vacated as to Goodfellow Housing and its assets. 6. Upon receipt of the Settlement Payment, the Receiver shall file a notice with the Court to advise it that the contingency stated in the foregoing paragraph has been satisfied and that the order stated in the preceding paragraph has become effective. DATED this day of November, 2014. BY THE COURT: 7322378_2.doc Honorable Bruce S. Jenkins U.S. District Court Judge 2
Case 2:11-cv-01165-BSJ Document 2203-1 Filed 11/20/14 Page 3 of 3 APPROVED AS TO FORM: LEWIS & KLEINMAN, LC /s/ Christopher F. Lewis (Signed by filing attorney with permission) Christopher F. Lewis Craig R. Kleinman Attorneys for ST&H Management Company, Inc. and S.A.L. Rentals, Inc. 7322378_2.doc 3