UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
November 10, 2011
SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
SAFEVEST, LLC; JON G. ERVIN; AND JOHN V. SLYE, DEFENDANTS.
The opinion of the court was delivered by: Judge: Hon. James V. Selna
ORDER TO SHOW CAUSE RE CONTEMPT
TO ALL INTERESTED PARTIES:
Thomas A. Seaman ("Receiver"), Court-appointed permanent receiver for Safevest, LLC, and its subsidiaries and affiliates (collectively, "Safevest" or the "Receivership Entities"), and his counsel of record, Allen Matkins Leck Gamble Mallory & Natsis LLP ("Allen Matkins"), (together, "Movants") have applied on an emergency ex parte basis, for an requiring A. Stephenson Wallace and his attorney David A. Bellon ("Respondents") to show cause why they should not be held in contempt and sanctioned for violating this Court's Preliminary Injunction Order, dated May 12, 2008 ("PI Order"). Doc #16. In the alternative, Movants sought an order to have a noticed motion for an OSC re Contempt heard on shortened notice.
The Court, having considered the ex parte application, having received no opposition, and finding good cause, hereby grants the application and orders as follows:
1. Respondents A. Stephenson Wallace and his attorney David A. Bellon are ordered to show cause in this Court why Respondents should not be held in civil contempt and sanctioned for violating the PI Order by:
(a) filing an adversary complaint against the Receiver and Allen Matkins in the U.S. Bankruptcy Court, Southern District of Georgia (Adv. Pro. No. 11-01050)("Adversary Proceeding"), without first obtaining leave of this Court as required under the PI Order and/or 28 U.S.C. § 959; and
(b) moving for and obtaining an order from said Bankruptcy Court purporting to substantively consolidate the estate of these Receivership Entities with the debtor's estate in said bankruptcy case, without notice to the Receiver and without first obtaining relief from the PI Order from this Court.
2. The sanctions to be issued may include, without limitation, monetary sanctions against Respondents, jointly and severally, in an amount sufficient to cover the fees and costs incurred by the receivership estate as a result of the conduct alleged in Paragraph 1 above.
3. A hearing on the Order to Show Cause is set for November 22, 2011 at 4:00 p.m. before the Honorable James V. Selna, Courtroom 10C, 411 West Fourth Street, Santa Ana, CA 92701. If either Respondent objects to being held in civil contempt, such Respondent shall file a legal memorandum of points and authorities and declarations containing his objections no later than November 17, 2011. Movants may file a response no later than 9:00 a.m. November 21, 2011.
4. Without limitation as to other means, filing of this Order in the Adversary Proceeding and service therein by ECF or mail shall constitute proper notice and service of this Order on Respondents.
IT IS SO ORDERED.
James V. Selna United States District Judge
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