All former students of Silver State Helicopters with questions about the proposed class action settlement with Student Loan Xpress are invited to e-mail their questions to settlementquestions@gmail.com. This is a special e-mail address set up by class action counsel for this purpose. In addition, in person meetings with former SSH students and class action counsel are being set up for January, 2010 for Fort Lauderdale, Jacksonville, Melbourne, Oakland, Long Beach, Las Vegas, Salt Lake City and Poughkeepsie. I will be answering questions and giving my opinions at the Long Beach, CA meeting.
All clients of mine with questions about the proposed settlement are invited to contact me directly. Many of you have all ready done so. Every class member will have a chance to opt out of the proposed settlement agreement. If you do not like the agreement and think that you can do better, you will NOT be forced to accept the proposed settlement. You should wait until you have received all relevant information before you make this decision.
For former SSH students that are not in the class, it is important for you to know that class counsel do NOT represent you. You will not be covered by the class action settlement. This applies also to all class members who reject the proposed settlement. You will want to have the best possible legal representation to help you in resolving your ongoing SSH problems. I represent many students in this category. I am still signing up a limited number of former SSH students, including students that left SSH prior to its bankruptcy filing, students that are currently in bankruptcy, students with Loans from KeyBank, and students that paid off their SLX loans.
Tuesday, November 24, 2009
Thursday, November 19, 2009
Court Grants Preliminary Approval of Class Action Settlement With Student Loan Express
Earlier today, United States District Court Judge Steven D. Merryday signed an Order granting preliminary approval to the proposed class action settlement with Student Loan Xpress. A copy of the docket entry is set forth herein:
The following transaction was entered on 11/19/2009 at 2:04 PM EST and filed on 11/19/2009
Case Name: Holman v. Liberty Bank, N.A.
Case Number: 8:08-cv-305
Filer:
Document Number: 87
Docket Text:
ORDER granting [78], [82], [83]--motions re approval of class action settlement, approval of the manner and form of notice to class members, approval of the claim form, approval and establishment of proposed schedule for final confirmation of settlement, preliminary injunction to preclude parallel action, a conditional certification of the class for settlement purposes, and appointment of lead counsel for the settlement class and class representative; retaining jurisdiction of this matter for all purposes; directing that notice to class members shall be mailed by 12/30/2009; providing that class members file claims or objections by 2/13/2010; providing that filings supporting settlement or responding to objections shall be filed by 3/15/2010; scheduling a fairness hearing for 3/22/2009 at 8:30 a.m. Signed by Judge Steven D. Merryday on 11/19/2009. (BK)
A full copy of the Judge's Order is set forth herein:
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
MICHAEL HOLMAN, et al., on behalf of
themselves and all others similarly
situated,
Plaintiffs,
v. CASE NO.: 8:08-cv-305-T-23MAP
STUDENT LOAN XPRESS, INC.,
Defendant.
__________________________________/
ORDER AND PRELIMINARY INJUNCTION
The parties jointly move for (1) preliminary approval of a class action settlement,
(2) approval of the “manner and form of notice” to class members, (3) approval of the
claim form, and (4) approval and establishment of a proposed schedule for final
confirmation of the class action settlement (Doc. 78). Additionally, the parties move for
(5) a preliminary injunction to preclude any parallel action pending review of the
proposed settlement (Doc. 82), (6) a conditional certification of the class for settlement
purposes, and (7) the appointment of both lead counsel for the settlement class and
class representatives (Doc. 83).
Background
1. General Allegations
The plaintiffs sue, on behalf of themselves and others similarly situated, the
defendant, Student Loan Xpress, Inc., for (1) a violation of the Ohio Retail and
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 1 of 13
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Installment Sales Act, Sections 1317.01-.99, Ohio Revised Code, (2) aiding and
abetting fraud, and (3) negligent misrepresentation (Doc. 77).
The plaintiffs’ claims derive from the defendant’s partnership with Silver State
Helicopters, LLC (“Silver State”), an unaccredited helicopter flight training school. The
plaintiffs allege that Silver State promised each student a flight instructor certification
within eighteen months of the student’s enrollment. Silver State charged a total tuition
of approximately $70,000. The defendant worked with Silver State and solicited a
private loan application from each student in order to facilitate the student’s enrollment
in Silver State. After approving a student’s loan application, the defendant disbursed
the total loan amount to Silver State. However, rather than investing the money in
either equipment or faculty for helicopter flight training, each executive officer of Silver
State misappropriated the money for the officer’s personal use. As a result, Silver
State’s business functioned like a “ponzi scheme”—Silver State educated the school’s
first group of students by recruiting additional students. Silver State perpetrated the
scheme by misrepresenting or concealing (1) “anticipated tuition costs,”
(2) “employment opportunities,” (3) “the time frame for receiving [Federal Aviation
Administration (“FAA”)] ratings;” (4) Silver State’s “capability to provide adequate
equipment, proper training[,] and sufficient maintenance;” and (5) Silver State’s
“intended and actual use of the loan proceeds.” (Doc. 77)
To facilitate Silver State’s scheme, the defendant solicited loan applications
during each Silver State recruiting event. In order to insulate itself from liability, the
defendant purposefully failed to notify each student that the loan agreement was subject
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 2 of 13
1 Notice is required by the Federal Trade Commission’s (“FTC”) “Holder Rule.” See 16 C.F.R. §
433.3.3.
2 Excluded from the class is “(i) any borrower or co[-]signer whose loan has a zero balance as of
the Preliminary Approval Order date; (ii) any borrower or co[-]signer who would have no balance owing on
the loan as of the Preliminary Approval Order Date as a result of the unconditional and conditional debt
forgiveness made available under the settlement; (iii) any borrower or co[-]signer who has a Chapter 7, 11
or[,] 13 case pending as of the Preliminary Approval Order Date, and the corresponding borrow or co[-
]signer or such person; (iv) any borrower or co[-]signer who validly requests exclusion therefrom in
accordance with the procedures ordered by the Court; (v) any borrower or co[-]signer who executed a
release to resolve his/her potential claims against [the defendant] arising out of Silver State on or before
the Preliminary Approval Order Date, and the corresponding borrower or co[-]signer of such person; and
(vi) any borrower or co[-]signer included on a government list of known or suspected terrorists or other
individuals, entities or organizations of concern, including persons appearing on the United States
Department of the Treasury, Office of Foreign Assets Control List of Specially Designated Nationals and
Blocked Persons, and the corresponding borrower or co[-]signer of such person.” (Doc. 78-2, § 1.8)
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to any defense applicable to Silver State for failing to provide the promised educational
service.1 (Doc. 77) Omitting notice from the loan agreement allowed the defendant to
argue that the defendant was not subject to any defense arising from Silver State’s
failure to educate a student. In exchange for the defendant’s facilitating and
disregarding Silver State’s fraudulent scheme, the defendant collected a substantial
profit from the high interest rate on each student loan. On February 4, 2008, Silver
State ceased operating and filed for bankruptcy. When Silver State closed, many
students had obtained loans in order to pay Silver State’s full tuition, but only a small
percentage had received the promised education.
