Magistrate Judge Vera Scanlon has recommended that the US Eastern District Court of New York order GPB Capital Holdings placed into Receivership immediately and a litigation injunction be imposed.
Her recommendation further appoints Joseph Gardemal as the Receiver.
Judge Scanlon’s proposed order is posted below in PDF format. Down below the proposed order is a second PDF which shows ruling upon which she based her recommendation.
While discussing technicalities of the case, Judge Scanlon clearly ruled that David Gentile violated the Monitorship agreement when he attempted to take back control of GPB Capital by appointing his three directors and proposed to pay them salaries of up to $400,000 per year to do his bidding. This violation, in turn, allowed Monitor Gardemal to ask the court to place the firm into receivership.
The risk of allowing David Gentile and his cronies access to $1 billion in GPB Capital and to gain access to internal information poses a risk to investors and the firm itself. Indeed, GPB Capital’s acting CEO Rob Chmiel and its operating arm Highline Management consented to Receivership.
David Gentile overreached as usual and, predictably, his misdeeds caught up with him. We believe the Court will place GPB Capital Holdings into Receivership and grant the litigation injunction.
Report and Recommendation:
SEC Letter of August 2, 2023 to Judge Scanlon: