Opinion
2:20-CV-02303-RFB-DJA
02-23-2023
SECURITIES AND EXCHANGE COMMISSION; Plaintiff, v. CAPSOURCE, INC., et al. Defendants.
GREENBERG TRAURIG, LLP KARA B. HENDRICKS, Nevada Bar No. 7743 KYLE A. EWING Nevada Bar No 14051 CHRISTIAN T. SPAULDING Nevada Bar No. 14277 Attorneys for Receiver Geoff Winkler SECURITIES & EXCHANGE COMMISSION TERRY MILLER Colorado Bar No. 39007 Attorneys for Plaintiffs Securities and Exchange Commission GREGORY P. HERLEAN Defendant STEPHEN J. BYRNE Defendant ROBERT G. MASSI, ESQ. Nevada Bar No. 13719 MASSI & MASSI, ATTORNEYS AT LAW ROGER BEHLE, ESQ. CA Bar No. 174755 KEVIN GAMARNIK, ESQ. CA Bar No, 273445 FOLEY BEZEK BEHLE & CURTIS, LLP Counsel for Plaintiffs CAC Investment Ventures, LLC, Cris Cannon and David Zebrowski in Case No. A-19-802088-B pending in the Eighth Judicial District Court of Clark County, Nevada
GREENBERG TRAURIG, LLP KARA B. HENDRICKS, Nevada Bar No. 7743 KYLE A. EWING Nevada Bar No 14051 CHRISTIAN T. SPAULDING Nevada Bar No. 14277 Attorneys for Receiver Geoff Winkler
SECURITIES & EXCHANGE COMMISSION TERRY MILLER Colorado Bar No. 39007 Attorneys for Plaintiffs Securities and Exchange Commission
GREGORY P. HERLEAN Defendant
STEPHEN J. BYRNE Defendant
ROBERT G. MASSI, ESQ. Nevada Bar No. 13719 MASSI & MASSI, ATTORNEYS AT LAW ROGER BEHLE, ESQ. CA Bar No. 174755 KEVIN GAMARNIK, ESQ. CA Bar No, 273445 FOLEY BEZEK BEHLE & CURTIS, LLP Counsel for Plaintiffs CAC Investment Ventures, LLC, Cris Cannon and David Zebrowski in Case No. A-19-802088-B pending in the Eighth Judicial District Court of Clark County, Nevada
ORDER TO LIFT STAY OF LITIGATION FOR A LIMITED PURPOSE
DANIEL J. ALBREGTS UNITED STATES MAGISTRATE JUDGE
Plaintiff Securities and Exchange Commission and Receiver Geoff Winkler of American Fiduciary Services, in his capacity as court-appointed Receiver (the "Receiver") for Defendant CapSource, Inc., stipulate and agree that:
1. On August 26, 2022, the Court issued its Order Appointing Receiver, in which the Court appointed Geoff Winkler receiver of Defendant CapSource, Inc. See ECF No. 17.
2. CapSource is a defendant in a lawsuit pending in the Eighth Judicial District Court of the State of Nevada styled CAC Investment Ventures, LLC, et al. v. Andrew Jolley, et al, Case No. A-19-802088-B (the "CAC State Court Action"). Stephen Byrne and Andrew Jolley are also named as defendants in the CAC State Court Action. 2
The Order Appointing Receiver includes a Stay of Litigation, (see ECF No. 17, ¶29), whereby all persons are stayed from commencing, prosecuting, or continuing, until further Order of this Court:
All civil legal proceedings of any nature...involving... (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...
3. The CAC State Court Action is a civil legal proceeding involving CapSource as a defendant and is therefore subject to the Stay of Litigation. The CAC State Court Action also involves claims against Stephen Byrne and Andrew Jolley relating, in part, to actions taken by Byrne and Jolley as officers, directors, managers, or agents of CapSource. These claims involve CapSource's issuance of certain loans to Panorama WON, LLC, and Byrne and Jolley's involvement in the procurement and issuance of these loans.
4. The CAC State Court Action was scheduled to begin trial before the Honorable Nancy Allf on August 30, 2022. Notice of the Order Appointing Receiver was filed in the CAC State Court Action, and the Action was accordingly stayed before trial began.
5. The parties in the CAC State Court Action have had ongoing discussions to determine if trial of the Action may proceed without violating this Court's Stay of Litigation.
6. Accordingly, the plaintiffs in the CAC State Court Action have agreed to proceed to trial against all named defendants other than CapSource, and plaintiffs agree that no claims against CapSource will be tried or determined in the CAC State Court Case.
7. Additionally, to the extent the CAC State Court Action asserts claims against Byrne and Jolley related to their roles as officers, directors, managers, or agents of CapSource, those claims will not proceed in the trial. Plaintiffs may proceed with any claims against Byrne and Jolley to the extent that such claims are unrelated to their role as officers, directors, managers, or agents of CapSource. Plaintiffs may proceed with any claims and theories where loans to Panorama Won, LLC from CapSource are referenced. For example and not by way of 3 limitation, claims and theories against Byrne and Jolley alleging they, as officers, directors, managers, or agents of Panorama Won, LLC ("Pan Won"), breached fiduciary duties to Pan Won based on the loan Pan Won obtained from CapSource.
8. By limiting the scope of the claims in the CAC State Court Action to exclude claims asserted against CapSource and against Byrne and Jolley as officers, directors, managers, or agents of CapSource, the parties believe the CAC State Court Action may proceed to trial without infringing upon the Receiver's ability to perform his duties in marshaling and preserving the assets of CapSource in this proceeding.
ACCORDINGLY, IT IS STIPULATED AND REQUESTED by the parties through their undersigned counsel of record that the Stay of Litigation be lifted for the limited purpose of permitting the CAC State Court Action to proceed to trial: (1) against all parties other than Capsource, Inc. and (2) against Stephen Byrne and Andrew Jolley for claims that are unrelated to their roles as officers, directors, managers, or agents of CapSource. Plaintiffs may proceed with any claims and theories where loans to Panorama Won, LLC from CapSource are referenced. For example and not by way of limitation, claims and theories against Byrne and Jolley alleging they, as officers, directors, managers, or agents of Panorama Won, LLC ("Pan Won"), breached fiduciary duties to Pan Won based on the loan Pan Won obtained from CapSource. 4
IT IS SO STIPULATED AND AGREED
ACKNOWLEDGED BY
IT IS SO ORDERED. 5
IT IS SO STIPULATED AND AGREED
ACKNOWLEDGED BY
IT IS SO ORDERED