United States District Court, D. Massachusetts
GLOBAL NAPS, INC.
VERIZON NEW ENGLAND, INC.
MEMORANDUM AND ORDER
ZOBEL SENIOR UNITED STATES DISTRICT JUDGE
2010, the court appointed Carl F. Jenkins as receiver of the
assets of the judgment debtors, including Frank Gangi, for
the ultimate purpose of satisfying an outstanding judgment
for Verizon New England, Inc. in the amount of $57, 716, 714.
To this end, the court authorized the receiver to identify,
safeguard and preserve all property and interests of the
judgment debtors. In July 2015, and February 2017,
respectively, it approved the receiver's Interim and
Final Accountings and instructed the receiver to prepare a
Final Supplemental Accounting covering the receivership's
post-December 1, 2015, activities. The receiver now moves for
approval of this Final Supplemental Accounting and requests
discharge. The court received Mr. Gangi's written
objections to the motion and held a hearing. The
receiver's motion (Docket # 1365) is ALLOWED, in
accordance with the following findings and rulings.
Final Supplemental Accounting and Final Supplemental
Gangi objects to the Final Supplemental Accounting, citing a
perceived lack of transparency in the transaction history.
Mr. Gangi made similar objections to each of the
receiver's previous accountings, each of which objections
the court overruled after hearing and upon finding that the
receiver's accountings were adequate and the underlying
methodology was sound. See Docket ## 1254, 1316. The
receiver's identical accounting methodology evidencing
the receipts and expenses incurred and paid in administering
the receivership estate from and after December 1, 2015 is
therefore approved. The court also credits the receiver's
representation that, at Mr. Gangi's request, he has
shared copies of all non-privileged supporting invoices.
Accordingly, the Final Supplemental Accounting and
accompanying Final Supplemental Narrative are also herewith
Disbursement of Remaining Receivership Funds
his motion, the receiver has included the proposed pro
rata list of claimants to participate in the final
distribution of funds, which the court has already approved
in the course of approving a settlement agreement between the
receiver, Verizon, USAC and Amtrak (hereinafter, the
“settlement agreement”). See Docket ##
1311, 1311-2, 1315, 1365-3. The receiver is, therefore,
authorized to make a final distribution of funds to approved
claimants pro rata in accordance with the settlement
agreement, after deducting and paying the expenses incurred
in the administration of the receivership estate. The timing
of the distribution to claimants is subject to the final
disposition of all appeals of this order. The receiver is
also authorized to enter a stop payment order on any checks
or funds that remain outstanding sixty (60) days after the
final distribution. Any remaining undistributed funds shall
be paid to Verizon.
Books and Records of the Receivership
his appointment, the receiver took possession of financial
and other historic books and records then maintained by
judgment debtors and the several GNAPs-related entities
(“Historic Records”). He also created and
maintained records related to his administration of the
receivership (“Receivership Records”). The
receiver requests authorization to permanently dispose of the
Historic and Receivership Records once he is discharged,
whereas Mr. Gangi objects and requests that the receiver
maintain them for at least three years.
month after either the final disposition of all appeals of
this order, or the lapse of the deadline to file such
appeals, the receiver (1) may permanently dispose of the
Receivership Records, and (2) shall return to Mr. Gangi all
Historic Records, which Mr. Gangi shall receive at the
receiver's then storage facility. If Mr. Gangi fails or
refuses to accept the Historic Records, the receiver may
dispose of them.
Indemnification of the Receiver
order appointing the receiver indemnifies him for actions
taken in the course of the receivership. The receiver seeks
formal reaffirmation of this indemnification upon his
discharge, but Mr. Gangi objects to any statement of
prior order specifies that the receiver “shall have no
personal liability for his acts or omissions as Receiver
other than gross negligence or willful misconduct” and
correspondingly indemnifies and holds the receiver harmless
“for any loss or liability of any nature whatsoever . .
. except as to any act or omission determined by the court to
be gross negligence or willful misconduct.” Docket #
624 ¶ 10. This provision reflects a defining feature of
receiverships: as fiduciaries of the court, receivers are
generally only liable in an official-but not
personal-capacity for actions taken within the scope of their
authority, and recourse therefore must be taken against the
assets of the receivership estate.
receiver's liability for actions taken in the course of
the receivership up to the time of his discharge will
continue to be defined and limited by the language of the
order appointing him. Thus, the indemnity and hold harmless
clauses will continue to apply to all pre-discharge
receivership activities, including any post-discharge
challenges to such activities. Once discharged, however, the
receiver's duties and authority cease, and he may no
longer act in an official capacity.
no fault with the manner in which the receiver has carried
out his duties from the time of his appointment to the
present, and further find ...