SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13G
Under the Securities Exchange Act of 1934
Amendment (No. 3)
MEDIABAY, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
58446J207
(CUSIP Number)
December 31, 2006
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:
[ ] Rule 13d-1(b)
[ ] Rule 13d-1(c)
[X] Rule 13d-1(d)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 58446J207 SCHEDULE 13G
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1. Names of Reporting Persons. Wood River Associates, L.L.C.
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3. SEC Use Only
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4. Citizenship or Place of Organization.
Delaware
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5. Sole Voting Power
Number 0
of -----------------------------------------------------------------
Shares 6. Shared Voting Power
Beneficially 0
Owned -----------------------------------------------------------------
by 7. Sole Dispositive Power
Each 0
Reporting -----------------------------------------------------------------
Person 8. Shared Dispositive Power
With 0
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9. Aggregate Amount Beneficially Owned by Each Reporting Person
0
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10. Check if the Aggregate Amount in Row (9) Excludes Certain Shares
(See Instructions) [ ]
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11. Percent of Class Represented by Amount in Row (9)
0%
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12. Type of Reporting Person (See Instructions)
OO
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Page 2 of 25
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CUSIP No. 58446J207 SCHEDULE 13G
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1. Names of Reporting Persons. Wood River Partners, L.P.
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3. SEC Use Only
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4. Citizenship or Place of Organization.
Delaware
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5. Sole Voting Power
Number 0
of -----------------------------------------------------------------
Shares 6. Shared Voting Power
Beneficially 0
Owned -----------------------------------------------------------------
by 7. Sole Dispositive Power
Each 0
Reporting -----------------------------------------------------------------
Person 8. Shared Dispositive Power
With 0
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9. Aggregate Amount Beneficially Owned by Each Reporting Person
0
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10. Check if the Aggregate Amount in Row (9) Excludes Certain Shares
(See Instructions) [ ]
--------------------------------------------------------------------------------
11. Percent of Class Represented by Amount in Row (9)
0%
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12. Type of Reporting Person (See Instructions)
PN
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Page 3 of 25
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CUSIP No. 58446J207 SCHEDULE 13G
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1. Names of Reporting Persons. Arthur Steinberg, Esq., solely as the Receiver
of the Wood River Entities (as defined herein) and not in his individual
capacity.(1)
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3. SEC Use Only
--------------------------------------------------------------------------------
4. Citizenship or Place of Organization.
U.S.A.
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5. Sole Voting Power
Number 0
of -----------------------------------------------------------------
Shares 6. Shared Voting Power
Beneficially 0(1)
Owned -----------------------------------------------------------------
by 7. Sole Dispositive Power
Each 0
Reporting -----------------------------------------------------------------
Person 8. Shared Dispositive Power
With 0(1)
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9. Aggregate Amount Beneficially Owned by Each Reporting Person
0(1)
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10. Check if the Aggregate Amount in Row (9) Excludes Certain Shares
(See Instructions) [ ]
--------------------------------------------------------------------------------
11. Percent of Class Represented by Amount in Row (9)
0%(1)
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12. Type of Reporting Person (See Instructions)
OO (Receiver)
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(1) See Items 2 and 4 herein.
Page 4 of 25
SCHEDULE 13G
ITEM 1.
(a) Name of Issuer:
MediaBay, Inc. (the "Issuer")
(b) Address of Issuer's Principal Executive Offices:
2 Ridgedale Avenue
Suite 300
Cedar Knolls, New Jersey 07927
ITEM 2.
(a) Names of Persons Filing:
Wood River Associates, L.L.C.
Wood River Partners, L.P.
Mr. Arthur Steinberg, solely as the Receiver of the Wood River
Entities and not in his individual capacity (the "Receiver")
See footnote 1 in Item 4.
On October 13, 2005, Arthur Steinberg, Esq. was appointed Receiver of
Wood River Capital Management, L.L.C., Wood River Associates, L.L.C., Wood River
Partners, L.P., Wood River Partners Offshore, Ltd. and their respective
subsidiaries, successors and assigns (collectively, the "Wood River Entities")
pursuant to an order of the United States District Court for the Southern
District of New York, dated October 13, 2005, in connection with the action
entitled Securities and Exchange Commission v. Wood River Capital Management,
L.L.C., Wood River Associates, L.L.C., John Hunting Whittier, Wood River
Partners, L.P. and Wood River Partners Offshore, Ltd. (the "Order").
