[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

_________________________

No. 16-10942

_________________________

D.C. Docket No: 8:09-cv-00087-RAL-TBM

SECURITIES AND EXCHANGE COMMISSION, 

Plaintiff-Appellee,

versus

WELLS FARGO BANK, N.A., Creditor,

 Interested PartyAppellant,

_____________________

Appeal from the United States District Court

for the Middle District of Florida

_______________________

(February 22, 2017)

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Before JORDAN and JILL PRYOR, Circuit Judges, and PROCTOR,

* District 

Judge.

PROCTOR, District Judge:

I. BACKGROUND

Following the collapse of a Ponzi scheme, the district court appointed a 

receiver to administer the affairs, funds, and property of parties who perpetrated 

that failed scheme. The district court also established a claims administration 

process by which those who had claims to property administered by the equity 

receivership could file proofs of claim. In this appeal, we are called upon to decide 

whether in such a circumstance a district court may extinguish a non-party’s preexisting rights to property under the administration of the equity receivership if 

that non-party fails to comply with the court’s orders regarding filing of proofs of 

claim. We conclude a district court may not. And, we look to bankruptcy law to 

aid us in addressing this question of first impression.

On January 21, 2009, the SEC initiated an action (the “Nadel action”) 

following the collapse of a Ponzi scheme perpetrated by Arthur Nadel. As a result, 

the district court appointed a Receiver over the Nadel action Defendants. The 

district court directed the Receiver to “administer and manage the business affairs, 

funds, assets, choses in action and any other property of the Defendants and Relief 

 

* Honorable R. David Proctor, United States District Judge for the Northern District of 

Alabama, sitting by designation.

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Defendants; marshal and safeguard all of the assets of the Defendants and Relief 

Defendants; and take whatever actions are necessary for the protection of the 

investors.” Accordingly, the receivership exercised authority not only over claims 

from victimized investors, but also entities and businesses which were funded with,

and properties purchased with, proceeds of Nadel’s Ponzi scheme. While Wells 

Fargo is not a party in the Nadel action, it has secured interests in three properties 

which the Receiver took possession of pursuant to the district court’s orders.

On April 21, 2010, the district court entered an order establishing a claims 

administration process by which potential claimants (both investors and creditors) 

could file proof of their claims against the receivership. As part of the claims 

administration process, the Receiver would mail a claims packet, which contained 

a Proof of Claim form, to investors and creditors whose property was implicated in 

the Ponzi scheme. Under authority of the district court order, the packet required 

that non-investors (including non-party creditors such as Wells Fargo) provide to 

the Receiver any amount claimed due, together with supporting documents, by the 

claim bar date.1

 The district court’s order required that all creditors submit their 

 1

 The Claim Bar Date Notice explained that:

If you were not an investor, but believe you are or may be a creditor of one o[r] 

more of the Receivership Entities, you must provide to the Receiver by the Claim 

Bar Date (1) the amount you contend you are owed from any Receivership Entity; 

(2) any amounts received from any Receivership Entity; and (3) legible copies of 

all documents on which you base your claim (i.e., all invoices for services or 

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claims before the claim bar date, and did not distinguish between secured and 

unsecured creditors with respect to this requirement. The district court (1) 

established a deadline of September 2, 2010 for filing a Proof of Claim form and

(2) barred any claims asserted after that date.

Consistent with this process, the Receiver mailed a single claims packet to 

Wells Fargo at its Atlanta, Georgia address. After receiving this packet, Wells 

Fargo submitted a Proof of Claim as to its loan that secured one receivership

property within the set claim bar date, but did not submit a Proof of Claim

detailing its secured interest in the other two receivership properties.

 

goods provided, loan documents, etc.) or, if any such documents are not available, 

a detailed explanation as to why such documents are not available.

