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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO.: 16-cv-21301-GAYLES

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,
v.
ARIEL QUIROS,
WILLIAM STENGER,
JAY PEAK, INC.,
Q RESORTS, INC.,
JAY PEAK HOTEL SUITES L.P.,
JAY PEAK HOTEL SUITES PHASE II. L.P.,
JAY PEAK MANAGEMENT, INC.,
JAY PEAK PENTHOUSE SUITES, L.P.,
JAY PEAK GP SERVICES, INC.,
JAY PEAK GOLF AND MOUNTAIN SUITES L.P.,
JAY PEAK GP SERVICES GOLF, INC.,
JAY PEAK LODGE AND TOWNHOUSES L.P.,
JAY PEAK GP SERVICES LODGE, INC.,
JAY PEAK HOTEL SUITES STATESIDE L.P.,
JAY PEAK GP SERVICES STATESIDE, INC.,
JAY PEAK BIOMEDICAL RESEARCH PARK L.P.,
AnC BIO VERMONT GP SERVICES, LLC,

Defendants,

JAY CONSTRUCTION MANAGEMENT, INC.,
GSI OF DADE COUNTY, INC.,
NORTH EAST CONTRACT SERVICES, INC.,
Q BURKE MOUNTAIN RESORT, LLC,
Relief Defendants, and
Q BURKE MOUNTAIN RESORT, HOTEL AND
CONFERENCE CENTER, L.P.,
Q BURKE MOUNTAIN RESORT GP SERVICES, LLC

Additional Defendants
_____________________________________________/

MOTION FOR (I) APPROVAL OF SETTLEMENT BETWEEN RECEIVER,
ARIEL QUIROS, WILLIAM STENGER, AND IRONSHORE INDEMNITY, INC.;
(II) ENTRY OF A BAR ORDER; AND (III) APPROVAL OF FORM, CONTENT
AND MANNER OF NOTICE OF SETTLEMENT AND BAR ORDER;
INCORPORATED MEMORANDUM OF LAW

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Michael I. Goldberg, as the court-appointed receiver (the “Receiver”) for Jay Peak, Inc., Q
Resorts, Inc., Jay Peak Hotel Suites L.P., Jay Peak Hotel Suites Phase II L.P., Jay Peak
Management, Inc., Jay Peak Penthouse Suites L.P., Jay Peak GP Services, Inc., Jay Peak Golf and
Mountain Suites L.P., Jay Peak GP Services Golf, Inc., Jay Peak Lodge and Townhouses L.P., Jay
Peak GP Services Lodge, Inc., Jay Peak Hotel Suites Stateside L.P., Jay Peak GP Services
Stateside, Inc., Jay Peak Biomedical Research Park L.P., AnC Bio Vermont GP Services, LLC, Q
Burke Mountain Resort, Hotel and Conference Center, L.P., Q Burke Mountain Resort GP
Services, LLC, Jay Construction Management, Inc., GSI of Dade County, Inc., North East Contract
Services, Inc., and Q Burke Mountain Resort, LLC (collectively, the “Receivership Entities”), in
the above-captioned civil enforcement action (the “SEC Action”), files this Motion for
(I) Approval of Settlement between Receiver, Ariel Quiros, William Stenger, and Ironshore
Indemnity, Inc.; (II) Entry of a Bar Order; and (III) Approval of Form, Content and Manner of
Notice of Settlement and Bar Order; Incorporated Memorandum of Law (the “Motion”). In
support of this Motion, the Receiver respectfully states:
I.
Introduction
In exchange for a settlement payment in the amount of $1,900,000 from Ironshore
Indemnity, Inc. (“Ironshore”), the Receiver, on behalf of the Receivership Entities, and Defendants
Ariel Quiros (“Quiros”) and William Stenger (“Stenger”) have agreed (i) to settle and compromise
all claims for coverage under the Ironshore insurance policies (“Policies”) and all claims related
to Ironshore’s payment of funds to any person or entity arising out of or related to the claims made
against any Insured (as defined in the Policies) in the SEC Action or in any other action, and (ii)
to obtain entry of a bar order enjoining any person from bringing any claims which directly or
indirectly arise from or relate to the Policies or to any other contract or agreement with Ironshore
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purporting to provide payment to any Insured or to any of the Insureds’ current or former attorneys,
all as more fully set forth in the Settlement Agreement and Release, dated December 27, 2018 (the
“Settlement Agreement”), a true and correct copy of which is attached as Exhibit “1” to this
Motion. The Receiver requests that the Court approve the settlement and bar order by means of a
two-step process.
First, the Receiver requests that the Court enter an order substantially in form and
substance as Exhibit “A” to the Settlement Agreement (the “Preliminary Approval Order”). The
Preliminary Approval Order preliminarily approves the Settlement Agreement and establishes
approval procedures – including for providing notice to parties affected by the settlement, along
with an opportunity to object and participate in the final approval hearing. The Receiver believes
that the Preliminary Approval Order can be entered without a hearing on the basis of the substantial
matters of law and fact set forth in this Motion.
