Page 1 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

Troy Greenfield, OSB #892534 

Email: tgreenfield@schwabe.com 

Alex I. Poust, OSB #925155 

Email: apoust@schwabe.com 

Lawrence R. Ream (Admitted Pro Hac Vice) 

Email: lream@schwabe.com 

SCHWABE, WILLIAMSON & WYATT, P.C. 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503-222-9981 

Facsimile: 503-796-2900 

Ivan B. Knauer (Admitted Pro Hac Vice) 

Email: iknauer@swlaw.com 

SNELL & WILMER LLP 

1101 Pennsylvania Avenue, NW, Suite 300 

Washington, DC 20004 

Telephone: 202-802-9770 

Facsimile: 202-688-2201 

Attorneys for Receiver for Defendants 

Aequitas Management, LLC; Aequitas Holdings, LLC; Aequitas 

Commercial Finance, LLC; Aequitas Capital Management, Inc.; 

Aequitas Investment Management, LLC 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

SECURITIES AND EXCHANGE 

COMMISSION, 

Plaintiff, 

v. 

AEQUITAS MANAGEMENT, LLC; 

AEQUITAS HOLDINGS, LLC; 

AEQUITAS COMMERCIAL FINANCE, 

LLC; AEQUITAS CAPITAL 

MANAGEMENT, INC.; AEQUITAS 

INVESTMENT MANAGEMENT, LLC; 

No. 3:16-cv-00438-JR

RECEIVER’S MOTION FOR ORDER (1) 

APPROVING FORM AND MANNER OF 

NOTICE REGARDING APPROVAL OF 

PROPOSED DISTRIBUTION PLAN AND 

PONZI DETERMINATION, 

(2) APPROVING PROCEDURES AND 

DEADLINES, (3) SETTING A HEARING, 

AND FOR RELATED RELIEF 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 1 of 14
Page 2 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

ROBERT J. JESENIK; BRIAN A. OLIVER; 

and N. SCOTT GILLIS,

Defendants.

LR 7-1 CERTIFICATION 

On December 23, 2019, counsel for Ronald F. Greenspan (the “Receiver”) circulated to 

the approximately 70 counsel of record, via email, a version of this motion, related exhibits, and 

proposed form of order that is substantially the same as the filed versions (“Motion”). The 

conferral requested that counsel respond by 12:00 noon (Pacific Standard Time) on December 

30, 2019, as to whether their clients object or consent to the relief sought pursuant to the Motion. 

As of the time of filing this Motion, the undersigned had received one (1) consent and 

one (1) potential objection. Through counsel, the Receiver has communicated with the party 

holding the potential objection and believes that it will be resolved in the very near term. The 

Receiver will report to the Court regarding the resolution of this potential objection. 

RELIEF REQUESTED 

Ronald F. Greenspan, the duly appointed Receiver,1

 moves this Court for an order 

establishing the procedures for the Court’s review of the Receiver’s proposed distribution plan 

(the “Distribution Plan”) and Ponzi determination. 

Broadly, by this Motion the Receiver requests the Court: 

 (1) approve the Receiver’s proposed form of notice to interested parties regarding the 

procedures for Court-approval of the distribution plan and Ponzi determination (the “Notice”), 

 (2) set deadlines for (a) filing of the Receiver’s motion for approval of distribution plan 

 1

 Capitalized terms not otherwise defined in this Motion shall have the meanings ascribed 

to them in the Order Appointing Receiver entered by this Court on April 14, 2016 (Dkt. 156). 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 2 of 14
Page 3 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

and Ponzi determination (the “Distribution Plan Motion”), (c) mailing of the Court approved 

Notice, (d) filing responses or objections to the Distribution Plan Motion, and (e) filing the 

Receiver’s reply in support of the Distribution Plan Motion, and 

(3) schedule a hearing on approval of the Distribution Plan Motion on or as soon after 

March 30, 2020, as the Court’s calendar will permit. 

