United States of America v. Rocket Ventures II SBIC, L.P.

Filing 2

STIPULATION FOR CONSENT ORDER of Receivership appointing U.S. Small Business Administration as Receiver for Rocket Ventures II, SBIC, L.P. re 1 Complaint filed by United States of America. Signed by Judge Jeffrey S. White, on September 4, 2008, USDC, Northern District of California San Francisco Division, case number C08-02240. (lw)

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J O S H P IP, RUSSONIELLO. NO. 44332 { CA Uflited StatesAttomoy J O A N NM. SWANSON (SBN 88r43) C h i e f ,Civil Division , E D W N L. JOE(SBN r 12328) S p e c i aAssistaflt l UnitodStatos Attomey

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455 Market Street,6F Floor S a nFrancisco, Califomia 94105-2420 T e l e p h o n e : [phone] F a c s i m i l o ; (20?) 481-1810 (415) or 744-6812 e d w i [e-mail] Email: Plaintiff A t t o m e y sfor Fodoral
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IN THE T]NTIED STATESDISTRICT COI]RT FOR TIfi NORTITERNDISTRICT OF CALIT'ORNIA SA} I FRANCISCO DTVISION

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TJTIITED STATES OF AMERICA. I'laintiff. v, ROCKET VEI{TURES tr, SBrC, L.P.
Defendqnt.

E-FiIing C i v i l Crse No. C08-02240 JSW S t i p u l f ltiotr for ReccivershipOrder a n d ConsentOrder ( C o v e r Page)

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IN TIIE UNITED STATESDISTRICT COI]RT FOR THE NORTIIERN DISTRICT OF CALIFOR]\IA I]NITEI} STATESOI' AMERICA. Plaintiff.

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) R OC I(E TVnNTURES SBIC,L.P. n,
Dcfendent,
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Civil Case No, C0E-02240 JSW

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STIPUIdTION FOR CONSENT ORDER OF RECEI1-RSIilP W H F : R E A SPlaintiff, UnitedStates America,on behalfof its agency, , of the

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U n i t o dStates $mall Business ,{dministration, filed and caused be servod has to upon dofondart, ROCKETVENTTIRES SBIC,L.P., a complaint; Il, and W H E R E A S ,the partiesdEsire resolve matteramioably without further to the and p r o o e e d i n g s , or adjudication trial ofany issue, as andstipulate follows: I. "), Thatdefbndant ROCI{-EI'VENTURES SBIC, L.P. ("Lioensee the II,

h o l d e rof the U.S. SmallBusiness Administration's tnvestment f'SBA1 SmallBusiness Company License No. 0979-0435, a oonditionof CapitalImpairmcnt, thattenn is has s,5 d e f i n e dunder'l'itle l3 ofthe Codeof Federal Regulations, Part 107(the.'Rcgulations"); T h a tdefendant Licensee failed to requirethat all privatecapiul

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c o mmi tme nbefunded asa consequence, consonted thoappointment ts and, has to ofSBA asReceiver thepurpose for ofcontinuing defcndant's pursuant the operations to Regulations;

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S]LIPULATION FOR CONSENT ORDEROERECEIVERSHIP

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3.

Thatthis Court hasjurisdiction overthe subject matterofthis actionand

o v e rdefendant; 4. Thatthe only mutuallyagreeable methodby whiohtd distribute asscts the

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o f t h e Licensee the appropriate to creditors and SBA is throughthe appointment ofSBA
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a s thereceiver pursuant the following Consent ofthe Licensee to OrderofReceivership w i t h o u t furtherproceedings; and 5. To the entryofthe following Consent OrderofReceivership without

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f u r t h o rproceodings.