A Schedule 13G was previously filed with the Securities and Exchange
Commission (the "Commission") on July 25, 2005 by certain of the Wood River
Entities and Mr. John H. Whittier purporting to report the acquisition and
beneficial ownership by certain of the Wood River Entities of certain of the
shares described herein as of such date (the "Existing Schedule 13G").
On October 24, 2005, the Receiver and certain of the Wood River
Entities (collectively, the "Original Reporting Persons") filed a Schedule 13G
(the "Original Schedule 13G") with the Commission to primarily reflect that the
Receiver may be deemed the beneficial owner of shares of the Issuer due to being
appointed Receiver and his duties and responsibilities as the Receiver pursuant
to the Order.
Page 5 of 25
On November 17, 2005, the Original Reporting Persons filed Amendment
Number 1 to the Schedule 13G (the "First Amendment") to amend and restate the
information in the Original Schedule 13G. On February 13, 2006, Wood River
Associates, L.L.C., Wood River Partners, L.P. and the Receiver (collectively the
"Reporting Persons") filed Amendment Number 2 to the Schedule 13G (the "Second
Amendment") to update the number and percentage of shares of the Issuer that may
be deemed to be beneficially owned by the Reporting Persons from those set forth
in the First Amendment and the Existing Schedule 13G, based on additional
information obtained by the Receiver and sales of shares of the Issuer since the
date of the First Amendment. This Amendment Number 3 to the Schedule 13G (the
"Third Amendment," together with the Second Amendment, the First Amendment and
the Original Schedule 13G, this "Schedule 13G") amends and restates the Original
Schedule 13G, the First Amendment and the Second Amendment in their entirety
and amends the information in the Existing Schedule 13G solely to the extent it
relates to the Wood River Entities or the shares of common stock of the Issuer
that may be deemed to be beneficially owned thereby. This Third Amendment is
being filed to reflect the sale by the Reporting Persons of all shares of common
stock of the Issuer that were beneficially owned by them.
Mr. Whittier is not a Reporting Person with respect to this Schedule
13G. The information contained in this Schedule 13G regarding certain of the
Wood River Entities, Mr. Whittier and the shares of common stock of the Issuer
that may be beneficially owned by the Reporting Persons is primarily based upon
a review of certain brokerage account statements and account information
delivered prior to the date hereof to the Receiver by certain brokers for the
Wood River Entities, as the Receiver has not yet completed reviewing other
information and the books, records and accounts of the Wood River Entities and,
hence, has not been able to determine, verify or confirm the amount of shares of
common stock of the Issuer that may be beneficially owned by the Reporting
Persons or the other information contained herein. In the course of reviewing
such information, it was determined that Wood River Capital Management, L.L.C.
would not be deemed to be the beneficial owner of greater than five percent of
the shares of the Issuer. Accordingly, Wood River Capital Management L.L.C. is
not a Reporting Person for purposes of this Third Amendment.
The Reporting Persons expressly disclaim knowledge as to the
completeness and the accuracy of the information contained in this Schedule 13G.
The Receiver is still in the process of exploring whether or not any other
brokers or nominees are holding additional shares of common stock of the Issuer,
with respect to which the Reporting Persons may be deemed the beneficial owners.
Similarly, the Receiver is still in the process of determining whether any of
the Wood River Entities have entered into any type of agreement, contract, trust
or other arrangement pursuant to which the Reporting Persons may be deemed the
beneficial owner of more or fewer shares of common stock of the Issuer than
indicated herein. The filing of this Schedule 13G (or any amendment hereto)
shall not be construed as an admission that any of the Reporting Persons is, for
the purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934,
as amended, the beneficial owner of any securities covered by this Schedule 13G.
The Receiver is in the process of confirming and verifying the facts and
circumstances stated in this Schedule 13G, and therefore, all statements made
herein are made based upon the Receiver's current information and belief and
subject to confirmation, correction, change and future amendment.
Page 6 of 25
The Receiver may be deemed to share beneficial ownership of the shares
of common stock of the Issuer reported herein due to being appointed the
Receiver of the Wood River Entities pursuant to the Order.
