Lex Vest LTD v. Glenn R. Bronson, Esq., Receiver for Emanations Communications Group LC
Lex Vest LTD v. Glenn R. Bronson, Esq., Receiver for Emanations Communications Group LC
Trial Court Opinion
1 J ennifer L. Braster Nevada Bar No. 9982 2 NAYLOR & BRASTER 1050 Indigo Drive, Suite 200 3 Las Vegas, NV 89145 Telephone: (702) 420-7000 4 Facsimile: (702) 420-7001 [email protected] 5 Attorneys for Glenn R. Bronson, 6 Receiver for Emanation Communications Group LC
7 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 LEX VEST LTD, a Nevada limited liability Case No.: 2:22-cv-01226-ART-BNW 11 company;
12 Plaintiff, JOINT MOTION FOR vs. SUBSTITUTION OF PARTY 13 EMANATIONS COMMUNICATIONS 14 GROUP LC, a Utah limited liability company; DOES 1 through 50; and ROE ENTITIES 51 15 through 100, inclusive,
16 Defendants. _____________________________________ 17 EMANATION COMMUNICATIONS 18 GROUP LC, a Utah limited liability company
19 Counterclaim Plaintiff, vs. 20 LEX VEST LTD, a Nevada limited liability 21 company,
22 Counterclaim Defendant. _____________________________________ 23 EMANATION COMMUNICATIONS 24 GROUP LC, a Utah limited liability company
25 Third Party Plaintiff, vs. 26 LEX TECNICA LTD, a Nevada limited 27 liability company; SAM CASTOR, a manager of LEX TECNICA LTD; ADAM KNECHT, a manager of LEX TECNICA LTD, NATHAN MORRIS, a manager of LEX TECNICA, | LTD; and BRADEN JOHN KARONY, an 5 individual and Utah resident, 3 Third Party Defendants.
4 Pursuant to FED.R.CIv.P. 25, Glenn R. Bronson, Esq., receiver for Emanatic 5 Communications Group LC, by and through his attorney of record, Naylor & Braster, and plainti 6 Lex Vest Ltd., by and through its attorney of record, Lex Tecnica Ltd., jointly move for tl 7 substitution of Glenn R. Bronson, Esq., as receiver of Emanation Communications Group, LC f 8 party Emanation Communications Group, LC. On April 24, 2023, Glenn R. Bronson, Esq. w. 9 appointed as a receiver over Emanation Communications Group, LC, among other entities. Si 10 Exhibit 1 hereto. As receiver, Mr. Bronson is now the real party in interest for Emanatic 1] Communications Group, LC. See, e.g., Sand Creek Partners, Ltd. v. Am. Fed. Sav. & Loan Ass 12 of Colorado, Case No. 2:14-cv-444-GMN-VCF,
2015 WL 316750, at *1 (D. Nev. Jan. 26, 201. 13 (receiver substituted as real party in interest). As such, Plamtiff and Bronson jointly move for tl 14 substitution of Glenn R. Bronson, Esq., receiver for Emanation Communications Group LC f 15 Emanation Communications Group LC. 16 Dated this 15th day of June 2023. 17 NAYLOR & BRASTER LEX TECNICA LTD 18 By: /s/ Jennifer L. Braster By: /s/Adam R. Knecht 19 Jennifer L. Braster Adam R. Knecht Nevada Bar No. 9982 Nevada Bar No. 13166 20 1050 Indigo Drive, Suite 200 10161 Park Run Drive, Suite 150 > Las Vegas, NV 89145 Las Vegas, NV 89145 Attorneys for Glenn R. Bronson, Attorneys for Plaintiff Lex Vest LTD, and 22 Receiver for Emanation Communications Third-Party Defendants Lex Tecnica LTD, Group LC Adam Knecht, Samuel Castor, 23 and Nathan Morris 24 25 IT ISSO ORDERED DATED: June 20, 2023 26 LE pn La WEEN 27 DISTRICT COURT JUDGE 28
1 CERTIFICATE OF SERVICE 2 Pursuant to Federal Rule of Civil Procedure 5, I hereby certify that I am an employee of 3 NAYLOR & BRASTER and that on this 19th day of June 2023, I caused the document JOINT 4 MOTION FOR SUBSTITUTION OF PARTY to be served through the Court’s CM/ECF system 5 to those persons designated by the parties that have appeared in the matter. 6 /s/ Amy Reams 7 An Employee of NAYLOR & BRASTER 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 EXHIBIT 1 PIANO, 24, LULL) sVUINU DIAS a ST LA 04:53:15 PM District-Court Judge
