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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

Elizabeth Berke-Dreyfuss (Bar No. 114651) 

WENDEL, ROSEN, BLACK & DEAN LLP 

1111 Broadway, 24th Floor 

Oakland, California 94607-4036 

Telephone: (510) 834-6600 

Fax: (510) 834-1928 

Email: edreyfuss@wendel.com 

Attorneys for Susan L. Uecker, Receiver 

and Monitor 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

SECURITIES AND EXCHANGE 

COMMISSION, 

Plaintiff, 

vs. 

SAN FRANCISCO REGIONAL CENTER, LLC; 

THOMAS M. HENDERSON; CALIFORNIA 

GOLD MEDAL, L.P.; CALLSOCKET, L.P.; 

CALLSOCKET II, L.P.; CALLSOCKET III, 

L.P.; COMPREHENSIVE CARE OF 

OAKLAND, L.P.; NA3PL, L.P.; WEST 

OAKLAND PLAZA, L.P.; CALLSOCKET, 

LLC; CALLSOCKET II, LLC; CALLSOCKET 

III, LLC; COMPREHENSIVE CARE OF 

CALIFORNIA, LLC; IMMEDIA, LLC; and 

NORTH AMERICA 3PL, LLC, 

Defendants, 

-andCALLSOCKET HOLDING COMPANY, LLC; 

CALLSOCKET III HOLDING COMPANY, 

LLC; BERKELEY HEALTHCARE 

DYNAMICS, LLC; CENTRAL CALIFORNIA 

FARMS, LLC; and JL GATEWAY, LLC, 

Relief Defendants. 

 Case No. 3:17-CV-00223-RS 

MOTION FOR ORDERS: (i) 

APPROVING COMMISSION 

AGREEMENT; (ii) APPROVING SALE 

OF RUNWAY ASSETS TO ACTIVE NET, 

INC.; AND; (iii) APPROVING 

OVERBIDDING AND AUCTION 

PROCEDURES FOR SALE 

Date: June 22, 2017 

Time: 1:30 p.m. 

Place: Courtroom 3 

 450 Golden Gate Ave., 17th Floor 

 San Francisco, CA 94102 

Judge: The Hon. Richard Seeborg 

 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 1 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

2 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

TO: ALL PARTIES, THEIR COUNSEL OF RECORD, AND THE HONORABLE 

COURT: 

In accordance with this Court’s March 29, 2017 Order Appointing Receiver and Monitor 

(“Order”) (Docket No. 100”), Susan L. Uecker, the duly appointed and acting Court appointed 

receiver (“Receiver”) for Defendants San Francisco Regional Center, LLC; California Gold 

Medal, L.P.; CallSocket, L.P.; CallSocket II, L.P.; CallSocket III, L.P.; NA3PL, L.P.; West 

Oakland Plaza, L.P.; CallSocket, LLC; CallSocket II, LLC; CallSocket III, LLC; Immedia, LLC; 

and Relief Defendants, CallSocket Holding Company, LLC; Central California Farms, LLC; and 

JL Gateway, LLC (“Received Entities”), hereby moves the Court for an order (i) approving the 

sale of Runway, the technology incubator business operated by CallSocket, L.P. (“CS I”), to 

Active Net, Inc. for cash in the amount of $525,000, and (i) approving the overbidding procedures 

and auction procedures for the sale. 

I. INTRODUCTION 

The Receiver was appointed pursuant to the Order for each of the Received Entities, 

including CS I. Pursuant to the terms of the Order, the Receiver was authorized to take custody, 

control and possession of all Receivership Property. (Order, Para. 9. B.) The Receiver was 

further authorized to manage, control, operate and maintain the Receivership Estates until further 

order of the Court. (Id. at Para. 9. C.) Moreover, the Receiver may be authorized to sell and 

transfer clear title to any Receivership Property pursuant to such procedures as may be required by 

the Court and additional authority such as 28 U.S.C. §§ 2001, 2004. (Id. at Paras. 35, 37). A true 

and correct copy of the proposed Order Approving Receiver’s Motion for Orders: (i) Approving 

Commission Agreement; (ii) Approving Sale of Runway Assets to Active Net, Inc.; and (iii) 

Approving Overbidding and Auction Procedures for Sale is attached hereto as Exhibit A. 