Second, the Receiver requests that, after the requirements of the Preliminary Approval
Order are met, the Court enter orders in substantially the same form and substance as attached as
Exhibits B (the “Final Approval Order”) and C (the “Bar Order”) to the Settlement Agreement.1
II.
Background
A. Commencement of the SEC Action and Appointment of the Receiver
The Complaint in the SEC Action alleged, inter alia, that Quiros and Stenger controlled
and used various Receivership Entities in violation of federal securities laws. Through the SEC
Action, the SEC sought various forms of relief, including appointment of the Receiver.
1 As is set forth in the Settlement Agreement, $500,000 of the settlement payment is conditioned on the Court’s
entry of the Bar Order and the exhaustion of all appeals to the Bar Order.
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This Court appointed the Receiver to exercise dominion and control over and act as sole
legal representative for and on behalf of the Receivership Entities in the SEC Action. Specifically,
the Receiver derives his authority over the Receivership Entities from the Court’s April 13, 2016
Order Granting Motion for Appointment for Appointment of Receiver [ECF No. 13] (the
“Receivership Order”), entered at the request of the Securities and Exchange Commission (the
“SEC”). [ECF No. 7]. The Receiver is empowered to take immediate possession and administer
“all property, assets and estates of every kind” of the Receivership Entities, in accordance with the
terms of the Receivership Order or subject to Order of the Court, and to compromise or settle legal
actions in which any of the Receivership Entities or the Receiver is a party. See Receivership
Order ¶¶ 1 & 6. The Receivership Order enjoins all persons with notice of the Order from “in any
way disturbing the assets or proceeds of the receivership or from prosecuting any actions or
proceedings . . . which affect the property of the” Receivership Entities. Id. ¶ 15.
B. The Coverage Action
From 2011 through 2016, Ironshore issued a series of directors, officers, and private
company liability policies which each insured Q Resorts, Inc., Quiros, and Stenger under a
combined $10 million policy limit. On April 15, 2016, after the commencement of the SEC Action
and the appointment of the Receiver, Quiros and Stenger requested coverage for the SEC Action
from Ironshore. Thereafter, the Receiver requested coverage on behalf of the Receivership
Entities, as additional insureds under the Policies. Ironshore denied coverage, claiming that the
SEC Action related back to the SEC’s prior investigation, and that the investigation was a covered
“claim” under the Policies that should have been reported.
On December 6, 2016, without notice to the SEC or the Receiver, Quiros filed an action
against Ironshore for coverage under the Policies, Quiros v. Ironshore, No. 1:16-cv-25073-MGC
(Cooke, J.) (the “Coverage Action”). Quiros sued Ironshore for breach of contract and declaratory
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relief, arguing that he was entitled to advancement of defense costs. On January 13, 2017,
Ironshore and Quiros entered into an Interim Funding Agreement, by which Ironshore agreed to
advance defense costs only while the Coverage Action was pending, with full reservation of
Ironshore’s rights and with Quiros’s obligation to repay Ironshore if, inter alia, Quiros lost the
Coverage Action. See Declaration of Joseph Galardi [ECF No. 406-1]. Quiros entered into the
Interim Funding Agreement without notice to the SEC or the Receiver.
On about March 29, 2017, Quiros terminated his counsel, Leon Cosgrove, and agreed with
Ironshore to the cancellation and termination of the IFA. Leon Cosgrove filed a notice of charging
lien in the Coverage Action (the “Charging Lien”). Several months later, on October 5, 2017,
Leon Cosgrove and Quiros’s other former attorneys, Mitchell Silberberg & Knupp LLP, filed a
breach of contract action against Ironshore in New York state court (the “IFA Action”). In the
IFA Action, Quiros’s former attorneys contend that Ironshore breached the Interim Funding
Agreement by not paying their legal fees.
C. Receiver’s Contentions and the Parties’ Settlement
The Receiver was granted leave to intervene in the Coverage Action on July 21, 2017.
After intervening, the Receiver asserted claims against Ironshore for defense and liability coverage
for those “claims” alleged against Q Resorts Inc. pursuant to the Policies. Ironshore disputed the
factual and legal bases of the claims of both Quiros and the Receiver. The parties thereafter
engaged in extensive discovery and summary judgment briefing, and were scheduled for an
October 17, 2018 oral summary judgment argument and for Judge Cooke’s two-week trial period
beginning October 29, 2018.
To avoid the expense, delay, and uncertainty of litigation, the parties began settlement
discussions in July 2017, and attended multiple mediations. The Receiver, Quiros, Stenger, and
Ironshore eventually settled and compromised their disputes as memorialized in the Settlement
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Agreement, without admission of any liability or concession to Quiros and the Receiver’s claims
and Ironshore’s defenses. The Settlement Agreement was fully and finally executed by all parties
on December 27, 2018.
