NEWTEK SOLUTIONS, INC. VS. SHANE MCBRIDE, ET AL

Shane McBride, the 51% majority shareholder of SME, allegedly unlawfully holds himself out as the sole director and multiple officers of the company, despite never having called a vote of SME’s directors nor shareholders as required. (Naicker Decl., ¶¶ 3-4.) Similarly, his wife, defendant Tracie McBride, was never properly elected to be a director of SME, nor is a payrolled employee. Allegedly, Shane McBride and Tracie McBride, for years concealed from Newtek that they were using SME’s credit and fuel cards for their personal use. (Id., ¶ 11.)

Naicker contends that she and the agents of Newtek whom she assigned to SME’s work, brought SME its best California client and over $1,000,000 profit to its shareholders. (Naicker Decl., ¶ 7.) Then in 2021, Shane McBride moved to Wisconsin, directing resources away from business in California to expand business in Wisconsin, and becoming an absentee owner who no

June 17, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ longer worked in the field. SME relied more heavily on its existing employees, increasing its payroll obligations. Through Naicker, Newtek urged Shane McBride to infuse more capital into the business to ensure that its construction projects would be completed and its payroll obligations met. However, Shane McBride provided Newtek with only $51,000 in loans. (Id., ¶¶ 8-9.)

Newtek loaned almost $500,000 to SME from 2021 to about February 2025. (Id., ¶ 10.) Naicker consistently informed Shane McBride that the loans she provided were costly due to withdrawal penalties, urging him to solve this problem or sell SME. (Ibid.) Shane McBride attempted only to make SME’s best client pay invoices before they were due, causing resentment and distrust in that business relationship. (Ibid.)

Citing its business losses and Shane McBride’s lack of interest in operating SME’s business in California, Naicker and Newtek urged Shane McBride to retain a fiduciary to appraise SME and list it for sale. Although he agreed to sell SME, he took no steps towards effecting a sale.

Although on or about January 22, 2025, Shane McBride acknowledged SME’s debts to Newtek and need for income, on or about February 7, 2025, Tracie McBride attempted to debit SME’s bank accounts and without authority, sent a “directive” to Naicker that SME would no longer pay its obligations and that all transaction requests should be sent to Tracie McBride. (See Naicker Decl., ¶¶ 13-14.)

Allegedly, on about February 5, 2025, Shane McBride promised to repay Newtek’s loan of $100,000 (FAC, ¶ 46) and told Newtek that he was trying to resolve a major fraud. (Id., ¶ 25.) As SME’s financial controller and in her role as Newtek’s president, which had the authority as a minority shareholder to inspect its records, Naicker investigated the fraud with Bank of America, which found that unauthorized transfers had been made by Tracie McBride. (Naicker Decl., ¶ 15.) The bank’s fraud department saw that Naicker was an authorized signatory for SME, and that Tracie McBride was not, and reversed the charges. (Ibid.) Further to protect SME’s funds, the bank opted to write a cashier’s check to SME and gave it to Naicker to hold in trust for the company.

When Naicker reported this to Shane McBride, including stressing that the cashier’s check was made out to SME, he nonetheless accused her of theft. He further broadcast this accusation to multiple third parties, including business customers and vendors, to tarnish the reputations of herself and of Newtek. Shane McBride further terminated her on about February 11, 2025 (Naicker Decl., ¶ 16), and shut Newtek out of SME’s business, both financially and regarding high-level decisionmaking.

Through counsel, Newtek requested multiple actions by SME via demand letter on or about February 26, 2025. Less than 20 minutes after the demand was made, Shane McBride’s counsel advised Newtek that it was disregarding the demand. Defendants allegedly threatened the bank manager for allowing a fraudulent transfer in the form of the cashier’s check, to the point where the bank pressed Newtek for the return of the check despite its seeking an interpleader, and finally voided the cashier’s check. Also, SME’s payroll processor contacted Newtek to advise that at least $15,461.31 had not timely been received for payroll. Newtek

June 17, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ demanded that SME remediate, but the processor terminated Newtek’s payroll account and sent $19,201.63 owed by SME to collections.

Moreover, in about April 2025, while this court’s TRO had frozen SME’s assets, it transferred at least $15,000 to Tracie McBride. Shortly after this court issued the TRO, Newtek suddenly lost access to SME’s financial records and shared business email. Newtek contacted the email service provider and was told that someone claiming to be Naicker had called to cancel the account, so that Shane McBride was its only authorized user. (See Naicker Decl., ¶ 18, apparently placing this occurrence in March 2025.)

