United States of America v. Capsource 2000 Fund

Filing 2

COPY OF ORDER from USDC-Northern District of Mississippi appointing United States Small Business Administration as receiver of Capsource 2000 Fund, L.P. (GJG)

Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31112 1 of 7 PagelD #: 13

,COURT

OF MISSISSIPPI

UNITED STATES D[S~
FOR THE NORTHERN DlST

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UNITED STATES OF AMERICA,

PlaiDtiff'

v.
CAPSOURCE 2000 FuDd, LaP.

DefeDdaDt

Civil No. 3:11ev034-SA-SAA
Reeeivership Order

CONSENT ORDER OF RECEIVERSIUP

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IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

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Pursuant to the provisions 15 U.S.C. §687c. this Court hereby takes ~

exclusive jurisdiction of the Capsource 2000 Fund. L.P. C'Capsource 2000"). and all of
its assets and property, ofwhatever kind and wherever located, and the United States
Small Business Administration ("SBA") is hereby appointed Receiver of Capsource 2000
("Receiver") to serve without bond until further order of this Court. The Receiver is
appointed for the pwpose ofmarshaling and liquidating all of Capsource 2000's assets

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and satisfying the claims ofcreditors therefrom in the order ofpriority as determined by
this Court.
2.

The Receiver shall have all powers, authorities, rights and privilege

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heretofore possessed by the officers, directors. managers and general and limi
ofCapsource 2000 under applicable state and federal law; by the Articles of
Partnership, and By-Laws of said limited partnership. in addition to all pow
authority ofa receiver at equity. and all powers and authority conferMCI upo

to
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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31/12 2 of 7 PagelD #: 14

Receiver by the provisions of 15 U.S.C. § 687c and 28 U.S.C. § 754. The trustees,
directors, officers, managers, employees, investment advisors, accountants, attorneys and
other agents of Capsource 2000 are hereby dismissed and the powers ofany general
partners are hereby suspended. Such persons and entities shall have no authority with
respect to Capsource 2000's operations or assets, except to the extent as may hereafter be
expressly granted by the Receiver. The Receiver shall assume and control the operation
ofCapsource 2000 and shall pursue and preserve all of its claims.
3.

The Receiver is entitled to take immediate possession ofall assets, bank

accounts or other financial accounts, books and records and all other documents or
instruments relating to Capsource 2000. The past and/or present officers, directors,
agents, managers, general and limited partners, trustees, attorneys, accoWltants, and
employees of Capsource 2000, as well as all those acting in their place, are hereby
ordered and directed to tum over to the Receiver forthwith all books, records, documents,
accounts and all other instruments and papers ofand relating to Capsource 2000 and all
ofCapsource 2000's assets and all other assets and property ofthe limited partnership,
whether real or personal. The general partner ofCapsource 2000 shall furnish a written
statement within five (5) days after the entry oftbis Order, listing the identity, location
and estimated value ofall assets ofCapsource 2000, a list ofall employees (andjob titles
thereof), other personnel, attorneys, accountants and any other agents or contractors of
Capsource 2000, as well as the names, addresses and amounts ofclaims of all known
creditors ofCapsource 2000. Within thirty (30) days following the entry ofthis Order,

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the general partner ofCapsource 2000 shall also furnish a written report descnoing all
assets. All persons and entities having control, custody or possession of any assets or

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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31/12 3 of 7 PagelD #: 15

propeny ofCapsource 2000 are hereby directed to tum such assets and property over to
the Receiver.
4.

The Receiver shall promptly give notice of its appointment to all known

officers, directors, agents, employees, shareholders, creditors, debtors, managers and
general and limited partners of Capsource 2000, as the Receiver deems necessary or
advisable to effectuate the operation ofthe receivership. All persons and entities owing
any obligation, debt, or distribution with respect to a partnership interest to Capsource
2000 shall. until further ordered by this Court, pay all such obligations in accordance with
the tenns thereof to the Receiver and itS receipt for such payments shall have the same
force and effect as if Capsource 2000 had received such payments.
5.

The Receiver is hereby authorized to open such Receiver's accomts at

banking or other financial institutions to extend credit on behalf ofCapsource 2000, to
utilize SBA personnel, and to employ such other personnel as it may deem necessary to
effectuate the operation of the receivership including, but not limited to, attorneys,
accountants, consultants and appraisers, and is further authorized to expend receivership
funds to compensate such personnel in such amounts and upon such terms as the
Receiver shall deem reasonable in light ofthe usual fees and billing practices and
procedures ofsuch personnel. The Receiver is not required to obtain Court approval
prior to the disbursement ofreceivership funds for payments to personnel employed by
the Receiver or for expenses that the Receiver 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

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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31/12 4 of 7 PagelD #: 16

Court. transfer. compromise. or otherwise dispose of any claim or asset in the ordinary
course ofbusiness, other than real estate.
6.

