United States of America v. Commerce Capital

Filing 3

COPY OF CONSENT ORDER OF RECEIVERSHIP from USDC-TN, case number 3:13CV415, appointing Small Business Administration as receiver of Commerce Capital, LP. (ADB)

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U.S. OiSiRIC"f COURT

:;~~nRIC1

IN THE UNITED STATES DISTRICT COlJRT
FOil THE MIDDLE DISTRICT OF TENNESSEE
(Nashville Division)

OFFICE

OF

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NEBRASt\.~

THE CLERK

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UNITED STATES OF AMERICA,

Plaintiff,

v.
COMMERCE CAPITAL, L.P.
Defendant.

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CASE NO. :

3·, t3 h'\C.... 5~

CONSENT ORDER OF RECEIVERSHIP

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1.

Pursuant to the provisions of 15 U.S. C. §687c, this Court takes exclusive

jurisdiction ofCOMMERCf CAPITAL, L.P. ("Cowmercc Capital") and all ofits assets
and property, ofwhalever kind and wherever located, and the United States Small
11usiness Administration ("SDA '') is hereby appointed Receiver of Commerce Capital
("Receiver'') to serve without bond until ilJrther order of this Court. The Receiver is
appointed for the purpose of marshalling and liquidating all of Commerce Capital's assets
and sarisfying the claims of creditors therefrom iu the order of priority as determined by

~is Court.

2.

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

heretofore possessed hy the general partners, limited partners, officers, directors,
managers, investment advisors and other agents of Commerce Capital under applicable
s1<1k and ft:derallaw, by the agreement of limited partnership, and by-laws ofsaid limited

RECEniED
MAY 2 8 2013
CLERK

u.s. D~~ ·:rncoaooa:n.3-cv-00415
Gi_,1;-;}:,-\

Document 7 Filed 05/15/13 Page 1 of 7 PageiD #: 45

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partnership, in addition to all powers and authority of a receiver at equity, and all powers
and authority conferred upon the Receiver by the provisions of 15 U.S.C. § 687c and 28
U.S.C. § 754. The trustees, directors, officers, employees, managers, investment
advisors, attorneys, accountants and agents of Commerce Capital are hereby dismissed
and the powers and authority of the general partner are suspended during the pendency of
this receivership. Such persons shall have no authority with respect to Commerce
Capital'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 ofCommen;e
Capital and shall pursue and preserve all of its claims.
3.

The Receiver is entitled to take immediate possession of all assets, bank

accounts or other financial accounts, books and records and all other documents or
instruments relating to Commerce Capital. The past and/or present general partners,
officers, directors, managers, investment advisors, agent!;, trustees, attorneys,
accountants, and employees of Commerce Capital, as well as all those acting in their
place, are hereby ordered and directed to turn over to [ht; Receiver forthwith all books,
records, documents, accounts and all other instruments and papers of and relating to
Commerce Capital and its assets and all other assets and property of the corporation,
whether real or personal. Commerce Equity Capital Corporation, general partner of
Commerce Capital, shall furnish a written statement within ten ( 10) days after the entry
of this Order, listing the identity, location and estimated value of all assets of Commerce
Capital os well as the names, addresses and amounts of claims of all known creditors of
Commerce Capi1al. Within thirty (30) days following the entry of this Order, Commerce
Equity Capital Corporation shall also furnish

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written report describing all assets. All

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Case 3:13-cv-00415 Document 7 Filed 05/15/13 Page 2 of 7 PageiD #: 46

Commerce Capital are hereby directed to turn such assets and property over to the
Receiver.
4.

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

general partners, officers, directors, agents, employees, shareholders, creditors and
debtors of Commerce Capital, as the Receiver deems necessary or advisable to etTectuate
the operation of the receivership. All persons and entities owing any obligation or debt to
Commerce Capital shall, until further ordered by this CoUJ1, pay all such obligations in
accordance with the terms thereof to the Receiver and its receipt for such paymenls shall
have the same force and effect as if Commen:e Capital had received such payments.
S.

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

banking or other financial institutions to extend credit on behalf of Commerce Capital, to
Lltilize SBA personnel, and to employ such other per:sonnel as it may deem necessary to
effectuate the operation of the receivership including, but not I imited to, attorneys,
accountants, 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 of the usual fees and billing practices and procedures of such
personnel. The Receiver is not required to obtain Court approval prior to the
disbursement of receivership funds for payments to personnel employed by the Receiver
or for expenses that the Receiver deems advantageous to the orderly administration and
operation of the receivership. In addition, the Receiver is authorized to reimburse the
SBA for travel expenses incurred by SBA personnel in the estuhlishment and
administration of the receivership. The Receiver may, without further order of this Court,

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transfer, compromise, or otherwise dispose of any asset (including without limitation any
claim), other than real estate.
6.

