Wednesday, November 3, 2010
Monday, October 18, 2010
Mantria Update #21
John Elway and Mantria were mentioned in the Denver Business Journal as yet another Ponzi Scheme has been uncovered. (see below)
Mueller in court on Ponzi scheme charges
Denver Business Journal - by Renee McGaw
Date: Friday, October 15, 2010, 1:17pm MDT - Last Modified: Friday, October 15, 2010, 1:22pm MDT
Related:Banking & Financial Services, Legal Services Alleged Ponzi scheme operator Sean Michael Mueller appeared in Denver District Court on Friday to be charged with four counts of racketeering, theft and securities fraud.
Mueller, 42, was taken into custody on Wednesday. Bond was set at $2 million, but Mueller doesn't plan to post it. He'll remain in custody until trial, while cooperating with authorities trying to recover as much money as possible for investors, his attorney, Rick Kornfeld, told reporters outside the courtroom on Friday.
Mueller, in jail garb, appeared at the hearing but did not enter a plea. Typically, defendants answer charges at the arraignment hearing, which in Mueller's case is scheduled for Nov. 1.
Charges against Mueller were announced Tuesday by Denver District Attorney Mitch Morrissey.
Mueller formed Mueller Capital Management in 2000, which operated two hedge funds, the Mueller Over Under Fund LP and Mueller Partners Fund LP, according to prosecutors' filings with the court. By April 2010, about 65 people had invested a total of $71 million in the funds.
Those investors include former Denver Broncos quarterback John Elway and a business partner.
Ironically, Elway made headlines last year for his role as a hired speaker for Speed of Wealth, a Centennial-based promoter of "green" housing developer and manufacturer Mantria Corp. The Securities and Exchange Commission has accused both Speed of Wealth and Mantria of running a $30 million Ponzi scheme; a trial is expected in early 2011. Elway has not been implicated in any wrongdoing.
Beginning in 2002, Mueller used day-trading strategies to attempt to generate returns for investors, according to prosecutors' court filings. Despite massive losses in 2008 and 2009, he continued to tell investors that the funds were profitable, according to a supporting affidavit for Mueller's arrest warrant.
He provided fictitious brokerage statements to his accountants, while using investor funds to live an extravagant lifestyle including three luxurious homes, expensive cars and memberships in exclusive country clubs, according to the affidavit. New investor funds were used to pay "returns" to existing investors, a classic Ponzi scheme strategy, according to the affidavit.
In April, Greenwood Village police responded to a report that a man was threatening to commit suicide by jumping off an RTD parking garage. It was Mueller, who had shortly before sent an email to employees and investors apologizing for his actions and saying that he was going to kill himself.
"Sometimes life stresses overwhelm a person to the point where they can't go on," Mueller wrote in the email, according to court filings. "The confusion has finally won its battle with me and I feel like there are no good options left. I always thought I could make it back but that's not going to happen."
By April, less than $9.5 million in cash and investments remained in the funds, against a liability of about $45 million, according to the affidavit.
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Mueller in court on Ponzi scheme charges
Denver Business Journal - by Renee McGaw
Date: Friday, October 15, 2010, 1:17pm MDT - Last Modified: Friday, October 15, 2010, 1:22pm MDT
Related:Banking & Financial Services, Legal Services Alleged Ponzi scheme operator Sean Michael Mueller appeared in Denver District Court on Friday to be charged with four counts of racketeering, theft and securities fraud.
Mueller, 42, was taken into custody on Wednesday. Bond was set at $2 million, but Mueller doesn't plan to post it. He'll remain in custody until trial, while cooperating with authorities trying to recover as much money as possible for investors, his attorney, Rick Kornfeld, told reporters outside the courtroom on Friday.
Mueller, in jail garb, appeared at the hearing but did not enter a plea. Typically, defendants answer charges at the arraignment hearing, which in Mueller's case is scheduled for Nov. 1.
Charges against Mueller were announced Tuesday by Denver District Attorney Mitch Morrissey.
Mueller formed Mueller Capital Management in 2000, which operated two hedge funds, the Mueller Over Under Fund LP and Mueller Partners Fund LP, according to prosecutors' filings with the court. By April 2010, about 65 people had invested a total of $71 million in the funds.
Those investors include former Denver Broncos quarterback John Elway and a business partner.
Ironically, Elway made headlines last year for his role as a hired speaker for Speed of Wealth, a Centennial-based promoter of "green" housing developer and manufacturer Mantria Corp. The Securities and Exchange Commission has accused both Speed of Wealth and Mantria of running a $30 million Ponzi scheme; a trial is expected in early 2011. Elway has not been implicated in any wrongdoing.
Beginning in 2002, Mueller used day-trading strategies to attempt to generate returns for investors, according to prosecutors' court filings. Despite massive losses in 2008 and 2009, he continued to tell investors that the funds were profitable, according to a supporting affidavit for Mueller's arrest warrant.
He provided fictitious brokerage statements to his accountants, while using investor funds to live an extravagant lifestyle including three luxurious homes, expensive cars and memberships in exclusive country clubs, according to the affidavit. New investor funds were used to pay "returns" to existing investors, a classic Ponzi scheme strategy, according to the affidavit.
In April, Greenwood Village police responded to a report that a man was threatening to commit suicide by jumping off an RTD parking garage. It was Mueller, who had shortly before sent an email to employees and investors apologizing for his actions and saying that he was going to kill himself.
"Sometimes life stresses overwhelm a person to the point where they can't go on," Mueller wrote in the email, according to court filings. "The confusion has finally won its battle with me and I feel like there are no good options left. I always thought I could make it back but that's not going to happen."
By April, less than $9.5 million in cash and investments remained in the funds, against a liability of about $45 million, according to the affidavit.
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Friday, August 13, 2010
Mantria Update #20
The Waste Conversion Technology is fresh in the minds of the State of Hawaii. The following two articles mention Hawaii's urgent waste disposal situation and our technology.
Lingle vetoes biofuel financing plan
Company that planned to turn waste into energy would have received $40M bond
by Nancy Cook Lauer
West Hawaii Today
ncook-lauer@westhawaiitoday.com
Thursday, July 8, 2010 8:50 AM HST
HILO -- A plan to convert Big Island gorse, macadamia nut shells and other waste into biofuel took a step backward this week, with Gov. Linda Lingle's veto of a $40 million special purpose revenue bond.
The plan was championed by Dante Carpenter, former Hawaii County mayor and current chairman of the state Democratic Party. Carpenter is secretary of the board and registered agent for Carbon Bio-Engineers Inc., an Oahu company.
"This bill is objectionable because the firm in question and members of its management have not satisfactorily resolved issues associated with the patent and licensing of a process developed by the University of Hawaii," Lingle, a Republican, said Tuesday in her veto message.
advertisement
Jonathan Roberts, licensing associate with the UH
Office of Technology Transfer & Economic Development, said his office did not contact the governor or speak with her about the licensing issue.
Carbon Bio-Engineers Inc. was created after the hostile takeover of its predecessor, Carbon Diversion Inc., by a company that later became the subject of a Securities and Exchange Commission investigation into a Ponzi scheme.
Roberts said Carbon Diversion was licensed to use Flash Carbonization and other patents developed by UH professor Michael Antal. But the company canceled the licenses, saying it had developed its own technology for which it has applied for patents.
"We have no way of knowing whether it infringes on our patents or not," Roberts said.
Antal said he hadn't talked with Lingle's office about the issue either. He added, however, that "the governor did the right thing."
Special purpose revenue bonds are bonds repaid by private developers but, because they're backed by the state Legislature, there is no federal tax charged on the interest.
The House unanimously passed the bill, HB 2497, and the Senate passed it with only three opposed, two of whom are Republicans.
The project has been years in the making, and initial steps have already been taken to remove invasive gorse plants from 13,000 acres of land on the slopes of Mauna Kea owned by the Department of Hawaiian Home Lands.
That project, which hopes to process 58 to 72 tons of gorse an acre into 21,000 to 26,000 gallons of synthetic diesel fuel, is managed by the nonprofit Oiwi Lokahi O Ka Mokupuni O Keawe in partnership with DHHL, Carbon Bio-Engineers and others.
Carpenter did not return a telephone message Wednesday. But he said in testimony to the Legislature that his company has "developed a hybrid gasification carbonization process, which can reduce various organic feedstock ... into carbon products and synthetic gas."
"CBEI continues working directly with its associations and DHHL to engage in essential projects on the island of Hawaii," Carpenter said in testimony. "In addition to sales of electrical power to the local utilities, the use of thermal fluid output from the cogeneration facility would be utilized by existing and planned businesses for both manufacturing and processing enterprises with economic benefits to the surrounding community."
The Democrat-majority Legislature praised the project for its potential to reduce greenhouse gas emissions, reduce waste going to the landfills, reduce transportation and disposal costs, create local technical and semitechnical jobs and produce renewable energy for local use.
"Your committee understands that Carbon Bio-Engineers Inc., will be utilizing a patented technology developed at the Hawaii Natural Energy Institute, University of Hawaii, to reduce various waste streams to useful, high-yield marketable products," said Sen. Mike Gabbard, D-Kapolei, Royal Kunia, chairman of the Senate Committee on Energy and Environment, in recommending passage of the bill. "In addition, the project will contribute to the standards projected for cogeneration facilities by the Hawaii Clean Energy Initiative, and will provide employment where the facilities are located."
I found a recent article on CNBC concerning Hawaii's inability to dispose of its waste.
Honolulu's Trash Woes Get Worse
Published: Tuesday, 24 Aug 2010 | 10:44 AM ET
Text Size
By: AP
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Facebook
Twitter
More Share
Gigantic piles of shrink-wrapped garbage have been moldering in the heat of a Hawaii industrial park for more than five months, waiting for a place to be shipped.
That wait appeared to end Monday when city officials inked a deal to dispose of the 40 million-pound pile of odious rubbish over the next six months by mostly burning it in an existing waste-to-power plant.
Source: hawaiianwastesystems.com
Shrink wrapped garbage.
--------------------------------------------------------------------------------
But bigger problems remain for Honolulu as the state's largest city struggles to find a home for all its waste. With its lone dump filling up fast, officials had been counting on a plan to ship at least 100,000 tons of blue, plastic-wrapped garbage bales each year to a landfill near an Indian reservation in Washington state.
But the tribe vehemently objected and won a court ruling last week that put the plan on hold indefinitely. Acting Honolulu Mayor Kirk Caldwell acknowledged as much Monday.
"The city bent over backwards to try to make this shipping effort work, but it is clear that shipping is not a viable option at this time," he said in a statement.
Honolulu makes up 80 percent of Hawaii's population and generates nearly 1.6 million tons of garbage a year. More than a third of the trash is incinerated to generate electricity. The remaining garbage is sent to the 21-year-old Waimanalo Gulch landfill on the island of Oahu's southwestern coast.
But the amount of available land on Oahu is limited, with Honolulu leaders reluctant to add landfills in their backyards and near sites known for their breathtaking, pristine beauty.
And the trash can't be taken elsewhere in the state; the Big Island has by far the most vacant land, and a dump with 71 years of capacity remaining. But a local ordinance bars importation of trash from outside that island.
"Honolulu has all the elements of a form of NIMBYism on steroids," said James Spencer, associate professor of urban and regional planning at the University of Hawaii. "In fact, the only place that is not in Honolulu's backyard seems to be off in Washington state."
RELATED LINKS
Current DateTime: 08:25:27 24 Aug 2010
LinksList Documentid: 38831576
Blog: Time to Ditch Plastic Bags
The Greenest States
Trash Inc.: A CNBC Special Report
And Washington state, at least the part overseen by the Yakama Indian Nation, isn't having it. The tribe, by treaty, has a degree of authority over nearly 11 million acres that it ceded to the U.S. government in 1855, including a regional dump in Klickitat County.
That's where a Seattle-based firm called Hawaiian Waste Systems wanted to ship some of Honolulu's trash. Starting last September, the trash was to be shredded and compressed into bales, wrapped in at least eight layers of thick plastic sheets and transported to the landfill, where it was to be covered with 18 inches of soil.
Tribal members were outraged that the U.S. Department of Agriculture, which regulates interstate waste transfers, granted preliminary approval to the shipments. They then went to court.
CONTINUED: What's In the Trash?
1 | 2 | Next Page »
Lingle vetoes biofuel financing plan
Company that planned to turn waste into energy would have received $40M bond
by Nancy Cook Lauer
West Hawaii Today
ncook-lauer@westhawaiitoday.com
Thursday, July 8, 2010 8:50 AM HST
HILO -- A plan to convert Big Island gorse, macadamia nut shells and other waste into biofuel took a step backward this week, with Gov. Linda Lingle's veto of a $40 million special purpose revenue bond.
The plan was championed by Dante Carpenter, former Hawaii County mayor and current chairman of the state Democratic Party. Carpenter is secretary of the board and registered agent for Carbon Bio-Engineers Inc., an Oahu company.
"This bill is objectionable because the firm in question and members of its management have not satisfactorily resolved issues associated with the patent and licensing of a process developed by the University of Hawaii," Lingle, a Republican, said Tuesday in her veto message.
advertisement
Jonathan Roberts, licensing associate with the UH
Office of Technology Transfer & Economic Development, said his office did not contact the governor or speak with her about the licensing issue.
Carbon Bio-Engineers Inc. was created after the hostile takeover of its predecessor, Carbon Diversion Inc., by a company that later became the subject of a Securities and Exchange Commission investigation into a Ponzi scheme.
Roberts said Carbon Diversion was licensed to use Flash Carbonization and other patents developed by UH professor Michael Antal. But the company canceled the licenses, saying it had developed its own technology for which it has applied for patents.