Proposed order submitted by: Thomas R. Barton [6827] [email protected] Brian M. Rothschild [15316] [email protected] Adam L. Bondy [14423] [email protected] Parsons Behle & Latimer 201 South Main Street, Suite 1800 Salt Lake City, Utah 84111 Telephone: 801.532.1234 Attorneys for Plaintiffs Braden John Karony, Ronin Energy Group, LC, and Ronan Real Estate Holdings, LC
IN THE second JUDICIAL DISTRICT COURT IN and FOR Davis County, Utah IBRADEN JOHN KARONY; RONIN IENERGY GROUP, LC; RONIN REAL ESTATE HOLDINGS, LC, Plaintiffs, ORDER APPOINTING RECEIVER S. ENNIFER KARONY, EMANATION COMMUNICATIONS GROUP, LC; ECG Civil No. 220700635 OPERATIONS GROUP, LC; ECG IP HOLDINGS LC; EMANATION ENERGY Judge Michael D. DiReda GROUP, LC; LEX VEST, LTD; LEX VEST LLC; SAMUEL CASTOR; NATHAN Tier 3 MORRIS; ADAM KNECHT; BRADFORD IKARONY; and JOHN DOES 1-10, Defendants. IEMANATION COMMUNICATIONS GROUP, LC, Counterclaim Plaintiff,
IBRADEN JOHN KARONY, 4893-1825-7500
Counterclaim Defendant. EMANATION COMMUNICATIONS GROUP,LC, Third-party Plaintiff, v. LEX VEST,LTD; LEXTECNICA, LTD, SAMUEL CASTOR;NATHAN MORRIS; and ADAMKNECHT, Third-party Defendants. This matter came before the Court on Plaintiffs’ Motion for Appointment of a Receiver (the “Receivership Motion”). The Courtgranted theReceivership Motion inahearingonApril 5, 2023 at 9:00 a.m.,and, therefore,the Receiverwasappointedeffectiveas ofthe Court’s ruling onApril 5,2023at9:00a.m. TheCourt, having reviewedthe recordsand filesherein,including,without limitation, the above-described Motionand documentssupportingthe same,andothermattersof recordrelating
thereto, and good cause having been shown, now enters the following “Receivership Order” setting forth the scope and duties of the Receiver, effectiveas ofthe hearingon thescope of this Receivership Order,which tookplaceonApril 7,2023at9:00a.m. (the“EffectiveDate”). IT IS HEREBYORDEREDAS FOLLOWS: I. APPOINTMENTOF RECEIVER 1. Pursuant to Rule 66 of the Utah Rules of Civil Procedure and Utah Code § 25-6-303(1)(c)(ii), a remedy provision of Utah’s Voidable Transactions Act (the “UVTA”), Glenn R. Bronson, Esq. (“Receiver”) is hereby immediately appointed as receiverin thisaction over (A) Emanation Communications Group, LC (“ECG”), ECG Operations, LC, ECG IP Holdings,LC, Emanation EnergyGroup,LC (the“ReceivershipEntities”), includingall oftheir assets of any kind or naturewhatsoever,wherever locatedandbywhomeverheld (real, personal, monetary, nonmonetary, intellectual, tangible, intangible, or otherwise), and including, without limitation, all data, research, equipment, supplies, machines, tools, devices, computers and intellectual property that is partially or completely held, owned, controlled, or otherwise within
the dominion of any of the Receivership Entities or in which the Receivership Entities holdany interest (the “Receivership Entity Assets”); (B) all assets and property of any kind or nature whatsoever, wherever located and by whomever held that were pledged, sold, assigned, distributed or otherwise transferred (directly or indirectly) fromtheReceivership Entitiesas part of any transaction between the Receivership Entities and Lex Vest, LTD (“Lex Vest”), to whomever transferred and wherever located (the “Transferred Assets” and, together with the Receivership Entity Assets,the “Assets”);and (C)all proceedsof anyof theAssets.
