Pursuant to a letter of request issued by the United States Bankruptcy Court, Eastern District of California dated 30 March 2012, the Order of the United States Bankruptcy Court, Eastern District of California, made on 6 March 2012 in Adversary Proceedings No 11-2337-D pending in Chapter 11 proceedings case number 09-29162-D-11 appointing the second plaintiff (Receiver) as receiver of certain property (SKPM Receiver Order), is hereby recognised.
The appointment of the Receiver over the Receivership Estate (as defined in Schedule 1 below) for the purpose of holding and safeguarding the Receivership Estate and, in particular, any Distribution (as defined in Schedule 1 below) that may be determined to be payable to any Defendant(s) (as defined in Schedule 1 below) and/or any of their alleged assignees from or by SK Foods Australia Pty Ltd ACN 009 245 735 (in liquidation) or Cedenco JV Australia Pty Ltd ACN 075 836 010 (in liquidation) pending the entry of a final order or judgment resolving the first plaintiff's claims against Defendants in Adversary Proceedings pending before the US Bankruptcy Court (as defined in Schedule 1) or further order of the United States Bankruptcy Court, is hereby recognised.
The Receivership Estate (as defined in Schedule 1) together with possession and control thereof be vested in the Receiver.
The Receiver shall have the powers set out in Schedule 2.
Upon presentation of a sealed copy of this Order, any person or entity over whom this Court has jurisdiction owing any payment or performance to the Defendants or their assignees on account of the Distribution or any part thereof, which, as a result of the SKPM Receiver Order or this Order, has been made a part of the Receivership Estate, shall attorn to the Receiver and shall render such payment or performance directly to the Receiver and not the Defendants.
The Receiver, after payment of any costs, charges and expenses that may be incurred in the exercise of any of the powers in realising property vested in him within Australia, is authorised to remit such surplus to the United States of America.
The plaintiffs (and either of them) be granted leave to apply for such further or other orders as may be necessary.
Fast Falcon Receiver Order
Pursuant to a letter of request issued by the United States Bankruptcy Court, Eastern District of California dated 17 May 2012, the Order of the United States Bankruptcy Court, Eastern District of California made on 7 May 2012 in Adversary Proceedings case number 12-2169 pending in Chapter 11 proceedings case number 09-29162-D-11 appointing the second plaintiff (Receiver) as receiver of certain property (Fast Falcon Receiver Order), is hereby recognised.
The appointment of the Receiver over the Receivership Estate (as defined in Schedule 1 below) pending the entry of a final order or judgment resolving the first plaintiff's claims against Fast Falcon LLC in Adversary Proceedings pending before the United States Bankruptcy Court (as defined in Schedule 3), or further order of the United States Bankruptcy Court, is hereby recognised.
The Receivership Estate (as defined in Schedule 3) together with possession and control thereof be vested in the Receiver.
The Receiver shall have the powers set out in Schedule 4, subject to the restriction set out in paragraph 2 of Schedule 4.
Upon presentation of a sealed copy of this Order, any person or entity over whom this Court has jurisdiction owing any payment or performance to Fast Falcon LLC or its assignees which, as a result of the Fast Falcon Receiver Order or this Order, has been made a part of the Receivership Estate, shall attorn to the Receiver and shall render such payment or performance directly to the Receiver and not Fast Falcon LLC.
The Receiver, after payment of any costs, charges and expenses that may be incurred in the exercise of any of the powers in realising property vested in him within Australia, is authorised to remit such surplus to the United States of America.
The plaintiffs (and either of them) be granted leave to apply for such further or other orders as may be necessary.
SS Farms Receiver Order
Pursuant to a letter of request issued by the United States Bankruptcy Court, Eastern District of California dated 17 May 2012, the Order of the United States Bankruptcy Court, Eastern District of California, made on 10 May 2012 in Adversary Proceedings case numbers 09-2692, 10-2014 and 10-2016 pending in Chapter 11 proceedings case number 09-29162-D-11 appointing the second plaintiff (Receiver) as receiver of certain property (SS Farms Receiver Order), is hereby recognised.
