Solis v. Do et al

Filing 36

ORDER re 35 Adopting Joint Modification of the May 27, 2011 Consent Judgment. Signed by Judge Koh on 7/7/2011. (lhklc3, COURT STAFF) (Filed on 7/7/2011)

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Lawrence Brewster
Regional Solicitor
Daniel J. Chasek
Associate Regional Solicitor
Danielle L. Jaberg, (CSBN 256653)
Counsel for ERISA
Boris Orlov, Attorney (CSBN 223532)
Office of the Solicitor
United States Department of Labor
350 S. Figueroa St., Suite 370
Los Angeles, California 90071-1202
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorneys for the Plaintiff
United States Department of Labor

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UNITED STATES DISTRICT COURT

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FOR THE

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NORTHERN DISTRICT OF CALIFORNIA

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) Case No. C10-03823 LHK
)
)
) MODIFICATION OF THE MAY 27,
) 2011 CONSENT JUDGMENT &
Plaintiff,
) ORDER
)
v.
)
CUONG VIET DO, an individual, THE MILI )
GROUP, INC. A California corporation, and )
THE MILI GROUP RETIREMENT PLAN, )
)
an employee benefit plan.
)
)
Defendants.
)
)
)
)
)
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)
)
HILDA L. SOLIS,
Secretary of Labor,
United States Department of Labor,

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Modification of the May 27, 2011 Consent Judgment & Order

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Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of La-

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bor, Employee Benefits Security Administration (“Secretary”) and Defendants Cuong

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Viet Do, The Mili Group, Inc. and The Mili Group Retirement Plan (“Plan), an em-

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ployee benefit plan respectfully request this Court to Modify the Consent Judgment &

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Order that it approved on May 27, 2011 as listed below:

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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that the May 27,

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2011 Consent Judgment and Order is fully incorporated herein by reference with the ex-

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ception of Paragraph 5, which is modified as follows:

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5(a). Michael J. FitzGibbons, FitzGibbons and Company, Inc., 8300 N. Hayden

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Rd., Suite A100, Scottsdale, AZ 85258, is herby appointed as an “Initial Independent Fi-

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duciary” to the Plan and has the following duties and responsibilities:

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(1).

The Initial Independent Fiduciary shall have the discretionary authority to

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collect, marshal and administer all of the assets of the Plan, including managing, market-

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ing, leasing and selling the real property owned by the Plan, described as Unit 718,

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Meadow Lake Palm Harbor Condominiums, 2690 Coral Landings Boulevard, Palm

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Harbor, Florida 34684 (“Condominium” or “Florida Property”) and to take further action

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with respect to the Plan as appropriate. Within 30 days of the sale of the Florida Prop-

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erty, the Initial Independent Fiduciary shall transfer all remaining Plan assets (less the

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amounts necessary for payment of Court approved fees and expenses as described in pa-

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ragraphs 5a(7) & (8)) to be held in trust for the Plan by the Successor Independent Fidu-

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ciary named in paragraph 5(b), infra, who shall have the discretionary authority to col-

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lect, marshal, pay out and administer all of the assets of the Plan, and to take further ac-

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tion with respect to the Plan as appropriate, including the orderly termination of the Plan

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when all of the assets have been distributed to all eligible participants and beneficiaries

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and it is prudent to do so;

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Modification of the May 27, 2011 Consent Judgment & Order

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(2).

The Initial Independent Fiduciary shall have all the rights, duties, discre-

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tion, and responsibilities of a trustee, fiduciary, and Plan Administrator under ERISA,

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except as limited by this Order;

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(3).

The Initial Independent Fiduciary is authorized to delegate or assign fiduci-

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ary duties as appropriate and allowed under the law and may retain such as assistance as

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he may require, including attorneys, accountants, real estate professionals, actuaries, and

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other service providers;

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(4).

The Initial Independent Fiduciary shall have full access to all data, informa-

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tion, and calculations in the possession of the respective Plans and under their control,

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including information and records maintained by the custodial trustees or service pro-

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viders of the Plan;

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(5).

ing the disposition of assets of the Plan; and

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The Initial Independent Fiduciary is authorized to give instructions respect-

(6).

The Initial Independent Fiduciary shall comply with all applicable rules and

(7)

The Initial Independent Fiduciary shall be bonded as required by ERISA §

laws;
412, 29 U.S.C. § 1112.
(8).