Pursuant to Section 13 of the Order, the Receiver is authorized,
empowered and directed to perform, among others, the following duties and
responsibilities at all times with a view towards, first, locating, preserving
and protecting all of the Wood River Entities' assets, and second, maximizing
returns to investors in the Wood River Entities: (i) locate and take immediate
possession and control of all assets of every kind whatsoever and wherever
located owned by, controlled by, belonging to, or traceable to the Wood River
Entities, whether tangible, intangible, real, equitable, personal, realized,
unrealized or otherwise (the "Assets"), and to hold, manage, and administer such
Assets as is required to comply with and effectuate the directives of the Order;
(ii) assume control of, and be named as authorized signatory for, all accounts
at any bank, brokerage firm, or financial institution which has possession,
custody or control of any Assets (the "Accounts"); (iii) manage, retain, sell
and/or liquidate the Accounts as necessary and appropriate to comply with and
effectuate the directives of the Order; (iv) take all reasonable and necessary
actions to manage, maintain, and wind-down business operations of the Wood River
Entities, including making legally required payments to creditors, employees and
agents of the Wood River Entities; (v) communicate with vendors, investors, and
others, as required to comply with and effectuate the purposes of the Order;
(vi) make or authorize such payments and disbursements from the Assets, and
incur, or authorize the incurrence of such expenses and make, or authorize the
making of, such agreements as the Receiver deems reasonable and necessary in
discharging the Receiver's duties; and (vii) develop a plan with respect to the
retention, liquidation, and/or distribution of all remaining Assets to investors
in the Wood River Entities.
A copy of the Order is attached hereto as Annex A and incorporated
herein by this reference.
(b) Address of Principal Business Office or, if none, Residence:
The address of the principal business office of the Reporting Persons
is:
c/o Kaye Scholer LLP
425 Park Avenue
New York NY 10022
(c) Citizenship:
Wood River Associates, L.L.C. is a Delaware entity.
Wood River Partners, L.P. is a Delaware entity.
The Receiver is a U.S. citizen.
(d) Title of Class of Securities:
Common Stock
Page 7 of 25
(e) CUSIP Number:
58446J207
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO RULE 13D-1(B) OR 13D-2(B) OR (C),
CHECK WHETHER THE PERSON FILING IS A:
(a) [ ] Broker or dealer registered under section 15 of the Act (15
U.S.C. 78o).
(b) [ ] Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).
(c) [ ] Insurance company as defined in section 3(a)(19) of the Act (15
U.S.C. 78c).
(d) [ ] Investment company registered under section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8).
(e) [ ] An investment adviser in accordance with Section
240.13d-1(b)(1)(ii)(E).
(f) [ ] An employee benefit plan or endowment fund in accordance with
Section 240.13d-1(b)(1)(ii)(F).
(g) [ ] A parent holding company or control person in accordance with
Section 240.13d-1(b)(1)(ii)(G).
(h) [ ] A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
(I) [ ] A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment
Company Act of 1940 (15 U.S.C. 80a-3).
(j) [ ] Group, in accordance with Section 240.13d-1(b)(1)(ii)(J).
ITEM 4. OWNERSHIP
(a) Amount purportedly beneficially owned:
Wood River Associates, L.L.C. 0
Wood River Partners, L.P. 0
The Receiver(1) 0
(b) Purported Percent of Class:
Wood River Associates, L.L.C. 0%
Wood River Partners, L.P. 0%
The Receiver(1) 0%
(c) Number of shares as to which each Reporting Person purportedly has:
(i) Sole power to vote or to direct the vote:
Wood River Associates, L.L.C. 0
Wood River Partners, L.P. 0
The Receiver(1) 0
Page 8 of 25
(ii) Shared power to vote or to direct the vote:
Wood River Associates, L.L.C. 0
Wood River Partners, L.P. 0
The Receiver(1) 0
(iii) Sole power to dispose or to direct the disposition of:
Wood River Associates, L.L.C. 0
Wood River Partners, L.P. 0
The Receiver(1) 0
(iv) Shared power to dispose or to direct the disposition of:
Wood River Associates, L.L.C. 0
Wood River Partners, L.P. 0
The Receiver(1) 0
(1) Due to the powers and authority conferred by the Order upon the Receiver,
the Receiver may be deemed to share beneficial ownership of the shares of
the common stock reported herein.