IT IS HER-EBY ORI}ERED, AI}JIJDGED AND DECREEDI I. Pur$uant the provisions 5 LI.S.C.g 687c,this Court hereby to | takes

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jurisdiotionofthe l.icensoe, all of its assets property, exolusive and and ofwhateverkind a n dwherever looated, the SBA is herebyappointed and Reoeiver ofthe Lioensee ( " R e c c i v e r " ) scrvewithout bonduntil furtherorderof this Corrt. The Receiver to is

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a p p o i n t e d the purpose for ofmarshalingand liquidatingall ofthe Licensee's assets and s a t i s f u i n g olaimsofcreditorstherefr.om the orderofpriority asdetermined this the in by Coun. 'Ihe

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shallhaveall powers, Receiver authorities, rightsandprivileges

heretofore possessed the officers,direotors, by and managors gonoral and limitedpartners o f t h c Lioensee underapplicable stateandfcderallaw, by the Limited partnership A g r e o m e n tandBy{,aws of saidlinited partnership, additionto all powersand , in a u t h o r i t yof a receiver equity,andall powersand authorityconfeneduponthe at R e c e i v eby theprovisions I 5 U.S.C.$ 6870and28 U.S.C,g 754. Thetrustees, r of

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STIPUI,AIION FOR CONSENT ORI}ER O.E XECEII4ERSIIIP

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d i r e c t o r sofhcers,managers, , employees, investment advisors, accountaitsr attorneys and o t h e ragents partners ofthe Lioensee hereby are dismissed the powercofany general and a r eherobysusponded duringthe pendency the receivership. of Suchpersons cntities and s h a l lhaveno authoritywith respeot the Lioensee's to opcrations assets, or exoept the to

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e x t o n tasmay hereaftor exprcssly granted the Receiver.The Receiver be by shallassume a n d controlthe operation ofthe Licensce shallpursuo and andpreserve of its claims. all 3. possession The Roceiveris entitledto tal(eimmediate ofall assets, bank

a c c o u f l t s otherfinancialaccounts, or booksandrecords andall otherdooumonts or i n s m r r h e n trelatingto tho Lioensoe. s The pastand/orpresent officers,directors, ageflts,

t z manager$, general and limitod partners, trusters,attomeys, accountanB, employees and o f t h e Licensee, well asall thoseactingin their place,arehereby as ordered directed and
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t o turn overto thc Rcceiverfonhwith all books,records, documents, aooounts all and
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o t h e rinstruments papers and ofand relatingto the Li$Ensee all ofthe Liconsoe's and a s s o t s all otherassets propertyof the limited partnership, and and whotherreal or 's p e r s o n a l .The Licensee gefleral partnershallfumish a written statomont within five (5) d a y saftertlre entryofthis Ofder, listingthe identity,looation andestimated valueofall assots (andjob titles lhereof),o0rerpersonnel, ofthe Lioensoo, list ofall employees a

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a t t o m c y saccotrntants arryotheragents contractors , and or ofthe Lic.ensee, well asthc as n a m e saddlesses amounts olaimsof all known creditors the Licensee.Within , and of of

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t h i r t y (30) daysfollowing tho entryofthis Ordcr,lhe Licensee's parrner shallal$o Heneral f u m i s h a written reportdescribing assets. persons ontities all All and havingcontrol, c u s t o d y possossion any assets propertyof the Licensee hereby or of or are dirocted turn to s u o hassets proprtyoverlo theReceivor, and

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to The Reooiver shallpromptlygive noticeof its appointmeflt a.llknown

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dgent$l employees, o f f i c e r s ,diroctors, shareholders, managers and creditors, dobtors, g e n e r aandlimiled partners l ofthe Lioonsoe, the Receiver deems as neoessary or

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a d v i s a b l e effectuate operation to thc All ofthe roooivership- persons entitiosowing and a n y obligation, with respeot a partnership interest tho Licensee, to debt,or distribution, to with by s h a l l ,until funhcr ordered this Court,pay all suchobligations accordance the in t e r m sthetcofto ths Rcceiverand its reoeiptfor suchpayments shallhavethe sameforce had a n deffectasif thc Licensee rooeived suohpflyments. 5. The Receiver herebyauthorized oponsuchReceivcr's is at acoounts to

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b a n k i n gor otherfinancialinstitutions extetrd to to crediton behalfofthe Lioonsee, utilize S B A personnel, to employsuchotherporsonnel, and includingthe formermanagers of as the t h e Defendant, it may deemneoessa4' effectuate operalion to ofthe reoeivership

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i n o l u d i n g ,but not limitedto, attorncys, accountants, and oonsultants appraisers, is and f u n h c r authorized expend fundsto coinpensate in to rooeivership suchpersonnol such