The appointment of the Receiver over the Receivership Estate (as defined in Schedule 1 below) pending the entry of a final order or judgment resolving the first plaintiff's claims against the Defendants (as defined in Schedule 5) in Adversary Proceedings pending before the United States Bankruptcy Court (as defined in Schedule 1) or further order of the United States Bankruptcy Court, is hereby recognised.
The Receivership Estate (as defined in Schedule 5) together with possession and control thereof be vested in the Receiver.
The Receiver shall have the powers set out in Schedule 6, subject to the restriction set out in paragraph 2 of Schedule 6.
Upon presentation of a sealed copy of this Order, any person or entity over whom this Court has jurisdiction owing any payment or performance to any Defendant or any of their assignees which, as a result of the SS Farms Receiver Order or this Order, has been made a part of the Receivership Estate, shall attorn to the Receiver and shall render such payment or performance directly to the Receiver and not the Defendants.
The Receiver, after payment of any costs, charges and expenses that may be incurred in the exercise of any of the powers in realising property vested in him within Australia, is authorised to remit such surplus to the United States of America.
The plaintiffs (and either of them) be granted leave to apply for such further or other orders as may be necessary.
Schedule 1 (SKPM Receiver Order)
(Definitions)
"Adversary Proceedings" means the Adversary Proceeding No 11-2337-D pending before the United States Bankruptcy Court, Eastern District of California, filed in the Chapter 11 proceedings case No 09-29162-D-11.
"Defendants" means:
SKPM Corporation Inc,
SSC&L 2007 Trust;
Frederick Scott Salyer (aka Scott Salyer) as trustee of the SSC&L 2007 Trust;
Scott Salyer Revocable Trust;
Frederick Scott Salyer (aka Scott Salyer) as trustee of the Scott Salyer Revocable Trust;
Monterey Peninsula Farms LLC; and
Fast Falcon LLC;
"Distribution" means:
any distribution that may be determined to be payable to any Defendant (s) and/or any of their alleged assignees by or from SK Foods Australia Pty Ltd A.C.N. 009 245 735 (in liquidation) (SKFA) or Cedenco JV Australia Pty Ltd A.C.N 075 836 010 (in liquidation) (CJV);
any distribution made on account of the right to payment asserted by Fast Falcon LLC in the proof of debt (in the approximate amount of AU$18,452,631.00) it filed on or about 27 March 2011 with John Sheahan and Russell Lock (Liquidators), as liquidators of SKFA (hereinafter, the Intercompany Debt),
any distribution that may be determined to be payable to any Defendant (s) and/or any of their alleged assignees made on account of the surplus funds which may be paid to shareholders/members of SKFA (hereinafter, the Cedenco Stock),
any distribution made on account of any other proof of debt that a Defendant and/or any assignee has or may assert against SKFA or CJV in connection with the Intercompany Debt or Cedenco Stock.
"Receivership Estate" means any Distribution.
Schedule 2 (SKPM Receiver Order)
(Receiver's powers)
The Receiver shall have the following powers:
a. The power to demand, collect, receive and preserve all or any portion of the Distribution determined to be payable to one or more of the Defendants or any of their respective alleged assignees;
b. The power to endorse all instruments and undertake whatever actions reasonably necessary to take possession and control of the Distribution or part thereof, and to prevent the Defendants or their alleged assignees from obtaining possession or control of same;
c. The power to open and maintain bank accounts, in the name of the Receivership Estate, in a United States federally insured lending institution, or in an Australian Bank and to transfer cash assets of the Receivership Estate when received to such accounts, if the Receiver deems it prudent or efficient to do so. If such accounts are created, the Receiver shall provide to all parties to the Adversary Proceedings copies of the monthly bank statements (including all cancelled cheques) for any such accounts and for any existing accounts over which he takes control. Such copies of bank monthly bank statements shall be provided within seven (7) days of their receipt by the Receiver;
d. The power to employ other professionals, including attorneys, to assist in carrying out the Receiver's rights and duties set forth in the SKPM Receiver Order or this Order;
e. The power to apply to this Court for such further or other orders as may be necessary.
Schedule 3 (Fast Falcon Receiver Order)
(Definitions)
"Adversary Proceedings" means the Adversary Proceeding No 12-2169 pending before the United States Bankruptcy Court, Eastern District of California, filed in the Chapter 11 proceedings case No 09-29162-D-11.
