a limited liability partnership · 2005-09-21 · global telelink services, inc., global contact...
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![Page 1: A LIMITED LIABILITY PARTNERSHIP · 2005-09-21 · GLOBAL TELELINK SERVICES, INC., GLOBAL CONTACT CORPORATION, and ROBERT SMITH 111, Defendants. CML ACTION B 1 01-CV-0632 ORDER OF](https://reader033.vdocuments.site/reader033/viewer/2022060217/5f063f417e708231d41708a8/html5/thumbnails/1.jpg)
TROUTMAN SANDERS LLP
Harris B. Winsberg [email protected]
A T T O R N E Y S A T L A W A L I M I T E D L I A B I L I T Y P A R T N E R S H I P
B A N K O F A M E R I C A P L A Z A
6 0 0 P E A C H T R E E S T R E E T , N . E . - S U I T E 5 2 0 0
A T L A N T A , G E O R G I A 3 0 3 0 8 - 2 2 1 6
w w w . t r o u t m a n s a n d e r s . c o m
T E L E P H O N E : 4 0 4 - 8 8 5 - 3 0 0 0
F A C S I M I L E ’ 4 0 4 - 8 8 5 - 3 9 0 0
Direct Dial: Direct Fax:
June 20,2001
( 1 ’
Danna Hazeiwood (j .- I6
Revenue Cabinet 3. “/
f l
Commonwealth of Kentucky 0: g Y
8’7 4 9 7 @
P. 0. Box 181 Frankfort, KY 40601
RE: Global Telelink Services, Inc. and Global Contact Corporation (collectivl “Receivership Estates”)
Dear Ms. Hazelwood:
This firm represents Lloyd T. Whitaker in his capacity as Receiver (the ‘‘Receive Receivership Estates. Enclosed please find the Order of Preliminary Injunction and Otl entered on March 9,2001 by the United States District Court for the Northern District o (the “Order”).
If you have any further questions or need any additional information, plear hesitate to contact me.
Harris Bryan Winsberg HBW:ys cc: Lloyd T. Whitaker, Receiver
Robert G. Brunton, Esq.
0702722
04-805-3348 04-962-671 9
ly, the
,”) of the er Relief ’ Georgia
; do not
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.
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ATLANTA DIVISION
SECURITIES AND EXCHANGE CoavMISSION,
Plaint i f f ,
V.
GLOBAL TELELINK SERVICES, INC., GLOBAL CONTACT CORPORATION, and ROBERT SMITH 111,
Defendants.
C M L ACTION B 1 01-CV-0632
ORDER OF PRELIMINARY INJUNCTION AND OTHER RELIE
Plaintiff , Securities and Exchange Commission (ttCod having filed its complaint in this matter against defendant
Telelink Services, Inc. ("GTS") , Global Contact Cox
("Global Contact") and Robert Smith I11 ("Smith") , injunctive and other relief, and said defendants having e
general appearance, admitted the jurisdiction of this co
them and over the subject matter of this action, waived
findings of fact and conclusions of law pursuant to Rules 5
of the Federal Rules of Civil Procedure with respect to tk
granted in this order, and without admitting or denying an
allegations of the complaint having consented to the entrq
?
ssion") , j Global
>oration
seeking
itered a
.rt over
ntry of
? and 65
5 relief
r of the
of this
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I.
