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HomeMy WebLinkAbout961015Jerrald D. Conder (0709) 341 South Main Street, Suite 406 Salt Lake City, Utah 84111 Telephone 801 359 -5534 Facsimile 801- 746 -5613 Attorney for Petitioner THE HUNT LAW CORPORATION, P.C., a dba of DAVID S. HUNT, P.C., a Utah professional corporation, vs. Petitioner, CASTLE ARCH REAL ESTATE INVESTMENT COMPANY, L.L.C., a California limited liability company, d IN THE SECOND JUDICIAL DISTRICT COURT DAVIS COUNTY, STATE OF UTAH Respondent. FILED JUL 1 2 2011 SECOND DISTRICT COURT (per ORDER APPOINTING A RECEIVER Civil No. 100700353 Honorable David Connors WHEREAS this matter came before the Court upon motion of the Petitioner The Hunt Law Corporation, P.C. "Petitioner to appoint a receiver for the purpose of marshaling and preserving assets in the above captioned action; and WHEREAS the Court has heard evidence that the appointment of a Receiver in this action is necessary and appropriate; and WHEREAS certain assets are in danger of having their value reduced by the passage of time, and it is appropriate that the assets be marshaled and an accounting provided to the Court; WHEREAS, this Court has jurisdiction over the subject matter of this action and espondent, and venue properly lies in this district. 1 000887 RECEIVED 9/16/2011 at 10:50 AM RECEIVING 961015 BOOK: 772 PAGE: 887 JEANNE WAGNER LINCOLN COUNTY CLERK. KEMMERER. WY NOW THEREFORE: 000888 I. IT IS HEREBY ORDERED that, pending such time as the Court may order, Trent J. Waddoups, Esq. be appointed Receiver "the Receiver of the Respondent the Castle Arch Real Estate Investment Company, L.L.C. and subsidiaries over which the Respondent has management or voting control (the "Entities The Receiver shall take control of the Entities' funds, assets and property wherever situated, with the powers set forth herein, including powers over all funds, assets, premises (whether owned, leased, occupied, or otherwise controlled), choses in action, books, records, and other property belonging to or in the possession of or control of the Entities, and the Receiver is hereby authorized, empowered, and directed: a. to have access to, to marshal and take control of all funds, assets, premises (whether owned, leased, occupied or otherwise controlled), choses in action, papers, books, records in whatever media, and other property, wherever located, belonging to, in the custody, control or possession of the Entities, with full power to take such steps as he deems necessary to secure such premises, funds and property; b. to have control of, and to close, transfer or otherwise take possession of all accounts, securities, funds, or other assets of, or in the name of the Entities at any bank, brokerage firm or financial institution which has possession, custody or control of any assets or funds of the Entities, or of any assets deposited by customers or clients with the Entities, or into an account in the name of the Entities, or held in trust or deposited with the Entities or its agents or trustees, wherever situated; 2 c. to take such action as is necessary and appropriate to preserve and take control of, and to prevent the dissipation, concealment, or disposition of any assets in the possession, custody, name, or control of the Entities; d. to hold in her possession, custody and control all assets, securities, monies and property, together with all profits, dividends, interest or other income attributable thereto, of whatever kind deposited by the Entities, with the Entities, or into an account in the name of the Entities, pending further order of this Court; e. to make or authorize such payments and disbursements from the funds and assets under her control pursuant to this Order, and to incur, or authorize the incurrence of, such expenses and make, or authorize the making of, such agreements as may be reasonable, necessary and advisable in discharging her duties as Receiver; f. to engage and employ persons in her discretion to assist her in carrying out her duties and responsibilities hereunder, including, but not limited to, accountants, attorneys, securities traders, registered representatives, financial or business advisers, liquidating agents, real estate agents, forensic experts, brokers, traders or auctioneers. g. to take possession, have access to, and to review all mail or any other communication, in any form, of the Entities or of its agents, officers and directors; h. if she deems it to be the appropriate course of action, to take any action which she deem to be necessary and appropriate in order to cause the Entities to file a bankruptcy petition under any chapter of Title 11 of the United States Code, including the execution of all necessary corporate resolutions or directions. The Respondent or