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a m o u n t s upon$uchtermsaslhe Receiver and shalldeemreasonable light of theusual in and f e e sandbilling practices procedures suchpersonnol.Tho Receiver not requirod of is prior to the disbursement t o obtainCourtapproval firndsfor payments ofreooivership to

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p e r s o n n eemployed the Rooeiver for expenses theRecciverdooms l by or that a d v a n t a g e o u s the orderlyadministration operation the receivership, addition, to and In of is to t h o Roceiver authorizcd reimburse SBA for travolexpenses the incurred SBA by

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p e r s o n n ein the establishment 4dmini$tration l ofthe rcceivcrship. may, and The Roooiver w i t h o u t furtherorderofthis Court,transfcr,compromise, otherwise of or dispose any in c l a i f t or asset the ordinaryoourso ofbusiness, otherthaflreal estate.

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STIPI]I.ATION FOR CONSENTORI}ER OF RECDI\IERSIIIE

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The Licensee's pasland/orpresent offioers,dircctors, agents, attornoys,

m a n a g e r sshareholders, , omployees, accountants, deb'tors, croditors, managers and g e n e r aand lirnitedpartners the l,icensee, otherappropriaE l of persons entities and or

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( i n c l u r l i n gwithout Iimitation,the deferrdant,s portfolioof small business concerns and f i n a n c i a linstittrtions doingbusinoss with defendant portfolioof small and/ordefendant's

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business concerns) shallansworunderoathto thc Reooiyer quostions all whiph lhe Receiver may put to therhand produce documents reqrrired the Reoeiver any as by

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r e g a r d i n g business saidlimitodpartnership, ary othormatterrelevant the the of or to o p e r a t i o n administr ion ofthe rooeivership tho colleotion or or offunds drreto the L i c e n s e e .ln the ovontthat tho Receiver deoms necessary requiretle appearance it to of t h e aforementioned persons entities,theReciver or shallmakeits discovery request(s) in a c c o r d a n cwith theFedoral e Rulesof Civil Procodure.

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Thc partie$ any aDdall civil legalprocecdings td inoluding, ofany nature,

proceedings, arbirration proceedings, forcclosure actions, r 7 b u t not limitedto, bankruptcy
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d e f a u l tproooedings, otheractions anynaturoinvolvingthe Licensoo any as$ets or of or of t h e Licensee, includingsubsidiaries partnerships, and wherever located, excluding and 's t h e instantproceeding, involvingthe Licensee, Receiver, any ofthe l.icensee tho or p a s tOrpfeseDt officers,diroct$rs, managerg agents, general limitedpnrtners or or suod f o r , or in connection with, any actiontakenby themwhile aotingin suohcapaciry ofbny

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nature,whether asplaintiff, defendnnt,third-pafly plaintiff, third-party defendant, or o t h e r w i $ eareenjoined , from commencing continuing suchlegalproceeding, or any or

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f r o m takingany actionrin conneotion with flny suchprocerding any suchassct.All or c i v i l logalprocoedings ofany narure, inoludingbut not limitedto bankruprcy

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procsedings, arbitration prooeedings, foreclosure actions, defaultproceedings, other or a o t i o nofany natureinvolving theLicensee ary assets or ofthe Lioenseqinctuding s u b s i d i a r i eandpartnerships, s wherever looated, exclrrding instantproceeding, and the i n v o l v i n gtho Licensee, Receiver, any ofthe Licensee's thc psstor present or officers, d i r e o t o r smanagers, , agcnts, general limitedpartners or or with, suodfor, or in connection a n y aotionuken by themwhile aotingin suohcapacity anynature, of whetherasplaintifI, d e f o n d a n tthird-partyplaintif{ third-partydefendant, otherwise, srayed thsir , or d-re in s n t i r e t y ,afld all Courtshavingan1, thereofare onjoinedfrom takingor .jurisdiction p e r m i t t i n gany actionuntil furthorOrderof this Court. Further,aEto a cause ofaotion a o c r u o d accrrring favor ofthe Liconsee or in against third person pady, any a or applicable of statute limitationis tolled duringthe periodin which this injunctionagainst c o m f f e n c c m e noflegal proceedings in effectasto that cau$e t is ofaction. 8. The Licensee its pastf,nd./or and present direotors, officors,managers,