2. The Proposed Class & Subclass
The plaintiffs seek conditional certification of a class for settlement purposes. The
proposed class includes “(a) all persons who obtained a loan originated by Liberty Bank
to finance the payment of tuition to Silver State, whose loan is held by [the defendant]
as of the Preliminary Approval Order Date, and who were enrolled at Silver State as of
February 4, 2008[,] and (b) all persons who co[-]signed such loans.” (Doc. 78-2, § 1.8)2
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 3 of 13
3 “Subclass One” includes each class member that received no FAA certification, “Subclass Two”
includes each class member that received an FAA certification, “Subclass Three” includes each class
member that received two FAA certifications, “Subclass Four” includes each class member that received
three FAA certifications, “Subclass Five” includes each class member that received four FAA certifications,
and “Subclass Six” includes each class member that co-signed a loan. (Doc. 78-2, § 1.62-1.67)
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Pursuant to Rule 23(c)(5), Federal Rules of Civil Procedure, the proposed class is
divided into six subclasses “based on the number of Federal Aviation Administration
(“FAA”) certifications or ratings a student received before Silver State closed.”3
(Doc. 83)
Discussion
1. Conditional Class Certification
“A class may be certified ‘solely for purposes of settlement [if] a settlement is
reached before a litigated determination of the class certification issue.’” Borcea v.
Carnival Corp., 238 F.R.D. 664, 671 (S.D. Fla. 2006) (quoting Woodward v. NOR-AM
Chem. Co., 1996 WL 1063670, *14 (S.D. Ala. 1996)); see also Amchem Products, Inc.
v. Windsor, 521 U.S. 591, 618-20 (1997). However, the requirements of Rule 23,
Federal Rules of Civil Procedure, that serve “to protect absentees by blocking
unwarranted or overbroad class definitions [ ]demand undiluted, even heightened,
attention in the settlement context.” 521 U.S. at 620. The plaintiffs bear the burden of
establishing that each requirement of Rule 23(a) and at least one requirement of Rule
23(b) is satisfied. Rutstein v. Avis Rent-A-Car Sys., 211 F.3d 1228, 1233 (11th
Cir. 2000). Rule 23(a) permits class certification only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of the claims or defenses of
the class; and (4) the representative parties will fairly and adequately protect
the interests of the class.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 4 of 13
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The numerosity requirement of Rule 23(a) is satisfied by the impracticability of
joinder, which is generally presumed if a putative class amounts to more than forty
individuals. Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir. 1986); see
also Jones v. Firestone Tire and Rubber Co., Inc., 977 F.2d 527, 534 (11th Cir. 1992)
(finding that fewer than twenty-one individuals is generally inadequate). Commonality is
satisfied by the existence of “‘at least one issue affecting all or a significant number of
proposed class members.’” Fresco v. Auto Data Direct, Inc., 2007 WL 2330895, *2
(S.D. Fla. 2007) (quoting Fabricant v. Sears Roebuck, 202 F.R.D. 310, 313 (S.D. Fla.
2001)). Typicality is satisfied by showing the existence of “‘a sufficient nexus . . .
between the claims of the named representative and those of the class at large.”
Hines v. Widnall, 334 F.3d 1253, 1256 (11th Cir. 2003); Murray v. Auslander, 244 F.3d
807, 811 (11th Cir. 2001) (finding that “[a] class representative must possess the same
interest and suffer the same injury as the class members in order to be typical under
Rule 23(a)(3).”). Finally, class counsel and the class representatives are adequate
representatives of the class if (1) “‘plaintiffs’ counsel are qualified, experienced, and
generally able to conduct the proposed litigation’” and (2) the plaintiffs lack “‘interests
antagonistic to those of the rest of the class.’” Kirkpatrick v. J.C. Bradford & Co., 827
F.2d 718, 726 (11th Cir. 1987) (quoting Griffin v. Carlin, 755 F.2d 1516, 1532 (11th
Cir. 1985)).
In this action, the proposed settlement class satisfies the requirements of
Rule 23(a). The proposed class includes approximately 2,900 individuals. Each
individual was enrolled at Silver State as of February 4, 2008, when Silver State ceased
operating. The alleged harm to each individual arises from Silver State’s closure, and
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 5 of 13
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each individual’s promissory note contains the same choice of law provision. The
plaintiffs share the same interest, legal claim, and alleged injury as the proposed class
and subclass. (Doc. 83) Furthermore, each named plaintiff’s interest aligns with the
that of the proposed class and a division of the proposed subclass. Specifically, each
plaintiff (1) was either a student at Silver State when Silver State ceased operating or
co-signed a loan for a student at Silver State and (2) “vigorously pursued relief” in
reaching the settlement agreement on behalf of the entire class. (Doc. 83) The
plaintiffs’ counsel (the proposed class counsel) understands the plaintiffs’ claim,
possesses experience handling consumer and class action litigation, and stands “ready,
willing, and able to devote the resources necessary to litigate this case vigorously.”
(Doc. 83)
Rule 23(b) defines each type of permissible class action. Relevant to this action
is Rule 23(b)(3), which permits class certification upon a finding that “the questions of
law or fact common to class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.” Essentially, the rule requires a
determination of “whether proposed class[] [is] sufficiently cohesive to warrant
adjudication by representation.” 521 U.S. at 623.
In this action, the proposed settlement class is sufficiently cohesive and common
issues of fact and law predominate over any individual issue. Each individual was a
student at Silver State and obtained a loan, which the defendant holds, from Liberty
Bank. Each individual suffered the same alleged injury, in that no individual received a
complete education, at the time that Silver State ceased operating. Each individual
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 6 of 13
4 Contact information for the settlement administrator is provided in the notice to class members.
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seeks relief under the same legal theory and each individual’s promissory note contains
the same choice of law provision. To date, each action filed on behalf of a former Silver
State student is a collective or class action seeking relief for a financial obligation the
student incurred in exchange for a service that Silver State failed to deliver. As a
practical matter, requiring multiple actions by each student or several groups of students
would be financially burdensome and judicially inefficient.
Accordingly, the proposed class is CONDITIONALLY CERTIFIED for settlement
purposes. The settlement class includes “(a) all persons who obtained a loan originated
by Liberty Bank to finance the payment of tuition to Silver State, whose loan is held by
[the defendant] as of the Preliminary Approval Order Date, and who were enrolled at
Silver State as of February 4, 2008[,] and (b) all persons who co[-]signed such loans.”
In the event that the settlement fails to receive final approval, conditional certification is
revoked and the plaintiffs must move for class certification for the purpose of litigation.
Any member may request exclusion from the settlement class by contacting the
settlement administrator.4 The request shall include the member’s (1) full name,
(2) current address, (3) telephone number, (4) SLX loan number, and (4) signed
statement requesting exclusion from the settlement class in this action. Failure to timely
request exclusion from the class will render binding as to each class member any
judgment concerning the proposed settlement in this action.
Any member not requesting exclusion may object in writing to any term of the
proposed settlement or to class certification by contacting the settlement administrator.
An objection shall include the objecting member’s (1) full name, (2) current address,
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 7 of 13
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(3) telephone number, (4) SLX loan number, (5) objection; (6) notice of an intent to
appear that the final fairness hearing, if the member wishes to present the member’s
objection; and (6) any evidence or supporting document for the court’s consideration.
