Securities and Exchange Commission v. Kapoor

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO.: 23-cv-24903-JB

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

v.

RISHI KAPOOR; et al.,

Defendants.

________________________________/

ORDER GRANTING IN PART RECEIVER’S MOTION

TO APPROVE SALE FREE AND CLEAR AND

RELATED SETTLEMENT AGREEMENT AND CLAIMS PROCESS

THIS CAUSE came before the Court upon the Receiver, Bernice C. Lee’s

Motion to Approve Sale Free and Clear and Related Settlement Agreement and

Claims Process (the “Motion”). ECF No. [128]. No party has filed a response to the

Motion or otherwise objected to the relief sought. However, Non-Parties Martin I.

Halpern, as Trustee of the Martin I. Halpern Revocable Trust and as Trustee of the

Halpern Family Trust (the “Halpern Trusts”), with the agreement of the Receiver and

SEC, ECF No. [148], filed a response to the Motion,1 which the Court construes as an

Objection. ECF No. [153]. The Receiver filed a Reply to the Objection, ECF No. [157],

and the Court held oral argument on the Motion. ECF No. [159].

Following oral argument, the Court required supplemental briefing regarding

1 The Halpern Trusts previously filed a Verified Motion to Intervene for the Limited

Purpose of Seeking Relief from the Court’s Receivership Order, ECF No. [130], which

remains pending.

the impact on the Motion, if any, of the Eleventh Circuit’s decision in Sec. & Exch.

Comm'n v. Wells Fargo Bank, N.A., 848 F. 3d 1339 (11th Cir. 2017). The Receiver

and the Halpern Trusts each filed a supplemental memorandum of law, and the

Receiver filed a revised proposed order in which she withdrew or amended certain of

the relief requested in the Motion. ECF Nos. [163], [164]. The Court held a status

conference on June 3, 2024, where it heard from counsel for the Receiver and the

Halpern Trusts regarding their respective positions on the Receiver’s revised

proposed order, and the Court’s intended changes thereto.

The Court has carefully considered the parties’ initial and supplemental

briefing, and the accompanying exhibits, as well the pertinent portions of the record

and the relevant legal authorities. For the reasons explained more fully below, the

Motion is GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

On December 27, 2023, the Securities and Exchange Commission (“SEC”) filed

a Complaint for Injunctive Relief against Rishi Kapoor (“Kapoor”) and the

Receivership Companies alleging that Kapoor used the Receivership Companies to

operate a real estate scheme in violation of the anti-fraud provisions of the federal

securities law raising approximately $93 million from more than 50 investors from

January 2018 through March 2023. See generally Complaint, ECF No. [14-1]. On

January 12, 2024, the Court entered an Order appointing Bernice C. Lee as receiver

“for the estate of the Receivership Companies, including any of [their] divisions,

subsidiaries, affiliates, successors, and assigns; and any fictitious business entities or

business names created or used by the Receivership Companies, their divisions,

subsidiaries, affiliates, successors, and assigns.” (“Receivership Order”) ECF No. [28]

at ¶ 2.

The Receivership Order authorizes the Receiver to sell real property in the

Receivership Estate, either at public or private sale, on terms and in the manner the

Receiver deems most beneficial to the Receivership Estate, and with due regard to

the realization of the true and proper value of such real property. Id. at ¶ 32. The

Receivership Order further provides that “[u]pon further Order of the Court,

pursuant to such procedures as may be required by the Court and additional

authority such as 28 U.S.C. sections 2001 and 2004, the Receiver is authorized to sell,

and transfer clear title to, all real property in the Receivership Estate.” Id. at ¶ 33.

On January 24, 2024, the Court entered an Order approving the parties’

Stipulation Waiving Requirements of 28 U.S.C. § 2001(a) and (b) in Connection with

Real Property Sale Motion (the “Section 2001 Order”). ECF No. [51]. The Section

2001 Order provides that “[t]he Receiver is excused from compliance with 28 U.S.C.

section 2001 in connection with the sale of real property in this case.” ECF No. [51].

The Halpern Trusts received notice of the Stipulation and Section 2001 Order at the

time each was filed, as its counsel previously filed a Notice of Appearance in this

action on January 17, 2024. ECF No. [31]. Neither the Halpern Trusts nor any other

non-party sought to file an objection to the Stipulation or otherwise dispute the

Section 2001 Order.

