Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-2_06-mc-00029/USCOURTS-arwd-2_06-mc-00029-0/pdf.json

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

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KEvrN v. RYAN (SEN t 18321)

lJnited States {ttomey

JOANN M. SWANSON (SBN 88143)

Chief. Civil Division

EDWIN L. JOE (SBN 112328)

Spocial Assistant United States Attromey

455 Market Stroot, 6rtr Floor

San Francisco, California 941 05-2420

Telephone: (415)744-8494

Facsimile: (202) 481-18i0 or (415) 744-6812

Email: edwin joe@sba.gov

Attomeys for Federal Plaintiff

UMTED STATES OF AMERICA,

Pleintiff,

v.

,A,LTOTECII II' L.P.,

E-Filing

Civil Case No, C06 3879 EMC

STIPULATI()N FOR CONSENT

ORDER OF R-ECEIVERSHIP

FS- 06 - d?

IN TIIE I,]NITED STATES DISTRICT COURT

F'OR THE NORTHHRN DISTRICT OF CALIFORNIA

$AN FRdNCISCO DIVISION

Ilcfendant.

I

wHEReA's, Plaintiff, united states of America, on behalf of its agencyi tho united strrres

America, has filed and causod to be served upon defenrialt and its ceneml partner, AltoTech

Ventures, LLfl, a complaint; and

Whcreas, the porties desire to resolve the matter amicahly and without further proccetlings,

trial or adjudication ofany issue and stipulate as follows:

STIPULATION F'OR CONSEN'I' OR-DER OF RECEIVERSHIP

JUN 2 $ 2006

EI|BE n. i0fit{8olt, 0LEK

DERIIY CI.TR{

Case 2:06-mc-00029-RTD Document 2 Filed 06/29/06 Page 1 of 11 PageID #: <pageID>
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KHv l1{ \'. RYA}i ($trrr* 1 I 83? 1 )

Li iteil Slatc$ Alt nle.v

JoANN r"1, SWANSON ($BN 8814_3)

Chicl Civil Division

EDr,|'rtN I_, -L0H (SHN I t3:j:81

Spccial -4.:;sistrrri I lnitctl Srates Artorrrcy

Aitllrrt 1,5 fb;: ljctlcral l'laintifi

I]IYI,I,I:D $,I -4T.[)$ OF Ai{F,RICA,

f latn ttft,

Al,'f()TE(ll.rr, r,.P..

/ T}RIGINAL

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.155 l\tfarket Street. 6''' Jjkx.rr

Sm: J.rancisco, Caliii:mia 941 t)5"14?0 'f r.leFhone: {415) 7.14-u494

Facsiruile: (?0?) 4S 1- 1810 or: (41 5 ) 74.+-S8l:

I:lur Eil; edu,ujoe{glsha.qov

.IN lfI.E U {I:I'ED STA DISTRICT CT)IJf{T

F'OR T}IE NORI.TTITR]'{ DISTRIC]T OF {:A],I}.ORNI-A

S-{, N FIIANT]I$C(} DIVI$I (}N

E- F)ling

civil ca+c \t" fl06 3879 EN(

STIIItiLA:lllOli FOIr {.rON S lr:f{ l'

ORT}I]R OF RA{:EI\1'Ii]R-S HI.P

Drtrndirtrt.

W[].EItti.{S. F)ainti|[ tJuiteo Statos of tul*ric4 on behr]1'of its eg*ncy, rc Lh.rirsrJ Slatr:r;

r- ltas jiled ;md causerl 1o hc scn'ed pofi dcfifidilflt'anrJ its General Piulner, All,ll'r:rh

\/rflftlrcs, I-1.C, a col{rfuint; ij d

lVhcrca;r. the parties dc$irc to ffsoJ','E the flralter dmiurltrlv arrd withouL f.u ther proi:eedil.gs,

tr ia.l or arljuciication ofanv issue a d stipuJ.ate as tblh:vvs;

