United States District Court, N.D. Georgia, Atlanta Division
OPINION AND ORDER
WILLIAM S. DUFFEY, JR. UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant James A.
Torchia's Emergency Motion for Preliminary and Permanent
Injunction  (“Emergency Motion”).
10, 2016, Receiver Al Hill (“Receiver”) filed a
motion requesting “an Order permitting him to sell
certain assets of CNC and AMC at his discretion and at the
best available price.” ( at 2). He sought the
Court's approval to retain the firm Wm. Page &
Associates, Inc. (“Wm. Page”) to manage, market,
and sell the life insurance policies for a fee for less than
the operating costs of Credit Nation Capital. (Id.
at 3). The Receiver represented that Wm. Page's
management responsibilities included marketing and selling
life insurance policies to interested third-parties with the
cooperation and approval of the Receiver. (Id.). On
May 11, 2016, the Court granted the Receiver's motion and
granted the Receiver's request to retain Wm. Page to
manage, market, and sell the life insurance policies. (
Receiver retained Wm. Page, and he also retained TrackLife,
LLC (“TrackLife”), a company affiliated with Wm.
Page, to monitor insurance premium due dates and policy
maturities and to determine market values of specific
policies when requested. Beginning in early May, 2016, the
Receiver's staff began marketing the Sneider policy
(policy no. ending in -2626) (the “Policy”) for
potential sale by sending out information about the Policy
and the insured. The Receiver represents that TrackLife and
Wm. Page were not asked to market the Policy and have never
marketed any of the Receivership's policies. On June 1,
2016, the Receiver also sent the Policy to TrackLife and
asked for a valuation. On June 9, 2016, TrackLife determined
that the Policy was worth between $500, 000 and $900, 000.
The Receiver represents that the valuation was for the
Receiver's internal use and was not part of the package
sent to potential bidders.
in early June, an employee of TrackLife disclosed that an
Irish company called Redbird was affiliated with TrackLife,
and asked whether Redbird could be allowed to bid. The
Receiver determined that allowing Redbird to bid, if it
wished to do so, would be appropriate because the Receiver
sought as many bids as possible to get the maximum amount for
the sale of the policy. The Receiver's staff sent the
same information to Redbird that was provided to all other
potential bidders, and it was the same information previously
given to TrackLife for its valuation of the Policy. No bidder
received any information regarding the identity or the bid of
any other potential buyer. TrackLife and Page were not privy
to the identity of any potential buyers other than Redbird
and did not have access to their bids.
potential buyers submitted bids for the Policy, with Redbird
submitting the highest bid at $1, 000, 000. After all initial
bids were received, the Receiver dealt directly with the
principal of Redbird to negotiate the final terms of the
offer and sale of the Policy. Redbird paid $1, 000, 000 for
the Policy. An entity called Lifeline signed the purchase
agreement as representative of Redbird, and Redbird
authorized Lifeline to “act on behalf of Purchaser with
respect to written directions to Seller from Purchaser under
Receiver dealt with Redbird on one other occasion, when
Redbird submitted a bid to purchase another policy. On that
occasion, Redbird did not submit the highest bid and did not
purchase the policy.
February 14, 2017, Mr. Torchia filed his Emergency Motion,
seeking an injunction preventing the Receiver from using Wm.
Page, TrackLife, and William Scott Page-Wm. Page's
principal-to provide any services to the Receiver including,
but not limited to, managing, marketing, and selling the life
insurance policies of the Receivership Estate. ([379.1] at
13-14). Mr. Torchia contends that Mr. Page, individually and
through his corporate Lifeline entities, had a significant
financial incentive to sell the Policy to Redbird for less
than fair market value. He claims that Mr. Page had an
undisclosed financial interest in Lifeline, and that two men,
Mr. Lauck and Mr. Covington, serve as directors of both
Redbird and Lifeline. Mr. Torchia claims that, prior to the
sale of the Policy, the Receiver failed to conduct adequate
due diligence about the financial relationships between Page,
Lifeline, and Redbird.
Receiver argues that Mr. Torchia's motion is based on
speculation, and that Redbird acquired the policy only
because it offered more money than two other unrelated
bidders. He argues Mr. Torchia fails to show a substantial
likelihood of success on the merits. The Receiver also
represents that he does not intend to employ TrackLife in the
future to market any policies, and thus Mr. Torchia cannot
show irreparable harm. He argues the balance of the equities
disfavors an injunction, because the cost of obtaining a new
service to monitor the policies on behalf of the Receivership
would be prohibitively expensive and potentially impossible
at this late stage. The Receiver also argues that Mr.
Torchia's Emergency Motion is frivolous, and requests an
opportunity to submit evidence of the fees incurred by the
Receivership in responding to the Motion.