A. The Stewart Property

Stewart Grove 1, LLC (“Stewart Grove”) is a Receivership Company that owns

a luxury single family home located on Stewart Avenue in Coconut Grove, Florida

(the “Stewart Property”). The Stewart Property is mostly constructed but does not

have a certificate of occupancy or a temporary certificate of occupancy from the City

of Miami. ECF No. [128] at 4.

In May 2023, the Stewart Property was listed for sale for $24.9 million

pursuant to a one-year Exclusive Right of Sale Listing Agreement with One Sotheby’s

International Realty. ECF No. [128-8]. On October 31, 2023, the price was reduced

to $19.5 million. Id; ECF No. [128-9].

On April 24, 2024, the Receiver received a contract to purchase the property

for $17.5 million, which was the result of an arms-length negotiation (the “Sale

Contract”). ECF Nos. [128] at 11-12; [128-11]. This offer was the highest all cash

offer that was received. ECF No. [128] at 12.

The Stewart Property is encumbered by a lien in favor of first position lender

3610 Stewart Acquisitions, LLC (the “Lender”), who has filed a foreclosure action and

sought 24.99% default interest. Id. at 5-9. The Receiver has reached an agreement

with the Lender with respect to the proposed sale of the Stewart Property. The terms

of this agreement are set out in the Motion, id. at 13-14, and below. As relevant here,

the Stewart Property is also encumbered by a second mortgage held by the Halpern

Trusts, and various lien claimants. Id. at 9-10. The junior mortgage secures a $4

million commercial loan that the Halpern Trusts made to Stewart Grove on January

27, 2023. Id. at 9.

B. The Sale Motion

The Receiver filed the Motion seeking the Court’s approval to sell the Stewart

Property free and clear of any liens, claims and encumbrances, and to enter the

proposed settlement agreement with the Lender. ECF No. [128]. The Receiver

intends to establish a Lien Claim Fund to hold the net sale proceeds, and proposes

that all other liens against the Stewart Property, including the junior lien held by the

Halpern Trusts, attach to the monies in the Lien Claim Fund (as defined below), with

the same priority, extent and validity as they had prior to the Receivership. Id. at

20. Lien claimants may, but are not required, to submit proofs of claim and

supporting documentation to the Receiver by a date certain. ECF No. [164] at 7.

After that date, the Receiver will file a motion setting forth her proposed distribution

of the Lien Claim Fund, notice of which will be provided to all lien claimants known

to the Receiver, who may object to the proposed distribution and be heard by the

Court. Id.

The Receiver argues that it is in the best interest of the receivership estate to

consummate the sale of the Stewart Property under the Sale Contract because it will

generate sufficient funds to pay the Lender in accordance with the settlement

agreement and prevent accrual of additional claimed default interest that could

otherwise reduce the potential recovery by lien claimants with allowed secured

claims, and the receivership estate. ECF No. [128] at 13. The Receiver also argues

that the proposed settlement with the Lender is reasonable, and constitutes a fair

resolution with respect to the administration of the Stewart Property and potential

liability given applicable claims, defenses, and risks. Id. at 23-24.

The Halpern Trusts object to the Sale Motion. ECF No. [153]. They offer five

reasons why the Court should deny the Motion. Specifically, that: (1) the Motion

requests a grant of powers to the Receiver greater than it is entitled to under the law;

(2) the Motion requires the Court ignore the mandatory requirements of 28 U.S.C. §

2001(b) without a valid reason; (3) the relief requested would deprive the Halpern

Trust of its property rights without due process; (4) if the relief sought is granted, the

Court’s action would constitute a taking under the Takings Clause of the Fifth

Amendment; and (5) the Court lacks subject matter jurisdiction to adjudicate the

rights and interests of the various lienholders because the lienholders are citizens of

Florida, and thus complete diversity is absent. Id.

III. ANALYSIS

“The district court has broad powers and wide discretion to determine relief

in an equity receivership.” S.E.C. v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992)

(citations omitted). The Receiver has shown that the proposed sale will maximize the

value of the Stewart Property, particularly since the Sale Contract is the highest all

cash offer received after a year on the market. This is significant given that the

Stewart Property does not have a certificate of occupancy, which makes it difficult for

an institutional lender to provide financing to a potential buyer. The Court has

carefully considered the objections raised by the Halpern Trusts, and concludes that

none warrant denial of the Motion.