Pursuant to Article 2, Section 3.2.7 of the governing Plan document, the

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Initial Independent Fiduciary’s reasonable fees and expenses may be charged against the

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assets of the Plan;

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(9)

Following the entry of this Consent Judgment & Order by the Court, the

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Initial Independent Fiduciary shall be required to present to the Court and the Secretary,

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on a quarterly basis, an itemized application for the payment of fees and expenses (“Fee

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Application”). The Fee Application shall include the hourly rates of pay, dates and

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hours of work, a description of work performed, and an itemized statement of expenses.

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The Initial Independent Fiduciary’s hourly fee schedule is attached hereto as Exhibit D

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and incorporated herein. The Secretary requests that the Fee Application shall be

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deemed approved, unless the Secretary specifically objects to the Fee Application within

Modification of the May 27, 2011 Consent Judgment & Order

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fifteen business days. In the event the Secretary objects to the Fee Application, the Sec-

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retary requests that the Court decide whether the Independent Fiduciary’s application

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should be granted;

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(10). The Initial Independent Fiduciary shall be paid the approved fees and expenses after the sale of the Florida Property;

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(11). The Initial Independent Fiduciary shall notify the Successor Independent
Fiduciary at least 30 days prior to the closing of the sale of the Florida Property.

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(12). Upon the final sale of the Florida Property and the subsequent transfer of

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the Plan assets to the Successor Independent Fiduciary, Mr. FitzGibbons, FitzGibbons

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and Company, Inc., shall be removed as the Independent Fiduciary of the Plan.

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5(b). Upon the sale of the Florida Property, Jeanne Brynt, Receivership Man-

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agement Inc., 783 Old Hickory Blvd., Suite 255, Brentwood, TN 37027, shall be ap-

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pointed as the Successor Independent Fiduciary to the Plan. Prior to the sale of the Flor-

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ida Property and until the transfer of Plan assets described in Paragraph 5(a)(1), the Suc-

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cessor Independent Fiduciary shall have no fiduciary responsibilities. Immediately upon

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receipt of the transferred Plan assets pursuant to Paragraph 5(a)(1), the Successor Inde-

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pendent Fiduciary shall have the following duties and responsibilities:

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(1).

The Successor Independent Fiduciary shall have the discretionary authority

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to collect, marshal, pay out and administer all of the assets of the Plan, and to take fur-

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ther action with respect to the Plan as appropriate, including termination of the Plan

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when all of the assets have been distributed to all eligible Plan participants and benefici-

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aries;

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a.

The eligible Plan participants and beneficiaries entitled to alloca-

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tions/distributions pursuant to the governing Plan Documents and the Consent Judgment

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& Order are identified on Exhibit A attached to the May 27, 2011 Consent Judgment &

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Order; and

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b.

In allocating any benefits due under the Plan and this Consent Judg-

ment & Order, the Successor Independent Fiduciary shall, pursuant to Article 3, section

Modification of the May 27, 2011 Consent Judgment & Order

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2.3.1(e) of the Plan Document, adjust any amounts due to Minha Do by recognizing that

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she obtained a $50,000 distribution from the Plan in July of 2007.

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(2).

The Successor Independent Fiduciary shall, pursuant to the procedures out-

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lined in the Employee Benefits Security Administration’s Field Assistance Bulletin

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2004-02, exercise reasonable care and diligence to identify and locate each participant

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and beneficiary of the Plan who is eligible to receive a distribution under the terms of the

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Plan;

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(3).

The Successor Independent Fiduciary shall have all the rights, duties, dis-

cretion, and responsibilities of a trustee, fiduciary, and Plan Administrator under ERISA;
(4).

The Successor Independent Fiduciary is authorized to delegate or assign fi-

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duciary duties as appropriate and allowed under the law and may retain such as assis-

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tance as he may require, including attorneys, accountants, actuaries, and other service

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providers;

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(5).

The Successor Independent Fiduciary shall have full access to all data, in-

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formation, and calculations in the possession of the respective Plans and under their con-

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trol, including information and records maintained by the custodial trustees or service

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providers of the Plan;

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(6).

The Successor Independent Fiduciary is authorized to give instructions re-

specting the disposition of assets of the Plan;

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(7).

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and laws;

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(8)

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The Successor Independent Fiduciary shall comply with all applicable rules
The Successor Independent Fiduciary shall be bonded as required by

ERISA § 412, 29 U.S.C. § 1112.
(9).

