Case 3:09-cv-00298-N Document 2578 Filed 09/07/17 Page 1 of 13 PageID 77805

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

IN RE: STANFORD ENTITIES

CIVIL ACTION NO. 3:09-MD-02099-N
SECURITIES LITIGATION
________________________________________________________________________

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

v. CIVIL ACTION NO. 3-09-CV 0298-N

STANFORD INTERNATIONAL
BANK, LTD., et al.,

Defendants.
________________________________________________________________________

JOINT EXPEDITED MOTION FOR STATUS CONFERENCE

BY THE RECEIVER, THE EXAMINER, AND
THE OFFICIAL STANFORD INVESTORS COMMITTEE

The Receiver Ralph S. Janvey (Receiver), the Examiner John. J. Little

(Examiner), and the Official Stanford Investors Committee (OSIC) file this Joint

Motion for a Status Conference, and show the Court as follows:

A. Summary

1. These proceedings, and a host of related actions, arise from the massive

fraud orchestrated by Robert Allen Stanford and the network of entities he owned and

controlled (the Stanford Entities). See Janvey v. Adams, 588 F.3d 831, 833 (5th Cir.

2009). As this Court has recently recognized, the Stanford Receivership and the

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litigation arising from it are extraordinarily complex and time consuming. Civil Action

No. 3:09-cv-0298-N (the SEC Action) [Doc. No. 2569 at 2].

2. Much of the litigation being prosecuted by the Receiver and the OSIC is at

a stage where meaningful progress is not possible without rulings from the Court on

certain critical threshold issues. This Court last held a general status conference in this

matter on August 21, 2014. The Receiver, the Examiner, and the OSIC believe that a

status conference could identify for the Court which pending, fully briefed motions

would have the most significant impact on the progress of Receivership litigation and, in

so doing, assist the Court in prioritizing which motions to address first.

3. The Receiver, the Examiner, and the OSIC believe that the agenda for the

status conference should include a discussion of the following items:

a. Combined class action and Receivership actions: Merits discovery has

been stayed pending the Courts consideration of the fully-briefed class
certification motions. As a result, the Receivers and OSICs claims in Rotstain v.
Trustmark National Bank, Civil Action No. 3:09-CV-02384-N, and Janvey v.
Greenberg Traurig, LLP, Civil Action No. 3:12-CV-4641-N, are not progressing,
and evidence is at risk of being lost due to the passage of time. The Court should
consider lifting the stay of merits discovery or severing the Receivers and OSICs
claims from the class claims.

b. OSICs fraudulent transfer claim against SG Suisse in Rotstain v.

Trustmark National Bank, Civil Action No. 3:09-CV-02384-N: OSICs fully
briefed motion for partial summary judgment on its fraudulent transfer claim
against SG Suisse needs a decision in order to advance this case further.

c. Dorrell v. Proskauer Rose, LLP, Civil Action No. 3:16-CV-1152: The

fully briefed motion to dismiss addressing the attorney immunity doctrine needs to
be decided before this case can move forward.

d. Janvey v. GMAG, LLC, Civil Action No. 3:15-CV-0401-N: Trial in this

case ended in January 2017. Entry of judgment is needed as either party is likely
to appeal.

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e. Settlement with Certain Underwriters at Lloyds of London: The Court has

approved the Receiver and OSICs settlement with Certain Underwriters at
Lloyds of London. Several parties have asked, in one form or another, for the
Court to reconsider that ruling. Until that motion is resolved, the appeal to the
Fifth Circuit that many of those same parties have filed cannot proceed.

The Receiver, the Examiner, and the OSIC address each such issue below.

4. The Receiver, the Examiner, and the OSIC request that the Court enter an

order setting the requested scheduling conference without waiting for the normal 21-day

response period for this motion, because this request does not seek any substantive relief

with respect to any pending issue. Rather, it simply requests an opportunity to be heard

for the relevant parties to the pending Receivership litigation. And for the reasons

discussed herein, the further passage of time results in an increased risk that valuable

claims are impaired as a result of loss or deterioration of evidence.

B. Background

5. This Receivership proceeding was commenced by the SEC on February 16,

2009. The Court appointed Ralph S. Janvey as Receiver on that same day. See SEC

Action [Doc. No. 10].1 Two months later, on April 20, 2009, the Court entered an Order

pursuant to Federal Rule of Civil Procedure 53 appointing John J. Little to serve as

Examiner. Id. [Doc. No. 322]. Among other things, the Court authorized the Examiner

to convey to the Court information he determines would be helpful to the Court in

considering the interests of Stanford investors.