POINTS AND AUTHORITIES 

 I. BROAD DISCRETION 

As this Court knows, a receivership is appropriate where, for example, there is a need to 

“marshal and preserve assets from further misappropriation and dissipation” and “clarify the 

financial affairs of an entity for the benefit of investors.”2

 This Court possesses “extremely 

broad” power when “determin[ing] the appropriate action to be taken in the administration of the 

receivership.”3 That “authority derives from the inherent power of a court of equity to fashion 

effective relief,” and the exercise of that power is particularly appropriate “where a federal 

agency seeks enforcement in the public interest.”4

 

This Court’s power and its related “wide discretion” extend to “determin[ing] the 

appropriate relief in an equity receivership.”5

 In part because every fraudulent situation is 

different, “[t]here are no hard rules governing a district court’s [distribution] decisions in [federal 

 2 SEC v. Schooler, No. 12-2164, 2012 U.S. Dist. LEXIS 188994, *11 (S.D. Cal. Nov. 30, 

2012). 

3 SEC v. Hardy, 803 F.2d 1034, 1037 (9th Cir. 1986). 

4 SEC v. Wencke, 622 F.2d 1363, 1369, 1371 (9th Cir. 1980). 

5 SEC v. Lincoln Thrift Ass’n, 577 F.2d 600, 606 (9th Cir. 1978). See also SEC v. Capital 

Consultants, LLC, 397 F.3d 733, 738 (9th Cir. 2005) (quoting same). 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 3 of 14
Page 4 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

equity receiverships].”6 That is, a distribution plan is subject to approval if it is “fair and 

reasonable.”7

 Indeed, the Ninth Circuit will uphold any “‘reasonable procedures instituted by the 

district court that serve the purpose’ of orderly and efficient administration of the receivership 

for the benefit of creditors.”8 Such broad deference is warranted, according to the Ninth Circuit, 

because “most receiverships involve multiple parties and complex transactions.”9 

Moreover, “the use of summary proceedings to determine appropriate relief in equity 

receiverships, as opposed to plenary proceedings under the Federal Rules, is within the 

jurisdictional authority of a district court.”10 By “avoid[ing] formalities that would slow down 

the resolution of disputes,” the use of summary proceedings “promotes judicial efficiency and 

reduces litigation costs to the receivership.”11 

Still, investors and other parties in interest are entitled to “fair notice and a reasonable 

opportunity to respond.”12 To that end, the Receiver moves this Court to approve his proposal for 

providing notice to known claimants and other interested parties, setting the hearing date and 

 6 SEC v. Enter. Tr. Co., No. 08 C 1260, 2008 U.S. Dist. LEXIS 79731, at *10 (N.D. Ill.

Oct. 7, 2008). 

7 See SEC v. Copeland, No. CV 11-8607-R, 2014 U.S. Dist. LEXIS 195315, at *5 (C.D. 

Cal. May 19, 2014) (“With respect to the motion to approve the distribution of CWM Realty, 

‘the primary job of the district court is to ensure that the proposed plan of distribution is fair and 

reasonable.’” (Quoting S.E.C. v. Wealth Management LLC, 628 F.3d 323, 332 (7th Cir. 2010))). 

8 CFTC. v. Topworth Int’l, Ltd., 205 F.3d 1107, 1115 (9th Cir. 1999) (quoting Hardy, 803 

F.2d at 1037-38). 

9 Hardy, 803 F.2d at 1037. 

10 Id. at 1040. 

11 SEC v. Wencke, 783 F.2d 829, 837 n.9 (9th Cir. 1986). 

12 Hardy, 803 F.2d at 1040 (citing Wencke, 783 F.2d at 837-38). 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 4 of 14
Page 5 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

related deadlines for consideration of the Receiver’s motion.13 

II. PROCEDURAL BACKGROUND—THE DISTRIBUTION PLAN IS RIPE FOR CONSIDERATION

Since the Receiver’s appointment, he has exercised his Court-authorized powers and 

duties, marshalling and liquidating Receivership Property, developing and administering the 

claims process,14 investigating and filing his Forensic Report,15 facilitating Investors’ third-party 

litigation and settlement of claims against the pre-receivership professionals of the Aequitas 

Enterprise and providing timely reports to this Court.16 

The Receiver formulated his proposed Distribution Plan after soliciting input from the 

SEC and the Investor Advisory Committee members (who number in excess of 57 and represent 

all of the major groups of Aequitas Investors). Based on this input and the Receiver’s forensic 

investigation, the Receiver formulated a Distribution Plan that contains interrelated components 

and compromises to provide the most equitable treatment of Allowed Claims. 