A. Runway 

Runway is a technology innovation hub for entrepreneurs and corporate partners. It 

provides a place and the partners to assist early stage start-ups. It includes co-working space, 

corporate partnerships, events and accelerators. Runway was operated by CS I as a dba and 

although it was ostensibly to be related to CS I’s call center operations, it was not, meaning that 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 2 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

3 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

Runway was not included in the CSI EB-5 Business Plan. Runway is located in the Twitter 

Building at 1355 Market Street, San Francisco, California. The Receiver is seeking an order to 

sell Runway assets which consist of a lease, with six months remaining on the term, partner 

contracts, membership contracts, IP including name/domain, brand, goodwill, and any personal 

property (“Runway Assets”). The current lease expires on November 30, 2017.1 Uecker 

Decl., ¶ 2. 

1. Commission Agreement 

During the State Court Action, the Receiver had been authorized to market and sell 

Runway, and to enter into a Commission Agreement with two current employees of Runway, 

Katie Doherty and Joe Vasquez, whereby they would each receive 5% of the sale price. The 

Commission Agreement was a 90-day agreement, commencing on February 6, 2017, and expiring 

on May 6, 2017. The Receiver is requesting that the Court approve a new Commission 

Agreement with Katie Doherty and Joe Vasquez that is identical in all respects, except that the 

new Commission Agreement provides that they would each receive a 7.5% commission on sale 

transactions of $750,000 and above. The Receiver believes the increase commission is warranted 

in order to retain Ms. Doherty and Mr. Vasquez, who are key employees, through the Auction and 

Overbid to ensure competitive and aggressive overbidding, and through the closing and transition 

to the new buyer. Uecker Decl., ¶ 3. 

2. Sale of Runway Satisfies the Receiver’s Business Judgment 

In the Receiver’s best business judgment, the time is also right to sell the Runway Assets, 

because CS I’s call center was closed on July 20, 2016, pursuant to order in the State Court 

Action, and CS I has no further business operations. Uecker Decl., ¶ 4. Pre-State Court Action 

receivership, CS I did not maintain separate financial statements for Runway. Runway’s financial 

information had been comingled with CS I, so it was impossible to determine how Runway 

 

1

 Prior to the Receiver’s appointment in this matter, the Receiver was the receiver in the litigation 

styled, Young v. Henderson et al, Case No. RG15778891, pending before the Superior Court of the 

State of California, County of Alameda (“State Court Action”). During the prior State Court 

receivership, the Receiver was authorized not to exercise the option to renew the lease. Uecker 

Decl., ¶ 2, fn. 1. 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 3 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

4 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

performed as a stand-alone entity. During the State Court Action receivership, in November 2016 

and December 2016, Runway only had a modest net income of $38,852, and a net loss of 

($113,94.25), respectively. Since January, and February, 2017, Runway posted net losses of 

($56,636.95) and ($9,250.52), respectively. In March 2017, Runway posted a net income of 

$28,456.70, but in April 2017, posted a net loss of ($83,068.83). For the six months from 

November 2016 to April 2017, Runway lost ($195,590.10). The Receiver anticipates the 

economic forecast for Runway to remain the same, if not weaker. Uecker Decl., ¶ 4. Equally 

important, in the Receiver’s best business judgment, it is crucial to sell the Runway Assets 

including assignment of the lease, before the lease expires in November 2017, so that a new owner 

can negotiate a new term or vacate. Uecker Decl., ¶ 4. 

