In a receivership-related motion arising from alleged fraudulent investment activities, the receiver sought authorization to utilize frozen funds held by entities subject to prior court orders to pay ongoing investigation costs.
The court held that the circumstances differed from typical insolvency proceedings because many affected entities were not parties and no specific allegations had been pleaded against them.
Exercising discretion under the prior freezing order, the court declined to allow prepayment of the receiver’s investigative expenses from the frozen funds.
The court also rejected a request for a sealing order due to the strong presumption of open courts but granted a confidentiality order restricting the receiver from voluntarily providing information to tax or criminal authorities.
Costs were not awarded due to divided success.
