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Securities and Exchange Commission v. Fujinaga

United States District Court, D. Nevada

February 23, 2015

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
EDWIN YOSHIHIRO FUJINAGA and MRI INTERNATIONAL, INC., Defendants. CSA SERVICE CENTER, LLC, THE FACTORING COMPANY, JUNE FUJINAGA, and THE YUNJU TRUST, Relief Defendants.

ORDER APPOINTING AN EQUITABLE RECEIVER

JAMES C. MAHAN, District Judge.

This cause comes before the Court on the motion of Plaintiff Securities and Exchange Commission, pursuant to Rule 66 of the Federal Rules of Civil Procedure and Local Rules 66-1 through 66-10, for an order appointing an equitable receiver for certain commercial properties, identified in Exhibit 1, which are owned or controlled by Defendants Edwin Fujinaga or MRI International, Inc., or Relief Defendants CSA Service Center, LLC, or The Factoring Company (collectively, "MRI International" or "Defendants").[1] The Court has received, read and considered the papers submitted by the parties on this motion, held the hearing required by Local Rule 66-2 and, being fully advised in the premises,

THE COURT HEREBY ORDERS THAT:

1. A Receiver is appointed for the commercial properties and their rents and issues(collectively, the "Properties") described in Exhibit 1.

2. The Court hereby appoints ____________________ to be theRobb Evans & Receiver (the Associates LLC "Receiver").

3. MRI International shall relinquish its occupancy rights with respect to the Properties to the Receiver within seven calendar days of the date of this Order.

4. The Receiver is hereby authorized, empowered and directed to perform the following duties and responsibilities, as reasonably appropriate and necessary to comply with and effectuate the goals and purposes of the equitable receivership:

a. Take and retain immediate possession, custody and control of the Properties, all personal property located in or at the Properties, and the books and records owned by, controlled by or belonging to MRI International pertaining to the Properties.

b. Take and retain immediate and exclusive possession, custody and control from MRI International of all keys, key cards, passwords, user names, and any other means of access to the Properties and any locked or secure areas within the Properties including, but not limited to, safes, secure computer or information systems, secure rooms and locked cabinets.

c. Take all steps the Receiver deems necessary to secure and protect the Properties including, but not limited to, their personal property, premises, files and computer or information systems.

d. Take all steps the Receiver deems necessary to maintain the confidentiality of information contained in the Properties, and to dispose of such information in an appropriate manner and in consultation with MRI International.

e. May, in the Receiver's discretion, pay all debts and remove all encumbrances as necessary and reasonable to preserve the Properties against foreclosure and loss including, but not limited to, all local, state and federal taxes, priority liens and property insurance. The Receiver may pursue negotiated settlements of all such debts and encumbrances.

5. Insofar as there is a tenant occupying a portion of the property located at 150 East Harmon Avenue, Las Vegas, Nevada, the Receiver shall take over the role of landlord, collect all rents and issues paid by the tenant, and take over the occupancy of the property upon the expiration or termination of the lease.

6. In accordance with Local Rule 66-7, and except as otherwise allowed by statute or ordered by the Court, no party in interest, and no accountant, attorney, or representative of a party in interest, shall be employed by the Receiver.

7. The Clerk of the Court shall issue a check in the full amount of the funds in the Registry Account of the Court in this action. The check shall be payable to the Receiver, and the check proceeds shall be used to pay the ongoing expenses of the Properties, such as insurance, maintenance, property taxes, repairs, security and utilities. The Receiver shall file and serve a quarterly report accounting for the use of the check proceeds received from the Registry Account of the Court.

8. The Receiver shall deposit the check and check proceeds described in paragraph 7 above in a custodial account at a federally insured bank.

The check proceeds described in paragraph 7 above shall also be used to pay the reasonable costs, expenses and fees of the Receiver incurred in connection with the performance of its duties described herein. All requests for payment of costs, expenses and fees of the receiver shall be made by application to the Court, setting forth in reasonable detail the nature of any such costs, expenses and fees.

9. The Receiver shall take all necessary steps to enable the check proceeds described in paragraph 7 above 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." MRI International shall cooperate with the Receiver in fulfilling the Settlement Fund's obligations under Treas. Reg. § 1.468B-2.

10. The Receiver shall deposit the net proceeds of any lease effected pursuant to paragraph 4 above into the custodial account described in paragraph 8 above. The net lease proceeds shall be maintained in the custodial account until the ...


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