The Claim Bar Date Notice further stated:

4. CONSEQUENCES OF FAILURE TO FILE A PROOF OF CLAIM 

BY THE BAR DATE

ANY HOLDER OF A CLAIM OR POTENTIAL CLAIM THAT FAILS TO 

FILE A PROOF OF CLAIM (1) THAT FULLY COMPLIES WITH ALL 

REQUIREMENTS SET FORTH IN THIS NOTICE AND (2) BY THE CLAIM 

BAR DATE WILL BE FOREVER BARRED, ESTOPPED, AND ENJOINED 

FROM ASSERTING SUCH CLAIM AGAINST RECEIVERSHIP ENTITIES... 

THEIR RESPECTIVE PROPERTY, THE RECEIVER, OR THE 

RECEIVERSHIP ESTATE, AND FROM PARTICIPATING IN ANY 

DISTRIBUTION FROM THIS RECEIVERSHIP.

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II. PROCEDURAL HISTORY

On February 8, 2012, well after the September 2, 2010 claim bar date, Wells 

Fargo submitted a motion seeking a determination that the filing of Proofs of 

Claim was unnecessary to preserve its security interests in, and claims against, 

collateral in the Receiver’s possession (including the two properties for which it 

failed to submit Proofs of Claim). Alternatively, Wells Fargo’s motion sought

leave to file belated claims pursuant to Rule 60(b) based on excusable neglect. The 

district court deferred ruling on the motion.

On December 7, 2015, the Receiver filed a motion seeking two forms of 

relief. First, the Receiver’s motion sought a determination that Wells Fargo’s 

failure to submit Proofs of Claim for the loans secured by two properties

extinguished its interests in those properties. Second, the motion requested the

release of the proceeds from the sale of one of the properties for which Wells 

Fargo did not file a Proof of Claim. Wells Fargo objected to the motion. 

Nevertheless, the district court granted the Receiver’s motion, finding that Wells 

Fargo’s security interests in the two properties were not preserved due to its failure 

to submit Proofs of Claim. The district court further held that Wells Fargo’s Rule 

60(b) request was untimely and insufficient. The district court specifically 

determined that Wells Fargo bore the burden to protect its rights pursuant to the 

framework set forth in the court’s prior order. The district court reasoned that 

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secured creditors such as Wells Fargo, despite their secured interest, were obliged

to follow court orders in order to protect their rights to collateral in the receivership 

proceedings. Wells Fargo appeals the district court’s order. After careful review,

and with the benefit of oral argument, we agree with Wells Fargo, and reverse and 

remand this matter to the district court for further proceedings consistent with this 

opinion.

III. STANDARD OF REVIEW

The sole issue in this appeal is whether the district court correctly 

determined that Wells Fargo’s failure to file certain proofs of claim in accordance 

with the district court’s procedures extinguished Wells Fargo’s secured interest in 

the receivership properties. This is a question of “pure law,” which we review de 

novo. See Young v. New Process Steel, LP, 419 F.3d 1201, 1203 (11th Cir. 2005) 

(holding that “[w]e decide ‘pure law’ issues de novo, which is another way of 

saying that a ruling based on an error of law is an abuse of discretion.”) (internal 

citations omitted). 

IV. DISCUSSION

We first address the Receiver’s argument that Wells Fargo’s appeal is 

untimely. After finding that argument is without merit, we address whether Wells 

Fargo’s security interests were properly terminated by the district court. 

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A. Wells Fargo’s Appeal is Timely.

As an initial matter, the Receiver argues that Wells Fargo untimely noticed 

its appeal, and accordingly is procedurally barred from bringing the appeal. 

