Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-01628/USCOURTS-casd-3_19-cv-01628-13/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:0078m(a) Securities Exchange Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

v.

GINA CHAMPION-CAIN AND ANI 

DEVELOPMENT, LLC,

Defendants, and

AMERICAN NATIONAL 

INVESTMENTS, INC.,

Relief Defendant.

Case No.: 3:19-cv-1628-LAB-AHG

ORDER GRANTING:

(1) RECEIVER’S MOTION FOR 

APPROVAL OF SALE OF THE 

SWELL COFFEE RESTAURANT 

PROPERTY AND ASSOCIATED 

PERSONAL PROPERTY;

(2) RECEIVER’S MOTION FOR 

APPROVAL OF SALE OF THE 

SASKA’S RESTAURANT 

PROPERTY AND ASSOCIATED 

PERSONAL PROPERTY AND 

LIQUOR LICENSE; and

(3) RECEIVER’S MOTION FOR 

APPROVAL OF SALE OF 

PERSONAL PROPERTY AND 

ASSIGNMENT OF COMMERCIAL 

LEASE ASSOCIATED WITH BAO 

BEACH RESTAURANT

[ECF Nos. 275, 276, 289]
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I. BACKGROUND

As described in prior orders, see, e.g., ECF Nos. 54, 162, 163, this is an action 

brought by the Securities and Exchange Commission (“SEC”) against Defendants ANI 

Development, LLC (“ANI Development”) and Gina Champion-Cain and Relief Defendant 

American National Investments, Inc. (“ANI Inc.”), alleging violations of federal securities 

laws based on a purportedly fraudulent liquor license loan scheme. ECF No. 1.

On September 3, 2019, the Court established an equitable receivership and appointed 

Krista L. Freitag (“Receiver”) as a permanent receiver of ANI Development and ANI Inc., 

authorizing her to take control over all funds and assets owned, managed, or in the 

possession or control of the receivership entities. See ECF No. 6 at 14-16. In that role, the 

Receiver acts under the control and direction of the Court to facilitate the “orderly and 

efficient administration of the estate . . . for the benefit of creditors.” SEC v. Hardy, 803 

F.2d 1034, 1038 (9th Cir. 1986). See also Atl. Tr. Co. v. Chapman, 208 U.S. 360, 370

(1908) (explaining that a motion to appoint a receiver to take charge of property is “to the 

end that the property might be cared for and preserved for all who had or might have an 

interest in the proceeds of its sale. . . . Immediately upon such appointment and after the 

qualification of the receiver, the property passed into the custody of the law, and 

thenceforward its administration was wholly under the control of the court by its officer [], 

the receiver.”). On December 11, 2019, the presiding judge in this action, Chief Judge 

Burns, granted the parties’ Joint Motion (ECF No. 156) to give limited consent to the 

undersigned to hear and directly decide all motions filed in this action to approve sales of 

receivership assets. ECF No. 160. See also 28 U.S.C. § 636(c); CivLR 72.1(g). All property 

sale motions are set before the undersigned pursuant to that grant of consent.

Before the Court are three pending motions seeking Court approval of the sale of 

restaurant properties and related property or property interests owned by receivership 

entities: (1) the Receiver’s Motion for Approval of Sale of the Swell Coffee Restaurant 

Property and Associated Personal Property (ECF No. 275) (the “Swell Coffee Motion”), 

filed March 12, 2020; (2) the Receiver’s Motion for Approval of Sale of the Saska’s 
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Restaurant Property and Associated Personal Property and Liquor License (ECF No. 276)

(the “Saska’s Motion”), filed March 12, 2020; and (3) the Receiver’s Motion for Approval 

of Sale of Personal Property and Assignment of Commercial Lease Associated with Bao 

Beach Restaurant (ECF No. 289) (the “Bao Beach Motion”), filed March 27, 2020. The 

Court considers these three motions together for the sake of efficiency and because many 

of the background facts overlap with respect to the Receiver’s solicitation of brokers and 

marketing of the properties. 