ORDERED that, until further order of this Court, def
GTS, Global Contact and Smith, their agents, servants, emp
attorneys and those persons in active concert or participati
them, in connection with the purchase or sale or in the o
sale of securities, by use of any means or instrumentalil
interstate commerce or any means or instruments of transpo
or communication in interstate commerce, or by the mails
facility of any national securities exchange, be, and they
are, until further order of this Court, restrained from, d
or indirectly:
employing any device, scheme or artifice to defrau
engaging in any act practice or course of b
which operates or would operate as a fraud or
upon any person;
obtaining money or property by means of any
statement of a material fact, or omitting to :
material fact necessary in order to make the sta
made, in the light of the circumstances under whi
were made, not misleading; or
making any untrue statement of a material f
omitting to state a material fact necessary in o
make the statements made, in light of the circun
2
tndants
.oyees,
)n with
fer or
ies of
:tation
or any
hereby
.rectly
1;
isiness
deceit
untrue
tate a
Iements
:h they
x t or
:der to
stances - --
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I
77q(a) , Section 10 (b) of the Securities Exchange Act of U.S.C. 78j (b), and Rule 10b 5 , 17 C.F.R. 240.10b-5, there
I1 . IT IS E'URTHER ORDERED that defendant GTS, Global
Smith, their officers, agents, servants, employees,
persons in active concert or participation with them
actual notice of this Order by personal service or ot
and they hereby are, until further order of this Cour
and enjoined from, directly or indirectly:
(1) making use of any means or instruments of
or communication in interstate commerce o
to sell any securities in the form
contracts, or any other security, through
prospectus or otherwise, unless and until
statement is in effect with the C o d s s
securities;
(2) carrying securities in the form of inves
or any other security, or causing th
through the mails or in interstate c
instruments of transportation, for the purpose
or delivery after sale, unless and
statement is in effect with the C
3
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(3) making use of any means or instruments of transpo tation f or communication in interstate commerce or of t
to offer to sell or offer to buy, through th
medium of any prospectus or otherwise, any in
securities, in the form of investment contract
other security, unless and until a re
statement is filed with the Commission as
security, or while a registration statement
the Commission as to such security is the s
refusal order or stop order or (prior to t
date of the registration statement)
proceeding or examination under Seccion 8
Securities Act of 1933 ("Securities Act"),
77h,
in violation of Sections 5(a) and 5(c) of the Securi
U.S.C. §§ 77e(a) and 77e(c). Provided, however, tha
the foregoing portion of this Order shall apply to an
transaction which is exempt from, or otherwise not s
provisions of Section 5 of the Securities Act, 15 U.S
111.
I T IS E'URTHER ORDERED that, pending further order
court, the assets of defendant G T S , Global Contact and S
officers, agents, servants, employees, attorneys, any
4
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financial institution holding any assets of the defendants
persons in active concert or participation with them,
permitted by any trustee, receiver or special fis
appointed by this Court, be, and hereby are, restrain
directly and indirectly, transferring, setting off,
changing, selling, pledging, assigning, liquidating or
disposing of or withdrawing any assets and property
controlled by, or in the possession of defendant G
Contact and Smith, except that Smith may withdraw $5,00
fo r four months from his personal assets for pers
expenses. Smith, upon appropriate notice to plaintiff,
modificat5oll of t h i s asset freeze.
Iv.
IT IS mTRTHER ORDERED that, pending further or
court, defendants GTS, Global Contact and Smith, the
agents, employees, servants, attorneys, and all perso
concert or participation with them, and each o
restrained and enjoined from destroying, transferring
rendering illegible all books, records, papers, ledge
statements and other documents employed in any of SUC
business, which reflect the business activities of th
or which reflect the transactions described in the
5
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from the date of this order, will file with this Court a
serve the Commission with a sworn accounting listing th
received by defendant Smith in connection with the tram
described in the Commission's complaint, and listing the
current disposition of such funds, including the name and
of all third parties receiving any of such funds from the dc
Smith, and the name of any third parties holding any of suc
on behalf of the defendant.
V I .
IT IS FURTHER ORDERED that Lloyd T. Whitaker
hereby is appointed as Receiver, without bond, for the est
GTS and Global Contact unless and until the Court
otherwise. The estates for which Whitaker is hereby ap
Receiver are hereinafter referred to as the "Receiver Esta
VII.
IT IS FURTHER ORDERED that the Receiver shall hz
possess all powers and rights to efficiently administ
manage the Receiver Estate, including but not limited
power:
A. to take custody, control and possession of i
-- --_- __ __ _ _ - ¶I
.a. ?ils,-p r ~ p e x & y , - + x e r n i s t z s ~ w F ? s . ~ t h - or in the possession or under the direct or i
control of the Receiver Estate, to manage, c
6
Id will
funds
nctions
use or
iddress
:endant
i funds
38 and
.tes of
orders
lointed
e .
re and
!r and
-0 the
L1 the
Pta uf
.direct
ntrol,
---
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operate and maintain the Receiver Estate,
income, earnings, rents and profits of the F
Estate, with full power to sue for and c
recover, receive and take into possession all
chattels, rights, credits, monies, effects,
books and records of accounts and other papers;
B. to sell, rent, lease or otherwise hypothec
dispose of the assets of the Receiver Estate;
C. to pursue, resist and defend all suits, actions,
and demands which may now be pending or which
brought by or asserted against the Receiver Esta
D. to make such payments and disbursements from th
so taken into his custody, control and posses
thereafter received, and to incur such expenses
be necessary or advisable in the ordinary co
business in discharging his duties as Receiver;
E. to open bank accounts in the name of the Rece
behalf of the Receiver Estate;
F. to engage and employ others (without Court apx
including but not limited to consultants, att
accountants, experts and employees of a firm c
the Receiver, to assist him in his duties, excc
any payment to such others for their services 5
- C1 - --- - lqpzet -koxinlr+-aaarr>Tmk--- - -.
