Sat Nam. On Wednesday, April 11, 2012 at a Status Conference in Portland, Judge Roberts issued a Draft Opinion Regarding Remedies in accordance with her Findings and Conclusions issued on December 13, 2011.
The Draft of her Ruling is posted on the SDW website in the Legal archive section. The Opinion does five things: (1) Transfers Golden Temple of Oregon, LLC (GTO) to a Receiver to manage it for the benefit of the Community; (2) Orders the Golden Temple Management, LLC (GTM) Defendants to repay to the Receiver all funds they received from GTO over and above their salaries; (3) Keeps the four UI members in place on the UI Board; (4) Orders the GTM and UI Defendants to return all bonuses and back vacation pay to the Receiver; and (5) Holds all UI Defendants and GTM Managers jointly liable for payment of all sums ordered to be repaid and reserves the right to enter a specific monetary judgment in the future if all sums are not repaid.
Her specific ruling on each of these points is set out below:
Golden Temple of Oregon, LLC interest of Golden Temple Management, LLC, To Be Conveyed Into Receivership For Benefit of Operating Nonprofits.
"However the interest conveyed to GTM, and the proceeds of that interest, flowed to GTM without consideration worthy of the name under the circumstances, and by violation of the fiduciary duties owed by UI, KIIT and their boards of directors (including Kartar Singh Khalsa, the chief beneficiary of these transactions). Accordingly, the interest conveyed to GTM, and proceeds of that interest, shall be conveyed to a receiver, to be appointed to take charge in that asset, to be managed and to be disposed of in a fashion consistent with the purposes of the trust: that is, to benefit the Sikh Dharma nonprofit institutions providing services to the Sikh Dharma community, in a manner that is consistent (to that extent only) with the application of the income from for-profit endeavors prior to the time that the utilization of the assets were bent to the private benefit of KITT and UI board members; thus, before August 28, 2007."
Compensation for Trust Funds Received by GTM and Individual Defendants.
- "GTM and its defendant members are required to pay over to the receiver appointed in accordance with this opinion, and for the purposes stated above, all funds and proceeds of funds received by GTM or by its members, other than salaries paid for performance of duties for the business of GTO."
- "Specifically included are "tax distributions" (whether distributions were, or were not, used to pay taxes)."
- "Those members of GTM who are personally named as defendants here are individually liable to restore to trust, by payment to the receiver, amounts equal to all funds the court has found to be distributions of trust funds." (This includes Kartar Singh and Karam Singh and means they could be made to pay back all the money owed, even beyond what they personally received.)
- "Each individual who was not a director or manager of KIIT or UI is liable for funds received by that individual." (This includes Ajeet Singh, Guru Hari Singh, Gurudhan Singh, and Robert Ziehl and means they only have to pay back what they each personally received.)
- "Each named defendant who as manager or director of KIIT/UI approved the August 2007 transfer of the Golden Temple business into Golden Temple of Oregon LLC is also jointly and severally liable for all amounts due to be paid to the receiver in accordance with the court's opinion." (This includes Kartar Singh, Peraim Kaur, Siri Karm Kaur and Sopurkh Kaur)
Management Of Other For-Profit, Trust Assets.
The Judge ruled that "the court will not remove persons appointed or elected to positions within UI, or its subsidiary KIIT, or restructure these or other entities."
Judge Roberts stated:
"The performance of the board members of UI/ KIIT in this matter, and most prominently that of Kartar Singh Khalsa, is disappointing. In the regards earlier explained, they violated fiduciary duties related to the trust they administered. The best that can be said of the behavior of any of the people involved in the Golden Temple transactions that were the basis for the trial is that they were reckless in the extreme, and as I have held, in specific regards the named defendants acted in brazen self-interest to the detriment of the trust. Furthermore, their unreliable and intentionally misleading dealings with the members of the benefitted community extended to include testimony in court that was misleading, unreliable, disingenuous, and contradictory. More than a few of the sworn statements and documents presented by defendants in this matter are dubious as to authenticity and authority. It became evident to the court in the course of the proceedings that little faith could be placed in the credibility of the individual manager/directors' testimony. Under these circumstances, there is considerable appeal to the urgings of the plaintiffs that all these individuals should be removed from positions of power over any valuable assets impressed by trust."
However the Court concluded:
"Whatever the merits or demerits, of the religious corporate structures and governance adopted by Yogiji, the court will not restructure essentially religious organizations along lines that might seem more democratic to the court, or that might seem fairer to elements within the religious community. The court will not enforce its view of the trustworthiness of persons placed in positions of religious authority by overriding the selection process established in governing documents of the Western Sikh Dharma organizations. Therefore, the court will not remove persons appointed or elected to positions within UI, or its subsidiaryKIIT, or restructure these or other entities."
Because of the First Amendment considerations, our lawyers were not surprised that Judge Roberts did not remove the UI Board members.
Past Compensation, Board Members and Managers, Employees
Judge Roberts ruled the following regarding bonuses, lump sum compensation and liability of the defendants:
- "... the bonuses paid to the individual named defendants by UI and KIIT, and by GTO, should all be reimbursed to the receiver as tainted funds, that should return to trust."
- "Included in the distributions were large sums paid by Golden Temple of Oregon, LLC, as lump sum compensation to members of Golden Temple Management, LLC for unused vacation time when working for Golden Temple of Oregon, Inc. I find that these payments were not based on a prior adopted rule or contract of the employment, and were not good faith payment of compensation for employment; but were made in order to conveying cash assets of the Golden Temple to Kartar Singh Khalsa and other executives and members of Golden Temple Management LLC. I find these payments to be in reality an unjustified distribution of trust assets and not a compensation for services. The individually named defendants who received such payments must pay over to the receiver the amounts received."
- "The individual defendants who, as managers of GTM, GTO, KIlT, KIIT-BV, or UI, authorized the payment of funds that are ordered paid over to the receiver, in accordance with this opinion, are all jointly and severally liable with each other and with named individual defendants in these actions, for the restoration of the assets."(This includes Kartar Singh, Karam Singh, Peraim Kaur, Siri Karm Kaur and Sopurkh Kaur.)
Money Judgments.
"To the extent that funds are not reimbursed in accordance with this order, to the receiver, the individual defendants will bear personal judgments based on the breach of fiduciary duty which caused the dissipation of the Golden Temple asset, and I will enter a supplemental judgment to that effect, upon proof of the deficiency in payments over to the receiver."
This means that each UI defendant is liable for the full amount owed by all the defendants, not just for the amount the individual personally received.
Our lawyers are pleased with the overall outcome. We got the business removed from the control of UI, substantial monetary penalties have been imposed on all defendants and because of the First Amendment and a very recent Supreme Court case almost exactly on point with our case, the private counsel and the AG were not surprised that Judge Roberts chose not to remove the UI Board members.
In addition to this ruling there are matters to be addressed in the bankruptcy court, on-going mediation and based on the scope and nature of the ruling further possibility of mutual resolution of the entire matter.
Judge Roberts has set another Status Conference for Friday, April 27th. The following day, on Saturday, John McGrory is planning to attend the Siblings of Destiny Meeting in Espanola to give us an update.