Pursuant to the Court’s briefing schedule orders, responses in opposition to the Swell 

Coffee Motion and the Saska’s Motion were due no later than March 30, 2020, and 

responses to the Bao Beach Motion were due no later than April 10, 2020. ECF Nos. 278, 

290. No responses were filed. Additionally, in both briefing schedule orders, the Court 

noted that “[if] no opposition is filed by the deadline, and the overbid submission deadline 

has passed with no overbids, the Court may take any unopposed motion under submission 

without oral argument.” ECF Nos. 278 at 2, 290 at 2. The Receiver reported that no 

overbids for any of the properties were submitted by the applicable deadlines advertised to 

the public in accordance with the statutorily mandated notice and overbid process. See ECF 

Nos. 296, 297, 307. Therefore, being fully advised and noting the lack of opposition, the 

Court will GRANT the Swell Coffee Motion (ECF No. 275), Saska’s Motion (ECF No. 

276), and Bao Beach Motion (ECF No. 289) without oral argument,

1 for the reasons 

explained more fully below.

II. LEGAL STANDARD

“[I]t is a recognized principle of law that the district court has broad powers and 

wide discretion to determine the appropriate relief in an equity receivership.” SEC v. 

Lincoln Thrift Ass’n, 577 F.2d 600, 606 (9th Cir. 1978). Where a district court sits in equity,

1 In consideration of the lack of opposition and non-receipt of qualified overbids, the 

Court took all three present motions under submission on April 23, 2020 and vacated the 

April 27, 2020 hearing. ECF No. 315. 
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“[u]nless a statute in so many words, or by a necessary and inescapable inference, restricts 

the court’s jurisdiction in equity, the full scope of that jurisdiction is to be recognized and 

applied. ‘The great principles of equity, securing complete justice, should not be yielded 

to light inferences, or doubtful construction.’” Porter v. Warner Holding Co., 328 U.S. 

395, 398 (1946). 

“[A] district court’s power to supervise an equity receivership and to determine the 

appropriate action to be taken in the administration of the receivership is extremely broad.” 

Hardy, 803 F.2d at 1037. As part of this broad discretion, the district court sitting in equity 

and having custody and control of property “has power to order a sale of the same in its 

discretion. The power of sale necessarily follows the power to take control of and to 

preserve property[.]” SEC v. Am. Capital Investments, Inc., 98 F.3d 1133, 1144 (9th Cir. 

1996), abrogated on other grounds by Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 

93-94 (1998) (quoting 2 Ralph E. Clark, Treatise on Law & Practice of Receivers § 482 

(3d ed. 1992)). If the court approves an equitable receiver’s proposed property sale, the 

sale “does not . . . purport to convey ‘legal’ title, but rather ‘good,’ equitable title enforced 

by an injunction against suit.” Id. (citing 2 Clark, Treatise on Law & Practice of Receivers, 

§§ 342, 344, 482(a), 487, 489, 491).

Pursuant to 28 U.S.C. § 2001(a), real property in the possession of an appointed 

receiver is subject to a public sale process, “upon such terms and conditions as the court 

directs.” 28 U.S.C. § 2002 further requires that notice be published once a week for at least 

four weeks prior to the sale in at least one newspaper regularly issued and of general 

circulation in the county, state, or judicial district where the realty is located.2 The purpose 

of such notice “is to inform the public of the kind and condition of the property to be sold, 

the time, the place, and the terms of the sale. It is to secure bidders and prevent the sacrifice 

2 28 U.S.C. § 2001 also provides for a private sale process under subsection (b), but the 

requirements of that subsection are more stringent. The Receiver does not propose a private 

sale here.
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of the property.” Breeding Motor Freight Lines v. R.F.C., 172 F.2d 416, 422 (10th Cir. 

1949). Therefore, the safeguards of notice and opportunity to submit overbids help to 

ensure that the sale is able to fetch the best price possible, which is consistent with the 

principle that “a primary purpose of equity receiverships is to promote orderly and efficient 

administration of the estate by the district court for the benefit of creditors.” Hardy, 803 

F.2d at 1038. See also United States v. Grable, 25 F.3d 298, 303 (6th Cir. 1994) (noting 

that “the intent of” the requirement in 28 U.S.C. § 2001 that property be sold in the county 

in which the land is situated is “to bring a better price at the sale”).

As for the sale of personal property, 28 U.S.C. § 2004 also lends the Court great

discretion in directing sales of personalty, requiring such sales to comply with § 2001

“unless the court orders otherwise.” The notice requirement of § 2002 governing realty

sales by the receiver does not apply to sales of personalty.