D. Settlement Terms and Conditions
The principal terms of the Settlement Agreement are as follows:2
(i) The Receiver obtains entry of the Preliminary Approval Order.
(ii) The Receiver obtains entry of the Final Approval Order.
(iii) The Receiver obtains entry of the Bar Order.
(iv) Ironshore pays the Receiver $1,900,000 (the “Settlement Payment”) in four
tranches: first, $500,000, payable 30 days following entry of the Final Approval
Order; second, $500,000, payable 60 days following entry of the Final Approval
Order; third, $400,000, payable 120 days following entry of the Final Approval
Order; and fourth, $500,000 which shall be paid once the Bar Order (supra at (iii))
is final and not subject to appeal.
(v) $300,000 of the Settlement Payment will be held in escrow (the “Charging Lien
Escrow Amount”) as security for possible payment of the Charging Lien, the
validity and amount of which are disputed.
(vi) The Receiver, Quiros, Stenger, and Ironshore agree to mutual releases as and to the
extent set forth in section 8 of the Settlement Agreement.
As stated above, it is a condition precedent to Ironshore’s obligation to pay the fourth and
final tranche of the Settlement Payment (i.e., $500,000) that the Bar Order is entered by the Court
and becomes final and non-appealable.
In connection with the Settlement Agreement and as consideration received by Quiros and
Stenger for the settlement of their rights and claims under the Policies and against Ironshore, the
Receiver, Quiros, and Stenger executed a distribution agreement (the “Distribution Agreement”)
to allocate the funds received from Ironshore pursuant to the Settlement Agreement. A copy of
2 This description of the Settlement Agreement is only a summary; the Settlement Agreement memorializes all of
the terms and conditions of the parties’ agreement.
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the Distribution Agreement is attached as Exhibit “2” to this Motion and is expressly contingent
on the Court’s approval of the Settlement Agreement. Of the $1,900,000 payable by Ironshore
pursuant to the Settlement Agreement, the Receiver is anticipated to receive $837,500, Quiros is
anticipated to receive $837,500, and Stenger is anticipated to receive $225,000. These amounts
may change in the event any of the proceeds must be used to resolve potential challenges to entry
of the Bar Order.
E. Facts Supporting Approval of the Settlement Agreement and Bar Order
The Receiver has diligently investigated all claims he believes he could have brought
against Ironshore. Among other things, the Receiver has obtained thousands of pages of
documents relating to the Policies, deposed several witnesses during the Coverage Action, and
engaged in multiple mediations and conferences with Ironshore. This investigation revealed that
the Receiver’s claims against Ironshore involve disputed facts and legal issues, including issues
concerning the actions and inactions of Quiros’s former counsel, that would require substantial
time and expense to litigate, with significant uncertainty as to the outcome of such litigation and
any ensuing appeal. Throughout this litigation, the Receiver and Ironshore were represented by
experienced and diligent counsel vigorously pressing their respective client’s position,
underscoring the risk of litigation in terms of time, expense and uncertainty of outcome.
If approved, the Settlement Agreement will result in a substantial recovery under the
Policies. The anticipated benefit would provide the Receivership Estate necessary liquidity and
funds to continue and optimize operation of the Jay Peak resort, during a time when the Receiver
readies receivership assets for liquidation and distribution to claimants. Because the insureds
under the Policies are limited to the Receivership Entities and the former officers and directors of
Q Resorts, Inc. (such as Quiros and Stenger), the terms of the Settlement Agreement are fair,
reasonable, and beneficial to the Receivership Estate.
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The Bar Order has been a key settlement term with Ironshore since the commencement of
the parties’ discussions. In colloquial terms, the total amount that Ironshore is willing to settle for
is contingent upon “global peace” with respect to all claims that could be asserted against Ironshore
relating in any way whatsoever to the Policies or to Ironshore’s obligation to pay any Insured or
any of the Insureds’ current or former attorneys, including in the IFA Action. The Bar Order is
thus a condition precedent to payment of the fourth tranche of the Settlement Amount (i.e.,
$500,000). Parties affected by the Bar Order, will receive notice in the manner set forth below
and provided in the Preliminary Approval Order (as may be supplemented by the Court).
E. Settlement Approval Procedures
To afford parties affected by the Settlement Agreement and the Bar Order notice and an
opportunity to object and participate in a hearing, the Receiver proposes the following procedures
for notice, objections and a hearing (the “Settlement Approval Procedures”):
(i) Notice. The Receiver will prepare a notice substantially in form and content as
Exhibit D to the Settlement Agreement (the “Notice”), which will contain a
description of the Settlement Agreement and the Bar Order and afford affected
parties the opportunity to obtain complete copies of all the settlement-related
papers; the notice will be distributed in accordance with items (ii), (iii) and (iv)
below.
