National Events To Consolidate Estates, Resolve D&O Dispute

Law360, New York (January 8, 2019, 9:11 PM EST) -- The debtor entities of defunct ticket brokerage
National Events Holdings LLC will be substantively consolidated in bankruptcy to further liquidation
proceedings and return money to creditors, a Chapter 7 trustee attorney said Tuesday, noting an
agreement reached to settle with the company's directors and officers insurer.

A proposed $1.65 million settlement between the National Events estate and Navigators Insurance Co. is
headed for court approval after parties in the company's bankruptcy cases reached a resolution to push
the proceedings forward with creditor recoveries in sight.

Counsel for trustee Kenneth Silverman informed the judge presiding over the cases on Tuesday that the
debtors and their three major creditors have agreed to substantively consolidate all of the National
Events estates being administered under Chapter 7 and Chapter 11 bankruptcy protection and then
work toward a plan to consensually distribute cash recoveries. The agreement helps resolve a pending
objection by the company's largest creditor, Falcon Investment Advisors LLC, to the D&O policy
settlement.

"Everyone thinks this makes sense to move these cases forward," said Thomas Draghi, an attorney for
the estate fiduciary in the Chapter 11 cases.

National Events did legitimate business as a ticket reseller, but prosecutors said founder and CEO Jason
Nissen also started using the company as a front for a Ponzi scheme in 2015, telling investors he was
using their money to buy premium sports and entertainment tickets when the money was in fact being
used to pay off other investors and for Nissen's personal profit. Nissen was arrested in May 2017 and
charged with wire fraud. He pled guilty in March.

The company entered bankruptcy in June 2017. As the result of a settlement between dueling creditor
factions, the bankruptcy was split into two cases, National Events Holding and National Events of
America Inc. The National Events Holding case was converted to a Chapter 7 liquidation.

The settlement with Navigators stems from a request by National Events for defense and
indemnification under the company's $5.5 million directors and officers policy. The deal formed after
the insurer pushed back, arguing that both the fraud claims and alleged misrepresentations Nissen
made on the policy application barred coverage.

Silverman originally submitted the settlement proposal for approval early last year. But the motion
faced opposition from Falcon, an investment fund that had placed members on National Events' board.
It argued that the directors, not the estate, were the intended beneficiaries of the policy and that
Silverman did not have the authority to agree to the settlement.

Silverman responded that because the policy both covered the company directly and indemnified it
from directors' claims, the proceeds belonged to the estate. He also noted a "substantial likelihood" that
the policy would be rescinded after "protracted litigation with Navigators."

The trustee supplemented his arguments urging the court to approve the settlement last week, saying
the proposed order actually protects the direct claims of creditors and third parties "while preserving
the estates' rights and property." The deal also protects the Falcon directors, he said.
Attorney trustee Ronald Friedman told the court on Tuesday that the agreements between the parties
in the case provide "multiple benefits" and help advance the proceedings forward.

Silverman is represented by Ronald J. Friedman of SilvermanAcampora LLP.

The Chapter 11 debtors are represented by Thomas A. Draghi and Mickee M. Hennessy of Westerman
Ball Ederer Miller & Sharfstein LLP.

Navigators is represented by David S. Sheiffer of Wilson Elser Moskowitz Edelman & Dicker LLP.

Falcon is represented by Joel H. Levitin and John M. Schoolman of Cahill Gordon & Reindel LLP.

The case is In re: National Events Holdings LLC, case number 1:17-bk-11556, in the U.S. Bankruptcy Court
for the Southern District of New York.

--Additional reporting by Ryan Boysen and Rick Archer. Editing by Aaron Pelc.