Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_04-cv-02037/USCOURTS-casd-3_04-cv-02037-2/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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K:\COMMON\CHMB_WHE\_Orders to be signed\Order re Receiver's objections to

the E-Bullion claims.wpd

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

CASE NO. 04-CV-2037 W (LSP)

ORDER APPROVING THE

RECEIVER’S OBJECTIONS

TO E-BULLION CLAIMS

v.

LEARN WATERHOUSE, INC.,

RANDALL T. TREADWELL, RICK

D. SLUDER, LARRY C. SATURDAY,

and ARNULFO M. ACOSTA,

Defendants.

On April 13, 2005, this Court granted Thomas F. Lennon’s (“Receiver”)

motion requesting approval of summary proceedings for the administration of claims,

resolution of claim disputes and ancillary actions. As part of that order, the Court set

a claims bar date and ruled that investor claims would only encompass the principal

invested, not any promised return thereon. The claim forms the Receiver used

Case 3:04-cv-02037-W-DHB Document 433 Filed 09/26/06 Page 1 of 3
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notified investors of both the claims bar date as well as the fact that their claims

would be limited to the principal they invested.

On May 9, 2006, the Court granted the Receiver’s ex parte application

extending the deadline to August 7, 2006 for objecting to claims submitted by the

investors that used E-Bullion (the “E-Bullion Investors”). Thereafter, the Receiver

timely filed his objections along with a schedule identifying the amount of each

investor’s claim and the Receiver’s proposed reduction, if any. (Declaration of Thomas

F. Lennon (“Lennon Decl.”), Doc. 410, Exhibit “A.”) As established by the schedule,

the Receiver is not objecting to a majority of the claims submitted by the E-Bullion

Investors. 

As for those claims to which the Receiver is objecting, none of the E-Bullion

Investors filed a response with the Court, and on September 21, 2006, the Receiver

filed a notice of non-opposition. In the notice of non-opposition, the Receiver

acknowledges receiving several letters and requests for documentation from the

investors, which led to an adjustment to the claim submitted by investor Gary

Crickenberger. 

With respect to the remaining claims to which the Receiver objected and no

response was filed with the Court, the Receiver has submitted sufficient evidence to

establish that those claims were either improperly calculated or duplicative of other

claims. (See generally Lennon Decl.) This is significant because when evaluating

claims against the receivership estate, it is well settled that the burden of establishing

a claim is on the claimant. Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d

1035, 1039 (9th Cir. 2000). And although a properly filled out and submitted proof of

claim form is sufficient to establish the claim’s prima facie validity (Id.), “[i]f the

objector [to the claim] produces sufficient evidence to negate one or more of the

sworn facts in the proof of claim, the burden reverts to the claimant to prove the

validity of the claim by a preponderance of the evidence.” In re Consol. Pioneer

Mort., 178 B.R. 222, 226 (B.A.P. 9th Cir. 1995) aff’d, 91 F.3d 151 (9th Cir. 1996). 

Case 3:04-cv-02037-W-DHB Document 433 Filed 09/26/06 Page 2 of 3
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Accordingly, because none of the claimants filed a response to the Receiver’s

objections, the Court approves the Receiver’s proposed reductions to the E-Bullion

Investors’ claims.

In light of the foregoing, the Court GRANTS the Receiver’s objections to the

E-Bullion Investors’ claims, and APPROVES the Receiver’s proposed claim amounts

as listed in Exhibit A to the Receiver’s notice of non-opposition filed on September

21, 2006.

IT IS SO ORDERED.

DATED: September 26, 2006

Hon. Thomas J. Whelan

United States District Judge

Case 3:04-cv-02037-W-DHB Document 433 Filed 09/26/06 Page 3 of 3