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g o n e r aor limited partflers, l employees othcr persons entitiesactingin agents, and or c o n c e r tor participating thcrcwithbe,andthey hereby are,enjoined from eirhertlirectlyor i n d i r e c t l ytaldngany actions causing or any suchactionto botakenwhichwould d i s s i p a t e assets propertyofthe Lioensee the detriment and./or the to ofthe Liconsee of or

in includingbut not limited to destruction oorporate of xz the Rcceiversppointod this cause, r e c o r d sor which would violatethe SmallBusinoss , lnvostment of I95g. asamentletl. Act
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l 5 U,S.C.661g!, seo.,or the regulations promulgated thercunder, ("Regularions"), l3 C . F . R .$107.1 peg. ot.

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9.

The Receiver authorized borrowon behalfofthe Lioensoe, is to fiom the

S B A , up to $1,000,000 is authorized cause Licensee issueRooeiver,s and the to to

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Certifioates oflndebtedness the principalamounts in ofthe sumsborrowed, which c e r t i f i o a t e s bearifltercstat of about| 0 peroont annumandwill havea matu.rity will per d a t eno laterthan l8 monthsafterthe dateofissue. SaidReceiver's Certificates of

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lndebtedless shallhavepriority overall otherdebtsandobligations ofthe Lioensee, e x c l u d i n gadministrativo expenses the Receivership, of whether currentlyexistingor h e r e i n a f t oinourred, r inoludingwithout limitationany claimsof gcneral limited or p a r t n e r s the Lioensee. of 10. This Courtdetermines adjudicates SBA hasmadea $uffioiont and thar

s h o w i n gthat the Licensee violatedthe Act andthe Regulations, allegedin the has as C o m p l a i n tfiled against Licensee the instantaotion, obtainthc relief so the ifl to rcquested. After oompleting activitiesin accordanoe this Order,the Receiver its with

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m a y submita rcportto this Courtrecommonding the Licensee's that SBIC license be
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revoked. SEEN, STIPULATED AND AGREED: R o c k e t VenturesII SBIC, L,P., through its authorized representetiv6 By: /s/ DavidAdams D a v i d Adams T i t l e : Gcneral Partner R o c k o tVentures SBIC Partners, I-.L.C. G e n e r aPartncrof RocketVentures SBIC, L.P. l lI Date: 8/25/08

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U n i t e d $tatesSmall Bueiness Administration By: /V Thomas Monis G.

T h o m a s Monis, Direotor G. O f f i c e of Liquidation Date: 08-28-08

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c08-02240 JSW FORCONSENT STIPULATION ORDER. R-ECEIVERSHIP OF

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(.lcrtiiicalds ()l d a l t ritrltt(r th3l1 ftonthsrilict thc d8tco! irisr,r(. lll $aidlttrr,rirer's lndebttOncss shnllh,rvcprioritydvct trllt\thcrdrtl)tn obligatirrns.rl'thc nlld I.,iccnsec. !\,1)rthrf e s u l r r J i r rirdrninistrativc p cxpenres tlreRt't*ilcrship, ol rurerltl), t:tistingrr

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incurrtd.irtr:luding withourlinritahon hrtreirrdlier ant,cluiurs ofgeneralor linritc'1 p r d n c r softht I ic+rist*,', l. 'Ihjs Crrrrrltlctcrrnines rrndldjudicatcr thirt SjBAirlrsnr,ldci' .rLrifltrir:nt

that lras the as s l r l l . r i n g , thc Liccnsee violoted A(,trrndtheRrpulation:'. allcgcJin tirc in thc [ ] u r r r p l l i n ifilcd altirinst l.icensee lJrcinstaDl lhc Ectiorl, r)htuin rclitf:l() 1I' ils in Ordct,tlrt l{crrivr:r r c q u c s r e , ,Aficr cdmplcting activi{ics uttdrdalccwith t-hir l.
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that s hc n u l suhrr:1treport1olhis Coufi rcuommcnding the Licenscc SBIC liccnsc a
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}'URSUANTTO STIPULATION. IT IS SOORDEREI}. D A T E Drhi$ 4rh S.WHITE

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STIPULATIOII FOR CONSEI{TORDEROF RECEN'ERSHIP