(ii) Service. The Receiver will serve the Notice no later than five (5) business days
after entry of the Preliminary Approval Order via email (or if no electronic mailing
address is available, then by first class U.S. mail, postage prepaid) to
a. all counsel who have appeared of record in the SEC Action;
b. all counsel for all investors who are known by the Receiver to have appeared
of record in any legal proceeding or arbitration commenced by or on behalf
of any individual investor or putative class of investors seeking relief
against any person or entity relating in any manner to the Receivership
Entities or the subject matter of the SEC Action;
c. all known investors in each and every one of the Receivership Entities
identified in the investor lists in the possession of the Receiver at the
addresses set forth therein; and
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d. all known non-investor creditors of each and every one of the Receivership
Entities identified after a reasonable search by the Receiver.
(iii) Publication. The Receiver will publish the Notice no later than ten (10) business
days after entry of the Preliminary Approval Order
a. twice a week for a period of not less than three (3) weeks in each o f
t h e Burlington Free Press and Vermont Digger; and
b. on the website maintained by the Receiver in connection with the SEC
Action (www.JayPeakReceivership.com), on which there is a “drop down”
feature that permits viewers to convert website text to seven languages.
(iv) Copies upon Request. The Receiver will provide promptly copies of the Motion,
the Settlement Agreement, and all exhibits and attachments thereto, to any person
who requests such documents via email to Kimberly Abbate at
kimberly.abbate@akerman.com, or via telephone by calling Ms. Abbate at 954-
759-8929.
(v) Evidence of Compliance. No later than 5 calendar days before the Final Approval
Hearing (defined below), the Receiver will file with the Court in the SEC Action
written evidence of compliance with items (i) through (iv) above either in the form
of an affidavit or declaration.
(vi) Hearing. The Receiver requests that the Court schedule a hearing (the “Final
Approval Hearing”) to consider final approval of the Settlement Agreement and
entry of the Bar Order on a date that is at least 75 calendar days after the entry of
the Preliminary Approval Order.
(vii) Objection Deadline and Objections.
a. The Receiver requests that the Court require any person who objects to the
Settlement Agreement or the Bar Order to file an objection with the Court
no later than 30 calendar days after entry of the Preliminary Approval Order
(the “Objection Deadline”).
b. The Receiver requests that the Court require all such objections to
i. be in writing;
ii. be signed by the person filing the objection, or his or her attorney;
iii. state, in detail, the factual and legal grounds for the objection;
iv. attach any document the Court should review in considering the
objection and ruling on the Motion;
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v. require the person filing the objection to make a request to appear at
the Final Approval Hearing, if that person intends to appear at the
Final Approval Hearing; and
vi. be served by email or regular mail on Jeffrey C. Schneider
(jcs@lklsg.com), Levine Kellogg Lehman Schneider + Grossman,
LLP, 201 S. Biscayne Blvd., 22nd Floor, Miami, FL 33131; Melissa
Damian Visconti (mvisconti@dvllp.com), Damian & Valori LLP,
1000 Brickell Avenue, Suite 1020, Miami, FL 33131; and Joseph G.
Galardi (galardi@beasleylaw.net), Beasley & Galardi, P.A., 505 S.
Flagler Dr. Suite 1500, West Palm Beach, FL 34401.
c. The Receiver requests that no person be permitted to argue at the Final
Approval Hearing unless such person has complied with the requirements
of these procedures.
d. The Receiver also requests that any party to the Settlement Agreement be
authorized to file a response to the objection before the Final Approval
Hearing.
III.
Relief Requested
The Receiver respectfully requests (i) entry of the Preliminary Approval Order upon the
filing of this Motion, and (ii) entry of the Final Approval Order and the Bar Order, after expiration
of the Objection Deadline if no objections are timely filed or after the Final Approval Hearing if
objections are timely filed.
IV.
Basis for Requested Relief
“A district 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). In such an action, a district
court has the power to approve a settlement that is fair, adequate and reasonable, and is the product
of good faith after an adequate investigation by the receiver. Sterling v. Steward, 158 F.3d 1199
(11th Cir. 1998). “Determining the fairness of the settlement is left to the sound discretion of the
trial court and we will not overturn the court’s decision absent a clear showing of abuse of that
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discretion.” Id. at 1202 (quoting Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984))
(emphasis supplied).
A district court also has the power to enter an order permanently enjoining third parties
from bringing any claims against a settling party that could have been asserted by or through the
receivership or in connection with any the facts giving rise to the receivership – often referred to
as a “bar order.” SEC v. Kaleta, 530 Fed. Appx. 360 (5th Cir. 2013) (approving bar order in SEC
receivership). Bar orders are appropriate “to assist the parties in reaching a settlement.” Matter
of Munford, Inc., 97 F.3d 449, 455 (11th Cir. 1996) (approving a bar order in a bankruptcy case).