"We have no way of knowing whether it infringes on our patents or not," Roberts said.
Antal said he hadn't talked with Lingle's office about the issue either. He added, however, that "the governor did the right thing."
Special purpose revenue bonds are bonds repaid by private developers but, because they're backed by the state Legislature, there is no federal tax charged on the interest.
The House unanimously passed the bill, HB 2497, and the Senate passed it with only three opposed, two of whom are Republicans.
The project has been years in the making, and initial steps have already been taken to remove invasive gorse plants from 13,000 acres of land on the slopes of Mauna Kea owned by the Department of Hawaiian Home Lands.
That project, which hopes to process 58 to 72 tons of gorse an acre into 21,000 to 26,000 gallons of synthetic diesel fuel, is managed by the nonprofit Oiwi Lokahi O Ka Mokupuni O Keawe in partnership with DHHL, Carbon Bio-Engineers and others.
Carpenter did not return a telephone message Wednesday. But he said in testimony to the Legislature that his company has "developed a hybrid gasification carbonization process, which can reduce various organic feedstock ... into carbon products and synthetic gas."
"CBEI continues working directly with its associations and DHHL to engage in essential projects on the island of Hawaii," Carpenter said in testimony. "In addition to sales of electrical power to the local utilities, the use of thermal fluid output from the cogeneration facility would be utilized by existing and planned businesses for both manufacturing and processing enterprises with economic benefits to the surrounding community."
The Democrat-majority Legislature praised the project for its potential to reduce greenhouse gas emissions, reduce waste going to the landfills, reduce transportation and disposal costs, create local technical and semitechnical jobs and produce renewable energy for local use.
"Your committee understands that Carbon Bio-Engineers Inc., will be utilizing a patented technology developed at the Hawaii Natural Energy Institute, University of Hawaii, to reduce various waste streams to useful, high-yield marketable products," said Sen. Mike Gabbard, D-Kapolei, Royal Kunia, chairman of the Senate Committee on Energy and Environment, in recommending passage of the bill. "In addition, the project will contribute to the standards projected for cogeneration facilities by the Hawaii Clean Energy Initiative, and will provide employment where the facilities are located."
I found a recent article on CNBC concerning Hawaii's inability to dispose of its waste.
Honolulu's Trash Woes Get Worse
Published: Tuesday, 24 Aug 2010 | 10:44 AM ET
Text Size
By: AP
Digg
Buzz
More Share
Gigantic piles of shrink-wrapped garbage have been moldering in the heat of a Hawaii industrial park for more than five months, waiting for a place to be shipped.
That wait appeared to end Monday when city officials inked a deal to dispose of the 40 million-pound pile of odious rubbish over the next six months by mostly burning it in an existing waste-to-power plant.
Source: hawaiianwastesystems.com
Shrink wrapped garbage.
--------------------------------------------------------------------------------
But bigger problems remain for Honolulu as the state's largest city struggles to find a home for all its waste. With its lone dump filling up fast, officials had been counting on a plan to ship at least 100,000 tons of blue, plastic-wrapped garbage bales each year to a landfill near an Indian reservation in Washington state.
But the tribe vehemently objected and won a court ruling last week that put the plan on hold indefinitely. Acting Honolulu Mayor Kirk Caldwell acknowledged as much Monday.
"The city bent over backwards to try to make this shipping effort work, but it is clear that shipping is not a viable option at this time," he said in a statement.
Honolulu makes up 80 percent of Hawaii's population and generates nearly 1.6 million tons of garbage a year. More than a third of the trash is incinerated to generate electricity. The remaining garbage is sent to the 21-year-old Waimanalo Gulch landfill on the island of Oahu's southwestern coast.
But the amount of available land on Oahu is limited, with Honolulu leaders reluctant to add landfills in their backyards and near sites known for their breathtaking, pristine beauty.
And the trash can't be taken elsewhere in the state; the Big Island has by far the most vacant land, and a dump with 71 years of capacity remaining. But a local ordinance bars importation of trash from outside that island.
"Honolulu has all the elements of a form of NIMBYism on steroids," said James Spencer, associate professor of urban and regional planning at the University of Hawaii. "In fact, the only place that is not in Honolulu's backyard seems to be off in Washington state."
RELATED LINKS
Current DateTime: 08:25:27 24 Aug 2010
LinksList Documentid: 38831576
Blog: Time to Ditch Plastic Bags
The Greenest States
Trash Inc.: A CNBC Special Report
And Washington state, at least the part overseen by the Yakama Indian Nation, isn't having it. The tribe, by treaty, has a degree of authority over nearly 11 million acres that it ceded to the U.S. government in 1855, including a regional dump in Klickitat County.
That's where a Seattle-based firm called Hawaiian Waste Systems wanted to ship some of Honolulu's trash. Starting last September, the trash was to be shredded and compressed into bales, wrapped in at least eight layers of thick plastic sheets and transported to the landfill, where it was to be covered with 18 inches of soil.
Tribal members were outraged that the U.S. Department of Agriculture, which regulates interstate waste transfers, granted preliminary approval to the shipments. They then went to court.
CONTINUED: What's In the Trash?
1 | 2 | Next Page »
Saturday, June 26, 2010
Mantria Update #19
An article on Mantria was recently published in Leagle. It appears that another creditor was desparately trying to receive payment from Mantria. (see article below)
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MANTRIA CORPORATION, TROY B. WRAGG, AMANDA E. KNORR, SPEED OF WEALTH, LLC, WAYDE M. McKELVY, and DONNA M. McKELVY, Defendants.
WILLIAM R. LOVE, INC., Interested Party.
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, D. Colorado.
June 24, 2010.
ORDER DENYING PETITION FOR RELEASE OF FROZEN ASSETS
CHRISTINE M. ARGUELLO, District Judge.
This matter is before the Court on a Petition for Release of Frozen Assets filed by Interested Party William R. Love, Inc. (Doc. # 89). For the following reasons, the Petition is denied.
This matter arises out of allegations by Plaintiff Securities and Exchange Commission ("SEC"), that Defendants Mantria Corporation, Troy B. Wragg, Amanda E. Knorr, Speed of Wealth, LLC, Wayde M. McKelvy, and Donna M. McKelvy have engaged in a Ponzi scheme to defraud numerous investors of their assets. (See Doc. # 1.)
On November 16, 2009, the SEC filed a Motion for Ex Parte Temporary Restraining Order, Preliminary Injunction and Other Equitable Relief. (Doc. # 2.) That same day, the Court granted the SEC's Motion for emergency relief and entered a temporary restraining order, which froze all funds and assets that were traceable to investor funds. (Doc. # 15.) On December 2, 2009, upon the conclusion of a preliminary injunction hearing, the Court continued the asset freeze (the "Preliminary Injunction Order"). (Doc. # 26.)
On March 10, 2010, the SEC filed a Motion for Appointment of a Receiver, upon receipt of information that Defendants Wragg and Mantria transferred property in violation of the Court's Preliminary Injunction Order. (Doc. # 69.) The Court granted the Motion and, on April 30, 2010, issued an Order Appointing Receiver, namely John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services, LLC. (Doc. # 82, ¶ 2.) As set forth in the April 30 Order, the Receiver's responsibilities include the identification, location, and protection of the receivership estate's assets.
On May 28, 2010, Interested Party W.R. Love, Inc. filed the instant Petition for Release of Frozen Assets. (Doc. # 89.) As set forth in the Petition, W.R. Love, Inc. and its subsidiary Sustainable Golf Development ("SGD") are in the business of golf course planning and design. On August 7, 2008, SGD entered into an agreement with Defendant Mantria for the provision of golf course design services and land planning for the planned residential community, Mantria Place (the "Service Agreement"). As a result of this agreement, W.R. Love, Inc. commenced work on the project and generated costs and fees in the amount of $48,958.51, in which amount W.R. Love, Inc. submitted an invoice to Defendant Mantria. (Doc. # 89-2.) The invoice remains unpaid. Accordingly, W.R. Love, Inc. has filed the instant Petition, requesting a release of Mantria's frozen assets in the amount of $48,958.51.
On June 16, 2010, the SEC responded to the Petition. (Doc. # 92.) In pertinent part, the SEC opposes the Petition because the release of the requested funds would interfere with the Receiver's attempt to identify, locate, and protect the receivership assets for the benefit of more than 300 investors nationwide. Accordingly, the SEC contends that "no funds should be released for the benefit of any specific investor or creditor unless sufficient justification exists." (Id. at 3.) The Court agrees.
At the outset, the Court notes that W.R. Love, Inc., a corporation, filed the instant Petition pro se.[ 1 ] Such a pro se filing by a corporate entity violates D.C.COLO.LCivR 11.1, which expressly precludes, and allows the striking of, pro se filings by corporations.[ 2 ] In any event, the Court finds other reasons to deny the instant Petition, as set forth below.
"Given its equitable nature and purposes, a district court supervising such a receivership has the discretionary power to deny [] equitable remedies as inimical to receivership purposes even though they might be warranted under controlling law." Bermant v. Broadbent, Esq., No. 2:05-cv-466, 2006 WL 3692661, at *6 (D. Utah Dec. 12, 2006) (unpublished) (quoting United States v. Vanguard Inv. Co., 6 F.3d 222, 226-27 (4th Cir. 1993)); see also SEC v. Elliott, 953 F.2d 1560, 1569-70 (11th Cir. 1992) ("A district court had broad powers and wide discretion to determine the appropriate relief in an equity receivership."). Further, "the rights of creditors of a receivership must be balanced against the need for expeditious administration of the receivership; a district court in overseeing a receivership must make rules which are practicable as well as equitable." SEC v. Hardy, 803 F.2d 1034, 1038-39 (9th Cir. 1986) (internal citation and quotation omitted).
Having reviewed the instant Petition, and mindful of the need to balance the rights of creditors, such as W.R. Love, Inc., with the expeditious administration of the receivership assets, the Court denies the instant Petition. That W.R. Love, Inc. is dependent on income to pay salaries and bills does not render it unique from other creditors. To allow creditors to collect on unpaid invoices at this juncture would seriously interfere with the Receiver's efforts to identify, locate, and secure the receivership assets. W.R. Love, Inc. has not provided sufficient justification for its request to be treated differently from Defendants' other creditors.
Accordingly, for the foregoing reasons, IT IS ORDERED THAT:
(1) Interested Party W.R. Love, Inc.'s Petition for Release of Frozen Assets (Doc. # 89) is DENIED; and
(2) W.R. Love, Inc. shall not file any further documents with this Court without representation of counsel.
1. Because the Service Agreement was entered into between Defendant Mantria and SGD, the subsidiary of W.R. Love, Inc., the Court questions whether the instant Petition should have also been filed on behalf of SGD. (See Doc. # 89-1.) However, the Court does not base its denial of the instant Petition on this potential deficiency.
2. "Only pro se individual parties and members of this court's bar may appear or sign pleadings, motions, or other papers. Any pleading, motion, or paper listing in a signature block, or purporting to enter an appearance by, any other person, partnership, professional corporation, limited liability company, or other entity may be stricken." D.C.COLO.LCivR 11.1 (emphasis added). While the instant Petition was signed by an individual, William R. Love, he did so as President of W.R. Love, Inc. Accordingly, the instant Petition is not a pro se filing by an individual, but an improper pro se filing by a corporation.
This copy provided by Leagle, Inc.
x
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MANTRIA CORPORATION, TROY B. WRAGG, AMANDA E. KNORR, SPEED OF WEALTH, LLC, WAYDE M. McKELVY, and DONNA M. McKELVY, Defendants.
WILLIAM R. LOVE, INC., Interested Party.
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, D. Colorado.
June 24, 2010.
ORDER DENYING PETITION FOR RELEASE OF FROZEN ASSETS
CHRISTINE M. ARGUELLO, District Judge.
This matter is before the Court on a Petition for Release of Frozen Assets filed by Interested Party William R. Love, Inc. (Doc. # 89). For the following reasons, the Petition is denied.
This matter arises out of allegations by Plaintiff Securities and Exchange Commission ("SEC"), that Defendants Mantria Corporation, Troy B. Wragg, Amanda E. Knorr, Speed of Wealth, LLC, Wayde M. McKelvy, and Donna M. McKelvy have engaged in a Ponzi scheme to defraud numerous investors of their assets. (See Doc. # 1.)
On November 16, 2009, the SEC filed a Motion for Ex Parte Temporary Restraining Order, Preliminary Injunction and Other Equitable Relief. (Doc. # 2.) That same day, the Court granted the SEC's Motion for emergency relief and entered a temporary restraining order, which froze all funds and assets that were traceable to investor funds. (Doc. # 15.) On December 2, 2009, upon the conclusion of a preliminary injunction hearing, the Court continued the asset freeze (the "Preliminary Injunction Order"). (Doc. # 26.)
On March 10, 2010, the SEC filed a Motion for Appointment of a Receiver, upon receipt of information that Defendants Wragg and Mantria transferred property in violation of the Court's Preliminary Injunction Order. (Doc. # 69.) The Court granted the Motion and, on April 30, 2010, issued an Order Appointing Receiver, namely John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services, LLC. (Doc. # 82, ¶ 2.) As set forth in the April 30 Order, the Receiver's responsibilities include the identification, location, and protection of the receivership estate's assets.
