In SEC v. Peterson, et al., CALG persuaded the 9th Circuit to reject an objector’s challenge to a “bar order” on which a receivership settlement worth approximately $183 million was conditioned. The settlement arose following the collapse of the largest Ponzi scheme in American history perpetrated by a woman, Gina Champion-Cain, who used CALG client Chicago Title Insurance Company’s escrow accounts to perpetrate a fraud involving loans for liquor licenses in San Diego, California.
Although unaware of Cain’s activities, Chicago Title ultimately settled in a way that made virtually all victims whole or nearly whole. The district court approved the settlement along with an injunctive order barring any other lawsuits against the company in state or federal court related to the affair, a necessary component for the settlement to occur. However, an objector who had been excluded from the settlement and claimed to face over $100 million in liability appealed the bar order.
The high-stakes Ninth Circuit proceedings involved three separate appeals, an intervening Supreme Court decision, and arguments requiring analysis of 16th and 17th Century English equity law. Ultimately, however, the Court of Appeals unanimously affirmed.
CALG Chairman Ben Feuer led the team, which included partners Rex Heinke and Jessica Weisel, and counsel Johanna Schiavoni. Trial counsel from Cooley LLP and Hahn Loeser & Parks LLP assisted.
You can read the opinion here.