"Receivership Estate" means:
any legal or equitable right, title or interest Fast Falcon LLC (Fast Falcon) holds in the shares in SS Farms Australia Pty Ltd. ACN 107 746 716 (receivers and managers appointed and in liquidation) (SS Farms Australia) (the shares issued by SS Farms Australia being the SSFA Stock) acquired directly or indirectly from SS Farms LLC (SS Farms) including but not limited to all right of Fast Falcon to require SS Farms (whether as trustee, equitable transferor or otherwise) to do all things necessary to convey legal title to the SSFA Stock or to require SS Farms to exercise or refrain from exercising any right arising out of or related to the SSFA Stock,
any rights Fast Falcon holds arising out of or in relation to the SSFA Stock, including but not limited to:
a. any rights Fast Falcon may have to appoint or remove the officers or directors of SS Farms Australia under the corporate Constitution of SS Farms Australia, the laws of Australia or the United States of America;
b. any rights Fast Falcon may have to receive a distribution payable on account of the SSFA Stock or the proceeds thereof, and
c. any other rights Fast Falcon may have as a shareholder of SS Farms Australia under the corporate Constitution of SS Farms Australia, the laws of Australia or the United States of America,
d. any instruments or other documents Fast Falcon acquired or has the right to acquire or possess directly or indirectly from SS Farms related to the SSFA Stock,
e. any proofs of debt and proofs of equity interest asserted or that may be asserted by Fast Falcon or on Fast Falcon's behalf in the liquidation of SS Farms Australia ("SSFA Liquidation") including but not limited to distributions made on account of such proofs of debt or proofs of equity interest by John Sheahan and Iain Russell Lock the joint liquidators appointed in the SSFA Liquidation; and
f. any proceeds, product, or offspring of any of the foregoing.
Schedule 4 (Fast Falcon Receiver Order)
(Receiver's powers)
Subject to the next paragraph, the Receiver shall have the following powers:
a. To demand, collect, receive and preserve all or any portion of the Receivership Estate or any distribution payable to Fast Falcon or its respective alleged assignees;
b. To endorse all instruments and undertake whatever actions reasonably necessary to take possession and control of the Receivership Estate, or part thereof, and to prevent Fast Falcon or its alleged assignees from obtaining possession or control of same;
c. To open and maintain bank accounts, in the name of the Receivership Estate, in a US federally insured lending institution, or in an Australian Bank, and to transfer cash assets of the Receivership Estate when received to such accounts, if the Receiver deems it prudent or efficient to do so. If such accounts are created, the Receiver shall provide to all parties copies of the monthly bank statements (including all cancelled cheques) for any such accounts and for any existing accounts over which he takes control. Such copies of bank monthly bank statements shall be provided within seven (7) days of their receipt by the Receiver;
d. To employ other professionals, including attorneys, to assist in carrying out the Receiver's rights and duties set forth in the Fast Falcon Receiver Order or this Order;
e. To exercise all rights of Fast Falcon to require SS Farms to do all things necessary to convey legal title to the SSFA Stock or to require SS Farms (whether as trustee, equitable transferor or otherwise) to exercise or refrain from exercising any rights arising out of or related to the SSFA Stock;
f. To exercise all rights Fast Falcon has to appoint or remove the officers or directors of SS Farms Australia or to require SS Farms (whether as trustee, equitable transferor or otherwise) to appoint or remove the officers or directors of SS Farms Australia;
g. The power to apply to this Court for such further or other orders as may be necessary.
Notwithstanding any other provision of this order, Fast Falcon shall have the right without interference by the Receiver to prosecute in the courts of Australia or the United States of America any legal or equitable claims or defenses seeking to establish or vindicate Fast Falcon's rights to any asset made subject to the control of the Receiver, or defend any challenges to its claimed rights in those assets, provided however, that in the event any court enters an order or judgment directing or permitting payment on account of any asset forming part of the Receivership Estate any part thereof, to Fast Falcon or any entity claiming under it, the Receiver shall have the sole and exclusive right to receive and hold said payment until the conclusion of the Adversary Proceedings or further order of the United States Bankruptcy Court.
