USA v. Audubon Capital SBIC, L.P.

Filing 66

ORDER & REASONS granting 11 Motion for Permanent Injunction and Motion to Appoint Receiver. Small Business Administration appointed. Signed by Judge Martin L.C. Feldman on 8/21/2013. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA

CIVIL ACTION

VERSUS

NO. 13-589

AUDUBON CAPITAL SBIC, L.P.

SECTION “F”

ORDER AND REASONS
Before the Court is the United States' motion for a
permanent injunction and the appointment of a receiver.

For the

reasons that follow, the motion is GRANTED.
Background
This case arises out of a bank's failure to comply with the
requirements of the Small Business Investment Act.
Audubon Capital SBIC, L.P., is a Delaware limited
partnership that maintains its principal place of business in
Covington, Louisiana.

In February 2000, Audubon was licensed by

the Small Business Administration under 15 U.S.C. § 681(c) to
operate as a Small Business Investment Company, in accordance
with the Small Business Investment Act, 15 U.S.C. § 661, and
regulations promulgated thereunder.

The Act was passed for the

purpose of making loans available to those engaged in relatively
small businesses who cannot otherwise get credit for business
loans.

The role of a licensed SBIC is to provide federal funds

to those small businesses who qualify under the Act.
1

The SBA provided more than $14,000,000 in financing to
Audubon through the purchase and guarantee of debentures.
Consistent with the purposes of the Act, Audubon invested in a
series of small business companies; however, complications soon
arose.
On August 23, 2012, the SBA notified Audubon of its capital
impairment condition and a portfolio diversification ("overline")
violation.

Under federal regulations, an institution like

Audubon is considered to have a capital impairment condition if
its capital impairment percentage is greater than 40%.

Audubon's

capital impairment percentage was 94%, obviously far greater than
the 40% allowed by law.

The SBA also notified Audubon that it

had made an unapproved "overline investment" by investing 33% of
its regulatory capital in one of its companies, which is greater
than the 30% maximum percentage permitted under federal
regulations.

Audubon was instructed to cure such violations

within fifteen days from the date of the letter, which Audubon
failed to do.
Around the same time, on October 31, 2012, the SBA sent
another letter to Audubon regarding a $1,250,000 debenture that
Audubon had issued on September 4, 2002 and the SBA had
guaranteed.1

The debenture had a maturity date of September 1,

2012, but Audubon failed to repay at maturity.

1

The debenture in question is number 02000760.
2

The SBA notified

Audubon of its default, giving Audubon fifteen days from the date
of the letter to cure the violation.

Audubon, again, failed to

do so.
The October 31, 2012 letter also stated that the SBA was
accelerating all of Audubon's debentures because of Audubon's
failure to comply with the SBA's August 23, 2012 letter.

As a

result, Audubon had fifteen days from the date of the letter to
pay $14,600,000 in principal, plus $658,865.43 in accrued
interest, with a per diem rate of $1,884.41.

To date, Audubon

has failed to repay the debentures, and there remains $14,600,000
in outstanding debenture leverage, $719,534.25 in accrued
interest,2 and $126,830 in SBA annual leverage fees.

In sum,

Audubon owes the SBA $15,446,364.26, and, as a result, Audubon
was transferred to the SBA's Office of Liquidation.
On April 1, 2013, the United States on behalf of the SBA
sued Audubon in this Court, requesting the Court to (1)
permanently enjoin Audubon from further violating the Act and its
regulations; (2) take exclusive jurisdiction of Audubon and all
of its assets; (3) permanently enjoin Audubon and, among others,
its past and present partners, officers, directors, agents,
employees, managers, and creditors from encumbering, conveying,
disposing, levying, executing, or in any other manner dealing
with any of the assets of Audubon; (4) appoint the SBA as

2

This was the amount of accrued interest as of March 15, 2013.
3

permanent receiver of Audubon; and (5) grant judgment in favor of
the SBA and against Audubon in the amount of $15,446,364.26.
Reiterating these same requests, the United States applied for a
permanent injunction and the appointment of a receiver on May 7,
2013.
On May 21, 2013, Audubon moved to dismiss as premature, or,
alternatively, to continue the United States' motion for a
permanent injunction and the appointment of a receiver.