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS
If this statement is being filed to report the fact that as of the date
hereof the Reporting Persons have ceased to be the beneficial owners of more
than five percent of the class of securities, check the following [X].
In addition, it was determined that Wood River Capital Management, L.L.C.
is not the beneficial owner of greater than five percent of the shares of the
Issuer.
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON
Mr. John H. Whittier was the principal and managing member of Wood River
Associates, L.L.C. Due to the powers and authority conveyed upon the Receiver,
by the Order, the Receiver may be deemed to share beneficial ownership of the
shares of common stock reported herein. See Exhibit 1.
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED THE
SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY OR CONTROL PERSON
See Exhibit 1.
ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP
Page 9 of 25
See Exhibit 1.
ITEM 9. NOTICE OF DISSOLUTION OF GROUP
Not applicable.
ITEM 10. CERTIFICATIONS
Subject to the information set forth in Item 2 hereof, by signing below I
certify that, to the best of my knowledge and belief, the securities referred to
above were not acquired and are not held for the purpose of or with the effect
of changing or influencing the control of the issuer of the securities and were
not acquired and are not held in connection with or as a participant in any
transaction having that purpose or effect.
Page 10 of 25
SIGNATURE
Subject to the information set forth in Item 2 hereof, after reasonable
inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Date: January 16, 2007
ARTHUR STEINBERG, ESQ., solely as the
Receiver of Wood River Associates,
L.L.C. and Wood River Partners, L.P., to
the extent contemplated by the Order, a
copy of which is annexed hereto, and not
in his individual capacity.
By: /s/ Arthur J. Steinberg
------------------------------------
Name: Arthur J. Steinberg
Title: Receiver
Page 11 of 25
Annex A
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - x
SECURITIES AND EXCHANGE COMMISSION :
Plaintiff, :
-against :
WOOD RIVER CAPITAL MANAGEMENT, LLC, : 05 Civ. 8713 (NRB)
WOOD RIVER ASSOCIATES, LLC, :
JOHN HUNTING WHITTIER, :
WOOD RIVER PARTNERS, L.P., and :
WOOD RIVER PARTNERS OFFSHORE, LTD., :
Defendants. :
:
- - - - - - - - - - - - - - - - - - - - - - - - x
STIPULATION AND ORDER GRANTING
PRELIMINARY INJUNCTION,
FREEZING ASSETS AND APPOINTING RECEIVER
WHEREAS, Plaintiff Securities and Exchange Commission ("Commission") and
the defendants have agreed and stipulated to a preliminary injunction against
defendants, enjoining them from violating the federal securities laws;
preserving evidence; freezing assets; ordering an accounting; and appointing a
receiver for certain defendants;
WHEREAS, counsel for the Defendant Whittier has reviewed the complaint and
this Order and has consented to the immediate entry of this Order; without an
adjudication of the merits on any issue of fact or law;
WHEREAS, this Order is designed to effectuate dual goals: first, locating,
preserving and protecting investor money, and second maximizing returns
available to investors;
WHEREAS, the Commission has submitted the credentials of a candidate to be
appointed Receiver of all of the assets, properties, and books and records of
defendants Wood River Asset Management, LLC, Wood River Associates, LLC, Wood
River Partners, L.P., and Wood River
Page 12 of 25
Partners Offshore, Ltd. (the "Wood River Entity Defendants"), and assets
traceable to the Wood River Entity Defendants, and the Commission has advised
the Court that this candidate is prepared to assume this responsibility if so
ordered by the Court;
WHEREAS, the Court having considered the Commission's Application for Entry
of an Order Granting Preliminary Injunction Freezing Assets, and Appointing a
Receiver;
WHEREAS, the Court finds that the relief set forth in the Order is
necessary and appropriate for the benefit of investors who may have been injured
as a result of the conduct alleged in this lawsuit;
WHEREAS, the Court is authorized to grant the relief set forth in the Order
pursuant to the Federal Rules of Civil Procedure, its general equitable
authority and also pursuant to Section 21(d)(5) of the Securities Exchange Act
of 1934 [15 U.S.C. Section 78u(d)(5)].
NOW, THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED as follows:
I.