III. DISCUSSION

A. Background of the Restaurant Properties at Issue and Proposed Sales

The Swell Coffee restaurant property is located at 3833 Mission Boulevard, San 

Diego, California 92109. ECF No. 275-1 at 5. The property houses a coffee shop called 

Swell Coffee, which was in operation at the time of the Receiver’s appointment. Id. The 

Swell Coffee property was purchased on February 15, 2015 at a purchase price of 

$615,000, and title was taken in the name of the Swell Coffee Roasting Company, LLC, 

one of the affiliated Receivership Entities. Title was then transferred on April 22, 2015 to 

another Receivership Entity, 3833 Mission Blvd., LLC. Id.

The Saska’s Steakhouse restaurant property is located at 3768 Mission Boulevard, 

San Diego, California 92109. ECF No. 276-1 at 5. Saska’s had been an operating restaurant 

at that location for many decades prior to the receivership entities’ $2,000,000 purchase in 

August 2015 of the stock of Perils of Pauline Food Productions, Inc., the entity that owned 

the property and operated the restaurant. Id. Title to the property was transferred to 

affiliated receivership entity 3768 Mission Blvd., LLC on June 7, 2018. Id.
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The Bao Beach restaurant property is located at 3735 Mission Boulevard, San Diego, 

CA 92109. ECF No. 289-1 at 5. However, the Bao Beach restaurant is leased—not 

owned—by the receivership entities. In addition to the leasehold interest, the receivership 

estate owns assets associated with the Bao Beach restaurant, including personal property

(furniture, fixtures, and equipment), contracts, and intellectual property. Id. Although the 

Receiver has authority to sell personal property through licensed auctioneers without Court 

approval, see ECF Nos. 153, 219, the Receiver determined that the net recovery from the 

assets associated with the restaurant would likely be greater if they were sold as a package 

along with an assignment of the lease to the buyer. 

The property interests at issue in this order with respect to all three properties are 

within the receivership estate. See ECF No. 76-2 at 4, 8, 9 (listing the Swell Coffee and

Saska’s Steakhouse properties within the “Restaurants and Real Property Owned” by the 

estate, listing Bao Beach property as “Real Estate Leased” by the estate, and also including 

the Saska’s liquor license in the Preliminary Real Estate and Liquor License Asset 

Schedule, filed on October 3, 2019). Following the Receiver’s appointment, she evaluated 

the profitability of the Swell Coffee, Saska’s, and Bao Beach restaurant locations to 

determine whether to continue restaurant operations while preparing for sale in the short 

term, or whether instead to cease operations. The Receiver ultimately determined that 

Saska’s could be operated at break-even or better and should remain open pending sale,

but that Swell Coffee and Bao Beach were not sufficiently profitable and should thus be 

closed while the Swell Coffee property and the Bao Beach assets were prepared for sale in 

the short term.

For all of the restaurant-related properties included in the receivership estate, the 

Receiver and her staff interviewed three licensed brokers with experience selling 

restaurants in San Diego, ultimately choosing two separate brokers—broker Colliers 

International (“Colliers”) for restaurant-related properties owned by the receivership 

entities, including Saska’s and Swell Coffee, and broker Next Wave for the Surf Rider 
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Pizza and Bao Beach restaurant concepts operated at leased and owned property locations. 

See ECF Nos. 275-1, 276-1, and 289-1 at 5.

Colliers publicized and advertised Saska’s and Swell Coffee on two widely used 

databases for commercial property listings, LoopNet and CoStar, as well as on its 

proprietary online database CREXi. ECF Nos. 275-1 and 276-1 at 6. Colliers also issued a 

press release, which was published in the San Diego Union-Tribune, and sent direct emails 

about the properties to over 5,000 potential buyers and investors. ECF Nos. 275-1 and 276-

1 at 6. Colliers’s marketing generated significant interest, resulting in a total of 28 offers 

for all of the properties it marketed. Additionally, at Colliers’s request, the Receiver 

ordered various reports and provided relevant internal documents to create due diligence 

packages for each property, which Colliers hosted on its CREXi website along with 

information on the Court sale process and a form of Purchase and Sale Agreement and 

Joint Escrow Instructions (“Form PSA”) prepared by Receiver and her counsel. ECF Nos. 

275-1 and 276-1 at 6. Prospective purchasers had until the Receiver’s “Call for Offers” 

deadline of February 3, 2020 to complete their due diligence and submit an executed Form 

PSA.

