By: Derek Hawkins//September 3, 2019//
7th Circuit Court of Appeals
Case Name: Michael Alonso, et al. v. Leslie J. Weiss, et al.
Case No.: 18-1740; 18-1791
Officials: SYKES, SCUDDER, and ST. EVE, Circuit Judges.
Focus: Breach of Fiduciary Duty
This appeal centers on the performance of the court-appointed receiver of financial advisory firm Nutmeg Group, LLC. The district court appointed the receiver after the Securities and Exchange Commission initiated an enforcement action against Nutmeg and its managing member, Randall Goulding. Against the Commission’s allegations of ongoing fraud and misappropriation of client assets, the district court presiding over the SEC matter entered a temporary restraining order prohibiting Goulding from operating Nutmeg and appointed a receiver to oversee all aspects of the firm’s business.
This civil suit followed. Goulding and a group of limited partners in one or more of the Nutmeg funds alleged that the receiver breached her fiduciary duties and, in doing so, reduced the value of the funds’ assets. After dismissing certain counts, the district court entered summary judgment in the receiver’s favor on all remaining claims. Because we agree that no reasonable jury could find that the receiver engaged in a willful, deliberate, or even grossly negligent breach of a fiduciary duty, we affirm.
Affirmed