Based on the foregoing, the Receiver believes that the matter is ripe for the Court’s 

consideration of the proposed Distribution Plan and the determination that the Aequitas 

Enterprise operated as a Ponzi Scheme. 

III. RECOMMENDED SCHEDULE

The Receiver moves this Court to establish the following dates as deadlines for the 

 13 Cf. FTC v. Crittenden, 823 F. Supp. 699, 705 (C.D. Cal. 1993) (approving notice 

procedure); SEC v. Sunwest Mgmt., No. 09-6056-HO, 2009 U.S. Dist. LEXIS 93181, at *19 (D. 

Or. Oct. 1, 2009) (finding hearing notice advised interested persons of date, time, and place of 

the hearing on approval of the distribution plan and their right to object and comment on the 

proposed distribution plan). 

14 Dkt. 683 (Order establishing the Claims Bar Date. Claims review in process). 

15 Dkt. 663 (The Forensic Report). 

16 Dkt. 776 (Receiver’s October 31, 2019 Report, which covers the period from July 1, 

2019 through September 30, 2019). 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 5 of 14
Page 6 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

following events: 

December 31, 2019 Deadline for the Receiver to file his Distribution Plan Motion and Ponzi 

determination

January 20, 2020 Deadline for the Receiver to send, by first class mail, the Court-approved 

Notice of the Distribution Plan Motion to investors and other parties in 

interest 

February 20, 2020 Deadline for parties to file and serve written responses or objections, if any, 

to the Distribution Plan Motion

March 20, 2020 Deadline for the Receiver to reply to written responses and objections to 

the Distribution Plan Motion, if any

(Set by the Court on a 

date on or after March 

30, 2020)

Hearing on the Receiver’s Distribution Plan Motion.

For reasons beneficial to the Receivership Estate, Investors and other parties in interest, 

the Receiver requests the Court set the hearing on the Distribution Plan Motion no earlier than 

March 30, 2020. 

IV. RECOMMENDED FORM OF NOTICE

The Receiver’s proposed form of the Notice is attached hereto as Exhibit A. The Notice 

provides known claimants and other interested parties with essential information about the 

procedures this Court shall establish to consider approval of the Distribution Plan and Ponzi 

determination, as well as a summary of the proposed Distribution Plan. The Receiver proposes to 

send the Notice, excluding the approximately 100-page Distribution Plan Motion, to the 

thousands of known claimants and other interested parties. In lieu of serving hard copies, the 

Distribution Plan Motion will be posted to the Receiver’s website, to the Claims Agent website. 

V. RECOMMENDED MANNER OF NOTICE

The Receiver recommends that the notice be mailed by first class mail to all of the 

following, who are known claimants or other parties in interest: 

 All persons who submitted a claim by the Claims Bar Date; 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 6 of 14
Page 7 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

 All persons to whom the Receiver provided an NOD; 

 Counsel for the Consumer Financial Protection Bureau and 14 Attorneys’ General 

 Counsel for all parties that have appeared in the SEC Enforcement Action; 

 Counsel for parties in the following civil actions: 

o American Student Financial Group, Inc. v. Aequitas Capital Management, 

Inc., 3:16-cv-01720-PK (D. Or.); 

o American Student Financial Group, Inc. v. Aequitas Student Funding, LLC, 

No. 37-2013-00028562-CU-IP-CTL (San Diego Cty. Sup. Ct.); 

o Enviso Capital Group, LLC v. Aequitas Holdings LLC, 37-2016-00009462-

CU-BC-CTL (San Diego Cty. Sup. Ct.); 

o Greenspan v. Fieldstone Financial Management Group, LLC, No. 3:17-cv00233 (D. Or.); 

o Gruber v. Education Dynamics LLC, No. 4:16-cv-06059-KAW (N.D. Cal.); 

o Reyes v. Ocean Avenue Financial Services, LLC, No. BC628619 (Los Angeles 

Cty – Central Dist. Sup. Ct.); 

o Western Property Holdings LLC v. Aequitas Capital Management Inc., No. 