7
o use
ceiver
lllect,
goods , lands,
te or
claims
nay be
e;
funds
ion or
as may
rse of
ver on
,oval) , mneys,
ned by
t that
.all be
- -____ ._ - - ~
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G.
H.
I.
IT
to take any action which could be taken 1:
officers, directors, partners and trustees c
Receiver Estate;
to suspend, terminate or grant a leave of abse
any employees of the Receiver Estate except as pr
in paragraph XXVI; and
to take such other action as may be approved b
Court.
VIII.
IS F’URTHER ORDERED that no person holding or claimi
pos,tion of any sort with the Receiver Estate shall posse
authority to act by or on behalf of any of the Receiver
except as authorized by the Receiver. With respect to the
freeze set forth herein, the Receiver shall be authorize
not required, to administer, manage, and direct the marsh
disbursement and/or transfer of monies or other assets h
third parties that are subject to the freeze. The Receive
in the reasonable exercise of his discretion, authori:
release, use or segregation of proceeds held by third part
he believes such action is necessary to preserve the Re
Estate. IX . IT IS EWRTHER ORDERED that no shareholders, officc
directors of the corporations that make up the Receiver
shall exercise any of their rights or powers with respect
by order of the Court.
a
r the
i the
ce to
wided
this
‘g any
s any
:state
asset
t but
ding;
Id by
may I
: the
es if
:eiver
r s or
:state
.o the
m r
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X.
IT IS E'URTHER ORDERED that defendants GTS and
Contact, as well as their agents, servants, employees, att
any persons acting for or on behalf of the Receiver Esta
any persons receiving notice of this order by personal ser
otherwise, are hereby restrained and enjoined from dis
transferring, exchanging, assigning or in any way convey:
property or assets of the Receiver Estate and frc
transaction of any business of the Receiver Estate excel
the written approval of the Receiver.
XI.
IT IS FURTHER ORDERED that, defendants GTS and
Contact, as well as their agents, servants, employees, attr
any persons acting for or on behalf of the Receiver Estal
any persons receiving notice of this order by personal ser
otherwise, having possession of the property, business,
records, accounts or assets of the Receiver Estate are
directed to deliver the same to the Receiver, his agents
employees.
XII.
IT IS FURTHER ORDERED that the defendants, their
servants, employees, nominees, attorneys and entities unde.
direct or indirect control shall cooperate with and assj
Receiver and shall take no action, directly or indirect
the performance of his duties.
9
Global
rneys,
e, and
ice or
osing,
2g any
n the
: with
Global
rneys,
3, and
ice or
booksf
hereby
and/or
gents,
their
;t the
- Y f to
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XIII.
IT IS FURTHER ORDERED that any brokerage insti
financial institution, bank, savings and loan, mutual f
any other person, partnership, or corporation maintair
having custody or control of any brokerage or deposit acc
other assets of any of the Receiver Estate or under
control, and that receives actual notice of this O X
personal service, facsimile transmission or otherwise
within three ( 3 ) business days of receipt of that noticc
with the Court and serve on the Receiver and counsel ;
commission a certified statement setting forth, with res]
each such account or other asset, the balance in the accl
description of the assets as of the close of business on t
of receipt of the notice.
XIV .
IT IS FURTHER ORDERED that the Receiver shall perj
accounting of the defendants' securities offerings as out1
the Commission's complaint including but not limited
defendants' solicitation, receipt, disposition and use
proceeds from such offerings.
xv.
IT IS FWRTHER ORDERED that the Receiver shall have th
to compel, including by subpoena, the appearance and testi
all persons and the production of the originals of any r -- ,-kk-e-*-a- ~~~~~ - __
€%js%s-+y-
of any person, in performing his duties hereunder.
10
ution,
id, or
ng or
int or
their
er by
shall,
file
lr the
!Ct to
mt or
3 date
rm an
led in
3 the
f the
power
m y of
:ords, .- __ .
The
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Receiver's authority under this paragraph shall not be co
to require the waiver by any person of any validly a
privilege.
XVI . IT IS FURTHER ORDERED that, on fift-en (15) days
notice from the Receiver, defendant Smith shall make
available for deposition at a mutually agreeable time anc
and shall produce to the Receiver the originals of any rec
his custody, possession or control relating to the fi
affairs, from November 1998 through the present, (
defendants GTS and Global Contact. This paragraph shall
construed to require the waiver by any person of any
asserted privilege.