For the Swell Coffee property, five prospective purchasers submitted executed Form 

PSAs by the deadline, including Jane Cohen and Mordechai Ami Cohen (“Swell Coffee 

Buyer”), who provided the highest and best offer of $825,000 and thus became the intended 

buyer after the Receiver finalized the Form PSA and countersigned the buyer’s PSA. ECF 

No. 275-1 at 6. The Swell Coffee Buyer deposited $25,000 into escrow in connection with 

the proposed sale. Id. at 7. 

For the Saska’s property, seven prospective purchasers submitted executed Form 

PSAs by the Call for Offers deadline. ECF No. 276-1 at 6. The highest and best offer was 

submitted by OMG 3768 Mission LLC (“Saska’s Buyer”), in the amount of $2,300,000, 

making it the intended buyer after the Receiver finalized a Form PSA and countersigned 

the buyer’s PSA. Id. at 7. In connection with the proposed sale, the Saska’s Buyer deposited 
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$75,000 into escrow for the real property, and another $25,000 into a separate liquor license 

escrow. Id. at 8. 

To market the Bao Beach assets, Next Wave created individual marketing flyers for 

the listing, and sent the listing out via email campaigns to a targeted list of over 6,200 

restaurant operators, buyers, brokers, and investors. ECF No. 289-1 at 6. Next Wave also 

used websites including CoStar, LoopNet, BizBuySell, and Next Wave Commercial to 

advertise the listing and distributed press releases to numerous local news publications. Id. 

These efforts resulted in a total of nine offers for all properties and restaurant assets 

marketed. Id.

As with the Swell Coffee and Saska’s properties, the Receiver created a typical due 

diligence package for the Bao Beach assets and set the same “Call for Offers” deadline of 

February 3, 2020. Next Wave hosted the due diligence materials online along with an 

offering memorandum and Form PSA. Id. Only one prospective purchaser, Oswaldo 

Rodriguez and Consulelo Rodriguez (“Bao Beach Assets Buyer”), submitted an executed 

Form PSA by the deadline, offering $28,000 to be paid in cash. Id. The Receiver finalized 

the Form PSA and countersigned the Bao Beach Assets Buyer’s PSA, making them the 

intended buyer. The Bao Beach Assets Buyer deposited $1,000 into escrow. Id. at 7.

B. Compliance with Overbid and Auction Process

In all of the motions before the Court, the Receiver proposed compliance with the 

overbid and auction process of 28 U.S.C. § 2001 by publishing notice in the San Diego 

Union-Tribune, a newspaper of general circulation in the San Diego area, once a week for 

four weeks. See ECF Nos. 275-1 at 11-12, 276-1 at 12-13, and 289-1 at 11. Each notice 

follows the same general form, giving notice to the general public that “[i]n the action 

pending in U.S. District Court for the Southern District of California, Case No. 19-CV01628-LAB-AHG, Securities and Exchange Commission v. Gina Champion-Cain, et al.,” 

the Receiver would conduct a public auction for the real property located at 3768 Mission 

Blvd. (Saska’s Property) and 3833 Mission Blvd. (Swell Coffee Property) in San Diego, 

California on April 9, 2020, and a public auction for the Bao Beach restaurant business and 
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personal property located at 3735 Mission Blvd. on April 23, 2020. The date, time, and 

location of the public auctions were provided. The minimum bid prices were, respectively: 

(1) $850,000 for the Swell Coffee Property, ECF No. 275-1 at 12; (2) $2,350,000 for the 

Saska’s Property, ECF No. 276-1 at 13; and (3) $30,500 for the Bao Beach assets. ECF 

No. 289-1 at 11. The notices further informed the public that any sale would be “subject to 

Court confirmation after the auction is held.” Prospective purchasers were required to 

qualify as bidders for the auctions by submitting a signed purchase agreement, an earnest 

money deposit (varying in amount depending on the minimum bid price amount), and proof 

of funds no later than 5:00 PM two days prior to the noticed date of auction. For those 

interested in qualifying as bidders, the notices also provided a phone number and email 

address for the relevant point of contact. 

