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COMMUNITY FIRST v. FIRST UNITED FUNDING

No. A12-40.

822 N.W.2d 306 (2012)

COMMUNITY FIRST BANK, a Wisconsin banking corporation, Respondent, v. FIRST UNITED FUNDING, LLC, Defendant, Lighthouse Management Group, Inc., as Receiver for First United Funding, LLC, Respondent, Corey N. Johnston, Respondent, Hillcrest Bank, a Kansas banking corporation, Respondent, v. Community Financial Bank, a Wisconsin banking corporation, intervenor, Respondent, Community State Bank of Prentice, a Wisconsin banking corporation, intervenor, Respondent, Choice Financial Group, intervenor, Respondent, MinnWest Bank Luverne, intervenor, Respondent, First International Bank and Trust, a North Dakota banking corporation, intervenor, Respondent, Maple Bank, intervenor, Respondent, The Bank, Weatherford Texas, intervenor, Respondent, LNV Corporation, intervenor, Respondent, Republic Bank of Chicago, intervenor, Respondent, The National Bank, intervenor, Appellant, v. John Doe, et al., Additional Defendants, and Western National Bank, Respondent, v. First United Funding, LLC, Defendant, Lighthouse Management Group, as Receiver for First United Funding, LLC, Respondent.

Court of Appeals of Minnesota.

July 16, 2012.

Attorney(s) appearing for the Case

T. Chris Stewart , Anastasi & Associates, Stillwater, MN, for respondent Community First Bank.

Ryan T. Murphy , Joseph J. Cassioppi , Fredrikson & Byron, P.A., Minneapolis, MN, for respondents Lighthouse Management Group, Inc., receiver for First United Funding, LLC and Non-Exempt assets of Corey N. Johnston.

Robert L. Meller, Jr. , Best & Flanagan, LLP, Minneapolis, MN, for Hillcrest Bank.

Community Financial Bank, Prentice, WI, respondent.

Community State Bank of Prentice, Prentice, WI, respondent.

Tracy A. Kennedy , Zimney Foster, P.C., Grand Forks, ND, respondent Choice Financial Group.

Kathryn J. Bergstrom , Gray, Plant, Mooty, Mooty & Bennett, PA, Minneapolis, MN, respondent Minnwest Bank Luverne.

Kevin D. Hofman , Halleland Habicht, P.A., Minneapolis, MN, and Kirstin D. Kanski , Lindquist & Vennum, P.L.L.P., Minneapolis, MN, for respondent First International Bank and Trust.

Maple Bank , Champlin, MN, respondent.

Steven M. Phillips , Anthony Ostlund Baer & Louwagie, P.A., Minneapolis, MN, for respondent The Bank, Weatherford, Texas.

LNV Corporation, respondent.

Mychal A. Bruggeman , Shane H. Anderson , Mackall, Crounse & Moore, PLC, Minneapolis, MN, for respondent Republic Bank of Chicago.

Timothy W. Waldeck , Lindsey J. Woodrow , Waldeck & Lind, P.A., Minneapolis, MN, and

Richard A. Davidson (pro hac vice), Lane & Waterman LLP, Davenport, IA, for appellant.

Patrick W. Michenfelder , Gries & Lenhardt, P.L.L.P., St. Michael, MN, for respondents Chez & Tabes, LLC, Brian Carney, and Edwad Rapee.

Lowell P. Bottrell , Fargo, ND, for respondent Bank Forward.

Kevin M. Busch , Moss & Barnett, Minneapolis, MN, for respondent Border State Bank.

Charter Bank , Eau Claire, WI, respondent.

David Galle , Oppenheimer Wolff & Donnelly, Minneapolis, MN, for respondent CLMG Corp.

William F. Stute, Jr. , Faegre Baker Daniels LLP, Minneapolis, MN, for respondent Western National Bank.

Brett M. Larson , Saliterman & Siefferman, P.C., Minneapolis, MN, for respondent Corey N. Johnston.

First Southern National Bank, respondent.

Labette Bank, respondent.

Sonoran Bank, N.A., respondent.

Mortgage Electronic Registration Systems, Inc., respondent.

Considered and decided by SCHELLHAS, Presiding Judge; KALITOWSKI, Judge; and CHUTICH, Judge.

OPINION

CHUTICH, Judge.

Appellant, The National Bank (National Bank), appeals the district court's distribution of funds recovered from a Ponzi scheme under a net-investment distribution method. Because the district court did not abuse its discretion in selecting that method, we affirm.

FACTS

Beginning in 2002, First United Funding, LLC (First United) and Corey Johnston sold loan participations to banks, promising impressive returns. A...

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