A. The Court Has Subject Matter Jurisdiction.

The Court first addresses the subject matter jurisdiction challenge. After

careful consideration, the Court finds, for the reasons noted below, that the Halpern

Trusts’ challenge to subject matter jurisdiction is not well-founded. Given that this

is an SEC action, the Court has federal question jurisdiction over the action, ECF No.

[14-1] at ¶ 36, and the receivership proceeding is within the Court’s equity

jurisdiction. See e.g., Elliott, 953 F.2d at 1566 (district court’s “wide discretion to

determine relief in an equity receivership . . . derives from the inherent powers of an

equity court to fashion relief.”); SEC v. Posner, 16 F.3d 520, 521 (2d Cir. 1994)

(holding that once the “equity jurisdiction of the district court has been properly

invoked by a showing of a securities law violation,” the court has “broad discretion”

to fashion an appropriate remedy) (citation omitted).

The Halpern Trusts do not dispute this, but rather, argue that resolution of

the Motion is akin to a foreclosure action over which the Court would not have subject

matter jurisdiction. ECF No. [153] at 12-14. Specifically, the Halpern Trusts

complain that “the Receiver is asking the Court to “functionally adjudicate” the rights

and claims of lienholders “as would be requested in a foreclosure,” yet the Court

“would lack subject matter jurisdiction to preside over such an action if independently

brought by the Receiver, because there is no federal question or diversity.” ECF No.

[153] at 13. However, the Receiver has not brought a foreclosure complaint in this

Court, and the Halpern Trusts cite no legal authority to support its assertion that

resolution of the Motion would transform this proceeding into a foreclosure action.

Thus, whether the Court has subject matter jurisdiction over a hypothetical

foreclosure action has no bearing on the Court’s authority to adjudicate the Motion

in this action. The Court clearly has jurisdiction over this SEC action, and no

argument based on the actual proceeding in this Court has been raised.

B. The Proposed Sale Does Not Violate Due Process Or Constitute

An Ultra Vires Act Of The Receiver, Nor Does It Violate the

Takings Clause.

Next, the Halpern Trusts contend that the proposed sale (i) violates its due

process rights, (ii) is a taking without just compensation in violation of the Takings

Clause of the Fifth Amendment, and (iii) constitutes an ultra vires act of the Receiver

because “the Receiver, through its Motion, seeks to extinguish the Trusts’ mortgage

lien rights” without notice and an opportunity to be heard. ECF No. [153] at 4, 9-12.

The premise of these arguments is that the proposed sale would invalidate the

Halpern Trusts’ junior lien. This is incorrect. The Halpern Trusts’ lien will not be

extinguished or terminated by the proposed sale. To the contrary, as stated in the

Motion, “liens against the Stewart Property will attach to the funds in the Lien Claim

Fund, with the same priority, extent and validity as they had prior to the

receivership.” ECF No. [128] at 20.

“Courts have repeatedly held that a receivership claims process is the

appropriate forum for considering interests of secured creditors and allowing secured

creditors to protect their interest.” Sec. & Exch. Comm’n v. JCS Enters., Inc., No. 14-

CV-80468, 2015 WL 13950381 (S.D. Fla. Nov. 3, 2015) (citations omitted); see also

Elliott, 953 F.2d at 1566 (“The government’s and parties’ interests in judicial

efficiency underlie the use of a single receivership proceeding.”).

Instructive is the Eleventh Circuit’s decision in Securities and Exchange

Commission v. Wells Fargo Bank, N.A., 848 F. 3d 1339 (11th Cir. 2017). In Wells

Fargo, the Eleventh Circuit held that “while a federal district court has wide-ranging

authority to supervise a receivership . . . it does not have the authority to extinguish

a creditor’s pre-existing state law security interest.” Id. at 1344.

The Court explained that:

[t]he appointment of a receiver does not invalidate liens existing

at the time the receiver is appointed, although it may affect or

change the remedy or remedies which the lienholder may use to

enforce his lien. Generally speaking the person who has a specific

lien on property is entitled by following proper procedure to pay

himself out of the property and if it be insufficient, then to prove

his claim for the deficiency. In the case of receivership such claim

must come out of the proceeds of property not covered by the

specific lien and such claim for deficiency must prorate with the

unsecured creditors. Generally speaking no other creditor except

the lienholder is entitled to any part of the proceeds of property

covered by a lien until the lienor is first paid.

Id. at 1345 (citing Ralph Ewing Clark, A Treatise on the Law and Practice of

Receivers, § 646 (3d ed. 1959)) (emphasis supplied). The Eleventh Circuit also stated

that “a federal district court cannot order a secured creditor to either file a proof of

claim and submit its claim for determination by the receivership court, or lose its

secured state-law property right that existed prior to the receivership.” Id.

The proposed sale does not violate these principles. As mentioned, the Halpern

Trusts’ junior security interest is not extinguished or invalidated, but rather,

attaches to the funds in the Lien Claim Fund. Further, the Receiver has withdrawn

her request for a mandatory claims process, and instead has agreed that a lienholder

may, but is not required to, file a proof of claim to receive distribution from the Lien

Claim Fund. ECF No. [164] at 7.

Given the preservation of the Halpern Trusts’ security interest, its argument

that the proposed sale violates the Takings Clause of the Fifth Amendment by

“extinguishing non-parties lien rights without just compensation” is without merit.

ECF No. [153] at 11-12. The Halpern Trusts also argue that “it would lose another

important right[:] the right to credit bid at a foreclosure sale . . . .” Id. at 10 n.3.

While a secured lien constitutes a protected property interest, see e.g., Armstrong v.

United States, 364 U.S. 40, 46-49 (1960), the Halpern Trusts cite no legal authority

that a right to credit bid qualifies as such.

“[I]t is appropriate for [a] district court to use summary proceedings” to dispose

of receivership property because it “reduces the time necessary to settle disputes,

decreases litigation costs, and prevents further dissipation of receivership assets.”

Elliott, 953 F. 2d at 1566. Indeed, the Eleventh Circuit has held that “summary

proceedings do not per se violate claimants’ due process interest.” Id. at 1571.

Rather, to establish a due process violation, the claimant “must show how they were

prejudiced by the summary proceedings and how they would have been better able to

defend their interests in a plenary proceeding.” Id. The Halpern Trusts make no

such showing. To be sure, “[s]ummary proceedings are inappropriate when parties

would be deprived of a full and fair opportunity to present their claims and defenses.”

Id. at 1567. That is not the situation here, as monies can only be distributed from

the Lien Claim Fund upon court order following notice to all known lien claimants,

including the Halpern Trusts, who will be given an opportunity to object.

For these reasons, the proposed sale does not constitute an unauthorized act

of the Receiver, or violate the Halpern Trusts’ due process or Fifth Amendment rights.

C. Compliance With 28 U.S.C. § 2001(b) Is Not Required.

Finally, the Halpern Trusts contend that the proposed sale is improper because

it does not comply with the requirements set forth in 28 U.S.C. § 2001(b). Section

2001(b) provides that:

After a hearing, of which notice to all interested parties shall be

given by publication or otherwise as the court directs, the court

may order the sale of such realty or interest or any part thereof

at private sale for cash or other consideration and upon such

terms and conditions as the court approves, if it finds that the

best interests of the estate will be conserved thereby. Before

confirmation of any private sale, the court shall appoint three

disinterested persons to appraise such property or different

groups of three appraisers each to appraise properties of different

classes or situated in different localities. No private sale shall be

confirmed at a price less than two-thirds of the appraised value.

Before confirmation of any private sale, the terms thereof shall be

published in such newspaper or newspapers of general circulation

as the court directs at least ten days before confirmation. The

private sale shall not be confirmed if a bona fide offer is made,

under conditions prescribed by the court, which guarantees at

least a 10 per centum increase over the price offered in the private

sale.

28 U.S.C. § 2001(b). After counsel for the Halpern Trusts appeared in this case, the

SEC, Receiver, and Mr. Kapoor filed a Stipulation waiving the requirements of

Section 2001(b) in connection with the sale of any real property sought by the

Receiver. ECF No. [48]. On January 24, 2024, the Court entered an Order approving

the Stipulation and explicitly stated that “[t]he Receiver is excused from compliance

with 28 U.S.C. section 2001 in connection with the sale of real property in this case.”

(the “Section 2001 Order”). ECF No. [51]. Despite receiving notice, the Halpern

Trusts did not seek to file an objection to the Stipulation or otherwise dispute the

Section 2001 Order.

The Halpern Trusts assert that the Section 2001 Order does not apply because

parties cannot waive the protections of Section 2001(b) on behalf of non-parties. ECF

No. [153] at 6-8. This argument misses the mark. The operative waiver is not the

parties’ waiver of the Halpern Trusts’ rights under Section 2001(b). Rather, it is the

Halpern Trusts’ waiver of their Section 2001(b) rights by taking no action to challenge

either the Stipulation or the Section 2001 Order despite knowledge of both filings.