Schedule 5 (SS Farms Receiver Order)
(Definitions)
"Adversary Proceedings" means the following Adversary Proceeding pending before the United States Bankruptcy Court, Eastern District of California, filed in the Chapter 11 proceedings case No 09-29162-D-11:
Adversary Proceedings No 09-2692;
Adversary Proceedings No 10-2014; and
Adversary Proceedings No 10-2016.
"Defendants" means:
SKPM Corporation Inc,
SSC&L 2007 Trust;
Frederick Scott Salyer (aka Scott Salyer) as trustee of the SSC&L 2007 Trust;
Scott Salyer Revocable Trust;
Frederick Scott Salyer (aka Scott Salyer) as trustee of the Scott Salyer Revocable Trust;
Monterey Peninsula Farms LLC;
SS Farms LLC;
SSC Farms I LLC; and
SKF Aviation LLC
"Receivership Estate" means:
Any and all assets held by or on behalf of Defendants as of March 20, 2010, which include but are not limited to any and all real or personal property, tangible or intangible, foreign or domestic, as well as any and all proceeds, products, offspring, rents, cash, stock, securities, accounts receivable, earnings, interest, trademarks, patents, copyrights, goodwill, actual or potential claims, and the like arising out of or resulting from any contracts, leases, agreements, and the like associated with or derived from any and all assets held by the Defendants as of March 20, 2010, including, but not limited to all rights, privileges and entitlements SS Farms LLC (SS Farms) holds that arise out of or relate to the shares in SS Farms Australia Pty Ltd. ACN 107 746 716 (receivers and managers appointed and in liquidation) (SS Farms Australia) (the shares issued by SS Farms Australia being the SSFA Stock) including, but not limited to:
a. all rights SS Farms has or may have as a shareholder of SS Farms Australia under the corporate Constitution of SS Farms Australia, the laws of Australia or the United States of America to appoint or remove the officers or directors of SS Farms Australia;
b. all rights SS Farms has or may have to receive a distribution payable on account of the SSFA Stock or the proceeds of the SSFA Stock or on account of any proofs of debt or proofs of equity interest asserted or that may be asserted by SS Farms in the liquidation of SS Farms Australia (SSFA Liquidation);
c. any other rights SS Farms may have as a shareholder of SS Farms Australia under the corporate Constitution of SS Farms Australia, the laws of Australia or the United States of America; and
d. any proceeds, product, or offspring of any of the foregoing.
Schedule 6 (SS Farms Receiver Order)
(Receiver's powers)
Subject to the next paragraph, the Receiver shall have the following powers:
a. To demand, collect, receive and preserve all or any portion of the Receivership Estate or any distribution payable to one or more the Defendants or any of their respective alleged assignees;
b. To endorse all instruments and undertake whatever actions reasonably necessary to take possession and control of the Receivership Estate, or part thereof, and to prevent the Defendants of their alleged assignees from obtaining possession or control of same;
c. To open and maintain bank accounts, in the name of the Receivership Estate, in a United States federally insured lending institution, or in an Australian Bank, and to transfer cash assets of the Receivership Estate when received to such accounts, if the Receiver deems it prudent or efficient to do so. If such accounts are created, the Receiver shall provide to all parties copies of the monthly bank statements (including all cancelled cheques) for any such accounts and for any existing accounts over which he takes control. Such copies of bank monthly bank statements shall be provided within seven (7) days of their receipt by the Receiver;
d. To employ other professionals, including attorneys, to assist in carrying out the Receiver's rights and duties set forth in the SS Farms Receiver Order or this Order;
e. To exercise all rights SS Farms has to appoint or remove the officers or directors of SS Farms Australia; and
f. The power to apply to this Court for such further or other orders as may be necessary.
