TD Bank attorneys, appearing Monday before Broward Circuit Judge Jeffrey Streitfeld on its role in the Scott Rothstein fraud litigation, announced they are nearing settlement agreements in three cases before the court.
Bank attorney Marcos Jimenez of McDermott Will & Emery in Miami said TD Bank was close to settlements with New York-based Platinum Partners Value Arbitrage Fund L.P. and with George and Gayla Sue Levin, who filed separate lawsuits.
“We will know more in seven days,” Jimenez added without offering other details.
The Levins and Platinum Partners are among several state court litigants pursuing millions of dollars in damages against the bank, which has made numerous out-of-court settlements over its role as the lead bank for Rothstein, whose $1.2 billion fraud destroyed his Fort Lauderdale law firm.
TD Bank lost its first case to go to trial. A Miami federal jury ordered it to pay $67 million to the Corpus Christi-based investor group Coquina Investments LLC in January 2012. The bank was also sanctioned by the judge over discovery violations.
All of the plaintiffs have alleged TD Bank officers aided and abetted the renegade Fort Lauderdale attorney by allowing him to use their offices and bank documents to market his settlement financing scheme. TD Bank was accused of deliberately ignoring red flags on the high volume and irregular money transfers in Rothstein Rosenfeldt Adler accounts.
Rothstein, a disbarred attorney, is serving a 50-year sentence in federal prison for leading the Ponzi scheme.
The case management hearing was intended to bring Streitfeld up to date on the progress of the defunct law firm’s bankruptcy case. U.S. Bankruptcy Judge Raymond Ray in Fort Lauderdale last week accepted the trustee’s disclosure statement, which creditors must rely on when deciding whether to accept the plan.
Jimenez said Ray has since set a July 11 hearing on confirmation. If the reorganization plan, which has the support of the creditors committee, is confirmed, Jimenez said TD Bank’s “walk away” deadline to accept or reject the plan is July 31. TD Bank also has agreed to a $72.4 million bankruptcy settlement.
Jimenez asked Streitfeld to extend the current stay on discovery in the pending cases beyond the current June 24 expiration.
Tucker Ronzetti, a shareholder at Kozyak Tropin Throckmorton, spoke for Gayla Sue Levin, two investor group lawsuits and the Razorback Funding LLC plaintiffs to object to delaying discovery.
“This entire set of proceedings in July is not in any way going to make a determination” on a proposed bar order, which would end most Rothstein-related litigation, Ronzetti countered. “It is a preliminary step.”
The disclosure statement was structured to avoid considering a bar to litigation until after the reorganization plan is confirmed, Ronzetti said. At some undetermined point after that, Ray and other judges with cases before them will determine whether the bar order can be applied on a case-by-case basis.
Streitfeld gave both parties seven days to respond to TD Bank’s request for an extended stay. The judge advised them to focus on whether a longer stay would prejudice the plaintiffs. He emphasized his concern that an indefinite bar order would harm their due process.
“There’s no reason we can’t work together, so long as due process is affected, to address this issue as soon as possible,” Streitfeld said. “And it should happen this year. It should not be delayed.”