Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-2_05-mc-00034/USCOURTS-arwd-2_05-mc-00034-0/pdf.json

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

---

Case 3:05-cv-00518Document 5 Filed 0

IN TIIE IINITED STATES DISTRJCT COIIRT

FOR THE IVIIDDDLE DISTHCT OF TEII-I{ESSEE

B/09/2005

I

UNITED STATES OF AMERICA,

Plaintiff,

v.

EQUITAS, LP.

Defendant,

)

)

)

)

)

)

)

)

)

2:05

Page 1 of 7

*rrlt#rDdpffifrco

AUG 22 2005

cllRls H. JoilNs0ii, DLutx

BY

DEPUTY CLIItK

- 3Ll

civilcaseNo.ffi sn- #sl,s

Order

"IUDGE TRAUGER

CONSENT ORDER AND JIJDGTWEI'{T

IT IS HEREBY ORDERED, ADJUDGED AT\D DECREED:

I . Pursuant to the provisions of 15 U.S.C, $687c, this Court takes exciusive

jurisdiction of Equitas, LP ("Equitas") and all of its assets axd properfy, ofwhatever kind

and wherevcr located, and the United States Smali Business Admirristration ("SBA") is

hereby appointed Receiver ofEquitas ("Receiver") to serv'e withoLrt bond until frrrther

order of this Court. The Receiver is appointed for the purpose of marshalling and

Liquidating in an orderly matner all of Equitas's assets tnd satisfying the claims of

creditors therefrom in the ordet of priority as determined by this Court.

2. The Receiver shall have all powers, authorities, rights and privileges

heretofore possessed by the off,cers, directors, partners, maflagors, investment advisors

and other agents ofEquitas under applicable state and federal law, by the Certificate of

Partnership and Partnership Agreement of said limited partlxership, in addition to all

powers and authority ofa reoeiver at equity, and all powers and authority conferted upon

the Receiver by the provisions of 15 U,S.C. $ 687c and 28 U.S.C. $ 754. The trustees,

directors, officers, general partners, employees, managers, investment advisors and

agents ofEqtitas are hereby dismissed. Such persons shali have no authority r'r'ith

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 1 of 7 PageID #: <pageID>
Case 3:05-cv-00518 Document 5 Filed Page 2 of 7

respect to Equitas's operations or essets, excepto the extent as may hereafter be

expressly granted by the Receiver. The Receiver sha1l assume and control the operation

ofEquitas and shall pursue and preserve all of its claims.

3. The past and/ot present officers, directors, trustees, general partners,

managers, ilvestment advisors, agents, trustees, attorneys, accountants, and employees of

Equitas, as rvell as all those acting in their place, are hereby ordered and directed to turfl

over to the Receiver forthrvith all books, recotds, documents, accounts and all other

iflstrurnents arrd papers of and relating to Equitas and its assets and all other a$sets afld

property of the oorpcration, lvhether real or personal. llne Receiver will provide

reasonable access to ali participants with regard to any invest'nent in the Equitas

portfolio. The former President, General Partner and./or other agent afEquitas. shall

irLrnish a written staiement within five (5) days after the entry of this Order, lisring the

idefltity, Iocation and estimated vaiue of all assets ofEquitas as rvell as the names,

addresses and amounts of claims of all knornrn creditors of Equitas. Wittun thirty (30)

days follorving the entry ofthis Order, such person shall also fumish a wittefl teport

describing al1 assets. Ail persons having control, custody or possession ofafiy assets or

property of Equitas are hereby directed to tum such assets and proFerty ovor to the

Receiver,

4. The Receiver shall promptly give notice of its appoifltflent to all known

officers, directors, general partners, agents, employees, shareholders, creditors and

debtors ofEquitas, as the Receiver deems necessa{y or advisable to effectuate the

operation ofthe receivership. Ali persons and entities owing any obligation or debt to

Bquitas, until further ordered by this Couil, pay all such obligations il accordance u ith

08i09/2005

I

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 2 of 7 PageID #: <pageID>
Case 3:05-cv-00518Document 5 Filed Page 3 of 7

the teffis thereof to the Receiver and its receipt for such payments shall have the sarne

force and effect as if Equitas had received such payments.

5. The Receiver is hereby authorized to open suoh Receiver's accoults at

banking or other financial institutions to extend credit on behalf of Equites, to utilize

SBA personnel, arrd to employ such other personnel as it may deom necessary to

effectuate the operation ofthe receivership including, but flot limited to, attoffieys,

accountants, and appraisers, and is further authorized to expend receivership fuflds to

conrpensate suoh persormel in such amounts and upon such terms as the Receiver shall

deem reasonable in iight of the usual fees and billing practices a:rd procedures of such

personnel. The Receiver is flot requiied to ohtain Court approval prior to the

disbtrsement ofreceivelship fiLnds for payrrents to personnel employed by the Receiver

or for erpenses that the Receiver deerns advantageous to the arderly administration and

operation of tire receivership. Il addition, the Receiver is authonzed to reimbruse the

SBA for trar'el expenses incurred by SBA porsonnel in the establishrnent and

adrtrinistration ofthe reoeivership. The Receiver may, vrithout f,trther order ofthis Court,

transfer, compromise, or otherwise dispose of any asset (including without limitation aay

claim), other than real estate,

6. Equitas's past and/or present officers, directors, partners, agents,

accowrtaflts, maxageis, shareholders, employees, debtors and creditors ofEquitas and

other appropriate persoTls (including rvithout limitation, the defendant's porlfolio of smalj

business concems and financial institutions. doirrg business with defendanl and,/or

defendant's portfolio of small business coucems) shali answer rmdor oath to the Receiver

aII questions which the Receiver may put to them in compliance with the Federal Rules

08/09/?005

t

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 3 of 7 PageID #: <pageID>
Case 3:05-cv Document 5 Filed 08/0S/2 Page 4 of 7

of Civil Procedure, and putsuanthereto shall produce any documents as required by the

Receivet regardirg the business of said cOrporationj or any other mattel relevAnto the

operation or administration ofthe receivership or the collection offirnds due to Equitas.

