United States of America v. Penn Venture Partners, L.P.

Filing 2

COPY OF ORDER from USDC-Middle District of Pennsylvania appointing U.S. Small Business Administration as receiver of Penn Venture Partners, L.P. (KLF)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA,
Plaintiff

v.
PENN VENTURE PARTNERS, L.P.
Defendant

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FILED
U S O\C.TR\CT COURT
DISTRICT OF HEBR/\St\i\

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OFF \Ct Ur·
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Civ. Action No.

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Receivership Order

6: l9 tvit-2.35

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

Pursuant to the provisions 15 U .S.C. §6891, this Court hereby takes

exclusive jurisdiction of the Penn Venture Partners, L.P. ("PVP"), and all of its assets and
property, of whatever kind and wherever located, and the U.S. Small Business
Administration ("SBA") is hereby appointed Receiver of PVP ("Receiver") to serve

without bond until further order of this Court. The Receiver is appointed for the purpose
of marshaling and liquidating all of PVP's assets and satisfying the claims of creditors
therefrom in the order of priority as determined by this Court.

2.

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

heretofore possessed by the officers, directors, managers and general and limited partners
of PVP under applicable state and federal law, by the Articles of Limited Partnership, and
By-Laws of said limited 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. § 6891 and 28 U.S.C. § 754. The trustees, directors, officers, managers,

RECEIVED
AUG O2 2019
US

CLERK
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CONSENT ORDER OF RECEIVERSIDP

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employees, investment advisors, accountants, attorneys and other agents of PVP are
hereby dismissed and the powers of any general partners are hereby suspended. Such
persons and entities shall have no authority with respect to PVP'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 of PVP 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 PVP. The past and/or present officers, directors, agents,
managers, general and limited partners, trustees, attorneys, accountants, and employees
of PVP, as well as all those acting in their place, are hereby ordered and directed to turn
over to the Receiver forthwith all books, records, documents, accounts and all other
instruments and papers of and relating to PVP and all of PVP's assets and all other assets
and property of the limited partnership, whether real or personal. The general partner of
PVP shall furnish a written statement within five (5) days after the entry of this Order,

listing the identity, location and estimated value of all assets of PVP, a list of all
employees (and job titles thereof), other personnel. attorneys, accountants and any other
agents or contractors of PVP. Within thirty (30) days following the entry of this Order,
the general partner of PVP shall also furnish a written report describing all assets. All
persons and entities having control, custody or possession of any assets or property of
PVP 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 ·

officers, directors, agents, employees, shareholders, creditors, debtors, managers and

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general and limited partners of PVP, as the Receiver deems necessary or advisable to
effectuate the operation of the receivership. All persons and entities owing any
obligation, debt or distribution to PVP shall, until further ordered by this Court, pay or
otherwise fulfill all such obligations in accordance with the terms thereof to the Receiver
and its receipt for such payments shall have the same force and effect as if PVP had
received such payments.

5.

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

banking or other financial institutions and to extend credit on behalf of PVP, to utilize
SBA personnel, and to retain or employ such other persons as it may deem necessary to
effectuate the operation of the receivership including, but not limited to, attorneys,
accountants, consultants, advisors, brokers, and appraisers, and is further authorized to
expend receivership funds to compensate such persons 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 persons. The Receiver is not required to obtain Court approval
prior to the disbursement of receivership funds for payments to persons retained or
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
establishment and administration of the receivership. The Receiver may, without further
order of this Court, transfer, compromise, or otherwise dispose of any claim or asset,
other than real estate.
6.

PVP's past and/or present officers, directors, agents, attorneys, managers,

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

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limited partners of PVP, and other appropriate persons or entities (including without
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limitation, the defendant's portfolio of small business concerns and financial institutions

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doing business with defendant and~or defendant's portfolio of small business concerns)
shall answer under oath to the Receiver all questions which the Receiver may put to them
and produce any documents as required by the Receiver regarding the business of said
limited partnership, or any other m'~tter relevant to the operation or administration of the
receivership or the collection of funds due to PVP. In the event that the Receiver deems
it necessary to require the appearance of the aforementioned persons or entities, the
Receiver shall make its discovery request(s) in accordance with the Federal Rules of
Civil Procedure.
7.

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The parties or prospective parties to any and all civil legal proceedings

(excluding the instant proceeding). wherever located, including, but not limited to
arbitration proceedings, bankruptcy or foreclosure actions, defa,ult proceedings, or any
other proceedings involving (i) PVP, (ii) any assets of PVP, (iii) the R~eiver for PVP or
(iv) PVP's present or past officers, directors, managers, or general partners (including the
managers or members of such general partner) to the extent said civil legal proceedings
involve any action taken by them while acting in their official capacity with PVP, are

enjoined from taking any action, including discovery, commencing or continuing any legal
proceeding of any nature without further order of this Court.
8.

All civil legal proceedings wherever located, including arbitration

proceedings. foreclosure activities, bankruptcy actions, or default proceedings, but
excluding the instant proceeding, involving (i) PVP, (ii) any of assets of PVP, (iii) the
Receiver for PVP or (iv} PVP's present or past officers, directors, managers, or general

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panners (including the managers or members of such general partner) to the extent said
civil legal proceedings involve any action taken in their official capacity for PVP are
stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from
taking or permitting any action in such proceedings until further Order of this Court.
9.

Further, as to a cause of action or claim accrued or accruing in favor of

PVP against a third person or party, any applicable statute of limitation is tolled to the
extent allowed by applicable law during the period in which this injunction against
commencement of legal proceedings is in effect as to that cause of action or claim.
I0.

PVP and its past and/or present directors, officers, managers, general or

limited partners, agents, employees and other persons or entities acting in concert or
participating therewith be, and they hereby are, enjoined from either directly or fodirectly
taking any actions or causing any such action to be taken which would dissipate the
assets and/or property of PVP to the detriment of PVP or 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.~
or the regulations promulgated thereunder ("Regulations") in Part I08 of Title 13 C.F.R.
I l.

The Receiver is authorized to borrow up to $500,000 from the SBA on

behalf of PVP and is authorized to cause PVP to issue Receiver's Certificates of
Indebtedness in the principal amounts of the sums borrowed, which certificates will bear
interest at or about IO percent per annum and will have a maturity date no later than 18

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months after the date of issue. Said Receiver's Certificates of Indebtedness shall have

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priority over all other debts and obligations of PVP, excluding administrative expenses of

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the Receivership, whether currently existing or hereinafter incurred, including without ·
limitation any claims of general or limited partners of PVP.
12.

This Court determines and adjudicates that SBA has made a sufficient

showing that PVP has violated the Act and the Regulations, as alleged in the Complaint

filed against PVP in the instant action, to obtain the relief so requested.
DATED this ~ayof_~_._..,_

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UNITE

SEEN, STIPULATED AND AGREED:
PENN VENTURE PARTNERS, L.P., through its authorized representative
By:~~Title:

d~111iJ(J ,J}ya£
General Partner of PVP, L.P.

Date:

;/Jr,, 9, Z0/Cj

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