USA v. Walnut Private Equity Fund, L.P.

Filing 1

Consent ORDER of Receivership by USDC - District of Ohio Chief Judge Susan J. Dlott on 11/12/2014. (Attachments: # 1 Complaint for Receivership and Injunctive Relief, # 2 Civil Cover Sheet) (jofox )

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Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 1 of 8 PAGEID #: 7 .oil J .f Df'l'BB 1JIOT.ID STATJ:S DIBl'KICI' C01JRT li'O:R80utBDNDJITRicrO:tom8 CINCINNATIDMSION ~ ) ) ) ) ). ~) CiY.AAfbNo./:f~c." ~~ ) ) ) -----4---------------------> CONIIJ!T ORQIBOIB'C'RDJ8RIP ~~Y ORDBRBD, ADJUDGED AND DBC.RBBD: Puma1t to the provisions of lS U.S.C. §687o. this Court takes exclusive ofWALNUT PRIVATB BQUITY FUND, L.P. ("WPBP") and all of its assots nln1'1m'iv, of whatever kind and whenwer located, and tho Umtod StaCe8 Small BueiDOBS A.dml:llfstr$lon ("SBA") is hereby appointed Recoiver ("the Raoaf:vOr") ofWPBF to sarve uutil fureher ordar of this Court. Tho R.eoefver is appobltad for the purpose of mm:Bbal- and Hquidating In an orderly manner all ofWPBF's asaets aDd satisfying the ; claims of 2. ' ra theroof Jn the order ofpriority as determined by this Court. The RBceiver shall have all powers, authorltles, rights and privileges bOa=saed by the general partner, liliUlllgm'S, officers, directms, investment other ~ts of"W.PBFJmdm'..BPPlimblc__ltllW ll!ld fc.dcralJaw,.by the.Certificate~··~ 1 .·- ,, Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 2 of 8 PAGEID #: 8 • .u powem aad authorhy ofa JOCOiver at equity, ad anf.powars 8DCl authorhy ' tho Receiver by tho provlslona-of 15 u.s.c. l687~aod ~':!: 754. The DIIID8prB, ofJ1cera, dlraatota, Jnvestment adfJsoaJ and 8p1tB ofWPBF aro :J::Icnl~ ctismiiJII'l(f aucl the po'Mil'l ofthe pnara1 ~ aro heleby susplll1ded, with the (a) 1ames M. Gould shall con1lnuo 1o mprcscnt WPIF on tho Board of the :lbnowJns WPBF portfoUo conaama: (i) The o•aara 0mup, Ino.; (H) ~'Diks.Jnc.; (tii) Marian Baath GreatlDg Cams, LLC; (lv) Wild Thtnga, ILC» (v) Group, LLC em tho 1orm8 sat by, and at tho ao1e c1isarefior1 ot; tho RDcelver and Frildmo H. Mayerson sbaJl oomfnue to represont WPBP em tho Board ofDfroo1ots of tho ftillowiDR WPBF portfoUo CODCCI.nS: (i) PBCO Logistlca, LLC;' and (il) Marian Hoath U,C on the terms sat by, and at tho sole diaoredon o( tho Racotver. UDless forth herein, tho managers, officers, directoJS, lnvestmoDt advisors and agents have no authority wi1h respeot to WPBF's operatiOD8 or assets. except to the y horeaftcu be expressly granted by the Rccelwr. The Reooiver shaD assume and 3. The put and/or }W8a1t general partncn, II18DIIP,tS• officers, directors, iDVeslmontiadvJsors, agmta, trustees, attol'nuy8. aecountants, and mnployees ofWPBF, as acting in their plaoa, are heroby ordered and direetod to tam over to the :with all books, records, documents, aacounts and all other instruments and relatiug to WPBP and i1s assets and all other assets and property of the whether real or personal. The former Oencnl Parlllet and/or other agent of __ --------~-------~,§',_ ~- _listiDa the • f\JrJ:dsJt~ wrlnen ~ witbm tca(lO)..dlysafter the..artr)'_ofthis Order, __ ,location aDd ostimated valuo of all aa.ta ofWPBF as woll u the aam01, 2 ,. . Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 3 of 8 PAGEID #: 9 a. .J.