In the event that the Receiver deems it necessary to require the appearance ofthe

aforementioned persons, the ptoduction of documents, information, or any other

discovery conceming the assets, property or business operations of Equitas, or any other

matter releva.nt to the operation or administration of the Receivership or the collection of

frrnds due ti Equitas, lhe Receiver shall make its disoovery request(s) in compliance t'ith

the Federal Rules of Civil Procedure.

7, The parties, or arry ptospective parties, to any aad all civil legal

proceedings of any nature, exclutling the instant proceeding, but including without

Iirnitation bankruptcy proceedings, arbitration proceedilgs, foreclosure actions, default

procoedrngs, or other actions of aay natute itrvolving Equitas or any aisets ofEquitas,

including subsidiaries, partnerships and other busineSs combinations of Equitas, wherovel

located, or involving Equitas, tho Receiver, or any ofEquitas's past or present officers,

direcrors, rdarragsrs, agents, ot general or limited partners sued for, or in connection with,

a.ny action taken by them while acting in such capacily of any nature, whether as plaintifl

defendant, third-pafiy plaintiff, third-party defendant, or otheruise, are enjoined from

commonding or continuing any suoh legal proceeding, or from taking any actlofl, In

connection with any such proceeding or any such asset.

B. All civil legal proceedirgs of any nahre, excluding the instant proceeding,

but including without linritation bankruptoy proceedings, arbitration proceedings,

foreclosure actions, default proceedings, or other action of any nature involving Equitas

-00518

I

005

I

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 4 of 7 PageID #: <pageID>
Case 3:05-cv-00518 Document 5 Filed Page 5 of 7

or afly assets of Eqritas, including subsidiaries, partnerships and other business

combinations ofEquitas, wherever located, and excluding the instant prooeeding, or

involving Equitas, the Receiver, or any ofEquitas's past or present officers, directors,

marlagers, agents, o( geletal or lifiited partners sued for, or in corurection with, any

action taken by them while acting in suoh oapacity ofany nature, whethcr as plaintiff,

defendant,hird-party plaintiff, third-party defendant, or otherwise, are stayed in their

efltirety, and all Cotrts having any jlrisdiction thereof are enjoined from taking or

penrritting any action until further Order of tiris Court.

9. Further, as to a cause of action accrued or accruing in favor ofEquitas

against a third person or parfy, any applicabie statute of limitation is tolled during the

period iu rvhich this injunction againsthe cofilflercement of legal proceedirr-es is in

effect as to tllat cause of actiorl.

10. Hquitas and its past aad/or present directors, officers, flarlagers, general or

iimited partners, agents, iflvestment advisors, employees and other persons acting in

concert or participating therewith be, and they irereby are, enj oined from either directlv or

indirectly taking any actions or causing any such action to be takerr which would

dissipate the assets and-/or prop erly ofEquitas to the detriment of the Receiver appointed

in this cause, including but not limited to destruction ofcorporate records, or which

tvould violate the Small Eusiness Investment Aot of 1958, as amended, 15 U.S.C. 661 et

gq,, or the regulations promulgated thereunder ("Regulations"), 13 C.F.R. Part i07.

i 1. The Receiver is authorized to borrow on behalf of Equitas, from tle SBA.

up to 5500,000 and is authorized to cause Equitas to issue Receiver's Certif,cates of

Indebtedness inthe principal amounts of the sums borowed rvhich certificates rvill bear

08/09/2005

I

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 5 of 7 PageID #: <pageID>
Case 3:05-cv-00518 Document 5 Filed 08/09/2005

I

Page 6 of 7

interest at or about I0 percent per annum and will have a maturity date no later than 18 months after

the date ofissue. Said Receiver's Certificates oflndebtedness shall be deemed to be administrative

expenses of the ReceivershiP.

lZ, Judgment is hereby e,lrtered in favor ofPlaurtiff, Untied States of America, on behalf

of its agency, the U.S. Small Business Administration ("SBA"), against Defendant,

Equitas, LP ('Equitas"), thepdncipal sum of$6,691,986,00 inprincipal and accrted

interest of$121,280.44 through Jrure 30, ?005 wirhaper dien of $ 1,347.56 through

the date ofjudgment and post judgrnent interestherefrom.

13. This cowt determines and adjudicates that Equitas has violated the Act and the

Regulations. A Receiver shall be appoilted based on Equitas's coflsent

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 6 of 7 PageID #: <pageID>
Case 3:05-cv-00518 Document 5

9th August

Filed08/09/2005 Page 7 of 7

I

SEEN.A.t\D AGREED BY EQUITAS, LP AND TI{E SMAIL BUSIMSS

A"DMINISTRATION, THROUGH THEIR DULY AUTHORIZED

REPRESENTATIVES:

{A n,-1

Y L,^-,* +{s-l{

\-- 

/

President

General Partner, Equitas, LP

r+, /*r-'r

@

Fail-ffiret+ cs\e\-\q U-l\+a---\

ffi C+sF.--*-_-- c+S:-*+-*Q G-*---,='-\te-'.'--'=='-\

U.S. Small Business Administration

SO ORIERED, DATED this _day of

2005

?00 .

TiJ{ITED STATES D]ST T COLIRT IL,DGE

Case 2:05-mc-00034-RTD Document 2 Filed 08/22/05 Page 7 of 7 PageID #: <pageID>