Such bar orders have been approved by the Eleventh Circuit and in cases in this District. In re
Seaside Eng’g & Surveying, Inc., 780 F.3d 1070, 1076 (11th Cir. 2015) (approving a bar order in
a chapter 11 bankruptcy case); In re U.S. Oil and Gas Lit., 967 F.2d 480 (11th Cir. 1992)
(approving bar order in a class action); SEC v. Mutual Benefits Corp., No. 04-60573 [ECF
No. 2345] (S.D. Fla. Oct. 13, 2009) (Moreno, J.) (approving bar order in SEC receivership); SEC
v. Latin American Services Co., Ltd., No. 99-2360 [ECF No. 353] (S.D. Fla. May 14, 2002)
(Ungaro-Benages, J.) (approving bar order in SEC receivership). Entry of a bar order is reviewed
for an abuse of discretion. Seaside Engineering & Surveying, 780 F.3d at 1081 (affirming entry
of a bar order where “the bankruptcy court did not abuse its discretion”).
The powers of the Court also include the fixing of procedures for the grant of such relief,
as long as due process is afforded to affected persons. See Elliott, 953 F.2d at 1566.
A. The Settlement Agreement is fair, adequate, and reasonable.
To approve a settlement in an equity receivership, a district court must find the settlement
is fair, adequate and reasonable, and is not the product of collusion between the parties. Sterling,
158 F.3d at 1203. To determine whether the settlement is fair, the court should examine the
following factors: “(1) the likelihood of success; (2) the range of possible [recovery]; (3) the point
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on or below the range of [recovery] at which settlement is fair, adequate and reasonable; (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.” Id. at 1203
n.6 (citing Bennett, 737 F.2d at 986 (11th Cir. 1984)).
Upon due consideration of these governing factors, the Settlement Agreement should be
approved. Before entering into the Settlement Agreement, the Receiver and his counsel carefully
considered and dutifully investigated all potential claims of the Receivership Entities against
Ironshore; the defenses to be asserted to those claims in the event of litigation; the delay and
expense of litigating such claims; the uncertainty of outcome in any such litigation; and the
possibility of appeal by Ironshore of any adverse outcome. The Receiver entered into the
Settlement Agreement after extensive, arm’s length negotiations conducted between the parties
and their experienced counsel in good faith. It was, of course, not the product of collusion.
Indeed, it bears mention that the process of negotiating the terms of the proposed settlement
occurred over a period of several months, and only after extensive discovery and summary
judgment briefing in the Coverage Action. The proposed settlement is the product of wellinformed
parties, and is reflected in the Settlement Agreement and this Motion. The Settlement
Agreement thus provides for a total anticipated payment of $837,500 to the Receiver. Such a
recovery is well within the range of reasonableness and will provide the Receiver liquidity needed
to maximize the value of the assets owned by the Receivership Entities for the benefit of investors
and other creditors. The Settlement Agreement, therefore, provides a substantial benefit to the
Receivership Entities and their investors and other creditors.
The Settlement Agreement also provides security for the putative Charging Lien filed by
Leon Cosgrove, because $300,000 of the Settlement Payment will be held in escrow pending
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judicial determination of the validity and amount of the Charging Lien, both of which are disputed
by the Parties to the Settlement Agreement. This escrowed amount is more than sufficient given
the information Leon Cosgrove has provided to date, and in any event, the Charging Lien is subject
to the pre-existing equitable rights of the Receivership Entities. See Christopher N. Link, P.A. v.
Rut, 165 So. 3d 768, 771 (Fla. 4th DCA 2015) (even duly noticed charging lien was inferior to
claim that was “superior in time and first in right”). Accordingly, the Settlement Agreement is
fair, adequate and reasonable, and not the product of collusion.
B. The Bar Order is necessary and appropriate ancillary relief to the SEC Action.
i. The Court has the authority to approve the Bar Order.
District courts have the power to enter bar orders in equity receiverships where necessary
or appropriate as ancillary relief in the context of the underlying action. Kaleta, 530 Fed. Appx.
at 362. As the Fifth Circuit has explained, a district court has “inherent equitable authority to issue
a variety of ancillary relief measures in actions brought by the SEC to enforce the federal securities
laws.” Id. (internal quotations omitted);see also All-Writs Act, 28 U.S.C. § 1651; In re Baldwin-
United Corp. (Single Premium Deferred Annuities Ins. Litig.), 770 F.2d 328, 338 (2d Cir. 1985).
Such ancillary relief includes injunctions against non-parties as part of settlements in the
receivership. Kaleta, 530 Fed. Appx. at 362.
This power to enter bar orders is consistent with the Eleventh Circuit’s recognition of the
district court’s “broad powers and wide discretion to determine relief in an equity receivership
[that] derives from the inherent powers of an equity court [to] fashion relief.” See Elliott¸953 F.2d
at 1566. Moreover, the Eleventh Circuit has expressly held that district courts have the power to
enter bar orders. Seaside Engineering & Surveying, 780 F.3d at 1081 (affirming entry of a bar
order through a chapter 11 plan where “fair and equitable”); Munford, 97 F.3d at 455 (affirming
entry of a bar order over objection of non-settling defendants where “integral to settlement in an
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adversary proceeding”); In re U.S. Oil and Gas Lit., 967 F.2d 489 (11th Cir. 1992) (affirming entry
of a bar order over objection of non-settling co-defendants).3
Citing the Eleventh Circuit’s precedents in Munford and U.S. Oil and Gas Litigation, Judge
Moreno concluded that bar orders are “within this Court’s jurisdiction and equitable authority to
enter and enforce”. Mutual Benefits Corp., No. 04-60573, slip op. [ECF No. 2345] at 8.