The

Court denied the motion on June 19, 2013, finding that the motion
was not premature because Audubon admitted to having engaged in
practices that violate the Act, and that a continuance was
unwarranted because the Act displaces the ordinary requirements
for equitable relief.
The Court now turns to the merits of the United States'
motion for a permanent injunction and the appointment of a
receiver.
I.

Legal Standards

A SBA license holder agrees to submit itself to all of the
terms and conditions prescribed by the Act, including the
provisions relating to injunctions and receivers.

Section

687c(a) of the Act states:
Whenever, in the judgment of the [SBA], a licensee or any
other person has engaged . . . . in any acts or practices
which constitute . . . a violation of any provision of
this chapter, or of any rule or regulation under this
chapter . . . the [SBA] may make application to the
4

proper district court of the United States . . . for an
order enjoining such acts or practices, or for an order
enforcing
compliance
with
such
provision,
rule,
regulation, or order, and such courts shall have
jurisdiction of such actions and, upon a showing by the
[SBA] that such licensee or other person has engaged or
is about to engage in any such acts or practices, a
permanent or temporary injunction, restraining order, or
other order, shall be granted without bond.
15 U.S.C. § 687c(a) (emphasis added).

The Act further provides

that in any such proceeding for injunctive relief:
The court as a court of equity may, to such extent as it
deems necessary, take exclusive jurisdiction of the
licensee or licensees and the assets thereof, wherever
located; and the court shall have jurisdiction in any
such proceeding to appoint a trustee or receiver to hold
or administer under the discretion of the court the
assets so possessed.
Id. § 687c(b) (emphasis added).

Finally, the Act states:

The [SBA] shall have authority to act as trustee or
receiver of the licensee. Upon request by the [SBA], the
court may appoint the [SBA] to act in such capacity
unless the court deems such appointment inequitable or
otherwise inappropriate by reason of the special
circumstances involved.
Id. § 687c(c) (emphasis added).
II.

Discussion

The United States contends that permanent injunctive relief
and the appointment of a receiver is appropriate.

The Court

agrees.
A.
To receive a permanent injunction under Section 687c(a), the
United States must show that Audubon has engaged or is about to

5

engage in "practices which constitute or will constitute a
violation of the rules and regulations" issued by the SBA
pursuant to the Act.

In its motion, the United States has

detailed four specific violations:

(1) failure to cure default

on debenture number 02000760, in violation of 13 C.F.R. §§
107.1810(f)(3), (g)(1)(2); (2) failure to maintain a capital
impairment percentage less than 40%, in violation of 13 C.F.R. §
107.1810(f)(5); (3) failure to pay the accelerated indebtedness
to the SBA, in violation of 13 C.F.R. §§ 107.1810(f)(3),
(g)(1)(2); and (4) a portfolio diversification ("overline")
violation, in violation of 13 C.F.R. § 107.740.3

Notably,

Audubon itself admits to three of the four alleged violations in
its answer, contesting only the fourth violation because it
claims to have cured the portfolio diversification problem.

The

fact that Audubon may have corrected one of the violations,
however, is unavailing; courts uniformly agree that "an afterthe-fact correction of a regulatory violation does not 'cure' it"

3

After this motion was filed, the United States alleges that
Audubon has continued to commit regulatory violations, including
the payment of excess management fees in violation of 13 C.F.R. §
104.1810(f)(1), and the selling of an asset to an "associate"
without SBA permission in violation of 13 C.F.R. § 107.885. In
total, the United States contends that Audubon currently has six
outstanding regulation violations. Because Audubon admits in its
answer to engaging in practices that violate the Act, it is
unnecessary to address the additional allegations for purposes of
issuing a permanent injunction. The Court considers the new
allegations, however, in determining whether to appoint a
receiver.
6

for purposes of a Section 687c motion.

United States v. Vanguard

Inv. Co. (Vanguard II), 694 F. Supp. 1219, 1225 (M.D.N.C. 1988);
see also United States v. Trusty Capital, Inc., No. 06-8170, 2007
WL 44015, at *4 (S.D.N.Y. Jan. 5, 2007); United States v. Coleman
Capital Corp., 295 F. Supp. 1016, 1020 (N.D. Ill. 1969) ("The
defendant's interpretation of the statute . . .

would permit a

licensee to disregard the Act and the regulations with impunity,
so long as violations are 'cured' by the time the S.B.A.
discovers them.").
The plain language of the statute provides that "upon a
showing by the [SBA] that such licensee or other person has
engaged or is about to engage in any such acts or practices, a
permanent or temporary injunction, restraining order, or other
order, shall be granted without bond."
(emphasis added).

