UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 20-CV-81205-RAR

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

COMPLETE BUSINESS SOLUTIONS GROUP,

INC. d/b/a PAR FUNDING, et al.,

Defendants.

/

LISA MCELHONE’S AND JOSEPH LAFORTE’S

OBJECTIONS TO THE ECKERT SEAMANS SETTLEMENT 

Defendants, Lisa McElhone and Joseph LaForte, by and through their undersigned counsel,

hereby file their objections to the Settlement Agreement proposed in the Receiver’s Motion for: (I) 

Approval of Settlement Among Receiver, Putative Class Plaintiffs, and Eckert Seamans; (II) 

Approval of Form, Content and Manner of Notice of Settlement and Bar Order; (III) Setting Deadline 

to Object to Approval of the Settlement and Entry of Bar Order; and (IV) Scheduling a Hearing [ECF 

No. 1861, the “Motion to Approve Settlement”]. As support therefore, McElhone and LaForte state 

as follows: 

1. On May 6, 2024, the Receiver filed its Motion to Approve Settlement.

2. On May 13, 2024, the Court entered its Order Preliminarily Approving Settlement 

Among Receiver, Putative Class Plaintiffs, and Eckert Seamans [ECF No. 1906, the “Preliminary 

Approval Order”]. 

3. The Preliminary Approval Order requires that “[a]ny person who objects to the terms 

of the Settlement Agreement, the Bar Order, the Motion, or any of the relief related to any of the 

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 1 of 7
- 2 -

foregoing, must file an objection, in writing, with the Court pursuant to the Court’s Local Rules not 

later than thirty (30) days before the Final Approval Hearing.” Id. at p. 5. 

4. On May 29, 2024, the Court entered a paperless order resetting the Final Approval 

Hearing for August 13, 2024, which makes the deadline to file objections July 14, 2024.

OBJECTIONS AND REQUEST FOR RELIEF

5. McElhone and LaForte object to the Settlement Agreement on the grounds that it is 

expressly conditioned on Eckert Seamans Cherin & Mellot, LLC (“Eckert Seamans”) receiving the 

benefit of a Bar Order. 

6. The proposed Bar Order would be inequitable because it would extinguish McElhone 

and LaForte’s potential claims against Eckert Seamans without conferring any benefit upon them. 

7. McElhone and LaForte – as controlling persons of Par Funding and other 

Receivership Entities – were ultimately subject to liability and a judgment of disgorgement in excess 

of $140 Million based, in significant part, on the actions of Eckert Seamans and John W. Pauciulo (a 

former Partner at Eckert Seamans) with respect to the marketing and sale of investments in Par 

Funding. 

8. The Receiver attempts to preempt McElhone and LaForte’s objections by asserting 

that any claims by “non-settling third parties... whom bear at least some responsibility for 

perpetrating this fraud” will be subject to comparative fault and unclean hands defenses, and are 

therefore doomed to fail. See Motion to Approve Settlement at p. 7. But the Receiver cannot 

substitute his judgment on such fact intensive legal issues for that of a jury (or other fact finder) in 

order to circumvent McElhone and LaForte’s valid claims. 

9. The Receiver also argues that such third-party claims “mirror” and are therefore 

“interrelated” with the Receiver’s own claims against Eckert Seamans. Id. This is precisely the point. 

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 2 of 7
- 3 -

The Settlement Agreement would resolve “potential claims by the Receiver on behalf of the 

Receivership Entities[.]” Id. Many of the Receivership Entities the Receiver purports to bring claims 

on behalf of – including Par Funding and Full Spectrum – were ultimately owned and/or controlled 

by McElhone and LaForte during the relevant time period. Nevertheless, the Receiver does not 

propose to apply any proceeds of the settlement with Eckert Seamans to the existing judgment against 

McElhone and LaForte – which is based on their actions on behalf of these same Receivership 

Entities. Indeed, McElhone and LaForte have been held jointly and severally liable with and to the 

same extent as Par Funding and Full Spectrum (another Receivership Entity) pursuant to Section 

20(a) of the Exchange Act. See Count VIII of the SEC’s Amended Complaint. Accordingly, 

McElhone and LaForte would be entitled to assert claims against Eckert Seamans to the same extent 

the Receiver is entitled to assert such claims on behalf of Par Funding and Full Spectrum. 