PRELIMINARY INJUNCTION PRECLUDING
VIOLATIONS OF THE FEDERAL SECURITIES LAWS
1. Defendants, their officers, agents, servants, employees, attorneys,
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, shall be and hereby are preliminarily restrained
and enjoined, pending entry of a Final Judgment in this action, from violating,
directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934
(the "Exchange Act") [15 U.S.C. Section 78j(b)] and Rule 10b-5 promulgated
thereunder [17 C.F.R. Section 240.10b-5], by using any means or instrumentality
of interstate commerce, or of the mails, or of any facility of any national
securities exchange, in connection with the purchase or sale of any security:
(a) to employ any device, scheme, or artifice to defraud; (b) to make any untrue
statement of a material fact or to omit to state a material fact necessary in
order to make the
Page 13 of 25
statements made, in the light of the circumstances under which they were made,
not misleading; or (c) to engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any person.
2. Defendants, their officers, agents, servants, employees, attorneys;
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, shall be and hereby are preliminarily restrained
and enjoined, pending entry of a Final Judgment in this action, from violating,
directly or indirectly, Section 17(a) of the Securities Act [15 U.S.C. Section
77q(a)], by, in the offer or sale of any security using any means or instruments
of transportation or communication in interstate commerce or by use of the
mails, directly or indirectly: (a) to employ any device, scheme, or artifice to
defraud; (b) to obtain money or property by means of any untrue statement of a
material fact or any omission of a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; or (c) to engage in any transaction, practice, or course of business
which operates or would operate as a fraud or deceit upon the purchaser.
3. Defendants Wood River Asset Management, LLC, Wood River Associates, LLC,
John Hunting Whittier, their officers, agents, servants, employees, attorneys,
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, shall be and hereby are preliminarily restrained
and enjoined, pending entry of a Final Judgment in this action, from, by use of
the mails or any means or instrumentality of interstate commerce: (1) employing
any device, scheme, or artifice to defraud; and/or (2) engaging in any act,
practice or course of business which would operate as a fraud or deceit upon any
client or prospective client, in
Page 14 of 25
violation of Section 206(1) and (2) of the Investment Advisers Act of 1940 [15
U.S.C. Section 80b-6(1) and (2)].
4. Defendants, their officers, agents, servants, employees, attorneys,
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, shall be and hereby are preliminarily restrained
and enjoined, pending entry of a Final Judgment in this action, from violating,
directly or indirectly, Section 13(d) of the Exchange Act [15 U.S.C. Section
78m(d)] and Rules 13d-1 and 13d-2 thereunder [17 C.F.R. Sections 240.13d-1 and
240.13d-2] by failing to: (a) within ten days of acquiring beneficial ownership
of more than five percent of any equity security registered pursuant to Section
12 of the Exchange Act: (i) file a complete and accurate Schedule 13D with the
Commission; and (ii) send to the issuer of such security, and each exchange
where such security is traded, a statement describing the purchases and other
information; or (b) amend a Schedule 13D if there is any material change in the
beneficial ownership position in the security noted therein, or any other facts
set forth in a previously filed Schedule 13D.
5. Defendants, their officers, agents, servants, employees, attorneys,
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, shall be and hereby are preliminarily restrained
and enjoined, pending entry of a Final Judgment in this action, from violating,
directly or indirectly, Section 16(a) of the Exchange Act [15 U.S.C. Section
78p(a)], and Rules 16a-2 and 16a-3 thereunder [17 C.F.R. Section 240.16a-2 and
240.16a-3], by failing to file timely with the Commission (and, if such security
is registered on a national securities exchange, also with the exchange), as a
direct or indirect beneficial owner of more than 10 percent of any
Page 15 of 25
class of any equity security (other than an exempted security) which is
registered pursuant to Section 12 of the Exchange Act [15 U.S.C. Section 781],
or as a director or an officer of the issuer of such security: (a) at the time
of the registration of such security on a national securities exchange or by the
effective date of a registration statement filed pursuant to Section 12(g) of
the Exchange Act [15 U.S.C. Section 781(g)], or within ten days after becoming
such a beneficial owner, director, or officer, a statement on Form 3 [17 C.F.R.