121114490 (Mult. Cty. Cir. Ct.) 

o Albers v. Deloitte & Touche LLP, No. 3:16-cv-02239-AC (D. Or.); 

o Brown v. Price, No. 16-2-19544-0 SEA (King Cty. Sup. Ct.); 

o Brown v. Price, No. 3:17-cv-0089 (D. Or.); 

o Ciuffitelli et al. v. Deloitte & Touche LLP, No. 3:16-cv-00580-AC (D. Or.); 

o Farr v. Private Advisory Group, LLC, No. 2:16-cv-01565-RAJ (W.D. Wash.); 

o Kirk v. v. Deloitte & Touche LLP, No. 17CV42915 (Mult. Cty. Cir. Ct.); 

o Pommier v. Deloitte & Touche LLP, No. 16CV36439 (Mult. Cty. Cir. Ct.); 

o Wurster v. Deloitte & Touche, LLP, No. 16CV25920 (Mult. Cty. Cir. Ct.); 

o Cavanagh, et al. v. Deloitte & Touche LLP et al., No. 18CV09052 (Or. Cir. 

Ct. filed Mar. 7, 2018); 

o Ramsdell, et al. v. Deloitte & Touche LLP et al., No. 16CV40659 (Or. Cir. Ct. 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 7 of 14
Page 8 - RECEIVER’S MOTION FOR ORDER (1) APPROVING FORM AND MANNER 

OF NOTICE REGARDING APPROVAL OF PROPOSED DISTRIBUTION 

PLAN AND PONZI DETERMINATION, (2) APPROVING PROCEDURES 

AND DEADLINES, (3) SETTING A HEARING, AND FOR RELATED RELIEF 

SCHWABE, WILLIAMSON & WYATT, P.C. 

Attorneys at Law 

1211 SW 5th Avenue, Suite 1900 

Portland, OR 97204 

Telephone: 503.222.9981 

Fax: 503.796.2900

filed Dec. 2, 2016); 

o Layton, et al. v. Deloitte & Touche LLP et al., No. 17CV42915 (Or. Cir. Ct. 

filed Oct. 2, 2017); 

o Royal Fund LP v. Deloitte & Touche LLP et al., No. 19CV22914 (Mult. Cty. 

Cir. Ct.); and 

o Tarrant County, et al v. Motolease Financial, LLC, No. 325-D17185-18 (In 

the 352nd Judicial District, Tarrant Cty, Texas). 

VI. CONCLUSION 

For the above-stated reasons, the Receiver respectfully requests that the Court grant the 

relief requested above. 

Dated this 31st day of December, 2019. 

Respectfully submitted, 

SCHWABE, WILLIAMSON & WYATT, P.C. 

By: /s/ Alex Poust 

Troy Greenfield, OSB #892534 

Email: tgreenfield@schwabe.com 

Alex I. Poust, OSB #925155 

Email: apoust@schwabe.com 

Lawrence R. Ream (Admitted Pro Hac Vice)

Email: lream@schwabe.com 

Telephone: 503-222-9981 

Facsimile: 503-796-2900 

Ivan B. Knauer (Admitted Pro Hac Vice) 

Email: iknauer@swlaw.com 

SNELL & WILMER LLP 

1001 Pennsylvania Avenue, NW, Suite 300 

Washington, D.C. 20004 

Telephone: 202.802.9770 

Attorneys for Receiver for Defendants Aequitas 

Management, LLC, Aequitas Holdings, LLC, 

Aequitas Commercial Finance, LLC, Aequitas 

Capital Management, Inc., and Aequitas 

Investment Management, LLC 

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 8 of 14
1 

Exhibit A 

Notice of Deadlines and Hearing on Receiver’s Motion For 

(1) Court consideration of the receiver’s distribution plan; 

(2) request for a finding of the existence of a Ponzi Scheme; and 

(3) the right to be heard. 

