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Securities and Exchange Commission v. Newpoint Financial Services

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


August 3, 2012

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
NEWPOINT FINANCIAL SERVICES, INC.; JOHN FARAHI; GISSOU RASTEGAR FARAHI; AND ELAHEH AMOUEI, DEFENDANTS.

The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

O

ORDER RE: OPPOSITION OF BANK OF AMERICA, N.A. TO MOTION OF RECEIVER FOR ORDER APPROVING DETERMINATION ON CLAIMS AND TO DISTRIBUTE FUNDS [Docket No. 343]

The Receiver in this matter has filed a Motion for Order Approving Receiver's Determination on Claims and to Distribute Funds ("Motion"). In its Motion, the Receiver recommends that Bank of America, N.A.'s ("Bank") claim be denied, because the Bank submitted this claim after the due date set forth by a Settlement Agreement between the Receiver and the Bank. Regardless, the Receiver seeks to prioritize the claims of investors defrauded by Defendants over the claims of general creditors, including the Bank. The Bank opposes the Receiver's Motion.

The court will issue a separate order as to the Motion in its entirety, but addresses Bank of America's Opposition here. The court concludes that Bank of America's claim should not be denied. Assuming that Bank of America's claim was untimely under the Settlement Agreement, the court finds excusable neglect for the one-day late submission. The court, however, approves the Receiver's determination that defrauded investors be paid before general creditors such as Bank of America.*fn1

IT IS SO ORDERED.


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