Receivership in SEC v. John V. Bivona, et al., Case No. 3:16-cv-01386-EMC
This is the website of successor Receiver, Kathy Bazoian Phelps, Partner at Raines Feldman LLP. Kathy On February 28, 2019, Ms. Phelps was appointed as the Successor Receiver in the case of Securities and Exchange Commission v. John V. Bivona, Saddle River Advisors, LLC, SRA Management Associates, LLC, and Frank Mazzola, Case No. 3:16-cv-1386, in the United States District Court for the Northern District of California. The case was originally filed on March 22, 2016, and on October 11, 2016, Sherwood Partners, Inc. was appointed and served as Receiver until the appointment of Ms. Phelps as successor receiver.
The Receivership is imposed over the following entities: SRA Management Associates, LLC, and relief defendants SRA I LLC, SRA II LLC, SRA III LLC, Clear Sailing Group IV LLC, Clear Sailing Group V LLC, as well as the stipulating affiliated entities, Felix Multi-Opportunity Fund I LLC, Felix Multi-Opportunity Fund II LLC, Felix Management Associates LLC, NYPA Fund I LLC, NYPA Fund II LLC and NYPA Management Associates LLC.
The purpose of this website is to provide convenient access to information about the receivership, including status reports from the Receiver, copies of pleadings filed in the case, and Frequently Asked Questions (FAQs). The website will be updated periodically, and all creditors, investors and parties in interest are encouraged to check the website for updates. If you require further information not contained in this website, you may Contact Us.
April 23, 2021
The Receiver and her counsel joined the law firm Raines Feldman LLP and filed a motion with the Court to approve the engagement of Raines Feldman shortly thereafter. Please note that Kathy Phelps can now be reached at email@example.com and Dave Castleman can now be reached at firstname.lastname@example.org. Please check back for updates on this new website for future filings, news, and other updates.
March 1, 2021
The Receiver began the Palantir distribution today. Shares were sold for the Tax Holding Account and the Palantir Administrative Reserve, and distributions of shares commenced. The final Palantir Distribution Schedule can be viewed here. We are aiming to complete the distribution this month and are moving as expeditiously as possible to get the shares distributed. This is a complex process that takes a substantial amount of time. Check your brokerage accounts to see if we have distributed your shares. If you think the number of shares received was incorrect based on the attached schedule, please let us know. We will not be providing individual confirmations of transfer. If we or our bankers identify any specific issues with your transfer, we will be in touch.
We cannot advise you as to your tax basis, or other tax advice related to any tax consequences you may have as a result of this distribution. We will not be doing tax filings for individual claimants. You will have to discuss individual tax matters with your accountants or advisers. As the receivership is a taxable entity, we are reserving and paying the taxes of the receivership. But your taxes are your own responsibility.
February 17, 2021
Palantir Technologies Inc. released its quarterly earnings on February 16, 2021, which will allow the Receiver to commence the process of obtaining the estate’s Palantir shares from Computershare on the morning of February 18, 2021. The Receiver is advised that it may take many days or even a few weeks for the unrestricted shares to arrive in the estate’s brokerage account.
The Receiver has filed a motion for authority to distribute the Palantir shares to investors and to sell shares necessary to pay the associated taxes. The Receiver is also seeking authority to retain an administrative reserve of Palantir shares that will be liquidated and the cash held to protect the estate from unknown future liabilities associated with the Palantir distribution. The hearing on the motion is scheduled for hearing on February 25, 2021 at 1:30 p.m. Interested parties may attend by Zoom webinar with the following link:
Webinar ID: 161 991 1861
The Receiver will need Palantir investors’ account information in order to distribute shares to those investors. Many investors have already provided their information to the Receiver. If you have not, that information must be obtained by February 26, 2021 to ensure timely delivery of your shares. You may review a copy of the Motion here. Hypothetical distribution schedules are attachedhere, and they will be updated with actual figures at the time that the actual sale and distribution takes place since the amounts to be distributed are tied to the then stock price of Palantir.
Please note that we cannot provide claimants with the number of shares they are receiving, with a delivery date, or with individual confirmations of the transfer once it is made. Please check the brokerage accounts you provided us to see if your shares have arrived. If you have not received your shares by March 31, 2021, and have not otherwise heard from us concerning this share transfer, please contact us to discuss next steps.
December 8, 2020
Airbnb is expected to have an IPO in the near term, but distribution to Airbnb investors will not occur until all lock up periods have expired. The allowed amounts of the Airbnb investor claims have been updated to reflect a stock split that occurred in October 2020.
