United States Securities and Exchange Commission v. Holzhueter, Loren et al
Filing
292
ORDER APPROVING SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF ISC, INC. AND HONEFI LLC FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES Signed by District Judge James D. Peterson on 5/25/17. (jat)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
__________________________________________
UNITED STATES SECURITIES
:
AND EXCHANGE COMMISSION,
:
:
Plaintiff,
:
:
Case No.: 3:15-cv-45-jdp
v.
:
:
THE ESTATE OF LOREN W.
:
HOLZHUETER, and ISC, INC.
:
(d/b/a Insurance Service Center),
:
:
Defendants, and
:
:
HONEFI, LLC, ARLENE HOLZHUETER,
:
and AARON HOLZHUETER,
:
:
Relief Defendants.
:
_________________________________________ :
ORDER APPROVING SALE OF SUBSTANTIALLY ALL OF THE ASSETS
OF ISC, INC. AND HONEFI LLC FREE AND CLEAR OF ALL LIENS, CLAIMS AND
ENCUMBRANCES
Michael S. Polsky, Esq., as court-appointed receiver (the “Receiver”) of ISC, Inc.
(“ISC”) and Honefi, LLC (“Honefi”), having filed and served his Motion for the Sale of
Substantially All of the Assets of ISC and Honefi Free and Clear of All Liens, Claims and
Encumbrances (the “Sale Motion”), this matter having come on for hearing on May 25, 2017;
Based upon the Sale Motion, the Notice (as defined below), the information presented in
Court, the file and pleadings in this matter, and the arguments presented at the hearing on the
Sale Motion, the Court hereby makes the following Findings of Fact, Conclusions of Law and
Order:
FINDINGS OF FACT
1.
On October 20, 2016, the Court entered an Order appointing Michael S. Polsky,
Esq., as Receiver and directing the Receiver to sell ISC, Honefi and/or their assets.
2.
On April 26, 2017, the Receiver filed the Sale Motion.
3.
Due notice of the Sale Motion and the Sale Hearing was provided to all Investors,
creditors and other parties-in-interest in this matter by notice dated April 28, 2017 (the “Notice”).
4.
The Notice and Sale Motion provide adequate information of a kind and in
sufficient detail that enable Investors, creditors and other parties-in-interest to make an informed
judgment about the Sale Motion.
5.
Pursuant to Transfers of Membership Interests dated November 2, 2016,
November 8, 2016 and November 12, 2016, the Receiver holds all membership interests in
Honefi LLC (“Honefi”). In addition, all former members of Honefi (Aaron Holzhueter, Arlene
Holzhueter and the Estate of Loren Holzhueter) have consented to the sale of Honefi’s assets.
6.
The Sale Motion seeks authority to sell substantially all of the assets of ISC, Inc.
(“ISC”) and Honefi, including: (a) the Real Estate; (b) all of ISC’s tangible personal property,
computers, furniture, fixtures and equipment; (c) all documents, files, books, lists, records and
correspondence, whether written or electronically stored or otherwise recorded, in each case
relating to the Business; (d) to the extent assignable or transferable under the terms thereof and
permitted by law, all insurance company and broker agreements primarily used in connection
with the Business; (e) all intangible and intellectual property owned or licensed by ISC and used
in the Business, including copyrights, trade names, trademarks, service marks, training and
promotion materials, and software licenses; provided, however, that in the case of any licensed
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intangible or intellectual property (such as software licenses), said licenses shall only be included
in the Purchased Assets to the extent assignable or transferrable under the terms thereof; (f) all
customer relationships and existing and prospective customer lists relating to or arising from the
Business; (g) all rights to renew policies for existing or prospective clients of the Business; (h) to
the extent assignable or transferrable under the terms thereof and permitted by law, all licenses,
certificates, franchises, accreditations, registrations or permits used in connection with the
Business; and (i) all commissions earned and recognized after the Closing Date with respect to
the Business, and any commissions earned and recognized prior to the Closing Date that
constitute prepayments for insurance premiums due and payable after the Closing Date
(collectively, the “Assets”).
7.
