United States of America v. Cardinal Growth, L.P.

Filing 2

COPY OF ORDER from USDC-Northern District of Illnois appointing Small Business Administration as receiver of Cardinal Growth, L.P. (TCL )

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·# FILr;· . Case: 1:11-cv-04071 Document #: 6 Filed: 06116/11 Page 1 of 6 Page~':M~hRJ~ ,. Case: 1:11-cv-04071 Document #: 4-1 Flied: 06116/11 Page 1 of 6 P~fI1IlI:JaJ F~~ .' :;Xi;i,:; II JUN 23 PH 12: 07 IN THE UNITED STATES DIS'I'RICI COURT FOR THE NORTHERN DISTlUCT OF ILLINOIS ) ) ) ) ) UNITED STAT.ES OF AMElUCA, Plaintiff v. ) ) CARDINAL GROWTH, LoP. Defendant ) OFF k:[ GFh,t (;LERI( Civ. AetioD No. ~ ~ )' ~q Receivership Order ) ) . ) CONSENT ORDEROFRECEIVERSBIP IT IS HEREBY ORDERED, ADJUDGED .AND DECREED: 1. Pursuant to the provisions 15 U.S.C. §687c, this Court hereby takes exclusive jurisdiction ofthe Cardinal Growth,. L.P. (IICardiDal"), and aU afits assets and property. of whatever kind and wherever located, and the United States Small Business Administration ("SBA'') is hereby appointed Receiver of Cardinal (''Receiver'') to serve without bond until further order oftIds Court. The Receiver is appointed for the purpose ·ofman;haling and liquidating all of Cardinal's ass~ and satisfying the claims of creditors therefrom in the order of priority as detemrln.ed by tilis Court. 2. TI1c Receiver shall have all powers. authoritil!lS, righta and privileges heretofore possessed. by tln::I officers, directors, managcr:s and general and Hmited partners of Caniinal under applicable state and federalla.w, by the Articles of Limited Partnership, Bnd By-Laws of said limited partnerslUp. in addition to a.11 powers and authority of a receiver at equity, and all powers ~d authority con:fmTed upon d18 Receiver by the provisions of IS U.S.C. § 687e and 28 U.S.C. § 754. The trustees. directors. officers. 1 . Case: 1: 11-cv-04071 Document #: 6 Filed: 06/16/11 Page 2 of 6 PagelD #:20 Case: 1:11-cv-04071 Document #: 4-1 Filed: 06116/11 Page 2 of 6 PagelD #:13 managers. employees, investment advisors, acc01lJltants, attorneys and other agents of Cardinal are hereby dismissed and the powers of any general parll1.erS are hereby suspended. Suoh persons and entities shall brive no authority with respect to Cardinal's operations or assets, except to the exten~ as may hereafter be expressly granted by the Receiver. The Receiver sballll88DDle and control the operation ofc::arwnal and shaU pUISUe and preserve all of its claims. 3. ThQRirociver is entitled to take immediate possession of all assets, bank accounts or other fiDancial accounts, books and records and aU other documents or instruments relating to Cardinal The past and/or present officers, directors. agents. managem, general and limited partners. ~ attorneys, accountants. and employees of Cardinal. as well as all those acting in 1heir place, are hereby ordered and directed to turn over to the Receiver forthwith all booIes, records, doouments, accounts and all other instruments and papers of and relating to Cardinal and all ofCsrdinars assets and all other assets and property of the limited pBrtnership.,wb«Sther real or personal. The general partncrof Csrdinal shall fbrnish a written statement within five (5) days afterthe entry of this Onier.listing the identity, location and estimated value of all assets of Cardinal, a list afall employees (andjob titles thereof). otherpcrsonnel. attorneys. accountants and my other agents or contractors of Cardinal. Within thirty (30) days followiIlg the entry of this Order, the general partner of Cardinal shall also furnish a written Rlport describing all 8Sl!IeB. AI) persons and entities having control, CUltodyor possession of any assets or property of Cardinal are hereby directed to tum such assets and property over to the Receiver. 2 . Case: 1:11-cv-04071 Document#: 6 Filed: 06/16/11 Page 3 of6 PageID#:21 Case: 1:11-cv-04071 Document#: 4-1 Filed: 06116/11 Page 3 of 6 PageID#:14 4. The Receiver shall promptly give notice of its appointment to al11mown officers, directors. agents. employees, shareholders. creditors, debtors, managers and general ~d limited partners of Cardinal. as the Receiver deems necessary or advisable to effectuate the operation ofthe receivership. All persons and entities owing any .obligation, debt" or distnDutioD with respect to 8 partnership interest to Cantinal shall, until further ordered by this Co~ pay all such obJigatiOlUi in acaorda.nce with the terms thercofto the Receiver and its receipt for sUch paYDlents shall have the same force and effect os if Cardinal had received such payments. S. The Receiver is hereby authorized to open such Receiver's accounts at banJcing or other financial institutions to extend credit on behalf of Cardinal. to utiHzc SBA personnel. and to oinploy such otberpersonnel as it m.ay deem necessary to efti::ctuate the operation ofthc receivership including. but not limited tot attorneys, accountants, consultants and appraisers, and is further authorized to mc.pend receivership funds to compensate such personnel in such amounts and upon such tenns as the Receiver shall deem reasonable in light of the usual fees and billing practices and procedures of 51.1Gb ponomel. The Receiver is not required to obtain Court approvnl prior to the disbursement ofreceivership funds fOr paymenta to pCllJODIleJ em.ployed by the Receiver or for expenses that the Receiyer deems advantageous to the orderly administration and operation ofthe receivership. In addition. the Receiver is authorized to reimburse the SBA for travel expenses incurred by SBA personnel in the establishment and administration of the receivership. The Receiver may. without further order of this Court. transfer. compromise. or otherwise dispose of any claiIn or asset in the ordinary COUISe ofbusincss, other than real estate. 