2. Receiver, as an officer of this Court, shall immediately have andtake possession, and shall immediately be deemed to have possession, custody and control of all the Assets, as well as any premises leased, rented, occupied or owned by any of the Receivership Entities—including without limitation the facility located at 190N. Cutler Drive,Suite D, North Salt Lake, UT 84054, and all property located there. All entities, assets and property falling in any of the above categories is now property of the “Receivership Estate” and is subject to the jurisdiction of this Court. No real, personal, intangible or business property of William Niedermeyer or of any entity owned or controlled by William Niedermeyer including, without limitation, LegacyTechnicalGroup,is includedinthe Assetsorthe ReceivershipEstate. 3. Plaintiffs shall make a deposit of $25,000 into the ReceivershipEstatein orderto cover initial reasonable costs and expenses of the Receiver. Plaintiffsmay,at theirdiscretionor pursuant to subsequent order of the Court, deposit additional funds into the Receivership Estate to fund the Receivership, which funds shallconstitute apost-appointment administrativepriority claim over other claims against the Receivership Estate and may be repaid at any time from
Receivership Estate assets without further order of the Court. Any repayment by sale or liquidation of Receivership EstateAssetsshallbeuponorderof theCourt. II. Turnover and Cooperation 1. Defendants, and any other person or entity with actual or constructive notice of this Receivership Order, including without limitation the managers, officers, directors, employees, agents, representatives, attorneys, and consultants of Defendants, and all persons or entities acting for or in concertwiththem, shallforthwith delivertoReceiver, andReceiver shall immediately have and take possession, custody, and control of all Assets, as defined above, including, without limitation, all of the following that are in Defendants’ possession, custody, control, or abilityto direct: (a) All Assets and property of theReceivership Estate,inanyform, including without limitation the rents, income, profits, and proceeds therefrom, and all other
property incidental thereto or that is or may be necessary or useful to allow and assist Receiver in collecting the Receivership Estate, including without limitation, all mailand other correspondence, all post office boxes, all keys to all locks, all codes to security systems, all other means of access to the Receivership Estateproperty,andthe contracts, records, books of account, ledgers, files and all business records for the Receivership Entities or the income, profits, or proceedsthereof, whereverlocated andwhatevermode maintained (including without limitation, information contained on computers or cloud storage and any and all software relating thereto as well as all banking records, statements, cancelledchecks,tax returns,credit cardstatements,licenses, andthe like);
(b) All documents1 that constitute or pertain to any contracts, leases, subleases, royalty payments, assignments, insurance policies, liens, security interests, licenses, permits or governmental approvals, patents, or agreements of any kind whatsoever,whethercurrentlyineffect or lapsed,ofor relatingto anyofthe Receivership Entities or Assets, including to the extent suchdocumentsarerelated tothe Receivership Estate,or any interest therein,or tothe income,profitsor proceedstherefrom;
1 The term “documents” shall be defined broadly and refers to all writings or recordings of any kind, which includes, without limitation, papers, photographs, films, recordings, memoranda, books, records, accounts, communications, and all retrievable information in any computer storage medium (including, without limitation, all electronically stored data, meta data and forms thereof), written, typed, printed, transcribed, filed, or graphic matter of everykindanddescription,originals,copiesoforiginals,copiesof copies, drafts, carbon copies, printouts, letters, correspondence, telegrams, emails, text messages, SMS messages, other transmitted messages,transcripts,notes,statements,reports,memoranda(includingthose of telephone or other conversations), minutes, agenda, communications, plans, specifications, diagrams, drawings, working papers, financial statements and records, accounting data, property records, travel records, purchase orders, invoices, receipts, checks, checkbooks, bank accounts, legal documents, stenographic notes, Photostats, photographs, electronically storedinformation,computerprograms,discs, tapes or other forms of mechanical or electrical transcription of information, tables, diary entries, schedules,deskcalendarsorpads,appointmentbooks,andtimesheetsorrecords. (c) All depository and financialaccountsand allaccountnumbers ofaccounts or wallets or virtual wallets for any of the Receivership Entities or inwhichfunds of the Receivership Estate and/orproceedsareheld; (d) All financial records with respect to the Receivership Estate, including without limitation, thefinancialrecords ofeach of theReceivership Entities; (e) Any other document or asset of the Receivership Estate—including all communications involvinganyof theReceivership Entities—whetheror notReceiverhas
requested suchdocumentor assetpursuantto thisReceivership Order; (f) All usernames, passwords, passcodes,andpersonal identification numbers and other information necessary to access online accounts held in the name of, for the benefit of, or used in the operations of, any of the Receivership Entities—including without limitation, email accounts, all other messaging services, eBay, PayPal, Amazon, Craigslist, Venmo,cryptocurrency wallets,and thelike; (g) All usernames, user profiles, passwords, passcodes, and personal identification numbers for any electronic devices, including without limitation desktop
computers, laptop computers, tablets, handheld devices, mobile phones, telephone accounts, VoIP accounts, and the like that are owned or used in the operations of any of theReceivership Entities. (h) To the extent accesstoany document,account,deviceorassetis restricted by or requires authentication through biometric or voice identification, confirmation or recognition, Defendants shall identify the document, account,deviceor assettoReceiver and provideReceiver directaccess tothedocument,account,deviceor asset; (i) Within thirty (30) daysafter the EffectiveDate ofthis Receivership Order, a full and complete accounting of (a) all assets,liabilities, andfinancialaffairsof each of the Receivership Entities, and, (b) to the extent not provided pursuant to the preceding clause, all transfers2 of the Assetsregardless ofwhethersuch transferinvolved anyof the Receivership Entities;
2. All Defendants or any other persons or entities with actual or constructivenotice of this Receivership Order, including without limitation any current and former managers, officers, directors, employees, agents, representatives, attorneys, and consultants of Defendants, and all persons or entities acting for or in concert with them, shall reasonably cooperate with Receiver (and any of his agents) as he performs his duties under this Receivership Order. Such cooperation includes, without limitation, prompt, open and truthful communications with Receiver regarding any aspect of the Receivership Estate—unless such communications would violate arecognized privilegeor othervalidlegalrestriction.
