After more than two years of litigation, Wednesday was supposed to mark the final arguments before a federal judge signed off on how much money owners of Philadelphia-based Par Funding must pay to reimburse 1,200 investors, who the government says were sold fraudulent securities to finance Par’s high-fee loans to small businesses.
Instead, the federal Securities and Exchange Commission was given 10 days to negotiate a settlement with Par founders, Joseph LaForte and his wife, Lisa McElhone.
The SEC had called on the court to order the couple to pay $337 million in a petition filed in May. The couple’s lawyers said they should pay a maximum $56 million.
» READ MORE: Brother of Par Funding owner says he raised millions to pay lawyers in long-running SEC fight
Under tough questions and complaints from Judge Rodolfo Ruiz II, lawyer Amie Riggle Berlin withdrew the SEC petition and agreed at Ruiz’s urging to one last attempt to negotiate a settlement with defense lawyers — though both sides said a deal was unlikely.
If they don’t come up with a plan, the judge says, he is likely to make an award that would disappoint both sides.
Whatever the judge sets aside will be used to help fill “a giant pot that’s to be assembled” so receiver Ryan Stumphauzer “can write 1,200 checks,” said James Miller Kaplan, a lawyer for the defense.
Two years ago at the SEC’s request, Ruiz appointed Stumphauzer, a former federal prosecutor, as the receiver to take over Par, also known…