Accordingly, courts in this District have regularly entered bar orders in SEC receiverships and in
bankruptcy cases. See, e.g., id. (entering a bar order where it was “necessary” to administration of
the receivership); Latin American Services Co., Ltd., No. 99-2360, slip op. [ECF No. 353] at 4
(entering a bar order against all investors over investor objection); In re Rothstein Rosenfeldt Adler,
PA, 2010 WL 3743885, at *7 (Bankr. S.D. Fla. Sept. 22, 2010) (entering bar order that was
“necessary to achieve the complete resolution” of the parties’ disputes and was “fair and
equitable”). Indeed, this Court has entered Bar Orders in the instant action nearly identical in form
to the Proposed Bar Order now requested.
ii. The Court should approve the Bar Order.
Whether a bar order should be approved turns on the specific facts and circumstance of
each individual case. See Kaleta, 530 Fed. Appx. at 362 (“receivership cases are highly factspecific”).
In this case, there are ample facts establishing that the Bar Order is necessary and
appropriate ancillary relief to the SEC Action:
 The Bar Order is necessary to secure substantial additional consideration –
specifically, the fourth and final $500,000 settlement payment. See Seaside
Engineering & Surveying, 780 F.2d at 1080 (approving bar order where settling
party made a substantial contribution); U.S. Oil and Gas Lit., 967 F.2d at 494 (bar
order appropriate to secure $8.5 million in exchange for global peace for setting
3 The Eleventh Circuit’s approval of bar orders in bankruptcy cases is particularly persuasive here in that the
Eleventh Circuit has also recognized the parallels between bankruptcy proceedings and equity receiverships. See
Bendall v. Lancer Management Group, LLC, 523 Fed. Appx. 554, 557 (11th Cir 2013) (“Given that a primary
purpose of both receivership and bankruptcy proceedings is to promote the efficient and orderly administration
of estates for the benefit of creditors, we will apply cases from the analogous context of bankruptcy law, where
instructive, due to limited case law in the receivership context.”).
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party); Kaleta, 530 Fed. Appx. at 362 (additional consideration in the form of
guarantee of payment to the receivership).
 The anticipated benefit to the Receivership Estate would provide necessary
liquidity and funds to continue and optimize operation of the Jay Peak resort and
maximize its value as a going concern. See Seaside Engineering & Surveying, 780
F.2d at 1080 (approving bar order that was essential to maintaining operations of
reorganized debtor and would provide “life blood”); Mutual Benefits Corp., No. 04-
60573, slip op. [ECF No. 2345] at 8 (bar order necessary to the administration and
disposition of receivership property).
 The Bar Order is integral to the settlement and is a condition precedent to
Ironshore’s payment of the additional $500,000. See U.S. Oil and Gas Lit., 967
F.2d at 494-95 (approving bar order that was “integral” to approved settlement).
 The Bar Order is tailored to the facts underlying the Coverage Action, and the
barred claims are interrelated to claims that could be brought by or through the
Receivership Entities or the other known insureds under the Policies. See U.S. Oil
and Gas Lit., 967 F.2d at 496 (barring interrelated claims); Kaleta, 530 Fed. Appx.
at 362 (bar order appropriately tailored to claims that arise from the underlying
fraud).
 Because each policy directly provided insurance to Q Resorts, Inc., the Policies are
property of the Receivership Estate and their proceeds belong, at least in part, to
the Receiver. See In re CyberMedica, Inc., 208 B.R. 12, 17 (Bankr. D. Mass. 2002)
(“[W]here a liability insurance policy provides broad coverage directly to a debtor
for liability arising from the acts or omissions of the debtor’s directors and officers
proceeds of such policies are property of the bankruptcy estate.”).
 The Bar Order’s preclusion of the IFA Action is appropriate and equitable under
the circumstances. Quiros, who was represented by Leon Cosgrove at the time,
filed the Coverage Action and entered into the Interim Funding Agreement without
any notice to the SEC or the Receiver, and Quiros subsequently agreed with
Ironshore, the only other party to the IFA, to cancel and terminate the IFA. The
Coverage Action, the Interim Funding Agreement, and the IFA Action are “related
to” the Receivership, because they impact estate assets. See Munford, 97 F.3d at
453.
 Additionally, the fees sought in the Coverage Action and the Interim Funding
Agreement are “on account” of Quiros’s and Stenger’s underlying liability to the
SEC, the Receiver, and Jay Peak’s investors. See In re HealthSouth Corp. Sec.
