SECURITIES AND EXCHANGE COMMISSION v. McKINLEY MORTGAGE CO.

Case No. 2:18-cv-00616-MCE-CMK.

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MCKINLEY MORTGAGE CO. LLC; et SALE OF LOAN PORTFOLIO, FREE al., Defendants.

United States District Court, E.D. California, Sacramento Division.

June 16, 2020.


ORDER GRANTING MOTION OF INDEPENDENT MANAGER/MONITOR, KRISTA L. FREITAG, FOR ORDER AUTHORIZING AND APPROVING AND CLEAR OF LIENS AND ENCUMBRANCES

Before this Court is the Motion of Krista L. Freitag (the "Monitor"), who has been engaged through E3 Realty Advisors, Inc. to serve the Independent Manager and Monitor for Defendants McKinley Mortgage Co. LLC, McKinley Mortgage Company, LLC, and their respective subsidiaries and affiliates, including but not limited to Alaska Financial Company III LLC and Alaska Financial Company2, LLC (collectively, the "Monitorship Entities") for an order authorizing and approving the sale of a portfolio of loans (collectively, the "Loans") made and held by Alaska Financial Company III LLC ("Alaska Financial"), with an aggregate, outstanding principal balance of approximately $1.5 million, to Veltra Capital LLC ("Veltra"), free and clear of liens and encumbrances.

In her Motion and her Declaration in support thereof, the Monitor identifies a number of UCC Financing Statements (collectively, the "Financing Statements") which purport to reflect perfected security interests in the assets of the Monitorship Entities, including the Loans, but which are not derived from any counterpart security agreement, as required by law. By her Motion, the Monitor requests that the sale of the Loans to Veltra be deemed free and clear of any liens or encumbrances created by or reflected in the Financing Statements. As set forth in the Monitor's Reply (ECF No. 25), no oppositions to the Motion have been submitted, either timely or otherwise.

The Monitor's Motion having been considered, and good cause appearing therefor, this Court orders as follows:

1. The Monitor's Motion (ECF No. 22) is GRANTED, in its entirety;

2. The Financing Statements, being unsupported by the documents necessary to create security interests that may be perfected, SHALL NOT constitute liens or encumbrances upon the assets of the Monitorship Entities, including the Loans;

3. Accordingly, this Monitor's proposed sale of the Loans to Veltra, in accordance with the terms and conditions of the Loan Purchase and Sale Agreement by and between Alaska Financial and Veltra, and free and clear of liens and encumbrances, is AUTHORIZED and APPROVED.

IT IS SO ORDERED.


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