malik settlement

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

Case No. 06-20975-CIV-HUCK-SIMONTON

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

JOHN P. UTSICK, et a!.,

Defendants._____________________________/

MICHAEL I.. GOLDBERG, as Receiver forWorldwide Entertainment, Inc., TheEntertainment Group Fund, Inc., American Enterprises, Inc., and Entertainment Funds, Inc., Case No. 08-CV-60870-Huck-Rosenbaum

Plaintiffs,

vs.

MICHAEL J. MALIK, SR.,

Defendant.________________________________________________/

RECEIVER'S MOTIONFOR APPROVAL OF SETTLEMENT AGREEMENT

REGARDING FRAUDULENT TRANSFERS, TO DISMISS CASE,AND INCORPORATED MEMORANDUM OF LAW

Michael I. Goldberg (the "Receiver"), in his capacity as the court-appointed Receiver for

Worldwide Entertainment, Inc. ("Worldwide"), The Entertainment Group Fund, Inc. ("TEGFI"),

American Enterprises, Inc. ("AEI"), and Entertainment Funds, Inc. ("EFI"), by and through

undersigned counsel, files this Motion for Approval of Settlement Agreement between the Receiver

Case 0:08-cv-60870-PCH Document 67 Entered on FLSD Docket 04/29/2009 of 10

and Defendant Michael J. Malik, Sr.. In support of this motion, the Receiver states as follows:

I. Facts

The Appointment and Powers of the Receiver

1. On April 17, 2006, the Securities and Exchange Commission ("SEC") commenced this

action in the United States District Court for the Southern District of Florida (the "Court")

against Worldwide, TEGFI, AEI and EFI (collectively referred to as the "Receivership

Entities"), and their principals, John P. "Jack" Utsick, Robert Yeager and Donna Yeager. The

SEC alleged violations of the anti-fraud and registration provisions of the federal securities

laws and sought an injunction against their further violation.

2. By Order dated April 20, 2006 (the "Receivership Order"), the Court appointed Michael I.

Goldberg as receiver over the Receivership Entities. Under the terms of the Receivership

Order, the Receiver is authorized to investigate the affairs of the Receivership Entities, to

marshal and safeguard these entities' assets, and to institute legal proceedings for the benefit

and on behalf of the Receivership Entities' investors and other creditors against individuals

or entities which the Receiver claims have improperly received funds traceable from

investors in the Receivership Entities, including but not limited to actions seeking

constructive trusts, disgorgement of profits and recovery and avoidance of fraudulent

transfers under Florida Statute § 726.101, et seq. or otherwise.

II. The Nature of the Receiver’s Claims Against Malik

3. The Receiver contends that Malik improperly received fraudulent transfers totaling $620,000

traceable from other investors of the Receivership Entities and the Receiver seeks to avoid

the Transfers pursuant to Florida's Uniform Fraudulent Transfer Statute. Fla. Stat. §726.01

et. seq. Substantial discovery was taken in this case including depositions of Malik, William


Sewer, Esq. (Malik’s transactional attorney, who documented loans from Malik to Utsick),

Bruce Glatman (the person who introduced Malik to Utsick), the Receiver, and the

Receiver’s experts.

III. The Proposed Settlement

4. The settlement terms are summarized in Exhibit A, which includes the following

information concerning the settlement:

Column 1 – The Defendant(s).1

Column 2 – Notation if lawsuit was filed.2

Column 3 - Amount of Receiver's claim.3

Column 4 - Amount of settlement.

Column 5 – Portion of settlement proceeds paid at time of filing Motion.

Column 6 – Defendant's outstanding balance due to Receiver, if any.

Column 7 – Notes, including payment terms, regarding any outstanding balance

due to Receiver.

IV. Receiver's Settlement Considerations

11. In determining whether to settle with a particular Defendant, the Receiver considered

various factors including without limitation: i) the Defendant's ability to pay; ii) whether the

payments were Profits or Commissions; iii) the lapse of time from the date of the payments until the

demand (i.e. statute of limitations); iv) the Defendant's lack of knowledge of alleged wrongdoing

by the Receivership Entities or their principals; v) the ability of the Receiver to set-off the claims

of related persons against the amount demanded by the Receiver; vi) the costs and risks of litigation;

and, vii) the dollar amounts involved.

12. The Receiver believes, in his sound business judgment, that the settlement is in the


best interests of the estates of the Receivership Entities and their creditors and urges the Court to

approve the settlement.

V. Memorandum of Law

The Court has broad powers and wide discretion to determine relief in an equity

receivership. SEC v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992). The right of a receiver to settle

claims and compromise actions with the approval and sanction of the court is well recognized.

O'Neal v. General Motors Corporation, 841 F.Supp. 391, 398 (M.D. Fla. 1993). The Receivership

Order specifically authorizes the Receiver to, among other things: "Defend, compromise or settle

legal actions . . . in which the Defendants or the Receiver is a party, commenced either prior to or

subsequent to this Order, with authorization of this Court…" See ¶ 6 of the Receivership Order.

Accordingly, the Receiver seeks approval of this Court to enter into the Settlement

Agreement with the Defendant. The Receiver believes the Settlement Agreement is in the best

interest of the parties and the Receivership Entities’ estates. Moreover, the Receiver entered into the

settlement in good faith following an analysis of the merits of the case, the defenses, the potential

costs of litigation and the impact on the resources of the Receivership Entities’ estates.