15 U.S.C. § 687c(a)

Further, courts have expressly held that

Section 687c displaces the ordinary requirements for equitable
relief, including the showing of irreparable harm, making the
only requirement for the issuance of an injunction a showing that
the licensee has engaged or is about to engage in practices that
violate the Act.

See, e.g., First La. Inv. Corp. v. United

States, 351 F.2d 495, 498 (5th Cir. 1965); United States v.
Vanguard Inv. Corp. (Vanguard I), 667 F. Supp. 257, 261 (M.D.N.C.
1987) ("The Court observes that the usual requirements for
preliminary equitable relief are supplanted by the specific

7

mandate of 15 U.S.C. § 687c."), aff'd, 907 F.2d 4369 (4th Cir.
1990); United States v. Novus Ventures II, L.P., No. 12-523, 2012
WL 3257524, at *4 (N.D. Cal. Aug. 8, 2012); Trusty Capital, 2007
WL 44015, at *3; United States v. Marathon Inv. Partners, LP, 399
F. Supp. 2d 1, 3 n.1 (D. Mass. 2005) ("Since the requested
equitable relief is expressly prescribed in the statute, it is
unnecessary for the SBA to show irreparable injury or to meet the
usual standards for equitable relief.").

Therefore, because it

is undisputed that Audubon has violated the federal rules and
regulations issued under the authority of the SBA, the Court
finds that the United States has met its burden under the statute
and a permanent injunction must be granted.4
B.
The question now becomes whether the SBA should be appointed
receiver of Audubon.

Section 687c(c) states that "[t]he [SBA]

shall have authority to act as trustee or receiver of the
licensee.

Upon request by the [SBA], the court may appoint the

[SBA] to act in such capacity unless the court deems such
appointment inequitable or otherwise inappropriate by reason of
the special circumstances involved."
(emphasis added).

15 U.S.C. § 687c(c)

No party genuinely contests that the decision

to appoint a receiver is discretionary.

4

See First La. Inv.

Audubon appears to concede this point, noting in its opposition
papers that "[i]f regulatory violations are found, an injunction
should be entered."
8

Corp., 351 F.2d at 497 (noting that the appointment of a receiver
in a Section 687c(c) action is "a discretionary matter").
Instead, Audubon focuses on the statutory language that allows a
Court to refuse a receivership if it would be "inequitable or
otherwise inappropriate by reason of the special circumstances
involved."

15 U.S.C. § 687c(c).

The Fifth Circuit has expressly stated that the appointment
of a receiver under Section 687c is "no small measure."

See

First La. Inv. Corp., 351 F.2d at 497; see also Netsphere, Inc.
v. Baron, 703 F.3d 296, 305 (5th Cir. 2012) ("Receivership is an
extraordinary remedy that should be employed with the utmost
caution . . . ." (internal quotation marks omitted)); Canada Life
Assurance Co. v. LaPeter, 563 F.3d 837, 844 (9th Cir. 2009)
("[A]ppointing a receiver is an extraordinary equitable remedy,
which should be applied with caution." (internal quotation marks
omitted)); Rosen v. Siegel, 106 F.3d 28, 34 (2d Cir. 1997)
("[T]he appointment of a receiver is considered to be an
extraordinary remedy, and . . . should be employed cautiously . .
. .").

In First Louisiana Investment Corp. v. United States, the

leading Fifth Circuit case that addresses Section 687c, the Fifth
Circuit upheld the district court's grant of injunctive relief
and the appointment of a receiver; however, the Fifth Circuit did
not delineate a formula for courts to use in determining whether
to appoint a receiver after the SBA has made a showing that it is

9

entitled to injunctive relief.

351 F.2d at 498.

In other

contexts, the Fifth Circuit has provided the following factors as
relevant for considering a receivership:

"the valid claim by the

party seeking the appointment; the probability that fraudulent
conduct has occurred or will occur to frustrate that claim;
imminent danger that property will be concealed, lost, or
diminished in value; inadequacy of legal remedies; lack of a less
drastic equitable remedy; and likelihood that appointing the
receiver will do more good than harm."

Santibanez v. Weir

McMahon & Co., 105 F.3d 234, 241-42 (5th Cir. 1997) (quoting
Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314,
316-17 (8th Cir. 1993)).