1
The Court has subsequently issued two amended orders appointing the Receiver. SEC Action
[Doc. Nos. 157, 1130].

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6. The OSIC was created by an Order of this Court dated August 10, 2010.

Id. [Doc. No. 1149] (the OSIC Order). The OSIC was designated and authorized to

represent the interests of Stanford investors in the Receivership proceeding and all related

proceedings. Id. Pursuant to authority granted to it by the OSIC Order, and a subsequent

agreement entered between the Receiver and the OSIC, the OSIC has brought and

prosecuted a number of actions on behalf of the Receivership Estate and Stanfords

investors. This Court has previously found that the OSIC has standing both as an

unincorporated association and by virtue of this Courts Order constituting it as

representative of the Stanford Investors. See Janvey v. IMG Worldwide, Inc., Civil

Action No. 3:11-CV-0117-N [Doc. No. 33].

7. This Receivership proceeding is now over eight years old. With a few

minor exceptions,2 all of the hard assets that came under the control of the Receiver have

been liquidated. The primary work of the Receiver (and the OSIC) going forward is to

prosecute pending litigation to a resolution and to distribute the assets of the

Receivership, including recoveries from the pending litigation.

C. Expedited Motion for Status Conference

8. The Receiver, the Examiner, and the OSIC respectfully move this Court for

an order scheduling a status conference to address with the relevant parties how best to

move the most significant pieces of pending Stanford litigation toward a resolution,

2
The Receivership still includes some non-litigation assets, including several parcels of real estate
in St. Croix, an inventory of coins from Stanford Coins & Bullion, investment assets, many of which are
illiquid, and other items of personal property of relatively insignificant value.

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including but not limited to how the Court should prioritize the various pending issues in

that litigation.

9. The Receiver, the Examiner and the OSIC suggest an agenda of the

following five items for discussion during such a status conference.

D. Merits Discovery in Pending Third Party Actions

10. There are two actions pending before the Court that combine alleged class

claims with claims asserted by the Receiver and/or the OSIC. Those two actions are:

a. Rotstain v. Trustmark National Bank, et al., Civil Action No. 3:09-

CV-02384-N (the Bank Case); and

b. Janvey v. Greenberg Traurig, LLP, et al., Civil Action No. 3:12-CV-

04641-N (the Greenberg Case).

Both cases combine claims asserted by the Receiver and/or the OSIC with claims

asserted by a putative class of Stanford Investors.

11. No merits discovery has been conducted in either action; merits discovery

has been expressly stayed in both actions while the Court considers class certification

motions. See Bank Case [Doc. No. 228, Class Certification Scheduling Order, at 3];

Greenberg Case [Doc. No. 142, Class Certification Scheduling Order, at 3].

12. Class certification discovery and briefing has been completed in both

actions. The class certification motion in the Bank Case has been fully briefed and

awaiting the Courts decision since January 26, 2016. Bank Case [Doc. Nos. 347-351,

364-365]. In the Greenberg Case, the class certification motion has been fully briefed

and awaiting the Courts decision since February 26, 2016. Greenberg Case [Doc. Nos.

175-184].

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13. Little has happened in either action while the motions for class certification

have been pending. Plaintiffs recently filed a Motion to approve a settlement reached in

the Greenberg Case with Hunton & Williams, Greenberg Case [Doc. No. 232]; Plaintiffs

claims against Greenberg remain pending. Because of the Courts discovery stay, the

Receiver and the OSIC have been forced to stand idle, prohibited from prosecuting their

separate claims. Importantly, the claims of the Receiver and/or the OSIC in each action

are independent of the claims asserted by the putative classes, and will proceed without

regard to the Courts rulings on the class certification motions. 3

14. The Receiver, the Examiner, and the OSIC respectfully submit that the

Court can and should lift the stay of merits discovery in both the Bank Case and the

Greenberg Case, at least as to the claims asserted by the Receiver and/or the OSIC.

Without a lifting of the stay, evidence will almost certainly be lost while the complex

class certification issues are litigated and ultimately resolved. As a result, judicial

economy is ultimately disserved by continuation of the stay.

E. Pending Summary Judgment Motion against SG Suisse

15. The Bank Case (addressed above) primarily addresses issues surrounding

the Bank Defendants roles in aiding, abetting and assisting Stanfords scheme. The case

also includes a $95 million fraudulent transfer claim by OSIC against Defendant Socit

Gnrale Private Banking (Suisse) S.A. (SG Suisse). The claim arises from a transfer

3
Plaintiffs in the Greenberg Case filed a Motion to Sever the claims asserted by the Receiver and
OSIC on December 10, 2015. Greenberg Case [Doc. No. 163]. Plaintiffs also filed a Motion for Entry of
a Scheduling Order with respect to the claims asserted by the Receiver and OSIC on March 31, 2017.
Greenberg Case [Doc. No. 225]. Both Motions have been fully briefed; granting either one would permit
discovery with respect to the Estate claims to proceed.