WHEREFORE, the Receiver respectfully requests this Court (i) enter an Order approving

the terms and conditions of the Settlement Agreement; (ii) reserve jurisdiction to enforce the terms

of the Settlement Agreement; and (iii) grant such other relief as is just and proper.

LOCAL RULE 7.1 CERTIFICATION OF COUNSEL

Pursuant to Local Rule 7.1, undersigned counsel hereby certifies that the Receiver has conferred

or attempted to confer with counsel on the attached service list and has not received a response or

an objection to this motion at the time it was filed. Counsel for Malik takes no position on the

motion. Counsel for the SEC has no opposition to this motion.


CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was served on the Clerk of Court,via CM/ECF, which will send a Notice of Electronic Filing to the parties on the service list attachedbelow, this 28st day of April, 2009.

By: s/ Jeffrey R. Sonn Jeffrey R. Sonn, EsquireFlorida Bar Number: 773514

SONN & EREZAttorneys for PlaintiffBroward Financial Centre500 E. Broward Boulevard, Suite 1600Fort Lauderdale, Florida 33394Telephone: (954) 763-4700Facsimile: (954) 763-1866


SERVICE LIST

David R. ChaseFlorida Bar No 967970David R. Chase, P.A.1700 East Las Olas Blvd., Penthouse 2Ft. Lauderdale, FL 33301Local Counsel for John P. (Jack) UtsickTelephone : (954) 920-7779Facsimile: (954) [email protected] for Utsick

Robert Kent LevensonSecurities & Exchange Commission800 Brickell Avenue, Suite 1800Miami, FL 33131Telephone : (305) 982-6341Facsimile: (305)[email protected] for the SEC

Abraham Singer, Esq.Pepper hamilton LLP100 Renaissance Center, Suite 1600Detroit, MI [email protected] for Malik

Richard Aldo Serafini, Esq.Katherine A. Compton, Esq.Avi Benayoun, Esq.Greenberg Traurig401 E. Las Olas Blvd, Suite 2000Ft. Lauderdale, FL 33301954-768-8256Fax: [email protected] for the Yeagers and AEI

Richard S. KrautDilworth Paxson LLP655 15th Street NWSuite 810Washington, DC 20005Telephone : (202) 466-9152Facsimile: (202) [email protected] for Jack Utsick

Teresa Jacqueline VergesYolanda GonzalezAndre ZamoranoSecurities & Exchange Commission801 Brickell Avenue, Suite 1800Miami, FL [email protected]@[email protected] for Plaintiff


Howard J. Berlin, Esq.Kluger Peretz, Kaplan, et al.201 South Biscayne Blvd. - 17th FloorMiami, FL 33131305-379-9000Fax: [email protected] for Receiver

David M. Levine, Esq.Tew Cardenas, LLPFour Seasons Tower, 15th Floor1441 Brickell AvenueMiami, FL 33131-3407305-536-1112Fax: [email protected] for First Source Bank


Exhibit “A”

Defendant Lawsuit? Claim Settlement PaymentsYet?

BalanceDue

PaymentTerms

Michael J.Malik

Yes $620,000 $170,000 No $170,000 Paymentsover one yearbeginningMay 1, 2009,Judgment for$620,000 lesspayments ifnot made.


UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

MICHAEL I.. GOLDBERG, as Receiver forWorldwide Entertainment, Inc., TheEntertainment Group Fund, Inc., American Enterprises, Inc., and Entertainment Funds, Inc., Case No. 08-CV-60870-Huck-Rosenbaum

Plaintiffs,

vs.

MICHAEL J. MALIK, SR.,

Defendant.________________________________________________/

ORDER OF DISMISSALWITH PREJUDICE, AND ORDER GRANTING RECEIVER'S MOTION FOR APPROVAL OF

SETTLEMENT AGREEMENT WITH MICHAEL J. MALIK

THIS MATTER came before the Court without hearing, on the Motion for Approval of

Settlement Agreement with Michael Malik, Sr. Regarding Fraudulent Transfers (the "Settlement

Motion") filed by Michael I. Goldberg, the Court appointed Receiver (the "Receiver"). The

Court, having reviewed the Settlement Motion and its attachment, finding that the Receiver has

exercised his business judgment in entering into the settlement, and being otherwise fully

advised in the premises, it is:


Case No. 08-CV-60870-Huck-Rosenbaum

ORDERED AND ADJUDGED that

1. The Settlement Motion is GRANTED.

2. The Receiver is authorized to enter into the settlement summarized in Exhibit A

to the Settlement Motion, and is further authorized to execute any documents and take any

actions reasonably necessary to consummate the transactions contemplated therein.

3. This case is DISMISSED WITH PREJUDICE, the parties shall bear their own

respective attorney’s fees and costs in this action. All pending motions, if any, are denied as

moot. The Court reserves jurisdiction to enforce the terms of the settlement between the parties..

DONE AND ORDERED in Miami-Dade County, Florida on this ____ day of _______, 2009.

_______________________________UNITED STATES DISTRICT JUDGE

Conformed copies to:All counsel of record


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