3. Marketing of Runway 

On or about February 6, 2017, the Receiver created a data room, and placed all of the 

pertinent information regarding the Runway Assets in the Data Room. The Runway employees, 

under the direction of the Receiver solicited thirty interested parties. In response to the 

solicitation, eighteen interested parties signed nondisclosure agreements. On March 13, 2017, the 

Receiver requested letters of intent, and in response the Receiver received five letters of intent to 

purchase the Runway Assets. The Receiver entered into negotiations with the two highest bidders, 

but neither of those transactions materialized. The Receiver now seeks approval of the sale of the 

Runway Assets to Active Net, Inc. (“Active Net”) for $525,000 cash on the following terms and 

conditions pursuant to the Asset Purchase Agreement. Uecker Decl., ¶ 5. A true and correct copy 

of the Asset Purchase Agreement is attached as Exhibit C to the Uecker Decl. Given the extensive 

marketing and solicitation for the Runway Assets, and the two prior higher bidders that were 

unable or unwilling to complete negotiations for the Runway Assets, the Receiver believes the 

purchase price to be paid by Active Net is fair and reasonable and represents the fair market value 

of the Runway Asset. Uecker Decl., ¶ 6. 

B. Active Net Asset Purchase Agreement 

Under the terms of the Asset Purchase Agreement, the purchaser, Active Net will purchase 

the following: 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 4 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

5 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

1. Assets: 

a. Runway Platform, Member Online Portal, and Research and 

Innovation Reports 

Runway platform / Member Online Portal - An online platform 

for members to access information on Runway office logistics, 

reserving conference rooms, registering guests, team perks and 

discounts, and events. Members can also choose to create team and 

individual profiles to more easily search and connect with other 

members, partners, and mentors. 

Research and Innovation Reports - Runway performs ongoing 

scouting and evaluation of startups in Corporate Partners’ strategic 

focus areas and produces reports to be reviewed in-person or via 

video conference with the Corporate Partners’ teams. Formats of 

reports are dependent on Corporate Partner preferences, but 

typically include information on the market, company, investor, 

technology and team. Runway has also created a number of 

industry reports, pulling from public information to compile analysis 

and overviews of technology, investing, and customer trends in 

specific verticals. 

b. Membership Agreements - the transfer and assignment of the 

Membership Agreements (the “Membership Agreements”) are not 

subject to the consent of the non-Seller parties to the Membership 

Agreements.

c. Partnership Agreement - that the transfer and assignment of the 

Partnership Agreements (the “Partnership Agreements”) are subject 

to the consent of the non-Seller parties to the Partnership 

Agreements. Receiver agrees to use best efforts to obtain the nonSeller party’s consent to the transfer and assignment of the 

Partnership Agreements to Buyer prior to the Closing.

d. Office Lease - Buyer acknowledges and agrees that the transfer and 

assignment of the Office Lease (the “Office Lease”) is subject to 

approval of SRI Nine Market Square LLC (“Landlord”). Seller 

agrees to use best efforts to assist Buyer in obtaining Landlord 

approval for the transfer and assignment of the Office Lease to 

Buyer prior to the Closing. Buyer acknowledges and agrees to use 

its best efforts to assist Receiver in negotiations with Landlord to 

obtain release of Receiver’s Letter of Credit held by Landlord 

pursuant to Paragraph 6 of the Office Lease and to negotiate directly 

with Landlord for a replacement Letter of Credit or such other 

Security Deposit as the Landlord and Buyer may mutually agree 

upon in connection with Buyer’s assignment and assumption of the 

Office Lease. The transfer and assignment of the Office Lease shall 

include all tenant improvements that are not affixed to the premises. 

e. Domain Name - Runway.is

f. Furniture, Fixtures and Equipment 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 5 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

6 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

g. Goodwill, Trade Names, Trade Marks and Service Marks - All 

goodwill associated with the business, CallSocket, L.P. dba 

Runway. All trade names, trademarks, and all service marks, 

including the name Runway. 