Other district courts have also

considered similar factors in deciding a Section 687c motion.
See Novus Ventures, 2012 WL 3257524, at *6; Trusty Capital, 2007
WL 44015, at *7-8.

"Although these factors must be adjusted to

fit the context of SBA receiverships and the mandate of [S]ection
687c to provide some type of relief," one court has soundly
observed, "they serve as a useful starting point for evaluation."
Novus Ventures, 2012 WL 3257524, at *8.

No one factor is

dispositive, and, in short, the Court has "broad powers and wide
discretion to determine the appropriate relief in an equity
receivership."

Sec. & Exch. Comm'n v. Safety Fin. Serv., Inc.,

674 F.2d 368, 372-73 (5th Cir. 1982) (citation and quotation
marks omitted).

10

The crux of SBA's argument is that Audubon's regulatory
violations, on their own, constitute sufficient grounds for
appointing SBA as receiver.

In addition to the four violations

alleged in its complaint, SBA submits that Audubon has also paid
excess management fees of $3,164,964.83 in violation of 13 C.F.R.
§ 104.1810(f)(1), and sold an asset to an "associate" without
permission in violation of 13 C.F.R. § 107.885.

In response,

Audubon asserts that self-liquidation should be permitted in lieu
of a receivership because (1) Audubon's managers have a long,
successful track record in operating the company, and they are
better suited to liquidate Audubon than a receiver who is
unfamiliar with the portfolio companies; (2) self-liquidation
will yield greater proceeds for the benefit of SBA, taxpayers,
and other stakeholders; (3) SBA failed to follow proper internal
procedures in developing a liquidation plan; and (4) an SBA
receivership would be costly and ineffective, as evidenced by a
report by SBA's own Inspector General.

In essence, these

arguments boil down to a single theme:

Audubon's management is

more likely to recover proceeds than the SBA.5

5

As a threshold matter, the Court notes that Audubon provides,
at some length, explanations for why it slipped into regulatory
violation. For instance, as to the issue of capital impairment,
Audubon asserts that as a result of the recession, two of its
companies were in a "precarious financial position," which caused
a decline in the value of investments. Further, in trying to
protect its investments in one company, Audubon inadvertently
exceeded the "overline investment" threshold, in part because of
matters occurring in a manager's personal life.
11

Although Audubon has explained why it believes receivership
is not necessary, its arguments do not adequately identify any
special circumstances that would render receivership inequitable.
Audubon asserts that its managers have been "successful,
responsive and compliant with the regulations," as evidenced by
ten years of "satisfactory and commendable" examinations, the
issuance of a second "green light letter,"

and numerous

compliments by the SBA regarding Audubon's working relationship

Audubon contends that "[n]either condition is necessarily
terminal or nefarious" and that "[t]he capital impairment, due to
the decline in value of two of Audubon's portfolio companies, is
not the basis of culpability and does not necessarily require a
receivership or liquidation." Simply put, Audubon submits that
"[c]apital impairment is not uncommon" and "overline investments
are not unusual." The recession-based failures of both
companies, according to Audubon, also contributed to Audubon's
default on one of its debentures. Audubon emphasizes that it
only defaulted on one debenture, and asserts that it was the SBA
who accelerated the remaining amount.
Contrary to Audubon's assertions, case law is clear: capital
impairment, an overline investment, and default on debentures are
all violations of SBA regulations, regardless of the reasons
behind such infractions. Further, Audubon conveniently glosses
over the fact that its capital impairment condition of 94% was
significantly worse than other cases in which the court granted
injunctive relief and appointed a receiver, and that the failure
to pay one debenture is not an uncommon basis for liquidation or
a Section 687c motion. See, e.g., Novus Ventures, 2012 WL
3257524, at *2 (noting that the SBIC had a condition of capital
impairment of 80.92%); Trusty Capital, 2007 WL 44015, at *2
(noting that defendant failed to pay a $1,000,000 debenture and
that defendant was transferred to liquidation status); Marathon,
399 F. Supp. 2d at 2-3 (stating in the complaint that the SBIC
had a condition of capital impairment of 89.90%).
After significant explanation, Audubon wisely recognizes
that the regulatory violations "are secondary to the Court's
determination of the best specific injunctive relief to order."
12

with the SBA analyst and the amount of information provided
during portfolio review meetings.

