United States of America v. Redstone Business Lenders

Filing 2

COPY OF ORDER from USDC-New Jersey appointing United States Small Business Administration as receiver of Redstone Business Lenders, LLC. (TCL )

case 2:13-cv-03939-DMC-JAD Document 4 Filed 06/28/13 Page 1 of 7 PageiD: 27
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I:\ THE UNITED STATES DISTRiCT COCRT

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FOR THE DISTRICT OF :\EW .IERSE\'

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l "iJTI':l) STATES OF AMERICA,

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Plaintiff,
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REDSTONE Bl:SI!':F..SS LE.l\'DERS,

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LLC.

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Defendant.

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CONSENT ORDF.R OF RECEI\"ERSIIIP
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l!f.RI:HY OHDFRED. :\DWDGED AND DECREED·

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Pursuant to the provisions of 15 U.S.C. §687c, this Cowt takt•-; cxcluSJ\'\.'

iurisd1dion of REDSTONE L3USINESS LENDERS, LLC {''Redstone'') and all
assel:i anJ propcrty,,lfwhatcvcr kind and wherever located. and the Lnitcd

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State~

ib

Small

L3u:.im:ss ;\,!ministration ("SA:\") is hereb) app•)ifltl!d Receiver ofHetbtonc ("Rccci\t:r")
to

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\\'itllllUt hund until funhcr order nfthi!l Court. J'hc Rt:<.:t:ivcr is

,

apJWiilh~d

The lh:c\!iver shalllwvc all powers, :Juthoritics. rights and

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privtlcgc~

hcn:l<lfon: possessed by I he oniccrs. director!', members, manager:., investment ad\ i:;ors
and other agents of Redstone under applicable state and federal law, by the agreement of
the lilllilcd liability ~:ompany. and by-law!' of said company, in addition to all powt:r!' anJ

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case 2 :l3-cv-03939-DMC-JAD Document 4 Filed 06/28/13 Page 2 of 7 PagelD: 28

l~xcl!iwr by the pmvisions of 15 U.S.C.

§ 687(c) and

2~ L'.S.C.

§ 754. Tt1c tru:-;tecs.

dircdor!-i, utlic~rs, members, employees, managers, investment advisors, attorneys,

accountants and agents of Redstone are hereby dismissed and the powers and authority of
the niftccrs and mcmhcrs are suspended during the pi.'ndcncy of thi~ rccd\'\:.T·dup Such

assuml· and cuntrnl the operation of RcJstnnc and shall

pur'-'liC

and

pr~!scrvc

all of 1t~

claims.
3.

The Receiver is entitled to take immediate possessilln of all a~scts, bank

accounts or other tiuancial acc<"IUI\IS, books and records :md all other documents or

instruments relating 10 Redstone. The past and/or present members, l•fficcrs, Jin:cltll,,

R(.'-tbl,,lll'. as wdl as <1ll those acting in their pLice, arc hen·h: llrtkrcd .md dm:ucd t\) !tun

tlvcr to the

RcL~eiYer

l(mhwith all hno~s. records. document~. accounts and all other

instruments and papers of and relating to Rt.xlstunc and its assets and all other as:;ets and

property of the corporation, whether real nr personal. Redstone, shall tltmish a written
statement within ten (I 0) days after the entry of this Order. listing the idcntit y. lm:ati(ln
and t:stim:ltcd value ur all assds of Redstone a~ well as the names. addrcs:-;es and amo11n1s

>f t.:l.!'llh l',f ;ail

ktHl\11:1

creJilllrs ,,f Rcdsfi)JiC. Within thlrt\

,,f I hi'> ( Jrder, Redstone shall

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furnish u •.o;rittcn report

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days

<k~LTihing

fPilP\\ 111_g

all

persons or entities ha\"ing wntrol. custody or possession of any assets

asst~ts.

t>r

tht• cnrn

·\ll

property of

Rcdst11nc arc hereby directed to tum such assets and pn1perty 0\er to the Receiver.

case 2:13-cv-03939-DMC-JAD Document 4 Filed 06/28/13 Page 3 of 7 PageiD: 29

!'he

l.