The highest and best offer (the “Offer”) which the Receiver received for the
Assets is from an entity to be formed by AVID Risk Solutions, Inc., Tom Schwarz and Family
Insurance Center, Inc. (the “Buyer”). As of February 28, 2017 the value of the Offer, as
amended, was approximately $5 million.
8.
The Receiver, the Buyer and SKE Group LLC entered into an agreement (the
“SKE Agreement”) regarding the transfer of an ownership interest held by SKE Group LLC in
certain assets relating to the Green Bay office of ISC.
9.
The Receiver and the Buyer amended the Offer in order to account for the terms
of the SKE Agreement and assign the Buyer’s rights under the Offer to an Operating Asset
Assignee and a Real Estate Assignee.
10.
The Buyer has advised the Receiver and the Court that it is ready, willing and able
to acquire the Assets pursuant to the terms of the Offer, as amended, without any contingencies,
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except those in the Offer, as amended, which have been waived or satisfied by the Buyer, other
than approval of this Court.
CONCLUSIONS OF LAW
11.
The sale process undertaken for the Assets described in the Sale Motion was
commercially reasonable, constituted a fair process to sell the Assets and maximized the value of
the Assets and funds available for distribution to the Investors and the creditors of ISC and
Honefi.
12.
Upon closing, the sale of the Assets by the Receiver will constitute a valid, legal
and enforceable transfer to the Buyer of all right, title and interest to the Assets, free and clear of
all mortgages, judgments, liens, claims and encumbrances.
13.
The Buyer is not a successor of ISC or Honefi, and the Buyer is not liable for any
of the debts, liabilities or obligations of ISC or Honefi, except those expressly assumed by
written agreement with the Receiver.
IT IS HEREBY ORDERED that:
1.
The court accepts the stipulations between the Receiver and the creditor objectors
filed at Dkts. 281-283.
2.
The Sale Motion is granted and any Objections to the Sale Motion that have not
been resolved by agreement with the Receiver in this order are overruled on their merits.
3.
The Sale of the Assets to the Buyer by the Receiver pursuant to the Offer, as
amended, and the sale process set forth in the Sale Motion are hereby approved in all respects.
4.
The Receiver is authorized to consummate the sale of the Assets pursuant to the
terms and conditions of the Offer, as amended, upon payment of the purchase price by the Buyer.
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Specifically, and without intending to limit the generality of the foregoing sentence, the Receiver
is authorized, both as the court-appointed Receiver for Honefi and holder of all of the limited
liability company membership interests in Honefi, to convey the Real Estate to the Buyer
pursuant to the terms and conditions of the Offer, as amended.
5.
The Receiver is authorized now and in the future to execute and deliver to the
Buyer any and all documents reasonably required to convey title to the Assets as defined in the
Offer, as amended, or otherwise to the Buyer without further Order of this Court. The SKE
Agreement is hereby approved and the Receiver is authorized to execute all documents necessary
to effectuate that transaction.
6.
Upon closing of the sale as described above, all right, title and interest in and to
the Assets shall be vested in the Buyer, free and clear of all mortgages, liens, claims and
encumbrances. All mortgages, liens, claims and encumbrances shall attach to the proceeds of the
sale to the same extent and priority as they existed with respect to the Assets immediately prior
to the closing.
7.
The Buyer or its assigns are not successors of ISC or Honefi, have no successor
liability for any obligations of ISC or Honefi, and are not liable for any of the debts, liabilities or
obligations of ISC or Honefi, except those expressly assumed by written agreement with the
Receiver.
8.
The Receiver is further authorized to hold in escrow the proceeds from the sale of
the Assets, following payment of any necessary closing costs and other customary prorations,
pending an Order of this Court approving the Receiver’s Phase II Distribution Plan.
9.
Upon the sale of the Assets, the Receiver shall be relieved of any and all
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responsibility for, or liabilities with respect to, the Assets.
10.
This Court retains exclusive jurisdiction to interpret and enforce the provisions of
this Order, the Offer, as amended, and the SKE Agreement, and to resolve any disputes with
respect to the sale of the Assets by the Receiver.
11.
The state court plaintiffs’ motion to stay, Dkt. 276, is denied.
SO ORDERED
Dated: May25, 2017
/s/
________________________________
James D. Peterson
United States District Judge
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