any other person affiliated with the Entities or purporting to act on behalf of the Entities may not file a bankruptcy petition under any hapter of Title 11 of the United States Code on behalf of the Entities or under any analogous 3 000889 law of any other jurisdiction. In the event that a Bankruptcy petition is filed on behalf of the Entities, the bankruptcy reference shall be withdrawn with regard to payment of fees and expenses of the Receiver, her attorneys, accountants, consultants and any other person or entity hired to assist the Receiver in the execution of' her duties pursuant to this Order, and this Court shall retain jurisdiction over the payment of such fees and expenses; i. if she deems it to be the appropriate course of action, to take any action alternative to, and instead of, a bankruptcy proceeding which she deem to be necessary and appropriate in order to reorganize the business, operations or capitalization of the Entities or to facilitate a total or partial liquidation of the Entities. j. to make demand, file or otherwise handle any claim under any insurance policy held by or issued on behalf of the Entities, its officers, directors, agents, employees, trustees or other persons affiliated with the Entities and to take any and all appropriate steps in connection with such policies. II. IT IS HEREBY FURTHER ORDERED that, in connection with the appointment of the Receiver provided for above: a. the Entities and all officers, agents, servants, employees, attorneys -in -fact, shareholders, consultants, accountants, advisers, counsel and other persons, and Respondent in this action, who are in custody, possession, or control of any customer or client information, assets, books, records, or other property belonging to or in the custody or control of the Entities shall forthwith give access to and control of such property to the Receiver, and shall forthwith grant to the Receiver, or such other person whom the Receiver may designate, authorization to e the signatory as to all accounts at banks, brokerage firms or financial institutions which have 4 000890 possession, custody or control of any assets or funds in the name of or for the benefit of the Entities. b. The Receiver is authorized, empowered, and directed without further leave of the Court, to liquidate and convert into money all of the assets, property, estate, effects and interests of every nature held in her possession and control pursuant to this Order, by selling, conveying, and disposing of the property, either at public or private sale, on terms and in the manner the Receiver deems most beneficial to the persons or parties entitled to the proceeds, and with due regard to the realization of their true and proper value and to deposit such proceeds into an account, pending further order of the Court. c. The Receiver is authorized to invest any and all money or proceeds in her possession and control in United States Treasury instruments or in a money market account that invests solely in United States Treasury instruments. d. All banks, brokerage firms, financial institutions, and other business the Entities which have possession, custody or control of any assets, funds or accounts in the name of or for the benefit of the Entities shall cooperate expeditiously in the transfer of funds, other assets and accounts to the Receiver or at the direction of the Receiver. e. All banks, brokers, dealers, depositories or any other financial institutions shall not liquidate, transfer, sell, convey or otherwise transfer any assets, securities, funds, or accounts in the name of or for the benefit of the Entities except upon instructions from the Receiver or her designees. f. The Receiver shall have the authority to issue subpoenas for documents and testimony consistent with the Utah Rules of Civil Procedure. 5 000891 g. Respondent and their respective officers, agents, servants, employees, and attorneys- in-fact, consultants, accountants, advisers and counsel shall cooperate with and assist the Receiver, including, if deemed necessary by the Receiver, by appearing for deposition testimony and producing documents, and shall take no action, directly or indirectly, to hinder, obstruct, or otherwise interfere with the Receiver in the conduct of her duties or to interfere in any manner, directly or indirectly, with the custody, possession, management, or control by the Receiver of the funds, assets, premises, and choses in action described above. h. The costs, fees and expenses of the Receiver incurred in connection with the performance of her duties described herein, including the costs and expenses of those persons who may be engaged or employed by the Receiver to assist her in carrying out her duties and obligations hereunder shall be paid out of the proceeds