EXHIBIT A 

Page 1 of 6

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 9 of 14
NOTICE OF HEARING OF PROPOSED DISTRIBUTION PLAN, PROPOSED FINDING OF PONZI SCHEME, AND RIGHT TO BE 

HEARD 

PAGE - 1

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

SECURITIES AND EXCHANGE 

COMMISSION, 

Plaintiff, 

v. 

AEQUITAS MANAGEMENT, LLC, ET 

AL. 

Defendants.

No. 3:16-cv-00438-JR

 

NOTICE OF HEARING OF THE RECEIVER’S PROPOSED DISTRIBUTION PLAN,

PROPOSED FINDING OF THE EXISTENCE OF A PONZI SCHEME AND 

YOUR RIGHT TO BE HEARD 

 

TO: ALL KNOWN CLAIMANTS AND OTHER PARTIES IN INTEREST OF THE AEQUITAS 

RECEIVERSHIP ENTITIES

PLEASE TAKE NOTICE OF THE FOLLOWING:

On [ ], the United States District Court for the District of Oregon—Portland 

Division (the “Court”) entered an order in the above-captioned case (the “Order Establishing Procedure and 

Notice For Hearing to Approve Distribution Plan and Ponzi Determination”)1 granting the Receiver’s 

Motion For Order Establishing Procedures Governing the Court’s Review of the Receiver’s Proposed 

Distribution Plan and Ponzi Determination (the “Distribution Plan Motion”).2

 The Order Establishing 

Procedure and Notice to Approve Distribution Plan and Ponzi Determination approved the form of this 

Notice. You are receiving this Notice because your rights may be affected. 

1. WHAT IS A DISTRIBUTION PLAN? 

A distribution plan, once approved by the Court, will dictate how the distributable funds of the 

Receivership Defendants3

 in the above-captioned case and all the specified and/or majority owned affiliates 

they control4

 will be apportioned among claimants and the process by which such funds will be distributed. 

 

1

 Dkt. #____. 

2

 Dkt. #____. 

3

 The Receivership Defendants include: Aequitas Management, LLC, Aequitas Holdings, LLC, Aequitas Commercial 

Finance, LLC, Aequitas Capital Management, Inc., and Aequitas Investment Management, LLC 

4

 The following Aequitas entities (or their predecessors in interest) are now part of and together with the Receivership 

Defendants comprise the Receivership Estate: AAM Fund Investment, LLC; ACC C Plus Holdings, LLC; ACC F 

Plus Holdings, LLC; ACC Funding Series Trust 2015-5; ACC Funding Trust 2014-1; ACC Funding Trust 2014-2; 

ACC Holdings 2, LLC; ACC Holdings 5, LLC; ACC Holdings, LLC; Aequitas Asset Management Oregon, LLC; 

Aequitas Capital Opportunities Fund, LP; Aequitas Capital Opportunities GP, LLC; Aequitas Corporate Lending, 

LLC; Aequitas EIF Debt Fund, LLC; Aequitas Enhanced Income Fund, LLC; Aequitas Enterprise Services, LLC; 

EXHIBIT A 

Page 2 of 6

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 10 of 14
NOTICE OF HEARING OF PROPOSED DISTRIBUTION PLAN, PROPOSED FINDING OF PONZI SCHEME, AND RIGHT TO BE 

HEARD 

PAGE - 2

Further, a distribution plan addresses are how claims are calculated, their relative priority once allowed, 

sources for paying claims, and the methodology for paying claims when funds are inadequate to pay all 

allowed claims an equal priority. 