Uecker Decl., Exhibit C, Asset Purchase Agreement, Art. 2., Exhibits B, C, D, E, F, G. All of the 

Assets are described on the Exhibits attached to Asset Purchase Agreement. Id. Any asset that is 

not listed as an included asset, is an excluded asset and will remain the property of the 

Receivership Estate. Uecker Deck., Exhibit C, Asset Purchase Agreement, Art. 2.2. 

2. Liabilities 

Active Net shall not assume any of the liabilities of Runway with the exception of two 

critical vendor contracts, the ISP contracts with Unwired and Zayo. Uecker Decl., Exhibit C, 

Asset Purchase Agreement, Art. 3, Exhibit H. 

3. Purchase Price 

Active Net shall pay a total of $525,000 for the Runway Assets. Active Net paid a deposit 

of $52,500 (“Deposit”) upon the signing of the Asset Purchase Agreement and shall pay the 

remaining $472,500 balance upon the close of escrow. Uecker Decl., Exhibit C, Art. 5, 6. 

4. Court Approval 

a. Overbidding Procedures 

The approval of the sale of the Runway Assets to Active Net and Asset Purchase 

Agreement is subject to Court approval and is subject to overbidding as provided for in the Asset 

Purchase Agreement. Immediately prior to the hearing on the approval of the sale of the Runway 

Assets and Asset Purchase Agreement, the Receiver will conduct an Auction and Overbid at 450 

Golden Gate Ave., 17th Floor, outside of Courtroom 3, San Francisco, California 94102. 

i. Determination of “Qualified Bidder” Status. 

The determination of bidder qualification is solely within the discretion of the Receiver. 

To participate in the Auction and be deemed a “Qualified Bidder,” each prospective bidder other 

than Active Net must deliver to the Receiver the following by no later than five (5) days prior to 

the date of the Auction: 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 6 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

7 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

1. a written statement pursuant to which such bidder (A) offers 

to purchase all of the Assets and the Critical ISP Vendor Contracts and (B) agrees that, if such 

bidder has the highest bid at the Auction, such bidder will purchase the Assets and the Critical ISP 

Vendor Contracts on the identical terms and conditions as contained in this Agreement except as 

to the identity of the bidder and as to price; 

2. an asset purchase agreement, pursuant to which such bidder 

proposes to purchase the Assets and the Critical ISP Vendor Contracts from the Receiver, that is 

identical to the Agreement except as to the identity as to the bidder and the purchase price, signed 

by an authorized representative of such bidder; 

3. documentation as requested by the Receiver demonstrating 

that such bidder is financially capable of consummating the transactions contemplated by the 

Agreement. Proof of funds must be in the name of the proposed bidder; and 

4. a deposit in an amount equal to at least $52,500 that is 

refundable if such bidder is not the winning bidder at the Auction. 

5. if the bidder has not already done so, execute a nondisclosure 

agreement in a form satisfactory to the Receiver. 

ii. Auction. 

The Receiver shall timely communicate via electronic mail to Buyer and any Qualified 

Bidders the time and place of the Auction. 

1. An “Overbid” is any bid or bids made at the Auction that 

complies with the following conditions: 

(i) the first Overbid must be an amount equal to at least 

$750,000; 

(ii) any Overbid thereafter shall be made in increments of 

not less than $50,000 more than the any prior Overbid that is the then-highest bid; and 

(iii) Active Net shall be permitted to bid additional 

consideration at the Auction. 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 7 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

8 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

2. In addition to complying with the above requirements, the 

Auction shall be governed by the following procedures: 

(i) the Auction will be conducted openly, and only 

Active Net and the Qualified Bidders shall be entitled to make subsequent bids at the Auction; 

(ii) Active Net and each Qualified Bidder shall be 

required to represent that it has not engaged in any collusion with respect to the bidding or the sale 

of the Assets and the Critical ISP Vendor Contracts and disclose any and all affiliations with the 

defendants in the Securities and Exchange Commission v. San Francisco Regional Center, LLC 

Action; 

(iii) Active Net and each Qualified Bidder or the 

Qualified Bidder’s designated representative participating in the Auction must appear in person at 

the Auction. 