Specifically, the Receiver contends that Wells Fargo’s security interest in the two 

properties for which it did not file Proofs of Claim was extinguished at the point 

that it failed to submit those Proofs of Claim in compliance with the district court’s 

order. Accordingly, the Receiver argues, Wells Fargo’s “Motion for 

Determination” was effectively a motion for reconsideration, which was untimely, 

because it was filed more than a year after the entry of the relevant district court 

order. Similarly, then, the Receiver argues, Wells Fargo had until only September 

21, 2010 to appeal the district court’s order establishing the claims filing 

procedure. But the Receiver’s argument is without merit. The district court’s 

order establishing the claims filing procedure cannot be characterized as a “final 

trial court judgment that ‘ends the litigation on the merits and leaves nothing for 

the court to do but execute the judgment.’”2

 Fla. Wildlife Fed’n, Inc, v. Adm’r, 

U.S. EPA, 737 F.3d 689, 692 (11th Cir. 2013) (quoting Coopers & Lybrand v. 

Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457 (1978)). And, as the order was 

not final, it did not put Wells Fargo on notice that the district court would 

 2

 Moreover, Wells Fargo clearly contests the abolition of its security interests in the 

properties at issue, not the creation of a claims procedure.

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extinguish its secured interests by later order or that its security interests would be 

automatically terminated upon non-filing of a Proof of Claim. Accordingly, the 

first order from which Wells Fargo could take an appeal was the district court’s 

February 2, 2016 order. Wells Fargo’s appeal is timely. Fed. R. App. P. 

4(a)(1)(A).

B. The District Court Erred When it Terminated Wells Fargo’s Security 

Interest in the Properties at Issue.

As we have observed, a “district court has broad powers and wide discretion 

to determine relief in an equity receivership.” SEC v. Elliott, 953 F.2d 1560, 1566 

(11th Cir. 1992). This discretion derives from the inherent powers granted an 

equity court to fashion relief. Id. (citing SEC v. Safety Finance Service, Inc., 674 

F.2d 368, 372 (5th Cir. 1982)). To be sure, among these broad powers is the power 

to establish proof of claim procedures and set an effective claims bar date. See 

SEC v. Tipco, Inc., 554 F.2d 710, 711 (5th Cir. 1977). However, while a federal 

district court has wide-ranging authority to supervise a receivership, we hold it 

does not have the authority to extinguish a creditor’s pre-existing state law security 

interest, as the district court purported to do here. 

It is axiomatic that security interests in property are determined by state law, 

Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918 (1979), and that “a 

receiver appointed by a federal court takes property subject to all liens, priorities, 

or privileges existing or accruing under the laws of the state,” Marshall v. New 

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York, 254 U.S. 380, 385, 41 S.Ct. 143, 145 (1920). But beyond these wellestablished rules, there is minimal authority with respect to a district court’s 

authority, in the context of a receivership, to extinguish a secured creditor’s preexisting state law security interest by operation of its own claims administration 

process. We note, however, that our Circuit’s bankruptcy law has fielded and 

answered questions similar to those presented here and specifically addressed what 

limits are imposed upon a district court under similar circumstances.

3

 We 

conclude bankruptcy law is both analogous and instructive here. After all, a

primary purpose of both receivership and bankruptcy proceedings is to promote the 

efficient and orderly administration of estates for the benefit of creditors. See, e.g., 

Elliott, 953 F.2d at 1572-73 (analyzing bankruptcy law in the receivership 

context). Accordingly, we analyze the question before us through the lens of our 

bankruptcy decisions.

In the bankruptcy context, a secured creditor’s lien remains intact through 

the bankruptcy, regardless of whether the creditor files a proof of claim. In re 

 3 A number of other circuits have also looked to bankruptcy law to aid in addressing 

issues raised in the receivership context. See e.g., Marion v. TDI Inc., 591 F.3d 137, 148 (3d Cir. 

2010) (analyzing bankruptcy law in a receivership context); Fidelity Bank, Nat’l Ass’n v. M.M. 

Grp., Inc., 77 F.3d 880, 882 (6th Cir. 1996) (finding it “appropriate and helpful to refer to the 

rules governing appellate standing in bankruptcy proceedings” when no case law existed 

regarding the rules in a receivership action); Unisys Fin. Corp. v. Resolution Trust Corp., 979 

F.2d 609, 611 (7th Cir. 1992) (reasoning that bankruptcy law is “parallel” and “instructive” in 

the receivership context).