2. HOW DOES THE RECEIVER PROPOSE TO DISTRIBUTE ASSETS? 

On ____, the Receiver filed the Plan Distribution Motion. In conjunction with his request for the 

finding of a Ponzi scheme, the Receiver moved the Court to approve a distribution plan that contains 

interrelated components and compromises that he believes provides the most equitable treatment of 

Allowed Claims and the equitable distribution of funds. The major components of the distribution plan as 

summarized in the Distribution Plan Motion are as follows: 

 The Receiver has resolved the tort claims of four investor litigation groups (the “Tort 

Claims Settlement”). Under the Tort Claims Settlement, the Receivership Estate will 

distribute a total of $30 million to those four investor litigation groups (the “Tort Settlement 

Payment”). Regardless of how those four investor litigation groups intend to internally 

distribute their portion of the Tort Settlement Payment, for purposes of calculating 

additional distributions under the Distribution Plan, the Receiver will apply the Tort 

Settlement Payment as if it were allocated among the members of each of the groups as if 

distributed under the rising tide methodology of the proposed Distribution Plan. That 

treatment preserves equity, to the extent within the Receiver’s control, between those 

Investors that were members of the four investor litigation groups that were party to the 

Tort Claims Settlement and those Investors that were not. 

 The Receiver will pay as priority payments the Allowed Claim of Non-Officer Former 

Employees up to $12,850, which the Receiver deems equitable as it comports with both 

federal bankruptcy law and the Oregon Receivership Code. 

 Allowed administrative tax claims shall be paid in full. 

 The overwhelming majority of Investors are Defrauded Investors, who will be treated as a 

single class because they are similarly situated in that the funds of the Defrauded Investors 

were commingled in various transactions and entities, notwithstanding some ostensible 

structural differences in their investments. 

 Defrauded Investors’ claims will be calculated on the basis of their Total Investment, which 

precludes claims for purported “profits,” “interest,” contractual default provisions, punitive 

damages, etc. after the Aequitas Enterprise was insolvent.5

 

 

Aequitas ETC Founders Fund, LLC; Aequitas Hybrid Fund, LLC; Aequitas Income Opportunity Fund, LLC; Aequitas 

Income Opportunity Fund II, LLC; Aequitas Income Protection Fund, LLC; Aequitas International Holdings, LLC; 

Aequitas Partner Fund, LLC; Aequitas Peer-to-Peer Funding, LLC; Aequitas Private Client Fund, LLC; Aequitas 

Senior Housing, LLC; Aequitas Senior Housing Operations, LLC; Aequitas Wealth Management Partner Fund, LLC; 

Aequitas Wealth Management, LLC; Aequitas WRFF I, LLC; APF Holdings, LLC; Aspen Grove Equity Solutions, 

LLC; Campus Student Funding, LLC; CarePayment Holdings, LLC; CarePayment, LLC; CP Funding I Holdings, 

LLC; Executive Citation, LLC; Executive Falcon, LLC; Hickory Growth Partners, LLC; ML Financial Holdings, 

LLC; Motolease Financial LLC; The Hill Land, LLC; and Unigo Student Funding, LLC. 5

 Because the funds to be distributed by the Receiver are a fixed amount and represent 100% of the net proceeds 

from the Estate, the accrual of fictitious interest, profits and the like during the Ponzi Period would only affect which 

Defrauded Investors get distributions and how much each one receives. It would have no effect on how much the 

Defrauded Investors receive as a whole. 

EXHIBIT A 

Page 3 of 6

Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 11 of 14
NOTICE OF HEARING OF PROPOSED DISTRIBUTION PLAN, PROPOSED FINDING OF PONZI SCHEME, AND RIGHT TO BE 

HEARD 

PAGE - 3

 Assets that were substantially commingled during the operations of the Aequitas Enterprise 

will be pooled across entities involved in the commingling and will be, consistent with 

Court determined priority distribution methodology, used to make distributions on 

Allowed Claims. 

 Consistent with many courts’ finding about the most equitable distribution methodology in 

the aftermath of a Ponzi scheme, distributions will be made to Defrauded Investors on a 

rising tide basis—that is, distributions will be made in an attempt to equalize the percentage 

of invested funds that are returned to each Defrauded Investor without regard for whether 

those funds were returned by the perpetrators of the fraud pre-Receivership (after the 

Aequitas Enterprise was insolvent) or paid under the Distribution Plan (and from the Tort 

Settlement Payment). 