“Ordinarily, a mere lack of diligence is sufficient to forfeit a constitutional or statutory

right.” Clement v. U.S. Attorney General, 75 F. 4th 1193, 1202 (11th Cir. 2023).

Indeed, the record reflects that the Halpern Trusts believed a sale of the

Stewart Property had already taken place, yet did not complain that Section 2001(b)

was not followed. Specifically, on April 18, 2024, counsel for the Halpern Trusts

emailed the Receiver stating “Can you give us an update on the status of the Stewart

project. We were under the impression that this property was sold months ago.” ECF

No. [157-5]. The Halpern Trusts’ silence under those circumstances is consistent

with the Court’s conclusion that given the Section 2001 Order, compliance with

Section 2001(b) is not required in connection with the proposed sale.2

2 At oral argument, counsel for the Halpern Trusts indicated that they did not have

a means to object to the Stipulation or Section 2001 Order because they were not

parties, and had no reason to know the Stewart Property would be sold. These

arguments are unpersuasive. The Halpern Trusts could have filed a motion to

Furthermore, the Halpern Trusts have not shown that waiver of Section

2001(b) prejudices them. The statute requires that a hearing with notice to all

interested parties take place before a court can approve a private sale of receivership

property. 28 U.S.C. § 2001(b). That occurred here, as the Halpern Trusts received

notice of the Motion and an opportunity to be heard at a hearing prior to court

approval of the proposed sale. Similarly, the statute allows an interested party to

make a bona fide offer that it is at least ten percent higher than the private sale

amount. Id. The Halpern Trusts have been on notice of the private sale amount and

could have, but did not, make a higher offer.

The Halpern Trusts are correct that the statute also requires that three

disinterested persons appraise the property, and the private sale price must be more

than two-thirds of the appraised value. Id. The Halpern Trusts have not offered any

appraisals of the Property, or other evidence to show that the current sale price is

less than two-thirds of the appraised value. Notably, the Property was listed on the

market for sale beginning in May 2023 at a price of $24.9 million, which had to be

reduced six months later to $19.5 million. The current offer of $17.5 million made in

April 2024—more than a year after the Stewart Property was first listed—is the

highest all cash offer received. This is significant because the Stewart Property does

intervene (as they did recently) to alert the Court to their concerns, or could have

conferred with the Receiver and SEC to secure an agreement that the Halpern Trusts

could file an objection without formal intervention (as they did here). Further, the

Stewart Property was publicly listed for sale even before the Receivership and, as

evidenced by the email correspondence discussed above, the Halpern Trusts believed

in April 2024 that the Stewart Property was “sold months ago.”

not have a certificate of occupancy, which will likely make it difficult for potential

buyers to secure financing. In short, the Halpern Trusts have failed to demonstrate

that the proposed private sale amount runs afoul of Section 2001(b).

III. CONCLUSION

For the foregoing reasons, and finding that good cause exists, it is hereby

ORDERED AND ADJUDGED as follows:

1. The Receiver’s Motion ECF No. [128] is GRANTED IN PART as

described herein.

2. The Receiver is authorized to enter the Sale Contract attached to the

Motion as Exhibit J, and the Receiver, as the Receiver over Stewart

Grove 1, LLC (“Stewart Grove”), is authorized to execute the deed, bill

of sale and title affidavit attached to the Sale Contract, and other

documents necessary for the proposed sale.

3. While the sale of the Stewart Property will be free and clear of pre-

existing liens as stated in Paragraph 4 below, all liens against the

Stewart Property, including, but not limited to, the liens described in

the Receiver’s Motion and those asserted between April 8, 2024 through

the closing date, are not extinguished, but rather, will attach to the

funds in the Lien Claim Fund (as defined below), with the same priority,

extent and validity as they had prior to the Receivership.

4. The sale of real property with a legal description Lot 1, Block 1, of the

Plat of Stewart, according to the plat thereof, as recorded in Plat Book

171, Page 50, of the Public Records of Miami-Dade County, Florida,

having folio no. 01-4128-051-0010, and Lot 2, Block 1, of the Plat of

Stewart, according to the plat thereof, as recorded in Plat Book 171,

Page 50, of the Public Records of Miami-Dade County, Florida, having

folio no. 01-4128-051-0020 (together, the “Stewart Property”), to Mimi

Chough, as Trustee of the JWY Trust u/t/a dated 7/1/2021 (the “Buyer”),

free and clear of all liens, claims and encumbrances, including, but not

limited to, the liens described in the Receiver’s Motion and those

asserted between April 8, 2024 through the closing date, is approved on

an as-is, where-is basis, without representations or warranties from the

Receiver.

