United States Securities and Exchange Commission v. Ahmed et al

Filing 2245

ORDER granting Receiver's Eleventh 2106 and Twelfth 2186 Motions for Fees. Signed by Judge Janet Bond Arterton on 5/11/2022. (Walker, M.)

Case 3:15-cv-00675-JBA Document 2245 Filed 05/11/22 Page 1 of 5

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
IFTIKAR AHMED,
Defendant, and

Civil No. 3:15cv675 (JBA)
May 11, 2022

IFTIKAR ALI AHMED SOLE PROP; I-CUBED
DOMAINS, LLC; SHALINI AHMED; SHALINI
AHMED 2014 GRANTOR RETAINED ANNUNITY
TRUST; DIYA HOLDINGS LLC; DIYA REAL
HOLDINGS, LLC; I.I. 1, a minor child, by and
through his next friends IFTIKAR and SHALINI
AHMED, his parents; I.I. 2, a minor child, by and
through his next friends IFTIKAR and SHALINI
AHMED, his parents; and I.I. 3, a minor child, by
and through his next friends IFTIKAR and
SHALINI AHMED, his parents,
Relief Defendants.

RULING ON RECEIVER’S ELEVENTH AND TWELFTH MOTIONS FOR FEES
Receiver Stephen Kindseth moves for payment of fees and expenses incurred on
behalf of the Receivership Estate. (Mots. for Fees [Docs. ## 2106, 2186].) Defendant opposes,
(Def.’s Opp’n [Docs. ## 2113, 2207]), and Relief Defendants join that opposition to the extent
that it does not conflict with their interests, (Relief Defs.’ Opp’n [Docs. ## 2114, 2208]).
Plaintiff Securities and Exchange Commission (“SEC”) submitted no briefing on the issue. For
the reasons that follow, the Receiver’s Eleventh and Twelfth Motions for Fees are granted.
I.

Background
The Court assumes the parties’ familiarity with the facts and history of this case but

will briefly review the background relevant to this motion. The Receiver1 was appointed on
1

Initially, Jed Horwitt was appointed as Receiver. On November 8, 2021, the Court granted

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December 20, 2018. (Appointment Order [Doc # 1070].) The Appointment Order states that
the Receiver and persons retained to assist in his administration of the Receivership Estate
are “entitled to reasonable compensation and expense reimbursement from the
Receivership Estate,” subject to “prior approval of the Court” and according to
predetermined hourly billing rates. (Id. at 16.) The Receiver “shall apply to the Court for
compensation and expense reimbursement from the Receivership Estate” within forty-five
days after the end of each calendar quarter. (Id.) All such fee applications are “interim,”
“subject to cost/benefit and final reviews at the close of the receivership,” and subject to a
holdback in the amount of 20% of the amount of fees and expenses for each application, but
the “total amounts held back during the course of the receivership may be paid out at the
discretion of the Court as part of the final fee application.” (Id. at 15-16.) The Appointment
Order sets out certain requirements for the content of each fee application. (Id. at 17.)
II.

Discussion
The Receiver moves for the payment of fees for the following periods: (1) July 1, 2021

through September 30, 2021, (Eleventh Mot. for Fees (“Eleventh Mot.”) [Doc. # 2106] at 1);
and (2) October 1, 2021 through December 31, 2021, (Twelfth Mot. for Fees (“Twelfth Mot.”)
[Doc. # 2186] at 1). The Eleventh Motion represents 374.20 hours worked by the Receiver
and Zeisler & Zeisler (“Z&Z”) and seeks payment in the amount of $77,012.95 in professional
and paraprofessional fees, $2,450.00 in Receiver’s fees, and reimbursement of actual and
necessary expenses in the amount of $1,184.89. (Eleventh Mot. at 3.) The Twelfth Motion
represents 221.8 hours worked by the Receiver and Z&Z and seeks payment in the amount
of $43,969.50 in professional and paraprofessional fees, $525.00 in Receiver’s fees, and
reimbursement of actual and necessary expenses in the amount of $1,123.82. (Twelfth Mot.
at 2-3.)