 When a Defrauded Investor holds a beneficial interest in multiple accounts—which the 

Receiver will determine from the Aequitas Enterprise’s records matching accounts to 

taxpayer identification numbers (“TIN”)—that Defrauded Investor’s claims will be 

aggregated for purposes of calculating the claim and allowing a distribution.6

 Such 

aggregation is equitable because it treats a Defrauded Investor that held multiple accounts 

with different Pre-Receivership Returns the same as a Defrauded Investor who held a single 

account. For those accounts where a single TIN is used but one account is designated as a 

“trust” account and other account(s) as either a separate “trust” account or an “individual” 

account, the accounts will be treated as separate accounts and not be aggregated. 

 In the event of transfers of an investment between investors or any other type of investment 

ownership or control changes, all of the pre-transfer activity of the transferor associated 

with the transferred investment during the relevant time period is attributed to the 

transferee. If the investments were split into multiple parts as a result of a transfer or other 

change of ownership or control event, the pre-transfer activity will be allocated to the 

transferee on a pro-rata basis. 

 The plaintiffs in the Wurster matter7

 (the “URGE Group”), have requested that the Receiver 

reallocate the aggregate Receiver’s distribution attributable to the URGE Group 

(approximately $11.6 million), in accordance with different allocation percentages 

embodied in the URGE Group intra-member agreement, and for the Receiver to make the 

recalculated distribution directly to the members of the URGE Group. The Receiver has 

received executed consent forms, solicited by counsel for the URGE Group, from all 

affected investors. The effect of this reallocation would be to shift some of the $11.6 

million from URGE investors who received lower Pre-Receivership Returns to URGE 

investors who received greater Pre-Receivership Returns. The reallocation would not affect 

the amount distributable nor the allocation to any non-URGE Investors. The Receiver takes 

no position with respect to this reallocation and has agreed to include it in the Distribution 

Plan as an accommodation to the URGE Group in light of its members’ unanimous request 

and the fact that it does not affect any non-URGE Group investor. 

 

6

 For tax and other distribution purposes, the Receiver will endeavor to allocate the distribution between the 

Defrauded Investor’s multiple accounts based on each account’s relative Net Investment Loss. 

7

 Wurster v. Deloitte, et al., State of Oregon, Multnomah County Circuit Court, Case No. 16cv25920; Wurster, et. 

al., Arbitration Service of Portland, Inc., Case Nos. 170623-2 (Respondents – Sidley Austin, Tonkon Torp and 

IBAT) also known as United Recovery Group for Equality ("URGE"). 

EXHIBIT A 

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Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 12 of 14
NOTICE OF HEARING OF PROPOSED DISTRIBUTION PLAN, PROPOSED FINDING OF PONZI SCHEME, AND RIGHT TO BE 

HEARD 

PAGE - 4

 Investors in certain equity funds (defined as “Pass-through Investors” for purposes of the 

Distribution Plan), were not defrauded because their moneys were used as represented and 

used for its intended purposes. Such Pass-through Investors obtained then, and pursuant to 

the Distribution Plan will retain now, the benefit of their bargain (equity) and the 

Distribution Plan does not direct any payment to the Pass-through Investors on account of 

such investment.8

 Allowed Professional Claims and Allowed Administrative Claims shall be paid up to the 

full amount of their Allowed Claims, as approved by the Court. 

 Allowed Convenience Class Claims (i.e. the holder of an Allowed Creditor Claim equal to 

or less than $20,000 or the holder of an Allowed Creditor Claim in excess of $20,000 who 

elects to reduce their Allowed Creditor Claim to $20,000 and waives the balance of their 

Allowed Creditor Claim) shall be paid an amount equal to twenty percent (20%) of their 

Allowed Convenience Class Claim. 