Capsource 2000's past and/or present officers, directors, agents, attorneys,

managers, shareholders, employees, accountants, debtors, creditors, managers and
general and limited partners of Capsource 2000. and other appropriate persons or entities
(including without limitation, the defendant's portfolio ofsmall business concerns and
financial institutions doing business with defendant and/or defendant's portfolio of small
business concerns) shall answer under oath to the Receiver all questions 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 ofthe receivership or the cotlection of funds due to
Capsource 2000. In the event that the Receiver deems it necessary to require the
appearance of the aforementioned persons or entities, the Receiver shaH make its
discovery request(s) in accordance with the Federal Rules of Civil Procedure.
7.

The parties to any and all civil legal proceedings of any nature, i~cluding,

but not limited to, bankruptcy proceedings, arbitration proceedings, foreclosure actions,
default proceedings, or other actions ofany nature involving Capsource 2000 or any
assets of Capsource 2000, including subsidiaries and partnerships, wherever located, and
excluding the instant proceeding, involving Capsource 2000, the Receiver. or any of
Capsource 2000's past or present officers. directors, managers, agents, or general or
limited partners and the managers, members, officers, directors, employees or agents of
the general partner sued for, or in connection with, any action taken by them while acting
in such capacity of any nature, whether as plaintiff, defendant, third-party plaintiff,

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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05131/12 5 of 7 PagelD #: 17

third-party defendant, or otherwise, are enjoined from commencing or continuing any
such legal proceeding, or from taking any action, in connection with any such proceeding
or any such asset. All civil legal proceedings ofany n~ture, including but not limited to
bankruptcy proceedings, arbitration proceedings, foreclosure actions, default
proceedings, or other action ofany nature involving Capsource 2000 or any assets of
Capsource 2000, including subsidiaries and partnerships, wherever located, and
excluding the instant proceeding, involving Capsource 2000, the Receiver, or any of
Capsource 2000's past or present officers, directors, managers, agents, or general or
limited partners and the managers, members, officers, directors, employees or agents of
the general partner sued for, or in connection with, any action taken by them while acting
in such capacity ofany nature, whether as plaintiff, defendant, third-party plaintiff, third--"
party defendant. or otherwise, are stayed in their entirety, and all Courts having any
jurisdiction thereof are enjoined from taking or permitting any action until further Order
ofthis Court. Further, as to a cause ofaction accrued or accruing in favor ofCapsource
2000 against a third person or party, any applicable statute of limitation is tolled during
the period in which this injunction against commencement oflegal proceedings is in
effect as to that cause ofaction.
8.

Capsource 2000 and its past and/or present directors, officers, managers,

general or limited partners, agents, employees and other persons or entities acting in
concert or participating therewith be, and they hereby are, enjoined from either directly or
indirectly taking any actions or causing any such action to be taken which would
dissipate the assets and/or property of c.apsource 2000 to the detriment of Capsource
2000 or of the Receiver appointed in this cause, including but not limited to destruction

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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31/12 6 of 7 PagelD #: 18

ofcorporate records, or which would violate the Small Business Investment Act of 1958,
as amended, 15 U.S.c. 661 et. ~ or the regulations promulgated thereunder,
(IIRegulations"), 13 C.F.R. §107.1
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et.~.

The Rec;eiver is authorized to borrow up to 5500,000 from the SBA on

behalfof Capsource 2000 and is authorized to cause Capsource 2000 to issue Receiver's
Certificates of Indebtedness in the principal amounts ofthe sums borrowed, which
certificates will bear interest at or about 10 percent per annum and will have a maturity
date no later than 18 months after the date ofissue. Said Receiver's Certificates of
Indebtedness shall have priority over all other debts and obligations of Capsource 2000,
excluding administrative expenses ofthe Receivership, whether currently existing or
hereinafter incurred, including without limitation any claims ofgeneral or limited
partners ofCapsource 2000.

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Case: 3:12-cv-00034-SA-SAA Doc #: 3 Filed: 05/31/12 7 of 7 PagelD #: 19

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10.

This Court determines and adjudicates that SBA has made a sufficient

showing that Capsource 2000 has violated the Act and the Regulations, as alleged in the
Complaint filed against Capsource 2000 in the instant action, to obtain the relief so
requested.

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DATED this

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~ J ;ayof 1Y1 ~ 2012.

Seen Agreed and Approved:

Submitted by:

CapSource 2000 Fund, L.P.

lsi Ralph M. Dean, III
Assistant U.S. Attorney

lsi James Herndon

By: Its General Partner

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