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made by SG Suisse to itself in December 2008, from a Stanford Entity account, to repay a

personal loan made years earlier by SG Suisse to Allen Stanford.

16. OSIC filed a motion for partial summary judgment addressing this

fraudulent transfer claim against SG Suisse on December 21, 2015. Bank Case [Doc.

Nos. 358-360]. That motion for partial summary judgment has been fully briefed since

March 1, 2016. Id. [Doc. Nos. 366-368, 371].

17. OSICs motion for partial summary judgment against SG Suisse on this

fraudulent transfer claim is wholly separate from both the class claims asserted in the

Bank Case and the aiding and abetting claims asserted by OSIC against all of the Bank

defendants in that case. Deciding OSICs motion would move a significant piece of the

Bank Case forward. The Receiver, the Examiner, and the OSIC urge the Court to enter an

Order deciding the OSICs motion for partial summary judgment against SG Suisse.

F. Motion to Dismiss in Dorrell v. Proskauer Rose, LLP

18. Dorrell v. Proskauer Rose, LLP, Civil Action No. 3:16-CV-1152-N, was

filed in the wake of the Fifth Circuits judgment dismissing Troice v. Proskauer Rose,

LLP, Civil Action No. 3:09-CV-1600-N, based upon the Texas Supreme Courts 2015

Cantey Hanger decision addressing the attorney immunity doctrine. The Fifth Circuit

declined to consider three exceptions to the attorney immunity doctrine raised by the

Troice plaintiffs on appeal.4 Since its decision in Troice, the Fifth Circuit has described

4
These three exceptions were not raised in this Court by the Troice plaintiffs because they briefed
the attorney immunity doctrine prior to the Texas Supreme Courts ruling in Cantey Hanger. That ruling
changed Texas law concerning the attorney immunity doctrine and made these other exceptions pertinent
to the claims asserted in both Troice and Dorrell.

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the Texas attorney immunity doctrine as an area of Texas law that appears to be

somewhat in flux. Kelly v. Nichamoff, ____ F. 3d ____, 2017 WL 3574969 (5th Circuit

2017). Dorrell was filed to obtain a ruling from this Court and potentially from the

Fifth Circuit and the Texas Supreme Court concerning the applicability of the three

exceptions that were not addressed in Troice.

19. The motion to dismiss the Dorrell complaint filed by Proskauer Rose, LLP,

Civil Action No. 3:16-CV-1152-N [Doc. No. 12] has been fully briefed since August 15,

2016. Since that date, the only activity in Dorrell has consisted of efforts by Proskauer

Rose, LLP, to submit additional authority in support of its motion to dismiss. See id.

[Doc. Nos. 28, 34, 40, 42, 45, 46].5

20. The class claims asserted in Dorrell cannot move forward until this Court

rules on the pending motion to dismiss, following which an appeal to the Fifth Circuit is

likely without regard to how this Court rules.6 The Receiver, the Examiner, and the

OSIC urge the Court to enter an Order deciding the pending motion to dismiss in Dorrell.

G. The GMAG, LLC Action

21. The Receivers action against GMAG, LLC, and related persons and

entities was tried to a jury in January 2017. See Civil Action No. 3:15-CV-0401-N [Doc.

5
Additionally, the Dorrell plaintiffs reached an agreement with Defendant Thomas Sjoblom,
which resulted in his dismissal from the Dorrell action. Id. [Doc. No. 44].
6
If this Court concludes that the exceptions do not apply and dismisses the plaintiffs complaint,
the Dorrell plaintiffs will file an appeal. If the Court concludes that the exceptions do apply, it is likely
that Proskauer Rose, LLP, will seek leave to appeal that issue on an interlocutory basis before proceeding
to class certification.

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Nos. 246-250, 254-255]. The action involves a fraudulent transfer claim seeking to

recover approximately $100 million.

22. The jury returned a verdict on January 18, 2017. Id. [Doc. No. 257.]

GMAG, LLC, and its associated defendants believe that they are entitled to judgment

against the Receiver based upon the jury verdict. The Receiver, in turn, has filed three

different motions for judgment in his favor, including a motion for judgment based on the

jury verdict. See id. [Doc. Nos. 243, 251, 260]. Those motions are fully briefed and sub

judice.

23. It is almost certain that an appeal will follow regardless of whether this

Court enters judgment in favor of the Defendants or the Receiver. Until that judgment is

entered, however, the GMAG Action, and the Receivers $100 million claim, cannot

proceed.