10. For these reasons, the equities simply do not support barring McElhone and LaForte’s 

claims without providing them any credit for settlement proceeds garnered on behalf of Receivership 

Entities they own and/or controlled.

11. Furthermore, the Court’s ability to issue a Bar Order is in serious doubt based on the 

Supreme Court’s recent decision in Harrington v. Purdue Pharma L.P. Case No. 23-124, 2024 WL 

3187799, at *5 (U.S. June 27, 2024) (holding that bankruptcy courts are not authorized to approve a 

release and injunction that extinguishes claims against non-debtor third parties without the consent of 

affected claimants). Following the logic of this decision, this Court cannot use its equity powers to 

extinguish the claims of affected claimants – like McElhone and LaForte – without their consent. 

12. The Receiver cites In re Seaside Eng'g & Surveying, Inc. 780 F.3d 1070 (11th Cir. 

2015) for the proposition that the Eleventh Circuit has expressly held that district courts have the 

authority to enter Bar Orders. See Motion to Approve Settlement at p. 17. However, Seaside Eng’g 

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 3 of 7
- 4 -

has now been expressly abrogated by Purdue Pharma L.P. Moreover, even if Seaside Eng’g remained 

good law (it is not), the Receiver makes no mention of the Eleventh Circuit’s warning in that opinion

that “bar orders should be used cautiously and infrequently.” See Seaside Eng'g, 780 F.3d at 1079 

(internal citations omitted).

13. For all of these forgoing reasons, McElhone and LaForte object to the proposed 

Settlement Agreement – in its current form – and respectfully request that the Court withhold 

approval of the Settlement Agreement and decline to enter a Bar Order in favor of Eckert Seamans.

1

14. In accordance with the Preliminary Approval Order, McElhone and LaForte hereby 

advise the court that they intend to have their respective counsel appear at the Final Approval 

Hearing, and respectfully request that the Court authorize their counsel to appear at the Final 

Approval Hearing.

Respectfully submitted,

1 Although McElhone and LaForte’s primary objection to the proposed settlement is that it would 

impermissibly bar their claims without conferring any benefit upon them, they also question whether 

the amount of the proposed settlement is fair and proper. Notably, the settlement is based on the 

available limits of Eckert Seamans’ insurance policies, and does not require the firm, or any of its 

principals, to contribute a cent of their own money (aside from their policy deductible). According to 

Eckert Seamans’ own website, Eckert Seamans is a full-service national law firm with approximately 

300 lawyers across a network of 15 offices. Other online sources reflect that Eckert Seamans had $134 

Million in gross revenue in 2023, and that the average profit for the firm’s 115 equity partners is 

$455,000 – yielding combined equity partner profits of approximately $51 Million, annually. See 

https://www.law.com/law-firm-profile/?id=96&name=Eckert-Seamans. Based on these figures, it is 

clear that Eckert Seamans could make a personal contribution to the settlement, above and beyond 

policy limits.

