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Securities and Exchange Commission v. Aequitas Management, LLC

United States District Court, D. Oregon, Portland Division

May 17, 2018

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
AEQUITAS MANAGEMENT, LLC; AEQUITAS HOLDINGS, LLC; AEQUITAS COMMERCIAL FINANCE, LLC; AEQUITAS CAPITAL MANAGEMENT, INC.; AEQUITAS INVESTMENT MANAGEMENT, LLC.ROBERT J. JESENIK, BRIAN A. OLIVER; AND N. SCOTT GILLIS

          Troy D. Greenfield, OSB #892534 Lawrence R. Ream (Pro Hac Vice) Alex I. Poust, OSB #925155 Schwabe, Williamson & Wyatt, P.C. Pacwest Center Ivan B. Knauer (Admitted Pro Hac Vice) Snell & Wilmer LLP Attorneys for the Receiver for Defendants AEQUITAS 1V1ANAGEJVIENT, LLC; AEQUITAS HOLDINGS, LLC; AEQUITAS COMMERCIAL FINANCE, LLC; AEQUITAS CAPITAL MANAGEMENT, INC.; AEQUITAS INVESTJVIENT MANAGEMENT, LLC

          [PROPOSED] ORDER GRANTING RECEIVER'S MOTION TO SELL PERSONAL PROPERTY TO SILVERMTNE MEDIA HOLDINGS, LLC, FREE AND CLEAR OF LIENS, INTERESTS, CLAIMS AND ENCUMBRANCES (Syncronex, LLC)

         This matter having come before the Honorable Paul Papak on Receiver's Motion for Orders: (1) Scheduling Hearing to Approve Sale of Assets; (2) Approving Silvermine Media Holdings, LLC, as Stalking Horse Bidder; (3) Approving Break-Up Fee; (4) Approving Bidding Procedures; and (5) Approving the Sale of Assets Free and Clear of All Liens, Claims, Encumbrances and Interests (Syncronex, LLC) (the "Motion")[1] [Dkt. 600], which Motion is unopposed, and the Court, having considered the Declarations of Brad Foster in support of the Motion [Dkt. 601 and 612], and further having considered the other records and files herein, and the Court being fully advised in the premises, now, therefore, THE COURT FINDS as follows:

         A. On March 10, 2016, the Securities and Exchange Commission ("SEC") filed a complaint in this Court against the five entity defendants, Robert J. Jesenik, Brian A. Oliver, and N. Scott Gillis.

         B. On March 16, 2016, pursuant to the Stipulated Interim Order Appointing Receiver, the Receiver was appointed as receiver for the entity defendants and 43 related entities on an interim basis (the "Interim Receivership Order"). On April 14, 2016, pursuant to the Order Appointing Receiver, the Receiver was appointed as receiver of the entity defendants and 43 related entities on a final basis (the "Final Receivership Order").

         C. Due, timely, and adequate notice of the Motion was given, and such notice was good, sufficient, and appropriate under the circumstances. No other or further notice of the Motion is or shall be required.

         D. On April 16, 2018, pursuant to the Motion, the Court entered the Order Granting Receiver's Motion (1) to Schedule Final Sale Hearing, (2) to Approve Silvermine Media Holdings, LLC, as Stalking Horse Bidder, (3) to Approve Break-Up Fee, (4) to Approve Bidding Procedures, and (5) for Related Relief (the "Bid Procedures Order") [Dkt. 603].

         E. Pursuant to the Bid Procedures Order, the Court authorized the Receiver to consider Alternative Bids and, if necessary, hold an auction for the sale of the Assigned Interests, all on the terms described therein. Pursuant to the Bid Procedures Order, Alternative Bids were due by the Bid Deadline of 12:00 Noon Pacific Time, on May 16, 2018.

         F. No Qualified Alternative Bids were submitted to the Receiver prior to expiration of the Bid Deadline or otherwise.

         G. Approval of the Sale and the Purchase Agreement is in the best interests of the Receivership Entity and its estate.

         H. The Sale of the Assigned Interests on the terms contemplated by the Purchase Agreement, including but not limited to the conduct of the sales process by the Receiver pursuant to the Bidding Procedures, was conducted in a fair and commercially reasonable manner under the circumstances. There is no evidence that the Receivership Entity, Receiver or Silvermine Media Holdings, LLC ("Purchaser"'), engaged in any conduct (including but not limited to collusion or fraud of any kind) that would cause or permit the Sale transaction to be avoided.

         I. The Sale is an arm's-length transaction, proposed in the sound exercise of the Receiver's business judgment, in good faith and for fair value. The Sale is in the best interests of the Receivership Entity, and its creditors and investors. Purchaser has at all times acted in good faith in connection with the sales process conducted by the Receiver and therefore is entitled to all the protections afforded good faith purchasers under applicable law.

         J. Purchaser, on the one hand, and the Receivership Entity, on the other hand, are not insiders or affiliates of each other. The transactions contemplated under this Order and the Purchase Agreement do not amount to a consolidation, merger, or de facto merger of Purchaser and any Receivership Entity. There is no substantial continuity between Purchaser and the Receivership Entity, and Purchaser is not a successor to the Receivership Entity or its estate.

         K. At all times prior to the entry of this Order, the Assigned Interests has been the property of Receivership Entity's estate, title thereto is vested in the Receivership Entity, and the Receivership Entity is the sole and lawful owner thereof. Pursuant to the Final Receivership Order, the Receiver has full power and authority to convey and deliver the Assigned Interests to Purchaser.

         L. The Court having reviewed the Motion, and having considered the presentations of counsel, and having considered any objections filed to the Motion, and it appearing that the Sale is in the best interest of the Receivership Entity and its ...


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