By its Motion, Newtek asks the court to enforce its Stipulation and Preliminary Injunction Order, filed on April 24, 2025, which plaintiff also refers to as the “Stipulated Injunction” (Motion, at pp. 3:5-8, 3:21-22, and passim) and the “Preliminary Injunction.” (See, e.g., id., at pp. 3:5, & 5:23-24). Newtek also asks the court to appoint a receiver for SME, or alternatively, to appoint directors for SME. Newtek further asks that the court impose monetary sanctions on defendants in the amount of $56,157.50. (Code Civ. Proc., § 1218, subd. (a).) Newtek seeks its attorney fees in costs incurred in bringing the Motion (McClelland Decl., ¶¶ 20-21), for defendants’ willful violation of the Order, which plaintiffs allege constitutes civil contempt.

Newtek further asks the court to issue an Order to Show Cause why defendants should not be held in civil contempt for the violations of its Order.

Finally, Newtek asks the court to order defendants to comply with its Order within thirty (30) days of its Order on the instant Motion, and to order defendants’ Answers and Cross- Complaint stricken and enter default against defendants in this action if they do not comply.

B. Plaintiffs’ Unopposed Assertions and Evidence in Support of the Motion

Newtek asserts that in addition to the allegations of the Complaint, defendants continue to mismanage SME, and that SME’s majority shareholder, Shane McBride, continues to disregard corporate requirements and to oppress its minority shareholder, Newtek. In particular, though the Motion was brought over six months after the court signed the Order, plaintiff alleges that defendants have not fulfilled any of its requirements.

Despite defendants’ noncompliance including refusal to provide Newtek with access to SME’s records, through the limited access achieved by subpoenas (McClelland Decl., 18, & exh. 12) Newtek has found evidence of multiple serious financial improprieties by Shane McBride and Tracie McBride, including, inter alia: nearly $100,000 in Zelle payments to the latter over these six months; loan payments that were not deposited in Defendant SME’s accounts; retroactive payroll payments to Defendant Shane McBride in excess of agreed amounts; and over $1,000 in overdraft and other bank fees. (See, e.g., Naicker Decl., ¶¶ 24-35, & exhs.

E-G.) Further, Shane McBride allowed the suspension of SME’s contractor’s bond due to the cancellation of a surety bond. (Naicker Decl., ¶ 38, & exh. K.) Plaintiffs contend that this evidence, derived from only limited access to information to which Newtek is entitled, shows mismanagement of SME, misconduct, and fraud by Shane McBride and Tracie McBride, who

June 17, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ continue to treat SME’s funds as their personal funds so that further action by this court is required.

In addition, plaintiffs contend that defendants’ failure to provide them with access to SME’s financial accounts as ordered impedes the progress of the instant action. Newtek is retaining a forensic accountant to assess defendants’ financial irregularities and prepare for trial, but that the accountant cannot inspect SME’s financial records without the access provided by the Order, which defendants continue to violate.

Defendants rejected Newtek’s proposal of a neutral director for SME, with little explanation. (McClelland Decl., ¶¶ 14-16, & exh. 10.) Shane McBride agreed to surrender the remainder of his term as director of SME to hold an election for all three directors, asserting that SME had “2023” Bylaws of which Newtek was unaware. (Id., ¶ 12, & exh. 7; Naicker Decl., ¶ 42, & exh. M.)

Plaintiffs further contend that defendants further appear to be using SME’s business assets to fund a separate business in Louisiana, without informing Newtek. (Naicker Decl., ¶ 35, & exh. H.)

C. Defendants are Ordered to Comply with the Court’s Injunction Order

The court has the power to enforce its Order. (Code Civ. Proc., § 128, subd. (a)(4); id., § 177, subd. (b).) “A failure to comply with a lawful court order is a form of civil contempt (Code Civ. Proc., § 1209, subd. (a)(5)), the consequences of which can include imprisonment.” (Hassell v. Bird (2018) 5 Cal.5th 776, 793.)

Plaintiffs seek a contempt order for defendants’ willful failure to comply with the court’s prior injunction order. “In order to institute a proceeding for indirect contempt under the Code of Civil Procedure, an affidavit must be presented to the court setting forth the facts constituting the contempt.” (In re M.R., 220 Cal.App.4th 49, 57 [citing Code Civ. Proc., § 1211, subd. (a)].) Code of Civil Procedure, section 1211, subdivision (a), provides in pertinent part that “[w]hen the contempt is not committed in the immediate view and presence of the court, or of the judge at chambers, an affidavit shall be presented to the court or judge of the facts constituting the contempt, . . .”

