Fed. Sec. L. Rep. P 91,679 Securities and Exchange Commission v. Walter Wencke, Palmer York, Jr. And George Croke, and Real Parties in Interest

Palmer York, Jr. and George E. Croke appeal the district court’s refusal to lift its stay preventing the commencement of their suit against the Wencke receivership. We reverse.

In 1982, Portsmouth Square, Inc. (PSI) sought to remedy its serious financial difficulties by making a deal with Walker Wencke, a self-proclaimed expert on saving financially troubled companies. Wencke, through his company RAMAPO, concluded an agreement with PSI pursuant to which PSI received $10,000 and an implied promise of Wencke’s services in exchange for stock representing a controlling interest in PSI and all of the stock of two of PSI’s unprofitable subsidiaries. Wencke also retained deLusignan, then president of PSI, to manage RAMAPO in exchange for twenty-five percent of the shares of RAMAPO Corporation.

The SEC began investigating Wencke’s activities and in March, 1977, at the SEC’s request, the district court appointed R.N. Gould as receiver for all corporate and trust entities owned by Wencke. The district court enjoined all persons from commencing or continuing with any actions against the Wencke receivership or its assets. We upheld the stay in Securities and Exchange Commission v. Wencke,…