the Receiver’s motion to substitute Stephen Kindseth as Receiver.
2

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The “fees assessed reflect the hours worked by the Receiver, Z&Z attorneys and
paraprofessionals, and the hourly rates applicable at the time that they rendered their
services, as modified by the significant discounts provided by the Receiver and Z&Z” for this
matter. (Twelfth Mot. at 3.)2 The Receiver represents that the fee applications
take into account all relevant circumstances and factors as set forth in the
Connecticut Rules of Professional Conduct and the SEC Guidelines, including
the nature of the services performed, the amount of time spent, the experience
and ability of the professionals and paraprofessionals working on this
engagement, the novelty and complexity of the specific issues involved, the
time limitations imposed by the circumstances, and the responsibilities
undertaken by the Receiver and Z&Z under the Appointment Order.
(Id. at 3-4.) The applications include narrative descriptions of the services provided in the
time records and summaries of the Receiver’s administration of the Receivership Estate. (Id.
at 4.) The Receiver does not seek “reimbursement for secretarial, word processing,
proofreading or document preparation expenses (other than by professionals or
paraprofessionals), data processing and other staff services (exclusive of paraprofessional
services, or clerical overtime).” (Id.) The fee applications reflect the substantial public service
discounts determined at the time of the Receiver’s appointment, including a twenty-five
percent discount to regularly applicable hourly rates for all legal professionals and
paraprofessionals. (Id.) In accordance with the SEC Guidelines, the Receiver and Z&Z
categorized fees incurred by certain “activity categories.” (Id. at 6.) The Receiver provided a
detailed description of the activities of the Receivership Estate during each billing period.
(Id. at 13-24; Eleventh Mot. at 13-21.)
In opposition, Defendant either repeats the same arguments unsuccessfully raised in
his objections to the Receiver’s previous motions for Receiver Fees3 or raises arguments
2 Where the

Receiver’s motions contain significant overlap in content, the Court cites only to
the Twelfth Motion for Fees.
(See, e.g., Def.’s Opp’n to Receiver’s Twelfth Mot. at 1 (“The Court must deny the Twelfth
Application for the same reasons as the Defendant outlined in his earlier oppositions. . . .”).)
3

3

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inappropriate for consideration on these motions.4 Similar to Defendant’s prior objection to
the Receiver’s Tenth motion, Defendant reiterates his objections to the Receiver’s
Liquidation Plan [Doc. # 2022] (the “Liquidation Plan”). (Def.’s Opp’n to Eleventh Mot., at 25). The Court has addressed those arguments. (See Order Granting with Modification
Receiver’s Proposed Liquidation Plan [Doc. # 2147].) Defendant also repeats his position
that the Receiver’s fees should be paid from within the Judgment. Again, the Court has ruled
on this argument. (See [Doc. # 2028] (reserving a decision on this argument until after
liquidation).)
Defendant does not dispute specific time entries in his opposition to the Twelfth
Motion for fees, but he does so in opposition to the Eleventh motion for fees. He argues that
some time entries were billed at the higher legal rate when they properly should have been
billed a non-legal rate. (See Def.’s Opp’n to the Eleventh Mot. at 5-6.) However, as the Receiver
argues, Defendant misconstrues these time entries, changing their descriptions to fit a nonlegal purpose. For example, Defendant challenges a time entry billed on July 13, 2021 by
attorney Christopher Blau that Defendant describes as “Draft correspondence.” (Id. at 6.) But
the actual time entry reads: “Draft correspondence to Iftikar Ahmed re liquidation plan.” (See
Ex. D-1 [Doc. # 2106-4] at 3.) Much of the preparation and communication regarding the
proposed liquidation plan involved legal analysis. Thus, it was appropriately billed as legal
work.

For, example, Defendant raises arguments concerning the Receiver’s handling of Essell
Farms. As Defendant has also filed an independent motion raising those arguments [Doc. #
2115], the Court declines to address them now.
4

4

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III.

Conclusion
For the foregoing reasons, the Receiver’s Eleventh and Twelfth motions for fees [Docs.

## 2106, 2186] are GRANTED.
IT IS SO ORDERED.
_________________/s/_______________________________
Janet Bond Arterton, U.S.D.J.
Dated at New Haven, Connecticut this 11th day of May 2022.

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