H. The Settlement with Certain Underwriters at Lloyds of London

24. On May 16, 2017, the Court approved the settlement agreement between

the Receiver and OSIC, and Certain Underwriters at Lloyds of London. See, e.g., Civil

Action No. 3:09-CV-0298-N [Doc. Nos. 2518-19.] Several objectors to the settlement

filed motions, asking the Court to reconsider its approval order. See, e.g., id. [Doc. Nos.

2530, 2533, 2539.] Several objectors also filed notices of appeal of the Courts approval

order. See, e.g., id. [Doc. Nos. 2528, 2535, 2537.] Until the pending motions to

reconsider are resolved, the appeals that have been taken from the Courts order cannot

proceed, see FED. R. APP. P. 4(a)(4)(B)(i), which, under the terms of the settlement,

delays the date on which the settlement payment is ultimately due.

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I. The SECs Position

25. The Examiner, the OSIC, and the Receiver have conferred with the SEC

concerning this Motion; the SECs position is that it is in favor of holding a status

conference.

J. Conclusion

26. It has been over three years since the Court held a status conference

addressing this Receivership proceeding and the related actions that arise from the

Receivership proceeding. The Receiver, the Examiner, and the OSIC believe that such a

conference is necessary and would assist the Court in identifying the issues and matters

that could best foster the goals and purposes of this Receivership. To that end, the

Receiver, the Examiner, and the OSIC respectfully request that the Court schedule such a

status conference at its earliest opportunity and that such a status conference focus upon

the issues outlined above, and such other and further matters as the Court may deem

appropriate.

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Dated: September 7, 2017 Respectfully submitted,

BAKER BOTTS L.L.P.

By: /s/ Kevin M. Sadler

Kevin M. Sadler
Texas Bar No. 17512450
kevin.sadler@bakerbotts.com
Scott D. Powers
Texas Bar No. 24027746
scott.powers@bakerbotts.com
David T. Arlington
Texas Bar No. 00790238
david.arlington@bakerbotts.com

98 San Jacinto Blvd., Suite 1500

Austin, Texas 78701-4078
Tel: 512.322.2500
Fax: 512.322.2501

Timothy S. Durst
Texas Bar No. 00786924
tim.durst@bakerbotts.com

2001 Ross Avenue

Dallas, Texas 75201
Tel: 214.953.6500
Fax: 214.953.6503

ATTORNEYS FOR RECEIVER

RALPH S. JANVEY

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Respectfully submitted,

By: /s/ John J. Little____

John J. Little
Tex. Bar No. 12424230
jlittle@lpf-law.com
LITTLE PEDERSEN FANKHAUSER, LLP
901 Main Street, Suite 4110
Dallas, Texas 75202
(214) 573-2300
(214) 573-2323 [FAX]

COURT-APPOINTED EXAMINER

CASTILLO SNYDER, P.C.

By: /s/ Edward C. Snyder

Edward C. Snyder
esnyder@casnlaw.com
Jesse R. Castillo
jcastillo@casnlaw.com

300 Convent Street, Suite 1020

San Antonio, Texas 78205
(210) 630-4200
(210) 630-4210 (Facsimile)

COUNSEL FOR THE OSIC

NELIGAN FOLEY, LLP

By: /s/ Douglas J. Buncher

Douglas J. Buncher
dbuncher@neliganlaw.com

Republic Center
325 N. St. Paul, Suite 3600
Dallas, Texas 75201
(214) 840-5320
(214) 840-5301 (Facsimile)

COUNSEL FOR THE OSIC

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STRASBURGER & PRICE, LLP

By: /s/ Judith Blakeway

Judith R. Blakeway
judith.blakeway@strasburger.com

2301 Broadway
San Antonio, Texas 78215
Telephone: (210) 250-6000
Facsimile: (210) 250-6100

COUNSEL FOR THE OSIC

BUTZEL LONG, P.C.

By: /s/Peter D. Morgenstern

Peter D. Morgenstern
(admitted pro hac vice)
morgenstern@butzel.com
Joshua E. Abraham
(admitted pro hac vice)
abraham@butzel.com

477 Madison Avenue, Suite 1230

New York, NY 10022
(212) 818-1110
(212) 818-0494 (Facsimile)

COUNSEL FOR THE OSIC

CERTIFICATE OF SERVICE

On September 7, 2017, I electronically submitted the foregoing document to the

clerk of the court of the U.S. District Court, Northern District of Texas, using the
electronic case filing system of the court. I hereby certify that I have served all counsel
and/or pro se parties of record electronically or by another manner authorized by Federal
Rule of Civil Procedure 5(b)(2).

/s/ John J. Little

John J. Little

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