Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00226/USCOURTS-casd-3_15-cv-00226-5/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

Case No. 15-cv-00226-BAS-DHB

ORDER GRANTING MOTION 

FOR ESTABLISHING 

SUMMARY CLAIMS 

PROCEDURES, SETTING 

CLAIMS BAR DATE, AND 

APPROVING PROPOSED 

CLAIM FORM

[ECF No. 124]

v.

TOTAL WEALTH 

MANAGEMENT, INC., et al.,

Defendants.

Presently before the Court is Receiver Thomas A. Seaman’s (“the Receiver”) 

motion for an order (1) establishing summary procedures for the determination of 

claims against the Receivership Entities; (2) setting a claims bar date for the 

submission of claims; and (3) approving the Receiver’s proposed Claim Form for the 

submission of claims. (“Motion” (ECF No. 124).) Plaintiff Securities and Exchange 

Commission filed a response supporting the Receiver’s Motion.1(ECF No. 129.) For 

 

1 The Court notes that a receiver appointed in a related state case filed a reply to Receiver’s 

Motion on December 19, 2016. (ECF No. 128.)

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the reasons set forth below, the Court grants the Motion.

DISCUSSION

“[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.” SEC v. Capital Consultants, LLC, 397 F.3d 733, 738 (9th Cir. 

2005) (quoting SEC v. Hardy, 803 F.2d 1034, 1037 (9th Cir. 1986)). This broad 

power includes the discretion to use summary procedures to supervise and administer 

the claims process. See Hardy, 803 F.2d at 1040 (“[T]he use of summary proceedings 

to determine appropriate relief in equity receiverships, as opposed to plenary 

proceedings under the Federal Rules, is within the jurisdictional authority of a district 

court.”) (citations omitted); United States v. Arizona Fuels Corp., 739 F.2d 455, 458 

(9th Cir. 1984) (“[T]he traditional rule is that summary proceedings are appropriate 

and proper to protect equity receivership assets.”) (citations omitted). Summary 

procedures promote judicial efficiency and help maximize recovery by reducing the 

time necessary to settle disputes, decreasing litigation costs, and preventing further 

dissipation of receivership assets. SEC v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 

1992). Such procedures satisfy due process so long as investors and creditors of the 

receivership entities are given adequate notice and a full and fair opportunity to be 

heard. Id. at 1567; Hardy, 803 F.2d at 1040.

Here, the Receiver’s proposed summary procedures provide a reasonable and 

practicable means of noticing, reviewing, and processing claims. The proposed Claim 

Form clearly and concisely explains what investors and creditors must do to properly 

submit their claims. (See Motion, Exh. A.) The publication of notice to potential 

claimants includes both an online and print component, with the print component 

focused in the geographic area with the largest concentration of Receivership Entity 

investors and the location of the Entities’ principal place of business. (Motion 6:20–

7:5.) The Receiver’s proposed deadline for submitting claims—60 days after the 

publication of notice—provides a sufficient amount of time for claimants to receive 

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and complete the Claim Form. Finally, the procedures allow investors and creditors 

who dispute the Receiver’s recommendations to present disputed claims to the Court 

with a full and fair opportunity to be heard. (Id. 4:9–20.) Overall, the Court finds that 

these procedures provide fair notice of the claims process, and serve the interest of 

the investors and creditors. The summary procedures are approved.

CONCLUSION AND ORDER

For the foregoing reasons, the Court GRANTS the Receiver’s motion in its 

entirety and ORDERS the following:

1. The Receiver’s use of summary procedures for the determination of 

claims against the estate of the Receivership Entities, as detailed in the Motion, is 

authorized and approved;

2. The Receiver’s proposed means of noticing prospective claimants, 

including via his website, email, mail, and by publication of a notice of the claims 

process in the San Diego Union-Tribune within ten (10) days of this order, and as 

detailed further in the Motion, is authorized and approved;

3. A claims bar date of sixty (60) days after the date of the Receiver’s 

publication of notice of the claims process, as referenced in Paragraph 2, above, is 

hereby established; and

4. The notice and instructions, and claim form, attached to the Motion 

collectively as Exhibit A are approved.

IT IS SO ORDERED.

DATED: February 27, 2017

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