3. If Defendants or any otherpersons orentities withactualor constructivenoticeof this Receivership Order, including without limitation the managers, officers, directors, employees, agents, representatives, attorneys, and consultants of Defendants, and all persons or
2 The term “transfer” has the same meaning as that contained in the UVTA, Utah Code § 25-6-102(16): “every mode, direct or indirect, absolute or conditional, or voluntary or involuntary, of disposing of or partingwithanassetoraninterestinanasset,andincludespaymentofmoney,release,lease,andcreation ofalienorotherencumbrance.” entities acting for or in concert with them, shall fail to comply with any of the above, Receiver shall be entitled to file an appropriate paper with the Court under Rule 37 of the Utah Rules of Civil Procedure to compel compliance and to recover reasonable costs and expenses, including attorney fees, unless the circumstances warrant otherwise as determined by the Court. Receiver shall provide written notice to the party, person, orentityof its intenttofilesuch apaperatleast three (3) dayspriorto thefilingof themotion. 4. Separate and in addition to their obligations hereunder to immediately deliver
provide access to all Assets, the ECG Corporate Entities will within fourteen (14) days of the Effective Dateof thisReceivershipOrder, whichtookplaceonApril 7,2023,provideacomplete and accurate list of all of their Property and means of access to it, including (and as applicable) all access credentials (including by making 2FA devices available) to all Receivership accounts and the location, account name, third parties with whom any Assets were exchanged or traded, merchant name, URL, and whatsoever other credentials or procedures required to allow Receivers to access all of the Assets. The ECG Corporate Entities also shall provide all accounting, financial, bank, and cryptocurrency files and data stored on any devices and in any
software applications, such as QuickBooks, excel, and all other records containing all such information. The ECG Corporate Entities shall provide such information and certify it is completeand accurateunder penaltyofperjury throughthe signaturesoftheir authorizedagents. 5. The ECG Corporate Entities will actively assist Receiver to access all of the Assets when and as requested by Receiver and upon one business day of notice of need for personal conference to obtain additional information, will send informationrequests orfacilitate sending information requests to any third parties in possession of information related to the Assets so that Receiver will have access to the Assets to the same extent as the ECGCorporate Entities did. 6. Receiver may question Jennifer Karony and any personnel employed or associated with any Defendant, at any time during regular business hours within one business day of a request, to provide access to the Assets. Receivermay questionanysuch personwitha court reporter or recording device to make a record of the questions andanswers. Suchpersons
will submit to all such questioning, answering all questions truthfully and completely under penalty of perjury.3 Any such person may, but is not required to, have counsel present at all times. III. Powers, Dutiesand Authorityof Receiver 1. Receiver shall have all powers, duties, and authority as are provided by law to take possession of, use, operate, manage and control the Receivership Estate, to collect and receive any rents, profits, proceeds and other income from the Receivership Estate, to protect, preserve, maintain, and improve the Receivership Estate, and to incur expenses that are necessary and appropriate toward those ends. Without limiting the foregoing, the Receiver’s powers anddutiesshallspecifically includetheright and obligation,asthe casemaybe: (a) to investigate the nature and extent of the Receivership Estate, and to make written reports to the Court and to the Parties related thereto, when deemed
3 Time spent answering Receiver’s questions under this section shall not count toward the time limitations for depositionofanysuchpersoninthisproceeding. necessary by Receiver, when reasonably requested by Plaintiffs, or when ordered by the Court; (b) to enter upon the premises of the Receivership Entities andgain accessto the Receivership Estate, and take possession, custody, and control of all property of the Receivership Estate, and to operate the same so as topreserve,protect andmaximize the value of theassetsand anybusiness; (c) to take possession of and/or obtain copies of all business records
pertaining to the Receivership Estate including without limitation, computer records, ledgers, financial statements, financial reports, bank records, statements, budgets, personnel records, sales records, communications (including emails and text messages) and any other record required to be turned over pursuant to this Receivership Order in whatever formand however stored; (d) to operate, manageandcontrolthe Receivership Estate,including,without limitation, the power to enter into, or appropriately cancel or modify, contracts, leases and other agreements—including but not limited to employment and consulting