Each notice was published as proposed. On April 8, 2020, the Receiver filed two 

Notices of Non-Receipt of Qualified Overbids (ECF Nos. 296 and 297) reporting that no 

overbids had been received by the bid qualification deadline for either the Swell Coffee 

Property or the Saska’s Property. On April 23, 2020 the Receiver filed a similar Notice of 

Non-Receipt of Qualified Overbids Regarding the Bao Beach Motion. ECF No. 307. In 

each Notice, the Receiver informs the Court that, in addition to publishing the proposed 

overbid and auction notices in the San Diego Union-Tribune, she posted notice of each 

motion on the receivership website anireceivership.com, and continued to market the assets 

and properties through her brokers and to notify potential purchasers about the opportunity 

to submit overbids. See ECF Nos. 296, 297, and 307. No overbids were submitted by the 

applicable deadlines.

C. Proposed Distribution of Sale Proceeds

The Swell Coffee Property is encumbered by a deed of trust securing a Small 

Business Association loan (“SBA loan”) from First Choice Bank. The remaining balance 

due on the loan, including principal and unpaid interest, was approximately $598,000 as of 

March 1, 2020. ECF No. 275-1 at 7. Another SBA loan, issued by CDC Small Business 

Finance, is secured by the personal property located at Swell Coffee. The remaining 
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balance on the second SBA loan is approximately $62,000, including principal and unpaid 

interest. Id. The Receiver also estimates that the receivership estate will receive a property 

tax credit at closing in the range of $1,400 to $1,700, since the second installment of the 

Swell Coffee property taxes for 2019-2020 is expected to be paid prior to closing. Id. The 

Receiver estimates costs of sale will total approximately $4,000. Colliers International also 

represents the Swell Coffee Buyer, and its broker’s fee pursuant to the listing agreement is 

2.5% of the sale price, or $20,625. Id. Based on these estimates, the Receiver anticipates 

that the net sale proceeds for the receivership estate from the proposed Swell Coffee 

Property sale will be in the range of $130,000 to $140,000. Id. at 7.

The Saska’s Property is encumbered by a deed of trust securing a loan issued by 

American National Life Insurance Company of New York, a loan which also encumbers a 

nearby parking lot owned by the Receivership Entities that is the subject of another pending 

motion. ECF No. 276-1 at 6.3 The amount required to pay off the loan is approximately 

$2,050,000. Id. Notably, the Saska’s sale also involves the transfer of the restaurant’s liquor 

license to the Saska’s Buyer, which will require another layer of approval by the California 

Department of Alcohol and Beverage Control (“ABC”), and which is expected to take three 

to six months from Court approval. Id. Consequently, there are two separate escrows 

involved in the proposed Saska’s sale—the real property escrow and the liquor license 

escrow—and only the real property escrow will close within five business days of Court 

3 The Saska’s Motion erroneously names the relevant creditor as “American National 

Insurance Company.” ECF No. 276-1 at 6. However, secured creditor American National 

Life Insurance Company of New York filed a Response (ECF No. 302) to the Receiver’s 

motion seeking approval of the sale of the parking lot property (ECF No. 293), which also 

named “American National Insurance Company” as the relevant creditor, for the purpose 

of correcting the record to reflect that it is the actual noteholder of the note secured by the 

deed of trust encumbering both the Saska’s Property and the parking lot property. See ECF 

No. 302 at 2-3. Although no such correction was filed in response to the same error in the 

Saska’s Property motion, the Court takes judicial notice of the correction and incorporates 

it herein. 
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approval of the sale. Id. Nonetheless, the Receiver anticipates that the closing of the sale 

of the Saska’s real property alone will generate sufficient funds to pay off the loan in its 

entirety, thus leaving the parking lot property unencumbered. Id.

As with the Swell Coffee property, the Receiver expects to pay the second 

installment of property taxes for 2019-2020 prior to the Saska’s closing, and accordingly 

estimates the receivership estate will receive a property tax credit at closing in the range of 

$3,500 to $4,500. Id. at 7. The Receiver further estimates costs of sale will total 

approximately $11,500. Colliers International’s broker’s fee pursuant to the Saska’s listing 

agreement is 4% of the sale price, or $92,000, to be split with the Saska’s Buyer’s broker. 

Id. Based on these estimates, and taking into account the full pay-off of the American 

National Insurance Company Loan, the Receiver anticipates that the net sale proceeds for 

the receivership estate from the proposed Saska’s Property sale will be in the range of 

$145,000 to $155,000, the majority of which will come out of the liquor license escrow 

after ABC approval of the license transfer. Id. at 7.