Notwithstanding any other provision of this order, the Defendants shall have the right without interference by the Receiver to prosecute in the courts of Australia or the United States of America any legal or equitable claims or defenses seeking to establish or vindicate their rights to any asset made subject to the control of the Receiver, or defend any challenges to their claimed rights in those assets, provided however, that in the event any court enters an order or judgment directing or permitting payment on account of any asset forming part of the Receivership Estate any part thereof to the Defendants or any entity claiming under them, the Receiver shall have the sole and exclusive right to receive and hold said payment until the conclusion of the Adversary Proceedings or further order of the United States Bankruptcy Court. Without limiting the generality of the foregoing, SS Farms shall retain the sole right to prosecute its application filed on or about March 21, 2012 in the Supreme Court of Victoria, Australia in the proceeding entitled SS Farms, LLC v. SS. Farms Australia Pty, Ltd., et al, SCI 2012/01582 seeking termination of the liquidation of SS Farms Australia.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION NSD 542 of 2012
[2]
BRADLEY D. SHARP AS TRUSTEE IN BANKRUPTCY OF SK FOODS LP, A CALIFORNIA LIMITED PARTNERSHIP (UNDER CHAPTER 11)
[3]
ROBERT C. GREELEY AS RECEIVER APPOINTED BY THE UNITED STATES BANKRUPTCY COURT
[4]
JUDGE: EMMETT J
DATE: 6 JUNE 2012
PLACE: SYDNEY
[5]
REASONS FOR JUDGMENT
1 The applicants seek orders under s 581 of the Corporations Act 2001 (Cth) (the Act) in relation to orders made by the United States Bankruptcy Court. Section 581(1) of the Act provides, relevantly, that the Federal Court, the judges of the Federal Court, and the officers of or under the control of the Federal Court must act in aid of, and be auxiliary to, each other in all external administration matters. Section 581(2) relevantly provides that, in all external administration matters, the Court must act in aid of, and be auxiliary to, the courts of prescribed countries that have jurisdiction in external administration matters. Under s 581(3), where a letter of request from a court of a country other than Australia, requesting aid in an external administration matter, is filed in the Federal Court of Australia, the Federal Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen in its own jurisdiction. Under s 580 of the Act, external administration matter includes a matter relating to winding up, outside Australia, a body corporate, or to the insolvency of a body corporate. Section 580 also provides that a prescribed country means a country prescribed under the Corporations Regulations 2001 (Cth) (the Regulations) for the purpose of that definition. Under reg 5.6.74 of the Regulations, the United States is a country prescribed for that purpose.
2 The first plaintiff, Mr Bradley D. Sharp, was appointed as trustee in bankruptcy of SK Foods LP on 14 May 2009. That appointment was approved on 18 May 2009 by the United States Bankruptcy Court. The second plaintiff, Mr Robert C. Greeley, has, at the behest of Mr Sharp, been appointed receiver of diverse assets by the United States Bankruptcy Court. The Federal Court has received three letters of request from the honourable Robert S. Bardwil, in his capacity as a judge of the United States Bankruptcy Court for the Eastern District of California. All three letters of request have been issued in case number 09-29162-D-11 in the United States Bankruptcy Court, Eastern District of California, Sacramento Division. Case number 09-29162-D-11 (the Chapter 11 Case) is a proceeding brought under Chapter 11 of the United States bankruptcy legislation in relation to SK Foods LP. The three letters of request relate to separate adversary proceedings brought in the Chapter 11 Case. Each letter of request relates to the recognition of the appointment of Mr Greeley as receiver of certain assets that are the subject of a different adversary proceeding in the Chapter 11 Case. Before describing the specific orders that are the subject of the letters of request, it is desirable to say something about SK Foods LP, and the various other companies that are the subject of proceedings in the Chapter 11 Case, as well as other proceedings in the Federal Court.
3 At all material times prior to the appointment of Mr Sharp, SK Foods LP was recorded in the share register of SK Foods Australia Pty Limited (SK Foods Australia) as the legal and beneficial owner of 100 shares in the capital of SK Foods Australia. Mr Scott Salyer was registered as the owner of one issued share in the capital of SK Foods Australia. SK Foods Australia was also the legal and beneficial owner of the issued shares in the capital of Cedenco JV Australia Pty Limited (Cedenco JV). The principal business of SK Foods Australia and Cedenco JV was the carrying on of an unincorporated partnership under the name Cedenco Australia (the Cedenco Partnership). The principal business of the Cedenco Partnership was the processing of tomatoes into tomato paste, diced tomatoes, and other products.