 Allowed Creditor Claims (i.e. Allowed Creditor Claims that are not Allowed Convenience 

Class Claims) are junior in priority to the Allowed Claims of Defrauded Investors. If funds 

are available for distribution for Allowed Creditor Claims, they shall be paid pro-rata from 

the Qualified Settlement Fund, until paid in full.9

 Current estimates, however, are that 

holders of Allowed Creditor Claims will not receive a distribution. 

 Allowed Claims of the Individual Defendants are subordinated to and junior in priority to 

all other Allowed Claims and will receive no distribution until all other non-subordinated 

Allowed Claims are paid in full. Current estimates, however, are that the Allowed Claims 

of the Individual Defendants will not receive a distribution. 

 The Receiver shall not be required to make a distribution to the holder of an Allowed Claim 

if the distribution on such Allowed Claim is in an amount less than $50. 

 The above Distribution Plan summary is limited in scope. 

Please review the entirety of the Receiver’s Distribution Plan Motion as your rights may be affected 

by provisions that are not addressed in the summary. 

A copy of the Receiver’s Distribution Plan Motion is available for review at the Aequitas Receiver’s website 

(www.kccllc.net/aequitasreceivership) and the Receiver’s Claims Agent website 

 

8

 Members of the four litigation groups that are parties to the Tort Claims Settlement negotiated private distribution 

schemes of their choosing with their fellow members. Neither the Receiver nor the Court has been asked to assess 

the equity of whatever private distribution scheme such litigation group members negotiated. As such, the Receiver 

does not know whether some portion of the Tort Settlement Payment, after payment to the four litigation groups, 

could by virtue of a private distribution agreement ultimately benefit a Pass-through Investor who is a member of a 

litigation group. 

9

 It is common for distribution plans to prioritize the claims of innocent investors in a Ponzi scheme over other nonsecured creditors. See, e.g., United States CFTC v. Capitalstreet Fin., LLC, No. 3:09cv387-RJC-DCK, 2010 U.S. 

Dist. LEXIS 75113, at *4 (W.D.N.C. June 18, 2010) (approving plan giving investors priority over creditors); SEC 

v. HKW Trading LLC, No. 8:05-cv-1076-T-24-TBM, 2009 U.S. Dist. LEXIS 77215, at *8 (M.D. Fla. Aug. 14, 

2009) (“Payment to claimants whose property was unlawfully taken from them is given a higher priority than 

payment to the general creditors.” (Citing Clark, TREATISE ON THE LAW AND PRACTICE OF RECEIVERS § 662.1(A), p. 

1174, § 667, p. 1198 (3d ed. 1959)); SEC v. Brian A. Bjork, No. 4:11-cv-2830 (S.D. Tex. 2013). 

EXHIBIT A 

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Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 13 of 14
NOTICE OF HEARING OF PROPOSED DISTRIBUTION PLAN, PROPOSED FINDING OF PONZI SCHEME, AND RIGHT TO BE 

HEARD 

PAGE - 5

(http://www.AequitasClaims.com). 

3. HOW CAN YOU BE HEARD? 

If you wish to support, oppose, or otherwise respond to the Receiver’s Distribution Plan Motion, 

you must do so by no later than [_____________]. To comply with that deadline, you must both: 

(a) Serve a copy of your written support, opposition or other response, if any, on counsel for 

the Receiver at: 

Troy Greenfield 

Lawrence R. Ream 

SCHWABE WILLIAMSON & WYATT 

1211 SW 5th Ave., Suite 1900 

Portland, OR 97204 

(b) File the original of your written support, opposition or other response, if any, with the 

United States District Court, District of Oregon, Portland Division, located at 1000 SW 

Third Ave., Portland, OR 97204. 

The Receiver will thereafter file and serve his reply to written support, objections, or other 

responses. The Court will hear the Receiver’s motion and objections to it on ____________________. 

Dated this [ ] day of [ ]. 

SCHWABE, WILLIAMSON & WYATT

ATTORNEYS FOR RECEIVER RONALD F. 

GREENSPAN

EXHIBIT A 

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Case 3:16-cv-00438-JR Document 785 Filed 12/31/19 Page 14 of 14