Commerce Capital's past and/or present general partners, officers,

directors, agents, accounttmts, managers, general partners, limited partners, shareholders,
employees, debtors and creditors of Commerce Capital and other appropriate persons
(including without limitation, the defendant's portfolio of small business concerns and
financial institutions doing business with defendant and/or defendant's portfolio of small
husiness concerns) shall answer under oath to the Receiver all questions which the
Receiver may put to them in compliance with the Federal Rules of Civil Procedure, and
pursuant thereto shall 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 rect:ivership or the collection of funds due to Commerce Capital. Jn
the event that the Receiver deems it necessary to require the appearance of the
aforementioned persons, the production of documents, information, or any other
discovery concerning the assets, property or business operations of Commerce Capital, or
any other matter relevant to the operation or administration of the Receivership or the
collection of funds due to Commerce Capital, the Receiver shall make its discovery
request(s) in compliance with the Federal Rules of Civil Procedure.
7.

The parties to any and all civil legal proceedings of any nature, excluding

the instant proceeding, but including without limitation bankruptcy proceedings,
arbitration proceedings, foreclosure actions, default proceedings, or other actions of any
nature involving Commerce Capital or any assets of Commerce Capital, including
subsidiaries, partnerships and other business combinations of Commerce Capital,

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case 3:13-cv-00415 Document 7 Filed 05115/13 Page 4 of 7 PageiD #: 48

wherever located, or involving Commerce Capital, the Receiver, or any of Commerce
Capital's past or present officers, directors, managers, agents, or general or limited
partners 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, 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 of any nature, excluding the instant proceeding,

but including without limitation bankruptcy proceedings, arbitration proceedings,
foreclosure actions, default proceedings, or other action of any nature involving
Commerce Capital or any assets of Commerce Capital, including subsidiaries,
partnerships and other business combinations of Commerce Capital, wherever located,
and excluding the instant proceeding, or involving Commerce Capital, the Receiver, or

any of Commerce Capital's past or present officc::rs, directors, managers, agents, or
general or limited partners 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, third-party defendant, or otherwh;e, are stayed in their entirety, and all Courts
having any jurisdiction thereof are enjoined from taking or permitting any action until
further Order of this Court. Further, as to a cause of action accrued or accruing in favor
of Commerce Capital against a third person or party, any applicable statute of limitation
is tolled during the period in which this injunction against the commencement oflegal
proceedings is in effect as to that cause of action.
8.

Commeice Capital and its past and/or present directors, officers,

managers, general or limited partners, agents, investment advisors, employees and other

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persons 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 Commerce Capital to the detriment of
the Receiver appointed in this cause, including but not limited to destruction of corporate
records, or which would violate the Small Business Investment Act of 1958, as amended,
15 U.S.C. 661 et. seq., or the regulations promulgated thereunder("Regulations"), 13
C.F.R. Part 107.

9.

The Receiver is authorized to borrow on behalf of Commerce Capital,

from the SBA, up to $500,000 and is authorized to cause Commerce Capital to issue
Receiver's Certificates of Indebtedness in the principal amounts of the sums borrowed,
which certificates will bear interest at or about I 0 percent per annum and will have a
maturity date no later than 18 months after the date of issue. Said Receiver's Certificates
oflndebtedness shall be deemed to be administrative expenses of the Receivership.

I 0.

This Court determines and adjudicates that Commerce Capital has violated

the Act and the Regulations, as alleged in the Complaint filed against Commerce Capital
in the instant action. After the foregoing activities are completed, the Receiver may
submit a report to this Court recommending that Commerce Capital's SBA license be
revoked.
SEEN AND AGREED BY COMMERCE CAPITAL, L.P. AND THE U.S. SMALL
BUSINESS ADMINISTRATlON, THROUGH THEIR DULY AUTHORIZED
REPRESENT A liVES:
Commerce Capital, L.P.
By: Co
rce Equity Capital Corppration, General Partner
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By:
Name: Andrew G. Higgins
Jts: Presiden1~
Date: Aprilt.f. 2013

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~·_.,

U.S. Small Busin s Administration
By: Thomas G. Morris
Its: Director, Office of SBIC Liquidation
Date: CJ "'/ I~

"l."' -

SO ORDERED, DATED this 15~y of

May

'2013.

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