4 SS Farms LLC was, at material times, registered as the owner of all of the issued shares in SS Farms Australia Pty Limited (SS Farms Australia). The business of SS Farms Australia was to grow tomatoes for the purposes of supplying them to the Cedenco Partnership. SS Farms Australia had no employees, and the employees of the Cedenco Partnership managed and undertook the business of SS Farms Australia. As and when required, the Cedenco Partnership provided loans to SS Farms Australia for working capital, and to finance losses incurred by SS Farms Australia.
5 Commencing from about August 2005, SK Foods LP and related entities operating in the United States were subject to a criminal investigation conducted by the United States Federal Bureau of Investigation (FBI), Internal Revenue Services Criminal Investigations Division (IRS), the Office of Inspector General, Food and Drug Administration (FDA), and the Department of Justice, Antitrust Division. The subject of that investigation included Mr Salyer's participation in a number of matters, including the payment of bribes by employees or agents of SK Foods to the purchasing officers of customers of SK Foods, the payment of bribes by employees or agents of SK Foods to officers of customers of SK Foods to obtain confidential information about competitors' bids or tenders, the widespread selling and shipping of tomato products that did not meet contractual specifications or were adulterated with mould at levels exceeding limits prescribed by the FDA, and the falsification of documentation to disguise the adulteration levels in order to comply with FDA limits, or to make products appear as though they were contractually compliant. The criminal investigation of Mr Salyer and the SK Foods group became overt on 16 April 2008, when the FBI, the IRS, and the FDA executed numerous, judicially authorised search warrants in the states of California and New Jersey.
6 After the appointment of Mr Sharp as trustee in bankruptcy of SK Foods LP, various transfer forms and other documents were signed, at the direction of Mr Salyer, purporting to transfer the 100 shares in SK Foods Australia held by SK Foods LP to SKPM Corporation, a California corporation, as to 55.45 per cent, and to the Scott Salyer Revocable Trust (the SSR Trust), of which Mr Salyer's family are the beneficiaries, as to the remainder. At the same time as those 100 shares were purportedly transferred, there was also purportedly assigned to the SSR Trust and to Fast Falcon LLC a debt of over $18 million owing to SK Foods LP by SK Foods Australia (the Intercompany Receivable).
7 In the meantime, liquidators were appointed to SK Foods Australia. SK Foods LP lodged a proof of debt in respect of the Intercompany Receivable. The liquidators partially admitted the proof of debt, and set off from the amount admitted debt an amount of approximately $8.7 million, said to be a contra debt owing by SK Foods LP to Cedenco JV. That resulted in a net admitted debt owing to SK Foods LP of approximately $9.13 million. SK Foods LP has appealed from the decision of the liquidators to set off the alleged contra debt. That appeal is still on foot in the Federal Court.
8 SSR Trust and Fast Falcon LLC have lodged separate proofs of debt, claiming to be owed the Intercompany Receivable. The liquidators rejected those proofs of debt. An appeal against the liquidators' decision has now been dismissed for want of prosecution (see Salyer v Sheahan and Lock, in the matter of SK Foods Australia Pty Ltd (in liquidation) [2012] FCA 734).
9 SS Farms Australia is also in liquidation, and there is likely to be a significant distribution to the shareholders of SS Farms Australia. Mr Sharp claims that the shares in SS Farms Australia are beneficially owned by SK Foods LP.
10 There is complex litigation in United States Bankruptcy Court, presently being managed by Judge Bardwil. On 15 September 2011, Judge Bardwil granted a preliminary injunction against various parties, restraining them from dealing with the 100 shares in SK Foods Australia, and restraining them from dealing with the right to payment of the Intercompany Receivable. Judge Bardwil has expressed the view that that preliminary injunction is not worth the paper it is printed on to the defendants. Judge Bardwil also observed that the bankruptcy of SK Foods LP has been plagued by "the chicanery that the defendants have repeatedly engaged in, in their aggressive, ongoing effort to divert and dissipate assets that would otherwise be available" to Mr Sharp as trustee in bankruptcy. Accordingly, Judge Bardwil appointed Mr Greeley as receiver of the various assets to which I have made brief reference.
