Receivers handling Ponzi schemes and fraud cases are familiar with the concept of suing the “winners” in the scheme to recover transfers made to them in excess of their investment. Such suits are based on the theory that the excess payments are fraudulent transfers. Indeed, it is generally accepted that where a Ponzi scheme is involved, no value is given for the excess payments received by investors. Donell v. Kowell, 533 F.3d 762 (9th Cir. 2008). Cases are split on whether parties that aided the fraud, such as brokers or sales people, can be held liable for payments they received. A ...

One of the more interesting laws to emerge from the 2014 legislative session was Assembly Bill 1792. AB 1792 amends and adds sections to the Government Code, Unemployment Insurance Code and Welfare and Institutions Code. Specifically, the law requires the State of California to compile information on the use of public assistance programs, including the average cost of state and federally funded benefits provided to each individual receiving benefits. “Public assistance program” is defined specifically as the Medi-Cal program. Beginning in January of 2016, the law requires ...

A hot topic for legislators throughout the United States, last fall California became the second state to require paid sick leave. Effective July 1, 2015, California’s Healthy Workplaces, Healthy Families Act of 2014 provides that all employees working in California for 30 or more days within a year from the commencement of employment are entitled to paid sick leave, which means that temporary and part-time employees may be eligible. Sick leave must either (i) accrue at the rate of no less than one hour for every 30 hours worked, or (ii) total at least three days or 24 hours and be ...

QUESTION: I purchased assets from a receiver. The court approved the sale over the objection of one of the defendants. The sale has now closed. I was just informed that the defendant is appealing the order approving the sale. Can the defendant set aside the sale to me or am I safe?

ANSWER: In United States v. Antiques Limited Partnership, 760 F. 3rd 668 (7th Cir. 2014) the federal government sued to enforce tax assessments against a husband and wife and partnerships they controlled and transferred property to. A receiver was appointed to manage the partnerships and to sell their assets to ...

Continuing in a trend that started in 2013, the California Legislature focused considerable time and effort on expanding liability and increasing penalties under several existing laws for 2015. Assembly Bill 1723 amended Labor Code section 1197.1 by expanding the penalty for the failure to pay employees minimum wage to include penalties under Labor Code section 203 in addition to liquidated damages in the amount of the unpaid wages, recovery of the unpaid wages and pay period violations for each employee of $100.00 for the first pay period and $250.00 per pay period thereafter. AB ...

Assembly Bill 1897 is essentially an effort to hold employers who contract for labor accountable for wage and hour violations, something the legislature has sought to do in various failed legislative attempts over the last several years. Specifically, AB 1897 adds section 2810.3 to the Labor Code and requires client employers to share all civil legal responsibility and liability with labor contractors. “Client employer” is defined to exclude businesses with a workforce of less than 25 workers and employers who employ five or fewer workers through a labor contractor at any ...

We’ve written about the abuse of interns previously. At the time, we were focused on the all-too-common practice of using unpaid interns to augment the workforce, a violation of labor law that occurs frequently in the entertainment industry. But whether paid or unpaid, it is clear that interns and volunteers must be treated with the same dignity and respect as are paid employees and independent contractors.

Indeed, Assembly Bill 1443 recently amended the Fair Employment and Housing Act to prohibit discrimination in the selection, termination, training or treatment of unpaid ...

Assembly Bill 2053 expanded the existing requirement for sexual harassment training under Government Code section 12950.1 to include training on the prevention of abusive conduct. Effective January 1, 2015, the law applies to every California employer that employs 50 or more persons or receives the services of 50 or more persons pursuant to a contract. “Abusive conduct” is defined as conduct that a reasonable person would find hostile and offensive and is otherwise unrelated to legitimate business interests. Abusive conduct may include derogatory remarks, insults ...

QUESTION: I am a receiver for an operating entity. It has three offices. The rent for one of the offices is excessive and the business does not need all the space. I have approached the landlord about giving back some of the space or terminating the lease, but no dice. Can I reject the lease like a bankruptcy trustee?

ANSWER: While trustees and receivers are different, there are many similarities. The Bankruptcy Code adopted many provisions from prior receivership practice. The power to assume or reject a lease is one of them. A receiver is not stuck with a defendant’s leases just ...

QUESTION: I am a receiver appointed pursuant to stipulation in an action pending in superior court between a husband and a wife over the operation of a business they own. After operating the business for many months, I agreed to a settlement with the husband resolving many of the disputed issues. The wife disagreed with the proposed settlement and moved to transfer the litigation to the family law court. After the action was transferred, the judge in the family court ruled that the original judge who appointed me had no jurisdiction to do so and that the appointment was “void.” The ...