Securities and Exchange Commission v. Fujinaga et al

Filing 392

ORDER Granting 374 Motion for Order. See Order for details. Signed by Judge James C. Mahan on 2/13/17. (Copies have been distributed pursuant to the NEF - ADR)

Case 2:13-cv-01658-JCM-CWH Document 391 Filed 02/09/17 Page 1 of 5

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Michael F. Lynch, Esq.
Nevada Bar No. 8555
LYNCH LAW PRACTICE, PLLC
3613 S. Eastern Ave.
Las Vegas, Nevada 89169
702.684.6000
702.543.3279 (fax)
[e-mail]
Attorney for the Receiver,
Robb Evans & Associates LLC

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
vs.
EDWIN YOSHIHIRO FUJINAGA and
MRI INTERNATIONAL, INC.,
Defendants,

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and

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CSA SERVICE CENTER, LLC
THE FACTORING COMPANY,
JUNE FUJINAGA, and
THE YUNJU TRUST,

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Case No.: 2:13-cv-01658-JCM-CWH
ORDER GRANTING MOTION FOR
ORDER (1) AUTHORIZING,
APPROVING AND CONFIRMING
SALE OF REAL PROPERTY
LOCATED AT 5330, 5370, AND 5420
S. DURANGO DRIVE AND SALE
AND OVERBID PROCEDURES AND
FOR RELATED RELIEF; AND (2)
GRANTING RELIEF FROM LOCAL
RULE 66-5 PERTAINING TO
NOTICE TO CREDITORS

Relief Defendants.
This came before the court on the Notice of Motion and Opportunity to Object, and

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Motion for Order (1) Authorizing, Approving and Confirming Sale of Real Property Located at

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5330, 5370, and 5420 S. Durango Drive and Sale and Overbid Procedures and for Related

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Relief; and (2) Granting Relief from Local Rule 66-5 Pertaining to Notice to Creditors (the

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“Motion”) [ECF. No. 374] and the Declaration of M. Val Miller in Support of the Motion (the

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“Miller Declaration”) [ECF No. 375] brought by Robb Evans & Associates LLC, the court-

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appointed receiver (the “Receiver”) by and through its undersigned counsel. The Motion and the

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Miller Declaration were served via the ECF system on January 16, 2017, and by U.S. Mail on all

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known non-consumer creditors of the estate on January 17, 2017, and by direct Email on January

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17, 2017, to other parties who informally requested the Receiver provide notices. The dates and

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Case 2:13-cv-01658-JCM-CWH Document 391 Filed 02/09/17 Page 2 of 5

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manner of service are set for in in the Certificate of Service [ECF No. 381] of the Motion and

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the Miller Declaration.

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The Motion came on regularly before the Court for determination, the Honorable James

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C. Mahan, United States District Judge, presiding. Pursuant to LR 7-2, an opposing party must

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file points and authorities in response to a motion and failure to file a timely response constitutes

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the party’s consent to the granting of the motion. See LR 7-2(d); United States v. Warren, 601

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F.2d 471, 474 (9th Cir. 1979). Neither the Defendants nor any other party has filed any

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opposition, objection, and/or points and authorities in response to the Motion and the deadline to

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do so has passed. Nevertheless, the court reviewed the substantive merits and grants the

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Receiver’s Motion in full.

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IT IS ORDERED that:

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1.

The Motion, and all relief sought therein, is granted in its entirety;

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2.

Without limiting the generality of the foregoing:

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2.1.

The Receiver’s proposed sale and overbid procedures for the Durango

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Property,1 located at 5330, 5370, and 5420 S. Durango Drive, Las Vegas, Nevada, and

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the Receiver’s request for an order authorizing and confirming the sale on an “as is” basis

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by private sale either (a) to IIP Durango 3, LLC and/or its assignee (the “Proposed

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Buyer”), an arm’s length buyer, at a purchase price of $12,000,000.00 pursuant to the

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Purchase and Sale Agreement attached as Exhibit 1 to the Miller Declaration or (b) to

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such higher qualified overbidder who submits the highest qualified overbid at a

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Capitalized terms not otherwise defined herein shall have the meanings set forth in the Motion.
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Case 2:13-cv-01658-JCM-CWH Document 391 Filed 02/09/17 Page 3 of 5

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subsequent overbid session, if any, to be conducted under the terms and conditions more

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fully set forth herein;

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2.2.

The Court hereby authorizes the sale of the Durango Property subject to

the following overbid procedures, which the Court hereby approves:
2.2.1.

The overbid session shall be conducted after entry of this order

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granting the Motion. The overbid session will be conducted at the Robb Evans &

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Associates LLC, 5560 S. Ft. Apache Road, Suite 120, Las Vegas, Nevada 89148;

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2.2.2.