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 4 of 7
- 5 -

KOPELOWITZ OSTROW 

FERGUSON WEISELBERG GILBERT

Attorneys for Defendant Joseph W. LaForte

One W. Las Olas Blvd., Suite 500 

Fort Lauderdale, Florida 33301

Tel: (954) 525-4100

By: /s/ David L. Ferguson

DAVID L. FERGUSON

Florida Bar Number: 0981737

Ferguson@kolawyers.com 

KAPLAN ZEENA LLP

Attorneys for Defendant Lisa McElhone

2 South Biscayne Blvd., Suite 3050

Miami, Florida 33131

Telephone: (305) 530-0800

Facsimile: (305) 530-0801 

By: /s/ James M. Kaplan

JAMES M. KAPLAN

Florida Bar No.: 921040

james.kaplan@kaplanzeena.com 

elizabeth.salom@kaplanzeena.com

service@kaplanzeena.com 

NOAH E. SNYDER

Florida Bar No.: 107415

noah.snyder@kaplanzeena.com

maria.escobales@kaplanzeena.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 12th day of July, 2024, I electronically filed the forgoing 

document with the clerk of the Court using CM/ECF. I also certify that the foregoing document is 

being served this day on counsel of record via transmissions of Notices of Electronic Filing generated 

by CM/ECF; and via Email and Regular U.S. Mail to the parties listed on the attached Service List.

By: /s/ James M. Kaplan

 JAMES M. KAPLAN

SERVICE LIST

Ryan Stumphauzer

Stumphauzer Kolaya Nadler & Sloman PLLC 

One Biscayne Tower

2 S. Biscayne Boulevard, Suite 1600

Miami, FL 33131

Tel: (305) 614-1400

Fax: (305) 614-1425

Email: rstumphuazer@sknlaw.com

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 5 of 7
- 6 -

Timothy A. Kolaya

Stumphauzer Kolaya Nadler & Sloman PLLC

One Biscayne Tower

2 S. Biscayne Boulevard, Suite 1600

Miami, FL 33131

Tel : (305) 614-1400

Fax : (305) 614-1425

Email : tkolaya@sknlaw.com

Gaetan J. Alfano

Pietragallo Gordon Alfano Bosick & Raspanti, LLP 

1818 Market Street, Suite 3402

Philadelphia, PA 19103

Tel.: (215) 320-6200

Fax: (215) 981-0082

Email: gja@pietragallo.com

Levine Kellogg Lehman Schneider + Grossman LLP 

Jeffrey C. Schneider

Jason K. Kellogg 

Victoria J. Wilson 

Miami Tower

100 SE 2nd Street, 36th Floor 

Miami, FL 33131

Tel.: (305) 403-8788

Fax: (305) 403-8789

Email: jcs@lklsg.com

Email: jk@lklsg.com

Email: vjw@lklsg.com

Steven A. Schwartz

Chimicles Schwartz Kriner & Donaldson-Smith LLP 

361 West Lancaster Avenue

Haverford, PA 19041

Tel.: (610) 642-8500

Fax: (610) 649-3633

Email: sas@chimicles.com

Marc H. Edelson 

Eric Lechtzin

Edelson Lechtzin LLP 

411 S. State Street

Ste N-300

Newtown, PA 18940

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 6 of 7
- 7 -

Tel.: (215) 867-2399

Fax: (267) 685-0676

Email: medelson@edelson-law.com

Email: elechtzin@edelson-law.com

Scott Lance Silver 

Silver Law Group 

11780 W. Sample Road 

Coral Springs, FL 33065 

Tel: (954) 755-4799

Fax: (954) 755-4684

Email: ssilver@silverlaw.com

Melanie Emmons Damian 

Damian & Valori LLP 

1000 Brickell Avenue, Suite 1020

Miami, FL 33131

Tel.: (305) 371-3960

Fax: (305) 371-3965

Email: mdamian@dvllp.com

Jay A. Dubow 

Troutman Pepper

3000 Two Logan Square 

Eighteenth and Arch Streets 

Philadelphia, PA 19103-27799

Tel.: (215) 981-4713

Email: jay.dubow@troutman.com

Catherine M. Recker 

Welsh and Recker 

306 Walnut Street

Philadelphia, PA 19106

Email: cmrecker@welshrecker.com

Case 9:20-cv-81205-RAR Document 1989 Entered on FLSD Docket 07/12/2024 Page 7 of 7