On May 28, 2010, Interested Party W.R. Love, Inc. filed the instant Petition for Release of Frozen Assets. (Doc. # 89.) As set forth in the Petition, W.R. Love, Inc. and its subsidiary Sustainable Golf Development ("SGD") are in the business of golf course planning and design. On August 7, 2008, SGD entered into an agreement with Defendant Mantria for the provision of golf course design services and land planning for the planned residential community, Mantria Place (the "Service Agreement"). As a result of this agreement, W.R. Love, Inc. commenced work on the project and generated costs and fees in the amount of $48,958.51, in which amount W.R. Love, Inc. submitted an invoice to Defendant Mantria. (Doc. # 89-2.) The invoice remains unpaid. Accordingly, W.R. Love, Inc. has filed the instant Petition, requesting a release of Mantria's frozen assets in the amount of $48,958.51.
On June 16, 2010, the SEC responded to the Petition. (Doc. # 92.) In pertinent part, the SEC opposes the Petition because the release of the requested funds would interfere with the Receiver's attempt to identify, locate, and protect the receivership assets for the benefit of more than 300 investors nationwide. Accordingly, the SEC contends that "no funds should be released for the benefit of any specific investor or creditor unless sufficient justification exists." (Id. at 3.) The Court agrees.
At the outset, the Court notes that W.R. Love, Inc., a corporation, filed the instant Petition pro se.[ 1 ] Such a pro se filing by a corporate entity violates D.C.COLO.LCivR 11.1, which expressly precludes, and allows the striking of, pro se filings by corporations.[ 2 ] In any event, the Court finds other reasons to deny the instant Petition, as set forth below.
"Given its equitable nature and purposes, a district court supervising such a receivership has the discretionary power to deny [] equitable remedies as inimical to receivership purposes even though they might be warranted under controlling law." Bermant v. Broadbent, Esq., No. 2:05-cv-466, 2006 WL 3692661, at *6 (D. Utah Dec. 12, 2006) (unpublished) (quoting United States v. Vanguard Inv. Co., 6 F.3d 222, 226-27 (4th Cir. 1993)); see also SEC v. Elliott, 953 F.2d 1560, 1569-70 (11th Cir. 1992) ("A district court had broad powers and wide discretion to determine the appropriate relief in an equity receivership."). Further, "the rights of creditors of a receivership must be balanced against the need for expeditious administration of the receivership; a district court in overseeing a receivership must make rules which are practicable as well as equitable." SEC v. Hardy, 803 F.2d 1034, 1038-39 (9th Cir. 1986) (internal citation and quotation omitted).
Having reviewed the instant Petition, and mindful of the need to balance the rights of creditors, such as W.R. Love, Inc., with the expeditious administration of the receivership assets, the Court denies the instant Petition. That W.R. Love, Inc. is dependent on income to pay salaries and bills does not render it unique from other creditors. To allow creditors to collect on unpaid invoices at this juncture would seriously interfere with the Receiver's efforts to identify, locate, and secure the receivership assets. W.R. Love, Inc. has not provided sufficient justification for its request to be treated differently from Defendants' other creditors.
Accordingly, for the foregoing reasons, IT IS ORDERED THAT:
(1) Interested Party W.R. Love, Inc.'s Petition for Release of Frozen Assets (Doc. # 89) is DENIED; and
(2) W.R. Love, Inc. shall not file any further documents with this Court without representation of counsel.
1. Because the Service Agreement was entered into between Defendant Mantria and SGD, the subsidiary of W.R. Love, Inc., the Court questions whether the instant Petition should have also been filed on behalf of SGD. (See Doc. # 89-1.) However, the Court does not base its denial of the instant Petition on this potential deficiency.
2. "Only pro se individual parties and members of this court's bar may appear or sign pleadings, motions, or other papers. Any pleading, motion, or paper listing in a signature block, or purporting to enter an appearance by, any other person, partnership, professional corporation, limited liability company, or other entity may be stricken." D.C.COLO.LCivR 11.1 (emphasis added). While the instant Petition was signed by an individual, William R. Love, he did so as President of W.R. Love, Inc. Accordingly, the instant Petition is not a pro se filing by an individual, but an improper pro se filing by a corporation.
This copy provided by Leagle, Inc.
x
Friday, June 11, 2010
Mantria Update #18
BioMass Magazine published an article on Mantria in their June 2010 issue. The following is page 1 of 3:
From the June 2010 Issue ShareThis RSS Feed Print this
Unearthing Green Scams
Some renewable energy investment opportunities seem too good to be true—and occasionally they are. How can a potential investor tell a wise investment from a shell game?
By Anna Austin
Historically, the number of investment fraud cases in a given industry increases with the level of hype surrounding it. If it’s frequently in the news and on the Internet, chances are it’s also plagued by gimmicks, scams and/or embellished technological advancements camouflaged by enticing promises of high and quick returns.
Rapidly expanding and increasingly profitable, the renewable energy industry is seeing its share of fraudulent business conduct. Perhaps the most notorious case within the biomass sector was brought to light in November by the U.S. Securities and Exchange Commission, which charged Pennsylvania-based Mantria Corp. with more than 300 cases of investor fraud via a $30 million Ponzi scheme. Mantria allegedly targeted elderly investors or those approaching retirement age to finance a supposed carbon negative housing community in rural Tennessee, as well as biochar, while claiming to be the world’s leading manufacturer and distributor of biochar with multiple facilities producing at a rate of 25 tons per day.
According to the SEC, Mantria never sold any biochar and had just one facility engaged in testing biochar for possible future commercial production. Mantria’s only source of revenue was from its resale of vacant lots for its purported residential communities in Tennessee, but those sales didn’t generate enough cash to pay investor returns, rather, the company provided 100 percent financing for almost all of its vacant lot sales to buyers using other investors’ funds, the SEC says.
Article Continues After Advertisement
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Interest in biochar as a means to sequester carbon and as a substitute for charcoal has reached new heights in the past few years, a likely reason why scammers are hot on its trail, according to John Gannon of the Financial Industry Regulatory Authority. “When an area is hot for investors, scamsters understand that and so that’s where they target their scams,” he says. “When oil prices are high, we see oil and gas scams. When Hurricane Katrina hit, we saw scams there as well. Whatever is in the news is what scamsters and fraudsters target. The legitimate stories in the media help them build credibility about the purported investment that they are pitching.”
Swindling Styles
FINRA is a private corporation that oversees nearly 4,750 brokerage firms, about 167,000 branch offices and approximately 634,000 registered securities representatives. Formed by a consolidation of the enforcement arm of the New York Stock Exchange, NYSE Regulation Inc. and the National Association of Securities Dealers Inc., one of FINRA’s many functions is to issue alerts and advice to investors to help protect their money and avoid scams.
Gannon, who is FINRA’s senior vice president of investor education, says there are two main ways of being scammed. The first, which is the scam that Mantria allegedly employed, is a Ponzi scheme. Named after Charles Ponzi who became notorious for using the technique during the early 1920s, the operation pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Mantria scammers allegedly encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds and mutual funds and urged them to borrow as much as possible against their homes or businesses so that they could invest in Mantria. The funds acquired from new or existing investors were then used to pay other investors.
The other most common scam is a “pump-and-dump” scheme. “The idea is to increase the price of the stock quickly by putting out bogus press releases, touting it on the Internet and in other various solicitations, basically creating a lot of activity to quickly jack up the price of the stock, and then they sell the shares they own and gain a big profit,” Gannon says. “The prices then quickly go down when there’s no more news/hype, and the investors who bought in at that time are left holding the bags.”
In 2008, for example, the SEC filed charges against Mississippi-based Sustainable Energy, alleging that the company made false claims to boost share prices from 25 to 45 cents a share, even above 70 cents after some wildly exaggerated press releases. In one release, Sustainable Energy said it could produce 5 gallons of biofuel from one bushel of soybeans, at a price of 50 cents per gallon. As a result of the alleged embellished claims, stock prices soared quickly—and artificially—prompting Sustainable Energy CEO John H. Rivera’s girlfriend to sell more than 2.6 million shares and then transfer a substantial portion of the proceeds into a bank account held jointly with Rivera.
Whether Ponzi, pump-and-dump or other, before an investor is lured into a bad investment, Gannon says it’s likely that multiple red flags will be present that should be carefully analyzed.
Look for Red Flags
Investors should always raise an eyebrow when the initial investment opportunity discovers the potential investor, rather than vice-versa, Gannon says. “Especially when the individual or organization presenting the opportunity is unknown or fairly unknown to the investor,” he says. “Ask yourself … why would somebody you don’t know bring you a promise of the next-greatest investment out there? Why are they targeting you with this pitch? If it’s so good, why aren’t they investing themselves?”
1 2 3 Next Page -->
From the June 2010 Issue ShareThis RSS Feed Print this
Unearthing Green Scams
Some renewable energy investment opportunities seem too good to be true—and occasionally they are. How can a potential investor tell a wise investment from a shell game?
By Anna Austin
Historically, the number of investment fraud cases in a given industry increases with the level of hype surrounding it. If it’s frequently in the news and on the Internet, chances are it’s also plagued by gimmicks, scams and/or embellished technological advancements camouflaged by enticing promises of high and quick returns.
Rapidly expanding and increasingly profitable, the renewable energy industry is seeing its share of fraudulent business conduct. Perhaps the most notorious case within the biomass sector was brought to light in November by the U.S. Securities and Exchange Commission, which charged Pennsylvania-based Mantria Corp. with more than 300 cases of investor fraud via a $30 million Ponzi scheme. Mantria allegedly targeted elderly investors or those approaching retirement age to finance a supposed carbon negative housing community in rural Tennessee, as well as biochar, while claiming to be the world’s leading manufacturer and distributor of biochar with multiple facilities producing at a rate of 25 tons per day.
According to the SEC, Mantria never sold any biochar and had just one facility engaged in testing biochar for possible future commercial production. Mantria’s only source of revenue was from its resale of vacant lots for its purported residential communities in Tennessee, but those sales didn’t generate enough cash to pay investor returns, rather, the company provided 100 percent financing for almost all of its vacant lot sales to buyers using other investors’ funds, the SEC says.
Article Continues After Advertisement
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest in biochar as a means to sequester carbon and as a substitute for charcoal has reached new heights in the past few years, a likely reason why scammers are hot on its trail, according to John Gannon of the Financial Industry Regulatory Authority. “When an area is hot for investors, scamsters understand that and so that’s where they target their scams,” he says. “When oil prices are high, we see oil and gas scams. When Hurricane Katrina hit, we saw scams there as well. Whatever is in the news is what scamsters and fraudsters target. The legitimate stories in the media help them build credibility about the purported investment that they are pitching.”
Swindling Styles
FINRA is a private corporation that oversees nearly 4,750 brokerage firms, about 167,000 branch offices and approximately 634,000 registered securities representatives. Formed by a consolidation of the enforcement arm of the New York Stock Exchange, NYSE Regulation Inc. and the National Association of Securities Dealers Inc., one of FINRA’s many functions is to issue alerts and advice to investors to help protect their money and avoid scams.
Gannon, who is FINRA’s senior vice president of investor education, says there are two main ways of being scammed. The first, which is the scam that Mantria allegedly employed, is a Ponzi scheme. Named after Charles Ponzi who became notorious for using the technique during the early 1920s, the operation pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Mantria scammers allegedly encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds and mutual funds and urged them to borrow as much as possible against their homes or businesses so that they could invest in Mantria. The funds acquired from new or existing investors were then used to pay other investors.
The other most common scam is a “pump-and-dump” scheme. “The idea is to increase the price of the stock quickly by putting out bogus press releases, touting it on the Internet and in other various solicitations, basically creating a lot of activity to quickly jack up the price of the stock, and then they sell the shares they own and gain a big profit,” Gannon says. “The prices then quickly go down when there’s no more news/hype, and the investors who bought in at that time are left holding the bags.”
In 2008, for example, the SEC filed charges against Mississippi-based Sustainable Energy, alleging that the company made false claims to boost share prices from 25 to 45 cents a share, even above 70 cents after some wildly exaggerated press releases. In one release, Sustainable Energy said it could produce 5 gallons of biofuel from one bushel of soybeans, at a price of 50 cents per gallon. As a result of the alleged embellished claims, stock prices soared quickly—and artificially—prompting Sustainable Energy CEO John H. Rivera’s girlfriend to sell more than 2.6 million shares and then transfer a substantial portion of the proceeds into a bank account held jointly with Rivera.
Whether Ponzi, pump-and-dump or other, before an investor is lured into a bad investment, Gannon says it’s likely that multiple red flags will be present that should be carefully analyzed.
Look for Red Flags
Investors should always raise an eyebrow when the initial investment opportunity discovers the potential investor, rather than vice-versa, Gannon says. “Especially when the individual or organization presenting the opportunity is unknown or fairly unknown to the investor,” he says. “Ask yourself … why would somebody you don’t know bring you a promise of the next-greatest investment out there? Why are they targeting you with this pitch? If it’s so good, why aren’t they investing themselves?”
1 2 3 Next Page -->
Sunday, May 9, 2010
Mantria Update #17
Alas, it looks like the Mantria/SEC saga will be coming to a conclusion, for better or worse. Apparently, the SEC is going to settle with Mantria. (see below) Mantria Investors will eagerly await what the terms of the settlement! From all the recent news against Mantria, I am not sure what is left to settle?
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff(s),
v.
MANTRIA CORPORATION, ET AL., Defendant(s).
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, D. Colorado.
May 6, 2010.
MINUTE ORDER RESETTING SETTLEMENT CONFERENCE
MICHAEL J. WATANABE, Magistrate Judge.