- IDI01mtl ofoJatma of all known Cled!tora ofWPBF. oatry of tis Order, auah peraon abal1 also tlJrniab fWftbln 1btrty (30) days ,, P; pmcms bavJDg control, custody orpoaaesalon of lillY report dasar1biDa all or property otWPBP are herolb)1.dlrooled to turn 8\lCb aats aud property ovar1o the Red,elver. 4. 1bo Bocelvor aba1l pmmptly give notice ofita appolntrnmt to all known CJ',liOca, dfrcotors, apn1l, employeas, abareho1dara. credlfora aud debtors otWPBF, an such obliptions Jn acocm1aDco wJth thD 1m:mB tharaofto 1be Receivc:r and ita paymants sba1l have the same force aud effect aa ttWPBF bad received such pay!I1CII118. . S. The is hareby authori7;ocl1o open such R.oalrdver's IOCO\Uits at other finanoial instltutlons to extend orectit on behaJf otWPBP, to utilize SBA d to employ such otbar personnel as it may deem DCIOIIB I)' to ef1bctuate tho appraiaD aDd is ibrthDr authorlzed to expend receivership funds to COIII.pOD8Ite such personnel such amoun11 and upon such terms as tho Reooiver shall deem roaaonablc in usual fees and billing practices aud procedures of such personnel The Receiver is notrea11*«K!to obtain Comt approval prior to the disbursement ofrcociverabip funds for ~onncl employed by the R.ccelver or for expeoses that 1be Receiver deems adVBI11lagcqus to the orderly administration and operation of the receivership. In addition, the ____ ·--···· ... __ ------~~-- ~\l~!D ~--~£1,\Afor~JZP§Dit:ftinQQl.'.t'ed by SBApersonne1 iD tho aDd administration oftbe recoivorabip. 'l'bB a.dver may, without 3 •'' Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 4 of 8 PAGEID #: 10 ,; oftbta Court, traDatot, OOlllpl'OII1iso or otherwJae dJa.rf- ofany 8IIIGt (iDcludiD& JDPitatlonany claim), o1hortban a!CIIIIato. WPBP's past adlor presont partDanJ, o1Boors, ~ agems. aooouula• r,, otWPBt and othar approprlatD ~... (il~tlill& without Umltatlcm, tho darendaDts portlb1io offnau buainaJs concoms JD8Daptla,tlbaebDldars, omployaaa, cJebtom 8Dd aredltors ( .lc tlllaJ!CJal iDsdtatloD8 doing basin,_ w1tb defeDdant and/or .ant's poxtfolio of small C$DICI'D8~ shall, upon re&IIODibJe 1lDtice, 8DS'Wal' 1ll1der oath 1D tho Rooolver all tho Recatvermay put to them. in oompllanao wlthitho Federal Rules at Civil Procledull'd; ancl pursuant thereto shall produce any doouments as·~ by the Rcoolver buslnesa of said. oorpmatlon, or any other matlm' reldvant to tho operation or adn1linisll$tl1011 oftJ:le reoeivahtp orb coDeoiJ.on off\mds due toWPBF. In the evant that bUSi:nelfS operations ofWPBF, or any otbar matter 1'0levaut to tho oporation or on ofthe Reco1versbip or the coUection of funds due to WPBF, tho Reoeiver shall very request(s) fn oomp1ianco with the notice, subpoena and other Foderal The parties orp.rospootlvo parties to any and all civlllegal proceedings acticms, default proceedings, or any other proceedings involving (i) WPBF, (ti) any BF, (ill) the Recelver for WPEF or (iv) WPEF's present or past officers, directors, _ ~!IIDIJI0!-~.91~~-(inclndjngthoJIJ.IIUI&C[~~IlJOh~~) . l8id civillcpl poccodiDp involvo any amion 1aken by tban while aodD& in their 4 ;'. Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 5 of 8 PAGEID #: 11 j ofBcia1 Cll]$lity with WPBP, a ~ eajomcct fi:om takmg any IIDtloa, iDitudms cUacovery, J 1cammaocil8 or oc•ntlnulnciiDJlepl ]'Jl'OOOD!ftns ofany Dature w1thout further order ofthls Court. JkoclptbatPBCO Loglatlgs, U.C. v. Walnut lnvestmcDtPar.Uul.'s. L.P., Walnut PrlvatD L.P., MIC Capital SBIC, L.P., MK Capital, L.P., The P1oduedv1ty Pund IV, L.P., PlodllCJIY.ltJ Fund IV Advisora Pund, L.P., 0maaraDao PariDarB 12. LLC, 0reanranse and J'IIDCIB 0zanno, Case No. 9978-CVP cuaaot1y pendfng In tho Court of tbo StadD ofQoJawaro, shall be axcludcd ftom auah iJdliDctkm aDd tho action shall prooaad iD tho Court ofChanomy oftbe State of~ 1Dgal proceedings wher:o'9or located, includina arblttition prooeediDgl, prooDOdllll&linvolviDa (i) WPBF, (H) any of 188018 ofWPBF, (til) tho Rocelvor :lbr WPBF or preiCIIlt or past aftiocn, directors, managora, or amerai partnm (inobdng the members ofsuoh general partnar) to tho extcat said c1vlllegal proceedings involve Jn their official capao1ty :fbr WPBF are stayed in their andrety, and all oourts ., Tho Productivity Fund IV, L.P., Tho Productlvity PuDd IV Advisors Fund, L.P., 0rec:ID1'8Ditt Parmcrs 12, LLC, Gmmrango Partners, LLC, and James Ozanno, Case No. 9978-- CVP Clll1'e1Jtiy pcmding in tho Court of Chancery of tho State ofDelawaro, shall be oxcluded ;y and the action shall be allowed to proceed in the Court of Chancery ofthe State of~~.. 5 I • Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 6 of 8 PAGEID #: 12 ~ l .- ~ ~ t " l Purlblr, as to aCIUIO ofaodon 8IJCJn10Cl or......., in tkYorofWPBF aptnst ,_ 9. f~ - ...-or party, any app1fcab1o 8llltate ofllmitado.u is toBed;to the extmt a1lowad by ~lllfiiiJ1111111YY durJDsthe pedod In whJoh t1da iDjubotlon agamst~ oflcgal proc:oocJIDiB Js m offoot as1o 1bat cause of aotkm. WPBP and ita past andfoi Pft*llliDilDfiPl'B. ~partner or Umited 10. cera, directors, 8aents. inws1mlmt advisors, employee~ and other per80D8 aotiDs participatiJJs 1barew1tb be, aud they hereby aro, ~from o1thDr diteot1y or any ttetiODS or CII1BDs any sach action to be t'akel1:whiab would dtsslpale or property ofWPBF to the dfttrlmmrt oftbc ReoeMf appointed in 1:hfs cause. not limited to destruction of corporate 1'C001'ds, or which would violate the Jnvestm.ont Act of 19SS. aslliDCilded, 15 U.S.C. 661 &.I.G.Qu or tho Small promulgated thcnuncler (11RoauJatious"), 13 C.P.R. Palt 107. The Reoeiver is authorlzacl to borrow on behalf ofWPBP, :from tho SBA, up to and is authorized to cause WPBF to issue Receivc:r's Certificates oflDdebtedness in tbc prlDIIlPaJ 8lllOl1II1B ofthe sums bo110Md, which cartificates wD1 bear intarest at or about l1lD.UDl aud will have a maturity date no later than 181D0llths det tho date of ~ Ccrtifioates ofiDdobteclneBs shall have priority over all other debts and ofWPBF, excludin& administrative expeases oftbe R.eocivmsbip, whether pmaently • or hereinafter incurred, including without limitation any claims ofpartners of WPBF. 12. This Court determines and adjudicates that WPEP baa violatec:l the Small Iltvc18tmml:1_~ 1S 'U!S,,C~§6l..ct B.Q.JDldtho Regulations.promnlga1ed thereunder. at_ 107.1 et. BDq, 88 allopd iD tbD Complaint 1ilod h11his DIIIUa'. 6 u~ ' \• Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 7 of 8 PAGEID #: 13 "'t't 1; rm 110. 111.0 r. t . 13. 1\.ftao compleliugi1a activ.ities m. acoo.rc1aeWitll thi o.rdlr, tho b:ciw:r may I ~~=----· 20~ ~~~~4E1!J.~--!o~AtwU II I1::2-1/lf COURT 1UDOE AORP.ED BYWALNUTPRIVATBBQtm'YFUND. L.P. AND THE U.S. D"t:~IJA~i:tD ADMINISTRATION, THROUGH THBIR DULY AUTHORIZBD "a'l:ft:n!l'e~,... 7 Case: 1:14-cv-00865-SJD Doc #: 2 Filed: 11/13/14 Page: 8 of 8 PAGEID #: 14 • .. ;. . ·1·.· 8

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