Uecker Decl., Exhibit C, Asset Purchase Agreement, Art. 4. 

5. Closing 

The closing of the sale of the Runway Assets to Active Net will occur under the terms of 

the Asset Purchase Agreement on or within five (5) days after the District Court signs the Order 

approving the sale and the Asset Purchase Agreement. Uecker Decl., Exhibit C, Art. 6. 

6. Termination 

If the District Court does not approve the Asset Purchase Agreement, the Deposit is 

refundable to Active Net. However, if the District Court approves the Asset Purchase Agreement 

and Active Net fails to close through no fault of the Receiver, the Receiver is entitled to retain the 

Deposit, the Asset Purchase Agreement is terminated, and all of the Receiver’s obligations under 

the agreement are terminated. Uecker Decl., Exhibit C, Art. 4.2. 

C. Legal Argument 

1. This Court Has Inherent Authority To Order The Disposition Of 

Receivership Assets. 

“The power of a district court to impose a receivership or grant other forms of ancillary 

relief does not in the first instance depend on a statutory grant of power from the securities laws. 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 8 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

9 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

Rather, the authority derives from the inherent power of a court of equity to fashion effective 

relief.” SEC v. Wencke, 622 F.2d 1363, 1369 (9th Cir. 1980). The “primary purpose of equity 

receiverships is to promote orderly and efficient administration of the estate by the district court 

for the benefit of creditors.” SEC v. Hardy, 803 F.2d 1034, 1038 (9th Cir 1986). 

District courts have the broad power of a court of equity to determine the appropriate 

action in the administration and supervision of an equity receivership. See SEC v. Capital 

Consultants, LLC, 397 F.3d 733, 738 (9th Cir. 2005); see also CFTC. v. Topworth Int’l, Ltd., 205 

F.3d 1107, 1115 (9th Cir. 1999) (“This court affords ‘broad deference’ to the court’s supervisory 

role, and ‘we generally uphold reasonable procedures instituted by the district court that serve 

th[e] purpose’ of orderly and efficient administration of the receivership for the benefit of 

creditors.”). 

In the estate administration context, courts are deferential to the business judgment of 

bankruptcy trustees, receivers, and similar estate custodians. See, e.g., Bennett v. Williams, 892 

F.2d 822, 824 (9th Cir. 1989); Southwestern Media, Inc. v. Rau, 708 F.2d 419, 425 (9th Cir. 

1983); In re Thinking Machines Corp., 182 B.R. 365, 368 (D. Mass. 1995) (rev’d on other 

grounds, In re Thinking Machines Corp., 67 F.3d 1021 (1st Cir. 1995)). 

The Court’s powers to administer the receivership and, specifically, to sell receivership 

assets, are not limited by the terms of private contracts. The Court’s authority over the assets of a 

receivership estate derives from the Court’s inherent power to exercise jurisdiction over assets 

taken into the receivership, rather than from underlying contracts. SEC v. American Capital 

Investments, Inc., 98 F.3d 1133, 1143-45 (9th Cir. 1996) (approving sale of property over limited 

partners’ objections based on court’s equitable powers, irrespective of state law or contract rights). 

Accordingly, this Court has broad equitable powers and discretion to grant this Motion and 

authorize and approve the terms of the Asset Purchase Agreement. 

2. The Court Should Approve The Terms Of Sale Including The Auction 

And Overbidding 

The Receiver may sell the Runway Assets pursuant to the terms of the Order and 28 U.S.C. 

§§ 2001, 2004. Order, ¶¶ 35-37 (Docket No. 100). Section 2004 requires that personal property 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 9 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

10 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

sold pursuant to an order of a court of the United States be sold in accordance with Section 2001. 