Any objecting member that notifies the settlement administrator of an intent to appear
must include the name, address, and telephone number of the objecting member’s
attorney (if applicable). Failure to notify will preclude, except for good cause shown, the
objecting member from presenting the objection at the final fairness hearing.
2. Appointment of Class Counsel & Class Representatives
Rule 23(g), Federal Rules of Civil Procedure, requires the appointment of class
counsel upon certification of a class. In appointing class counsel, the factors
considered are (1) “the work counsel has done in identifying or investigating potential
claims in the action;” (2) “counsel’s experience in handing class actions, other complex
litigation, and the types of claims asserted in the action;” (3) “counsel’s knowledge of the
applicable law;” and (4) “the resources that counsel will commit to representing the
class.” Considering the plaintiffs’ motion (Doc. 83), counsel’s experience with complex
litigation, counsel’s knowledge of the claim and applicable law, and counsel’s
committing the necessary time and resources to this matter, Christopher Casper of
James, Hoyer, Newcomer & Smiljanich, P.A. and Kevin F. Rooney of the Pinnacle Law
Group, LLP, are appointed as class counsel.
The plaintiffs, Michael Holman, Robert Perrotta, Kevin Wilhemy, Matthew Arnold,
Christopher Korte, and Deborah Pechacek, are appointed to represent the class.
Additionally, Robert Perrotta is appointed to represent “Subclass One,” Michael Holman
is appointed to represent “Subclass Two,” Kevin Wilhemy is appointed to represent
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 8 of 13
5 The defendant’s defenses include, for example, (1) preemption of the plaintiffs’ claims under the
National Bank Act, (2) the lack of a private right of action under the FTC Holder Rule, and (3) “numerous
complex individualized issues of liability, causation[,] and damages” that predominate over issues common
the proposed class. (Doc. 78, pp. 26-28)
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“Subclass Three,” Matthew Arnold is appointed to represent “Subclass Four,”
Christopher Korte is appointed to represent “Subclass Five,” and Deborah Pechacek is
appointed to represent “Subclass Six.”
3. Preliminary Settlement Approval
Rule 23(e), Federal Rules of Civil Procedure, permits approval of a class action
settlement if the settlement is “fair, reasonable, and adequate.” See Strube v. Am.
Equity Inv. Life Ins. Co., 226 F.R.D. 688, 697 (M.D. Fla. 2005) (Fawsett, J.). Approval is
generally a two-step process in which a “preliminary determination on the fairness,
reasonableness, and adequacy of the proposed settlement terms” is reached. See
DAVID F. HERR, ANNOTATED MANUAL FOR COMPLEX LITIGATION § 21.632 (4th ed. 2008).
The factors considered are (1) the influence of fraud or collusion on the parties’
reaching a settlement, (2) “the likelihood of success at trial,” (3) “the range of possible
recovery,” (4) “the complexity, expense[,] and duration of litigation, (5) “the substance
and amount of opposition to the settlement,” and (6) “the stage of proceedings at which
the settlement was achieved.” Bennet v. Behring Corp., 737 F.2d 982, 986 (11th
Cir. 1984).
In this action, no apparent fraud or collusion influenced the parties’ reaching a
settlement. The settlement is the product of both an arm’s length, “protracted and
contentious” negotiation with a mediator and two “mediator’s proposals.” (Doc. 78)
Success at trial is uncertain because the defendant possesses legal and factual
defenses to the plaintiffs’ claims as well as several grounds for challenging class
certification.5 The range of possible recovery under the proposed settlement is
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 9 of 13
6 The parties assert (Doc. 78) that twelve state attorneys general support the settlement. Also
supporting the settlement are two attorneys retained by two groups of Silver State students and various
class members. (Doc. 78, at 32) (Doc. 79).
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substantial and includes (1) conditional and unconditional debt forgiveness based on the
number of FAA certifications that a student received, (2) an early re-payment refund;
(3) a freeze on interest accrual from February 4, 2008, until final settlement approval;
(4) a reduced monthly re-payment rate, (5) amended reports to credit rating agencies;
(6) the payment of any attorneys’ fee, cost, or expense; (7) additional compensation to
each class representative not to exceed $5,000.00 per class representative; and (8) the
payment of any cost of notice to the class or of settlement administration. (Doc. 78-2,
§ 3.3) The combined conditional and unconditional debt forgiveness ranges from
seventy-five percent for a member of Subclass One to twenty percent for a member of
Subclass Five. The total unconditional debt forgiveness amounts to more than
$11,000,000.00 (Doc. 78-2, § 3.3.3) and the total conditional debt forgiveness amounts
to more than $100,000,000.00 (Doc. 78-2, § 3.3.4).
Furthermore, full litigation of this case would be lengthy, expensive, and highly
complex. The aggregate outstanding debt of the settlement class exceeds
$175,000,000.00 and class counsel has already incurred $100,000.00 in expenses. In
light of the high stakes involved, both parties are highly motivated to “aggressively” and
“vigorously” litigate this case. (Doc. 78, at 32) Additionally, substantial support exists
for the settlement,6 and the parties reached a settlement only after extensive
investigation, research, and negotiation.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 10 of 13
7 Shealy v. Student Loan Express, Inc., No. 3:08-cv-03057-JFA (D.S.C. 2008); Hyatt v. Student
Loan Express, Inc., No. C09-1324-TSZ (W.D. Wa. 2009); Kilgore v. KeyBank National Assoc., No. C-08-
02958 (N.D. Cal. 2009); Mason v. KeyBank National Assoc., No. A 565943; Caney v. Airola, ADV 2008-
141 (Feb. 15, 2008) (settled); Elrod v. Airola, No. 08-A-10868-1 (July 25, 2008) (settled).
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Accordingly, the proposed settlement is preliminarily approved as a “fair,
reasonable, and adequate” compromise of the plaintiffs’ claim.
4. Preliminary Injunction
Pursuant to Rule 23(d), Federal Rules of Civil Procedure, and the All-Writs Act,
28 U.S.C. § 1651, the parties move (Doc. 82) for a preliminary injunction to preclude
any parallel or overlapping action pending final approval of the proposed settlement.
The All-Writs Act provides authority “to enjoin a party to litigation before it from
prosecuting an action in contravention of a settlement agreement over which the district
court has retained jurisdiction.” Henson v. Ciba-Geigy Corp., 261 F.3d 1065, 1068
(11th Cir. 2001); Demint v. Nationsbank Corp., 208 F.R.D. 639, 644 n.8 (M.D. Fla.
2002). Accordingly, “[f]ederal courts may invoke the authority conferred by the All-Writs
Act to enjoin parties from separate litigation to protect the integrity of a judgment
entered in a class action and to avoid re[-]litigation of issues . . . .” 208 F.R.D. at 644
n.8. In the context of a conditional class certification and an impending settlement,
“[t]he threat to the federal court’s jurisdiction posed by parallel state actions is
particularly significant . . . . “ In re Diet Drugs, 282 F.3d 220, 236 (3rd Cir. 2002)
(describing complex litigation as “especially vulnerable to parallel state actions that may
‘frustrate the district court’s efforts to craft a settlement in the multi-district litigation
before it’ . . . thereby destroying the ability to achieve the benefits of consolidation.”)
(citation omitted).