11 In the Chapter 11 Case, there are currently three sets of adversary proceedings. In those proceedings, Mr Sharp as trustee in bankruptcy claims recovery of assets from various entities associated with Mr Salyer. The claims include the following:
first, the claim in respect of the 100 shares issued by SK Foods Australia;
secondly, the claim over the Intercompany Receivable; and
thirdly, claims concerning recovery of assets held by other entities related to Mr Salyer, including the shares in SS Farms Australia held by SS Farms LLC.
Each of those claims is the subject of the separate appointment of Mr Greeley as receiver.
12 On 6 March 2012, Judge Bardwil made an order in adversary proceeding 11-2337. On 7 May 2012, he made an order in adversary proceeding 12-2169, and on 10 May 2012 he made an order in adversary proceedings 09-2692, 10-2014, and 10-2016. Those three orders might conveniently be referred to respectively as the SKPM Receiver Order, the Fast Falcon Receiver Order, and the SS Farms Receiver Order. The first relates to the shares in SK Foods Australia, the second relates to the Intercompany Receivable, and the third relates to the shares in SS Farms Australia.
13 The evidence in support of the present application includes a declaration made on 23 May 2012 by Mr Gregory Nuti, a partner of the firm of Schnader Harrison Segal & Lewis LLP, who are acting for Mr Sharp. Mr Nuti said in his declaration that, at that date, the SKPM Receiver Order was final and not subject to any appeal. On 12 May 2012, SS Farms LLC and the other defendants in the relevant proceeding filed a notice of appeal from the SS Farms Receiver Order. That appeal remains pending in the United States District Court for the Eastern District of California. On 14 May 2012, Fast Falcon LLC filed a notice of appeal from the Fast Falcon Receiver Order. That appeal also remains pending in the United States District Court for the Eastern District of California. However, notwithstanding the appeals, both the SS Farms Receiver Order and the Fast Falcon Receiver Order remain in full force and effect. Mr Nuti is not aware of any fact, matter, or circumstance affecting the validity or enforceability of any of the SKPM Receiver Order, the Fast Falcon Receiver Order, or the SS Farms Receiver Order.
14 SK Foods LP is a California limited partnership, which is governed by the California Corporations Code. Title 2 of that Code deals with limited partnerships. Chapter 5.5 of title 2 enacts the Uniform Limited Partnership Act of 2008. Section 15901.04 of the Code, being part of the Uniform Limited Partnership Act of 2008, relevantly provides that a limited partnership is an entity distinct from its partners, and that a limited partnership has perpetual duration. Under s 15901.105 of the Code, a limited partnership has the power to do all things necessary or convenient to carry on its activities, including the power to sue, be sued, and to defend in its own name and maintain an action against a partner for harm caused to the limited partnership by a breach of the partnership agreement or violation of a duty to the partnership.
15 Under Californian law, a limited partnership is a distinct legal entity, separate from its individual partners, has perpetual duration, can be sued and be sued, and can be administered in bankruptcy under Chapter 11 of the Bankruptcy Code in a manner no different from any other legal entity recognised under the law of the United States. Mr Nuti has been informed by Mr Sharp, and believes, that SK Foods LP is insolvent and has liabilities exceeding assets by approximately USD $250 million.
16 In the light of that evidence, I am satisfied that SK Foods LP is a body corporate. I am also satisfied that each of the adversary proceedings to which I have referred is a matter relating to the insolvency of SK Foods LP.
17 In all of the circumstances, I am satisfied that s 581(2) and s 581(3) of the Act have been enlivened by the receipt by the Federal Court of the three letters of request from Judge Bardwil in his capacity as a judge of the United States Bankruptcy Court. I consider, therefore, that it is appropriate to make orders that the SKPM Receiver Order, the Fast Falcon Receiver Order and the SS Farms Receiver Order be recognised, and that the appointment of Mr Greeley as receiver of the respective assets described be recognised. Each letter of request identifies the specific assets to which Mr Greeley is appointed by the relevant order, and it is appropriate that possession and control of those assets be vested in Mr Greeley, and that he be given expressly the powers conferred upon him by the United States Bankruptcy Court. I therefore propose to make orders along the lines sought in the originating process.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.
Parties
Applicant/Plaintiff:
Salyer
Respondent/Defendant:
Sheahan and Lock, in the matter of SK Foods Australia Pty Ltd