RESPONSE OF JON HARDER TO SEC'S OBJECTIONS TO DISTRIBUTION

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RESPONSE OF JON HARDER TO SEC'S OBJECTIONS TO DISTRIBUTION Powered By Docstoc
					    Stephen F. English, OSB #730843
    E-Mail: steve.english@bullivant.com
    Robert B. Miller, OSB #960068
    E-Mail: bob.miller@bullivant.com
    David VanSpeybroeck, OSB #954440
    E-Mail: david.vanspeybroeck@bullivant.com
    BULLIVANT HOUSER BAILEY PC
    300 Pioneer Tower
    888 SW Fifth Avenue
    Portland, Oregon 97204-2089
    Telephone: 503.228.6351
    Facsimile: 503.295.0915
    Attorneys for Jon M. Harder, and Kristin Harder



                             UNITED STATES DISTRICT COURT

                                     DISTRICT OF OREGON




     SECURITIES AND EXCHANGE
     COMMISSION,                                            Civil No.: 6:09-CV-6056-HO

                               Plaintiff,         RESPONSE OF JON HARDER TO
                                                  SEC'S OBJECTION TO THE
          v.                                      DISTRIBUTION PLAN OF RECEIVER
                                                  AND CHIEF RESTRUCTURING
     SUNWEST MANAGEMENT, INC.,                    OFFICER FOR SUNWEST
     CANYON CREEK DEVELOPMENT, INC.,
     CANYON CREEK FINANCIAL, LLC, and
     JON M. HARDER,

                               Defendants.


                 And

             DARRYL E. FISHER, J. WALLACE
             GUTZLER, KRISTIN HARDER, ENCORE
             INDEMNITY MANAGEMENT LLC,
             SENENET LEASING COMPANY, FUSE
             ADVERTISING, INC., KDA
Bullivant|Houser|Bailey PC        RESPONSE OF JON HARDER TO SEC’S OBJECTIONS TO
300 Pioneer Tower
888 SW Fifth Avenue                                          DISTRIBUTION PLAN
Portland, Oregon 97204-2089
Telephone: 503.228.6351                                                   Page 1
           CONSTRUCTION, INC., CLYDE
           HAMSTREET, and CLYDE A.
           HAMSTREET & ASSOCIATES, LLC.

                                     Relief Defendants.



                        Defendant, Jon Harder, (“Harder”) responds to the Securities and Exchange

           Commission’s Objections To The Distribution Plan Of Receiver and Chief Restructuring

           Officer for Sunwest Enterprise (“the SEC objection”) as follows:

                        The SEC appears to object to any plan that gives Jon Harder, Darryl Fisher, or Wally
           Gutzler (collectively “the insiders”) any chance of having any equity in the resulting
           companies. The Receiver’s plan provides that Harder, Fisher and Gutzler only begin to
           receive the benefit of any equity they hold in the company after the investors have been paid
           $500 million in value, or about the total amount invested. Once the $500 million threshold is

           reached, the Distribution Plan provides that the insiders then receive the benefit of their
           equity on a vesting schedule which starts at 5% and finally tops out at 25% once the
           investors have received over $1 billion dollars. The insiders will only receive the benefit of
           their equity to the extent, if any, that the company exceeds the bench marks described above
           in the first seven years.
                        The SEC objection is not well taken. Attached as Exhibit 1 is a transcript from a

           March 2nd court proceeding in which the SEC agreed to a structure that gave the insiders

           100% of the company once the investors were repaid. The current Distribution Plan only

           gives the insiders 25% of the company after the investors have been fully repaid. The

           Distribution Plan was agreed to in court by the CRO, and by Receiver Michael Grassmueck

           after a lengthy and difficult mediation. The SEC was invited to this mediation and chose to
           not attend. Receiver Grassmueck was appointed by the SEC and presumably has worked

           closely with the SEC throughout this case. Under the circumstances, the SEC’s current
Bullivant|Houser|Bailey PC                RESPONSE OF JON HARDER TO SEC’S OBJECTIONS TO
300 Pioneer Tower
888 SW Fifth Avenue                                                  DISTRIBUTION PLAN
Portland, Oregon 97204-2089
Telephone: 503.228.6351                                                           Page 2
           attempt to distance itself from the Receiver’s plan is improper and should be ignored.
                        DATED this 9th day of September, 2009.

                                                  BULLIVANT HOUSER BAILEY PC



                                                  BY         /s/ David VanSpeybroeck
                                                       Stephen F. English, OSB #730843
                                                       Robert B. Miller, OSB #960068
                                                       David VanSpeybroeck, OSB #954440
                                                       Telephone: 503.228.6351
                                                       Attorneys for Jon M. Harder, and Kristin Harder


           11946933.1




Bullivant|Houser|Bailey PC               RESPONSE OF JON HARDER TO SEC’S OBJECTIONS TO
300 Pioneer Tower
888 SW Fifth Avenue                                                 DISTRIBUTION PLAN
Portland, Oregon 97204-2089
Telephone: 503.228.6351                                                          Page 3