This case was last updated from Los Angeles County Superior Courts on 09/04/2021 at 20:17:47 (UTC).

INTRIBIS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY VS OCEAN PRO, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL.

Case Summary

On 04/07/2021 INTRIBIS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY filed a Contract - Other Contract lawsuit against OCEAN PRO, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is TERRY GREEN. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******3189

  • Filing Date:

    04/07/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

TERRY GREEN

 

Party Details

Appellants, Cross Defendants and Plaintiffs

INTRIBIS LLC A CALIFORNIA LIMITED LIABILITY COMPANY

GUEVARA JUDD

NOSAL WILLIAM

GUEVARA JUDD R.

NOSAL WILLIAM E.

TANIGUCHI CRAIG A.

PARTAKE LLC A CALIFORNIA LIMITED LIABILITY COMPANY

VAHC INC. A CALIFORNIA CORPORATION

MAINSTAY MANAGEMENT LLC A CALIFORNIA LIMITED LIABILITY COMPANY

Cross Plaintiffs, Respondents and Defendants

MR. VENTURE LLC A CALIFORNIA LIMITED LIABILITY COMPANY

OCEAN PRO LLC A CALIFORNIA LIMITED LIABILITY COMPANY

MENG RICHARD

Attorney/Law Firm Details

Cross Defendant and Plaintiff Attorneys

SHACKELFORD JOEL

SHACKELFORD JOEL T. ESQ.

NELSON MITCHELL THOMAS

Cross Plaintiff and Defendant Attorneys

SHIODA GENE HITOSHI

LEE CHRISTOPHER D.

CHANG STEVEN PO

LEE CHRISTOPHER DAMIAN

 

Court Documents

Unknown - AMENDED CROSS-COMPLAINT (1ST)

8/25/2021: Unknown - AMENDED CROSS-COMPLAINT (1ST)

Reply - REPLY DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER; MEMORANDUM OF POINTS AND AUTHO

9/1/2021: Reply - REPLY DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER; MEMORANDUM OF POINTS AND AUTHO

Notice - NOTICE DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLCS NOTICE OF ERRATA

9/1/2021: Notice - NOTICE DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLCS NOTICE OF ERRATA

Declaration - DECLARATION SUPPLEMENTAL DECLARATION OF RICHARD P. ORMOND IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/ CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APP

9/1/2021: Declaration - DECLARATION SUPPLEMENTAL DECLARATION OF RICHARD P. ORMOND IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/ CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APP

Declaration - DECLARATION SUPPLEMENTAL DECLARATION OF MEITAL MANZURI IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTM

9/1/2021: Declaration - DECLARATION SUPPLEMENTAL DECLARATION OF MEITAL MANZURI IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTM

Declaration - DECLARATION DECLARATION OF CHRISTOPHER D. LEE IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTMENT OF RE

9/1/2021: Declaration - DECLARATION DECLARATION OF CHRISTOPHER D. LEE IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLCS REPLY TO PLAINTIFFS/CROSS-DEFENDANTS OPPOSITION TO MOTION FOR APPOINTMENT OF RE

Appeal - Ntc Designating Record of Appeal APP-003/010/103 - NOTICE APPELLANT'S NOTICE DESIGNATING RECORD ON APPEAL (UNLIMITED CIVIL CASE)

8/18/2021: Appeal - Ntc Designating Record of Appeal APP-003/010/103 - NOTICE APPELLANT'S NOTICE DESIGNATING RECORD ON APPEAL (UNLIMITED CIVIL CASE)

Declaration - DECLARATION DECLARATION OF MOLLY PITLUCK, ESQ. IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

8/26/2021: Declaration - DECLARATION DECLARATION OF MOLLY PITLUCK, ESQ. IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

Declaration - DECLARATION DECLARATION OF JOEL T. SHACKELFORD, ESQ. IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

8/26/2021: Declaration - DECLARATION DECLARATION OF JOEL T. SHACKELFORD, ESQ. IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

Opposition - OPPOSITION OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

8/26/2021: Opposition - OPPOSITION OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

Declaration - DECLARATION DECLARATION OF JUDD GUEVARA IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

8/26/2021: Declaration - DECLARATION DECLARATION OF JUDD GUEVARA IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

Declaration - DECLARATION DECLARATION OF WILLIAM NOSAL IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

8/26/2021: Declaration - DECLARATION DECLARATION OF WILLIAM NOSAL IN SUPPORT OF OPPOSITION OF PLAINTIFFS AND/OR CROSS-DEFENDANTS TO MOTION TO APPOINT RECEIVER

Declaration - DECLARATION OF RICHARD P. ORMOND WITH EXHIBIT IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

8/17/2021: Declaration - DECLARATION OF RICHARD P. ORMOND WITH EXHIBIT IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

Motion re: - MOTION RE: FOR APPOINTMENT OF RECEIVER; MEMORANDUM OF POINTS AND AUTHORITIES

8/17/2021: Motion re: - MOTION RE: FOR APPOINTMENT OF RECEIVER; MEMORANDUM OF POINTS AND AUTHORITIES

Amended Complaint - AMENDED COMPLAINT (1ST)

8/17/2021: Amended Complaint - AMENDED COMPLAINT (1ST)

Declaration - DECLARATION OF CHRISTOPHER D. LEE WITH EXHIBITS IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

8/17/2021: Declaration - DECLARATION OF CHRISTOPHER D. LEE WITH EXHIBITS IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

Declaration - DECLARATION OF MICHAEL WU WITH EXHIBITS IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

8/17/2021: Declaration - DECLARATION OF MICHAEL WU WITH EXHIBITS IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

Declaration - DECLARATION OF MEITAL MANZURI WITH EXHIBIT IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

8/17/2021: Declaration - DECLARATION OF MEITAL MANZURI WITH EXHIBIT IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLCS MOTION FOR APPOINTMENT OF RECEIVER

90 More Documents Available

 

Docket Entries

  • 10/01/2021
  • Hearing10/01/2021 at 08:45 AM in Department 14 at 111 North Hill Street, Los Angeles, CA 90012; Case Management Conference

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  • 09/09/2021
  • Hearing09/09/2021 at 1:30 PM in Department 82 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion - Other TO APPOINT RECEIVER

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  • 09/01/2021
  • DocketNotice (DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLC?S NOTICE OF ERRATA); Filed by Mr. Venture, LLC, a California limited liability company (Cross-Complainant)

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  • 09/01/2021
  • DocketReply (DEFENDANTS/CROSS- COMPLAINANTS OCEAN PRO, LLC AND MR. VENTURE LLC?S REPLY TO PLAINTIFFS/CROSS-DEFENDANTS? OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER; MEMORANDUM OF POINTS AND AUTHORITIES;); Filed by Mr. Venture, LLC, a California limited liability company (Cross-Complainant)

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  • 09/01/2021
  • DocketDeclaration (SUPPLEMENTAL DECLARATION OF RICHARD P. ORMOND IN SUPPORT OF DEFENDANT/CROSS- COMPLAINANT MR. VENTURE LLC?S REPLY TO PLAINTIFFS/ CROSS-DEFENDANTS? OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER); Filed by Mr. Venture, LLC, a California limited liability company (Cross-Complainant)

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  • 09/01/2021
  • DocketDeclaration (DECLARATION OF CHRISTOPHER D. LEE IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLC?S REPLY TO PLAINTIFFS/CROSS-DEFENDANTS? OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER); Filed by Mr. Venture, LLC, a California limited liability company (Cross-Complainant)

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  • 09/01/2021
  • DocketDeclaration (SUPPLEMENTAL DECLARATION OF MEITAL MANZURI IN SUPPORT OF DEFENDANT/CROSS-COMPLAINANT MR. VENTURE LLC?S REPLY TO PLAINTIFFS/CROSS-DEFENDANTS? OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER); Filed by Mr. Venture, LLC, a California limited liability company (Cross-Complainant)

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  • 08/26/2021
  • DocketOpposition (Opposition of Plaintiffs and/or Cross-Defendants to Motion to Appoint Receiver); Filed by Intribis, LLC, a California limited liability company (Plaintiff); William Nosal (Plaintiff); Judd Guevara (Plaintiff)

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  • 08/26/2021
  • DocketDeclaration (Declaration of Molly Pitluck, Esq. in support of Opposition of Plaintiffs and/or Cross-Defendants to Motion to Appoint Receiver); Filed by Intribis, LLC, a California limited liability company (Plaintiff); William Nosal (Plaintiff); Judd Guevara (Plaintiff)

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  • 08/26/2021
  • DocketDeclaration (Declaration of William Nosal in support of Opposition of Plaintiffs and/or Cross-Defendants to Motion to Appoint Receiver); Filed by Intribis, LLC, a California limited liability company (Plaintiff); William Nosal (Plaintiff); Judd Guevara (Plaintiff)

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97 More Docket Entries
  • 04/26/2021
  • DocketDeclaration (Declaration of William Nosal in support of Ex Parte Application No. 1 of Plaintiff, Intribis, LLC); Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/26/2021
  • DocketEx Parte Application (for a Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction); Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/16/2021
  • DocketProof of Personal Service; Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/15/2021
  • DocketProof of Mailing (Substituted Service); Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/15/2021
  • DocketProof of Service by Substituted Service; Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/09/2021
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 04/07/2021
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 04/07/2021
  • DocketCivil Case Cover Sheet; Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/07/2021
  • DocketSummons (on Complaint); Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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  • 04/07/2021
  • DocketComplaint; Filed by Intribis, LLC, a California limited liability company (Plaintiff)

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Tentative Rulings

Case Number: *******3189 Hearing Date: September 9, 2021 Dept: 82

Intribis, LLC,

v.

Ocean Pro, LLC, et al.

Judge Mary Strobel

Hearing: September 9, 2021

*******3189

Tentative Decision on Motion for Appointment of Receiver

Defendant and Cross-Complainant Mr. Venture LLC (“Mr. Venture” or “Cross-Complainant”) moves for an order appointing a receiver over Plaintiff and Cross-Defendant Intribis LLC (“Intribis”) “to take possession of its complete business operations, to ensure corporate compliance, to ensure all assets are properly owned by Intribis, to ensure all laws are followed and maintained, to ensure all books and records of the Intribis Companies (including electronic books and record) are maintained, and all revenue, profits and proceed thereof.” (Mot. 2.) The requested receivership would also apply to Cross-Defendants Mainstay Management LLC (“Mainstay”), Partake, LLC (“Partake”) and VAHC, Inc. (“VAHC”), which Mr. Venture refers to as the “Intribis Companies.”

