Artists Management Group partner Rick Yorn has agreed to pay $610,000 to settle a lawsuit filed in connection with the bankruptcy of the Cassandra Group, the investment firm of disgraced money manager Dana Giacchetto.
Yorn released a statement that read, “I did nothing wrong and operated under the belief that the financial transactions were handled appropriately. It would take an enormous amount of time and legal fees to produce the evidence of what really happened. Therefore, I’m putting an end to the matter today. The high costs of legally pursuing a bankruptcy case simply outweigh the end result, and ultimately the settlement is more beneficial to everyone affected.”
In a separate settlement agreement dated July 30, Yorn also expressly denied that he engaged in any wrongdoing or illegal or actionable acts or omissions.
The Cassandra Group filed for Chapter 7 bankruptcy in Manhattan in July 2000, after it was discovered that the fund had only $25,000 in assets.
In February, bankruptcy trustee Robert Geltzer, who was appointed to retrieve assets to repay creditors, sued Yorn in what is called a fraudulent conveyance under federal bankruptcy law. The trustee claimed Yorn received $737,467 from the sale of Paradise Music & Entertainment stock, even though Yorn knew that he had never bought the stock and that Cassandra was insolvent at the time he received the money.
The trustee also claimed Yorn received an interest-free loan of $606,521 to buy a new home. Although Yorn did repay the loan, the trustee was seeking interest, along with punitive damages and attorney’s fees.
Attorneys for the bankruptcy trustee did not return calls Wednesday.
Part of the fallout
The Yorn matter is just one piece of the vast amount of litigation spawned by the downfall of Giacchetto, the one-time “money manager to the stars.” At one point Giacchetto counted a vast stable of actors, agents and managers among his investors, including Yorn and his AMG partner, Michael Ovitz, as well as several of Yorn’s clients, including Cameron Diaz and Leonardo DiCaprio, who was closely associated with Giacchetto during his heyday.
In February, Giacchetto was sentenced to 57 months in federal prison after pleading guilty to securities fraud. He admitted stealing $10 million from his clients by diverting checks from their brokerage accounts and depositing them in Cassandra’s account. He used the money for his own lavish living expenses and to cover previous losses from risky investments of his clients’ money.
Last week Giacchetto settled a related SEC suit by agreeing to repay $14 million and agreeing to a permanent prohibition from acting as an investment adviser.