agreements—that Receiver in his business judgment reasonably believes necessary for theprudentoperationandmanagement of theReceivership Estate; (e) to seize any and all funds or other assets which constitute income, proceeds, or profits of the Receivership Estate, including, without limitation, bank accounts, other cash accounts or cash equivalents, and lock boxfunds, andtochange the signatoryauthority onsuch accounts; (f) to demand an inventory and turnover regarding the identity of all depository and financial accounts and all account numbers in which Receivership Estate or proceedsof ReceivershipEstateareheld; (g) to demand, collect, and receive any rents, payments, income profits or proceedsof theReceivershipEstateand anypartthereof fromanythird person; (h) to use the Receivership Entities tax identification numbers and any other similar numbers used by the Receivership Entities with thestate,localand federaltaxing
authorities for the preservation, protection, maintenance, operation, management, and control of the Receivership Entities and the Receivership Estate; provided however, Receiver shall be under no obligation toprepare, complete,or filetaxreturns of anykind onbehalf of theReceivershipEntities; (i) to prepare and execute any and all documents and to perform any and all acts that are necessary to fulfilling Receiver’s duties, including preserving, protecting, maintaining, operating,managingand controllingthe Receivership Estate;
(j) to present for payment any checks, money orders, or other forms of payment made payable toanyReceivership Entity,to theextentsuch paymentisproperty of the Receivership Estate, which constitute profits, income, or proceeds of the Receivership Estate, endorse the same and collect the proceeds thereof, such proceedsto be held,usedandmaintainedas elsewhere providedherein; (k) to open a separate account, oraccounts, intheReceiver’s name relating to the Receivership Estate and Receiver’s administration of the Receivership Estate; andto appropriately transfer all funds or liquid assets from accounts held by, or for the benefit of, any of theReceivership Entitiesintothe Receiver’s separateaccounts; (l) to operate, manage, control, and conduct the Receivership Estate, and its business and incur the reasonable expenses necessary in such operation, management, control and conduct in the ordinary and usual course of business, and do all otherthings ordinarily done, and incur the risks and obligations ordinarily incurred by owners, managers, and operators of similar businesses, and no such risks or obligations so
incurred shall be the personal risk or obligation of Receiver, but shall be the sole riskor obligation of theReceivershipEstate; (m) to collect income, proceeds, or other profits generated by or from the property of theReceivershipEstate,and todepositthesameinto Receivership accounts; (n) to expend funds to pay for the maintenance, repairs, operating expenses, fees, andregular taxesassociatedwith theReceivership Estate; (o) to open anymaildirected totheReceivership Entities,or toanagent of the Receivership Entities to the extent such mail is related to the Receivership Estate,at any
of the Receivership Entities’ addresses,andtoredirectsuch mailtoReceiveras Receiver, in itsbusiness judgment,deemsnecessary; (p) to prosecute, settle, dismiss, or defend legal actions related to the Receivership Entities, the Receivership Estate, and/or the Receiver, including without limitation the litigation entitled Lex Vest, LTD v. Emanation Communications Group, Case 2:22-cv-01266, in the United States District Court for the District of Nevada, and any other claims, causes of action, contracts, accounts receivable, promissory notes, or other claims against any Plaintiff, Defendant, or any other third party—including any claims arising under the UVTA on behalf of anyof theReceivership Entitiesor creditors thereof.4 (q) to issue subpoenas on any person or entity in possession of the itemsthat constitute or that Receiver reasonably believes could constitute Assets, property, proceeds,or proceeds ofproperty of,or transfersfrom, theReceivership Estate;
(r) to employ attorneys, accountants, investigators,consultants, andanyother persons or entities deemed necessary to assist Receiver in the discharge of Receiver’s duties under this Receivership Order (each, a “Professional”) with the costs of such services to be paid out of the Receivership Estate on a regular basis without further approval of the Court, so long as the fees chargedfor such servicesarereasonable,usual and customary; (s) to transfer, dispose of, disclaim, sell and/or abandon any tangible and intangible Assets or other property of the Receivership Estate, including, without
limitation, licenses, accounts, inventory, equipment, real property, leasehold interests, trade secrets, trade processes trademarks and other intellectual property, and business lines for reasonable value in the accordance with the Receiver’s business judgment, or
4 The Receiver’s powers hereunder include the power not to prosecute, settle, dismiss, or defend such legalactions,asdeterminedbytheReceiverinhisdiscretion. otherwise if the Receiver determines the property to be unduly burdensome to the Receivership Estate orof inconsequentialvalue andbenefit totheReceivership Estate; (t) to the exclusion of any other person or entity, including, without limitation, Defendants, and only after receiving an order of the Court after notice and a hearing authorizing the act, to file any petition under title 11 of the United States Code that Receiver reasonably deems necessary andprudentwithregard toprotecting property of theReceivership Estate;
