United States of America v. CVP SBIC, L.P.

Filing 2

COPY OF ORDER from USDC-Northern District of California appointing Small Business Administration as receiver of CVP SBIC, L.P. (JSF)

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Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 1of12

BENJAMIN MIZER
PRINCIPAL DEPUTY ASSISTANT ATTORNEY GENERAL
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-FILED
'U.S. DISTRICT COU1• T
DISTRICT OF NEBRA~KA

2ui& JUL -6 AM IO: 2

BRIAN J. STRETCH, CA No. 163973
United States Attorney
SARA WINSLOW, DC No. 457643
Chief, Civil Division
CHRISTINA L. GOEBELSMANN, CA No. 273379
Special Assistant U.S. Attorney

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U.S. Small Business Administration
455 Market Street, Suite 600
San Francisco, CA 94105
Telephone: [phone]
Facsimile: [phone]
christina. [e-mail]
CHRlSTOPHERJ. MCCLINTOCK, VA Bar No. 68417
ARLENE M. EMBREY, FL Bar No. 0125539
Trial Attorney
Office of General Counsel
U.S. Small Business Administration
409 Third St., S.W.
Washington, D.C. 20416
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for Plaintiff

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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UNITED STATES OF AMERICA,

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Plaintiff,
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v.
CVP SBIC, L.P.
Defendant.

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Civil Action No. 3:16-cv-2213

SIPULATION FOR ENTRY OF
CONSENT RECEIVERSHIP
ORDER

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STIPULATION FOR ENTRY OF ORDER, United States of America v. CVP SBIC, L.P.

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Case 3:16-cv-02213-JCS Document 17 Filed 06/27116 Page 2of12

TO THE COURT AND ALL PARTIES IN INTEREST:
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Please find attached hereto a Stipulation for Entry of Consent Receivership Order

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entered into between Plaintiff United States of America and Defendant CVIP SBIC, L.P.

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and Consent Receivership Order regarding the same.

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Dated: May 16, 2016

By: Isl Christina L. Goebelsmann
CHRISTINA L. GOEBELSMANN
Special Assistant United States Attorney
U.S. Small Business Administration
455 Market Street, Suite 600
San Francisco, CA 94105
Telephone: [phone]
Facsimile: [phone]
[e-mail]

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STIPULATION FOR ENTRY OF ORDER, United States of America v. CVP SBIC, L.P.

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 3of12

STIPULATION FOR l!iNTRY OF C0NBM ORDERBOR!!i'£!1WBSBIP
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WHEREAS, Defimdrmt, CVP SBIC, L.P. ("Defendant") is a licensee ofthc U.S. 8JDall
Business Admlnlstration ("SBA") under the Small Busln!388 Investment Act of 1958, a5

s emended, JS U.S.C. §661, et seq. (the "Act");
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WHEREAS Ddendant hes a condition of Capital Impairment in violation ofthc Act and
SBA's regulations, thereby entitling SBA to obtain a recelvel'!lhip and other iqjunctive reliilf

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against Defimdant under IS U.S.C. §687c;

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WHEREAS Defendant has agreed to entr)' ofthe Consent Order for Receivership; and

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W.HERBAS, the said parties desire to resolve this matter amicably without tbrthcr

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.proceedings, trial or adjiuli.cation of any iss1111, and do hereby stipulate as follows:

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That this Comt has jurisdiction over the subject matter of this ection and over

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Defendant 15 U.S.C. §§6a7(d) and 687h, and that venue is proper under 15 U.S.C. §§687(d),

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687h, and 28 u.s.c. §139l(b);

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That Dcfcndent agrees to the entry of the attached Consent Order without further

proceedings;

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That the Dilfendant waives findings of fact and conclusions of Jaw plD'suant to

Rule 52 of the Federal Rules of Civil Procedure;

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4.
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That Dilfendant waives any right or basis to contest the validity of the attached

Consent Order; and

case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 4of12

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That the Consent Order may be presented by Plaintiff to the Court for sign~ture

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and entry without further notice to Defendant; provided however the United Stales will prnvjde

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notice of entry to Defendant.
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STIPULATED AND AGREED BY THE :PARTIES' AUTHORIZED

REPRESENTATIVES:

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CVP SBIC, L.P.
By its General Partner, CV SBIC, lnc.