The Receiver will cause to be published a notice of the proposed

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sale of the Durango Property to a qualified bidder at the overbid session, which

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notice shall state the date, time and place of the overbid session, the requirement

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for pre-qualification by overbidders and the terms and conditions of the

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overbidding and sale of the Durango Property, as described below (“Overbid

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Notice”). The Receiver will cause the Overbid Notice to be published in Las

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Vegas Review Journal one time at least 10 calendar days prior to the scheduled

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overbid session date;

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2.2.3.

Any person wishing to overbid at the overbid session shall be

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required to pre-qualify with the Receiver no later than 10:00 a.m., two business

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days preceding the overbid session, by delivering to the Receiver’s office located

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at 5560 S. Ft. Apache Road, Suite 120, Las Vegas, Nevada 89148: (a) notice in

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writing of the prospective overbidder’s intent to overbid, together with (b) written

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verification from a financial institution demonstrating to the Receiver’s

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satisfaction, in the Receiver’s sole opinion, discretion and judgment, the

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prospective overbidder’s ability to complete and close a purchase of the Durango

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Property through sufficient funds or credit facilities within 10 days of the date of

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the overbid session, and (c) a cashier’s check in the sum of $250,000.00 payable

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to “Robb Evans & Associates LLC, Receiver of MRI International, Inc. et al.”,

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which cashier’s check shall become non-refundable upon acceptance of the

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overbidder’s overbid at the conclusion of the overbid session;

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2.2.4.

Overbidders bidding at the overbid session will be deemed to

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have completed all inspections of the Durango Property and will be deemed to

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have waived and/or removed all contingencies in favor of the buyer under the

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Purchase and Sale Agreement, including, without limitation any contingency

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pertaining to inspection of title, and will be required to complete a cash purchase

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of the Durango Property and close escrow for the purchase within 10 days of the

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date of the overbid session. The successful overbidder will be required to execute

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a purchase agreement for the Durango Property substantially in the form of the

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Purchase and Sale Agreement together with a waiver of all buyer contingencies

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promptly after conclusion of the overbid session;

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2.2.5.

The initial overbid shall be in the amount of $13,200,000.00 (a

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sum that is $1,200,000.00, or 10%, higher than the purchase price under the

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Purchase and Sale Agreement, and all subsequent overbids shall be in an amount

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at least $25,000 higher than the preceding bid; and

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2.2.6.

Pursuant to the Purchase and Sale Agreement and the Listing

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Agreement with the Brokers, a sales commission in the amount of 5% of the

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purchase price paid for the Durango Property shall be paid by the Proposed

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Buyer, or if a higher overbid is received and accepted at the overbid session, by

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the wining overbidder, from the proceeds of sale of the Durango Property at close

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of escrow, to the Brokers as listing agent under the Listing Agreement and a

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cooperating broker representing the buyer, if any, under the terms of the Listing

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Agreement; and

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2.2.7.

The sale of the Durango Property by private sale to the

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Proposed Buyer under the Purchase and Sale Agreement, or to the person who

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submits the highest qualified overbid at the overbid session to be conducted

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pursuant to the foregoing procedures, is hereby confirmed without further notice
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or hearing and without the necessity of any subsequent motion for confirmation of

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the sale;

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3.

The Receiver is authorized to execute all documents and instruments necessary or

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convenient to complete, implement, effectuate and close the sale of the Durango Property to the

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purchaser, including but not limited to a deed conveying title to the Durango Property free and

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clear of all existing liens, claims, accrued and unpaid taxes and/or outstanding utility charges as

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of the closing;

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4.

The Receiver is authorized to permit and/or cause to be paid from the proceeds of

the sale of the Durango Property: (a) all ordinary and customary closing costs, all costs and

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expenses required to be paid under the terms of the Purchase and Sale Agreement by the seller

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from the proceeds of sale, (b) the discounted settlement payment of $140,000.00 to satisfy the

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lien, and disburse to a judgment creditor/lien holder, as discussed in more detail in the Motion

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and Exhibit 2 to the Miller Declaration, (c) all commissions provided for in the Purchase and

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Sale Agreement and the Receiver’s Listing Agreement for the Durango Property, and (d) all real

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property tax liens and prorated real property taxes due up to the date of closing; and

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5.

Notice of the Motion is deemed to be sufficient under LR 66-5 based on the

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service of the Motion, which Motion contains notice of the Motion and opportunity to object,

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and by serving the Motion on all known non-consumer creditors of the estate concurrent with the

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filing of this Motion with the Court, but not on the tens of thousands of potential foreign

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creditors.

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IT IS SO ORDERED.

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Dated: February 13, 2017

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The Honorable James C. Mahan
UNITED STATES DISTRICT JUDGE

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