More importantly, Audubon

submits that the "continued viability" of its portfolio
companies, and, thus the proceeds they will generate, "hinges
greatly" on the continued involvement of managers Richard Cryar
and Robert Cowin, because they are "instrumental" to the
companies.

For example, Audubon points to an affidavit of record

by Johnny D. Combs, CEO of Trinity Green Services, LLC, in which
Mr. Combs states that Cryar and Cowin have functioned as de facto
chief financial officers, providing annual budgeting, cash
management and forecasting, monthly variance analyses, and
financial modeling.

This line of reasoning has been consistently

rejected by the courts.

(Perhaps in part because most SBICs, to

be approved for an SBA license, generally have capable leadership
at the helm, and, for obvious reasons, are more familiar with
their investment companies than the SBA.)
In United States v. Novus Ventures II, L.P., the SBIC
submitted that its managing directors are "seasoned venture
capitalists with specific industry experience and are thus in a
better position to liquidate [the SBIC's] portfolio to maximize
return."

2012 WL 3257524, at *7.

Further, the SBIC argued that

its managing directors "also sit on the boards of these companies
and actively participate in their management."

Id.

The court

rejected this argument, among others, holding that the SBIC

13

failed to establish special circumstances that demonstrate why a
receivership would be inequitable.

Id. at *8.

Similarly, in

United States v. Marathon Investment Partners, LP, the court
rejected the SBIC's request to self-liquidate, noting that it was
the management's failure to honor the SBIC's commitments that led
to the receiver request in the first place.
at 3.

See 399 F. Supp. 2d

Likewise, the SBIC in United States v. Trusty Capital,

Inc. alleged that the court should allow self-liquidation because
"appointment of SBA as receiver will result in increased defaults
by [the SBIC's] debtors, because it will signal [the SBIC's] weak
financial position" and because of the management's "unique
relationship" with its clients.

2007 WL 44015, at *8.

The court

in Trusty Capital rebuffed defendant's arguments, noting that
"[s]uch claims are not new."

Id.

In fact, Audubon fails to cite

a single case where the appointment of a receiver was denied.6
Audubon also contends that the SBA failed to follow proper
internal procedures and that an SBA receivership would be more

6

In Trusty Capital, the court did require that the SBIC
president remain engaged in the receivership as a consultant
because of the president's ties to the SBIC's Korean-based
portfolio companies; however, the court expressly noted that
"this is insufficient to justify leaving [d]efendant's assets
entirely in his hands" and that "[f]inal decision-making
authority will lie with the Receiver." Id. at *9. No such
foreign-based companies are alleged to be involved here, and
Audubon's arguments regarding its managers fail to rise to a
level of uniqueness that would justify retaining them as
consultants. More importantly, the SBA was nevertheless
appointed to be the receiver in Trusty Capital. Id.
14

costly and ineffective than self-liquidation.

In a 2005 report,

the SBA Inspector General found that SBA's dissolution procedures
have significant shortcomings.

Specifically, the auditor found

that the SBA had no measurement of efficiency, cost
effectiveness, or timeliness.

The auditor also determined that

the SBA "selection process for liquidation methods needed to
include cost analysis and consideration of all possible methods,"
and "better enforcement was needed of the requirement that sales
of portfolio assets by the SBIC be commercially reasonable . . .
[to avoid] reduced recovery."
Again, this line of reasoning has been consistently rejected
by the courts.

In Trusty Capital, the court noted that

"[a]lthough [d]efendant cites an Inspector General's report that
is critical of SBA's Office of Liquidation, there is no evidence
that SBA is incompetent or cannot be placed in charge of
recovering its debts."

2007 WL 44015, at *8.

The court

elaborated that "[a]lthough SBA certainly will be less familiar
with [d]efendant's current portfolio, that is true whenever a
court has to go to the extraordinary means of appointing a
receiver."

Id.; see also Novus Ventures, 2012 WL 3257524, at *7-

8 (finding the argument that "the SBA has a terrible track record
of maximizing the value of the assets of SBICs that it places in
receivership" insufficient to constitute special circumstances
that would justify denying a receivership).

15

Further, in this case, the SBA submits a 2010 letter from
the Inspector General to the SBA, which states:
The OIG [Office of the Inspector General] determined
that SBA (1) was actively monitoring and timely
transferring impaired Small Business Investment Companies
(SBICs) to liquidations when warranted and (2) had
developed performance goals and indicators to evaluate
effectiveness of the liquidation process of SBICs and was
reporting annually on whether those goals had been met.
Thomas Morris, Director of the SBA Office of Liquidation,
also testified that receiverships vary in cost and expense,
because each receivership is "so different in regards to the
number of assets, stage of asset, problems and so forth.