It is hereby ORDERED that the Unopposed Motion of Defendants Mantria Corporation, Troy B. Wragg and Amanda E. Knorr to Vacate and Continue Settlement Conference, DN 84, filed with the Court on May 5, 2010, is GRANTED. The Settlement Conference set on May 11, 2010, at 1:30 p.m., is VACATED and RESET on July 16, 2010, at 1:30 p.m., in Courtroom A-502, Fifth Floor, Alfred A. Arraj U.S. Courthouse, 901 19th Street, Denver, Colorado.
FURTHER, IT IS ORDERED that counsel and pro se litigants shall have parties present who shall have full authority to negotiate all terms and demands presented by the case, and full authority to enter into a settlement agreement, including an adjustor if an insurance company is involved. "Full authority" means that the person who attends the settlement conference has the complete and unfettered capacity and authority to meet or pay all terms or amounts which are demanded or sought by the other side of the case without consulting with some other person, committee or agency. If any person has limits upon the extent or amount within which he or she is authorized to settle on behalf of a party, that person does not have "full authority." No party shall be permitted to attend the settlement conference by phone unless that party has obtained leave of Court following the filing of an appropriate motion, no later than five (5) business days prior to the settlement conference date.
In order that productive settlement discussions can be held, the parties shall prepare and submit two settlement documents: one to be mailed to the other party or parties, and the other to be mailed only to the Magistrate Judge. The documents which are presented to opposing parties shall contain an overview of the case from the presenter's point of view, shall summarize the evidence which supports that side's claims, and shall present a demand or offer. These documents should be intended to persuade the clients and counsel or pro se litigant on the other side.
The document to be mailed to the Magistrate Judge shall contain copies of the above materials, but additionally shall contain any confidential comments which counsel or the pro se litigant wishes to make, any comments with regard to perceived weaknesses in the case and any comments which would be helpful to the magistrate in assisting the parties to negotiate a settlement.
ECF participants shall e-mail their Confidential Settlement Statements to chambers with a subject line "Confidential Settlement Statement" and their CASE NUMBER to: Watanabe_Chambers@cod.uscourts.gov, no later than five (5) business days prior to the settlement conference date. The Confidential Settlement Statement should be in PDF format and sent as an attachment to the e-mail. Statements containing more than 15 pages should also be submitted to chambers on paper (hard copy), with the envelope addressed to "Magistrate Judge Watanabe Chambers, Personal and Confidential". Confidential Settlement Statements prepared by parties not represented by counsel, or without access to ECF, shall be submitted on paper to the Clerk's Office.
This copy provided by Leagle, Inc.
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff(s),
v.
MANTRIA CORPORATION, ET AL., Defendant(s).
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, D. Colorado.
May 6, 2010.
MINUTE ORDER RESETTING SETTLEMENT CONFERENCE
MICHAEL J. WATANABE, Magistrate Judge.
It is hereby ORDERED that the Unopposed Motion of Defendants Mantria Corporation, Troy B. Wragg and Amanda E. Knorr to Vacate and Continue Settlement Conference, DN 84, filed with the Court on May 5, 2010, is GRANTED. The Settlement Conference set on May 11, 2010, at 1:30 p.m., is VACATED and RESET on July 16, 2010, at 1:30 p.m., in Courtroom A-502, Fifth Floor, Alfred A. Arraj U.S. Courthouse, 901 19th Street, Denver, Colorado.
FURTHER, IT IS ORDERED that counsel and pro se litigants shall have parties present who shall have full authority to negotiate all terms and demands presented by the case, and full authority to enter into a settlement agreement, including an adjustor if an insurance company is involved. "Full authority" means that the person who attends the settlement conference has the complete and unfettered capacity and authority to meet or pay all terms or amounts which are demanded or sought by the other side of the case without consulting with some other person, committee or agency. If any person has limits upon the extent or amount within which he or she is authorized to settle on behalf of a party, that person does not have "full authority." No party shall be permitted to attend the settlement conference by phone unless that party has obtained leave of Court following the filing of an appropriate motion, no later than five (5) business days prior to the settlement conference date.
In order that productive settlement discussions can be held, the parties shall prepare and submit two settlement documents: one to be mailed to the other party or parties, and the other to be mailed only to the Magistrate Judge. The documents which are presented to opposing parties shall contain an overview of the case from the presenter's point of view, shall summarize the evidence which supports that side's claims, and shall present a demand or offer. These documents should be intended to persuade the clients and counsel or pro se litigant on the other side.
The document to be mailed to the Magistrate Judge shall contain copies of the above materials, but additionally shall contain any confidential comments which counsel or the pro se litigant wishes to make, any comments with regard to perceived weaknesses in the case and any comments which would be helpful to the magistrate in assisting the parties to negotiate a settlement.
ECF participants shall e-mail their Confidential Settlement Statements to chambers with a subject line "Confidential Settlement Statement" and their CASE NUMBER to: Watanabe_Chambers@cod.uscourts.gov, no later than five (5) business days prior to the settlement conference date. The Confidential Settlement Statement should be in PDF format and sent as an attachment to the e-mail. Statements containing more than 15 pages should also be submitted to chambers on paper (hard copy), with the envelope addressed to "Magistrate Judge Watanabe Chambers, Personal and Confidential". Confidential Settlement Statements prepared by parties not represented by counsel, or without access to ECF, shall be submitted on paper to the Clerk's Office.
This copy provided by Leagle, Inc.
Mantria Update #16
It appears Mantria is going into receivership. (see below) I doubt they will recover any $$$ from Mantria, but I suppose it's worth a try and a necessary part of the legal process.
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MANTRIA CORPORATION, TROY B. WRAGG, AMANDA E. KNORR, SPEED OF WEALTH, LLC, WAYDE M. McKELVY, and DONNA M. McKELVY, Defendants.
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, District of Colorado.
April 30, 2010.
ORDER APPOINTING RECEIVER
CHRISTINE M. ARGUELLO, District Judge.
WHEREAS this matter has come before this Court upon motion of the Plaintiff Securities and Exchange Commission ("SEC", "Commission" or "Plaintiff") to appoint a receiver in the above-captioned action; and,
WHEREAS the Court finds that, based on the record in these proceedings, the appointment of a receiver in this action is necessary and appropriate for the purposes of marshaling and preserving all assets of the Defendants Mantria Corporation and Speed of Wealth, LLC ("Receivership Assets") that: (a) are attributable to funds derived from investors or clients of the Defendants Mantria Corporation and/or Speed of Wealth, LLC; (b) are held in constructive trust for Defendants Mantria Corporation and/or Speed of Wealth, LLC; (c) were fraudulently transferred by Defendants Mantria Corporation and/or Speed of Wealth, LLC; and/or (d) may otherwise be includable as assets of the estates of the Defendant Mantria Corporation (collectively, the "Recoverable Assets");
WHEREAS this Court has subject matter jurisdiction over this action and personal jurisdiction over the Defendants, and venue properly lies in this district; and
WHEREAS the Court recognizes that not all of Speed of Wealth, LLC's assets and/or business may be related, directly or indirectly, to the conduct alleged in the Commission's Complaint.
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. This Court hereby takes exclusive jurisdiction and possession of the Recoverable Assets, of whatever kind and wherever situated, of the following Defendants: Mantria Corporation and Speed of Wealth, LLC, and all of their subsidiaries, parent companies, and its interests in any affiliated entities of any kind, including but not limited to: Mantria Realty, LLC; Mantria Communities Inc.; Mantria Real Estate Opportunities Group, LLC; Mantria Investments, LLC; Mantria Financial, LLC; Mantria Capital Advisors, LLC; Mantria Industries, LLC; Carbon Diversion, Inc.; Mantria Records, LLC; The Mantria Foundation, Inc.; Mantria Realty FL, LLC; Mantria Communities, LP; Mantria Real Estate Opportunities Group I, LP; KITN Investments, LLC; The Mantria Renewable Energy Fund, LP; The Mantria Place Renewable Energy Site Development, LP; The Mantria Industries Hohenwald Tennessee Eco-Industrial Center Site Development L.P.; Earth Mate Technologies, LLC; Clean Energy Components, LLC; EternaGreen Capital, LLC; The EternaGreen International Carbon Economy Network, LLC; EternaGreen University; EternaGreen Global Corporation; C&M Industrial Center, LLC; Mantria Industries II, LLC; Carbon Diversion Carlsbad New Mexico Manufacturing Plant, LLC; Indian Trail Estates, LLC; Mantria Village, LLC; Mantria Bluffs, LLC; IronBridge Properties, LLC; Legacy Ridge, LLC; Iris Village, LLC; Mantria Place, LLC; The Mantria Group, LLC; Mantria Indian Trail Development, LLC; Indian Trail Estates Phase I, LLC; Indian Trail Estates Phase II, LLC; Indian Trail Estates Phase III, LLC; Indian Trail Estates Homeowners Association, Inc.; Legacy Ridge Homeowners Association, Inc.; The Mantria Place Homeowners Association, Inc.; SOW Trust Deed, LLC; SOW Hard Money Loans Investment Club, LLC; SOW Hard Money Loans II, LLC; SOW Trust Deed Group II, LLC; Trust Deed Group I, LLC; SOW Hard Money 50 Economic Stimulus Investment Club, LLC; SOW Mantria Income, LLC; SOW Mantria Diversification, LLC; SOW Mantria 5%, LLC; SOW Mantria Place 25%, LLC; SOW Mantria 25%, LLC; Speed of Wealth Investments Gold Club, LLC; Trust Deed 3.0, LLC; and SOW MI 25% Sale of Systems, LLC (collectively, the "Receivership Defendants").
2. Until further Order of this Court, John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services, LLC is hereby appointed to serve without bond as receiver (the "Receiver") for the estates of the Receivership Defendants.
I. ASSET FREEZE
3. Except as otherwise specified herein, all Receivership Assets and Recoverable Assets are frozen until further order of this Court. Accordingly, all persons and entities with direct or indirect control over any Receivership Assets and/or any Recoverable Assets, other than the Receiver, are hereby restrained and enjoined from directly or indirectly transferring, setting off, receiving, changing, selling, pledging, assigning, liquidating or otherwise disposing of or withdrawing such assets. This freeze shall include, but not be limited to, Receivership Assets and/or Recoverable Assets that are on deposit with financial institutions such as banks, brokerage firms and mutual funds.
II. GENERAL POWERS AND DUTIES OF RECEIVER
4. The Receiver shall have all powers, authorities, rights and privileges heretofore possessed by the officers, directors, managers and general and limited partners of the entity Receivership Defendants under applicable state and federal law, by the governing charters, by-laws, articles and/or agreements in addition to all powers and authority of a receiver at equity, and all powers conferred upon a receiver by the provisions of 28 U.S.C. §§ 754, 959 and 1692, and Fed.R.Civ.P. 66.
5. Subject to compliance with the terms of this Order, the trustees, directors, officers, managers, employees, investment advisors, accountants, attorneys and other agents of the Receivership Defendants are hereby dismissed and the powers of any general partners, directors and/or managers are hereby suspended. Such persons and entities shall have no authority with respect to the Receivership Defendants' operations or assets, except to the extent as may hereafter be expressly granted by the Receiver. The Receiver shall assume and control the operation of the Receivership Defendants and shall pursue and preserve all of their claims.
6. No person holding or claiming any position of any sort with any of the Receivership Defendants shall possess any authority to act by or on behalf of any of the Receivership Defendants.
7. Subject to the specific provisions in Sections III through XIV, below, the Receiver shall have the following general powers and duties:
A. To use reasonable efforts to determine the nature, location and value of all property interests of the Receivership Defendants, including, but not limited to, monies, funds, securities, credits, effects, goods, chattels, lands, premises, leases, claims, rights and other assets, together with all rents, profits, dividends, interest or other income attributable thereto, of whatever kind, which the Receivership Defendants own, possess, have a beneficial interest in, or control directly or indirectly ("Receivership Property" or, collectively, the "Receivership Estates");
B. To take custody, control and possession of all Receivership Property and records relevant thereto from the Receivership Defendants, provided such Receivership Property is Mantria-related; to sue for and collect, recover, receive and take into possession from third parties all Receivership Property and records relevant thereto;
C. To manage, control, operate and maintain the Receivership Estates and hold in his possession, custody and control all Receivership Property, pending further Order of this Court;
D. To use Receivership Property for the benefit of the Receivership Estates, making payments and disbursements and incurring expenses as may be necessary or advisable in the ordinary course of business in discharging his duties as Receiver;
E. To take any action which, prior to the entry of this Order, could have been taken by the officers, directors, partners, managers, trustees and agents of the Receivership Defendants;
F. To engage and employ persons in his discretion to assist him in carrying out his duties and responsibilities hereunder, including, but not limited to, accountants, attorneys, securities traders, registered representatives, financial or business advisers, liquidating agents, real estate agents, forensic experts, brokers, traders or auctioneers;
G. To take such action as necessary and appropriate for the preservation of Receivership Property or to prevent the dissipation or concealment of Receivership Property;
H. The Receiver is authorized to issue subpoenas for documents and testimony consistent with the Federal Rules of Civil Procedure;
I. To bring such legal actions based on law or equity in any state, federal, or foreign court as the Receiver deems necessary or appropriate in discharging his duties as Receiver;
J. To pursue, resist and defend all suits, actions, claims and demands which may now be pending or which may be brought by or asserted against the Receivership Estates; and
K. To take such other action as may be approved by this Court.
III. ACCESS TO INFORMATION
8. The Receivership Defendants and the past and/or present officers, directors, agents, managers, general and limited partners, trustees, attorneys, accountants and employees of the entity Receivership Defendants, as well as those acting in their place, are hereby ordered and directed to preserve and turn over to the Receiver forthwith all paper and electronic information of, and/or relating to, the Receivership Defendants and/or all Receivership Property; such information shall include but not be limited to books, records, documents, accounts and all other instruments and papers.