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nereruazens

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Its Principal

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Date:

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CVP SBIC, L.P.

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By its General Partner, CV SBIC, Inc.

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U.S. SMALLBUSJNESS ADMINISTRATION

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By:

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Thomas G. Mo ·
Director, Office o Liquidation
U.S. Small Business Admimstralion
Investment Division

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Date:
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Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 5 of 12

BENJAMIN MIZER
PRINCIPAL DEPUTY ASSISTANT ATTORNEY GENERAL
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BRIAN J. STRETCH, CA No. 163973
United States Attorney
SARA WINSLOW, DC No. 457643
Chief, Civil Division
CHRISTINA L. GOEBELSMANN, CA No. 273379
Special Assistant U.S. Attorney

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U.S. Small Business Administration
455 Market Street, Suite 600
San Francisco, CA 94105
Telephone: [phone]
Facsimile: [phone]
[e-mail]
CHRISTOPHER J. MCCLINTOCK, VA Bar No. 68417
ARLENE M. EMBREY, FL Bar No. 0125539
Trial Attorney
Office of General Counsel
U.S. Small Business Administration
409 Third St., S.W.
Washington, D.C. 20416
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for Plaintiff

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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UNITED STATES OF AMERICA,

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Plaintiff,

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v.

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CVP SBIC, L.P.
Defendant.

Civil Action No. 3:16-cv-2213

CONSENT RECEIVERSHIP
ORDER

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IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
CONSENT RECEIVERSIDP ORDER, United States of America v. CVP SBIC, L.P.

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case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 6of12

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

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jurisdiction of the CVP SBIC, L.P.("CVP SBIC" or "licensee"), and all of its assets and propi:rty

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of whatever kind and wherever located, and the United States Small Business Administration

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("SBA") is hereby appointed Receiver of CVP SBIC C'Receiver") to serve without bond until

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1\mhiir Older of this Court. The Receiver is appointed for the purpose ofmmshaling and

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liquidating all of CVP SBIC's assets and satisfying the claims of credltoJ!I thereftom in. the order

s of priority as detennined by this Court.
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The Receiver shsll have all powers, authorities, rights and privileges betetofore

possessed by the officers, directors, manegom and general and limited partners ofCVP ~IC

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liDder appliceble state and federal lsw, by the Articles ofLhniled Partnership, and By-Laws of

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said limited partnership, in addition to all powers and authority of 11 n:ceiver llt equity, and all

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powers and authorlty conferred upon the Receiver by the provisions of 15 U.S.C. § 687c and 28

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U.S.C. § 754. The trustees, din:ctors, officers, mansgers, employees, investment advisors,

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accountllnts, attorneys 11Dd other agents of CVP SBIC are hereby dismiased and the poweni of

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llIIY general partners ere hereby suspended. Such pemons and entities shell have no anthorlty

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With respect to CVP SBIC's opel'lltions or assets, exC!lpt to the~ as may herellfter be

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expressly granted by the Receiver. The Receiver shsll assume and control the openiuon of CVP

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SBIC and shall pumue and preserve all of its claims.

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

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or other financial accounts, books and records and all other documents or instruments relsting to

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CVP SBIC. The past and/or present.officers, din:ctors, agents, managers, general and limited

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partners, trustees, attorneys, accountants, and employees of CVP SBIC, as well as all those

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acting in their plsee, are hereby ordered and din:cted to nun over to the Receiver forthwith all

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CONSENT RECEIVERSHIP ORDER, United States of America v. CVP SBIC, L.P,

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 7 of 12

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books, records, docwnents, accounts and all other instruments and papeni of and rclating to CVP

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SBIC and all ofCVP SBIC's assets and al) other assets and property of the limited parlnerahip,

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whether real or personal. The general partner of CVP SBIC shall furnish a written statement

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within five (S) days after the entry of this Onler, Jisting the identity, location and e!ltim•ted value
of all assets of CVP SIDC, a list of all employees (and job titles thereof), other persollllel,

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attorneys, accountants and any other agents or contractors ofCVP SBIC, as well as the luunes,

s eddleSses and amounts of claims of all known creditors of CVP SBIC. Within thirty (30) days
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following the entry of this Order, the general partner of CVP SBIC shall also furnish a writteri
report describing all assets. All persons and entities having control, custody or possesslOn. of any

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assets or property of CVP SBIC are hereby directed to tum sw:h assets and property over to the

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Receiver.

