Two days after assuming management of VPL Medical, the Redwood Receiver shut it down.
Jason Cardiff was livid, prompting a twenty-eight web page rage submitting demanding removing of the Receiver.
Spoiler alert: Cardiff was denied.
We’ve beforehand lined Cardiff’s VPL Medical scheme, so I received’t go to deep into it once more right here.
At challenge was a July 14th deadline, requiring VPL Medical to provide the U.S. Division of Well being & Human Providers with two million COVID-19 masks.
Following a “shock go to” to VPL Medical’s manufacturing amenities, the Redwood Receiver concluded the corporate wouldn’t have the ability to meet its contractual obligations.
VPL has not more than 1 functioning manufacturing machine, which is outdated and isn’t functioning nicely.
That machine just isn’t able to manufacturing greater than 8,000 to 10,000 masks throughout any given 8- hour shift.
Three of the opposite machines are used equipment, missing key elements, and are non-functional.
The Receiver additionally relied on an announcement from Matthew Peters, VPL’s main investor, confirming
VPL wouldn’t be prepared to supply 2 million FDA-compliant masks by the HHS contract deadline.
Jason Cardiff argues the Receiver’s choice was based mostly on the “false declare” that there ‘weren’t sufficient manufacturing strains obtainable to fabricate masks.’
Merely acknowledged, the Receiver has created a double bind for VPL; that’s, you should meet the HHS deadlines, however don’t present the funds to pay VPL’s Engineer and fund staff to function the manufacturing strains.
In an try to bypass the court docket order, Cardiff threw cash on the FTC.
VPL and Jason Cardiff made gives to the FTC to settle the case.
The gives are excess of the FTC would get in the event that they destroy VPL.
The FTC nonetheless suspected Cardiff wasn’t good for the cash, and demanded settlement upfront.
Cardiff took this request personally, claiming
the FTC’s incapacity to see that some threat is likely to be essential to fund a settlement illustrates the rigid perspective of company officers who usually are not involved concerning the constituency they purportedly serve.
He even went as far as to border the FTC as standing in the way in which of ‘HHS’s means to guard the general public from the hazards of the Coronavirus.’
The court docket rejected Cardiff’s arguments, falling again on the reasoning the VPL Medical preliminary injunction was granted.
Paying homage to their arguments towards the Court docket’s July 7 Preliminary Injunction, Cardiff and VPL haven’t supplied a authorized foundation on which to take away the Receiver.
The Receiver has been ordered to “[c]onserve, maintain, handle, and forestall the lack of all VPL Property, and carry out all acts vital or advisable to protect the worth of these Property.”
Primarily based on the data earlier than the Receiver, the Receiver didn’t clearly violate its fiduciary obligation or its Court docket-ordered obligation to stop lack of VPL Property by spending cash to meet a contract that gave the impression to be doomed to fail.
Furthermore, eradicating the Receiver at this stage would trigger the property irreparable hurt, because the Court docket has already amply defined its issues of asset dissipation (and Cardiff and VPL’s proposed order seeks to pay $20,000 per thirty days to each Bedi and Cardiff, with out temporal limitation or clarification).
The Court docket thus doesn’t discover that the equities require terminating the Receiver’s duties over VPL.
Nor have Cardiff and VPL acknowledged with enough particularity based mostly on credible info what the Court docket ought to order the Receiver to do within the different.
Criticising communication between the events, concern was expressed over the submitting of
legally baseless advert hominem assaults and last-minute purposes to the Court docket.
The Receiver has been ordered to file a report detailing the present standing of VPL Medical’s HHS contract.
The court docket’s order was made on July sixteenth. As on the time of publication a report hasn’t been filed.
In associated information, the FTC has signaled it intends to file for abstract judgment with respect to the Redwood case.
That is by way of a movement requesting permission to file an extended than allowed memorandum in assist of abstract judgment. The Cardiffs have opposed the movement.
A choice on the FTC’s request stays pending.