Cross-Defendants Intribis, VAHC, Partake, Mainstay, William E. Nosal (“Nosal”), Craig A. Taniguchi (“Taniguchi”), and Judd R. Guevara (“Guevara”) (collectively, “Cross-Defendants”) oppose the motion.

Mr. Venture’s Evidentiary Objections

Declaration of William Nosal

(1) Overruled.

(2) Overruled.

(3) Sustained.

(4) Overruled.

Declaration of Molly Pitluck, Esq.

(1) Overruled.

(2) Overruled.

(3) Overruled.

(4) Overruled.

(5) Overruled.

(6) Overruled.

(7) Sustained.

Procedural History

On April 7, 2021, Intribis filed a complaint against Ocean Pro, Mr. Venture, and Richard Meng for breach of contract, declaratory relief, intentional misrepresentation, and other claims.

On April 28, 2021, the court denied Intribis’ ex parte application for a TRO and OSC re: preliminary injunction without prejudice to filing the motion on regular notice in Department 14.

On May 17, 2021, Cross-Complainants filed a cross-complaint against Cross-Defendants, as well as VAHC, LLC, Partake, LLC, and Mainstay Management, LLC, for breach of contract, fraud, and other claims.

On May 19, 2021, the court granted Cross-Complainants’ ex parte application for a TRO and OSC re: preliminary injunction.

On June 17, 2021, the court granted Cross-Complainants’ application for a preliminary injunction that enjoins Cross-Defendants Intribis LLC, Nosal, and Guevara from selling, transferring, disbursing, hypothecating, or otherwise dissipating any of the assets of Intribis, LLC. At the hearing on June 17, 2021, the court modified its tentative ruling and excluded Cross-Defendant Craig Taniguchi as an enjoined party.

The court entered the order re: preliminary injunction on June 23, 2021. The injunction does not prohibit Intribis “from conducting sales and paying expenses as per its regular course of business/operations.” The court ordered Cross-Complainants to post an undertaking of $75,000.

On August 5, 2021, Department 14 denied Cross-Defendants’ motion to increase undertaking for preliminary injunction.

On August 17, 2021, Cross-Defendants filed a first amended complaint. On August 25, 2021, Cross-Complainants filed a first amended cross-complaint.

On August 17, 2021, Mr. Venture filed the instant motion for appointment of a receiver. The court has received Cross-Defendants’ opposition and Mr. Venture’s reply.[1]

The memorandum of points and authorities in the moving papers is 20 pages long, and significantly exceeds the applicable page limit of 15 pages. (See CRC Rule 3.1113(d).) In addition to the points and authorities, Plaintiff also filed five declarations in support of the motion, three declarations in support of the reply, and hundreds of pages of exhibits.

Counsel for Mr. Venture should address at the hearing the reason the points and authorities significantly exceed the page limitation without leave of court. (See Rule 3.1113(g).)

Legal Standard for Appointment of a Receiver

Defendant moves for appointment of a receiver pursuant to CCP sections 564(b)(1), (6), and (9), which provide in relevant part:

“(b) A receiver may be appointed by the court in which an action or proceeding is pending … in the following cases:

(1) In an action … between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of any party whose right to or interest in the property or fund, or the proceeds thereof, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured.

[¶¶]

(6) Where a corporation is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights….

[¶¶]

(9) in all other cases where necessary to preserve the property or rights of any party.”

“In this state a receiver may be appointed only as permitted by Code of Civil Procedure section 564.” (Barclays Bank of California v. Sup.Ct. (1977) 69 Cal.App.3d 593, 597.)

Appointment of a receiver is a drastic provisional remedy that the court should only grant when facts are presented by admissible evidence that clearly establish a receiver is necessary to protect the property and maintain the status quo. (Barclays, supra, 69 Cal. App. 3d at 597; City and County of San Francisco v. Daley (1993) 16 Cal.App. 4th 734, 744). The appointment of a receiver is an equitable remedy, and should be used only when necessary and where other legal remedies are unavailable. (Rogers v. Smith (1946) 76 Cal.App.2d 16, 21).

“Appointment of a receiver may well result in serious injury to the name and good will of a solvent, going concern, and that if there is any other adequate remedy, which is less severe and which will protect the rights of the parties, a court should not take the drastic step of appointing a receiver.” (In re Jamison Steel Corp. (1958) 158 Cal.App.2d 27, 36.)

Analysis

Mr. Venture contends that it has a “probable interest” in Intribis as a result of a $250,000 investment and resulting 25% membership interest in Intribis. Mr. Venture contends that a receiver should be appointed over all of Intribis’ business operations for various reasons, as analyzed below. (Mot. 5-7, 22-23.)

Factual Background

On November 10, 2020, Intribis entered into a Membership Interest Purchase Agreement (“MIPA”) with Mr. Venture whereby Mr. Venture purchased a 25% membership interest in Intribis in exchange for payment of $250,000. (Meng Decl. Exh. 2-3.) The recitals to the MIPA state that Nosal and Guevara own 100% ownership interests in Intribis, and that Intribis owns and controls 100% ownership of subsidiaries Mainstay, Partake, and VAHC. (Id. Exh. 2.)

