Securities and Exchange Commission v. Vassallo et al

Filing 128

STIPULATION and ORDER signed by Senior Judge Lawrence K. Karlton on 09/03/09 ORDERING that EIMT is the sole owner of any and all membership interests in EIMT Properties, LLC; Receiver Stephen E. Anderson is hereby APPOINTED Receiver over EIMT Properties, LLC with all of the same rights, duties, powers and obligations for EIMT Properties, LLC as he has over EIMT as set forth in the OAR dated 04/30/09 and the 07/31/09 order making Receiver a permanent Receiver. No further bond shall be required of Receiver. If he has not already done so, Receiver shall file a noticed motion seeking Court authorization to unwind the purported transfer of the Kenitzer Family Foundation's fifty percent (50%) membership interest in Tracy Clover 22, LLC to EIMT, in exchange for EIMTs membership interest in EIMT Properties, LLC, and relinquishing all claim of EIMT to any interest in Tracy Clover 22, LLC, which will restore the Kenitzer Family Foundations ownership interest in Tracy Clover 22, LLC. (Benson, A.)

1 FUTTERMAN DUPREE DODD CROLEY MAIER LLP JAMIE L. DUPREE (158105) 2 JAIME E. GODIN (233187) 180 Sansome Street, 17th Floor 3 San Francisco, CA 94104 Telephone: [phone] Facsimile: [phone] [e-mail] 5 [e-mail] 6 Attorneys for Receiver Stephen E. Anderson 7 8 9 10 11 SECURITIES AND EXCHANGE COMMISSION, 12 Plaintiff 13 v. 14 ANTHONY VASSALLO, et al, 15 Defendants. 16 17 18 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA SACRAMENTO Case No. CV 09-000665 LKK-DAD STIPULATION AND ORDER PLACING EIMT PROPERTIES, LLC UNDER RECEIVER'S AUTHORITY Judge Lawrence K. Karlton

RECITALS Pursuant to orders dated April 30, 2009 and July 31, 2009, the Court appointed Stephen

19 E. Anderson ("Receiver") as Receiver over Defendant Equity Investment Management Trading, 20 Inc. ("EIMT"). 21 The Court has empowered Receiver to "take all steps the receiver deems necessary to

22 secure and protect the assets and property of EIMT...." Order Appointing Temporary Receiver 23 for Equity Investment Management and Trading, Inc. and Order to Show Cause for Appointment 24 of Permanent Receiver dated April 30, 2009 ("OAR"), ¶ III B. 25 Receiver's investigation into the affairs of EIMT has revealed an entity was formed called

26 EIMT Properties, LLC in or around July 2007. Receiver believes that EIMT was the sole 27 member of EIMT Properties, LLC at the time it was formed. EIMT investor funds were used to 28 purchase a property located at 3788 Century Drive, Island Park, Idaho 83429 (the "Idaho FUTTERMAN DUPREE 1
DODD CROLEY MAIER LLP

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STIPULATION AND [PROPOSED] ORDER PLACING EIMT PROPERTIES, LLC UNDER RECEIVER'S AUTHORITY CASE NO. CV 09-000665 LKK-DAD

1 Property") in the name of EIMT Properties, LLC. Of the $2,750,000 paid for the Idaho Property, 2 $500,000 was returned to the purchaser from the seller in escrow at the time of purchase, and the 3 seller holds a $1,000,000 note and deed of trust on the property. Receiver believes that the 4 $500,000 in cash returned to the purchaser was invested in the name of EIMT Properties, LLC. 5 Receiver believes all assets in the name of EIMT Properties, LLC were purchased with EIMT 6 investor funds. 7 Defendant Kenneth Kenitzer is the Trustee for the Kenitzer Family Foundation. Prior to

8 November 4, 2008, the Kenitzer Family Foundation was a fifty percent (50%) member of Tracy 9 Clover 22, LLC, which was a business entity formed in California in 2002, before the fraudulent 10 activity alleged in the complaint in this action. Tracy Clover 22, LLC owns an interest in a Tracy, 11 California shopping center (the "Tracy Shopping Center"). 12 On November 4, 2008, EIMT, acting through Defendant Anthony Vassallo, and the

13 Kenitzer Family Foundation, acting through Defendant Kenneth Kenitzer, entered into an 14 "Exchange Agreement" and an "Assignment of Interests" through which EIMT purported to 15 transfer its membership interest in EIMT Properties, LLC to the Kenitzer Family Foundation in 16 exchange for the Kenitzer Family Foundation's fifty percent (50%) membership interest in Tracy 17 Clover 22, LLC (the "Membership Transfer"). The purported Membership Transfer had the 18 effect of transferring ownership of the Idaho Property and investment funds held in the name of 19 EIMT Properties, LLC to the Kenitzer Family Foundation and the fifty percent (50%) interest in 20 Tracy Clover 22, LLC (and its interest in the Tracy Shopping Center) to EIMT. 21 Receiver does not believe that the purported Membership Transfer conveyed fair and