9. Within ten (10) days of the entry of this Order, the Receivership Defendants shall file with the Court and serve upon the Receiver and the Commission a sworn statement, listing: (a) the identity, location and estimated value of all Receivership Property; (b) all employees (and job titles thereof), other personnel, attorneys, accountants and any other agents or contractors of the Receivership Defendants; and, (c) the names, addresses and amounts of claims of all known creditors of the Receivership Defendants.
10. Within thirty (30) days of the entry of this Order, the Receivership Defendants shall file with the Court and serve upon the Receiver and the Commission a sworn statement and accounting, with complete documentation, covering the period from January 1, 2007 to the present:
A. Of all Receivership Property, wherever located, held by or in the name of the Receivership Defendants, or in which any of them, directly or indirectly, has or had any beneficial interest, or over which any of them maintained or maintains and/or exercised or exercises control, including, but not limited to: (a) all securities, investments, funds, real estate, automobiles, jewelry and other assets, stating the location of each; and (b) any and all accounts, including all funds held in such accounts, with any bank, brokerage or other financial institution held by, in the name of, or for the benefit of any of them, directly or indirectly, or over which any of them maintained or maintains and/or exercised or exercises any direct or indirect control, or in which any of them had or has a direct or indirect beneficial interest, including the account statements from each bank, brokerage or other financial institution;
B. Identifying every account at every bank, brokerage or other financial institution: (a) over which Receivership Defendants have signatory authority; and (b) opened by, in the name of, or for the benefit of, or used by, the Receivership Defendants;
C. Identifying all credit, bank, charge, debit or other deferred payment card issued to or used by each Receivership Defendant, including but not limited to the issuing institution, the card or account number(s), all persons or entities to which a card was issued and/or with authority to use a card, the balance of each account and/or card as of the most recent billing statement, and all statements for the last twelve months;
D. Of all assets received by any of them from any person or entity, including the value, location, and disposition of any assets so received;
E. Of all funds received by the Receivership Defendants, and each of them, in any way related, directly or indirectly, to the conduct alleged in the Commission's Complaint. The submission must clearly identify, among other things, all investors, the securities they purchased, the date and amount of their investments, and the current location of such funds;
G. Of all expenditures exceeding $1,000 made by any of them, including those made on their behalf by any person or entity; and
H. Of all transfers of assets made by any of them.
11. Within thirty (30) days of the entry of this Order, the Receivership Defendants shall provide to the Receiver and the Commission copies of the Receivership Defendants' federal income tax returns for 2006, 2007, 2008 and 2009 with all relevant and necessary underlying documentation.
12. The individual Receivership Defendants and the entity Receivership Defendants' past and/or present officers, directors, agents, attorneys, managers, shareholders, employees, accountants, debtors, creditors, managers and general and limited partners, and other appropriate persons or entities shall answer under oath to the Receiver all questions which the Receiver may put to them and produce all documents as required by the Receiver regarding the business of the Receivership Defendants, or any other matter relevant to the operation or administration of the receivership or the collection of funds due to the Receivership Defendants. In the event that the Receiver deems it necessary to require the appearance of the aforementioned persons or entities, the Receiver shall make its discovery requests in accordance with the Federal Rules of Civil Procedure.
13. To issue subpoenas to compel testimony of persons or production of records, consistent with the Federal Rules of Civil Procedure and applicable Local Rules, except for the provisions of Fed.R.Civ.P. 26(d)(1), concerning any subject matter within the powers and duties granted by this Order.
14. The Receivership Defendants are required to assist the Receiver in fulfilling his duties and obligations. As such, they must respond promptly and truthfully to all requests for information and documents from the Receiver.
IV. ACCESS TO BOOKS, RECORDS AND ACCOUNTS
15. The Receiver is authorized to take immediate possession of all assets, bank accounts or other financial accounts, books and records and all other documents or instruments relating to the Receivership Defendants. All persons and entities having control, custody or possession of any Receivership Property are hereby directed to turn such property over to the Receiver.
16. The Receivership Defendants, as well as their agents, servants, employees, attorneys, any persons acting for or on behalf of the Receivership Defendants, and any persons receiving notice of this Order by personal service, facsimile transmission or otherwise, having possession of the property, business, books, records, accounts or assets of the Receivership Defendants are hereby directed to deliver the same to the Receiver, his agents and/or employees.
17. All banks, brokerage firms, financial institutions, and other persons or entities which have possession, custody or control of any assets or funds held by, in the name of, or for the benefit of, directly or indirectly, and of the Receivership Defendants that receive actual notice of this Order by personal service, facsimile transmission or otherwise shall:
A. Not liquidate, transfer, sell, convey or otherwise transfer any assets, securities, funds, or accounts in the name of or for the benefit of the Receivership Defendants except upon instructions from the Receiver;
B. Not exercise any form of set-off, alleged set-off, lien, or any form of self-help whatsoever, or refuse to transfer any funds or assets to the Receiver's control without the permission of this Court;
C. Within five (5) business days of receipt of that notice, file with the Court and serve on the Receiver and counsel for the Commission a certified statement setting forth, with respect to each such account or other asset, the balance in the account or description of the assets as of the close of business on the date of receipt of the notice; and
D. Cooperate expeditiously in providing information and transferring funds, assets and accounts to the Receiver or at the direction of the Receiver.
V. ACCESS TO REAL AND PERSONAL PROPERTY
18. The Receiver is authorized to take immediate possession of all personal property of the Receivership Defendants, wherever located, including but not limited to electronically stored information, computers, laptops, hard drives, external storage drives, and any other such memory, media or electronic storage devices, books, papers, data processing records, evidence of indebtedness, bank records and accounts, savings records and accounts, brokerage records and accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments, contracts, mortgages, furniture, office supplies and equipment.
19. The Receiver is authorized to take immediate possession of all real property of the Receivership Defendants, wherever located, including but not limited to all ownership and leasehold interests and fixtures. Upon receiving actual notice of this Order by personal service, facsimile transmission or otherwise, all persons other than law enforcement officials acting within the course and scope of their official duties, are (without the express written permission of the Receiver) prohibited from: (a) entering such premises; (b) removing anything from such premises; or, (c) destroying, concealing or erasing anything on such premises.
20. In order to execute the express and implied terms of this Order, the Receiver is authorized to change door locks to the premises described above. The Receiver shall have exclusive control of the keys. The Receivership Defendants, or any other person acting or purporting to act on their behalf, are ordered not to change the locks in any manner, nor to have duplicate keys made, nor shall they have keys in their possession during the term of the receivership.
21. The Receiver is authorized to open all mail directed to or received by or at the offices or post office boxes of the Receivership Defendants, and to inspect all mail opened prior to the entry of this Order, to determine whether items or information therein fall within the mandates of this Order.
22. Upon the request of the Receiver, the United States Marshal Service, in any judicial district, is hereby ordered to assist the Receiver in carrying out his duties to take possession, custody and control of, or identify the location of, any assets, records or other materials belonging to the Receivership Estate.
VI. NOTICE TO THIRD PARTIES
23. The Receiver shall promptly give notice of his appointment to all known officers, directors, agents, employees, shareholders, creditors, debtors, managers and general and limited partners of the Receivership Defendants, as the Receiver deems necessary or advisable to effectuate the operation of the receivership.
24. All persons and entities owing any obligation, debt, or distribution with respect to an ownership interest to any Receivership Defendant shall, until further ordered by this Court, pay all such obligations in accordance with the terms thereof to the Receiver and its receipt for such payments shall have the same force and effect as if the Receivership Defendant had received such payment.
25. In furtherance of his responsibilities in this matter, the Receiver is authorized to communicate with, and/or serve this Order upon, any person, entity or government office that he deems appropriate to inform them of the status of this matter and/or the financial condition of the Receivership Estates. All government offices which maintain public files of security interests in real and personal property shall, consistent with such office's applicable procedures, record this Order upon the request of the Receiver or the SEC.
26. The Receiver is authorized to instruct the United States Postmaster to hold and/or reroute mail which is related, directly or indirectly, to the business, operations or activities of any of the Receivership Defendants (the "Receiver's Mail"), including all mail addressed to, or for the benefit of, the Receivership Defendants. The Postmaster shall not comply with, and shall immediately report to the Receiver, any change of address or other instruction given by anyone other than the Receiver concerning the Receiver's Mail. The Receivership Defendants shall not open any of the Receiver's Mail and shall immediately turn over such mail, regardless of when received, to the Receiver. All personal mail of any individual Receivership Defendants, and/or any mail appearing to contain privileged information, and/or any mail not falling within the mandate of the Receiver, shall be released to the named addressee by the Receiver. The foregoing instructions shall apply to any proprietor, whether individual or entity, of any private mail box, depository, business or service, or mail courier or delivery service, hired, rented or used by the Receivership Defendants. The Receivership Defendants shall not open a new mailbox, or take any steps or make any arrangements to receive mail in contravention of this Order, whether through the U.S. mail, a private mail depository or courier service.
27. Subject to payment for services provided, any entity furnishing water, electric, telephone, sewage, garbage or trash removal services to the Receivership Defendants shall maintain such service and transfer any such accounts to the Receiver unless instructed to the contrary by the Receiver.
VII. INJUNCTION AGAINST INTERFERENCE WITH RECEIVER
28. The Receivership Defendants and all persons receiving notice of this Order by personal service, facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any action or causing any action to be taken, without the express written agreement of the Receiver, which would:
A. Interfere with the Receiver's efforts to take control, possession, or management of any Receivership Property; such prohibited actions include but are not limited to, using self-help or executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any Receivership Property;
B. Hinder, obstruct or otherwise interfere with the Receiver in the performance of his duties; such prohibited actions include but are not limited to, concealing, destroying or altering records or information;
C. Dissipate or otherwise diminish the value of any Receivership Property; such prohibited actions include but are not limited to, releasing claims or disposing, transferring, exchanging, assigning or in any way conveying any Receivership Property, enforcing judgments, assessments or claims against any Receivership Property or any Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security agreement or other agreement executed by any Receivership Defendant or which otherwise affects any Receivership Property; or
D. Interfere with or harass the Receiver, or interfere in any manner with the exclusive jurisdiction of this Court over the Receivership Estates.
29. The Receivership Defendants shall cooperate with and assist the Receiver in the performance of his duties.
30. The Receiver shall promptly notify the Court and SEC counsel of any failure or apparent failure of any person or entity to comply in any way with the terms of this Order.
VIII. STAY OF LITIGATION
31. As set forth in detail below, the following proceedings, excluding the instant proceeding and all police or regulatory actions and actions of the Commission related to the above-captioned enforcement action, are stayed until further Order of this Court:
All civil legal proceedings of any nature, including, but not limited to, bankruptcy proceedings, arbitration proceedings, foreclosure actions, default proceedings, or other actions of any nature involving: (a) the Receiver, in his capacity as Receiver; (b) any Receivership Property, wherever located; (c) any of the Receivership Defendants, including subsidiaries and partnerships; or, (d) any of the Receivership Defendants' past or present officers, directors, managers, agents, or general or limited partners sued for, or in connection with, any action taken by them while acting in such capacity of any nature, whether as plaintiff, defendant, third-party plaintiff, third-party defendant, or otherwise (such proceedings are hereinafter referred to as "Ancillary Proceedings").
32. The parties to any and all Ancillary Proceedings are enjoined from commencing or continuing any such legal proceeding, or from taking any action, in connection with any such proceeding, including, but not limited to, the issuance or employment of process.
33. All Ancillary Proceedings are stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from taking or permitting any action until further Order of this Court. Further, as to a cause of action accrued or accruing in favor of one or more of the Receivership Defendants against a third person or party, any applicable statute of limitation is tolled during the period in which this injunction against commencement of legal proceedings is in effect as to that cause of action.
IX. MANAGING ASSETS
34. For each of the Receivership Estates, the Receiver shall establish one or more custodial accounts at a federally insured bank to receive and hold all cash equivalent Receivership Property (the "Receivership Funds").
35. One of the Receiver's deposit account shall be entitled "Receiver's Account, Estate of Mantria Corporation" together with the name of the action. Similarly, another Receiver's deposit account shall be entitled "Receiver's Account, Estate of Speed of Wealth, LLC" together with the name of the action.
36. The Receiver may, without further Order of this Court, transfer, compromise, or otherwise dispose of any Receivership Property, other than real estate, in the ordinary course of business, on terms and in the manner the Receiver deems most beneficial to the Receivership Estate, and with due regard to the realization of the true and proper value of such Receivership Property.
37. Subject to Paragraph 38, immediately below, the Receiver is authorized to locate, list for sale or lease, engage a broker for sale or lease, cause the sale or lease, and take all necessary and reasonable actions to cause the sale or lease of all real property in the Receivership Estates, either at public or private sale, on terms and in the manner the Receiver deems most beneficial to the Receivership Estate, and with due regard to the realization of the true and proper value of such real property.
38. Upon further Order of this Court, pursuant to such procedures as may be required by this Court and additional authority such as 28 U.S.C. §§ 2001 and 2004, the Receiver will be authorized to sell, and transfer clear title to, all real property in the Receivership Estates.
39. The Receiver is authorized to take all actions to manage, maintain, and/or wind-down business operations of the Receivership Estates, including making legally required payments to creditors, employees, and agents of the Receivership Estates and communicating with vendors, investors, governmental and regulatory authorities, and others, as appropriate.
