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 )

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case 2:13-cv-03939-DMC-JAD Document 4 Filed 06/28/13 Page 1 of 7 PageiD: 27 - 0 -'?'! (..,-..) c:. t: - r~·t I:\ THE UNITED STATES DISTRiCT COCRT 0 -q FOR THE DISTRICT OF :\EW .IERSE\' --1 f'l , 0 I l "iJTI':l) STATES OF AMERICA, ~ ) Plaintiff, \', ) ) ) REDSTONE Bl:SI!':F..SS LE.l\'DERS, ) LLC. ) ) Defendant. ---.--- ------------- - _______ ) ) CONSENT ORDF.R OF RECEI\"ERSIIIP IT I~ l!f.RI:HY OHDFRED. :\DWDGED AND DECREED· l. 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 11f State~ ib Small L3u:.im:ss ;\,!ministration ("SA:\") is hereb) app•)ifltl!d Receiver ofHetbtonc ("Rccci\t:r") to SCI'-~ \\'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 t;,.. ·:~~· 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 c (/). -·..,..l I ;....:> ,.. _;. ::'""l'J 0 h) :_Jl -1 (/) :JJ· OS? --1 (/) .,., . o-i_: I I ::;or -~1' 0 rn ~ rn_,~c, GJo :.:1o ):» c: c:~ /• ).~» ::t - 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 :tlS\l furnish u •.o;rittcn report (~!l) 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 6 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, 4 Dbt f !3;24.dw14: 4: .END.I<BE!l!Epdvn f ol.l5!!!Qme!17<B9CP4!\!Qbhf !61pg8\Qbhf ..E;\42 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 <'! 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 Dbt f !3;24.dw 14: 4: . EN D.I<BE !!!Epdvn f ol.l5!!!Qme!17ffi9~4!!!Qbhf !7!pg8!Qbhf ..E ;!43 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. 6 Obtf t3:24.dw14: 4: .END.KBE\1\Epdvn f ol.l5\!!Qrhe!17CB9024!!!Qbhf 18!pg8!Qbhf .E;!44 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! .. '\..-! 7

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