December 7, 2020
The interim distribution to Class 3 cash claimants has been made. Wire transfers were made to those timely requesting payment by wire, and checks have been sent to requested addresses or, where no request was made, to the last known address of the claimant. The timing of the final distribution is not yet known as the Receiver needs to retain a cash reserve for the administration of the estate.
October 16, 2020
On September 30, 2020, Palantir Technologies began trading publicly following its direct listing. Shortly thereafter, pursuant to the Lockup Agreement executed by the Receiver upon approval by the Court to do so, the Receiver received approximately 20% of the estate’s Palantir holdings. Over the week of October 6, the Receiver sold 966,995 shares for an average price of $10.21, and received total net proceeds after commissions of $9,854,110. Of those proceeds, $9,765,512 was contributed to the Plan Fund pursuant to the Court-approved Distribution Plan and $88,598 was reserved for taxes in connection with the sale of the Palantir shares.
After those sales, there remain 4,773,254 shares of Palantir in the receivership estate, the vast majority of which remain restricted and subject to the Lockup Agreement. Those shares can not be freely traded or distributed until after Palantir issues its FY2020 financial results, which is expected in the first quarter 2021. When the Lockup period expires, the Receiver will make an interim distribution of shares to claimants, but will hold back a percentage of those shares as an administrative reserve until the final tax liability of the receivership has been fully resolved. The Receiver may also need to liquidate additional shares to fund the tax holding account as it relates to the distribution of shares to claimants, depending on the price of Palantir at the time of distribution. We will file a motion in advance of making a distribution or any further sales as the expiration of the lockup period expires, which will contain details with respect to the anticipated timing and amounts of distribution.
As a result of the recent Palantir sale, the Plan Fund now has sufficient funds to allow us to make an interim distribution to Class 3 unsecured creditor claimants. We are preparing a motion to do so and expect to file it shortly. If you are a Class 3 claimant and have a preference to receive funds via a wire transfer or by a check. If you prefer distribution by wire, please provide wire instructions by sending an email to email@example.com, and if you prefer check, please ensure that your mailing address is up to date in the Receiver’s records.
Please continue to check this website for future updates. We have updated our Frequently Asked Questions substantially in light of the many questions our team has fielded. Please check that page here first if you have a question.
August 18, 2020
There has been discussion in the news recently that Palantir may elect to do a direct listing rather than an underwritten public offering of its shares and that this direct listing may take place in the next month or so. The shares of Palantir that are held in the receivership estate were acquired pursuant to multiple contracts. We are in the process of evaluating any applicable restrictions in those contracts that would limit when and the manner in which those shares might be sold or distributed if Palantir were to do a direct listing. Additionally, if and when Palantir formally announces its intention to conduct a direct listing, we will be able ascertain how Palantir will address contractual restrictions on the resale of its shares and possible waivers of those restrictions. These factors will dictate the timing of when the Palantir shares held by the receivership estate can be sold and distributed pursuant to the terms of the Court-approved distribution plan.
July 27, 2020
The sale of the publicly traded securities pursuant to the terms of the Plan took place on July 23, 2020, and the distributions began on July 24, 2020. Those investors who have provided accurate and valid account information should have received an interim distribution on July 24, 2020 of the following publicly traded securities in which each particular investor had asserted a claim: Cloudera, DropBox, MongoDB, Lyft, Pinterest, Snap, and Uber. Bloom Energy shares have not yet been distributed but will hopefully be distributed within the next week or two.
For those of investors who have not yet delivered your account information to the Receiver, or where the information provided was not valid, your distribution will be delayed until complete and correct account information is provided. Please send all account information to the Receiver at firstname.lastname@example.org.
July 8, 2020
Many investors have contacted the Receiver to inquire about shares in Palantir Technologies Inc. given the recent news of a possible imminent public offering. The Court approved Distribution Plan does not permit the sale or transfer of any Palantir shares until such time as Palantir has gone public or had a liquidity event and all lockup periods have expired. As such, the Receiver continues to hold the interests in the shares pursuant to the Plan and will continue to monitor the status of Palantir. Claimants may check the status of their Allowed Claims on the Claims tab of this website.
July 7, 2020
The Receiver is preparing to seek authority to sell and distribute shares of the following publicly traded securities held in the Receivership Estate:
Bloom Energy, Inc.