Section 249.103], Initial Statement of Beneficial Ownership of Securities, of
the amount of all equity securities of such issuer of which he is the beneficial
owner; (b) within ten days after the close of each calendar month thereafter, if
there has been a change in such ownership during such month, a statement on Form
4 [17 C.F.R. Section 249.104], Statement of Changes in Beneficial Ownership of
Securities, indicating ownership at the close of the calendar month and such
changes in ownership as have occurred during such calendar month; and (c) within
forty-five days of the issuer's year-end, a statement on Form 5 [17 C.F.R.
Section 249.105], Annual Statement of Beneficial Ownership of Securities,
disclosing, among other things, all holdings and transactions that should have
been, but were not, reported on Forms 3, 4, or 5 during the most recent fiscal
year.
II.
FULL ACCOUNTING OF ASSETS
6. Defendant Whittier shall, subject to, and without waiver of, any
applicable privilege, within ten (10) days of receipt of this Order, serve upon
the Commission a sworn accounting of all funds and other assets that he owns,
possesses, or controls, or has a beneficial interest in, or has a right to own,
possess, or control, in whatever form, and wherever located. The accounting
provided in this paragraph shall include, but is not limited to: (1) providing a
detailed description of such funds and assets; (2) reporting on the disposition
and current location of the funds and assets; and (3) disclosing all bank and
brokerage account numbers where these
Page 16 of 25
funds and assets have been deposited. Defendant Whittier shall also provide an
accounting of all monies received from and paid to the Wood River Entity
Defendants since January 1, 2004.
III.
WOOD RIVER ENTITIES ASSET FREEZE
7. The Wood River Entity Defendants, their officers, agents, servants,
employees, attorneys, successors-in-interest, and those persons in active
concert or participation with them who receive actual notice of this Order by
personal service or otherwise, and each of them, shall hold and retain within
their control, and otherwise prevent any disposition, transfer, pledge,
encumbrance, assignment, dissipation, concealment or other disposal whatsoever,
by themselves or any person or entity under their direct or indirect control, of
any funds or assets, in their name, for their benefit or under their control.
8. Any institution or person or entity holding any funds, accounts or other
assets in the name, for the benefit or under the control of the Wood River
Entity Defendants, or where the Wood River Entity defendants are signatories or
have signing authority, and which receives actual notice of this Order by
personal service or otherwise, shall hold and retain within its control and
prohibit the withdrawal, removal, transfer or other disposal of any funds or
other assets in the name, for the benefit or under the control of any of the
Wood River Entity Defendants.
IV.
THE WHITTIER PARTIAL ASSET FREEZE
9. Defendant Whittier shall provide plaintiff with at least three business
day's advance written notice of any proposed transfer, disposition, sale, or
encumbrance of any asset in which Whittier has an interest (the "Transaction")
if the amount or value of the Transaction exceeds $10,000. Plaintiff shall then
have three business days in which to provide Whittier's
Page 17 of 25
counsel with a written objection to the proposed Transaction including a
specific basis for the objection. If Defendant Whittier wishes to pursue the
Transaction despite plaintiff's written objection, he shall do so only after
seeking (and obtaining) the Court's approval, with notice to plaintiff. Notice
and objections shall be sent by fax and electronic mail to counsel of record,
respectively, for plaintiff and Defendant Whittier. This procedure for approving
or objecting to transactions shall be called the "Approval Mechanism." If
seeking Court approval for a Transaction to which plaintiff has objected,
Whittier may do so in an expedited fashion via letter to the Court.
10. Defendant Whittier's expenditures in any calendar month shall not
exceed $15,000, exclusive of attorneys' fees (the "Expenditure Cap"). If
Whittier wishes to exceed the Expenditure Cap, he shall seek and obtain approval
pursuant to the Approval Mechanism.
11. Three business day after the end of each calendar month, Defendant
Whittier shall provide a report to counsel of record for plaintiff of all
expenditures in excess of $1,000 that he made that month, including attorneys'
fees.
V.
RESTRAINT FROM DESTRUCTION OF EVIDENCE
Defendants, their officers, agents, servants, employees, attorneys,
successors-in-interest, and those persons in active concert or participation
with them who receive actual notice of this Order by personal service or
otherwise, and each of them, are hereby restrained from destroying, mutilating,
concealing, altering or disposing of any document or other record or data
referring or relating in any manner to (1) the acts, practices and transactions
described in the complaint in this action, (2) communications between or among
the defendants and their agents; and (3) funds or other assets that any of the
defendants have received from investors.