(u) to seek the assistance of the County Sheriff or other law enforcement officers to assist in the enforcement of this ReceivershipOrderand, specifically,byentry of this Receivership Order, such officers are hereby directed to enforce all provisions of this ReceivershipOrder atthe requestof theReceiver; (v) to take any and all other actions with respect to theReceivership Entities, the extent such actions are related to the administration of the Receivership Estate, including their management,employees, assets,vendors,creditors,debtors, rents,income and profits, as Receiver reasonably deems necessary and prudent to preserveandprotect
the Receivership Estate, and to maximize the income and profits and value of the Receivership Estate, whichmay include,butisnot limitedto,the following: 2. Nothing in this Receivership Order shall preclude Receiver from hiring professionals and third-party providers or vendors to assist Receiver in the performance of Receiver’s duties under thisReceivership Order, solongas thefeeschargedfor such servicesare reasonable,usual andcustomary inthe localitywhere theservicesareto befound. 3. Receiver shall: (a) be compensated at the rate of $440 per hour for Glenn R. Bronson and, unless otherwise approved the Court, at the ordinary and reasonable hourly rates (not to exceed $440 per hour) for other employees and staff in Receiver’s office that assist Receiver, plus actual reasonable out-of-pocket expenses, for services as Receiverherein. Such fees and expenses shall be paid from the assets of the Receivership Estatenomore often than on a monthly basis, upon approval of the Court after the submission of an
appropriate motion, with supporting documentation, and an opportunity for objections and a hearing. If there are insufficient funds in the Receivership Estate to pay the Receiver’s reasonable expenses, such expenses shall be paid by Plaintiffs, which, after the initial deposit of funds has been expended, may move the Court for an order to terminate theReceivership basedonlack of fundsin theReceivership Estate; (b) prepare detailedwritten reportsregarding the administration,finances, and other aspects of the Receivership Estate when ordered by this Court, with the first such report due 30 (thirty) days of the Effective Date, and additional reports due every 90
(ninety) daysthereafter, oras otherwiseordered bytheCourt; (c) retain, preserve and protect originals and/or legible copies of all writings and other documents used or referenced in order to prepare the statements under the foregoing paragraphs of this Receivership Order, including, without limitation, checks, contracts,agreements,and invoices; (d) record a certified copy of this Receivership Order in the County Recorder’s Offices of any County where Receiver determines real property belonging to theReceivership Estateis located;and (e) appropriately and lawfully pursue claims of the Receivership Estate, as empowered in the previous section, with regard to any Transferred Assets or any other assets or property of the Receivership Entities or the Receivership Estate or order to vindicate the rights of the Receivership Entities and provide value to the Receivership
Estate. 4. Receiver shall be empowered to serve as the sole “Manager” and “CEO” of the Receivership Estate, and each of the Receivership Entities, and shall be authorized to take any action necessary to perform his duties as Manager of the Receivership Estate and the Receivership Entities irrespective of the corporate documents, interests, votes, instructions or directions of any member or owner (or their agent or representative) of any of theReceivership Entities. In this capacity, the Receiver is vested with appliable privileges (including attorney-client and accountant-client) as to each entity, and may exercise and/or waive them in
his discretion. No current or prior professional retained by any of theReceivership Entitiesmay use such a privilege or other restriction of confidentiality as a ground for failing to disclose information toReceiver related toserviceshe/shehasprovidedto aReceivership Entity. 5. During the pendency of this Receivership, and unless expressly authorized in writing by Receiver or by Order of the Court, none of the individual Defendants (Jennifer Karony, Bradford Karony, Samuel Castor, Nathan Morris and Adam Knecht)haveanyauthority to act on behalf of any of the Receivership Entities or with regard to the Receivership Estate. That authority restswiththeReceiveras anofficerof thisCourt. 6. Receiver is further empoweredandauthorized togenerally dosuch otherthingsas may be necessary or incidental to the specific powers, directions, and general authorizations set out in this Receivership Order, including any actions permitted by UtahRuleof CivilProcedure 66, and/or any other applicable law. Receiver may take actions relating to the Receivership Estate beyond the scope contemplated by the provisions set forth above, so long as Receiver