R.~ ..:civl'r

shall promp!iy give

!H•Iic~o·

,,fits ::ppoinll11\.!llt

tfl

<Jll knnwn

lllt'Illher-,. (lrtitTrs. dir,!ctors, agents, employees. st<JkdhliJ~rs, creditors nnJ debtors'''

Rcdstom:, as th\: Receiver deems necessary or advisabk to effectuate the ~1pcration of tht~

receivership. All persons and entities owing any obligation or debt to Redstone shall,
until fi.Jrllwr ordered by this Court, pay all such obligationc; in accordanc(: with the

term~

thereuf to the Receiver and its receipt for such payments shall have the same ft1rcc and

ha11king «•r other fin.1nci,ll institUI!Dlll->

l\) cxt...~nJ cn:Jit~om

behalf ut' R.cd!'tunc:, ''' utd!lc:

SBA pcrl'mmcl, n.nd to employ su.:h other personnel as it may deem nccc:;sary to
cnt.·ctuatc the operation of the receivership including, but not limited to, attorney:-,
accountants, and appraisers. and is huthcr auth,)rized to expend receivership funds tt•
t:tllllpc:ns;.~tt such
,ICl'In

personnel in such amourns and upon such tcnns as the Receiver sha i I

rc:t:-ilnahk in light of the usuul tees and hilli~g practi~.:c.:s and prn.;edurc,; of such

pcr:-.111\!H:L

1"111.:·

Rcc.ciVt:l 1:\ Jl()\ !Cljlllred t<•

dl:il1UJ:;cmcnt <)frcccivcrship funJs

obtain

c~lUI1

Jpprl)\ai prior to the

!c1r payments to pcrsonnd cmpl0yLJ by the

RccciH~r

or ti.1r expenses that the Receiver deems ad"\antageous to the nrderly aJministwlion and
opcrati(1l1 Ill' the receivership. In addition, the Receiver is authorized to reimburse the

SBA

t~1r trnvel

expenses incuiTe.d hy SBA personnel in the establishment and

admini:stt ation of the rccctV<'T$hip. The Recei vcr m;:ty. without fwther ordt:r ~lr th i~ ( ,·,un.
t.ranslt·r , nn:pmmis~. ur llflil:nvisc tl!sposc ~1r any as~et (including withnUI li111itation :m)

,:Jaim' 1111·,er thw1 rci.ll

cstc~tc.

3

case 2:13-cv-03939-DMC-JAD Document 4 Filed 06/28113 Page 4 of 7 PageiD: 30

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Redstom·'s past and/or present members, otlkcrs, directors, a)!cnts.

ac.-llwJtants, managers,

~takeholders. cmph,~·ecs.

debtors and creditor:; of l{cd~tnnc and

nth ..T ;~ppmpriatc pcrs.,ns (indudi:1g withourlimitatinn. th.: ddcndant'•. P•,nt\~li•l t~f :;n1:dl
bu~ii!Ls:-, cun~..:rns
dck11dant'~

and financial institut1om doing busino.:s" with Jct\:ndant

~md:i>r

po11iiJ!io of ::~mall hu:;mcss coJII.:crns) shall <:nswcr under Path to the Recei\'cr

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

Het·c•n:r regarding thc business of said compan)', or any l•thcr maHer relevant to tlw

ahllvll:..'ll!l"IH:-d P'~r-;,tns.

di~~.: .. wry L'Onc~rnmg

the pmducti.:tll{,f dm:um~nts, mlonnatinn,

tll

any ••the:

the assets, propt.:rty or business operation!.' ol RcdshHJC. or any

other maucr rd~vant l\) the opcmtion

0r

administration of the Receivership or tbl·

colk.:-lt\111 uf funds due tn Redstone, the Receiver shall make its disco\'ery rcqucst(s) in
compliance with the Fc.der.Jl Rules of Civil Procedure.

lh.: partie~ to any and all civil legal pmcccdings vf any nature. excluding
ilit'

tL-;i,m\

pru,_·c·L·(!mg. but tn,·luding Without limitation banknlpt-:y

nature mvPh mg Redstone or any .1sscts of Rctbton:..:. mc..:luding

pl<'cc~Jing..•.

suhsidiaric..·~. p;~r!th:rslllp:-.

and other business combinations of Redstone, wherever located, or involving Redstone,
the Rcceivcr. or any of Redstonc..~·s past or present memhers. ofticcrs, directors, managers.
agent ... , or stakeholders ti.•r, or in connection with, any •tction taken by them whilt: ;.~~.:ting

in "'ud1 l·iipacity <'I' :my

nJtun~.

wh:thcr as plaintifL dclcnd:tnt. third-pany p!Jintifl,

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third-j'atty dctl:ndant. ur otherwise, arc enjoined from commencing or continuing any
such legal proceeding, or fiom taking any action, in connection with any sw..:h procct:uing
or any ~uch asset. All civil legal proceedings of any nature. excluding the in~tant
pro,:enling, but including without limitation bankruptcy prot:eeJing:-:. arbitration
pr.l~ccding:>,

foredosun: actions, ddn~111 pro.:-ccding~.

