By Eric G. Pearson, Foley & Lardner LLP
It’s an ancient principle of equity, drawn from Roman law: Equity relieves the vigilant, not those who sleep upon their rights. And it sums up quite well the Seventh Circuit’s recent decision in SEC v. First Choice Management Services, Nos. 14-1270 & 14-2284 (Sept. 11, 2014). First Choice did not involve equity (or even cite the maxim); it concerned an untimely motion to intervene. But the principle was the same, and it’s a good lesson for potential intervenors.
The court, in an opinion written by Judge Posner, affirmed the district court’s denial of a motion to intervene as untimely in a receivership proceeding. The intervenor knew that the receiver proposed to sell the property to which the intervenor had an adverse claim six months before seeking to intervene and had even been involved for over a decade in what the court described as “protracted negotiations” with the receiver to reclaim the property. But the intervenor never was a litigant and, the court held, “had no possible excuse for waiting for six months after [learning of the receiver’s adverse claim] before moving to intervene.” Instead, it had “wait[ed] till the last minute to try to throw a monkey wrench into the deal.”
The Seventh Circuit was unwilling to brook that sort of “dawdling,” which created only more work for the receiver, purchaser, and district court. It affirmed the denial of the motion and dismissed an independent appeal challenging the sale order. Please see a full copy of this article here.