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The Receiver shall promptly give notice of its appointment to all known bffiam'S,

directors, agents, employees, shareholders, creditors, debtom, managers and general and limited
partners ofCVP SBIC, as ihe Receiver deems necessary or advisable to effectuate.the operation

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of the receivership. All persons and entities owing any obligation, debt, or distribution ~th

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respect to a partnership interest to CVP SBIC, until further ordered by this Court, pay al.I such

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obligations in accordance with the terms thereof to the Receiver and its receipt for such

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payments shall have the same force and effect as if CVP SBIC bad received such payments.

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

other financial institutions to extend credit on behalf of CVP SBIC, to utilize SBA personnel,

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and to employ such other personnel as it may deem necessary to effectuate the operatiou:ofthe

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receivership including, but not limited to, attorneys, accountants, consultants and apprais,ers, and

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is further authorized to expend receivership funds to compensate such personnel in such amounts

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CONSENT RECEIVERSmP ORDER, United States of America v. CVP SBIC, L.P.

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 8of12

end upon such terms 811 the Receiver sball deem rea5DDBhle In light of the usual fees end billing
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practices and procedures of such personnel. The Receiver Is not required to obtain Court

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approval prior to the disblD'Sement of receivcrsbip funds for payments to personnel employed by

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the Receiver or for expenses that the Receiver deems advantageous to the orderly admblistration

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and operation of the receivership. In addition, the Receiver is euthori7.ed to reimburse the SBA
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for travel expenses Incurred by SBA personnel In the establishment and administration Jfthe

a receivership. The Receiver may, without further order of this Court, transfer, compromise, or
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otherwise dispose of any claim ilr 811Set In the ordinary course of business, other than real estate.
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CVP SBIC's put and/or pzesent officers, dlreotars, agents, attomeys, managem,

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shareholders, employees, accountants, debtors, creditors, managers and general and limited

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partners of CVP SBIC, end other appropriate persons or entitles {including without ~on,

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the defendant's portfolio of small business concerns and finaneial institutions doing baslness

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with defendant and/or defendant's portfolio of small business c:oncems) shall answer und~.oath

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to the Receiver all questions which the Receiver may put to them and produce any do1111ments 811

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required by the Receiver regarding the business of said limited partnership, or any other matter

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relevant to the operation or administration of the receivership or the collection of funds due to

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CVP SBIC. In the event that the Receiver deems it necessary to require the appeanmce of the

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aforementioned persons or entities, the Receiver shall n:iake its discovery request(s) in

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accordance with the Federal Rules of Civil Procedure.

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The parties to any and all civil legal proceedings of any Dllture, including. but not

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limited to, bankruptcy proceedings, arbitration proceedings, foreclosure actions, default

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proceedings, or other actions of any D11ture involving CVP SBIC or any 11SSets of CVP SBIC,

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Including subsidiaries end partnerships, wherever located, and ex.eluding the instant proceeding,

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CONSENT RECEIVERSHIP ORDER, United States of America v. CVP SBIC, LP.

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Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 9of12

involving CVP SIDC, the Receiver, or any ofCVP SBlC's past or present officers, directors,
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lllllllllgCl'S, agents,

or general or limited partners or the managers, members, employees OJ' agmUs

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of any past or present general partner sued for, or in COllllection with, any action laken by them

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while acting in such capacity of any ll8ture, whether as plaintift defendant, third-party~

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third-party defendant, or otherwise, are enjoined from commencing or continuing any such legal
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pmceeding, or from taking llIIY action, in coMection with any such proceeding or any ~uch asset.

a All civil lepl pmreeding~ of any ll8ture, including but not limited to bankruptcy proceedings,
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arbitration proceedings, foreclosure actions, default pmceedings, or other action of any,IUlturll
Involving CVP SBIC or any mets of CVP SBIC, including subsidiaries and parblerships,