In this instance, the defendant faces several actions7 by former Silver State
students and a high probability exists that additional actions will be filed. (Doc. 82)
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 11 of 13
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Accordingly, a preliminary injunction enjoining any overlapping or parallel action is
necessary to preserve this court’s jurisdiction to administer and enter final judgment on
the proposed settlement agreement.
5. Notice to Class Members
Rule 23(c)(2)(B), Federal Rules of Civil Procedure, requires notice to members
of a class certified under 23(b)(3). Notice must consist of the “best notice that is
practicable under the circumstances.” Furthermore, notice “must clearly and concisely
state in plain, easily understood language:”
(i) the nature of the action;(ii) the definition of the class certified; (iii) the class
claims, issues, or defenses; (iv) that a class member may enter an
appearance through an attorney if the member so desires; (v) that the court
will exclude from the class any member who requests exclusion; (vi) the time
and manner for requesting exclusion; and (vii) the binding effect of a class
judgment on members under Rule 23(c)(3).
In this action, the parties submit the proposed notice material for review and approval.
(Doc. 78-1, Ex. 1-6) The proposed notice and claim form appear to state all of the
required information in a relatively clear and concise manner and otherwise satisfy the
requirements of Rule 23(c). The parties’ proposed method of notice consists of the
settlement administrator’s mailing notice by first class mail to the most current mailing
address of each member of the settlement class. (Doc. 78)
Because the proposed method of notice is reasonable and the notice material
meets the requirements of Rule 23(c), the “manner and form” of notice to class
members is approved.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 12 of 13
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Conclusion
Accordingly, the parties motions’ (Docs. 78, 82, & 83) are GRANTED. The
plaintiffs, any class member, and any person acting on behalf of a class member are
ENJOINED from prosecuting, pending this court’s review of the proposed class action
settlement, any claim resolved by or subject to the proposed settlement. The court shall
retain jurisdiction over this matter for all purposes. Furthermore, (1) notice to each class
member shall be mailed no later than December 30, 2009; (2) each class member shall
object to the proposed settlement, object to the class member’s number of FAA
certifications, file a claim, or request exclusion from the settlement no later than
February 13, 2010; (3) any party that wishes to support the settlement or respond to
any objection to the settlement shall file any supporting or responding paper by
March 15, 2010, (4) a final fairness hearing on the proposed settlement is set for
March 22, 2010, at 8:30 a.m..
ORDERED in Tampa, Florida, on November 19, 2009.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 13 of 13
The following transaction was entered on 11/19/2009 at 2:04 PM EST and filed on 11/19/2009
Case Name: Holman v. Liberty Bank, N.A.
Case Number: 8:08-cv-305
Filer:
Document Number: 87
Docket Text:
ORDER granting [78], [82], [83]--motions re approval of class action settlement, approval of the manner and form of notice to class members, approval of the claim form, approval and establishment of proposed schedule for final confirmation of settlement, preliminary injunction to preclude parallel action, a conditional certification of the class for settlement purposes, and appointment of lead counsel for the settlement class and class representative; retaining jurisdiction of this matter for all purposes; directing that notice to class members shall be mailed by 12/30/2009; providing that class members file claims or objections by 2/13/2010; providing that filings supporting settlement or responding to objections shall be filed by 3/15/2010; scheduling a fairness hearing for 3/22/2009 at 8:30 a.m. Signed by Judge Steven D. Merryday on 11/19/2009. (BK)
A full copy of the Judge's Order is set forth herein:
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
MICHAEL HOLMAN, et al., on behalf of
themselves and all others similarly
situated,
Plaintiffs,
v. CASE NO.: 8:08-cv-305-T-23MAP
STUDENT LOAN XPRESS, INC.,
Defendant.
__________________________________/
ORDER AND PRELIMINARY INJUNCTION
The parties jointly move for (1) preliminary approval of a class action settlement,
(2) approval of the “manner and form of notice” to class members, (3) approval of the
claim form, and (4) approval and establishment of a proposed schedule for final
confirmation of the class action settlement (Doc. 78). Additionally, the parties move for
(5) a preliminary injunction to preclude any parallel action pending review of the
proposed settlement (Doc. 82), (6) a conditional certification of the class for settlement
purposes, and (7) the appointment of both lead counsel for the settlement class and
class representatives (Doc. 83).
Background
1. General Allegations
The plaintiffs sue, on behalf of themselves and others similarly situated, the
defendant, Student Loan Xpress, Inc., for (1) a violation of the Ohio Retail and
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 1 of 13
- 2 -
Installment Sales Act, Sections 1317.01-.99, Ohio Revised Code, (2) aiding and
abetting fraud, and (3) negligent misrepresentation (Doc. 77).
The plaintiffs’ claims derive from the defendant’s partnership with Silver State
Helicopters, LLC (“Silver State”), an unaccredited helicopter flight training school. The
plaintiffs allege that Silver State promised each student a flight instructor certification
within eighteen months of the student’s enrollment. Silver State charged a total tuition
of approximately $70,000. The defendant worked with Silver State and solicited a
private loan application from each student in order to facilitate the student’s enrollment
in Silver State. After approving a student’s loan application, the defendant disbursed
the total loan amount to Silver State. However, rather than investing the money in
either equipment or faculty for helicopter flight training, each executive officer of Silver
State misappropriated the money for the officer’s personal use. As a result, Silver
State’s business functioned like a “ponzi scheme”—Silver State educated the school’s
first group of students by recruiting additional students. Silver State perpetrated the
scheme by misrepresenting or concealing (1) “anticipated tuition costs,”
(2) “employment opportunities,” (3) “the time frame for receiving [Federal Aviation
Administration (“FAA”)] ratings;” (4) Silver State’s “capability to provide adequate
equipment, proper training[,] and sufficient maintenance;” and (5) Silver State’s
“intended and actual use of the loan proceeds.” (Doc. 77)
To facilitate Silver State’s scheme, the defendant solicited loan applications
during each Silver State recruiting event. In order to insulate itself from liability, the
defendant purposefully failed to notify each student that the loan agreement was subject
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 2 of 13
1 Notice is required by the Federal Trade Commission’s (“FTC”) “Holder Rule.” See 16 C.F.R. §
433.3.3.
2 Excluded from the class is “(i) any borrower or co[-]signer whose loan has a zero balance as of
the Preliminary Approval Order date; (ii) any borrower or co[-]signer who would have no balance owing on
the loan as of the Preliminary Approval Order Date as a result of the unconditional and conditional debt
forgiveness made available under the settlement; (iii) any borrower or co[-]signer who has a Chapter 7, 11
or[,] 13 case pending as of the Preliminary Approval Order Date, and the corresponding borrow or co[-
]signer or such person; (iv) any borrower or co[-]signer who validly requests exclusion therefrom in
accordance with the procedures ordered by the Court; (v) any borrower or co[-]signer who executed a
release to resolve his/her potential claims against [the defendant] arising out of Silver State on or before
the Preliminary Approval Order Date, and the corresponding borrower or co[-]signer of such person; and
(vi) any borrower or co[-]signer included on a government list of known or suspected terrorists or other
individuals, entities or organizations of concern, including persons appearing on the United States
Department of the Treasury, Office of Foreign Assets Control List of Specially Designated Nationals and
Blocked Persons, and the corresponding borrower or co[-]signer of such person.” (Doc. 78-2, § 1.8)
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to any defense applicable to Silver State for failing to provide the promised educational
service.1 (Doc. 77) Omitting notice from the loan agreement allowed the defendant to
argue that the defendant was not subject to any defense arising from Silver State’s
failure to educate a student. In exchange for the defendant’s facilitating and
disregarding Silver State’s fraudulent scheme, the defendant collected a substantial
profit from the high interest rate on each student loan. On February 4, 2008, Silver
State ceased operating and filed for bankruptcy. When Silver State closed, many
students had obtained loans in order to pay Silver State’s full tuition, but only a small
percentage had received the promised education.
