Opinion ID: 3010602
Heading Depth: 1
Heading Rank: 5

Heading: propriety of the procedural orders

Text: Appellants also complain that the procedural orders entered by the District Court denied them discovery and prevented them from introducing evidence during the hearing which culminated in the orders lifting the freeze. The proceedings at issue spanned two days. A designated representative from each category of investors was permitted to raise objections to the modification of the freeze and was given a set amount of time for oral argument. In addition, a representative from each category of investors was allowed to cross-examine a designated witness regarding the Price Waterhouse accounting analysis, as well as the SEC official who oversaw the investigation of defendants, and was permitted to present testimony by way of an affidavit or expert report in support of any filed objections. Also, the legal position appellants urge, which was the position advanced by the Trustee and the SEC that assets subject to the alleged taints should remain subject to the freeze, had been fully briefed by the Trustee and the SEC prior to the time that the District Court issued its May 11 order lifting the freeze from these assets. We note that where there is a receiver with equitable power in a proceeding before it, the District Court has wide discretion as to how to proceed. See Elliott, 953 F.2d at _________________________________________________________________ freeze as to the A, B and D accounts following the April 29 hearing regarding the Trustee's motion to modify the restraining order does not change this analysis. As discussed infra, the court has wide discretion in fashioning proceedings with regard to an equitable receivership. SEC v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992) (noting court's wide discretion to determine relief in equity receivership), rev'd in part on other grounds, 998 F.2d 922 (11th Cir. 1993). Further, this issue had been fully briefed by the SEC and the Trustee, with the Trustee taking appellants' position that the court should not release these funds. Appellants have not argued how further factual development of this issue would have led to a different result since it had already been adequately developed. 20 1566 (noting court's wide discretion to determine relief in equity receivership); SEC v. Hardy, 803 F.2d 1034, 1040 (9th Cir. 1986) (noting that a court may use summary proceedings to determine relief in equity receivership). Appellants have failed to advance a theory or posit a relevant rule or case precedent that would have been the basis for continuing the freeze if they had not been thwarted in their effort to obtain the necessary proof. Even assuming that appellants had an arguable right to the procedural protections they seek, they have failed to show how they were prejudiced or harmed by the summary proceedings, since they have articulated no theory whereby a freeze could possibly have been appropriate as to the A, B or D funds. See Elliott, 953 F.2d at 1567 (stating that appellants must show how they were prejudiced by the summary proceedings and how they would have been better able to defend their interests in a plenary proceeding); Wencke, 783 F.2d at 837-38 (holding that summary proceedings are sufficient where party failed to show how he was prejudiced by such proceedings). Again, the fact that appellants may wish to pursue a cause of action for recovery of taints, even under a common enterprise theory, does not constitute a basis for a freeze of assets ex parte at the behest of the SEC. Since legal action in pursuit of the taints is clearly contemplated in the receivership or the bankruptcy proceedings, no harm has been done by the court's implementation of certain procedures for the conduct of the April 29 hearing. Accordingly, we find that the District Court did not abuse its discretion in conducting the hearing in the manner it did.