The “affidavit is like a complaint in a criminal case; it frames the issues and must charge facts which show a contempt has been committed.” (Reliable Enterprises, Inc. v. Superior Court (1984) 158 Cal.App.3d 604, 616 (Reliable Enterprises); In re Cowan (1991) 230 Cal.App.3d 1281, 1286 (Cowan) [“It has long been the rule that the filing of a sufficient affidavit is a jurisdictional prerequisite to a contempt proceeding.”]; see also Koehler v. Superior Court (2010) 181 Cal.App.4th 1153, 1169 (Koehler); Mossman v.

Superior Court (1972) 22 Cal.App.3d 706, 709 (Mossman).) “Without an initiating affidavit, a contempt order is void. (In re M.R., supra, 220 Cal.App.4th at p. 57.

“In cases of indirect contempt the affidavit required by statutory declaration is the means by which the accused is given notice of the nature of the charge against which he must defend.” (Cowan, supra, 230 Cal.App.3d at p. 1288 [citing Freeman v. Superior Court (1955) 44 Cal.2d

June 17, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ 533, 536–537; Mery v. Superior Court (1937) 9 Cal.2d 379, 380; In re Gould (1961) 195 Cal.App.2d 172, 175].)

The OSC re contempt must be personally served on the alleged contemnor (and not on his, her, or its counsel). (Koehler, supra, 181 Cal.App.4th at p. 1169; Cedars–Sinai Imaging Medical Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1287-1288 (Cedars-Sinai).) And “[t]he accused is entitled to a full and fair hearing that satisfies due process.” (In re M.R., supra, 220 Cal.App.4th at p. 58.)

The Naicker Declaration sets out factual allegations of events both pre-and post-dating the court’s April 24, 2025 Order. Only those actions taken after the Order was issued can form the basis of a contempt proceeding. It is not for the court to tease out the allegations supporting a contempt from those that supplied the basis for the injunction. Accordingly, the court is not issuing an OSC re contempt at this time.

D. Sanctions

Plaintiffs seek sanctions in the form of recovery of their attorneys’ fees under Code of Civil Procedure, section 1218, subdivision (a). That statute applies to contempts, and is not applicable at this time.

E. Kevin Singer is Appointed as the Receiver for SME

California law provides that:

If, at the time of the filing of a complaint for involuntary dissolution or at any time thereafter, the court has reasonable grounds to believe that unless a receiver of the corporation is appointed the interests of the corporation and its shareholders will suffer pending the hearing and determination of the complaint, upon the application of the plaintiff, and after a hearing upon such notice to the corporation as the court may direct and upon the giving of security pursuant to Sections 566 and 567 of the Code of Civil Procedure, the court may appoint a receiver to take over and manage the business and affairs of the corporation and to preserve its property pending the hearing and determination of the complaint for dissolution.

(Corp. Code. § 1803; see also Gold v. Gold Realty Co. (2003) 114 Cal.App.4th 791.)

The unopposed evidence discussed above, and set forth in the Naicker Declaration, provides reasonable grounds for the court’s finding that the interests of SME and of Newtek, its 49% shareholder, will suffer pending the hearing and determination of the First Amended Complaint in this action. The court has reviewed the declaration submitted by Kevin A. Singer and hereby appoints him as a receiver to take over and manage the business and affairs of SME, and to preserve its property pending the hearing and determination of the FAC, which includes two causes of action for the involuntary dissolution of SME. Before entering upon his duties as the receiver of SME, Mr. Singer must be sworn to perform those duties faithfully, and “shall give an undertaking to the State of California” in the amount of $10,000.00, “to the effect that the

June 17, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ receiver will faithfully discharge the duties of receiver in the action and obey the orders of the court therein. The receiver shall be allowed the cost of the undertaking.” (Code Civ. Proc., § 567.) Plaintiffs are to submit to the court a proposed order appointing the receiver and setting out his duties and responsibilities.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, plaintiff’s counsel shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, Rule 3.1312 and Local Rule 3.403(b)(iv), and provide written notice of the ruling to all parties who have appeared in this action. The order should be e-filed only, do not email or mail a hard copy to the court.