3 • Case: 1: 11-cv..Q4071 Document #: 6 Filed: 06/16111 Page 4 of 6 PagelD #:22 Case: 1:11-cv-04071 Document #: 4-1 Flied: 06116111 Page 4 of6 PagelD #:15 6, Cardinal's put andlor present officers, directors, agents, attom~ managers, shareholders, employees, accountants, debtors, creditors, managers and general and limited partners of Cardinal. and other appropriate persons or aniities (including without limitation, the defendant's portfolio of small business concerns and financial institutions doing business with defendant and/or defendmt's portfolio of small business concerns) shall answer under oath to the Receiver all qUostioDS which the Receiver may put to them and produce any documents as required by the Receiver regarding the business of said limited partnership, or any other matter relevant to the operation or administration of the receivership or the collection of funds due to Cardinal. In the ClVcnt that tho Receiver deems it necessary to require the appearance oftbe aforementioned pcrscms or entities. the Receiver slutll make its discovery request(s) in accordance with the Federal Rules of Civil Procedure. 7. The pnrties to any and aU civil legal proceedings of any nature, including. but not limited to, bankruptcy proceedings. arbitration proceedings, foreclosure actions, default proceedings. or ~ther actions of any nature involving Cardinal or any assets of Cardinal, including subsidimielS and partnerships, wherever located, and exoluding the instant proceeding, involving Cardinal, the Receiver" or any of Cardinal's paat or p:rcsent officers, cUrectors, nlanagers. agents. or general or limited partners sued f()r, or in connection with, any action taken by them while acting in such capacity of any nature, whether as plaintiff. defendant. third-party plaintiff, third-party defendant, or otherwise, are enjoined from commencing or continuing any such legal proceeding, or Jrom taking any action, in connection with any such proceeding or any such asset. All civil legal proceedings of any nature, including but not limit«ld to bankruptcy proceedings. 4 • Case: 1: 11 ~cv-04071 Document #: 6 Filed: 06/16111 Page 5 of 6 PagelD #:23 Case: 1:11-cv-04071 Document#:4-1 Filed: 06116/11 Page 50f6 PageID#:16 arbitration proceedings. foreclO8UIe acticma, default proceedings. or other action of any nature involving Cardinal or any assets of Cardinal. including subsidiaries and partnerships, wherever located. and excluding the instant proceedin& involving Cardinal. the Receiver. or any of Cardinal·s past or present officers, directors, m.e.nagem. agents. or geneml 01· limited partners sued for, or in connection with, any action taken by them while acting in such capacity of any nature. whether 88 plaintif( defendant. third-party plaintiff; third-party defendant, or otherwise, are stayed in their entirety. and all Courts having any jurisdiction thereof arc enjoined from takillg or pl!lll1litting any action until furtber Order of this Court. Further, as to a cause of action accrued or accruing in favor of Cardinal against a thin:l person or party, any applicabJe statute of limitation is tolled during the period in which thia injunction against commencement oflegal procoedings is in e:ffi:rot as to that cause of action. 8. Cardinal and its past andlor present directors, officers, managers. geDeraI or limited partners. agents, employees and other persons or entities acting in concert or partioipating therewith be., and they hereby are, enjoined from either directly or indirectly taking any actions or causing any suob action to be taken wbich. would dissipate the assets and/or property of Cardinal to ~ detriment of Cardinal or of the Receiver appointed in this cause, including but not limited to destnxction of corporate records, or which would violate tbe Small Business Investment Act of 19S8, as amended, 15 U.S.C. 661 ~!!m:.t Ol the regulations promulgated thereunder, ("Regulations"), 13 C.F.R. §107.1 m:,g. 9. The Receiver is authorized to borrow up to $500.000 from the SBA on behalf of Cardinal and i& authorized to causa Cardinal to issue Receiver's Certificates of s f , 'Case: 1:11-cv-04071 Document #: 6 Filed: 06/16/11 Page 6 of 6 PagelD #:24 Case: 1:11~-04071 Document#: 4-1 FRed: 06116111 Page 6 of6 PagelD #:17 Indebtedness in the principal amounts of the S\DDS borrowed, which certificates will bear interest at or about 10 peroent per annum and wi]] have a ms.turity date no later than 18 months ofterthe date of issue. Said Receiver's Certificates of Indebtedness shall have priority over all other debts and obligations of Cardinal, excluding administrative expenses of the Receivership, whether cun-ently cxistiDg or hereinafter incurred, including without limitation any claims of general or limited partnlEB of CardiDal. 10. This Court determi.IJ.es and adjudicates that SBA has made a sufficient .. showing that Cardinal has violated the Act aud the Regulations, as aJ.Ieged in the Complaint filed against Cardinalt;!!e mstBnt BCnOn. to obtain the relief so rc::quested. , DATED this£ day of :Jt;.;-e.. 2011. ~GB SEEN, STIPULATED AND AGREED: Cardinal Growth, L.P. . By: Cardinal Growth. LLC., General Partner '9..;,: c ...................." c:;...,...~~, B~~7 ~..... J~ Its:: 6

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