The MIPA states that, “at Closing” or execution of the agreement, Mr. Venture must wire the $250,000 into Interbris’ bank account with Evertrust Bank, account no. 3502929. (Meng Decl. Exh. 2-3.) On December 9, 2020, about a month after execution of the MIPA, Mr. Venture wired $250,000 to account no. 3502929 at Evertrust Bank. (Meng ¶ 3, Exh. 3.) Mr. Venture submits evidence that Nosal and Guevara did not object to the payment being made on December 9, 2020, rather than at the time of execution of the MIPA. (Wu Decl. ¶ 6.) Nosal and Guevara declare that they never personally received the $250,000; that they have no access to account no. 3502929 at Evertrust Bank; and that the account was opened by Mr. Venture or its representative. (Guevara Decl. ¶ 5; Nosal Decl. ¶ 7.)

In its ruling on the motion for preliminary injunction, the court stated: “Intribis cultivates, distributes, and sells cannabis at properties located in the County of Los Angeles. Intribis has owned, or has had rights, title, or interests in entities that own, commercial cannabis licenses issued by the State of California. Nosal has been the manager of Intribis since it was created in 2017…. In 2020, Intribis sought new investors to raise money for its cannabis grow facilities located at 807 and 817 E. Gage Ave., Los Angeles, CA (the ‘Gage Property’) and 11511 Bellinger St., Lynwood, CA (the ‘Lynwood Property’).” (Court’s Minute Order dated 6/17/21 at 3-4, citing Nosal Decl. filed 6/10/21 and Meng Decl. filed 5/17/21.) This factual summary was based on evidence presented for and against the motion for preliminary injunction, including a declaration of William Nosal.

With the instant motion, Mr. Venture cites deposition testimony of Nosal stating that, contrary to the representations in the MIPA and Nosal’s prior declaration, Intribis does not own Mainstay, Partake, or VAHC. Nosal testified that the intent was for Intribis to be an “umbrella corporation” that owned these entities. However, he testified that California cannabis regulations resulted in an “an extremely complex structure” and that, “formally,” Mainstay, Partake, and VAHC are owned either by Nosal and/or Guevara individually. (See Mot. 10 and Lee Decl. Exh. 7.) Specifically, Nosal testified that Guevara owns 100% of VAHC and Partake, and that he and Guevara each own 50% of Mainstay. (Ibid.) Nosal testified that VAHC is the holder of five cannabis licenses: a nursery license, a cultivation license, a manufacturing license, a distribution license, and a retail license. (Ibid.)

In opposition to the instant motion, Cross-Defendants submit an email dated September 30, 2020, from Mr. Venture’s counsel, Christopher Lee, to Cross-Defendant Taniguchi stating that Mr. Venture “did not require Intribis to be officially listed as the parent company of the VAHC, Mainstay, and other subsidiaries it owns.” (Nosal Decl. ¶ 7 and Exh. D.) The email refers to an investment or loan transaction between Ocean Pro and Intribis. (Ibid.)

On March 2, 2021, Nosal filed with the California Secretary of State an updated Statement of Information that identified Mr. Venture as a member of Intribis. (Lee Decl. Exh. 5.) On April 15, 2021, after reviewing the matter with legal counsel and after this legal action was filed, Nosal filed an updated Statement of Information that removed Mr. Venture as a member of Intribis. (Id. Exh. 6; see Nosal Decl. ¶ 8.)

The court’s ruling on the preliminary injunction, dated June 17, 2021 contains additional factual background concerning the Bridge Loan Agreement (“Bridge Loan” or “BLA”) executed between Intribis and Cross-Complainant Ocean Pro, LLC in November 2020, and is not repeated here.

Receivership Pursuant to CCP Section 564(b)(1)

To obtain a receivership over Intribis under section 564(b)(1), Mr. Venture must show that it has a “probable interest” in Intribis and that the interest is “in danger of being lost, removed, or materially injured.”

Probable Interest

Mr. Venture must show “at least a probable interest in the described property.” (Sachs v. Killeen (1958) 165 Cal.App.2d 205, 213.)

For reasons stated in the court’s ruling on the motion for preliminary injunction, Mr. Venture submits sufficient evidence of a probable interest in Intribis. Specifically, Mr. Venture submits evidence of the existence of the contract (the MIPA); Mr. Venture’s performance by payment of $250,000 to Cross-Defendants on or about December 9, 2020; and that such performance entitled Mr. Venture to a 25% interest in Intribis. (Court’s Minute Order dated 6/17/21 at 9-10; see also Meng Decl. Exh. 2-3.) In addition to evidence of payment of $250,000, Mr. Venture cites undisputed evidence that on March 2, 2021, Nosal filed with the California Secretary of State an updated Statement of Information that identified Mr. Venture as a member of Intribis. (Lee Decl. Exh. 5.)

In opposition, Cross-Defendants contend that “Mr. Venture materially breached the MIPA by not paying the $250,000, not paying that amount timely, not actually paying any amount to either of Mr. Nosal, Guevara, or Intribis, and having unapproved expenses paid therefrom.” (Oppo. 14, citing Nosal Decl. ¶ 7 and Guevara Decl. ¶ 5.) Cross-Defendants’ evidence creates a factual dispute with respect to whether Mr. Venture performed its obligations under the MIPA. Weighing the evidence, the court concludes that Mr. Venture has a “probable interest” in Intribis, LLC for purposes of section 564(b)(1). The evidence of payment of $250,000, lack of objection to the timeliness of the payment, and the statement of interest acknowledging Mr. Venture’s membership interest are sufficient to show a probable interest in Intribis, LLC.