5. Any licensed title insurer and the Buyer are authorized to rely on this

Order as authorizing the transfer of legal title to the Stewart Property.

6. The Receiver is authorized to take any and all actions reasonably

necessary to consummate the sale of the Stewart Property including, but

not limited to, execute deeds, bills of sale, title affidavits, and closing

statements reasonably required to consummate the sale of the Stewart

Property in accordance with the terms of the Sale Contract.

7. The settlement agreement between the Receiver and 3610 Stewart

Acquisitions, LLC (the “Lender”) set forth in the Motion is

APPROVED.

8. The Receiver is authorized to pay at closing: (a) the Lender Payment (as

defined in the Motion) consisting of $13,923,238.49 for amounts owed

through June 20, 2024, and $3,978.57 per diem at the non-default

interest rate of 12.875% for the period after June 20, 2024 through the

date the sale of the Stewart Property closes, plus any additional

amounts Lender was required to and did advance prior to closing under

the Advance Agreement, and interest thereon in accordance therewith,

(b) traditional seller’s fees and costs specified in the Sale Contract, and

(c) the Carveout (as defined in the Motion) to the receivership estate

consisting of a payment of $651,407.28 plus $3,743.72 per diem for the

period after June 20, 2024 through the date the sale of the Stewart

Property closes, for the benefit of the receivership estate. The Carveout

funds will be free and clear of any liens, claims and encumbrances, and

will constitute an unencumbered asset of the receivership estate, with

any disbursement subject to the terms of the Receivership Order and

future Court orders.

9. The Receiver is authorized to fund, at closing, a reserve of $100,000 (the

“Lender Fee Reserve”) that will be held by the Receiver, and the

Receiver is authorized to release amounts from the Lender Fee Reserve

to the Lender for reasonable attorney’s fees and costs incurred after

April 26, 2024 for the Stewart Property that have been paid by the

Lender, and to the extent there are excess funds in the Lender Fee

Reserve after the payment of such fees and costs, such excess funds will

be split 50% to the Lender and 50% for the Lien Claim Fund (defined

below).

10. The Receiver will separately account for the remaining net sale proceeds

after payment of the Lender Payment, Carveout and closing fees and

costs, and funding of the Lender Fee Reserve (the “Lien Claim Fund”).

11. The modified proof of lien claim form attached as Exhibit E to the

Receiver’s Supplemental Brief on Stewart Sale Motion (the “Proof of

Lien Claim”), ECF No. [164-5], and modified submission procedure set

forth herein are APPROVED, and all other relief relating to the lien

claims process described in the Motion is denied.

12. On the date that is 60 days after the entry of this Order (the “Lien Claim

Submission Date”), any person or entity (including, without limitation,

individuals, partnerships, corporations, joint ventures, estates, trusts,

and governmental units) who claims to have a right to payment or claim

of any nature, whether or not such right is reduced to judgment,

liquidated, unliquidated, fixed, contingent, mature, unmatured,

disputed, undisputed, legal, equitable, secured, or unsecured, that arose

from the beginning of time through the present date, against Stewart

Grove, Stewart Grove 2, LLC and/or the Stewart Property secured by a

lien against the Stewart Property may complete and submit the Proof

of Lien Claim, signed under the penalty of perjury, with supporting

documents evidencing the amount, extent, validity, perfection and

priority of their claim and lien, including, but not limited to, compliance

with applicable state law requirements, to the Receiver by electronic

mail to Bernice C. Lee at blee@kttlaw.com and David L. Rosendorf at

dlr@kttlaw.com for the Receiver to consider in preparing the proposed

distribution of the funds in the Lien Claim Fund.

13. Following the Lien Claim Submission Date, the Receiver will file an

appropriate motion with the Court to approve the proposed distribution

of the funds in the Lien Claim Fund, with notice to all known lien

claimants. A lien claimant with a claim against the Lien Claim Fund

may file an objection to the motion if it disagrees with the proposed

distribution. The Court will thereafter set a briefing schedule and make

a final determination regarding the distribution of funds from the Lien

Claim Fund.

DONE AND ORDERED in Miami, Florida this 17th day of June, 2024.

JACQ ff BECERRA

UNITED STATES DISTRICT JUDGE

18