So

there is not the same typical amount that you can focus on for
the cost . . . ."

Costs are monitored by the SBA and, if they

seem above average, must be substantiated.
Having considered the relevant case literature, the parties’
arguments, and the evidence presented, the Court is not persuaded
that appointment of SBA as receiver for Audubon would be
“inequitable or otherwise inappropriate by reason of the special
circumstances involved.”

There is no dispute that: (1) SBA has a

valid claim to over $14 million in outstanding debenture
leverage; (2) Audubon’s capital impairment percentage was 94%, in
far excess of the 40% allowed by law; and (3) Audubon has not yet
cured this capital impairment.1
1

On May 14, 2013, Audubon answered SBA’s complaint, admitting
that “as of the date of this answer, Audubon has not cured its
condition of capital impairment.” Audubon has not stated that
this violation has been cured in any of its subsequent
16

Perhaps even more troubling, and a relevant factor to be
considered in weighing a receivership, is SBA’s allegations of
potentially fraudulent conduct.

In February 2012, Audubon was

reporting to the SBA that it was owed $4.496 million in unfunded
capital commitments from Audubon Capital Fund, I, L.P., which is
Audubon’s sole limited partner (referred to by both parties as
the “Parent Fund”).

The SBA uses the disclosed capital

commitment amount when determining whether an SBIC qualifies for
self-liquidation under SBA’s standard operating procedures,
because the disclosed funds should generally be available to pay
down the leverage.

When the SBA requested that Audubon “call the

capital” from its investors, Audubon refused, noting that the
commitment and funding period for the Parent Fund expired in
2007.

Nothing had been done by Audubon or its principals to

protect the collectability of the capital commitments (even
though Audubon continued to report the $4.496 million as if the
funds were available for five years after expiration).

In

response, Audubon asserts that “[a]lthough the capital
commitments were erroneously reported after their expiration, SBA
was just as aware of the expiration” because the “expiration
terms were reported as part of Audubon’s license application in
1999."

submissions to the Court.
17

In addition, the SBA contends that Audubon committed another
regulatory violation in attempting to cure its overline
investment problem.

In a January 13, 2013 e-mail between counsel

for Audubon and the SBA, Audubon notes that it was asked to
explain its proposal to cure the overline violation, which was to
sell an asset to the Parent Fund.

For transactions involving the

sale of assets to an “associate,” which is defined as any person
who owns or controls at least ten percent of the partnership
capital of a partnership licensee, written SBA approval is
required before the sale can occur.
107.885.

See 13 C.F.R. §§ 107.50,

Audubon expressly acknowledged in the January 2013 e-

mail that SBA did “not consent to the proposal.”

Despite SBA's

disapproval, Audubon proceeded to consummate the transaction on
March 26, 2013.

In defense of its actions, Audubon “concedes

that the cure constitutes a violation only because the SBA
refused to [authorize the transaction.]”
at best.

A recalcitrant argument

The SBA alleges that this “cure” of the overline

violation conveniently eliminated potential personal liability on
the part of Audubon’s principals, an allegation that Audubon
fails to address in its opposition papers, and one which leaves
the Court understandably concerned about possible dishonesty.
The Court finds that SBA has adequately shown that its
request for receivership is reasonable and would not yield an
inequitable result, a conclusion supported by the case literature

18

in which receiverships have been granted for far fewer and less
serious regulatory violations.

See, e.g., Trusty Capital, 2007

WL 44015, at *2 (granting SBA's motion for a permanent injunction
and the appointment of a receiver when the SBIC failed to pay a
$1,000,000 debenture, even though the SBIC managed to pay a
portion of the amount due); Marathon, 399 F. Supp. 2d at 2-3
(granting SBA's motion when there was only one regulatory
violation, a capital impairment condition of 89.90%).
Accordingly, IT IS HEREBY ORDERED that the United States'
motion for a permanent injunction and the appointment of a
receiver is GRANTED.

New Orleans, Louisiana, August 21, 2013

______________________________
MARTIN L.C. FELDMAN
UNITED STATES DISTRICT JUDGE

19