40. The Receiver shall take all necessary steps to enable the Receivership Funds to obtain and maintain the status of a taxable "Settlement Fund," within the meaning of Section 468B of the Internal Revenue Code and of the regulations, whether proposed, temporary or final, or pronouncements thereunder, including the filing of the elections and statements contemplated by those provisions. The Receiver shall be designated the administrator of the Settlement Fund, pursuant to Treas. Reg. § 1.468B-2(k)(3)(I), and shall satisfy the administrative requirements imposed by Treas. Reg. § 1.468B-2, including but not limited to (a) obtaining a taxpayer identification number, (b) timely filing applicable federal, state, and local tax returns and paying taxes reported thereon, and (c) satisfying any information, reporting or withholding requirements imposed on distributions from the Settlement Fund. The Receiver shall cause the Settlement Fund to pay taxes in a manner consistent with treatment of the Settlement Fund as a "Qualified Settlement Fund." The Receivership Defendants shall cooperate with the Receiver in fulfilling the Settlement Funds' obligations under Treas. Reg. § 1.468B-2.
X. INVESTIGATE AND PROSECUTE CLAIMS
41. Subject to the requirement, in Section VIII above, that leave of this Court is required to resume or commence certain litigation, the Receiver is authorized, empowered and directed to investigate, prosecute, defend, intervene in or otherwise participate in, compromise, and/or adjust actions in any state, federal or foreign court or proceeding of any kind as may in his discretion, and in consultation with SEC counsel, be advisable or proper to recover and/or conserve Receivership Property.
42. Subject to his obligation to expend receivership funds in a reasonable and cost-effective manner, the Receiver is authorized, empowered and directed to investigate the manner in which the financial and business affairs of the Receivership Defendants were conducted and (after obtaining leave of this Court) to institute such actions and legal proceedings, for the benefit and on behalf of the Receivership Estate, as the Receiver deems necessary and appropriate; the Receiver may seek, among other legal and equitable relief, the imposition of constructive trusts, disgorgement of profits, asset turnover, avoidance of fraudulent transfers, rescission and restitution, collection of debts, and such other relief from this Court as may be necessary to enforce this Order. Where appropriate, the Receiver should provide prior notice to Counsel for the SEC before commencing investigations and/or actions.
43. The Receiver hereby holds, and is therefore empowered to waive, all privileges, including the attorney-client privilege, held by all entity Receivership Defendants.
44. The Receiver has a continuing duty to ensure that there are no conflicts of interest between the Receiver, his Retained Personnel (as that term is defined below), and the Receivership Estate. Notwithstanding the foregoing, the Receiver may retain Alvarez & Marsal Dispute Analysis & Forensics, LLC ("A&M DAF") and/or its affiliates as Retained Personnel notwithstanding that Receiver is an employee of A&M DAF and such retention shall not be deemed a conflict of interest.
XII. BANKRUPTCY FILING
45. The Receiver may seek authorization of this Court to file voluntary petitions for relief under Title 11 of the United States Code (the "Bankruptcy Code") for the Receivership Defendants. If a Receivership Defendant is placed in bankruptcy proceedings, the Receiver may become, and may be empowered to operate each of the Receivership Estates as, a debtor in possession. In such a situation, the Receiver shall have all of the powers and duties as provided a debtor in possession under the Bankruptcy Code to the exclusion of any other person or entity. Pursuant to Paragraph 4 above, the Receiver is vested with management authority for all entity Receivership Defendants and may therefore file and manage a Chapter 11 petition.
46. The provisions of Section VIII above bar any person or entity, other than the Receiver, from placing any of the Receivership Defendants in bankruptcy proceedings.
XII. LIABILITY OF RECEIVER
47. Until further Order of this Court, the Receiver shall not be required to post bond or give an undertaking of any type in connection with his fiduciary obligations in this matter.
48. The Receiver and his agents, acting within scope of such agency ("Retained Personnel") are entitled to rely on all outstanding rules of law and Orders of this Court and shall not be liable to anyone for their own good faith compliance with any order, rule, law, judgment, or decree. In no event shall the Receiver or Retained Personnel be liable to anyone for their good faith compliance with their duties and responsibilities as Receiver or Retained Personnel, nor shall the Receiver or Retained Personnel be liable to anyone for any actions taken or omitted by them except upon a finding by this Court that they acted or failed to act as a result of bad faith, gross negligence, or in reckless disregard of their duties.
49. This Court shall retain jurisdiction over any action filed against the Receiver or Retained Personnel based upon acts or omissions committed in their representative capacities.
50. In the event the Receiver decides to resign, the Receiver shall first give written notice to the Commission's counsel of record and the Court of its intention, and the resignation shall not be effective until the Court appoints a successor. The Receiver shall then follow such instructions as the Court may provide.
XIII. RECOMMENDATIONS AND REPORTS
51. The Receiver is authorized, empowered and directed to develop a plan for the fair, reasonable, and efficient recovery and liquidation of all remaining, recovered, and recoverable Receivership Property (the "Liquidation Plan").
52. Within ninety (90) days of the entry date of this Order, the Receiver shall file the Liquidation Plan in the above-captioned action, with service copies to counsel of record.
53. Within thirty (30) days after the end of each calendar quarter, the Receiver shall file and serve a full report and accounting of each Receivership Estate (the "Quarterly Status Report"), reflecting (to the best of the Receiver's knowledge as of the period covered by the report) the existence, value, and location of all Receivership Property, and of the extent of liabilities, both those claimed to exist by others and those the Receiver believes to be legal obligations of the Receivership Estates.
54. The Quarterly Status Report shall contain the following:
A. A summary of the operations of the Receiver;
B. The amount of cash on hand, the amount and nature of accrued administrative expenses, and the amount of unencumbered funds in the estate;
C. A schedule of all the Receiver's receipts and disbursements (attached as Exhibit A to the Quarterly Status Report), with one column for the quarterly period covered and a second column for the entire duration of the receivership;
D. A description of all known Receivership Property, including approximate or actual valuations, anticipated or proposed dispositions, and reasons for retaining assets where no disposition is intended;
E. A description of liquidated and unliquidated claims held by the Receivership Estate, including the need for forensic and/or investigatory resources; approximate valuations of claims; and anticipated or proposed methods of enforcing such claims (including likelihood of success in: (I) reducing the claims to judgment; and, (ii) collecting such judgments);
F. A list of all known creditors with their addresses and the amounts of their claims;
G. The status of Creditor Claims Proceedings, after such proceedings have been commenced; and
H. The Receiver's recommendations for a continuation or discontinuation of the receivership and the reasons for the recommendations.
55. On the request of the Commission, the Receiver shall provide the Commission with any documentation that the Commission deems necessary to meet its reporting requirements, that is mandated by statute or Congress, or that is otherwise necessary to further the Commission's mission.
XIV. FEES, EXPENSES AND ACCOUNTINGS
56. Subject to Paragraphs 57-63 immediately below, the Receiver need not obtain Court approval prior to the disbursement of Receivership Funds for expenses in the ordinary course of the administration and operation of the receivership. Further, prior Court approval is not required for payments of applicable federal, state or local taxes.
57. Subject to Paragraph 58 immediately below, the Receiver is authorized to solicit persons and entities ("Retained Personnel") to assist him in carrying out the duties and responsibilities described in this Order. The Receiver shall not engage any Retained Personnel without first obtaining an Order of the Court authorizing such engagement. The Receiver has identified a preliminary list of Retained Personnel in his Proposal dated April 9, 2010, submitted as Exhibit 1 to the SEC's Recommendation for Appointment of a Receiver.
58. The Receiver and Retained Personnel are entitled to reasonable compensation and expense reimbursement from the Receivership Estates as described in the "Billing Instructions for Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission" (the "Billing Instructions") agreed to by the Receiver. Such compensation shall require the prior approval of the Court.
59. Unless otherwise ordered by the Court, within forty-five (45) days after the end of each calendar quarter, the Receiver and Retained Personnel shall apply to the Court for compensation and expense reimbursement from the Receivership Estates (the "Quarterly Fee Applications"). At least thirty (30) days prior to filing each Quarterly Fee Application with the Court, the Receiver will serve upon counsel for the SEC a complete copy of the proposed Application, together with all exhibits and relevant billing information in a format to be provided by SEC staff.
60. All Quarterly Fee Applications will be interim and will be subject to cost benefit and final reviews at the close of the receivership. At the close of the receivership, the Receiver will file a final fee application, describing in detail the costs and benefits associated with all litigation and other actions pursued by the Receiver during the course of the receivership.
61. Quarterly Fee Applications may be subject to a holdback in the amount of 20% of the amount of fees and expenses for each application filed with the Court. The total amounts held back during the course of the receivership will be paid out at the discretion of the Court as part of the final fee application submitted at the close of the receivership.
62. Each Quarterly Fee Application shall:
A. Comply with the terms of the Billing Instructions agreed to by the Receiver; and,
B. Contain representations (in addition to the Certification required by the Billing Instructions) that: (I) the fees and expenses included therein were incurred in the best interests of the Receivership Estate; and, (ii) with the exception of the Billing Instructions, the Receiver has not entered into any agreement, written or oral, express or implied, with any person or entity concerning the amount of compensation paid or to be paid from the Receivership Estate, or any sharing thereof.
63. At the close of the Receivership, the Receiver shall submit a Final Accounting, in a format to be provided by SEC staff, as well as the Receiver's final application for compensation and expense reimbursement.
Accordingly, IT IS SO ORDERED.
This copy provided by Leagle, Inc.
SECURITIES AND EXCHANGE COMMISSION v. MANTRIA CORPORATION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MANTRIA CORPORATION, TROY B. WRAGG, AMANDA E. KNORR, SPEED OF WEALTH, LLC, WAYDE M. McKELVY, and DONNA M. McKELVY, Defendants.
Civil Action No. 09-cv-02676-CMA-MJW.
United States District Court, District of Colorado.
April 30, 2010.
ORDER APPOINTING RECEIVER
CHRISTINE M. ARGUELLO, District Judge.
WHEREAS this matter has come before this Court upon motion of the Plaintiff Securities and Exchange Commission ("SEC", "Commission" or "Plaintiff") to appoint a receiver in the above-captioned action; and,
WHEREAS the Court finds that, based on the record in these proceedings, the appointment of a receiver in this action is necessary and appropriate for the purposes of marshaling and preserving all assets of the Defendants Mantria Corporation and Speed of Wealth, LLC ("Receivership Assets") that: (a) are attributable to funds derived from investors or clients of the Defendants Mantria Corporation and/or Speed of Wealth, LLC; (b) are held in constructive trust for Defendants Mantria Corporation and/or Speed of Wealth, LLC; (c) were fraudulently transferred by Defendants Mantria Corporation and/or Speed of Wealth, LLC; and/or (d) may otherwise be includable as assets of the estates of the Defendant Mantria Corporation (collectively, the "Recoverable Assets");
WHEREAS this Court has subject matter jurisdiction over this action and personal jurisdiction over the Defendants, and venue properly lies in this district; and
WHEREAS the Court recognizes that not all of Speed of Wealth, LLC's assets and/or business may be related, directly or indirectly, to the conduct alleged in the Commission's Complaint.
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. This Court hereby takes exclusive jurisdiction and possession of the Recoverable Assets, of whatever kind and wherever situated, of the following Defendants: Mantria Corporation and Speed of Wealth, LLC, and all of their subsidiaries, parent companies, and its interests in any affiliated entities of any kind, including but not limited to: Mantria Realty, LLC; Mantria Communities Inc.; Mantria Real Estate Opportunities Group, LLC; Mantria Investments, LLC; Mantria Financial, LLC; Mantria Capital Advisors, LLC; Mantria Industries, LLC; Carbon Diversion, Inc.; Mantria Records, LLC; The Mantria Foundation, Inc.; Mantria Realty FL, LLC; Mantria Communities, LP; Mantria Real Estate Opportunities Group I, LP; KITN Investments, LLC; The Mantria Renewable Energy Fund, LP; The Mantria Place Renewable Energy Site Development, LP; The Mantria Industries Hohenwald Tennessee Eco-Industrial Center Site Development L.P.; Earth Mate Technologies, LLC; Clean Energy Components, LLC; EternaGreen Capital, LLC; The EternaGreen International Carbon Economy Network, LLC; EternaGreen University; EternaGreen Global Corporation; C&M Industrial Center, LLC; Mantria Industries II, LLC; Carbon Diversion Carlsbad New Mexico Manufacturing Plant, LLC; Indian Trail Estates, LLC; Mantria Village, LLC; Mantria Bluffs, LLC; IronBridge Properties, LLC; Legacy Ridge, LLC; Iris Village, LLC; Mantria Place, LLC; The Mantria Group, LLC; Mantria Indian Trail Development, LLC; Indian Trail Estates Phase I, LLC; Indian Trail Estates Phase II, LLC; Indian Trail Estates Phase III, LLC; Indian Trail Estates Homeowners Association, Inc.; Legacy Ridge Homeowners Association, Inc.; The Mantria Place Homeowners Association, Inc.; SOW Trust Deed, LLC; SOW Hard Money Loans Investment Club, LLC; SOW Hard Money Loans II, LLC; SOW Trust Deed Group II, LLC; Trust Deed Group I, LLC; SOW Hard Money 50 Economic Stimulus Investment Club, LLC; SOW Mantria Income, LLC; SOW Mantria Diversification, LLC; SOW Mantria 5%, LLC; SOW Mantria Place 25%, LLC; SOW Mantria 25%, LLC; Speed of Wealth Investments Gold Club, LLC; Trust Deed 3.0, LLC; and SOW MI 25% Sale of Systems, LLC (collectively, the "Receivership Defendants").
