A plan to repay victims of the $1.2 billion Ponzi scheme run by disbarred Florida attorney Scott Rothstein is on hold after a judge rejected disclosure materials explaining the proposal, Bloomberg News reported on Friday. Bankruptcy Judge Raymond B. Ray, who is overseeing the liquidation of Rothstein’s law firm, on Friday ordered a hearing on a motion to end the chapter 11 case and appoint a new trustee under chapter 7. Several groups of investors oppose the plan by current trustee Herbert Stettin, which included a settlement with Toronto-Dominion Bank. The plan would bar investors from suing TD Bank and halt pending state-court lawsuits against the bank.