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wherever located, and excluding the inst8nt pmceeding, involving CVP SBIC, the Receiver, or

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any ofCVP SBIC's past or present officers, directors, mllllllpI5, agents, or general or limited

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partners or the men agers, members, employees or agents of any past or present general parlDer

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sued for, or in connection with, any action taken by them while acting in such capacity of any

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nature, whether as plaintiff, defendant, third-party plaintiff; third-party defendant, or otherwise,

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are stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from

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taking or pennitting any action until further Order of this Court. Further, as to a cause of action -

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accrued or accruing in favor ofCVP SBIC against a third person or party, any applicable statute

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oflimitalion is tolled during the period in which this injunction egainst commencement of legal

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proceedings is in effect as to that cause of action.

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CVP SBIC and its Pl!St lllld/or present directors, officers, m111111gers, general or

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limited pllI1Ders, agents, employees and other persons or entities acting in concert or pai'ticipatin

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therewith be, and they hereby are, eojoined from either directly or Indirectly taking any actions

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or causing any such action to be taken which would dissipate the assets and/or property of CVP

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CONSENT RECEIVERSHIP ORDER, United States of America v. CVP SBIC, L.P.

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 10 of 12

SBIC to the detriment of CVP SBIC or of the Receiver appointed in Ibis cause, Including but not
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limited to destruction of corporate records, or which would violate the Small Business

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Investment Act of 1958, as amended, 15 U.S.C. 661 £1,.sg.. orlhe regulations promuijated

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thereunder, (''Regulations"), 13 C.F.R. §107.1 a, Bil·

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The Receiver is aathOrized to borrow up to $1,000,000 from the SBA ori behalf o

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CVP SBIC and is authomed to cause CVP SBIC to Issue Receiver's Certificates of Indebtedness

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in the principal amounts of the sums borrowed, which certificates will bear interest at or about 1

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pcICOilt per annum

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and will have a mat\1rlty date no later than 18 months after the date of Issue.

Said Receiver's ~ertificates of Indebtedness shall have priority over all other debts and
obligations of CVP SBIC, excluding administrative expenses of the Receivership, whether

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cuaently existing or hereinafter incurred, including without limitation any claims of 11~ or

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limited parl11lll'S of CVP SBIC.

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CONSENT RECEIVERSHIP ORDER, United States of America v. CVP SBIC, L.P.

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 11of12

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This Court dctennincs and adjudicates that SBA has made a sufficient sboWing.

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that CVP SB!C had a condition of Capital Impairment in violation of the Act wid the

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Regulations, as alleged in the Complaint filed against CVP SBIC in the instant action, to obtain

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the relief so requested.
SEEN, STIPULATED AND AGREED BY:

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CVP SBIC, L.P.

By its General Partner, CV SB!C, Inc.

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Its Principal

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Date:

3-7·2016

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CVP SBJC, L.P.

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By its General Partner, CV SBIC, Inc.

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.<>--• • L.

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Christian Borcher
Its Principal

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Date:

3-7-2016
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U.S. SMAl.L BUSINESS ADMTNJSTRATION

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By:

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Thomas G. Morri
Director, Office of Liquidation
U.S. Small Business Administration
Investment Division

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CONSENT RECEIVERSHIP ORDER, United States of America v. CVP SBIC, L.P.

Case 3:16-cv-02213-JCS Document 17 Filed 06/27/16 Page 12of12

Dated: May 16, 2016
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By: Isl Christina L. Goebelsmann
CHRISTINA L. GOEBELSMANN
Special Assistant United States Attorney
U.S. Small Business Administration
455 Market Street, Suite 600
San Francisco, CA 94105
Telephone: [phone]
Facsimile: [phone]
christina. [e-mail]

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IT IS SO ORDERED

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This 27th day of ~~_ _ _,2016
June

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Isl Joseph C. Spero

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Joseph C. Spero
Chief Magistrate Judge

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STIPULATION FOR ENTRY OF ORDER, United States of America v. CVP SBIC, L.P.

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