Mr. Venture also moves for a receivership over Cross-Defendants Mainstay, Partake, and VAHC, which Mr. Venture refers to as the “Intribis Companies.” However, Mr. Venture represents that “Mainstay, Partake, and VAHC … are not owned by Intribis but by Nosal or Guevara in their individual [capacities].” (Mot. 3.) Mr. Venture explains: “Culminating the need for the Court to appoint a Receiver, it has now been discovered, that Intribis does not actually own Partake, Mainstay, and VHAC. Although Intribis, Nosal and Guevara have warranted, represented Partake, Mainstay, and VHAC are wholly owned by Intribis, the true fact is Partake is owned by Guevara, Mainstay is owned by Nosal and Guevara.” (Mot. 6.)

In reply, Mr. Venture similarly states: “Intribis does not own VAHC, Mainstay, or Partake, which is attested to by Mr. Nosal under penalty of perjury.” (Reply 7.) The court finds it difficult to reconcile these statements with Mr. Venture’s position that it has a probable interest in Mainstay, Partake, and VAHC that could justify a receivership over those entities. Read literally, some parts of Mr. Venture’s legal briefs concede, as a factual matter, that Intribis “does not own” VAHC, Mainstay, or Partake.

In contrast to the statements quote above, Mr. Venture also asserts that the “true owners” of VAHC are Guevara, Nosal, Taniguchi, Intribis, and Mr. Venture. (Reply 5.) Mr. Venture seems to refer to reporting requirements under pertinent cannabis regulations. However, the determination of “ownership” under the cannabis laws is not the same as ownership from a contractual perspective. (Manzuri Decl. ¶ 10; see 4 CCR ; 15003.)

The MIPA granted Mr. Venture a 25% interest in the “Company,” which apparently refers to Intribis LLC. The MIPA also states that “the Company owns and controls 100% ownership [sic] its subsidiaries, i.e., Mainstay Management LLC, Partake LLC, and VAHC, Inc.” (Meng Decl. Exh. 2.) Nosal also previously represented that Intribis owns and controls the cannabis assets of certain subsidiaries and that it operates businesses at the Gage and Lynwood Properties. (See Reply 4 and Reply Lee Decl. Exh. 11-12.) To the extent Intribis or Nosal made false representations about Intribis’ corporate structure, and to the extent Mr. Venture relied on them, that could support a fraud or breach of contract claim. It does not necessarily follow that Mr. Venture has a probable interest in Mainstay, Partake, and VAHC simply because false statements were allegedly made by Nosal or Intribis.

Despite the foregoing, the express recitals in the MIPA suggest that Mr. Venture may have some interest – contractual or equitable – in Mainstay, Partake, and VAHC.

Based on the foregoing, Mr. Venture shows a probable interest in Intribis LLC. While Mr. Venture’s interest in Mainstay, Partake, and VAHC is less clear, the court will assume, for purposes of analysis, that Mr. Venture has a probable, albeit indirect interest, in those entities through the MIPA.

In Danger of Being Lost, Removed, or Materially Injured

Alleged Violations of Cannabis Laws and Risk to VAHC’s Cannabis Licenses

Based on an expert declaration of cannabis attorney Meital Manzuri, Mr. Venture contends that Intribis or Mainstay, Partake, and VAHC have violated California cannabis laws by failing to properly disclose and register their ownership structures and membership interests. Mr. Venture contends that Intribis or Mainstay, Partake, and VAHC are at risk of suspension, revocation, or cancellation of their cannabis licenses because of these alleged regulatory violations. (Mot. 15-18.) Mr. Venture contends that “[a] prompt appointment of receiver is, therefore, necessary and warranted, which will ensure that Intribis Companies are operated legally under an experienced professional who has expertise in cannabis regulations and compliance.” (Mot. 18.)

Manzuri declares, inter alia, that “[t]he California Department of Cannabis Control (‘DCC’) is the state agency charged with issuing commercial cannabis activity licenses, maintaining the status of all licenses, and creating and enforcing all cannabis regulations for the state. The DCC is governed by various rules and Regulations most of which are contained in the DCC text of Regulations Title 4, Division 19, sections 1500 through 17999. (‘DCC Regulations’).” (Manzuri Decl. ¶ 6.)

“DCC Regulations require a licensed cannabis business to disclose its ownership structure, which shall include all ‘Owners’. Thereunder, Owners include anyone with an aggregate ownership interest in the business of 20% or more and anyone ‘who will be participating in the direction, control, or management of the person applying for a license.’” (Manzuri Decl. ¶ 10; see 4 CCR ; 15003.) “When an entity is an owner in a commercial cannabis business, all entities and individuals with a financial interest in the entity shall be disclosed to the Department and may be considered owners of the commercial cannabis business. For example, this includes all entities in a multi-layer business structure, as well as the chief executive officer, members of the board of directors, partners, trustees and all persons who have control of a trust, and managing members or non-member managers of the entity. Each entity disclosed as having a financial interest must disclose the identities of persons holding financial interests until only individuals remain.” (Manzuri Decl. ¶ 12; 4 CCR ; 15003(c); see also Manzuri Decl. ¶ 11 and 4 CCR ; 15004 [defining financial interests].)

Local agencies have similar cannabis regulations that may apply in this case. (Id. ¶ 7, referring to Los Angeles regulations as “DCR Regulations”.) Manzuri does not show that any distinction between state or local regulations are dispositive here.