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VI.
APPOINTMENT OF RECEIVER
12. ________ is hereby appointed the Receiver for the Wood River Entities,
and their subsidiaries, successors and assigns during the pendancy of this
litigation, or until further direction of the Court.
13. The Receiver is authorized, empowered and directed to perform the
following duties and responsibilities, at all times with a view towards, first,
locating, preserving and protecting all of Wood River Entity defendants' assets,
and second, maximizing returns to investors:
a. Preservation of Assets. Locate and take immediate possession and
control of all assets of every kind whatsoever and wherever located owned by,
controlled by, belonging to, or traceable to Wood River Entities, whether
tangible, intangible, real, equitable, personal, realized, unrealized, or
otherwise (the "Assets"), and to hold, manage, and administer such Assets as is
required to comply with and effectuate the directives of this Order;
b. Identification of Assets and Liabilities. Prepare a full accounting
of all Assets. Present to the Court and the Commission within 60 days of the
date of this Order a report reflecting the existence and value of the Assets,
including all liabilities.
c. Identification of Assets Subject to Freeze. Investigate the past
and current operations and transactions of the defendants, and within 60 days of
the date of this Order, submit a report to the Court identifying those persons
and entities who have received, or are in possession, of any Assets. The report
shall include an analysis of all returns and redemptions that investors in the
Wood River Entities received from February 2003 to the present, including any
interest or earnings on investments.
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d. Assume Control Over the Defendants' Accounts. Assume control of,
and be named as authorized signatory for, all accounts at any bank, brokerage
firm, or financial institution which has possession, custody or control of any
Assets (the "Accounts"). Manage, retain, sell and/or liquidate the Accounts as
necessary and appropriate to comply with and effectuate the directives of this
Order.
e. Secure, Manage and Discontinue On-Going Business Operations. Secure
the business premises, and all business equipment, data and documents, of the
Wood River Entity defendants. Take control of all means of communication with
investors, vendors, agents, and others doing business with these defendants.
Take all reasonable and necessary actions to manage, maintain, and wind-down
business operations of the Wood River Entity defendants, including making
legally required payments to creditors, employees and agents of these
defendants. Communicate with vendors, investors, and others, as required to
comply with and effectuate the purposes of this Order.
f. Institute, Defend, Compromise or Settle Legal Actions. Institute,
prosecute, defend and settle any legal actions on behalf of the Receivership to
comply with and effectuate the purposes of this Order;
g. Authorize Payments. Make or authorize such payments and
disbursements from the Assets, and incur, or authorize the incurrence of such
expenses and make, or authorize the making of such agreements as the Receiver
deems reasonable and necessary in discharging the Receiver's duties.
Page 20 of 25
h. Access to Corporate Documents and Computers. Have complete and
unfettered access to all documents, books and records of the Wood River Entity
defendants, wherever located, and in whatever form or format they exist.
i. Disposition Plan. Develop a plan with respect to the retention,
liquidation, and/or distribution of all remaining Assets to investors.
j. Bankruptcy. If appropriate, file for bankruptcy or liquidation, on
behalf of the Wood River Entities, after notice to all parties in this action.
k. Investor Communications. Use best efforts to consult with the Wood
River Partners L.P. limited partners and the Wood River Partners Offshore Ltd.
shareholders and their representatives and to consider their reasonable requests
or suggestions.
14. The Receiver is entitled to payment for all reasonable costs, fees and
other expenses incurred in the performance of his duties, and to engage and
retain attorneys, accountants, securities professionals, and other persons or
entities to assist in carrying out this Order. The Receiver shall not retain
such persons or entities without the prior consent of the staff of the
Commission. The Receiver shall disclose to the Commission's counsel of record
all financial arrangements with such persons or entities.
15. The Receiver shall, at such times as he deems appropriate, submit fee
applications for his services and the services of persons he retains, plus
expenses, to the Court for approval before payment. Payment of all such fees and
expenses shall be made from the Assets.
16. The Receiver shall give the Commission counsel of record at least ten
(10) days notice of all of his applications to the Court under this Order,
including all applications for disbursements from the Assets. The Commission
shall be permitted to submit to the Court for
Page 21 of 25
consideration its position on the reasonableness of the Receiver's application.