22 adequate value to the EIMT investors. 23 Defendant Kenneth Kenitzer, on behalf of the Kenitzer Family Foundation, is willing to

24 stipulate and agree that the assets held by EIMT Properties, LLC belong to EIMT and further 25 stipulate and agree that EIMT Properties, LLC be placed under authority of Receiver under the 26 same terms and conditions as in the OAR and the July 31, 2009 Order permanently appointing 27 Receiver. Defendant Kenneth Kenitzer represents that he is authorized to make this stipulation on 28 behalf of the Kenitzer Family Foundation.
FUTTERMAN DUPREE DODD CROLEY MAIER LLP

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STIPULATION AND [PROPOSED] ORDER PLACING EIMT PROPERTIES, LLC UNDER RECEIVER'S AUTHORITY CASE NO. CV 09-000665 LKK-DAD

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Receiver believes that EIMT has no interest in Tracy Clover 22, LLC, and has been unable

2 to identify any EIMT investor funds that were used in connection with any assets held by Tracy 3 Clover 22, LLC. Accordingly, Receiver shall file a noticed motion seeking Court authorization to 4 unwind the purported transfer of the Kenitzer Family Foundation's fifty percent (50%) 5 membership interest in Tracy Clover 22, LLC to EIMT, in exchange for EIMT's membership 6 interest in EIMT Properties, LLC, and relinquishing all claim of EIMT to any interest in Tracy 7 Clover 22, LLC, which will restore the Kenitzer Family Foundation's ownership interest in Tracy 8 Clover 22, LLC. 9 10 STIPULATION NOW, THEREFORE, Receiver, on behalf of EIMT, through his counsel of record, and

11 Defendant Kenneth Kenitzer, as Trustee for the Kenitzer Family Foundation, HEREBY 12 STIPULATE AND AGREE AS FOLLOWS: 13 14 LLC. 15 2. Receiver Stephen E. Anderson shall be appointed Receiver over EIMT Properties, 1. EIMT is the sole owner of any and all membership interests in EIMT Properties,

16 LLC with all of the same rights, duties, powers and obligations for EIMT Properties, LLC as he 17 has over EIMT as set forth in the OAR dated April 30, 2009, and the July 31, 2009 order making 18 Receiver a permanent Receiver. 19 3. Receiver shall file a noticed motion seeking Court authorization to unwind the

20 purported transfer of the Kenitzer Family Foundation's fifty percent (50%) membership interest in 21 Tracy Clover 22, LLC to EIMT, in exchange for EIMT's membership interest in EIMT 22 Properties, LLC, and relinquishing all claim of EIMT to any interest in Tracy Clover 22, LLC, 23 which will restore the Kenitzer Family Foundation's ownership interest in Tracy Clover 22, LLC. 24 IT IS SO STIPULATED AND AGREED. FUTTERMAN DUPREE DODD CROLEY MAIER LLP By:Jamie L. Dupree Jamie L. Dupree Attorneys for Receiver Stephen E. Anderson 3
STIPULATION AND [PROPOSED] ORDER PLACING EIMT PROPERTIES, LLC UNDER RECEIVER'S AUTHORITY CASE NO. CV 09-000665 LKK-DAD

25 Dated: September 1, 2009 26 27 28
FUTTERMAN DUPREE DODD CROLEY MAIER LLP

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1 Dated: September 1, 2009 2 3 4 5

KENITZER FAMILY FOUNDATION By:Kenneth L. Kenitzer Kenneth Kenitzer, Trustee [PROPOSED] ORDER

Having reviewed the parties' Stipulation and Proposed Order Placing EIMT Properties,

6 LLC under Receiver's Authority, and for good cause shown, 7 8 9 LLC. 10 2. Receiver Stephen E. Anderson is hereby appointed Receiver over EIMT THE COURT FINDS AND ORDERS: 1. EIMT is the sole owner of any and all membership interests in EIMT Properties,

11 Properties, LLC with all of the same rights, duties, powers and obligations for EIMT Properties, 12 LLC as he has over EIMT as set forth in the OAR dated April 30, 2009, and the July 31, 2009 13 order making Receiver a permanent Receiver. No further bond shall be required of Receiver. 14 3. If he has not already done so, Receiver shall file a noticed motion seeking Court

15 authorization to unwind the purported transfer of the Kenitzer Family Foundation's fifty percent 16 (50%) membership interest in Tracy Clover 22, LLC to EIMT, in exchange for EIMT's 17 membership interest in EIMT Properties, LLC, and relinquishing all claim of EIMT to any interest 18 in Tracy Clover 22, LLC, which will restore the Kenitzer Family Foundation's ownership interest 19 in Tracy Clover 22, LLC. 20 21 22 Dated: September 3, 2009 23 24 25 26 27 28
FUTTERMAN DUPREE DODD CROLEY MAIER LLP

IT IS SO ORDERED.

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STIPULATION AND [PROPOSED] ORDER PLACING EIMT PROPERTIES, LLC UNDER RECEIVER'S AUTHORITY CASE NO. CV 09-000665 LKK-DAD

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