Manzuri opines: “After an independent investigation into the facts and surrounding circumstances here, my review of the Records, and associated regulations, it is my opinion that VAHC, INC. is in violation of DCC Regulations as well as DCR Regulations because they only listed Mr. Judd Guevara as an Owner, while VAHC, INC. was represented to be owned by Intribis LLC and that there are at least two other Owners/operators in VAHC INC., i.e., Mr. Craig Taniguchi and Mr. William Nosal. Intribis Companies’ failure to comply with the DCC Regulations and DCR Regulations could cause either agency to fine, suspend, revoke, cancel and/or refuse to renew VAHC’s cannabis licenses.” (Manzuri Decl. ¶ 24.)

In opposition, Cross-Defendants submit a responsive declaration of cannabis attorney Molly Pitluck. Attorney Pitluck does not dispute Manzuri’s summary of the relevant cannabis regulations. Pitluck asserts that “VAHC and Mainstay are not in violation of any cannabis laws related to non-reporting of ownership or financial interests because Intribis and Craig Taniguchi have never been an ‘Owner’ of, nor had a financial interest in, VAHC or Mainstay to report. Nor has Nosal ever had an Ownership or financial interest in VAHC to report.” (Pitluck Decl. ¶ 4.) As argued in reply, parts of Pitluck’s expert opinion may be questioned on the basis that she fails to address testimony of Nosal that he and Taniguichi are closely involved in the management of VAHC, Partake, and Mainstay. (Reply 4-5; see Lee Decl. Exh. 7 at 102-103.) Under DCC Regulations, “an owner” for purposes of reporting requirements includes “[a]n individual who will be participating in the direction, control, or management of the person applying for a license.” (4 CCR ; 15003(b).)

However, Mr. Venture does not submit any evidence that any regulatory bodies have taken or threatened disciplinary action against Intribis, VAHC, Partake, or Mainstay for the potential violations discussed in Manzuri’s declaration. If regulatory bodies raised the alleged reporting issues, Intribis, VAHC, Partake, or Mainstay would be entitled to notice and opportunity to respond. (See Pitluck Decl. ¶ 5.) On the record presented, the court has insufficient reason to believe that the alleged violations present an imminent or material risk to the cannabis licenses of Intribis, VAHC, Partake, or Mainstay or the businesses of those entities. Accordingly, Mr. Venture does not show, based on the Manzuri declaration, that assets of Intribis, VAHC, Partake, or Mainstay are presently in danger of being lost, removed, or materially injured.

Furthermore, on this record, the court is not persuaded that a receiver is necessary to address the alleged harm. It seems reasonably likely that Intribis, VAHC, Partake, or Mainstay could file the appropriate paperwork to address any reporting issues raised by regulatory authorities. (See Pitluck Decl. ¶¶ 5-16.)

Alleged Insolvency

Mr. Venture contends that it appears Intribis is insolvent because it has not paid debts owed to Cross-Complainant Ocean Pro, LLC, utility payments, or lease payments for its Lynwood location. (Mot. 5-7, 19-20.)

For the purposes of the Uniform Voidable Transactions Act, California Civil Code ;3439.02, a “debtor is insolvent if, at a fair valuation, the sum of the debtor’s debts is greater than the sum of the debtor’s assets.” (Cal. Civ. Code ; 3439.02(a).) California Civil Code ;3439.02(b) further provides that “[a] debtor that is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.” These definitions are not incorporated into CCP section 564, but provide some guidance on the question of whether a corporation is insolvent or in danger of insolvency.

At his deposition, Nosal admitted that VAHC and Partake presently owe about $300,000 to the Los Angeles Department of Water and Power (“LADWP”). (Lee Decl. Exh. 7 at 107.) He estimated that VAHC and Partake have average utility charges of about $25,000 to $30,000 a month. (Id. at 108.) VAHC and Partake stopped making utility payments in late 2020; they make “ad hoc payments here and there”; and they intend to resume making utility payments depending on “the assets we have, based on the OP [Ocean Pro] loan restrictions.” (Id. at 108.) Nosal stated that VAHC and Partake stopped making LADWP payments because of “extensive obligations,” including unpaid rent for the Lynwood Property and payments made to Ocean Pro. (Id. at 109.) Nosal stated that the rent owed for the Lynwood Property is about $250,000. (Id. at 114.) Thus, other than the BLA made by Ocean Pro and loans or investments made by Taniguchi, Intribis, VAHC, Partake, and Mainstay have outstanding debts of at least $550,000. (Id. at 115.)

In opposition, Cross-Defendants contend that “the Intribis Parties are absolutely not insolvent as their assets are valued at at least $4,000,000 by arm’s length, third party offers, and their total debt(s) are in the range of $2,000,000.” (Oppo. 17, citing Nosal Decl. ¶¶ 17-19, Exh. L, M.) In the cited declaration, Nosal declares that he has received purchase offers for two of the six cannabis licenses held by VAHC for a total of $4,000,000. Nosal opines, without elaboration, that the other four licenses are likely worth in excess of $4,000,000. (Nosal Decl. ¶¶ 17-19.)