As for the Bao Beach assets sale, Next Wave’s broker’s commission pursuant to the 

listing agreement is 10% of the sale price, or $2,800, to be split with the Bao Beach Assets 

Buyer’s broker. ECF No. 289-1 at 6-7. The Receiver estimates the costs of sale will be 

approximately $2,000. Id. at 7. Therefore, the Receiver estimates the net sale proceeds to 

the receivership estate from the Bao Beach Assets sale will be approximately $23,000. Id.

D. Court Approval of the Proposed Procedures and Sale

The Court has reviewed the documents submitted by the Receiver in support of each 

of the Swell Coffee, Saska’s, and Bao Beach Motions and finds all proposed sales to be 

fair, reasonable, and in the best interest of the receivership estate.

In particular, each property was widely marketed and advertised, even after the 

Receiver secured tentative agreements with the intended buyers. Multiple prospective 

purchasers submitted executed Form PSAs to try to purchase the Swell Coffee and Saska’s 

real properties, allowing the Receiver to enter into agreements with those offerors of the 

highest and best prices for those properties. And although there was only one executed 
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Form PSA submitted for the Bao Beach assets, the record persuades the Court that this fact 

is not due to lack of trying, and that the offer reflects fair market value. The Receiver 

reports that broker Next Wave’s advertising on multiple websites produced over 150,000 

ad views and that press releases about the Next Wave-brokered properties were placed in 

the San Diego Union-Tribune, San Diego Business Journal, Eater San Diego, and 

elsewhere. ECF No. 289-1 at 6. Additionally, the Receiver and Next Wave continued to 

market the Bao Beach assets up until the overbid deadline passed. ECF No. 307. Finally, 

the Court is also convinced that the Receiver is acting in the best interests of the 

receivership estate due to her decision to market and sell the Bao Beach personalty and the 

leasehold interest as a package, rather than immediately selling off the personal property 

piecemeal without the delay of seeking Court approval. This approach shows a considered

regard for the type of sale that would fetch the best return for the estate overall, which in 

turn indicates the Receiver would not be willing to accept an offer for the Bao Beach assets

that fell below fair market value in her view. 

Moreover, the Receiver’s publication of notice seeking qualified overbids in the San 

Diego Union-Tribune, in addition to the solicitation of overbids through the receivership 

website and continued efforts to market the property, establish that the Receiver not only 

met but exceeded the requirements for the public sale procedures set forth in 

28 U.S.C. §§ 2001(a) and 2002 designed to ensure the best price is obtained for each 

property. Therefore, the Court finds that the Receiver implemented sufficient safeguards 

by way of the notice and overbid process to garner the highest possible price for the real

properties and assets at issue. The Court is thus satisfied that the intent of the statutory 

scheme—to ensure that the best and highest possible price is paid for property within the 

receivership estate—has been fulfilled. 

All uniform property sale procedures have been satisfied. Based on these 

considerations, and noting in particular the lack of any express opposition to any of the 

motions at hand, the Court finds the Receiver has sufficiently established that the proposed 

sales of the Swell Coffee Property, Saska’s Property, and Bao Beach Assets, and proposed 
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distribution of the sale proceeds are consistent with principles of equity and the goal of a 

receivership to ensure the orderly and efficient administration of the estate for the benefit 

of creditors. See Hardy, 803 F.2d at 1038.

IV. CONCLUSION

Upon thorough consideration of the Receiver’s Motion for Approval of Sale of the 

Swell Coffee Restaurant Property and Associated Personal Property (ECF No. 275), the 

Receiver’s Motion for Approval of Sale of the Saska’s Restaurant Property and Associated 

Personal Property and Liquor License (ECF No. 276), and the Receiver’s Motion for 

Approval of Sale of Personal Property and Assignment of Commercial Lease Associated 

with Bao Beach Restaurant (ECF No. 289), the Court finds the motions well-founded and 

GRANTS each in its entirety. 