Section 2001, which sets forth the requirements for sales of real property, requires that property 

sold either at a public sale on the court house steps, or as the court directs. 28 U.S.C. § 2001(b). 2 

After a hearing, of which notice to all interested parties shall be given by publication or otherwise 

as the court directs, the court may order the sale of such realty or interest or part thereof for cash 

or other consideration and upon such terms and conditions as the court approves if it finds that the 

best interests of the estate will be served thereby. 

A public sale is one made at an auction to the highest bidder and which all persons have a 

right to come in and bid. Offredi v. Huhla, 60 A.2d 779, 781 (1948)(probate sale). The purpose of 

the public sale to capture the highest value of the property, and not afford the buyer an opportunity 

to make off with a bargain at expense of the debtor or creditors. National Oil & Gas, Inc. v. 

Gingrich, 716 N.E.2d 491 (Ind. Ct. App. 1999). 

The Receiver’s proposed sale procedures, providing for notice to interested parties who 

have previously executed nondisclosure agreements,3

 an Auction in the Federal Courthouse, 

outside of the Courtroom and competitive Overbidding immediately prior to hearing on 

confirmation of the sale of the Runway Assets and approval of the Asset Purchase Agreement for 

all intents and purposes qualifies the Receiver’s sale as public sale. The combination of soliciting 

offers, negotiating an Asset Purchase Agreement, holding an open Auction subject to Overbid at 

the Court substantially complies with the meaning of a public sale under 28 U.S.C.§ 2001(a),(b). 

 

2

 Section 2001(b) also authorizes the sale of property by private sale. However, prior to 

confirmation of a private sale, the court must appoint three disinterested persons to appraise the 

property, and no private sale can be confirmed that is at a price less than two-thirds of the 

appraised value. 28 U.S.C. § 2001(b). The Receiver is of the opinion that the value of the 

Runway Assets could not support the appointment of three appraisers, and given the fact that the 

two prior bidders were unable to complete the negotiations of an asset purchase agreement at 

higher prices than are being offered suggests that the current price is the fair market value. Uecker 

Decl., ¶ 7. 

3

 The Runway Assets consist of confidential membership and partner contracts, and IP so that all 

potential bidders must have already executed a nondisclosure agreement regarding the Runway 

Assets. The pool of bidders served with notice of the Auction and Overbidding are the thirty 

parties who were originally solicited as interested parties. Uecker Decl., ¶ 7, fn.2. 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 10 of 11
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009589.0024\4714259.6 MOTION FOR ORDERS APPROVING 

COMMISSION AGMT; SALE OF RUNWAY, 

OVERBIDDING AND AUCTION PROCEDURES 

11 3:17-CV-00223-RS

Wendel, Rosen, Black & Dean LLP 

1111 Broadway, 24t h Floor 

Oakland, California 94607-4036 

In either event, the Section 2001(b) authorizes the Court to approve a sale upon such conditions 

terms and conditions as the Court approves if it finds that the sale is in the best interests of the 

estate. The Receiver submits that the proposed sale to Active Net or such other Qualified Over 

Bidder is in the best interests of the CS I receivership estate because Runway is a “melting” asset, 

posting losses virtually every month. The closer Runway moves to lease termination, the less 

value there will be to the Runway Assets and there is insufficient ability to move locations after 

the lease terminates. Uecker Decl., ¶ 7. The Receiver requests that the Court approve the sale of 

the Runway Assets as proposed as in the best interests of the CS I Receivership Estate. 

II. CONCLUSION 

Wherefore, the Receiver request that the Court approve the Commission Agreement; 

approve the sale of the Runway Assets to Active Net for $525,000; and approve the proposed 

Auction and Overbidding Procedures for sale, and for such other and further relief as the Court 

deems proper. 

DATED: May 31, 2017 WENDEL, ROSEN, BLACK & DEAN LLP 

By: /s/ Elizabeth Berke-Dreyfuss 

 Elizabeth Berke-Dreyfuss 

Attorneys for Susan L. Uecker, Receiver 

and Monitor 

Case 3:17-cv-00223-RS Document 157 Filed 05/31/17 Page 11 of 11