ERG Aerospace Corporation v. United States of America

Filing 63

Order by Hon. Vince Chhabria granting 61 Stipulated Judgment and Injunction.(knm, COURT STAFF) (Filed on 7/22/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION
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ERG AEROSPACE CORPORATION,

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Plaintiff,
v.
UNITED STATES OF AMERICA,

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Defendant.
UNITED STATES OF AMERICA,

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Counterclaim-Plaintiff,
v.
ERG AEROSPACE CORPORATION,
ENERGY RESEARCH & GENERATION,
INC., individually, and d/b/a ERG
MATERIALS & AEROSPACE CORP.,

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Counterclaim-Defendants.

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1.

) CASE NO. C-13-2973 VC
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) [proposed]
) STIPULATED JUDGMENT AND INJUNCTION
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The United States filed a counterclaim alleging that ERG Aerospace is the successor-in-

26 interest of Energy Research & Generation, Inc.; ERG Aerospace is the transferee of Energy Research &
27 Generation, Inc.; Energy Research & Generation, Inc.’s tax assessment should be reduced to a judgment;
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[proposed] Stipulated Judgment &
Junction (No. C-13-2973-VC)

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1 and the court should enjoin Energy Research & Generation, Inc. and ERG Aerospace from interfering
2 with the Internal Revenue Laws.
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2.

IT IS ORDERED THAT Plaintiff ERG Aerospace’s complaint filed on June 27, 2013, is

4 DISMISSED, with prejudice.
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3.

With respect to Count II of the United States’ Counterclaim, IT IS ORDERED THAT

6 ERG Aerospace is the Successor-in-Interest of Energy Research & Generation, Inc., and is responsible
7 for paying the $24,086,135.69 judgment entered in this case, with interest;
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4.

With respect to Count III of the United States’ Counterclaim, IT IS ORDERED THAT

9 ERG Aerospace is the transferee of Energy Research & Generation, Inc. and is responsible for paying
10 the $24,086,135.69 judgment entered in this case, with interest;
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5.

With respect to Count I of the United States’ Counterclaim, Counterclaim Defendants,

12 without admitting any of the allegations in the complaint except as to jurisdiction, waives the entry of
13 findings of fact and conclusions of law under Fed. R. Civ. P. 52, and consents to the entry of this
14 Stipulated Judgment of Permanent Injunction (“Stipulated Judgment”) under Fed. R. Civ. P. 65 and 26
15 U.S.C. § 7402;
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Accordingly, in light of the foregoing, the Court hereby ORDERS that:

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A.

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1340, 1345 and 26

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U.S.C. § 7402;

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B.

Counterclaim Defendants have consented to the entry of this Stipulated Judgment and

20 agree to be bound by its terms;
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C.

Pursuant to 26 U.S.C. § 7402, commencing on the date this order is entered,

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Counterclaim Defendants and their representatives, agents, employees, attorneys, and anyone in active

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concert or participation with them, are enjoined from:

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i.

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and 6041;

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ii.

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in 2015, and thereafter, with regard to any extension approved by the IRS;

Engaging in conduct that violates 26 U.S.C. §§ 3101, 3102, 3111, 3402, 6011(a),

Failing to file a timely federal income tax return for the tax years commencing

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[proposed] Stipulated Judgment &
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iii.

Changing names without prior notification sent to the IRS Revenue Officer

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who is assigned to collect the tax debt owed by Energy Research & Generation, Inc.;

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iv.

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to Counterclaim Defendants;

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v.

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position of fiduciary duty, including the authority to sign bank accounts, hire

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employees, enter contracts on behalf of Counterclaim Defendants, or to prepare and

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sign federal income, employment or unemployment tax returns;

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vi.

Applying for a Tax Identification Number related to any business connected

Employing, in any pay, paid or unpaid, Burton O. Benson in a managerial or

Permitting Burton O. Benson to serve as an officer or as a member of the

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board of directors for Counterclaim Defendants;

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vii.

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employee of Counterclaim Defendants;

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viii.

Providing false or misleading financial information to the IRS;

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ix.

Moving the location of the business without first notifying the IRS Revenue

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Officer assigned to collect Energy Research & Generation, Inc.’s unpaid tax debt.

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D.

Paying any non-business expense of any current or former officer or

Pursuant to 26 U.S.C. § 7402, commencing on the date this order is entered,

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Counterclaim Defendants and their representatives, agents, employees, attorneys, and anyone in active

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concert or participation with them, shall:

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i.

File all unfiled tax returns from 1999- to the present, related to the entity Energy

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Research & Generation, Inc.;

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ii.

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for those years Counterclaim Defendants filed income tax returns using the name ERG

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Aerospace;

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iii.

File all unfiled employment and unemployment tax returns;

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iv.

Counterclaim Defendants shall filed all unfiled tax returns referenced in this

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stipulation no later than 24-months from the date the stipulation is filed;

File all unfiled tax returns in the name of Energy Research & Generation, Inc.

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[proposed] Stipulated Judgment &
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v.

Timely deposit withheld FICA taxes, as well as Counterclaim Defendants’ FICA

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taxes, in an appropriate federal depository bank in accordance with the federal deposit

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regulations;

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vi.

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accordance with the federal deposit regulations;

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vii.

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appropriate federal depository bank in accordance with the federal deposit regulations;

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viii.

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to be filed herein with regard to any installment agreement with the IRS;

Deposit withheld FUTA taxes in an appropriate federal depository bank in

Deposit withholdings from Counterclaim Defendants’ employees’ wages in an

Timely pay all required outstanding liabilities due on each return required

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ix.

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Counterclaim Defendants acquire, or manage in the next ten years; and

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x.

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and shall deliver to the IRS statements from the accounts prior to March 31,

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June 30, September 30, and December 31, annually.

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E.

Notify the Internal Revenue Service of any new company or entity that

Control, use, or have an interest in no more than four bank accounts,

The United States shall be entitled to conduct discovery to monitor Paying any non-

16 business expense for any officer or employee of Counterclaim Defendants’ compliance with the terms of
17 this Stipulated Judgment; and
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F.

This Court shall retain jurisdiction over this matter and Defendant for the purpose of

19 enforcing this Stipulated Judgment.
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THUS DONE AND SIGNED on this 22nd day of July
California.

, 2015 at San Francisco,

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IT IS SO ORDERED.

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DATED:______________
July 22, 2015

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________________________________
THE HONORABLE VINCENT CHHABRIA
United States District Judge

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[proposed] Stipulated Judgment &
Junction (No. C-13-2973-VC)

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