2. Until further Order of this Court, John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services, LLC is hereby appointed to serve without bond as receiver (the "Receiver") for the estates of the Receivership Defendants.
I. ASSET FREEZE
3. Except as otherwise specified herein, all Receivership Assets and Recoverable Assets are frozen until further order of this Court. Accordingly, all persons and entities with direct or indirect control over any Receivership Assets and/or any Recoverable Assets, other than the Receiver, are hereby restrained and enjoined from directly or indirectly transferring, setting off, receiving, changing, selling, pledging, assigning, liquidating or otherwise disposing of or withdrawing such assets. This freeze shall include, but not be limited to, Receivership Assets and/or Recoverable Assets that are on deposit with financial institutions such as banks, brokerage firms and mutual funds.
II. GENERAL POWERS AND DUTIES OF RECEIVER
4. The Receiver shall have all powers, authorities, rights and privileges heretofore possessed by the officers, directors, managers and general and limited partners of the entity Receivership Defendants under applicable state and federal law, by the governing charters, by-laws, articles and/or agreements in addition to all powers and authority of a receiver at equity, and all powers conferred upon a receiver by the provisions of 28 U.S.C. §§ 754, 959 and 1692, and Fed.R.Civ.P. 66.
5. Subject to compliance with the terms of this Order, the trustees, directors, officers, managers, employees, investment advisors, accountants, attorneys and other agents of the Receivership Defendants are hereby dismissed and the powers of any general partners, directors and/or managers are hereby suspended. Such persons and entities shall have no authority with respect to the Receivership Defendants' operations or assets, except to the extent as may hereafter be expressly granted by the Receiver. The Receiver shall assume and control the operation of the Receivership Defendants and shall pursue and preserve all of their claims.
6. No person holding or claiming any position of any sort with any of the Receivership Defendants shall possess any authority to act by or on behalf of any of the Receivership Defendants.
7. Subject to the specific provisions in Sections III through XIV, below, the Receiver shall have the following general powers and duties:
A. To use reasonable efforts to determine the nature, location and value of all property interests of the Receivership Defendants, including, but not limited to, monies, funds, securities, credits, effects, goods, chattels, lands, premises, leases, claims, rights and other assets, together with all rents, profits, dividends, interest or other income attributable thereto, of whatever kind, which the Receivership Defendants own, possess, have a beneficial interest in, or control directly or indirectly ("Receivership Property" or, collectively, the "Receivership Estates");
B. To take custody, control and possession of all Receivership Property and records relevant thereto from the Receivership Defendants, provided such Receivership Property is Mantria-related; to sue for and collect, recover, receive and take into possession from third parties all Receivership Property and records relevant thereto;
C. To manage, control, operate and maintain the Receivership Estates and hold in his possession, custody and control all Receivership Property, pending further Order of this Court;
D. To use Receivership Property for the benefit of the Receivership Estates, making payments and disbursements and incurring expenses as may be necessary or advisable in the ordinary course of business in discharging his duties as Receiver;
E. To take any action which, prior to the entry of this Order, could have been taken by the officers, directors, partners, managers, trustees and agents of the Receivership Defendants;
F. To engage and employ persons in his discretion to assist him in carrying out his duties and responsibilities hereunder, including, but not limited to, accountants, attorneys, securities traders, registered representatives, financial or business advisers, liquidating agents, real estate agents, forensic experts, brokers, traders or auctioneers;
G. To take such action as necessary and appropriate for the preservation of Receivership Property or to prevent the dissipation or concealment of Receivership Property;
H. The Receiver is authorized to issue subpoenas for documents and testimony consistent with the Federal Rules of Civil Procedure;
I. To bring such legal actions based on law or equity in any state, federal, or foreign court as the Receiver deems necessary or appropriate in discharging his duties as Receiver;
J. To pursue, resist and defend all suits, actions, claims and demands which may now be pending or which may be brought by or asserted against the Receivership Estates; and
K. To take such other action as may be approved by this Court.
III. ACCESS TO INFORMATION
8. The Receivership Defendants and the past and/or present officers, directors, agents, managers, general and limited partners, trustees, attorneys, accountants and employees of the entity Receivership Defendants, as well as those acting in their place, are hereby ordered and directed to preserve and turn over to the Receiver forthwith all paper and electronic information of, and/or relating to, the Receivership Defendants and/or all Receivership Property; such information shall include but not be limited to books, records, documents, accounts and all other instruments and papers.
9. Within ten (10) days of the entry of this Order, the Receivership Defendants shall file with the Court and serve upon the Receiver and the Commission a sworn statement, listing: (a) the identity, location and estimated value of all Receivership Property; (b) all employees (and job titles thereof), other personnel, attorneys, accountants and any other agents or contractors of the Receivership Defendants; and, (c) the names, addresses and amounts of claims of all known creditors of the Receivership Defendants.
10. Within thirty (30) days of the entry of this Order, the Receivership Defendants shall file with the Court and serve upon the Receiver and the Commission a sworn statement and accounting, with complete documentation, covering the period from January 1, 2007 to the present:
A. Of all Receivership Property, wherever located, held by or in the name of the Receivership Defendants, or in which any of them, directly or indirectly, has or had any beneficial interest, or over which any of them maintained or maintains and/or exercised or exercises control, including, but not limited to: (a) all securities, investments, funds, real estate, automobiles, jewelry and other assets, stating the location of each; and (b) any and all accounts, including all funds held in such accounts, with any bank, brokerage or other financial institution held by, in the name of, or for the benefit of any of them, directly or indirectly, or over which any of them maintained or maintains and/or exercised or exercises any direct or indirect control, or in which any of them had or has a direct or indirect beneficial interest, including the account statements from each bank, brokerage or other financial institution;
B. Identifying every account at every bank, brokerage or other financial institution: (a) over which Receivership Defendants have signatory authority; and (b) opened by, in the name of, or for the benefit of, or used by, the Receivership Defendants;
C. Identifying all credit, bank, charge, debit or other deferred payment card issued to or used by each Receivership Defendant, including but not limited to the issuing institution, the card or account number(s), all persons or entities to which a card was issued and/or with authority to use a card, the balance of each account and/or card as of the most recent billing statement, and all statements for the last twelve months;
D. Of all assets received by any of them from any person or entity, including the value, location, and disposition of any assets so received;
E. Of all funds received by the Receivership Defendants, and each of them, in any way related, directly or indirectly, to the conduct alleged in the Commission's Complaint. The submission must clearly identify, among other things, all investors, the securities they purchased, the date and amount of their investments, and the current location of such funds;
G. Of all expenditures exceeding $1,000 made by any of them, including those made on their behalf by any person or entity; and
H. Of all transfers of assets made by any of them.
11. Within thirty (30) days of the entry of this Order, the Receivership Defendants shall provide to the Receiver and the Commission copies of the Receivership Defendants' federal income tax returns for 2006, 2007, 2008 and 2009 with all relevant and necessary underlying documentation.
12. The individual Receivership Defendants and the entity Receivership Defendants' past and/or present officers, directors, agents, attorneys, managers, shareholders, employees, accountants, debtors, creditors, managers and general and limited partners, and other appropriate persons or entities shall answer under oath to the Receiver all questions which the Receiver may put to them and produce all documents as required by the Receiver regarding the business of the Receivership Defendants, or any other matter relevant to the operation or administration of the receivership or the collection of funds due to the Receivership Defendants. In the event that the Receiver deems it necessary to require the appearance of the aforementioned persons or entities, the Receiver shall make its discovery requests in accordance with the Federal Rules of Civil Procedure.
13. To issue subpoenas to compel testimony of persons or production of records, consistent with the Federal Rules of Civil Procedure and applicable Local Rules, except for the provisions of Fed.R.Civ.P. 26(d)(1), concerning any subject matter within the powers and duties granted by this Order.
14. The Receivership Defendants are required to assist the Receiver in fulfilling his duties and obligations. As such, they must respond promptly and truthfully to all requests for information and documents from the Receiver.
IV. ACCESS TO BOOKS, RECORDS AND ACCOUNTS
15. The Receiver is authorized to take immediate possession of all assets, bank accounts or other financial accounts, books and records and all other documents or instruments relating to the Receivership Defendants. All persons and entities having control, custody or possession of any Receivership Property are hereby directed to turn such property over to the Receiver.
16. The Receivership Defendants, as well as their agents, servants, employees, attorneys, any persons acting for or on behalf of the Receivership Defendants, and any persons receiving notice of this Order by personal service, facsimile transmission or otherwise, having possession of the property, business, books, records, accounts or assets of the Receivership Defendants are hereby directed to deliver the same to the Receiver, his agents and/or employees.
17. All banks, brokerage firms, financial institutions, and other persons or entities which have possession, custody or control of any assets or funds held by, in the name of, or for the benefit of, directly or indirectly, and of the Receivership Defendants that receive actual notice of this Order by personal service, facsimile transmission or otherwise shall:
A. Not liquidate, transfer, sell, convey or otherwise transfer any assets, securities, funds, or accounts in the name of or for the benefit of the Receivership Defendants except upon instructions from the Receiver;
B. Not exercise any form of set-off, alleged set-off, lien, or any form of self-help whatsoever, or refuse to transfer any funds or assets to the Receiver's control without the permission of this Court;
C. Within five (5) business days of receipt of that notice, file with the Court and serve on the Receiver and counsel for the Commission a certified statement setting forth, with respect to each such account or other asset, the balance in the account or description of the assets as of the close of business on the date of receipt of the notice; and
D. Cooperate expeditiously in providing information and transferring funds, assets and accounts to the Receiver or at the direction of the Receiver.
V. ACCESS TO REAL AND PERSONAL PROPERTY
18. The Receiver is authorized to take immediate possession of all personal property of the Receivership Defendants, wherever located, including but not limited to electronically stored information, computers, laptops, hard drives, external storage drives, and any other such memory, media or electronic storage devices, books, papers, data processing records, evidence of indebtedness, bank records and accounts, savings records and accounts, brokerage records and accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments, contracts, mortgages, furniture, office supplies and equipment.
19. The Receiver is authorized to take immediate possession of all real property of the Receivership Defendants, wherever located, including but not limited to all ownership and leasehold interests and fixtures. Upon receiving actual notice of this Order by personal service, facsimile transmission or otherwise, all persons other than law enforcement officials acting within the course and scope of their official duties, are (without the express written permission of the Receiver) prohibited from: (a) entering such premises; (b) removing anything from such premises; or, (c) destroying, concealing or erasing anything on such premises.
20. In order to execute the express and implied terms of this Order, the Receiver is authorized to change door locks to the premises described above. The Receiver shall have exclusive control of the keys. The Receivership Defendants, or any other person acting or purporting to act on their behalf, are ordered not to change the locks in any manner, nor to have duplicate keys made, nor shall they have keys in their possession during the term of the receivership.
21. The Receiver is authorized to open all mail directed to or received by or at the offices or post office boxes of the Receivership Defendants, and to inspect all mail opened prior to the entry of this Order, to determine whether items or information therein fall within the mandates of this Order.
22. Upon the request of the Receiver, the United States Marshal Service, in any judicial district, is hereby ordered to assist the Receiver in carrying out his duties to take possession, custody and control of, or identify the location of, any assets, records or other materials belonging to the Receivership Estate.
VI. NOTICE TO THIRD PARTIES
23. The Receiver shall promptly give notice of his appointment to all known officers, directors, agents, employees, shareholders, creditors, debtors, managers and general and limited partners of the Receivership Defendants, as the Receiver deems necessary or advisable to effectuate the operation of the receivership.
24. All persons and entities owing any obligation, debt, or distribution with respect to an ownership interest to any Receivership Defendant shall, until further ordered by this Court, pay all such obligations in accordance with the terms thereof to the Receiver and its receipt for such payments shall have the same force and effect as if the Receivership Defendant had received such payment.
25. In furtherance of his responsibilities in this matter, the Receiver is authorized to communicate with, and/or serve this Order upon, any person, entity or government office that he deems appropriate to inform them of the status of this matter and/or the financial condition of the Receivership Estates. All government offices which maintain public files of security interests in real and personal property shall, consistent with such office's applicable procedures, record this Order upon the request of the Receiver or the SEC.
26. The Receiver is authorized to instruct the United States Postmaster to hold and/or reroute mail which is related, directly or indirectly, to the business, operations or activities of any of the Receivership Defendants (the "Receiver's Mail"), including all mail addressed to, or for the benefit of, the Receivership Defendants. The Postmaster shall not comply with, and shall immediately report to the Receiver, any change of address or other instruction given by anyone other than the Receiver concerning the Receiver's Mail. The Receivership Defendants shall not open any of the Receiver's Mail and shall immediately turn over such mail, regardless of when received, to the Receiver. All personal mail of any individual Receivership Defendants, and/or any mail appearing to contain privileged information, and/or any mail not falling within the mandate of the Receiver, shall be released to the named addressee by the Receiver. The foregoing instructions shall apply to any proprietor, whether individual or entity, of any private mail box, depository, business or service, or mail courier or delivery service, hired, rented or used by the Receivership Defendants. The Receivership Defendants shall not open a new mailbox, or take any steps or make any arrangements to receive mail in contravention of this Order, whether through the U.S. mail, a private mail depository or courier service.
27. Subject to payment for services provided, any entity furnishing water, electric, telephone, sewage, garbage or trash removal services to the Receivership Defendants shall maintain such service and transfer any such accounts to the Receiver unless instructed to the contrary by the Receiver.
