A tentative ruling has signaled it’s unlikely Jay Noland will acquire entry to ~$450,000 tied up in Enhanced Capital Funding.
Enhanced Capital Funding (ECF) seems to be a shell firm partially owned by Noland.
The FTC asserts Noland owns 80% of ECF, with the remaining 20% owned by his spouse Lina.
Fairly than preserve every little thing in home, Noland created ECF to obtain royalty funds from Success By Dwelling.
Beneath that settlement, ECF granted Success By Dwelling permission to make use of
Recipes and Formulations for Nutraceuticals, Rights to Manufacture and Promote, Trademark license for Coffees, Teas, and different Well being Merchandise.
In trade Success By Well being paid ECF $500,000 plus fifteen % of its internet income.
The Royalty settlement was signed off on by Noland from ECF’s aspect. Lina Noland signed the settlement on behalf of Success By Well being.
Jay Noland processed funds between the businesses, owing to him proudly owning and controlling each company financial institution accounts.
So far Success By Well being has transferred between $443,000 to $448,000 to ECF.
These funds are at the moment below the management of the court-appointed Success By Well being Receiver.
On June twenty sixth ECF filed a movement requesting the corporate and its belongings be launched from Receivership management. Noland desires to make use of ECF funds to pay authorized charges.
In anticipation of an upcoming listening to on the matter, on July twenty ninth the courtroom issued a tentative ruling.
Within the ruling the courtroom cites ECF’s movement arguments as being offered
in considerably (of a) shotgun trend and in typically colourful and hyperbolic language.
The courtroom’s evaluation of ECF’s arguments revealed them to be “unclear”.
Upon weighing the steadiness of equities between the 2 events, the courtroom concluded “they don’t help ECF’s request”.
Regardless that ECF is a non-party that didn’t transact immediately with any of SBH’s clients, the undisputed proven fact that ECF is owned and managed by Noland (and could also be owned by Lina Noland, too) makes the freezing of its belongings permissible.
The info and equities of this case help the freeze.
Noland with the ability to increase $150,000 after the preliminary injunction was granted earlier this 12 months was additionally a consideration.
One amusing argument raised by ECF (that neither the FTC or Receiver bothered addressing), is that the FTC’s lawsuit was the results of a former Success By Well being worker “actual(ing) revenge for getting caught committing adultery”.
Not surprisingly, the courtroom discovered “these arguments are largely unencumbered by authorized quotation and authority.”
The Court docket’s greatest guess as to their supposed significance is that they bear on the “balancing of equities” addressed … above.
To the extent this was ECF’s intention, the Court docket will not be persuaded that these arguments present its prior evaluation within the order granting the preliminary injunction was fallacious.
Consequently, the tentative ruling denies ECF’s request to be launched from the Receivership.
A listening to on the matter is scheduled for August 4th. Except Noland’s authorized staff pulls a rabbit out of their hat, it appears unlikely ECF will probably be launched.
Replace twentieth August 2020 – The movement requesting ECF be launched from the Success By Well being Receivership was denied on August sixth.