2. The Proposed Class & Subclass
The plaintiffs seek conditional certification of a class for settlement purposes. The
proposed class includes “(a) all persons who obtained a loan originated by Liberty Bank
to finance the payment of tuition to Silver State, whose loan is held by [the defendant]
as of the Preliminary Approval Order Date, and who were enrolled at Silver State as of
February 4, 2008[,] and (b) all persons who co[-]signed such loans.” (Doc. 78-2, § 1.8)2
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 3 of 13
3 “Subclass One” includes each class member that received no FAA certification, “Subclass Two”
includes each class member that received an FAA certification, “Subclass Three” includes each class
member that received two FAA certifications, “Subclass Four” includes each class member that received
three FAA certifications, “Subclass Five” includes each class member that received four FAA certifications,
and “Subclass Six” includes each class member that co-signed a loan. (Doc. 78-2, § 1.62-1.67)
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Pursuant to Rule 23(c)(5), Federal Rules of Civil Procedure, the proposed class is
divided into six subclasses “based on the number of Federal Aviation Administration
(“FAA”) certifications or ratings a student received before Silver State closed.”3
(Doc. 83)
Discussion
1. Conditional Class Certification
“A class may be certified ‘solely for purposes of settlement [if] a settlement is
reached before a litigated determination of the class certification issue.’” Borcea v.
Carnival Corp., 238 F.R.D. 664, 671 (S.D. Fla. 2006) (quoting Woodward v. NOR-AM
Chem. Co., 1996 WL 1063670, *14 (S.D. Ala. 1996)); see also Amchem Products, Inc.
v. Windsor, 521 U.S. 591, 618-20 (1997). However, the requirements of Rule 23,
Federal Rules of Civil Procedure, that serve “to protect absentees by blocking
unwarranted or overbroad class definitions [ ]demand undiluted, even heightened,
attention in the settlement context.” 521 U.S. at 620. The plaintiffs bear the burden of
establishing that each requirement of Rule 23(a) and at least one requirement of Rule
23(b) is satisfied. Rutstein v. Avis Rent-A-Car Sys., 211 F.3d 1228, 1233 (11th
Cir. 2000). Rule 23(a) permits class certification only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of the claims or defenses of
the class; and (4) the representative parties will fairly and adequately protect
the interests of the class.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 4 of 13
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The numerosity requirement of Rule 23(a) is satisfied by the impracticability of
joinder, which is generally presumed if a putative class amounts to more than forty
individuals. Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir. 1986); see
also Jones v. Firestone Tire and Rubber Co., Inc., 977 F.2d 527, 534 (11th Cir. 1992)
(finding that fewer than twenty-one individuals is generally inadequate). Commonality is
satisfied by the existence of “‘at least one issue affecting all or a significant number of
proposed class members.’” Fresco v. Auto Data Direct, Inc., 2007 WL 2330895, *2
(S.D. Fla. 2007) (quoting Fabricant v. Sears Roebuck, 202 F.R.D. 310, 313 (S.D. Fla.
2001)). Typicality is satisfied by showing the existence of “‘a sufficient nexus . . .
between the claims of the named representative and those of the class at large.”
Hines v. Widnall, 334 F.3d 1253, 1256 (11th Cir. 2003); Murray v. Auslander, 244 F.3d
807, 811 (11th Cir. 2001) (finding that “[a] class representative must possess the same
interest and suffer the same injury as the class members in order to be typical under
Rule 23(a)(3).”). Finally, class counsel and the class representatives are adequate
representatives of the class if (1) “‘plaintiffs’ counsel are qualified, experienced, and
generally able to conduct the proposed litigation’” and (2) the plaintiffs lack “‘interests
antagonistic to those of the rest of the class.’” Kirkpatrick v. J.C. Bradford & Co., 827
F.2d 718, 726 (11th Cir. 1987) (quoting Griffin v. Carlin, 755 F.2d 1516, 1532 (11th
Cir. 1985)).
In this action, the proposed settlement class satisfies the requirements of
Rule 23(a). The proposed class includes approximately 2,900 individuals. Each
individual was enrolled at Silver State as of February 4, 2008, when Silver State ceased
operating. The alleged harm to each individual arises from Silver State’s closure, and
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 5 of 13
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each individual’s promissory note contains the same choice of law provision. The
plaintiffs share the same interest, legal claim, and alleged injury as the proposed class
and subclass. (Doc. 83) Furthermore, each named plaintiff’s interest aligns with the
that of the proposed class and a division of the proposed subclass. Specifically, each
plaintiff (1) was either a student at Silver State when Silver State ceased operating or
co-signed a loan for a student at Silver State and (2) “vigorously pursued relief” in
reaching the settlement agreement on behalf of the entire class. (Doc. 83) The
plaintiffs’ counsel (the proposed class counsel) understands the plaintiffs’ claim,
possesses experience handling consumer and class action litigation, and stands “ready,
willing, and able to devote the resources necessary to litigate this case vigorously.”
(Doc. 83)
Rule 23(b) defines each type of permissible class action. Relevant to this action
is Rule 23(b)(3), which permits class certification upon a finding that “the questions of
law or fact common to class members predominate over any questions affecting only
individual members, and that a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.” Essentially, the rule requires a
determination of “whether proposed class[] [is] sufficiently cohesive to warrant
adjudication by representation.” 521 U.S. at 623.
In this action, the proposed settlement class is sufficiently cohesive and common
issues of fact and law predominate over any individual issue. Each individual was a
student at Silver State and obtained a loan, which the defendant holds, from Liberty
Bank. Each individual suffered the same alleged injury, in that no individual received a
complete education, at the time that Silver State ceased operating. Each individual
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 6 of 13
4 Contact information for the settlement administrator is provided in the notice to class members.
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seeks relief under the same legal theory and each individual’s promissory note contains
the same choice of law provision. To date, each action filed on behalf of a former Silver
State student is a collective or class action seeking relief for a financial obligation the
student incurred in exchange for a service that Silver State failed to deliver. As a
practical matter, requiring multiple actions by each student or several groups of students
would be financially burdensome and judicially inefficient.
Accordingly, the proposed class is CONDITIONALLY CERTIFIED for settlement
purposes. The settlement class includes “(a) all persons who obtained a loan originated
by Liberty Bank to finance the payment of tuition to Silver State, whose loan is held by
[the defendant] as of the Preliminary Approval Order Date, and who were enrolled at
Silver State as of February 4, 2008[,] and (b) all persons who co[-]signed such loans.”
In the event that the settlement fails to receive final approval, conditional certification is
revoked and the plaintiffs must move for class certification for the purpose of litigation.
Any member may request exclusion from the settlement class by contacting the
settlement administrator.4 The request shall include the member’s (1) full name,
(2) current address, (3) telephone number, (4) SLX loan number, and (4) signed
statement requesting exclusion from the settlement class in this action. Failure to timely
request exclusion from the class will render binding as to each class member any
judgment concerning the proposed settlement in this action.
Any member not requesting exclusion may object in writing to any term of the
proposed settlement or to class certification by contacting the settlement administrator.
An objection shall include the objecting member’s (1) full name, (2) current address,
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 7 of 13
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(3) telephone number, (4) SLX loan number, (5) objection; (6) notice of an intent to
appear that the final fairness hearing, if the member wishes to present the member’s
objection; and (6) any evidence or supporting document for the court’s consideration.
Any objecting member that notifies the settlement administrator of an intent to appear
must include the name, address, and telephone number of the objecting member’s
attorney (if applicable). Failure to notify will preclude, except for good cause shown, the
objecting member from presenting the objection at the final fairness hearing.
2. Appointment of Class Counsel & Class Representatives
Rule 23(g), Federal Rules of Civil Procedure, requires the appointment of class
counsel upon certification of a class. In appointing class counsel, the factors
considered are (1) “the work counsel has done in identifying or investigating potential
claims in the action;” (2) “counsel’s experience in handing class actions, other complex
litigation, and the types of claims asserted in the action;” (3) “counsel’s knowledge of the
applicable law;” and (4) “the resources that counsel will commit to representing the
class.” Considering the plaintiffs’ motion (Doc. 83), counsel’s experience with complex
litigation, counsel’s knowledge of the claim and applicable law, and counsel’s
committing the necessary time and resources to this matter, Christopher Casper of
James, Hoyer, Newcomer & Smiljanich, P.A. and Kevin F. Rooney of the Pinnacle Law
Group, LLP, are appointed as class counsel.
The plaintiffs, Michael Holman, Robert Perrotta, Kevin Wilhemy, Matthew Arnold,
Christopher Korte, and Deborah Pechacek, are appointed to represent the class.
Additionally, Robert Perrotta is appointed to represent “Subclass One,” Michael Holman
is appointed to represent “Subclass Two,” Kevin Wilhemy is appointed to represent
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 8 of 13
5 The defendant’s defenses include, for example, (1) preemption of the plaintiffs’ claims under the
National Bank Act, (2) the lack of a private right of action under the FTC Holder Rule, and (3) “numerous
complex individualized issues of liability, causation[,] and damages” that predominate over issues common
the proposed class. (Doc. 78, pp. 26-28)
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“Subclass Three,” Matthew Arnold is appointed to represent “Subclass Four,”
Christopher Korte is appointed to represent “Subclass Five,” and Deborah Pechacek is
appointed to represent “Subclass Six.”
3. Preliminary Settlement Approval
Rule 23(e), Federal Rules of Civil Procedure, permits approval of a class action
settlement if the settlement is “fair, reasonable, and adequate.” See Strube v. Am.
Equity Inv. Life Ins. Co., 226 F.R.D. 688, 697 (M.D. Fla. 2005) (Fawsett, J.). Approval is
generally a two-step process in which a “preliminary determination on the fairness,
reasonableness, and adequacy of the proposed settlement terms” is reached. See
DAVID F. HERR, ANNOTATED MANUAL FOR COMPLEX LITIGATION § 21.632 (4th ed. 2008).
The factors considered are (1) the influence of fraud or collusion on the parties’
reaching a settlement, (2) “the likelihood of success at trial,” (3) “the range of possible
recovery,” (4) “the complexity, expense[,] and duration of litigation, (5) “the substance
and amount of opposition to the settlement,” and (6) “the stage of proceedings at which
the settlement was achieved.” Bennet v. Behring Corp., 737 F.2d 982, 986 (11th
Cir. 1984).
In this action, no apparent fraud or collusion influenced the parties’ reaching a
settlement. The settlement is the product of both an arm’s length, “protracted and
contentious” negotiation with a mediator and two “mediator’s proposals.” (Doc. 78)
Success at trial is uncertain because the defendant possesses legal and factual
defenses to the plaintiffs’ claims as well as several grounds for challenging class
certification.5 The range of possible recovery under the proposed settlement is
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 9 of 13
6 The parties assert (Doc. 78) that twelve state attorneys general support the settlement. Also
supporting the settlement are two attorneys retained by two groups of Silver State students and various
class members. (Doc. 78, at 32) (Doc. 79).
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substantial and includes (1) conditional and unconditional debt forgiveness based on the
number of FAA certifications that a student received, (2) an early re-payment refund;
(3) a freeze on interest accrual from February 4, 2008, until final settlement approval;
(4) a reduced monthly re-payment rate, (5) amended reports to credit rating agencies;
(6) the payment of any attorneys’ fee, cost, or expense; (7) additional compensation to
each class representative not to exceed $5,000.00 per class representative; and (8) the
payment of any cost of notice to the class or of settlement administration. (Doc. 78-2,
§ 3.3) The combined conditional and unconditional debt forgiveness ranges from
seventy-five percent for a member of Subclass One to twenty percent for a member of
Subclass Five. The total unconditional debt forgiveness amounts to more than
$11,000,000.00 (Doc. 78-2, § 3.3.3) and the total conditional debt forgiveness amounts
to more than $100,000,000.00 (Doc. 78-2, § 3.3.4).
Furthermore, full litigation of this case would be lengthy, expensive, and highly
complex. The aggregate outstanding debt of the settlement class exceeds
$175,000,000.00 and class counsel has already incurred $100,000.00 in expenses. In
light of the high stakes involved, both parties are highly motivated to “aggressively” and
“vigorously” litigate this case. (Doc. 78, at 32) Additionally, substantial support exists
for the settlement,6 and the parties reached a settlement only after extensive
investigation, research, and negotiation.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 10 of 13
7 Shealy v. Student Loan Express, Inc., No. 3:08-cv-03057-JFA (D.S.C. 2008); Hyatt v. Student
Loan Express, Inc., No. C09-1324-TSZ (W.D. Wa. 2009); Kilgore v. KeyBank National Assoc., No. C-08-
02958 (N.D. Cal. 2009); Mason v. KeyBank National Assoc., No. A 565943; Caney v. Airola, ADV 2008-
141 (Feb. 15, 2008) (settled); Elrod v. Airola, No. 08-A-10868-1 (July 25, 2008) (settled).
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Accordingly, the proposed settlement is preliminarily approved as a “fair,
reasonable, and adequate” compromise of the plaintiffs’ claim.
4. Preliminary Injunction
Pursuant to Rule 23(d), Federal Rules of Civil Procedure, and the All-Writs Act,
28 U.S.C. § 1651, the parties move (Doc. 82) for a preliminary injunction to preclude
any parallel or overlapping action pending final approval of the proposed settlement.
The All-Writs Act provides authority “to enjoin a party to litigation before it from
prosecuting an action in contravention of a settlement agreement over which the district
court has retained jurisdiction.” Henson v. Ciba-Geigy Corp., 261 F.3d 1065, 1068
(11th Cir. 2001); Demint v. Nationsbank Corp., 208 F.R.D. 639, 644 n.8 (M.D. Fla.
2002). Accordingly, “[f]ederal courts may invoke the authority conferred by the All-Writs
Act to enjoin parties from separate litigation to protect the integrity of a judgment
entered in a class action and to avoid re[-]litigation of issues . . . .” 208 F.R.D. at 644
n.8. In the context of a conditional class certification and an impending settlement,
“[t]he threat to the federal court’s jurisdiction posed by parallel state actions is
particularly significant . . . . “ In re Diet Drugs, 282 F.3d 220, 236 (3rd Cir. 2002)
(describing complex litigation as “especially vulnerable to parallel state actions that may
‘frustrate the district court’s efforts to craft a settlement in the multi-district litigation
before it’ . . . thereby destroying the ability to achieve the benefits of consolidation.”)
(citation omitted).
In this instance, the defendant faces several actions7 by former Silver State
students and a high probability exists that additional actions will be filed. (Doc. 82)
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 11 of 13
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Accordingly, a preliminary injunction enjoining any overlapping or parallel action is
necessary to preserve this court’s jurisdiction to administer and enter final judgment on
the proposed settlement agreement.
5. Notice to Class Members
Rule 23(c)(2)(B), Federal Rules of Civil Procedure, requires notice to members
of a class certified under 23(b)(3). Notice must consist of the “best notice that is
practicable under the circumstances.” Furthermore, notice “must clearly and concisely
state in plain, easily understood language:”
(i) the nature of the action;(ii) the definition of the class certified; (iii) the class
claims, issues, or defenses; (iv) that a class member may enter an
appearance through an attorney if the member so desires; (v) that the court
will exclude from the class any member who requests exclusion; (vi) the time
and manner for requesting exclusion; and (vii) the binding effect of a class
judgment on members under Rule 23(c)(3).
In this action, the parties submit the proposed notice material for review and approval.
(Doc. 78-1, Ex. 1-6) The proposed notice and claim form appear to state all of the
required information in a relatively clear and concise manner and otherwise satisfy the
requirements of Rule 23(c). The parties’ proposed method of notice consists of the
settlement administrator’s mailing notice by first class mail to the most current mailing
address of each member of the settlement class. (Doc. 78)
Because the proposed method of notice is reasonable and the notice material
meets the requirements of Rule 23(c), the “manner and form” of notice to class
members is approved.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 12 of 13
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Conclusion
Accordingly, the parties motions’ (Docs. 78, 82, & 83) are GRANTED. The
plaintiffs, any class member, and any person acting on behalf of a class member are
ENJOINED from prosecuting, pending this court’s review of the proposed class action
settlement, any claim resolved by or subject to the proposed settlement. The court shall
retain jurisdiction over this matter for all purposes. Furthermore, (1) notice to each class
member shall be mailed no later than December 30, 2009; (2) each class member shall
object to the proposed settlement, object to the class member’s number of FAA
certifications, file a claim, or request exclusion from the settlement no later than
February 13, 2010; (3) any party that wishes to support the settlement or respond to
any objection to the settlement shall file any supporting or responding paper by
March 15, 2010, (4) a final fairness hearing on the proposed settlement is set for
March 22, 2010, at 8:30 a.m..
ORDERED in Tampa, Florida, on November 19, 2009.
Case 8:08-cv-00305-SDM-MAP Document 87 Filed 11/19/2009 Page 13 of 13
All States Covered By Proposed Class Action Settlement With Student Loan Xpress
The proposed class action settlement applies to eligible class member students in all 50 states, regardless of whether or not their State Attorney General is a party to the Assurance of Voluntary Compliance Agreement entered into by Student Loan Xpress and the Attorney Generals for 12 states.
Wednesday, November 18, 2009
In re ArmorLite Roofing Technology, LLC Notice of Sale of Estate Property
NOTICE OF SALE OF ESTATE PROPERTY
In re: ArmorLite Roofing Technology, LLC
United States Bankruptcy Court for the Central District of California
Case No. 2:09-bk-22974-SB
Sale Date: December 16, 2009
Sale Time: 11:00 a.m.
Sale Location: 255 E. Temple Street, Courtroom 1575, Los Angeles, California 90012
DESCRIPTION OF PROPERTY TO BE SOLD
ArmorLite Roofing Technology, LLC (the “Debtor”), proposes to sell to Wilton Acquisitions, Corp., a Delaware corporation, and its assignees (“Buyer”), all business fixtures, all leasehold improvements, all inventories, all goodwill and intellectual property, all existing contracts for the sale/delivery of roofing materials, all business records, all cash and marketable securities, and all accounts receivable (collectively, the “Purchased Assets”).
PROPOSED PURCHASE PRICE
$75,000.00
TERMS AND CONDITIONS OF SALE
Pursuant to the Purchase and Sale Agreement, dated October 2, 2009 (the “Purchase Agreement”), the Buyer does not assume the obligations and liabilities of Debtor, except for all sales contracts made in the ordinary course and any applicable property lease for the premises located at 11643 E. Telegraph Road, Suite 100, Santa Fe Springs, California 90670 (the “Premises”). The closing is the second Monday following Court approval of the sale. Debtor proposes to sell the Purchased Assets free and clear of all liens and encumbrances, except to the extent the liabilities and obligations of the Debtor are specifically assumed under the Purchase Agreement.
CONTACT PERSON FOR POTENTIAL BIDDERS
Michael E. Mahurin, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Blvd., 6th Floor
Beverly Hills, California 90212
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
PROPOSED OVERBID PROCEDURES
1. On or before five (5) business days prior to the sale hearing, all potential overbidders (other than Buyer) must demonstrate to the reasonable satisfaction of Debtor that they are financially qualified so as to be able to perform all of the obligations arising under the Purchase Agreement. Such demonstration must include evidence of adequate cash or liquid assets on hand to close on the date required by the Purchase Agreement, executed by Buyer.
2. All potential overbidders shall be required to provide Debtor’s counsel with a non-refundable deposit of not less than $25,000.00 in cash or certified funds made payable to “Law Offices of Michael Jay Berger Client Trust Account” (the “Trust Account”) no later than 4:00 p.m., Pacific Time, of that day which is five (5) business days before the date set for the sale.
3. Any potential overbidder, at any time prior to the date set forth in (b), above, may obtain access to Debtor’s due diligence material by providing to Debtor’s counsel a refundable deposit of $10,000.00 in cash or certified funds made payable to the Trust Account. Any such potential overbidder must also sign a confidentiality agreement which provides that any non-public information they may receive in conducting due diligence shall remain confidential, shall not be copied and shall be returned to Debtor in its original format in the event the potential overbidder is not the successful overbidder. Upon determination by any such potential overbidder that said party chooses not participate as a qualified overbidder, that party shall notify Debtor’s counsel in writing of such intention and shall return all due diligence materials to Debtor prior to the date set forth in (b), above. Within three (3) business days of the receipt of such notification, and return of all due diligence materials, Debtor’s counsel shall return the deposit to the potential overbidder.
4. On or before two (2) business days prior to the date set for the sale hearing, all potential overbidders shall be required to execute a purchase and sale agreement on exactly the same terms and conditions as set forth in the Purchase Agreement.