VII. INJUNCTION AGAINST INTERFERENCE WITH RECEIVER
28. The Receivership Defendants and all persons receiving notice of this Order by personal service, facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any action or causing any action to be taken, without the express written agreement of the Receiver, which would:
A. Interfere with the Receiver's efforts to take control, possession, or management of any Receivership Property; such prohibited actions include but are not limited to, using self-help or executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any Receivership Property;
B. Hinder, obstruct or otherwise interfere with the Receiver in the performance of his duties; such prohibited actions include but are not limited to, concealing, destroying or altering records or information;
C. Dissipate or otherwise diminish the value of any Receivership Property; such prohibited actions include but are not limited to, releasing claims or disposing, transferring, exchanging, assigning or in any way conveying any Receivership Property, enforcing judgments, assessments or claims against any Receivership Property or any Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security agreement or other agreement executed by any Receivership Defendant or which otherwise affects any Receivership Property; or
D. Interfere with or harass the Receiver, or interfere in any manner with the exclusive jurisdiction of this Court over the Receivership Estates.
29. The Receivership Defendants shall cooperate with and assist the Receiver in the performance of his duties.
30. The Receiver shall promptly notify the Court and SEC counsel of any failure or apparent failure of any person or entity to comply in any way with the terms of this Order.
VIII. STAY OF LITIGATION
31. As set forth in detail below, the following proceedings, excluding the instant proceeding and all police or regulatory actions and actions of the Commission related to the above-captioned enforcement action, are stayed until further Order of this Court:
All civil legal proceedings of any nature, including, but not limited to, bankruptcy proceedings, arbitration proceedings, foreclosure actions, default proceedings, or other actions of any nature involving: (a) the Receiver, in his capacity as Receiver; (b) any Receivership Property, wherever located; (c) any of the Receivership Defendants, including subsidiaries and partnerships; or, (d) any of the Receivership Defendants' past or present officers, directors, managers, agents, or general or limited partners sued for, or in connection with, any action taken by them while acting in such capacity of any nature, whether as plaintiff, defendant, third-party plaintiff, third-party defendant, or otherwise (such proceedings are hereinafter referred to as "Ancillary Proceedings").
32. The parties to any and all Ancillary Proceedings are enjoined from commencing or continuing any such legal proceeding, or from taking any action, in connection with any such proceeding, including, but not limited to, the issuance or employment of process.
33. All Ancillary Proceedings are stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from taking or permitting any action until further Order of this Court. Further, as to a cause of action accrued or accruing in favor of one or more of the Receivership Defendants against a third person or party, any applicable statute of limitation is tolled during the period in which this injunction against commencement of legal proceedings is in effect as to that cause of action.
IX. MANAGING ASSETS
34. For each of the Receivership Estates, the Receiver shall establish one or more custodial accounts at a federally insured bank to receive and hold all cash equivalent Receivership Property (the "Receivership Funds").
35. One of the Receiver's deposit account shall be entitled "Receiver's Account, Estate of Mantria Corporation" together with the name of the action. Similarly, another Receiver's deposit account shall be entitled "Receiver's Account, Estate of Speed of Wealth, LLC" together with the name of the action.
36. The Receiver may, without further Order of this Court, transfer, compromise, or otherwise dispose of any Receivership Property, other than real estate, in the ordinary course of business, on terms and in the manner the Receiver deems most beneficial to the Receivership Estate, and with due regard to the realization of the true and proper value of such Receivership Property.
37. Subject to Paragraph 38, immediately below, the Receiver is authorized to locate, list for sale or lease, engage a broker for sale or lease, cause the sale or lease, and take all necessary and reasonable actions to cause the sale or lease of all real property in the Receivership Estates, either at public or private sale, on terms and in the manner the Receiver deems most beneficial to the Receivership Estate, and with due regard to the realization of the true and proper value of such real property.
38. Upon further Order of this Court, pursuant to such procedures as may be required by this Court and additional authority such as 28 U.S.C. §§ 2001 and 2004, the Receiver will be authorized to sell, and transfer clear title to, all real property in the Receivership Estates.
39. The Receiver is authorized to take all actions to manage, maintain, and/or wind-down business operations of the Receivership Estates, including making legally required payments to creditors, employees, and agents of the Receivership Estates and communicating with vendors, investors, governmental and regulatory authorities, and others, as appropriate.
40. The Receiver shall take all necessary steps to enable the Receivership Funds to obtain and maintain the status of a taxable "Settlement Fund," within the meaning of Section 468B of the Internal Revenue Code and of the regulations, whether proposed, temporary or final, or pronouncements thereunder, including the filing of the elections and statements contemplated by those provisions. The Receiver shall be designated the administrator of the Settlement Fund, pursuant to Treas. Reg. § 1.468B-2(k)(3)(I), and shall satisfy the administrative requirements imposed by Treas. Reg. § 1.468B-2, including but not limited to (a) obtaining a taxpayer identification number, (b) timely filing applicable federal, state, and local tax returns and paying taxes reported thereon, and (c) satisfying any information, reporting or withholding requirements imposed on distributions from the Settlement Fund. The Receiver shall cause the Settlement Fund to pay taxes in a manner consistent with treatment of the Settlement Fund as a "Qualified Settlement Fund." The Receivership Defendants shall cooperate with the Receiver in fulfilling the Settlement Funds' obligations under Treas. Reg. § 1.468B-2.
X. INVESTIGATE AND PROSECUTE CLAIMS
41. Subject to the requirement, in Section VIII above, that leave of this Court is required to resume or commence certain litigation, the Receiver is authorized, empowered and directed to investigate, prosecute, defend, intervene in or otherwise participate in, compromise, and/or adjust actions in any state, federal or foreign court or proceeding of any kind as may in his discretion, and in consultation with SEC counsel, be advisable or proper to recover and/or conserve Receivership Property.
42. Subject to his obligation to expend receivership funds in a reasonable and cost-effective manner, the Receiver is authorized, empowered and directed to investigate the manner in which the financial and business affairs of the Receivership Defendants were conducted and (after obtaining leave of this Court) to institute such actions and legal proceedings, for the benefit and on behalf of the Receivership Estate, as the Receiver deems necessary and appropriate; the Receiver may seek, among other legal and equitable relief, the imposition of constructive trusts, disgorgement of profits, asset turnover, avoidance of fraudulent transfers, rescission and restitution, collection of debts, and such other relief from this Court as may be necessary to enforce this Order. Where appropriate, the Receiver should provide prior notice to Counsel for the SEC before commencing investigations and/or actions.
43. The Receiver hereby holds, and is therefore empowered to waive, all privileges, including the attorney-client privilege, held by all entity Receivership Defendants.
44. The Receiver has a continuing duty to ensure that there are no conflicts of interest between the Receiver, his Retained Personnel (as that term is defined below), and the Receivership Estate. Notwithstanding the foregoing, the Receiver may retain Alvarez & Marsal Dispute Analysis & Forensics, LLC ("A&M DAF") and/or its affiliates as Retained Personnel notwithstanding that Receiver is an employee of A&M DAF and such retention shall not be deemed a conflict of interest.
XII. BANKRUPTCY FILING
45. The Receiver may seek authorization of this Court to file voluntary petitions for relief under Title 11 of the United States Code (the "Bankruptcy Code") for the Receivership Defendants. If a Receivership Defendant is placed in bankruptcy proceedings, the Receiver may become, and may be empowered to operate each of the Receivership Estates as, a debtor in possession. In such a situation, the Receiver shall have all of the powers and duties as provided a debtor in possession under the Bankruptcy Code to the exclusion of any other person or entity. Pursuant to Paragraph 4 above, the Receiver is vested with management authority for all entity Receivership Defendants and may therefore file and manage a Chapter 11 petition.
46. The provisions of Section VIII above bar any person or entity, other than the Receiver, from placing any of the Receivership Defendants in bankruptcy proceedings.
XII. LIABILITY OF RECEIVER
47. Until further Order of this Court, the Receiver shall not be required to post bond or give an undertaking of any type in connection with his fiduciary obligations in this matter.
48. The Receiver and his agents, acting within scope of such agency ("Retained Personnel") are entitled to rely on all outstanding rules of law and Orders of this Court and shall not be liable to anyone for their own good faith compliance with any order, rule, law, judgment, or decree. In no event shall the Receiver or Retained Personnel be liable to anyone for their good faith compliance with their duties and responsibilities as Receiver or Retained Personnel, nor shall the Receiver or Retained Personnel be liable to anyone for any actions taken or omitted by them except upon a finding by this Court that they acted or failed to act as a result of bad faith, gross negligence, or in reckless disregard of their duties.
49. This Court shall retain jurisdiction over any action filed against the Receiver or Retained Personnel based upon acts or omissions committed in their representative capacities.
50. In the event the Receiver decides to resign, the Receiver shall first give written notice to the Commission's counsel of record and the Court of its intention, and the resignation shall not be effective until the Court appoints a successor. The Receiver shall then follow such instructions as the Court may provide.
XIII. RECOMMENDATIONS AND REPORTS
51. The Receiver is authorized, empowered and directed to develop a plan for the fair, reasonable, and efficient recovery and liquidation of all remaining, recovered, and recoverable Receivership Property (the "Liquidation Plan").
52. Within ninety (90) days of the entry date of this Order, the Receiver shall file the Liquidation Plan in the above-captioned action, with service copies to counsel of record.
53. Within thirty (30) days after the end of each calendar quarter, the Receiver shall file and serve a full report and accounting of each Receivership Estate (the "Quarterly Status Report"), reflecting (to the best of the Receiver's knowledge as of the period covered by the report) the existence, value, and location of all Receivership Property, and of the extent of liabilities, both those claimed to exist by others and those the Receiver believes to be legal obligations of the Receivership Estates.
54. The Quarterly Status Report shall contain the following:
A. A summary of the operations of the Receiver;
B. The amount of cash on hand, the amount and nature of accrued administrative expenses, and the amount of unencumbered funds in the estate;
C. A schedule of all the Receiver's receipts and disbursements (attached as Exhibit A to the Quarterly Status Report), with one column for the quarterly period covered and a second column for the entire duration of the receivership;
D. A description of all known Receivership Property, including approximate or actual valuations, anticipated or proposed dispositions, and reasons for retaining assets where no disposition is intended;
E. A description of liquidated and unliquidated claims held by the Receivership Estate, including the need for forensic and/or investigatory resources; approximate valuations of claims; and anticipated or proposed methods of enforcing such claims (including likelihood of success in: (I) reducing the claims to judgment; and, (ii) collecting such judgments);
F. A list of all known creditors with their addresses and the amounts of their claims;
G. The status of Creditor Claims Proceedings, after such proceedings have been commenced; and
H. The Receiver's recommendations for a continuation or discontinuation of the receivership and the reasons for the recommendations.
55. On the request of the Commission, the Receiver shall provide the Commission with any documentation that the Commission deems necessary to meet its reporting requirements, that is mandated by statute or Congress, or that is otherwise necessary to further the Commission's mission.
XIV. FEES, EXPENSES AND ACCOUNTINGS
56. Subject to Paragraphs 57-63 immediately below, the Receiver need not obtain Court approval prior to the disbursement of Receivership Funds for expenses in the ordinary course of the administration and operation of the receivership. Further, prior Court approval is not required for payments of applicable federal, state or local taxes.
57. Subject to Paragraph 58 immediately below, the Receiver is authorized to solicit persons and entities ("Retained Personnel") to assist him in carrying out the duties and responsibilities described in this Order. The Receiver shall not engage any Retained Personnel without first obtaining an Order of the Court authorizing such engagement. The Receiver has identified a preliminary list of Retained Personnel in his Proposal dated April 9, 2010, submitted as Exhibit 1 to the SEC's Recommendation for Appointment of a Receiver.
58. The Receiver and Retained Personnel are entitled to reasonable compensation and expense reimbursement from the Receivership Estates as described in the "Billing Instructions for Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission" (the "Billing Instructions") agreed to by the Receiver. Such compensation shall require the prior approval of the Court.
59. Unless otherwise ordered by the Court, within forty-five (45) days after the end of each calendar quarter, the Receiver and Retained Personnel shall apply to the Court for compensation and expense reimbursement from the Receivership Estates (the "Quarterly Fee Applications"). At least thirty (30) days prior to filing each Quarterly Fee Application with the Court, the Receiver will serve upon counsel for the SEC a complete copy of the proposed Application, together with all exhibits and relevant billing information in a format to be provided by SEC staff.
60. All Quarterly Fee Applications will be interim and will be subject to cost benefit and final reviews at the close of the receivership. At the close of the receivership, the Receiver will file a final fee application, describing in detail the costs and benefits associated with all litigation and other actions pursued by the Receiver during the course of the receivership.
61. Quarterly Fee Applications may be subject to a holdback in the amount of 20% of the amount of fees and expenses for each application filed with the Court. The total amounts held back during the course of the receivership will be paid out at the discretion of the Court as part of the final fee application submitted at the close of the receivership.
62. Each Quarterly Fee Application shall:
A. Comply with the terms of the Billing Instructions agreed to by the Receiver; and,
B. Contain representations (in addition to the Certification required by the Billing Instructions) that: (I) the fees and expenses included therein were incurred in the best interests of the Receivership Estate; and, (ii) with the exception of the Billing Instructions, the Receiver has not entered into any agreement, written or oral, express or implied, with any person or entity concerning the amount of compensation paid or to be paid from the Receivership Estate, or any sharing thereof.
63. At the close of the Receivership, the Receiver shall submit a Final Accounting, in a format to be provided by SEC staff, as well as the Receiver's final application for compensation and expense reimbursement.
Accordingly, IT IS SO ORDERED.
This copy provided by Leagle, Inc.
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