Litig., 572 F.3d 854, 864 (11th Cir. 2009). The claims being barred “arise out of
the same common nucleus of operative facts and circumstances,” namely, the suits
against Quiros and Stenger and the Insureds’ demand for insurance coverage from
the Policies. Brophy v. Salkin, 550 B.R. 595, 600 (S.D. Fla. 2015). Finally, the
parties are providing $300,000 in security for Leon Cosgrove’s disputed Charging
Lien, which will not be affected by the Bar Order.
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 Investors and other creditors will be able to benefit from the Settlement Payment
by filing a claim against the Receivership after a claims process is established and
by having a more valuable asset – namely, a resort that can be sold as an operating
resort and a going concern. See Kaleta, 530 Fed. Appx. at 362 (investors may
“pursue their claims by participat[ing] in the claims process for the Receiver’s
ultimate plan of distribution for the Receivership Estate”) (alteration in original;
internal quotations omitted).
 The interests of persons affected by the Bar Order have been represented by the
Receiver, acting in the best interests of the Receivership Entities in his fiduciary
capacity and upon the advice and guidance of his experienced counsel.
A similar bar order was approved by the court in SEC v. Kaleta, CIV.A. H-09-3674, 2013
WL 2408017, at *1 (S.D. Tex. May 31, 2013). In Kaleta, the principals of an entity in receivership
demanded coverage under the entity’s errors and omissions policy for lawsuits that had been filed
against them. See id. at *3. The SEC receiver then made a demand that the insurance company
tender the policy proceeds to the estate, for distribution to investors. Id. The receiver settled with
the insurance company and moved for a bar order enjoining all persons “from in any manner taking
any adverse action against the Insurance Company and/or the Policy,” effectively wiping out the
principals’ claim for coverage. Id. The principals objected to the bar order, but the court overruled
their objection. The court found that entry of the bar order was within the court’s “broad equitable
authority” to stay litigation “in circumstances affecting assets of a receivership estate.” Id. at *6.
In light of the circumstances of this case, and the authorities entering similar bar orders in
comparable circumstances, entry of the Bar Order is necessary and appropriate ancillary relief to
the SEC Action.
C. The Settlement Approval Procedures comply with due process, in that they afford
persons affected by the Settlement Agreement and Bar Order notice and an
opportunity to be heard in a manner that is good and sufficient under the
circumstances.
“Due process requires notice and an opportunity to be heard.” Elliot, 953 F.2d at 1566.
The procedures required to satisfy due process vary “according to the nature of the right and to the
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type of proceedings.” Id. “[A] hearing is not required if there is no factual dispute.” Elliot,
953 F.2d at 1566. Ultimately, due process requires procedures that are “fair.” Id. The Settlement
Approval Procedures meet these requirements.
The form and content of the Notice provide a reasonable opportunity to evaluate and object
to the Motion, the Settlement Agreement and the Bar Order. The Notice contains a description of
the settlement, including the Bar Order, the parties to the Settlement Agreement, and the material
terms thereof. The Notice provides a reasonable description and warning that the rights of the
person receiving or reviewing it may be affected by the Settlement Agreement and Bar Order, and
of such person’s right to object and the manner in which to make such an objection.
The manner and method of service and publication set forth in the Settlement Approval
Procedures is reasonably calculated under the circumstances to disseminate the Notice to all
affected parties. The Notice will be served on counsel of record in the SEC Action, including
Quiros’s former attorneys, and on counsel for investors appearing of record in any legal proceeding
or arbitration relating to investors. The Notice will be served on all investors identified in the
investor lists maintained by the Receivership Entities. The Notice will also be served on all noninvestor
creditors identified after a reasonable search. Therefore, all investors and creditors of
which the Receiver has actual knowledge will receive actual service of the Notice.
In addition, the Notice will be published in the Burlington Free Press, which is the regional
paper of widest circulation in Vermont, and the Vermont Digger, which has run many stories on
Quiros and the Jay Peak projects and is believed to be followed by many stakeholders in the
Receivership Entities. The Notice will also be published on the Receiver’s website, which has
been online since the Receiver’s appointment and is available in seven languages. Such
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publication is reasonably calculated to apprise persons not receiving actual service of the Notice
that their rights may be affected and of their opportunity to object.
Accordingly, the Settlement Approval Procedures furnish all parties in interest a full and
fair opportunity to evaluate the Motion, the Settlement Agreement and the Bar Order, and to object
thereto.
V.
Conclusion
WHEREFORE, the Receiver respectfully requests that the Court grant the Motion, and
enter the Preliminary Approval Order, Final Approval Order, and Bar Order, in the manner set
forth above.
Local Rule 7.1 Certification of Counsel
Pursuant to Local Rule 7.1, undersigned counsel has conferred with counsel for all parties
to this action. Undersigned counsel hereby certifies that defendants Ariel Quiros and William
Stenger agree to the relief sought herein. Undersigned counsel certifies that the SEC does not
object to the settlement, but takes no position for or against the proposed bar order.