or other assets of the Entities, or any and all assets under the control of the Receiver pursuant to this Order. All applications for costs, fees and expenses for services rendered in connection with the Receiver shall be made by application setting forth in reasonable detail the nature of the services and shall be heard by the Court. The court- appointed receiver shall submit her fee application to counsel for the Petitioner for review at least ten (10) days prior to filing the application with the Court. i. No bond shall be required in connection with the appointment of the Receiver. The Receiver and all other persons who may be engaged or employed by the Receiver to assist her in carrying out her duties and obligations hereunder shall not be liable for any act or omission of the Receiver or such person, respectively, or any of their partners, employees, or agents, unless it shall be proven that the Receiver or such other person acted or omitted to act willfully and in bad faith. This provision shall apply to claims based on conduct of the Receiver and all other persons 6 000892 who may be engaged or employed by the Receiver hereunder during the term of the appointment by this Court, even if such claims are filed after the termination of any such appointment. III. IT IS HEREBY FURTHER ORDERED that, pending the determination of the Petitioner's action on the merits, representatives of the Receiver are authorized to have continuing access to inspect or copy any or all of the corporate books and records and other documents of the Entities, including records relating to any accounts maintained by or in the name of the Entities at a broker, dealer, financial institution, depository institution or any other entity, or of accounts maintained on behalf of the Entities' customers or clients that have transferred, transmitted or otherwise delivered any securities, monies, or property of any kind, to the Entities, and continuing access to inspect the Entities funds, property and assets, including customer or client accounts, wherever they may be located. IV. IT IS HEREBY FURTHER ORDERED that, in addition to the powers, duties and responsibilities as set forth herein, the Receiver shall be authorized, empowered and directed to investigate, prosecute, defend, intervene in or otherwise participate in, compromise, and adjust actions in any state, federal or foreign court or proceeding of any kind as may in her sole discretion be advisable or proper to recover or conserve funds, assets and property of the Entities. V. IT IS HEREBY FURTHER ORDERED that the Entities and its officers, directors, employees, agents and counsel shall transfer to the Receiver, as and when directed by him, any and all funds, property, documents or records of the Entities, in whatever form, that may be in 7 000893 their possession, custody or control; and that any signatories on any and all the Entities' accounts at banks, brokerage firms or financial institutions which have possession, custody or control of any assets or funds in the name of or for the benefit of the Entities, shall forthwith take all steps necessary to relinquish their signatory authority as to said accounts including, but not limited to, accounts containing securities or other assets that the Entities' customers have transferred, transmitted or otherwise delivered to the Entities. VT. The following acts are stayed pending further order of this Court: (i) the commencement or continuation, including the issuance or employment of process, of any judicial, administrative, or other action or proceeding, other than actions of the Petitioner related to the above captioned enforcement action, against the Entities; (ii) the enforcement against the Entities against property now held in the name of or by the Entities, of any judgment obtained before the filing of the Complaint in this action; (iii) any act to obtain possession of property held by the Entities or to exercise control over property held by the Entities; (iv) any act to create, perfect or enforce any lien against property held by the Entities or Southwick; (v) any act to collect, assess or recover any claims related to the Entities, or against property held by the Entities; and, (vi) the exercise of any rights of setoff or recoupment. 8 000894 VI. IT IS FURTHER ORDERED that this Order shall remain in effect and shall supplement all prior Orders of this Court until further Order of this Court. The Court shall retain jurisdiction of this matter for all purposes. k Dated this /2 day of dine, 2011. Approved as to Form vi. er Att rney Respondent Dis Court Judge 9 STATE OF UTAH 1 COUNTY OF DAVIS }SS. 1 HEREBY CERTIFY THAT THIS IS A ORIGINAL ON FII N MY OFFICE. DATED THIS ALYSON E. CLERK 0 BY PAGE 0 91 N I c p i by tA COPY OFTHE DEPUTY 000895