5. In the event that there is at least one qualified overbid, the following terms shall apply to the non-refundable deposit submitted by all potential overbidders:
a. As to all parties, the entire $25,000.00 deposit shall be considered liquidated damages and shall be non-refundable, except as set forth in (5)(b) through (d) below;
b. If the Buyer is not the successful bidder, the Debtor shall reimburse Buyer any deposit paid;
c. In the event that Buyer is the successful bidder, the entire $25,000.00 deposit shall be refunded to all potential overbidders within five (5) business days of the date of the sale hearing; and
d. In the event that there is more than one qualified overbidder, and one of the overbidders is successful, any deposit paid by the Buyer and the unsuccessful overbidders’ deposits shall be refunded within five (5) business days of the sale hearing.
6. The minimum initial overbid shall be $5,000.00 for a total of $80,000.00. All subsequent overbids shall be in a minimum increment of $5,000.00. The actual minimum bid is subject to change as may be ordered by the Honorable Samuel L. Bufford, United States Bankruptcy Judge for the Central District of California (the “Bankruptcy Court”)
7. In the event of at least one qualifying overbid, the overbidding shall take place at the time of hearing for approval of the sale to Buyer, currently set for December 16, 2009, at 11:00 a.m., in Courtroom 1575, 255 E. Temple St., Los Angeles, California 90012. All potential overbidders must appear personally at the hearing, unless otherwise authorized by the Bankruptcy Court.
8. The successful overbidder must pay the balance of the purchase price with cash or certified funds made payable to Sell
In re: ArmorLite Roofing Technology, LLC
United States Bankruptcy Court for the Central District of California
Case No. 2:09-bk-22974-SB
Sale Date: December 16, 2009
Sale Time: 11:00 a.m.
Sale Location: 255 E. Temple Street, Courtroom 1575, Los Angeles, California 90012
DESCRIPTION OF PROPERTY TO BE SOLD
ArmorLite Roofing Technology, LLC (the “Debtor”), proposes to sell to Wilton Acquisitions, Corp., a Delaware corporation, and its assignees (“Buyer”), all business fixtures, all leasehold improvements, all inventories, all goodwill and intellectual property, all existing contracts for the sale/delivery of roofing materials, all business records, all cash and marketable securities, and all accounts receivable (collectively, the “Purchased Assets”).
PROPOSED PURCHASE PRICE
$75,000.00
TERMS AND CONDITIONS OF SALE
Pursuant to the Purchase and Sale Agreement, dated October 2, 2009 (the “Purchase Agreement”), the Buyer does not assume the obligations and liabilities of Debtor, except for all sales contracts made in the ordinary course and any applicable property lease for the premises located at 11643 E. Telegraph Road, Suite 100, Santa Fe Springs, California 90670 (the “Premises”). The closing is the second Monday following Court approval of the sale. Debtor proposes to sell the Purchased Assets free and clear of all liens and encumbrances, except to the extent the liabilities and obligations of the Debtor are specifically assumed under the Purchase Agreement.
CONTACT PERSON FOR POTENTIAL BIDDERS
Michael E. Mahurin, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Blvd., 6th Floor
Beverly Hills, California 90212
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
PROPOSED OVERBID PROCEDURES
1. On or before five (5) business days prior to the sale hearing, all potential overbidders (other than Buyer) must demonstrate to the reasonable satisfaction of Debtor that they are financially qualified so as to be able to perform all of the obligations arising under the Purchase Agreement. Such demonstration must include evidence of adequate cash or liquid assets on hand to close on the date required by the Purchase Agreement, executed by Buyer.
2. All potential overbidders shall be required to provide Debtor’s counsel with a non-refundable deposit of not less than $25,000.00 in cash or certified funds made payable to “Law Offices of Michael Jay Berger Client Trust Account” (the “Trust Account”) no later than 4:00 p.m., Pacific Time, of that day which is five (5) business days before the date set for the sale.
3. Any potential overbidder, at any time prior to the date set forth in (b), above, may obtain access to Debtor’s due diligence material by providing to Debtor’s counsel a refundable deposit of $10,000.00 in cash or certified funds made payable to the Trust Account. Any such potential overbidder must also sign a confidentiality agreement which provides that any non-public information they may receive in conducting due diligence shall remain confidential, shall not be copied and shall be returned to Debtor in its original format in the event the potential overbidder is not the successful overbidder. Upon determination by any such potential overbidder that said party chooses not participate as a qualified overbidder, that party shall notify Debtor’s counsel in writing of such intention and shall return all due diligence materials to Debtor prior to the date set forth in (b), above. Within three (3) business days of the receipt of such notification, and return of all due diligence materials, Debtor’s counsel shall return the deposit to the potential overbidder.
4. On or before two (2) business days prior to the date set for the sale hearing, all potential overbidders shall be required to execute a purchase and sale agreement on exactly the same terms and conditions as set forth in the Purchase Agreement.
5. In the event that there is at least one qualified overbid, the following terms shall apply to the non-refundable deposit submitted by all potential overbidders:
a. As to all parties, the entire $25,000.00 deposit shall be considered liquidated damages and shall be non-refundable, except as set forth in (5)(b) through (d) below;
b. If the Buyer is not the successful bidder, the Debtor shall reimburse Buyer any deposit paid;
c. In the event that Buyer is the successful bidder, the entire $25,000.00 deposit shall be refunded to all potential overbidders within five (5) business days of the date of the sale hearing; and
d. In the event that there is more than one qualified overbidder, and one of the overbidders is successful, any deposit paid by the Buyer and the unsuccessful overbidders’ deposits shall be refunded within five (5) business days of the sale hearing.
6. The minimum initial overbid shall be $5,000.00 for a total of $80,000.00. All subsequent overbids shall be in a minimum increment of $5,000.00. The actual minimum bid is subject to change as may be ordered by the Honorable Samuel L. Bufford, United States Bankruptcy Judge for the Central District of California (the “Bankruptcy Court”)
7. In the event of at least one qualifying overbid, the overbidding shall take place at the time of hearing for approval of the sale to Buyer, currently set for December 16, 2009, at 11:00 a.m., in Courtroom 1575, 255 E. Temple St., Los Angeles, California 90012. All potential overbidders must appear personally at the hearing, unless otherwise authorized by the Bankruptcy Court.
8. The successful overbidder must pay the balance of the purchase price with cash or certified funds made payable to Sell
Monday, November 02, 2009
Student Loan Xpress' Parent Corporation CIT Group Files Chapter 11 Bankruptcy
CIT Group, the owner of Student Loan Xpress, filed a Chapter 11 bankruptcy Sunday night, November 1, 2009. CIT's bankruptcy filing will be the fifth largest in U.S. history. The 101 year old lender received a $2.33 billion taxpayer-financed bailout in December 2008. This taxpayer money will most likely be lost. The effect of CIT Group's bankruptcy filing on the pending class action settlement in the Student Loan Xpress matter and on all former Silver State Helicopters students who obtained loans from SLX is not yet known. Student Loan Xpress' website states that "Student Loan Xpress is a member company of CIT Group Inc." Because Student Loan Xpress itself did not file bankruptcy, there is no automatic stay preventing litigation against Student Loan Xpress from going forward.
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