All of the Receiver's requests for payments of fees or expenses must be approved
by the Court before payment of such fees or expenses are made, and the Court
will review the reasonableness of such fees and expenses in determining whether,
in its equitable discretion, such payment will be approved. The Receiver is not
required to seek prior Court approval of payments made for any federal, state or
local taxes that may be applicable.
17. Applications for disbursement shall include the appropriate supporting
documentation to justify the expense or service rendered. Charges for services
shall include (a) the date of the service; (b) the name or initials of the
individual rendering the service; (c) a description of the service; (d) the
hourly rate; (e) the time charged; and (f) the amount (rate x time). The
description of the service or activity should be brief and informative. Expenses
shall be supported by invoices.
18. The Receiver, along with any persons or firms retained by the Receiver
pursuant to this Order, shall be entitled to rely on all outstanding rules of
law and court orders and shall not be liable to anyone for his or their own good
faith compliance with any order, rule, law, judgment or decree, including those
issued or enacted in foreign jurisdictions. In no event shall the Receiver or
any person or firm retained by the Receiver in this action be liable to anyone
for his, her, its or their good faith compliance with the duties and
responsibilities as Receiver or as counsel for or consultant to the Receiver.
Nor shall the Receiver or any person or firm retained by the Receiver in this
matter be liable to anyone for any actions taken or omitted by them except on a
finding by this Court that he, she, it or they acted or failed to act as a
result of misfeasance, bad faith or gross negligence or in reckless disregard of
his, her, its or their duties.
Page 22 of 25
19. The Receiver is excused from all legal requirements to post a bond or
to give an undertaking of any type in connection with his fiduciary duties.
20. The Receiver may be removed at any time by the Court and replaced with
a successor. In the event the Receiver decides to resign, the Receiver shall
first give written notice to the parties and the Court of his intention, and his
resignation shall not be effective until the Court appoints a successor. The
Receiver shall then follow such instructions as his successor or the Court may
provide.
21. All persons who receive actual notice of this Order by personal service
or otherwise are enjoined from in any way disturbing the Assets; from appointing
a receiver, liquidator or administrator; and from filing or prosecuting any
judicial action or proceeding of any kind, civil or criminal (including any
bankruptcy proceeding with respect to the Wood River Entities) which involves
the Receiver or which affects the Assets, except on leave having been granted by
this Court. The Receiver shall not be required to respond to any subpoena or
other court process (for documents or testimony) relating to the Receiver's
duties except on order of this Court.
22. On the request of the Commission, the Receiver shall provide the
Commission with any documentation that the Commission deems necessary to meet
its reporting requirements, that is mandated by statute or Congress, or that is
otherwise necessary to further the Commission's mission.
* * * * * * * * *
Page 23 of 25
23. This Stipulation and Order is entered into without prejudice to
defendants' rights to file a motion to transfer venue of this case to the U.S.
District Court for the Northern District of California following the entry of
this Order.
SO AGREED:
/s/ John H. Whittier /s/ John H. Whittier
------------------------------------- ----------------------------------------
JOHN HUNTING WHITTIER WOOD RIVER ASSET MANAGEMENT, LLC
By By
---------------------------------- -------------------------------------
Dated: Dated:
------------------------------ ---------------------------------
/s/ John H. Whittier /s/ John H. Whittier
------------------------------------- ----------------------------------------
WOOD RIVER ASSOCIATES, LLC WOOD RIVER PARTNERS, L.P.
By By
---------------------------------- -------------------------------------
Dated: Dated:
------------------------------ ---------------------------------
/s/ John H. Whittier
-------------------------------------
WOOD RIVER PARTNERS OFFSHORE, LTD.
By
----------------------------------
Dated:
------------------------------
/s/ Elliot R. Peters /s/ Kevin P. O'Rourke
------------------------------------- ----------------------------------------
ELLIOT R. PETERS KEVIN P. O'ROURKE
Keker & Van Nest LLP 100 F. Street, N.E.
710 Sansome Street Washington, D.C. 20549
San Francisco, CA 94111 (202) 551-4442
(415) 676-2273 Counsel for the Securities and Exchange
Counsel for John Hunting Whittier Commission
Dated: Dated:
------------------------------ ---------------------------------
SO ORDERED
/s/
----------------------------------------
United State District Judge
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