Uber Technologies, Inc
For investors with a claim for any of those securities, please send your brokerage account to the Receiver at email@example.com so that she can direct the transfer of securities directly into your personal brokerage account:
Account Information Needed
Name of Receiving Financial Institution: _______________________________
Receiving Account Number: _______________________________
Receiving Account Name: _______________________________
Receiving Firm DTC Number: _______________________________
May 13, 2020
Hearings were held by Zoom webinar on the following matters, which were resolved as follows:
- Receiver’s Motion for (1) Final Approval of Receiver’s Plan of Distribution; and (2) For Order Approving Form and Manner of Notice, and Notice of Opportunity to Serve on Investment Advisory Committee (Doc. No. 570). The Motion was granted with two modifications that postpone decisions relating to the treatment of Failed Investment Claims and the treatment of the claim of Joshua Cilano.
- Plaintiff Securities and Exchange Commission’s Objection to Receivership Claims by Michelle Mazzola and Joshua Cilano for Management Fees (Doc. No. 572). The Court granted the objection to the claim of Michelle Mazzola and postponed a decision of the allowance of the claim of Joshua Cilano.
- Receiver’s Motion to Disallow Purported Guarantee Claims (Doc. No. 575). The Court granted the motion.
- Receiver’s Motion for Instructions Regarding Investors Advisory Committee (Doc. No. 583). The Court approved the participation of Joshua Cilano on the Investment Advisory Committee.
May 11, 2020
The Court posted instructions for dialing into the Zoom hearing for the May 13, 2020 hearings. The instructions can be found here.
April 21, 2020
The Court issued the following notice regarding the May 13, 2020 hearing on the distribution plan and related matters, which are scheduled to go forward by Zoom Webinar on the scheduled date:
CLERKS NOTICE: Regarding the upcoming hearing for motions related to final approval set on 5/13/2020 (Docket Nos. 570, 572, 575, and 583), the Court will conduct same by Zoom Webinar. The general public will receive an invitation, posted on the docket, to appear in these proceedings. The participants in the “well” of the court will be deemed panelists with the ability to see and hear all other panelists. The listening and watching audience, including investors which wish to attend, will be deemed “Attendees.” Attendees will have the opportunity to raise their virtual hand to speak, with permission from the Court, provided that person has given advance notice to the Court that they want to speak at the hearing. The Court directs the Receiver to notify all interested parties (including known investors) of the timing and nature of the 5/13/2020 hearing and to inform them that anyone wishing to speak at the hearing must notify Judge Chen’s CRD via email: EMCCRD@cand.uscourts.gov by 5/11/2020
March 20, 2020
Due to the corona virus, the Court has rescheduled the hearings on the following motions to May 13, 2020 at 10:00 a.m.:
-  Receiver’s Motion for (1) Final Approval of the Receiver’s Plan of Distribution; and (2) for Order Approving Form and Manner of Notice; and Notice of Opportunity to Serve on Investment Advisory Committee
-  SEC’s Objections to Receivership Claims by Michele Mazzola and Joshua Cilano for Management Fees
-  Receiver’s Motion for Disallowance of Guaranty Claims
-  Motion for Instructions Regarding Investment Advisory Committee
February 28, 2020
This Update is posted to provide a high level summary of the structure of the Plan. All investors and creditors are encouraged to read the terms of the Distribution Plan, and the following summary of the structure of the Plan is not intended to, and shall not, substitute the actual terms of the Plan. The Plan provides for the distribution of shares to investors and cash to creditors as set forth in detail in the Plan.
Under the Plan, investors will receive some of their claimed shares back if and only if an IPO event has occurred for a particular company in which shares are claimed, and creditors will receive some cash back. The number of shares to be returned to investors is not yet fixed as some of the shares held in the estate will need to be liquidated to create the Plan Fund as described in the Plan, which will be used to pay cash to administrative and unsecured creditors. Additionally, some of the shares will need to be liquidated to pay the tax liability associated with the sale and distribution of the shares. It is therefore possible that some investors will not receive any shares following an IPO because the assessment under the Plan exceeds the remaining value of the particular company’s publicly traded share held by the estate, but this is unknown at this time and is dependent on the market value of the shares at the time of liquidation and distribution. Shares that remain pre-IPO at this time will not yet be distributed as the Plan requires that the shares first have an IPO or liquidity event prior to distribution. If the investor has purchased interests in shares that no longer have value because the investment company has failed and will not have a liquidity event such as an IPO, the investor will receive nothing for those shares.
A final distribution schedule for each investment company will be filed with the Court and approved before any distributions are made, which will not occur until a Distribution Plan has been approved and shares are ripe for distribution under the terms of the Plan. Investors are encouraged to review the terms of the Plan and to consult the schedules of Allowed Claims attached to the Plan to evaluate the treatment of their particular claim.