Accordingly, IT IS ORDERED as follows:

(1) The sale of the real property located at 3833 Mission Blvd., San Diego, 

California, as described in Exhibit A to the Declaration of Krista L. Freitag in support of 

the Swell Coffee Motion (ECF No. 275-3) (“Swell Coffee Property”), by Krista L. Freitag, 

as receiver, to Jane Cohen and Mordechai Ami Cohen, or their designee, is confirmed and 

approved;

(2) The purchase price of $825,000 for the Swell Coffee Property is confirmed 

and approved; 

(3) The Receiver is authorized to pay broker Colliers International a commission 

of 2.5% of the sale price, or $20,625; 

(4) The Receiver is authorized to pay First Choice Bank the amount necessary to 

pay off the mortgage on the Swell Coffee Property, which amount is approximately 

$598,000 (with the exact amount to be determined at closing); 

(5) The Receiver is authorized to pay CDC Small Business Finance the amount 

necessary to pay off the loan secured by the personal property located at the Swell Coffee 

Property, which amount is approximately $62,000 (with the exact amount to be determined 

at closing);
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(6) The Receiver is authorized to pay the costs of sale due from the seller at 

closing, which are expected to total approximately $4,000 (with the exact amount to be 

determined at closing); 

(7) After the aforementioned estimated amounts (with the exact amounts to be 

determined at closing) are paid out of escrow, the net sale proceeds of the Swell Coffee 

Property, which are estimated to be in the range of $130,000 to $140,000 (with the exact 

amount to be determined at closing), shall be paid to the receivership estate; 

(8) The sale of the real property located at 3768 Mission Blvd., San Diego, 

California, as described in Exhibit A to the Declaration of Krista L. Freitag in support of 

the Saska’s Motion (ECF No. 276-3) (“Saska’s Property”), by Krista L. Freitag, as receiver, 

to OMG 3768 Mission LLC, or its designee (“Saska’s Buyer”) is confirmed and approved;

(9) The purchase price of $2,300,000 for the Saska’s Property is confirmed and 

approved; 

(10) The Receiver is authorized to pay broker Colliers International a commission 

of 4% of the sale price, or $92,000, which amount will be split with the Saska’s Buyer's 

broker; 

(11) The Receiver is authorized to pay American National Life Insurance 

Company of New York the amount necessary to pay off the mortgage on the Saska’s 

Property, which is estimated to be approximately $2,050,000, with the exact amount to be 

determined at closing; 

(12) The Receiver is authorized to pay the costs of sale due from the seller at 

closing, which are expected to total approximately $11,500, with the exact amount to be 

determined at closing; 

(13) After the aforementioned estimated amounts (with the exact amounts to be 

determined at closing) are paid out of escrow, the net sale proceeds of the sale of the 

Saska’s Property, which are estimated to be in the range of $145,000 to $155,000 (with the 

exact amount to be determined at closing), shall be paid to the receivership estate;
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(14) The sale of assets associated with the restaurant known as Bao Beach, 

including personal property (furniture, fixtures, and equipment), contracts, intellectual 

property, and a leasehold interest in the restaurant premises (“Bao Beach Assets”), as 

described in Exhibit A to the Declaration of Krista L. Freitag in support of the Bao Beach 

Motion (ECF No. 289-3), by Krista L. Freitag, as receiver, to Oswaldo Rodriguez and 

Consulelo Rodriguez, or their designee (“Bao Beach Assets Buyer”) is confirmed and 

approved;

(15) The purchase price of $28,000 for the Bao Beach Assets is confirmed and 

approved; 

(16) The Receiver is authorized to pay broker Next Wave a commission of 10% of 

the sale price, or $2,800, which amount will be split with the Bao Beach Assets Buyer’s 

broker; 

(17) The Receiver is authorized to pay the costs of sale due from the seller at 

closing, which are expected to total approximately $2,000, with the exact amount to be 

determined at closing; 

(18) After the aforementioned estimated amounts (with the exact amounts to be 

determined at closing) are paid out of escrow, the net sale proceeds of the Bao Beach 

Assets, which are estimated to be in the range of $23,000 (with the exact amount to be 

determined at closing), shall be paid to the receivership estate; and

(19) The Receiver is immediately authorized to complete all sale transactions 

approved herein, including executing any and all documents as may be necessary and 

appropriate to do so.

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IT IS FURTHER ORDERED that after each closing, the Receiver shall provide a 

full accounting of sale costs, property tax credits received and/or property taxes paid, the 

precise amounts used to pay off any loans on the properties, and the amount ultimately 

returned to the receivership estate from the sale proceeds. The Receiver may delay the 

accounting with respect to the Saska’s Property sale until after the liquor license escrow 

has closed. 

IT IS SO ORDERED.

Dated: May 6, 2020