S] ]PI.JJ'A'I(}N F(}R CONSTIN'I ORUSIT OF RECF]ryERSI{IP

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L That defbndant Altol'ech [, LP, (.,AltoTech" or,,Licensoe,'), the holtjer of the U.S. Sma 

Busincss Adminisfation's (sBA) srnall Business Investment company (SBIC) License No. 0g/7g,

0431 has a condition of Capital Impaitment as that term is defined under Title 13 of the Code of

Federal Regulations, Part 107t

2. That this Coutl has jurisdiction over the subject mattor ofthis action and over defendanq

3. That the onll mutually a$oeablc method by whioh to tlistribute the assets ofthe Licensee

to the appropriate oreditors and sBA is through ths appointment of sBA as the receiver of the

Lioensee pursuant to the following Consent Order ofReoeivership without firrlher proceedings; and

4' To the entry ofthe following Conse{rt Order ofReceivership lvithout further proceedings.

I

IT IS FIEREBY ORDERED, ADJL]DT,O O"O O'"OO*O.

I

I' Pursuant to the provisions of 15 I].S.C. $687c. this Cou( Iakes exclusive jurisdiction of

AltoTech II, L.P. ("AltoTech") and all of its assets and property, of whatever kinrj and wlerever

located, and the united states small Business Administration ("sBA',) is hereby appointod Receiver

of AltoTech ("Rcceiver") to serve without bond until further order of this Court. The Receiver is

appointed for the puryose of marshalling and liquidating in an ortlerly manner all of Altol eoh's

as$ots and satisffing the olaims of creditors therefrom in the order of priority as detormined by this

Court.

2. The Reoeiver slrall . have all powers, authorities, rights and privileges heretofore

possessed by the general partnet, offioers, directors, managersr investment advisors arri othor agents

ofAlto'l-ech undcr applicable stete and federalaw and by the Agreement of Limited partnership, in

addition to all powers and authority ofa recelver at equity, and all powers and authority confened

ripon thc Receiver by the provisions of I 5 u.s.c. g 687o and 28 u.s.c. $ 754, The general partrer,

management oompany, trustses, directo'rs, offc€rs, employees, managers, invcstment advisors and

STIPULATION FOR CONSENT ORDEROF RECEIVERSH]P 2

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agsnts of AltoTech ate hereby dismissed. Such persons and cntities shall have rr0 authority with

respecl to AltoTech's operations or a$sets, except to the extent as may hereafter bc exprossly

granted by the Receivcr. The Receivcr shall assume and oontrolhe operation ofAltoTeoh antl shall

ptfisue and preserve all of its claims. Jurisdiction is conferred on this Court by virtue of ttre Small

Business Investment Act of r 958, as amended (hereinafter, the .,Aot'), sections 30g(d), 3l I and

316, I5 U.S.C. gg 687(d),687o and 687h; and 28 U.S.C, $ t345.

3. Thc Receiver is entitred to take immediate po$session of all assets, bank aooounts ar

other financial aocouflts, books and records and all other documents or instrumsnts relating to the

Lic'ensee. The p*st and/or present generar pa.nner, management oompanyr offioers, diroctors,

managers, investmetlt advisors, agents, trustees. attoffieys, 4csountants, and omployees ofAltoTech,

as well as allthose acting in their place, are hereby ordered and directed to turn over to the Receiver

forttrwith alt books, reoords, documents! acdounts antl all othor instrurnents antl papers of and

relating to AltoTech and its assets, whether real or personal, including but not limited to:

(i) all definitive agre.meflts to which tho partncrship is a party or is otherwi,se bound,

inoluding, the Partnsrship Agreement afld Bny amefldments thereto,

(ii) a list of all limited pflrtners inoluding contaot infbrmation,

(iii) all records related to porffblio company investmonts,

(iv) the financial books and records of Alto.l'ech and

(v) oopies of the financial books and reoords of the generar partner and ffansgement

company and ail other assets and property of AltoTech, whether real or personal.