In his declaration, Nosal also declares: “The Intribis Parties are paying their debts; there are none currently ‘due’ which have not been paid. While there is a balance owned [sic] with the LADWP, such is common with facility upgrades such as those undertaken by VAHC and/or Mainstay, and, perhaps more importantly, Mr. Venture, and/or its cohorts, were expressly aware of a significant five-figure balance with the LADWP even before they provided capital to Intribis. As to rent owed at the Lynwood Property, while there is a balance due at that facility, Mainstay has a long-lasted and strong relationship with the Lynwood Property owner, who has been willing to work with Intribis and Mainstay, and is indeed working with them, as to maintaining the cannabis development agreement for that property (which is needed in order for that property to maintain or obtain a significantly higher value). Indeed, both landlord and tenant at the Lynwood Property are incentivized to work together on any issues at the property (as Lynwood cannabis development agreements are scarce - with only 19 in existence, and the current one in the name of Mainstay is not transferable). Moreover, the operations of VAHC at the Gage Property cover the fixed and variable expenses of the business.” (Nosal Decl. ¶ 16.)

Nosal submits an email dated April 1, 2021, from Richard Meng, who executed the MIPA on behalf of Mr. Venture, which stated: “Hi Chris [Cross-Complainants’ attorney], pls send email to Intribis and asking for buyer detail and their offer today. We can discuss and reply them what we want 3.5m or buy them out at 1.5 tomorrow.” (Nosal Decl. ¶ 21, Exh. N.) The context of this email is not entirely clear. However, the email provides some support for Nosal’s assertion, which Mr. Venture does not dispute, that the cannabis licenses are valuable assets of the Intribis-related entities. Based on Nosal’s declaration, the email submitted as Exhibit N, the valuations of Intribis implicit in the BLA and MIPA, and other evidence in the record, it seems reasonable to infer that VAHC’s cannabis licenses have total values that exceed the admitted debts owed to LADWP and for the Lynwood Property.

Nosal submits profit and loss statements for VAHC. He declares that VAHC is the only Intribis entity that generates income. He declares that VAHC had total revenue of $2,149,346.42 in 2020, and total revenue of $1,508,603.94 for year 2021 to date. (Nosal Decl. ¶¶ 13-14.) The attached statements show that VAHC had net income of -$612,00.93 in 2020 and -$218,462.92 in 2021 through July 2021. (Id. Exh. J, K.) That VAHC has net losses for recent years does not, in itself, prove insolvency or grounds for a receivership.

In reply, Mr. Venture contends that Nosal is not a credible witness because his prior declarations did not accurately disclose the ownership structure of Intribis and VAHC, Mainstay, and Partake. (Reply 9-11.) However, Mr. Venture also relies substantially on Nosal’s testimony to prove the amount of debt owed by Intribis or other entities. In any event, in weighing the evidence, the court has considered the inconsistent statements in Nosal’s various declarations. Those inconsistent statements do not justify a wholesale disregard of Nosal’s declaration and deposition testimony, especially where Nosal is corroborated by other evidence in the record, including emails between the parties.

While Mr. Venture argues in reply that Cross-Defendants’ financials are inaccurate or inconsistent, it fails to sufficiently develop the argument. (Reply 10-11.) Mr. Venture also relied on the same financials earlier in its reply brief, which undermines its argument. (Reply 6-7.) Mr. Venture also has less drastic remedies than a receivership to investigate alleged inaccuracies or inconsistencies in financial statements.

The record contains evidence that VAHC and Partake presently owe about $300,000 to LADWP, and that the landlord for the Lynwood property is presently owed back rent of at least $250,000. (Lee Decl. Exh. 7 at 107, 114.) It appears Intribis, VAHC, Partake, and Mainstay may not be able to make these payments at present time. However, Mr. Venture presents no evidence that LADWP or the Lynwood landlord are presently threatening action against the cannabis licenses of VAHC or the businesses of Intribis, Partake, and Mainstay. Furthermore, there is a reasonable inference that VAHC’s cannabis licenses are worth more than these alleged debts.

Mr. Venture also contends that the “Intribis Companies’ insolvency is evident from the facts that: (1) they are entertaining sales offers for Lynwood, (2) have not paid money to Ocean Pro (a creditor).” (Mot. 19.) That Cross-Defendants have entertained offers for the Lynwood property does not prove that they are insolvent. The Ocean Pro debt is disputed and is at issue in this action. Should Ocean Pro prevail in this action, that could result in imminent danger to Cross-Defendants’ financial status. However, since Ocean Pro’s debt is disputed and could be remedied by money damages, the court is not persuaded that it provides grounds for appointment of a receiver under section 564(b)(1).

Further, Mr. Venture presents no evidence that appointment of a receiver would help the financial situation of Intribis, and thereby protect Mr. Venture’s property interest. A receiver is typically paid on an hourly basis for work performed for the receivership estate. While Mr. Venture fails to provide any evidence of the contemplated remuneration structure for the proposed receiver, given the nominee’s status as an attorney, the hourly rate is likely not insignificant, and the proposed scope of the receivership is quite broad. Significantly, Mr. Venture does not support factually that the losses suffered by Intribis are due to mismanagement or misappropriation. (Motion, p. 22-23.) Absent that showing, with respect to Intribis’ financial condition, Mr. Venture has not shown that appointment of a receiver would do anything except further burden the profits of the company.

