DALLAS – LAWFUEL – The Law News Network – Insurers for a bankrupt Plano, TX-based Internet company have agreed to a settlement that will recoup more than $8 million for a group of former company shareholders and the bankruptcy trustee. The settlement was approved by the bankruptcy court this afternoon.
Geoffrey Harper, a partner in Dallas’ Fish & Richardson, led a group of attorneys representing 100 former shareholders of Cool Partners Inc., which operated as an Internet service provider under the name Coollink Broadcast Network. The attorneys also represented Robert Yaquinto, trustee in the Cool Partners bankruptcy.
“We are extremely pleased to have achieved this result for a group of people who lost a lot of money because of the greed of others,” Mr. Harper says. “While they thought their investments were safe, the company was busy throwing money at Ferrari racing teams and trips to Mexico for swimsuit model calendar shoots.”
Cool Partners filed for Chapter 7 bankruptcy protection in January 2002. Soon after, the company and its officers and directors became the subject of multiple lawsuits alleging fraud, misrepresentation, wrongful conversion of corporate assets, and a variety of other claims. The lawsuit against six former company officers and directors was scheduled to begin Jan. 17, 2006 in Judge Mark Greenberg’s County Court at Law No. 5 in Dallas.
The settlement was submitted to Northern District of Texas Bankruptcy Judge Harlin D. Hale, who is presiding over Cool Partners’ bankruptcy case. At today’s hearing, Judge Hale approved the settlement in all respects. In addition to $7,541,078.17 from Cool Partners’ insurers, the settlement includes a $510,000 payment from two law firms that provided legal counsel to Cool Partners prior to the company’s bankruptcy. The law firms were not formally sued in the case.
Under the proposed settlement, the group of shareholders and the bankruptcy trustee will split the proceeds evenly. Mr. Harper says the recovery will amount to approximately 25 cents on the dollar after attorneys fees.
“It’s not everyday that you see this type of recovery for a company that had virtually no assets,” Mr. Harper says. “Although both insurers put up a fierce fight, we are thankful that we were able to reach the best agreement for the trustee and the former shareholders.”
In addition to Mr. Harper, the attorneys for the shareholder and the bankruptcy trustee included Steven H. Stodghill, Victor C. Johnson and Kiprian Mendrygal from Fish & Richardson, P.C., and I. Richard Levy from I. Richard Levy, P.C.