Pursuant to Article 2, Section 3.2.7 of the governing Plan document, the

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Successor Independent Fiduciary’s reasonable expenses and fees may be charged against

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the assets of the Plan;

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(10). Following appointment, the Successor Independent Fiduciary shall be required to present to the Court and the Secretary an itemized application for the payment

Modification of the May 27, 2011 Consent Judgment & Order

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of fees and expenses on a quarterly basis (except that, if all the proceeds from the sale of

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the Florida Property have been distributed and there are no assets in the Plan, the Suc-

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cessor Independent Fiduciary may submit this application on an annual basis, until the

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commencement of the payment plan under paragraph 6 (b) of the May 27, 2011 Consent

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Judgment & Order). The Fee Application shall include the hourly rates of pay, dates

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and hours of work, a description of work performed, and an itemized statement of ex-

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penses. The Initial Independent Fiduciary’s hourly fee schedule is attached hereto as

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Exhibit E and incorporated herein. The Secretary requests that the Fee Application shall

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be deemed approved, unless the Secretary specifically objects to the Fee Application

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within fifteen business days. In the event the Secretary objects to the Fee Application,

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the Secretary requests that the Court decide whether the Independent Fiduciary’s appli-

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cation should be granted.

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5(c). Within ten days of the entry of this Modification of the May 27, 2011 Con-

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sent Judgment & Order by the Court, Defendant Do shall deliver to the Initial Independ-

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ent Fiduciary, identified in Paragraph 5(a), all Plan documents, and all other documents

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related to the Plan, including all documents related to the ownership of the Florida Prop-

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erty. In addition, Defendant Do shall execute all necessary documents to transfer title of

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the Florida Property as directed by the Initial Independent Fiduciary.

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The Court directs the entry of this Modification to the May 27, 2011 Consent
Judgment & Order as a final order.

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July 7, 2011

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Dated: _____________

________________________
Lucy H. Koh,
United States District Judge

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Modification of the May 27, 2011 Consent Judgment & Order

Page 6

EXHIBIT D

FitzGibbons and
Company, Inc.

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co ale rizo 52

P on (480 9 -4 1
h e: ) 48 35
F
ax: (48 ) 4
0 43-59
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COMPENSATION AND EXPENSES PAYABLE

I.

RATES PAYABLE FOR EXPERT FIDUCIARY SERVICES
Hourly Rate
Michael J. FitzGibbons
Staff

II.

$200.00
$100.00 to $185.00

REIMBURSABLE EXPENSES
Expense Item
Long distance telephone
Overnight delivery service
Fax transmissions
Photocopies
Rail
Airline travel
Hotels
Rental car or taxi fare
Parking
Bonds and other incidentals

III.

Reimbursement Rate
Actual cost
Actual cost
$0.25 per page
$0.10 per page
Actual cost
Actual cost/Coach only
Actual room rates and taxes
Actual cost
Actual cost
Actual cost

UNACCOUNTABLE PER DIEM PER PERSON
Per Diem

Rate

Full day
Partial day

GSA
GSA

EXHIBIT E

Receivership Management, Inc.
783 Old Hickory Blvd., Suite 255 Brentwood, TN 37027 [phone] Fax [phone]

Effective July 1, 2008

Fee Schedule for Receivership Management, Inc:

Jeanne Barnes Bryant
Rob Moore
Billy Spaulding
Sarah Forton
Information Tech Consultant

$150 per hour
$130 per hour
$110 per hour
$45 per hour
$65 per hour

Overhead charges are allocated pro-rata based upon the number of hours billed to a receivership. Currently
overhead is billed at $11.00 per hour. Overhead includes expenses of a general nature which cannot be charged
to a specific receivership. Examples include depreciation on equipment, insurance, etc.
Rent is allocated to a receivership based on a physical presence (ie. Files, records, and other documentation) at
the RMI location and the time spent on that receivership. It is by its nature an estimate and is normally set at the
beginning of each quarter and remains constant during that quarter. The allocation is reviewed each month and
if there is a material change in either the physical presence occupied or time spent on the receivership, the rent
allocation is adjusted to reflect current conditions.
Office Expenses which can be specifically identified to a receivership (eg. telephone, postage, copies etc.) are
charged to the receivership as incurred.
Travel: Per Diem-$39.00 for meals and incidentals (first and last day of travel 75% of per diem amount
allowed). Per Diem paid only if overnight travel is required. Transportation: By private car: 50 cents per mile;
By common carrier: Actual ticket cost at coach. Lodging: Actual amount charged.