Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-2_06-mc-00016/USCOURTS-arwd-2_06-mc-00016-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: Civil Miscellaneous Case

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STEPTIEN J. MURP}IY

TINITED STATES ATTORhTEY

Ellcn E. Christensen

Unitcd States Attome/s Office

2I I W. Fort Street

Suite 2001

Dctroit, MI48226-321i

313-?26-9100

Email: ellen. christenscn@usdo i. eov

Arlene M. Embroy

U.S. Small Business Adminisuation

409 Third Street, S.W., Scvonth Floor

Washington, D.C. ?0416

?02-2A5-6976

Email: arlene,embrey@sba, gov

TII{ITED STATES OF AMERICA,

Plaintiff

v.

WIIITE PINES LIMITED PARTNERSHIP I,

10857-BAF-VMMDocument 2Filed 03/02/2006 Page 1 of 7

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Civ. Actlon No.

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fil1 rr,h

MAR -Z ruu6 A

I=J 06-tG

IN TIIE UNITEI} STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICEIGAN

SOUTIIERN DTVISION

06 - 1 0 B 5 7

tsFRNAFDA. FHIEDMAN

Defendant

CONSENT ORDER

Before this Court is the motion by thc United States of Amcrica, on behalf of the United

States Small Business Administration ("SBA"), for a preliminary and perma$ent injunction and

the appointment of the SBA as Permanent Receiver for White Pines Limited Partnership I

("White Pines" ot "Dcfendant'). The Court, being fully advised in the morits, and having beon

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informed that Whitc Pines has consentod to the reliefrequested in the motioq hereby:

ORDERS, AI}JUDGES ANI} DECREES TIIAT:

l, Pusuant to the provisions of 15 U,S.C. $ 687c, this Court shall take exclusive

jurisdiction of White Pifles Limited Partnership I ("White Pides" or "Defendant"), and all of its

assets. wherever located, and the United States Small Business Administration ("SBA"), is

hcreby appointed receivcr ("the Rcoeiver") ofWhite Pines to sewc without bond until furtber

ordcr of this Court, The Receivcr is appointcd for the purpose of admiflistering, marshalling and,

if necessary, liquidating all of White Pines's assets to satisfu tbe claims of creditors therefrom in

the order ofpnonty as detetmined by this Courl.

2. The Receiver shall have all poweffi, euthorities, rigbb and privileges herctofore

possossed by the general partners, managus, officers, and directors of White Pines undr

applicable state and federal law and by the Certificatc afid Limited Partnership Agreement ofsaid

parhership, in addition to all powers and authonty conferred upon ttre Receiver by the provisions

of l5 U.S.C. $ 687c and 28 U.S.C. $ 754. The general parfrors, managers, directors, officers,

anployees aad agerrts of White Pines arc heroby dismissed. Such persons shall have no authority

with respect to White Pines's operafionB or assots, except as may hereafter be exptessly granted by

the Rocsiver. The Parries acknowledge that tlre individual managers of Woodlot Management,

LLC, the management company of White Pines, have offered to continue as compensated

coflsultants to White Pines to the extent flnd on such term$ as the Receiver may accept, The

Rcceiver shall assume and control the operation of White Pinos and shall pursue and preserve all of

its claims.

3. The past and/or present officers, directors, agents, fldnagffs, gencral parttcrt,

accountsnts, attorneys and ernployees of White Pincs, as well as sll thosc actifig in their placc, are

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hercby ordered rnd directed to tum over to the Receivor forthwith all books, records, documonts,

accounts and all other insttments and papers ofsaid pfftslership and all other assets and plopel|y

of tlre partrrerahip, whether real or personal, upon receipt of instruotions hy tho Reoeiver regatding

the time and place of such prodtrction. White Fines shall fllrnish a wdtten Etatement within five (5)

days aftcr the entry ofthis Ordcr, listing thc identiry, location and estifiated value ofall asseb of

White Pines as well as the names, addresses ald amounts of olaims of all known oreditors ofWhitc

Pines. All persons having oonfrol, cuslody or posression of any assets or property of $rhite Pines,

including White Pines's genoml parher and manBgcment company, are hereby dirooted to turn

such propefy ovor to tho Recoiver,

4, The Reoeiver shall promFtly give notice ofits appointmont to all lanovm general

md limited parurers, offioers, directors, agents, msnagers, employoes, shareholdors, oreditors,

debtoffi ard agents of White Pines. All persons and entities owing any obligations or debts to

White Pines shall, until fufiher ordercd by this Court, pay all such obligatioru in accotdance with

the terms thoreof to the Receiver, and its rcceipt for 6uch pdymeflts shall have the samc force and

effect as if White Pines had received such payficnts.

5. The Receiver is hereby authorized to open zucb Rsoeive,r's bank aooounb, at

banking or other financihl institution$, to oxtend credit on behalf of Wtite Pines, to utilize SBA

personnel, and to employ sucb other personnel as necessary to effectuate the operation ofthe

Receivership including, but not limited to, attomeys and accountfirts; and is fiulhcr authodzed to

expend Receivcrship funds to compensate such personnel in such amounts and upon such terms as

the Receiver shall dean reasonable in light ofthe usual fees and billing practices End procedures 0f

such personnel. The Receiver is not required lo obrain Court approval prior to the disbursement of

Receivexhip fiuds for payments to perronnel employed by the Receiver or payments for eltpeflBes

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incidental to adminisnstion of ftc Receiverthip. In addition, the Rcceiver is autborized to

rcimburse the SBA or its ernployoes for bwel expcnsos incurred by SBA personnel in the

establishmsnt and administration of the Rcceivership. The Receiver may, without furttrer ordct of

this Court, t'.rnsfet, cofipromise, or othenriso dispose of any claim or asset, other than real estste,

whioh would resrrlt in net procccds to the Receivor.