01

11thcr action of any :uttun.:

im·1 •I ving Rctbhme or any asset~ nt Rcd.:;tone. including subsiJiaric:>. partnership:-. and
1\l!Jc:r business combinations nf Rctbtonc. wht~rcvcr located. and cxduding the in:,tant

proceeding, or involving Redstone, the Receiver, or any of Rcd~tonc's past or prcscut,
members, ofticers, directors. managers, agents, or stakchnldcrs sued f()f, or in e<mncction
\Vith, any action taken by them while acting in

~uch

capacity of any nature. whether

a~

plaintttt. ddcmlant. third-pa1·ty plaintiff third-party dc!Cn,Lmt. t•r olhcrwis(.'. <lie staycd in
thct• ,·ntir.:ty. and all

Coun~

h.wing any jUJis,\iclion

tlwrc~···f

ar.:- el'l.JUIIll'd !io111 lahnr

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accntcd <Jr accruing 111 bvor ofRcdswnc against a thtrd pcr.sc1!l or p.111y. any applicahk

statute

or iimitat!{)J) i::. wlleJ Juring the period in which this injunction against the

~.:ommcncemcnt

of legal proceedings is in etlect as to that cause of action.

Redstone and its pa<;t andlt)r present director;. nfliccrs,

S.
mcmlwr~.

ag.cnt.s. investment

tn C•lnu:tl

llf

adviM)r~. cmploycc~.

~1articipating therewith h~.-. and

m~magcrs,

stakeholders and other pcrsuns acting

they hereby arc. cnjl)int:d trom either dir<:ct 1y

,,r mdncrtly takmg any actilln:; t'r c:au::ing any ~ul'h a...:ti,,n tu he taken whi..:h would
dio;'-'lpate the a."sds and'or property of R.:J:-;tun~~
app' 'i11tc.:d in this

~.:ausc. including

l\)

the dctnm.:nt ,,f the Rc ...:~:i\ cr

out not limited lo

destnll~tion of corpt,ratc

rct:ords, or

whic:h wnuld violate the Small Bu.... im:ss lnvt..'slmcm Act of 1958, <:s amended, 15 \ l.S.C'.

5

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l1i1l d.~- 1'r th~·

regulations rromulgated thcrcuncicr ("Regulations''),

I~

C.f.R P ,,

it('

SB.'\. up tn $1 ,!100,000 and is auth()fized to cause Redstone to 1ssuc Rccci\cr\
Ct•rit!icatcs of lntkbtcdness in the principal amounts of the sums bo!Tl.'Wcd. which
~;..·ndlc:atcs

will hear interest at or about 10 percent per annum and will haw a maturit!'

dall· 11•' later than 1H months aticr tht~ date 0fissut:-. SJid

K.c~civcr's

(\:r1itit:a!es ;1f

lndcl •tcdnes~ skill he dccnwd to hl' ad min istrativc expenses uf the Rn·cn cr:-~hip.
!'his Court

Ill.

d~.:.,tcnnincs

and ;1djut.licatcs that Hcdstonc has viobtcd

tlh!

,\ct

and lltL R cgulations. w> alleged in th.:: Complaint filed again:.t Rcdstom: rn lht.: insta111
ut:11on. Alter

the foregoing activities an: completed, the Receiver mny submit a n:pc..'rl to

this c.mrt recommending that Redstone':; SBA license be rl~\okcd. Upon llllJtJOn and
disdwrgc of the Recl.!i\'Cl' !he rrc-rcccivcr:;hip records.\\ hich the Receiver dctcnnin.:~

tht: I I .I·

~hall

ll

he rctumeti :.' pri·.lr m<.magcrnmt.

This C(>\111 IH::rcb) cnkrs JUdgment in the anH •wtl ,)f S 15 J l 3. ~..,I 'J5 aguil~st

l\cdsli11ll: Ill favur ('f ~B/\. l'ost _judgment intcrcst,at the ratt.: SCI under fcdcr:tllaw, \\ill

continue to accrue after September 1. 20 I 3.

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SEFN A~D AGREED BY Rf:DSTONE BUSINESS LENDERS, LLC AND TilE U.S.
Stv1ALL I3USI\JESS ADMI~ISTRATIO::--J, THROUGH THEIR DULY AUTHORIZED
Rf:PRFSENT ATJVES:
lkdsk•nc Busiuess Lt:nders, LLC

By:

-~_i.,-4 .{: . , .).... __ _

Nanlt': Jcffr~Hirhbl"rg

lts: President
Date.;: June'-;, :n1J

~~~ V.~·,...:.,
U.S. Small Businp;s Administratiou
By: ·nwmas G. Morris
Its: IJirectN, Office of Sl3lC Liquidation
Date: .lun~: l-:(2013

UNITED S
· Pr11
J)... n J1.1S ~ '1 ~ ("a·\''...& l1···•·1,•h
uy~~~
U.S. IJisu·ict Judge!
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