obtainsprior approvalfrom this Courtfor anysuch actions. IV. Further Orders 1. Receiver or any of the Parties to this action may, at any time, apply tothis Court for any further orders or other instructions and powers necessaryordesirabletoenableReceiver to perform Receiver’sdutiesproperly. V. Non-Interferencewith Receiver 1. It is further ordered that Defendants and any other parties with actual or constructive notice of this Receivership Order who are subject to the jurisdiction of this Court, including, without limitation, Defendants and their managers, officers, directors, employees, agents, creditors, shareholders, representatives, attorneys and consultants, and all persons or entities actingfor or inconcertwiththem, areenjoinedandrestrained from: (a) interfering, directly or indirectly, with Receiver’s custody and control of the Receivership Estate, including, without limitation, withholding, secreting, or changing accesscodesand/orcomputer passwords; (b) interfering, directly or indirectly, with Receiver’s effort to collect or take possessionof theReceivershipEstate,or theincome,profits or proceedsthereof; (c) committing orpermitting any wastein connectionwithanyof theproperty constituting the Receivership Estate, or suffering, committing, or permitting any act in connection withtheReceivership Estateinviolationof this ReceivershipOrderor law; (d) collecting or attempting to collect the Receivership Estate, or theincome, profits or proceeds thereof, other thanat thewrittendirection of Receiver;
(e) extending,dispersing, transferring,assigning,selling, conveying,devising, pledging, encumbering, hypothecating, mortgaging, creating a security interest in or disposing of the whole or any part of the assets of the Receivership Estate or the rents, income,profits or proceeds thereof, withoutthe priorwrittenconsentof theReceiver; (f) absent further order of the Court, commencing, or continuing, including through the issuance or employment of process, of a judicial, administrative, or other action against or involving theAssetsor anypropertyof theReceivership Estatethat was or could have been commenced beforethe entryofthis Receivership Order,or torecover
any claims that arose before the entry of this Receivership Order from the Receivership Estate; (g) absent further orderof theCourt, andexceptasexpressly authorized under this Receivership Order, enforcing against any Receivership Entity or the Receivership Estate any judgment obtained before the entry of this Receivership Order, or obtaining possession of or exercising dominion and control over any property of the Receivership Estate; (h) absent further order of the Court, and except as expressly authorized by this Receivership Order, taking any action or engaging in any other conduct concerning the Receivership Estate that wouldconstitute aviolationof theautomatic stay asset forth in
11 U.S.C. § 362(a) as if the Receivership Entities had filed a voluntary petition for reliefunder theBankruptcyCode;and
(i) doing any act that will or that will tend to, impair, defeat, divert, prevent, or prejudice the preservation of the Receivership Estate and the rents, income, profits or proceedsthereof, or this Court’sjurisdiction overthe Receivership Estate. 2. Receiver, in his businessjudgment,shallbeentitled toengage locksmithsor other professionals for the purposes of gaining entry to any property or premises that is thesubjectof this Receivership Estate, and to gain access to any computer or security system, in order to obtain any property or documents to which Receiver is entitled pursuant to this Receivership Order, or to otherwise perform Receiver’s duties under this Receivership Order. Receiver may
also have locks, passcodes, passwords or security codes changed in order to safeguard the Receivership Estate. VI. Subordination ofLiensand Claims 1. Receiver shall have, as of the date hereof, the standing and status of a judgment creditorand bonafidepurchaser for valueof all ofthe Assetsofthe ReceivershipEstate. 2. As soon as practicable, and no later than thirty (30) days after the EffectiveDate of this Receivership Order, Receiver shall, to the best of hisabilitiesand withthefull assistance of all Parties, identify all of the secured andunsecuredcreditors ofthe ReceivershipEntities and theReceivership Estateand serveacopyof this ReceivershipOrderonthem. 3. Any sale, disposition, further pledge or other transfer of the Receivership Estate shall require that unavoidable, pre-appointment liens of secured creditors shall attach to the proceeds from any such sale, disposition, pledge, or transfer to the same extent as such liens
attachedto theReceivershipEstate. VII. Assemblingof Receivership EstateandRecommendations of Receiver 1. Receiver shall gather, collect, recover and protect the Assets and all other assets and property of the Receivership Estate—including the pursuit and resolutionof claims.Aspart of the periodic reports required by this Receivership Order,Receivershallreport onthestatus of suchactivities. 2. Once Receiver has gathered, collected and recovered the Assets and all other assets and property of the Receivership Estate (including thepursuitand resolutionof claims)to his satisfaction, or to the extent he believes reasonable and practicable under thecircumstances, he shall, make recommendations to the Court and the Parties for the liquidation of the Receivership Estate, distribution of assets and property from the Receivership Estate, continued operation of the Receivership Entities, termination of the Receivership and/ororothercourseof
action. 3. Receiver shallnot, withoutfurther orderof theCourt, makeany distribution ofthe proceeds from the liquidation of the Receivership Estate. Nothing in this Paragraph requires Receiver to make any interim distribution, and Receiver isauthorized tomaintain acash reserve to pay future costs of administering the Receivership Estate. Receiver may pay expenses, including, without limitation, professional fees and his own fees and expenses, as provided herein, and other creditors in the ordinary course of the Receivership Estate’s business in Receiver’ssolediscretion.