6, White Pines's past and/or presont offrcers, directors, agents, managers, general

partflirs, shareholders, employoes, ortd other apprqpriate pcrsons (including, without limitation, the

Defendant's ponfolio of small busincss concems, and banla or other financial institutions doing

business with Defendant and/or Defendent's portfolio of small business concems) shall answer

under oath, pursuant to a Receiver's Notice or Subpoena, to the Recoiver, gll questions wbioh it

may put to them regarding tho business ofsBid pBrtnership, or any othor mEtter relovant to the

operation or administration of the Receivership or the colleotion of frrnds due to White Pines. In

the eventhat tho Reoeiver deems it necessary to require the appearance ofthe aforcmentioned

pcrtons, the produotion of documentso information, or any othu form of discovery ooncerning the

dssets, propolry or businoss assos of White Pjnes or any otler matter relevant to the operation or

administation ofthe Receivership or the collection of firnds due to White Pines, ttre Receiver shall

direct notice for any such appearance by cenified mail, and said persons shall appear dnd give

answer to thc Receiver, produce documentB or dubmito any other form ofdiscovery in accordarce

with tlre Federal Rules of Civil Ptocedure,

?. The parties or prospective parties to my and all civil Iegal proceedings wherever

Iocated including, but not limited to arbitration proceedings, bankruptoy or foreclosrte action$,

default procceding$l of any other proceedings involving White Pines or any assets of t#hite Pines,

involving White Pines or its present or past ofiicers, dir€ctdrs, managefti, or general parhers or the

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Receiver, whioh partieS have sued or have been sued for sued for, or in connectr0n with, any action

taken by White Pines's officers, diroctors, managers, or general parErers while acting in such

capacity whether as plaintiff, deferrdant, third-party plaintif{ third-party defendant, or otherwise, or

witb respect to any assets of White Pines, are enjoincd from taking any action, including discovery,

commencing or oontinuing any legal procceding ofany nature in connection with any procecding

8, All pending oivil legal proceedings whcrcvor located, including arbitation

proceedings, foreolosure activities, banknrptcy sctiofis, or default proceedings, but excluding the

instant prooeeding afld the separate receivership aotion filed in this Court styled United States v.

Pacific Capital,IP, involving White Pines or any ofits assets or any action ofany nsture takefl by

White Pines's present or past officors, diroctors, manageffi, or general partners, which parties have

sued or heve becn sued for, or in connection with, any action taken by thun while aotrng in their

offrcial capacity whether as plaintiff, defendarrt, third-party plaintiff' third-pany defendanq or

otherwiss, sre steyed in their entirety, and all Courts having aayjudsdiction thereof are enjoined

from taking or permitting afly action until further Order of this Court.

9, Wbite Pines and its past and/or presont directors, officers, managers, general

partlerE, agents, cmployees and other persons aoting in concert or pafiioipation therewith shall be,

and they heteby are, enjoined from either directly or indirectly uking any aotions or causing any

such action to be taken which would dissipate tle assets and property of t4rite Pincs to the

detriment ofthe Receiver appointed in this cause, including but not limited to destruction of

partflership records, or whioh would violate the Small Business Invesbnent Act of 1958, as

amended, (the "SBtA"), l5 U.S.C. Secs. 661, g seq., or the regulations promulgated thereunder,

(the "Regulations*), 13 C.F'.IL Secs. 107.1,4S99.

10. The Receiver is authorized to bonow on behalf of White Pines, from the SBA, up

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to $1,000,000, and is authorized to ceu.6e White Pines to issue Reoeiver'o Cenilicates of

Indebtedness in the principal amounts ofthe sums bonowed, whioh ceniftcatcs will bear interest at

or aborrt ten (10) percent per Ennum and will hsve a maturity date no lster tbnn i 8 months sffer the

dato ofissue. Said Reccivor's Certrfioates of Irdebtednetshall have priority ovdr all other debts

and obligations ofWlrite Pinos, oxdluding Bdministrative expense$ ofthe ReceivershiP, whetier

presently existing or horeinafter incuned, including without limitation any claims of equity holders

in Wlite Pines.

I l. This Court determines and adjudioates that White Pines has violated the capital

impairment provisions of the SBIA and ofthc Regulations, as alleged in the Complaint ftled in thit

matter. Aftor oompleting its activities in accordance with this Ordor, the Receiver may submit a

report to this Court reoommending that White Finee 's license as an SBIC be rcvoked.

12. The United States Small Businers Adhinistration is fiuther entilled to a judgment

against White Pines in the total sum of $8,058,003,3?, including principal in the Rmount of

$8,048,859,45 and aocrued interest in the amount of $9,743.87 as of January ?0, 2006, with a per

diem rate of $1,217.97 up to the date ofentry ofthis Order, plus postjudgment interest

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pursuant to 28 U.S,C, $ 1961 thereafter.

AGREED AND ACKNOWLEDGEDI

WHITE PINES LIMTTED PARTNER.SHIP I

by Woodlot I GP, L.L.C.,

it$ gercral pafiier

By: ahtA----{

,-f\

Itr__l,la-r--'*- .- _

on this 161l^ day of February,2006.

U.S. SMALL BUSINESS AI}MINISTRATTON

J

Bv; -ffi -fuA.#rt-*+

Office of Liquidation

on this I ?tfi'46y of Febrmry ?006.

SO ORDEREI) this - dny of

HAR .2 ZOOE

2006.

STATES DISTRICT JUDGE

$DC. 9t1n0ql - 1161485 fl

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