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Bateman, 331 F.3d 821, 827 (11th Cir. 2003) (“An unsecured creditor is required 

to file a proof [of] claim for its claim to be allowed, but filing is not mandatory for 

a secured creditor. In fact, a secured creditor need not do anything during the 

course of the bankruptcy proceeding because it will always be able to look to the 

underlying collateral to satisfy its lien.”) (citations omitted); In re Thomas, 883 

F.2d 991, 997 (11th Cir. 1989) (finding that a creditor’s lien was not voided in 

bankruptcy proceeding, and a proof of claim must only be filed in a Chapter 13 

proceeding to preserve a deficiency claim).4

This reasoning is also consistent with treatises that have addressed the issue 

in the receivership context. For example, one such treatise states that:

The appointment of a receiver does not invalidate liens existing at the 

time the receiver is appointed, although it may affect or change the 

remedy or remedies which the lienholder may use to enforce his lien. 

Generally speaking the person who has a specific lien on property is 

entitled by following proper procedure to pay himself out of the 

property and if it be insufficient, then to prove his claim for the 

deficiency. In the case of receivership such claim must come out of 

the proceeds of property not covered by the specific lien and such 

claim for deficiency must prorate with the unsecured creditors. 

Generally speaking no other creditor except the lienholder is entitled 4 The Receiver argues that the cases cited by Wells Fargo “are a creature of, and unique 

to, the federal bankruptcy code itself.” Response Br. at 27. But that argument is simply off the 

mark. Secured creditors’ liens ride through bankruptcy for reasons beyond 11 U.S.C. § 506(d). 

In fact, well before section 506(d) was added to the modern Bankruptcy Code, courts held that

creditors’ secured interests were preserved throughout bankruptcy. Long v. Bullard, 117 U.S. 

617, 620-21 (1886); see also White v. FIA Card Servs., N.A., 494 B.R. 227, 230 (Bankr. W.D. 

Va. 2012) (“A longstanding pre-Code rule allowed secured creditors to choose not to participate 

in a debtor’s bankruptcy proceeding and still retain valid, enforceable liens once the debtor was 

discharged from bankruptcy.”). 

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to any part of the proceeds of property covered by a lien until the 

lienor is first paid.

Ralph Ewing Clark, A Treatise on the Law and Practice of Receivers, § 646 (3d ed. 

1959). A secured creditor certainly may file a proof of claim in a receivership 

action, in turn submitting itself to the jurisdiction of the receivership, and entitling

itself to access of the general pool of receivership assets for any unsecured portion 

of its debt.5

 In fact, this may often be advisable where a secured creditor is 

undersecured or anticipates having a claim for deficiency beyond what may be 

paid out of the collateral. However, a federal district court cannot order a secured 

creditor to either file a proof of claim and submit its claim for determination by the 

receivership court, or lose its secured state-law property right that existed prior to 

the receivership.

V. CONCLUSION

For the reasons stated above, we reverse the district court’s order granting 

the Receiver’s Motion for Determination that Wells Fargo’s Failure to Comply 

with this Court’s Claims Administration Process Extinguished its Purported 

Interests in Receivership Properties, and for Release of Proceeds of Sale of 

Sarasota Property. Wells Fargo’s security interests remain intact as to the two 

 5 As the district court correctly noted, there is a distinction between a secured creditor’s 

in rem rights to the collateral and its right to receive a distribution for the general pool of 

receivership assets. Nevertheless, the district court erred when it then determined that Wells 

Fargo’s failure to file Proofs of Claim for two of its properties extinguished its in rem rights to

the collateral as well as its right to receive a distribution from the pool of receivership assets.

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properties for which it did not file a Proof of Claim in the district court. This case 

is remanded for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

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