Securities & Exchange Commission v. TLC Investments & Trade Co.

ORDER DENYING APPLICANTS’ MOTION FOR AN ORDER LIFTING THE STAY OR, ALTERNATIVELY, FOR LEAVE TO INTERVENE

A group of investors (“Applicants”) request that the Court order the Receiver in this action to administer the Receivership as a trustee would administer a bankruptcy estate under the bankruptcy code. In the alternative, the Applicants seek leave to intervene as parties in this action. After consideration of the papers filed regarding this motion, oral argument on April 2, 2001, and other materials on file this matter, the Court DENIES the motion.

I.

BACKGROUND

In this case, the Securities and Exchange Commission (“SEC”) brings suit against several affiliated companies (collectively, “TLC entities”) and three individuals. The SEC alleges that Defendants have engaged in a Ponzi-type scheme and have thereby defrauded the approximately 2,000 individuals who had invested in the TLC entities via promissory notes. After entering a temporary restraining order and then a preliminary injunction, the Court appointed a Receiver to manage the companies. The Court also approved a plan of liquidation. A group of approximately 700 of the investors in the companies, referred to here as…