Securities and Exchange Commission v. Lincoln Thrift Assoc., Continental Service Corp., Receiver-Appellee v. Charles Schonfeld and Helga Schonfeld

The appellants, Charles and Helga Schonfeld, petitioned the district court to resolve certain disputes involving a lease with Lincoln Leasing Corporation (LLC), whose property at that time was in the possession of Continental Service Corporation (the Receiver), a receiver appointed by the district court. In the alternative, the Schonfelds sought leave to sue the Receiver in an independent action. The district court denied their petition and instead granted the petition of the Receiver that the Schonfelds be enjoined from interfering in any way with the Receiver’s possession of the leased premises. We reverse and remand for further proceedings.

I.

On November 24,1975, the Securities and Exchange Commission (SEC) filed a complaint against several corporate officers and a group of affiliated corporations, including LLC, alleging violations of sections 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a), section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240 .10b-5. The complaint sought injunctive relief and the appointment of a receiver. In the SEC’s view, the district court’s authority to appoint a receiver was comprised…