Dated: January 8, 2019
LEVINE KELLOGG LEHMAN
SCHNEIDER + GROSSMAN LLP
Co-counsel for the Receiver
201 South Biscayne Boulevard
Miami Center, 22nd Floor
Miami, FL 33131
Telephone: (305) 403-8788
Facsimile: (305) 403-8789
By: /s/ Jeffrey C. Schneider
JEFFREY C. SCHNEIDER, P.A.
Florida Bar No. 933244
Primary: jcs@lklsg.com
Secondary: lv@lklsg.com
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was served on this
January 8, 2019 via the Court’s notice of electronic filing on all CM/ECF registered users
entitled to notice in this case as indicated on the attached Service List.
By: /s/ Jeffrey C. Schneider
JEFFREY C. SCHNEIDER, P.A.
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SERVICE LIST
1:16-cv-21301-DPG Notice will be electronically mailed via CM/ECF to the following:
Robert K. Levenson, Esq.
Senior Trial Counsel
Florida Bar No. 0089771
Direct Dial: (305) 982-6341
Email: levensonr@sec.gov
almontei@sec.gov, gonzalezlm@sec.gov,
jacqmeinv@sec.gov
Christopher E. Martin, Esq.
Senior Trial Counsel
SD Florida Bar No.: A5500747
Direct Dial: (305) 982-6386
Email: martinc@sec.gov
almontei@sec.gov, benitez‐perelladaj@sec.gov
SECURITIES AND EXCHANGE
COMMISSION
801 Brickell Avenue, Suite 1800
Miami, Florida 33131
Telephone: (305) 982-6300
Facsimile: (305) 536-4154
Attorneys for Plaintiff
Roberto Martinez, Esq.
Email: bob@colson.com
Stephanie A. Casey, Esq.
Email: scasey@colson.com
COLSON HICKS EIDSON, P.A.
255 Alhambra Circle, Penthouse
Coral Gables, Florida 33134
Telephone: (305) 476-7400
Facsimile: (305) 476-7444
Attorneys for William Stenger
Melissa Damian Visconti, Esq.
Email: mvisconti@dvllp.com
DAMIAN & VALORI, LLP
1000 Brickell Avenue, Suite 1020
Miami, Florida 33131
Telephone: (305) 371-3960
Counsel for Ariel Quiros
Jonathan S. Robbins, Esq.
jonathan.robbins@akerman.com
AKERMAN LLP
350 E. Las Olas Blvd., Suite 1600
Ft. Lauderdale, Florida 33301
Telephone: (954) 463-2700
Facsimile: (954) 463-2224
Naim Surgeon, Esq.
naim.surgeon@akerman.com
AKERMAN LLP
Three Brickell City Centre
98 Southeast Seventh Street, Suite 1100
Miami, Florida 33131
Telephone: (305) 374-5600
Facsimile: (305) 349-4654
Attorney for Court-Appointed Receiver
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21
Scott B. Cosgrove, Esq.
Email: scosgrove@leoncosgrove.com
James R. Bryan, Esq.
Email: jbryan@leoncosgrove.com
LEON COSGROVE, LLC
255 Alhambra Circle
Suite 800
Coral Gables, Florida 33133
Telephone: (305) 740-1975
Facsimile: (305) 437-8158
Former attorney for Ariel Quiros
David B. Gordon, Esq.
Email: dbg@msk.com
MITCHELL SILBERBERG & KNOPP, LLP
12 East 49th Street – 30th Floor
New York, New York 10017
Telephone: (212) 509-3900
Former attorney for Ariel Quiros
Jean Pierre Nogues, Esq.
Email: jpn@msk.com
Mark T. Hiraide, Esq.
Email: mth@msk.com
MITCHELL SILBERBERG & KNOPP, LLP
11377 West Olympic Blvd.
Los Angeles, CA 90064-1683
Telephone (310) 312-2000
Former attorney for Ariel Quiros
Mark P. Schnapp, Esq.
Email: schnapp@gtlaw.com
Mark D. Bloom, Esq.
Email: bloomm@gtlaw.com
Danielle N. Garno, Esq.
E-Mail: garnod@gtlaw.com
GREENBERG TRAURIG, P.A.
333 SE 2nd Avenue, Suite 4400
Miami, Florida 33131
Telephone: (305) 579-0500
Attorney for Intervenor, Citibank N.A.
J. Ben Vitale, Esq.
Email: bvitale@gurleyvitale.com
David E. Gurley, Esq.
Email: dgurley@gurleyvitale.com
GURLEY VITALE
601 S. Osprey Avenue
Sarasota, Florida 32436
Telephone: (941) 365-4501
Attorney for Blanc & Bailey Construction, Inc.
Stanley Howard Wakshlag, Esq.
Email: swkshlag@knpa.com
KENNY NACHWALTER, P.A.
Four Seasons Tower
1441 Brickell Avenue
Suite 1100
Miami, FL 33131-4327
Telephone: (305) 373-1000
Attorneys for Raymond James & Associates
Inc.
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