Block on Trump's Asylum Ban Upheld by Supreme Court
SEC v. Vescor Capital Corp., No. 08-4224, concerned an appeal from a district court's order staying all actions related to property in a receivership estate containing the proceeds of an alleged financial fraud. The court of appeals affirmed the order, holding that 1) the district court properly focused on safeguarding the investors' assets as a whole in refusing to lift the stay; and 2) the receiver's actions to this point did not invalidate or otherwise impact any party's perfected security interest.
As the court wrote: "The SEC filed a complaint against Val E. Southwick and a variety of companies he controlled (Vescor Capital Corp.; Vescor Capital, Inc., Vescorp Capital, LLC, Vescorp Capital IV-A, LLC; Vescorp Capital IV-M, LLC; together "Vescor"), alleging that Mr. Southwick operated a massive Ponzi scheme that defrauded several hundred investors of approximately $180 million. Soon thereafter, the SEC sought and obtained the appointment of a receiver to manage and control all Vescor-related assets as well as any other entity directly or indirectly controlled by Mr. Southwick. A group of investors, which included Heritage Capital Management, LLC; Covenant Bancorp, Inc.; Covenant Capital, LLC; Heritage Orcas Partners, LP; Heritage Orcas VL Partners, LP; and Boundary Bay Capital, LLC (collectively, the "Covenant Group"); had advanced over $66 million to various Southwick-related entities, and were caught within the receiver's wide net. The district court granted a stay of all actions related to property in the receivership estate."