VIII. GeneralProvisions Relatedto Receiver 1. No person or entity shall file suit against Receiver, or take other action against Receiver, without an order of this Court permitting the suit ofaction;provided,however, thatno prior court order is required to file a motion in this action to enforce the provisions of this Receivership Order or any other order of this Court in this action. Receiver and his assistants, agents, attorneys, professionals and management companies (the “Receiver Parties”) (i) may relyonany andall outstanding courtorders,judgments,decrees andrules oflaw,andshallnot be liable to anyone for their own good faith compliance with any such order, judgment decree or ruleof law;(ii) mayrelyon,andshallbe protectedin anyactionupon,anyresolution, certificate, statement, opinion, report, notice, consent, or other documents believed by them to be genuine and to have been signed or presented by the proper parties; (iii) to the fullest extent allowed by the law, shall be immune from and shall be held harmless from any and all suits, liabilities,
claims, losses, lawsuits, judgments, and/or expenses, including, without limitation, attorneys’ fees, costs, and monetary damages, arising out of or related to, either directly or indirectly, his, her, or their performance ofdutiesor obligationsunder the termsof thisReceivership Order;(iv) shall not be liable to anyone for their acts or omissions, unless suchactsor omissionsconstitute gross negligence, recklessness, or intentional malfeasance. Parties dealing with the Receiver Parties may only look to the assets of the Receivership Estate to satisfy any liability, and the Receiver Parties shall have no personal liability to satisfy such obligations or claims unless the provisionsof clause (iv)are provento thisCourt byclearandconvincingevidence. 2. The Receivership Entities, the Receivership Estate, and theReceiverParties shall
not be held liable for any claim, obligation, liability, action, causes of action, cost, expense, or debt incurred by any of the non-receivership entity Defendants in this case,after the dateof this Receivership Order. 3. In no event shall the Receiver Parties beliablefor anyobligation oract that arose or occurred prior to the entry date of this Receivership Order, including without limitation, any of Defendants’ contingent or unliquidated obligations, taxes of any kind, assessments, utility charges,or goodsor services providedtoDefendants.
4. Receiver shall have no obligation to file any federal orstate incometaxreturn on behalf of any Defendant. Receiver shall reasonably cooperate with Defendants and furnish any information and documents requested by Defendants inconnection withthepreparation orfiling of any federal or state tax return(s). The Receivership Estate shall bear the expense for the preparation and filing of the tax returns for the ReceivershipEstateto maintaincompliance with Internal Revenue Service deadlines and avoid liens from being established against the assets of theReceivership Estate. 5. Following Receiver’s appointment, Receiver shall not be deemed in any way to be anownerof theReceivership Estate. 6. Any claims against any of the Receiver Parties shall be subject to the exclusive jurisdiction of thisCourt. A. Discharge 7. Receiver may apply for discharge after allproperty ofthe Receivership Estatehas been liquidated and/or the debts of the Receivership Entities have been satisfied or upon any settlement or release of the matters in the Verified Complaint or for other cause shown. In such event, Receiver shall file with the Court and serve on all Parties hereto a motion for discharge. Upon approval, Receiver shall be discharged from all further duties, liabilities, and responsibilities relating to the Receivership Entities and the Receivership Estate, except for the preparation andfiling of a finalreportand account.
8. Not later than thirty (30) days after the filing of the motion for discharge, Receiver shall file, serve, and set, for hearing its final report and account. Notice mustbe given to all Parties hereto and all other persons of whom Receiver is awaremay havepotential claims against theReceivershipEstate. IX. ProvisionsRegarding Confidential Information PROVISIONS REGARDING TREATMENTOF CONFIDENTIALINFORMATION 1. The Court finds that a protective order is necessary to facilitate the exchange of
information anddocuments that maybeconsidered confidentialin thismatter. A. Confidential Information Defined 2. As used herein, the term “Confidential Information” means any financial information concerning a party or an affiliate of a party, including without limitation, interrogatories and responses thereto,requests for admissions andresponses thereto,demandsfor production of documents and responses thereto, and deposition transcripts or portions thereof, that aredesignatedas“Confidential” inthe mannerprovidedinthis Order. A. Designation of ConfidentialInformation 3. The Protective Order agreed to by the parties and submitted to the court shall govern allinformation provided toor fromtheReceiver. X. EffectiveDate 1. This Receivership Order is effective as of the Court’s ruling granting the Receivership MotiononApril5,2023at 9:00a.m. MT. IT ISSO ORDERED. *ENDOFORDER* *EXECUTEDANDENTEREDASINDICATEDBYTHEDATEANDSEALATTHETOPOFPAGE1*
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