XVII.
IT IS FLTRTHER ORDERED that the Receiver may investig
defendants, current and former employees of the Receiver
and related parties in connection with discovering add
information as it relates to activities of the Receiver E
The Receiver shall have the authority to investigate re
such related parties and employees prior to filii
litigation, and shall have the express authority to
consumer reports in the course of any such investigation.
XVIII.
IT IS FVRTHER ORDERED that the Receiver and any . . - -_ .- . . -
engaged o r empl-GGa357hit- Receiver, are entitiea io rea
11
strued
serted
ritten
imself
place
rds in
ancial
E the
not be
alidly
te the
state,
tional c
tate.
arding
J any
order
person
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compensation from the assets o
the prior approval of the Court.
XIX . I T I S FURTHER ORDERED tha
but is not required, to file v
Title 11 of the United States
Receiver Estate. If a bankrup
shall become, and shall be
Estate as a debtor in possess
the powers and duties as pr
the Bankruptcy Code to the
entity. Thn ~ . p ~ o i v r a ~ sh
written notice of the Receiv
The parties may contest suc
xx.
IT I S mJRTI-IER ORDERED
file petitions under Title
of the Receiver Estate, sha
filing to file with the Ba
required to be filed with
that the Receiver will re
filing.
XXI . -_ - - - - - E M S - E V R T S R ~ R D *-hat-
creditors and other person
from defendants GTS and G
12 1
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behalf of any such creditors and other persons, ir
sheriffs, marshals, and all officers and deputies, ant
respective attorneys, servants, agents and employees, are
further order of this Court, hereby stayed and restrain
doing anything to interfere with the possession, recoy
management by the Receiver of the property and assets
controlled, belonging to, or in the possession of the F
Estate, or to interfere with the Receiver in any manner
the pendency of this proceeding.
XXII.
IT IS FURTHER ORDERED that the Receiver is author
Luruuiiiiicate with all such pe?rc~r?c 2s t h c E e c k L v = ~
appropriate to inform them of the status of this matter
financial condition of the Receiver Estate.
XXIII.
IT IS FURTHER ORDERED that the Receiver is author
record this Order with government offices and to serve thj
on any person as he deems appropriate in furtherance
responsibilities in this matter. Receiver shall notify
counsel of all persons so served,
XXIV.
IT IS FURTHER ORDERED that the Receiver shall
notify the Court and counsel for the Commission and Smith
. - -. - _ _ _ - ---f&-hre-ar- apparent - failwe --of the--defendan~~-~o-com~~- - ---_I___-
way with the terms of this Order. m.
13
luding
their
until
ci from
zry or
owned,
ceiver
during
zed to * - - _.. -
U C G A L L a
nd the
zed to
' Order
)f his
rnith' s
-amp t 1 y
of any
u n y
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IT IS FURTHER ORDERED that, except for an act oj
negligence, the Receiver and all persons engaged or empl
the Receiver shall not be liable for any loss or damage i
by the defendants, or any other person, by reason of i
performed or omitted to be performed by the them in con
with the discharge of their duties and responsibilities
matter.
XXVI . IT IS E'URTHER ORDERED that Smith may prepare a busine
to operate all or a part of the businesses of the Receiver
and may submit it to the Receiver. If the Receiver determin
it is in the best interest of the Receiver Estate, the Recei
permit Smith to operate segments of the GTS or Global
businesses, subject to the execution
agreement as to Smith's compensation.
of a mutually acc
If the Receiver dc
approve the business plan, in whole or ,n part, Smith may su
to the Court for approval, with notice to plaintiff E
Receiver. The funds to operate such business segments shall
be provided from the assets of the defendants as of the 1
this Order, or directly or indirectly from the investors
schemes described in the Commission's complaint, and provid
any persons advancing such funds be provided with a copy
commission's ccmplaint in this matter before advanc- g such
14
gross
icurred
ny act
iection
n this
s plan
Estate
s that
'er may
:ontact
ptable
3s not
Imit it
Id the
be not
ate of
in the
d that
Df the
funds - eht sr .
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determination before this Court.
__ __
15
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XXVII.
IT IS FURTHER ORDERED that t h i s Court w i l l r e ta in j u r i s
Over this matter and the defendants for a l l purposes and w i l
other and further re l ie f that t h i s Court deems appropriatl
the circumstances.
t h i s
of
16
i c t ion
order
under
c(
- day /
DGE
. .
1