The former Cencml Partner, and the mflnagernent company, shall furnish a written statemont withrn

fifteen (15) days after tho entry of this Order, listing the identity, location and estimated value ofall

assets of AltoTech as well as the names" addtesses afld arnounts of claims ofall known oreditors of

STIPULATION FOR CONSENT ORDER OF RECEIVERSHIP 3

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AltoTech' within thirly (30) days following the enhy of this order, such person srralr also tumish a

writtetr report describing atl assets. Alr persons having conrol, oustotry or possession ofany assets

or property oiAltoTech are hereby directed to trrm such assets and property over to the Receiver.

4' The Reoeiver shall promptry give notico of its appointmento all known partners,

officers, directors, agsnts! emproyees, sharehorders, creditors anrr debtors of AltoTech, as the

Receiver deoms necessary or advisable to effectuate the operation ofthe rcceivorship. All persons

and entities owing any obrigation or debt t0 ArtoTech, until further oncrered by this court shal pay

all such obligations in acootdance with ths tcrms thereof to tho Receiver and its receipt for such

payments shall have the same force and effect as if Artor'eoh had received such payments.

5. The Receiver is hereby authorized to open such Reoeivey's aooounts at banking or other

ftnancial institutions to extcnd credit on behalf of AltoTeoh, to utilize sBA personnel, and to

employ such othor personnel as it may deem neoessary to effec.uate the operstiofi of the

rcceivership including. but not limiterr to, attomeys, accountants, and appraisers, and is further

authorized to expend reoeivership firnds to compensate such personnel in such amounts and upon

such terms a$ the Receiver shall deem reasonabls in light ofthe usual fees and billing praotices and

prooedures of such personnel. The Receiver is not required to obtain court approval prior to the

dishurscment of receivorship funds for payments to personner employed by tho Receiver or for

expenses that the Reoeiver deems advantageous to the orderly administration and opemtion ofthe

teceivership. In addition, the Receiver is arrthorized to reimburse the sBA for travel expensos

inou*ed by sBA porsonner in the estabrishment and adminishation of flre receivership. The

Receiver may, without further order of this cour! transfer, compromise, or otherwise dispose of any

asset (including without limitation any olaim), other than real estate.

S'IIPULA'IION FOR CONSENT ORDER OF RECEIVERSHIP

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6. Alto Tech,s past and/or present partnors, offioers, directors, agents, accountants,

m4nagers, sharcholders, employees, debtors and oreriitors and other appropriate persons (including

without limitation, the Defendant's portfoHd qf small business oonoefils and finalcial institutions

doing business with Defendant and/or Defendant's ponfolio of small business conccms) shall

answer under oath to the Receiver all question$ which the Receiver may put to them in compliance

with the F'ederal Rules of civir procedure, and pursuant thereto shall produoe any documonts as

tequired by the Receiver tegarding the busihess of AltoTech, or any other matter rslevanto the

operation or adminishation of the receivershfp or the collection of funds due to ArtoTech. In the

event thal the Receiver deems it o...=*ry to lr"quire the appearance ofthe aforeftentioned porsons, I

the production ofdocuments, information, orlany other discovery concerning the assets, properfy or I

business operations of AltoTech, or any oth{ mattcr relevanto the operation or administration of

the Receivership or the collection of funds due to AltoTech, the Receiver shall make its disooverv

reques(s) in compliance with the Federal Rules of Civil procedwe.

7. Tho parties, or any prospective nfrtes, to any afld all civil legal proceedings of any

nature, excluding the instant pror;eeding, but linoruding without limitation bankruptoy proceedings,

arbitration proceedings, foreorosure aotions, detaurt procee<Iings, or other actions or. any nature

' involving AltoTech or sny asset$ of Artolech, incruding subsidiaries, partnerships and other

business combinations of AltoTech, wherevef rocated, or involving ArtoTech the Receiver, or iury

of AltoTech's or its general pdxtner's or manirgement company's past or present officers, direotors,

ftanagers, agonts, or goneral or limited parhets sued for, or i4 connection wit[ any action taken by

them while acting in such capadity of any nature, whether as praintifi defendant, third party

plaifltifi' third party dcfendant, or othetwise, are enjoinert from commencing or oontihuing any $uoh

legal procecding, or from taking any action, in oonnection with any such prooeerling or any suoh