Based on present record, Mr. Venture does not show that Intribis or related entities VAHC, Partake, and Mainstay are insolvent when the values of VAHC’s cannabis licenses are considered. Furthermore, there is insufficient evidence that the admitted debts to LADWP or the Lynwood landlord, or the disputed debt owed to Ocean Pro, create a risk of danger to Cross-Defendants’ assets or businesses that would justify a receivership. Given the complexities of the Intribris business structures, and the cannabis businesses that Cross-Defendants operate, a receivership would be an extremely costly and disruptive remedy. While the court acknowledges some evidence of financial stress of Intribis and related entities, much of the financial stress seems to relate to the disputed transactions with Ocean Pro and Mr. Venture. The court finds this evidence insufficient to justify a receivership. The court has also considered evidence that Mr. Venture knew of Intribis’ structure and potential debt to LADWP when it invested, which weighs somewhat against use of the court’s equitable powers to appoint a receiver. (See Nosal Decl. ¶ 7 and Exh. D; Id. ¶ 16.)

Other Grounds for Receivership Under CCP Section 564(b)(1)

Mr. Venture also contends that a receiver should be appointed over all of Intribis’ business operations because the members and managers of Intribis have refused to recognize Mr. Venture’s ownership interest; and Mr. Venture’s informal and discovery requests for financial and corporate records have been “rebuffed.” (Mot. 5-7.) Later in the moving brief, Mr. Venture also asserts that a receivership is required to protect Mr. Venture from “mismanagement or misappropriation” and because Nosal and Guevara are entertaining offers to sell Mainstay or Lynwood. (Mot. 22-23.)

Contrary to Mr. Venture’s assertion, the alleged refusal to recognize Mr. Venture’s membership interest in Intribis does not, standing alone, justify a receivership. Mr. Venture has a sufficient remedy for this alleged harm in the damages and declaratory relief sought in its cross-complaint. To the extent Mr. Venture contends that failure to report its interest violates cannabis regulations, the court notes that Mr. Venture’s interest is disputed in this legal action. The requirements for Cross-Defendants to report disputed financial interests are less clear from the regulations. (See generally Pitluck Decl. and 4 CCR ;; 15002-04.) Moreover, the alleged violations of cannabis law do not justify a receivership for the reasons discussed above.

To the extent Mr. Venture seeks additional documents or information from Intribis, or further inspection of business premises or security footage, Mr. Venture has sufficient remedies that are less drastic than a receivership, including discovery. While it seems possible that Cross-Defendants have not fully complied with demands for documents or information, Mr. Venture fails to develop a clear argument of how Cross-Defendants’ responses were deficient and why a receivership is needed to obtain responsive information.

Mr. Venture cites conclusory evidence that “in January 2021, Intribis Companies reported that they lost approx. 40% of its cannabis harvest because of a purported ‘employee theft’ at the Gage location. See Wu Decl., ¶7.” (Mot. 8.) The cited Wu declaration relies on hearsay and does not provide any foundation or context for the claim that the “Intribis Companies” reported substantial “employee theft” in January 2021. In opposition, Nosal declares that “[t]here's been no loss to any harvest due to ‘theft,’ or the like; VAHC is in the farming business, and sometimes crops simply don't flourish and yield satisfactory product (which is what occurred to a harvest of VAHC in or about February 2021).” (Nosal Decl. ¶ 15.) Given the conclusory nature of Mr. Venture’s evidence, it does not prove that Cross-Defendants’ assets are “in danger of being lost, removed, or materially injured.”

Finally, the preliminary injunction order addresses Mr. Venture’s concern that Cross-Defendants are entertaining offers for the cannabis licenses or businesses. On June 17, 2021, the court granted Cross-Complainants’ application for a preliminary injunction that enjoins Cross-Defendants Intribis LLC, Nosal, Guevara, “and their agents, servants, employees, representatives, and all persons acting on the behalf of said Cross-Defendants” from selling, transferring, disbursing, hypothecating, or otherwise dissipating any of the assets of Intribis, LLC. The court’s order requires Cross-Defendants and persons acting with them to “maintain the status quo.” In opposition, Cross-Defendants present evidence that they are not presently marketing or soliciting offers to purchase any of the assets of the Intribis Parties. (Nosal Decl. ¶ 20.) Mr. Venture does not rebut that evidence in reply and does not submit any evidence of attempted sales of the Intribis companies or assets since the court entered the preliminary injunction order. Mr. Venture also has a less drastic remedy in enforcing the preliminary injunction order.

Based on the foregoing, Mr. Venture does not prove that Cross-Defendants’ assets are “in danger of being lost, removed, or materially injured.” While there is evidence of financial stress among the Intribis entities, this evidence is insufficient to justify a receivership for the reasons discussed above. Furthermore, Mr. Venture has alternative remedies that are less drastic than a receivership, including discovery and enforcement of the preliminary injunction order. On the present record, Mr. Venture is not entitled to a receiver under CCP section 564(b)(1).

CCP Section 564(b)(6) and (b)(9)

Section 564(b)(6) requires Mr. Venture to show that Cross-Defendants are

insolvent, or in imminent danger of insolvency.” Section 564(b)(9) is a catch-all provision that applies to “all other cases where necessary to preserve the property or rights of any party.” The relevant arguments under these sub-sections have been analyzed above. For the reasons discussed above, Mr. Venture is not entitled to a receivership under CCP sections 564(b)(6) and (b)(9).

Conclusion

The motion is DENIED.


[1] The notice of motion states clearly that only Mr. Venture moves for appointment of a receiver. The caption to the reply states that the motion is also brought by Cross-Complainant Ocean Pro, LLC, but other parts of the reply (including evidentiary objections) indicate that the motion is only brought by Mr. Venture. (See Reply 2.) The court interprets the motion as being brought solely by Mr. Venture.


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