Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_06-cv-00951/USCOURTS-azd-3_06-cv-00951-1/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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WO 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

SECURITIES AND EXCHANGE 

COMMISSION, 

 Plaintiff, 

 vs. 

DAVID L. MCMILLAN, 

 Defendant. 

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No. CV-06-0951-PCT-SMM 

ORDER MODIFYING ASSET FREEZE 

The Court has considered Plaintiff’s Motion to Alter the Asset Freeze (Dkt 19) 

contained in the preliminary injunction that was entered on April 17, 2006, to allow 

Polly McMillan, the former wife of defendant David McMillan, to sell two items of 

community property, a pontoon boat and Harley Davidson motorcycle, and then use 

$5,628.06 of proceeds from the sale to pay mortgage and late charges on the couple’s 

house, which is currently in default, and to allow Mrs. McMillan to use an additional 

$8,382.60 of the proceeds to make the December 2006, January and February 2007 

mortgage payments. 

The court has discretion to modify the asset freeze and may consider requests to 

release funds to pay living expenses. See e.g. SEC v. Coates, 1994 U.S. Dist. Lexis 

11787 *3-4 (S.D.N.Y. 1994) (court considered whether investors interests would be 

served by modifying asset freeze to pay mortgage and living expense); CFTC v. Noble 

Metals Int’l, 67 F.3d 766, 775 (9th Cir. 1995) (court has discretion to limit payment of 

attorney fees out of frozen assets). The Court finds that modifying the asset freeze to 

allow the sale of these two items and use of the proceeds for mortgage payments is in 

the best interest of the investors, to preserve the house as an asset against which the 

SEC may obtain disgorgement in this matter. 

Case 3:06-cv-00951-SMM Document 20 Filed 12/08/06 Page 1 of 2
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THEREFORE IT IS ORDERED that the Court’s Preliminary Injunction and 

Asset Freeze entered on April 17, 2006 is modified to allow Polly McMillan to sell two 

items of community property, a pontoon boat and Harley Davidson motorcycle, and 

then use $5,628.06 of proceeds from the sale to pay mortgage and late charges on the 

couple’s house, which is currently in default, and to allow her to use an additional 

$8,382.60 of the proceeds to make the December 2006, January and February 2007 

mortgage payments. Mrs. McMillan is ordered to provide plaintiff’s counsel with 

copies of the checks that she receives as payment for these two items. Mrs. McMillan is 

ordered to provide to plaintiff’s counsel proof that she has made the payments to the 

mortgage company to cure the default and the December 2006 mortgage payment. After 

making the $14,010.66 in mortgage payments and late charges, Mrs. McMillan is 

ordered to pay the remaining balance of the proceeds from the sale of these two items 

into the registry of the court. The funds deposited into the registry of the court shall be 

placed in an interest bearing account 

Dated this 7th day of December, 2006. 

 

 

Case 3:06-cv-00951-SMM Document 20 Filed 12/08/06 Page 2 of 2