S'IIPULATION IJOR CONSENT ORDER OF RHCEIVERSHIP

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as$et. All oivil legal proceedings of any nature, excluding the instdflt proceeding, but incruding

without limitation bankruptcy proceedings, arbitration proceedings, foreclosuro actions, defaurt

prooeedings, or othor action of any nature involving AltoTeoh or any assets of Alto].ech or its

generul pErtner or managemont company, inoruding subsidiaries, partnerships and otrrer business

cornbinatidns of AltoTeoh, wherever looated, and excluding tho instant proceeding, or involving

AltoTech, the Receiver, or any ofAlto'fech's past or presurt ottcers, dirsotors, rnflnagersr agents, or

general or limitcd partners sued for, or in connection with, any action taken by them while acting in

such capacif of any nature' whethef as plaintifl aefendant" third party plaintiff, third-parry

defendant, or otherwise, are st:ayed in their otrtirety, and a[ courts having any jrrrisdiotion thercof

ate enjoined from taking or permitting any action ufltil further order of this court.

8. Frrrther, as to & cause of action acqrued or acoruing in favor of AltoTech against a thiro

person or party' any applioable statute of limitation is tolled during the period in whioh this

injunction against the c.mmencement oflegal prooeetlings is in effeot as to that cause ofacti'n.

' 9' AltoTech and i.' past and/or preqent directors, orTicers. managers, generar or limited

partners! agEnts' investment advisors, ernploySs anti other persons acting in corrcort or parliciiating

therewith be, and tJrey hercby are, eqioined {om eit}rer direotly or indirectry taking any actions or

causing any such action to bc taken which would dissipate the assets anri/or property of AltoTech io

the defriment of the Receiver appointed in triis caus", incrurring but not rimited to dcshuction of

oor?orate records, or which would violate the [mall Business Investment Act of 195g, as amended,

l5 U.S.C, 661 et. seq., or the regulations promulgated thereunrler (,,Regulations,,)" l3 C.F.R. pan

tlt.

l0 The Recrivor is authorized to bonow on beharf of Alto'r'eoh, ftom trre sltA, up to

$l'000,000 and is authorized to oause AltoTeoh to issue Receiver,s Cefiilicates of Indehtedness in

STIPULATION FOR CONSENT ORDF,R OF RECEIVT,RSHIP

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the principal amounts of the sums bonowed, which oertificates will bear interesl :rt or about l0

percent per annum and will have a maturity date no later than r g months after the date of issue.

Said Receiver's Cettificates of Indebterlness shall be deemed to be administative expenses of rne

Receivership.

I I ' This Court determines and adjudioatcs thqt SBA has marje a sufticietrt showing that the

Lioensee has violated the Act and Regurations, as aleged in the complaint filed against AJlo.r.ech in

the instant action, to otrtain the reliefso requested.

12. sBA shall be appointed Recciver ofAltoTeoh based on AltoTeoh,s consent.

13. After compreting its activities in accortranoe with this order, the Receiver may suhmit a

report to this court recommending that AltoTech's lioense as an sBIC bo revoked.

READ AND AGREED BY ALTOTHCH AND T}IE S]\,[ALL BUSINESS ADMINISTRA,TION, THROUCH T.}IEIR DULY AU"I'HOR]ZED REPRESENTATIVES:

AltoTeoh II. LP

By: AlioTech Ventures, LLC

Its: General Partner

The United States Small Business Administration

STIPLILA'I'ION FOR CONSENT ORDER OF RECEIVERSHIP

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10. Thc R+cliver is arjrhur.izerl tr honirw r:rr be*nlf of A]toTcch, fkrm tire S.H.A, Lrtrr t+

I

$if i)00,i100 +trl is authorizerl lo uaust AirlTecd to issue Receivei's (ler(r ficatcs of hrde,brcdLre.qr" i:n

ttre p ncipal afi{}unts of the sumt bororvrcl whrdh cer{:iljcald$ u'ill 'uea; 

intcres: al o; ahoul ll}

Ftrcent pcr amuum ani t'iJl have a traluritr dulue no later tlratr l8 montls alier thc {:lare oJ' jssue.

Sairl Rr:ceivet'.t C'Lrriiiicalcs oi Inci.cl:tedn+ss sl:all be dremrd to bc, adm inistttrtr ve expensrs of )ir

Recciver:ship.

'I I 'llns Court dclennines and udjLrdicatcs that SBA has n:ade a sLLf'lrcicnt iiir6uing rlrgt thu

Liftn$ee llss virllttotl the Act and .Rsgrrlatiioru, as alleged ir] lJ:e Complairt filed agai.nst Alto']'crh in.

the iniitnflt ilctir . tr:r ohtrrin re rr,.lief s,: requeslccl.

Il, SII.A shdl 'rrc ll1:p*irted R.crcivcr.of .Alto.fech h;r,retJ on AItoTech,s co sor[.

i i, A fter c,rmirleiine its activitics in accordrncc with this Orcl+r, ilrr-. Rr:ceiver n-:irv srihmit a

r*pofl 10 thiri coLrrt reconrmu:ding rhar Altor.ech's licenso uri un slllc be revokutl,

RI. AL) ANII AGREIiD I]l/ Al , t'o]'FtcH ANt) Tti{tr srvrALL Eustr\Ess ADMlNlst.tr,tTToN, ]:]JR OLILiH :ITI ElR ],)L;IT' A I"I1'I.] ORIZIJ D ]i.]lFRI]SIiN'I A,.I ]VTi$ :

A Lto:le+h ll, LP

.tsy; Altol etl \/crlttreji, L.,l..C

Its: GeleruJ P.lrurer

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Ily: f-iloria Wrrh.l

fts; Marrget

Duto

'J'he Llnitccl Siates Snr al I lJrrsiless .Atlministiirtion

0G *# 5--I c <,6

STiiIUI,ATION FOIt O:{SENT ORDER T)F .R};T]F]]ViI}ISI. I

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PI,JRSUANT TO STIPULAI'ION OF TTIE PARTIES:

IT IS SO ORDERED.

DATEI) this

By: Thomas C. Morris

Direotor, Of ioe of Liquidation

Of Counsel:

ARIENE P. MESS]NGER

Assistant General Corrnsel fbr SBIC Enfi

Date

dayof_Jufl2l. 2006 - 2006.

tJ.S. Smai I Business Administration

409 Third Street, S.W. Seventh F'loor

Washington. D,C. 20416

Email;

Telephone:

Facsimile:

(?02) 205-68s7

(202) 481-0325

UNITED STATES trISTRIcI couTTffi g

STIPULAT]ON FOR CONSHNT ORDER OF RHCEIVERSHIP

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PIIRSLIAI'iT l'{} FTlPul.ATiON O} TIIE ITARTIF]ST

t-t ts s{.} o}tDERrt),

Hy: T'hurnirll ti. iVlonis

Direcrrrr, C)lfice r:f f .igrlid6tj(rfi

llAl ED this

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clay of JUti Sl ffi ?00i,

}YILIJAMAT,SUP

LINT IHD STATES I}]S]]TICT COI,IR.T .]IIDfi h;

Cti{irunsel:

AITI-.ENII, Fh.:{HS SIN (iER

.,\ssistlut r (-ieneral {lru nsel l'trr SR LC lrllijrcetrelrt

U,S. Snrall llu.sirrcss A,:imilistration

409 lhird Str*ct, S.\At, Severrth f.'loor

\trjashingto:r, D.(:1, 104 iti

l}rai[; ar]ere.mcssin{erlerner@sba.gov

J. tlcpfxrne: (70?) :0,i-685 ?

F rr.usunile: (2{12) 481-031.5

S]I]ILILAI'ION lit)it CIJNI]L]N'f ORNER {-]}. ITFCF;IVEI(SJ.IIP

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