Crabar/GBF, Inc. v. Wright et al

Filing 704

MEMORANDUM AND ORDER - The Receiver retains all of the powers allowed by filing 693 . The Receiver shall have the additional power to examine the assets of Mark Wright and Wright Printing Company, including the origination and servicing of any and all loans by, between, or among them. On or before March 5, 2024, Mark Wright, or an entity possessing assets payable to Mark Wright, may pay into the registry of the Court funds in an amount up to and including $4,000,000 as security for the Se ptember 19, 2023, judgment and November 8, 2023, cost award against Mark Wright. The Clerk of the Court shall accept such funds and deposit them into an interest-bearing account until further order of the Court. The Receiver shall file a third report and recommendation on or before April 1, 2024.Ordered by Senior Judge John M. Gerrard. (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
CRABAR/GBF, INC.,
Plaintiff,

8:16-CV-537

vs.
MEMORANDUM AND ORDER
MARK WRIGHT et al.,
Defendants.
This matter is before the Court on the Receiver's second report and
recommendation. Filing 703. The Receiver has recommended that the Court
expand the receivership based on Mark Wright's disclosure regarding
unwritten loans between himself, the LLCs subject to the Court's charging
order (filing 665), and Wright Printing Company. Further, the Receiver
recommends that Mark Wright be allowed to pay a cash bond as security for
the judgment on or before March 5, 2024. Finally, the Receiver recommends
that this Court order Wright to pay the entire amount of the Receiver's fees.
The Court will adopt the Receiver's recommendations. The Court
previously ruled that a broader receivership may be warranted if the sale of
the property owned by 121 Court, LLC, was not completed by February 3, 2024.
Filing 693 at 3. The sale's delay, coupled with the Receiver's discovery of the
unwritten loans, merits a limited expansion of the receivership at this time.
This limited expansion will not permit the Receiver to dispose of or control any
of Wright's assets, so the Court will not impose a bond at this time. See Neb.
Rev. Stat. § 25-1084; Fed. R. Civ. P. 66. The Court will, again, and only at the
recommendation of the Receiver, allow Wright additional time to complete the
sale of the property.

The parties also contest who must pay the Receiver's fees. While
receiverships are based on federal law and federal equitable principles, courts
may look to state laws for guidance. Rule 66; Morgan Stanley Smith Barney
LLC v. Johnson, 952 F.3d 980 (8th Cir. 2020) (citing 12 C. Wright & A. Miller,
Fed. Prac. & Proc. § 2983). In Nebraska, fair and reasonable receivership fees
are borne by the party which necessitated the receivership. See State ex rel.
Beck v. Assoc. Discount Corp., 96 N.W.2d 55, 82 (Neb. 1959), overruled on other
grounds by Dailey v. A.C. Nelsen Co., 136 N.W.2d 186, 189 (Neb. 1965).
Wright's failure to post a bond or adequate security has necessitated the
receivership.
The Receiver is an officer of the Court, and is not, as proffered by Wright
(filing 703 at 15), the plaintiff's agent for the purposes of collection. See Rule
66; 12 Wright & Miller § 2983 ("The receiver is considered to be an officer of
the court, and therefore not an agent of the parties" (citing Booth v. Clark, 58
U.S. 322, 331 (1854); Ledbetter v. Farmers Bank & Tr. Co., 142 F.2d 147, 150
(4th Cir. 1944))). General principles of equity, and longstanding historical
practice in federal courts, indicate that Wright should bear the costs of the
receivership. State ex rel. Beck, 96 N.W.2d at 82; see also Trs. Corp. v. Kansas
City, M. & O. Ry. Co., 26 F.2d 876, 881-82 (8th Cir. 1928); Rule 66.
In Nebraska, a receiver is entitled to "such compensation as the court
may award." Neb. Rev. Stat. § 25-1092. A receiver's compensation "should be
fixed at an amount that will be fair and reasonable for the services rendered,"
and the compensation "should not be greater than what would be reasonable
compensation for doing the same amount and character of work if employed in
the usual course of private business." State ex rel. Beck, 96 N.W.2d at 78-79;
see also Trs. Corp., 26 F.2d at 881-82. The Receiver's hourly billable rate is
reasonable in this case, based on the nature and complexity of the
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responsibilities assigned to him. NECivR 54.4 provides how the Receiver
should present to the Court a proper factual basis on which to base his
compensation award, to be paid by Mark Wright, at the conclusion of the
receivership.
Accordingly,
IT IS ORDERED:
1. The Receiver retains all of the powers allowed by filing 693.
2. The Receiver shall have the additional power to examine the
assets of Mark Wright and Wright Printing Company, including
the origination and servicing of any and all loans by, between,
or among them.
3. On or before March 5, 2024, Mark Wright, or an entity
possessing assets payable to Mark Wright, may pay into the
registry of the Court funds in an amount up to and including
$4,000,000 as security for the September 19, 2023, judgment
and November 8, 2023, cost award against Mark Wright. The
Clerk of the Court shall accept such funds and deposit them into
an interest-bearing account until further order of the Court.
4. The Receiver shall file a third report and recommendation on or
before April 1, 2024.

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Dated this 22nd day of February, 2024.
BY THE COURT:
John M. Gerrard
Senior United States District Judge

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