February 27, 2020
The Receiver filed a Motion for Final Approval of the Distribution Plan, which is set for hearing on April 7, 2020. Any opposition or response to the Motion must be filed no later than March 16, 2020. One of the provisions of the Plan provides for the formation of an Investor Advisory Committee (“IAC”) to consult with the Receiver regarding the liquidation of securities in connection with the Plan implementation. If you are interested in serving on the IAC, please submit an application to the Receiver by March 9, 2020 by email to firstname.lastname@example.org or regular mail to Kathy Bazoian Phelps, Raines Feldman LLP, 1800 Avenue of the Stars, 12th Floor, Los Angeles, CA 90067. The IAC application must include: (1) the investor name; (2) mailing address; (3) email address; (4) phone number; and (5) brief statement of qualifications to serve on the IAC. Submission of an application to serve on the IAC is not a guarantee of a position to serve on the IAC.
February 7, 2020
A hearing was held on January 30, 2020 regarding the Receiver’s Motion for Instructions on the tax and plan issues. The Court authorized the Receiver to amend prior tax returns and to file qualified settlement fund tax returns. The Court also preliminarily approved the Receiver’s form of distribution plan that was attached to her Supplement as Exhibit “1.” The Receiver shall meet and confer with counsel for the SRA Fund Investor Group, the SEC and Progresso Ventures on certain revisions to the Plan discussed at the hearing and shall then file a motion for final approval of the distribution plan. The Receiver shall serve notice of the motion for final approval on all claimants.
January 27, 2020
The Receiver has filed her Interim Status Report for Fourth Quarter 2019.
December 26, 2019
The hearing on the Receiver’s Motion for Instructions has been continued to January 30, 2020 at 1:30 p.m. The Administrative Motion filed by the SRA Funds Investor Group was denied by the Court.
December 19, 2019
The Court continued the Receiver’s Motion for Instructions from December 19, 2019 to January 16, 2020 at 1:30 p.m. The Receiver has filed a Supplement setting for the legal analysis of tax and securities issues relating to the distribution issues in the case, which will be heard and considered by the Court on January 16, 2020. The Investor Group filed an Administrative Motion seeking turnover of reports relating to the tax and securities issues, and the Receiver has filed an opposition to that motion.
October 9, 2019
The Court granted the Receiver’s Motion to employ tax and securities professionals and continued the hearing on the Motion for Instructions regarding the tax opinion to December 19, 2019 at 1:30 p.m. The Court’s Minute Order from the October 8, 2019 hearing is located here.
October 8, 2019
The hearing on the Receiver’s Motion to (1) Employ Miller Kaplan as Tax Advisor; (2) Employ Schinner & Shain as LLP as Securities Counsel; and (3) for Instructions has been rescheduled for October 8, 2019 at 1:30 p.m.
The Court has also rescheduled the case management conference for October 8, 2019 at 1:30 p.m.
The Receiver has filed her Interim Status Report for Third Quarter 2019.
August 29, 2019
A hearing was held on June 27, 2019 in connection with the proposed Distribution Plan. At the hearing, modifications were suggested to the plan, and the parties were asked to meet and confer regarding the proposed modifications. The Receiver was instructed to obtain an opinion regarding the tax consequences of the proposed plan. The Receiver has filed a motion to employ a tax advisor and securities counsel and for instructions regarding the tax opinion, which motion is set for hearing on October 10, 2019.
Following the sharing of that opinion with the SRA Investor Group, Progresso and other interested parties, the Receiver shall file a revised Plan of Distribution with the Court.
A further case management conference is set for October 10, 2019 at 10:30 a.m.
July 1, 2019
A hearing was held on June 27, 2019 in connection with the proposed distribution plan. At the hearing, modifications were suggested to the plan, and the parties were asked to meet and confer regarding the proposed modifications. The Receiver was instructed to obtain an opinion regarding the tax consequences of the proposed plan by August 9, 2019, if possible. Following the sharing of that opinion with the SRA Investor Group, Progresso and other interested parties, the Receiver shall file a revised Plan of Distribution with the Court. The Court’s order is reflected in the Court’s Civil Minutes.
On June 27, 2019, the Court also approved the Receiver’s Motion to Disallow Claims and the Stipulation with Progresso Ventures LLC regarding its claim.
A further case management conference is set for October 17, 2019 at 10:30 a.m.
Please click on the following links to view copies of: