Securities and Exchange Commission v. Nadel et al

Filing 745

RESPONSE re #733 Order filed by Wells Fargo Bank, N.A., as successor by merger to Wachovia Bank, N.A.. (Attachments: #1 Exhibit, #2 Exhibit, #3 Exhibit, #4 Exhibit, #5 Exhibit)(Barnett, Ana)

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EXHIBIT C Case 0:09-cr-60331--JlC Document g4-1 UNÏTED STATES DISTRTCT COURT SOUTHERN DTSTRICT OF NEW YORK UNÏTED STATES OF Entered on FLSD DqpuMEryT AIVfERTCA, 09 Cr. 085 MARC DREIER, (,ISR) MEMORANDI}M ORDER ::::iiiil:, JED S. RAKOFF, U. S. D.,r. Àn under-appreciated evil of substantial frauds like those of is how they pit their victims against one anot,her. Where, as here, the fund.s remaining after the fraud j-s uncovered are insuffícient to make whole Dreier's numerous victims and creditors, Marc Dreier these unfortunates are left to sguabble over who should get what. In this case, moreover, resolution of these competing claims involves considerabj-on of three bodies of law -- criminal law, securities law, and bankruptcy 1aw -- that cannot always be reconciled without some friction. For some time now, it has been evident to this Court in presidj-ng over the criminal action against Dreier, and to the judges presidj-ng over the civil enforcement action brought against Dreier by the Securities and Exchange Commission and the bankruptcy proceedings invorvíng the estates of Dreier and his raw firm, Dreier LLp, that these inherent tensions are best addressed through coordínat.ion and cooperation by all concerned. Accordingry, on April 22, 2009, Lhe three judges convened a joint hearing to urge such a resolution by the affected parties. Eventually, the Government, the Commission (which is no longer directly affected), the bankruptcy trustees, and Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03/05/201-0 Page 2 of t3 various other affect.ed parties reached a globa1 settlement in the form of several proposed agreemenLs and orders, Lo which oùhers filed objections. On January 12, zOLO, Senior District ,Judge Cedarbaum, Chief Bankrupt,cy Judge BernsLei-n, and the undersigned held a joint hearing on the proposed set.tlemenL, to which al-l affected parties were invited t.o attend and following which the judges received further written submissions. Now, subjecÈ only to certain relaEed proposals pending before the Bankruptcy Court, Lhis Court, confj-rming its Memorandum issued on January 29, 2OlO, hereby approves the proposed settlemenL agreements and reconfirms the Court, s prior restituti-on order as wel1. The first of the proposed settlement agreements is a "Coordj-nat.ion Agreement" bet,ween the Government and the Trustee for the Dreier LLP bankruptcy estate (the .Chapter 1l- Trustee,, ) . Under this agreement, the Government will not seek forfeÍture of any recoveries generated through avoj-dance actions brought by the Chapter 11 Trustee, and the Government will release to the Chapter 1l- Trustee ninety-seven seized artworks t.hat the Government, is presently unable to trace to the proceeds of Dreier, s offenses. fn return, the chapt.er Ll- Trustee promises not to contest forfeiture of the properties listed in the schedule to the Court's Preliminary Order of Forf eiture entered July J-3, 2OO9 Additionally, under the CoordÍnatíon Agreement, the Chapter 1l- Trustee will not challenge the forfeiture of funds d,isgorged by GSo capital partners and its affiliates ("cso") pursuant to a , Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03/05/20L0 Page 3 of 13 proposed consent order (the "GSO Consent Order,, ) . Under the Consent Order, GSO will, forfeit GSO the Government $30,89s,027.78 an amount representing payments of interest and fees received by facilities in connect,ion with their invesEmenÈs in Dreier's fictitious promissory not,es. fn exchange for this payment, the Eo GSO will- forego seeking forfeiÈure of other GSO facilicy funds presently under restraint, because of their connecEion to Dreier's Government note fraud. rn conjunction wíth the Coordinatíon Agreement and the GSO Consent order, certain related applications are also pending before the Bankruptcy CourÈ. First, the Chapter LL Trustee seeks Bankruptcy CourÈ approval of the Coordination Agreement. Second, the Chapter 1-lTrustee and Èhe Trustee for Dreier's personal bankruptcy (tne "Chapter 7 Trust,ee") seek Bankruptcy Court approval of agreements with GSO whereby GSO will pay $9,250,000 to the Chapter LL Trustee and $250,000 t,o the Chapter 7 Trustee in exchange for the Trustees' promise not Eo litigate any claims against GSO and the entry of a Bar Order enjoíning creditors and other parties in interest from seeking to recover funds from GSO. Although Ehese applications are before the Bankruptcy Court, not this Court, the Coordination Agreement provides that, even if it is approved by this court, it wi1l not take effect unless the Bankruptcy Court approves the settl-ement between GSO and the Chapter 11 Trustee AIso before this CourE are stipulaÈions beLween the Government and the Chapter 7 Trustee (tfre ',Chapter 7 Trustee Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket O3|OSIZOL} Page 4 of 13 St.ipulations" ) regarding the sale of three real properties tist.ed in the PrelimÍnary Order of Forfeiture (two houses in East Quogue and a Manhattan condominium) . fn exchang'e for the Chapter 7 TrusLee, s successful efforts to market and seII these properties, and because the Government previously agreed to release the personalty in these properties to the Chapter 7 Trustee, the GovernmenL proposes to release ten percent of the proceeds from the sal-e of these properties to t.he Chapter 7 bankruptcy estate. rina1Iy, before the Court is a proposed stipulation (the "Fortress Stipulation") between the Government and cert,ain facilities managed by Fortress Investment Group LLC and its affiliates ("Fortress"). Because the Fort.ress facilities lost over $84 million from their investments in Dreier's fictitious notes, Lhe Government does not intend to seek forfeiture of certaÍn note fraud proceeds that were received by these facilities; accordingly, the proposed stipulation would vacate the restraining order that. is currently freezing those funds. WhíIe the undersigned has solicited the opinions of ,Judge Chief Bankruptcy ,fudge Bernstein as t.o their views of these proposals from the standpoint of securities 1aw and bankruptcy raw, this court. must address these proposals, fírst and foremosL, Cedarbaum and from the st,andpoint of federal criminal 1aw, especially Èhe provisíons of federal criminal law dealing wíth forfeiture and rest.itution. Under the rest.itution prov5-sions, victims of crimes have the right to "fu1l and timely restitution as provided in 1aw. " l-8 U.S.C. S 377]-(a) (6) . This Court "shall ensure,, that these and Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03/05/201-0 Page 5 of 13 other victims' rights are vindicated, and t,he Government has the obligat,ion to "make [its] best, efforts" to this end. Id. S 377t (b) (1) , (c) (r) . Thus, while the related forfeiture provisj.ons provide only that a defendant sha1l forfeit "to the United States" the fruits of his crime, 21 U.S.C. S 853(a), including so-ca11ed "substituLe assets" under certain conditions, id. S 853 (p) , Lhe Government has represented that, consistent with applicable laws and regulat.ions, the assets obtained f rom the forfeit.ures in this case will be applied toward victim restitution, g Gov't Letter, 4/22/09, aE 10. In furtherance of these laws, the Court, in the aforementioned. Preliminary Order of Forfeit,ure, ordered preliminary forfeiture to the United St,ates of ç746,690,000 in cash held in accounts controlled by Dreier, as well as preliminary forfeit.ure of specific propertj-es listed in that order. As part of Dreier's senEence, he was also ordered to make an addit.ional restitution pa).ment to his victims in the amount of $387,675,303. A1so, of, September 29, 2009, the Court entered a Second Amended Restitution Order specifying that. if restitution is made in partial payments, t,hosepa)¡mentsaretodistributedtothevictimsona@abasis according to their loss amounts. The forfeiture laws furt.her authorize the Government Eo compromise competing claims Eo forfeiEed (i) asseÈs, ZI U.S.C. S ; accord. In re W.R. Huff Asset Mgrmt. Co. , 4Og F.3d 555, 564 (2d Cir. 2oO5). Many of the objectíons to the settlement agreements 853 (2) here under considerat,i-on come down to the assertion t,hat t.he Case 0:09-cr-60331-JlC Document not 94-1 Entered on FLSD Docket 03/05/201-0 Page 6 of l-3 its claims to certain artwork and other property that, in the objectors' view, belong, indirect.ly, to the victims. Thus, Fortress and certaín other hed.ge funds (collectively, the "Hedge Funds"), who are by some measures the Government shoul-d compromise largest victims of Dreier's frauds (buE who were also arguably t.he recipients of fraud proceeds) assert that t.he property to be turned over to the Chapter 11 Trustee under the Coordination Agreement is indisputably forfeitable, so its transfer wouLd diminish the pool of assets available for distribution to the víctims. In response Co the that the artwork proposed to be turned over to the Chapter 11 Trustee cannot be traced to the proceeds of Dreier's frauds, the Hedge Funds cIaím that such properÈy is nevertheless subject to forfeiture as substitute assets. Furthermore, according to these victims, the "consideration" flowing to the Government under the Coordinatíon Agreement the Chapter 11 Trustee's prgmise not to challenge either the forfeiture of the properties specified in the Preliminary Order of Forfeiture or the $30.9 million payment under the GSO Consent Order is iIlusory, as there would be no merit to GovernmenE's argument any such challenge. Although not without some merit, the Hed.ge Funds' argument.s are ultimately unpersuasive. While the Chapter 11 Trustee's claims to the forfeíted assets might ultimately prove defective, they are not so frivolous that their resolution would noE result in protracLed, costlf, Ínternecine liEigation that would, ât'a minimum, have the effect of delaying and díminishing the vict.j-ms' recoveries. For example, it is unclear wheEher the Government,s interest in Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03i05/201-0 Page 7 ol 13 substit.ute assets would relate back to the date of Lhe wrongful acts. See United Stat.es v. Parrett, 530 F.3d 422, 430 (6th Cir. 2008) (describing circuit split on this issue). Thus, to the extent that the Government's interest in such property depends on the application of t.his "relaLion back" doctrine, litigation would be far from frivolous and it,s outcome uncertain. Concomitantly, the Government's promise to refrain from seekíng forfeiture of any avoidance recoveries does not, appear to give up anything of value, as the Government. has taken the posj-tion that it is not entitled to pursue such forfeiture actions, see Transcript, l/L2/I0 .foint Hearing ("Tr.") 35, and the Hedge Funds have noE identified any authority indicating the conErary. It follows that one effect of t,he agreemenE is Lo incentivize the Chapter l-1 Trustee to go after recoveries the Government could not pursue. While any such recoveries will go to the creditors of the Chapt.er L1 estate, many of these are also vict.ims of the fraud. It may also be noted that, the Hedge Funds do noL object to either the GSO Consent Order or Lhe Fortress Stipulation insofar as they involve the Government's st,ipulation that, it will not seek additional forfeiture from these parties. This is, in effecL, cont.rary to their argument that the Government should seek Eo maximize the amount. of assets available for distribution to victims regardless of oLher equitable considerations. It, is hence evÍdent t.hat the Hedge Funds' objections to the Coord.ination Agreement prove Loo much, âs they are unwilling to carry such objections to their Case 0:09-cr-60331--JlC Document logical conclusions interests. 94-1 Entered on FLSD Docket 03/05/201-0 Page when doing so might, adversely affect their I of 13 own other objections stated by the Hedge Funds are simitarly unpersuasive. For example, aÈ the joint. hearing on January 12, 2OLO, The counsel for Eton Park CapiÈal Management, L.P., one of the Hedge Funds, complained that the proposed set.t.lement, was reached without adequat.e When input from some or all of the Hedge Funds. See Tr. 45-46. pressed, however, counsel was unable to make a specific application to apart from reguesting that approval of the Coordination Agreement be delayed until more ',information" was Èhe CourÈ provided regarding how the victims would be treat.ed. Id. .at 46. Similar process-based objections were advanced by Fortress at the joint hearing and by the Hedge Funds in written submissions. Although the Government is obligated to confer with the víctims before compromising c1aíms, @. 18 U.S.C. S 3771- (a) (a)othing in the fCrime Victims' Rights Act] requires the Government to seek approval from crime viccims before negotiating or enterj-ng into a settlement agreement.,' W.R. Huf f Asset Mqmt. Co., (5) , " [n] at 564. The Court accepts the Government's representation, not directly disputed by the Hedge Funds, that opportuniÈies to confer were early offered to Èhe Hedge Funds, who failed to take advantage of t.he offer, Tr. 47. Moreover, as a result of the joint 'i t Hedge Funds were aware aE Ieast. _-".ïT9: -11-.hf l"-.:_"*t, the "r ""tfy i l as April 22, 2OO9 that settlement negotiat,ions between the Government and. the trustees were actively ongoing, and they could Frave sought to be heard by t.he Government at any time in the process. 409 F.3d : Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03/05/201-0 Page 9 of 13 is driven to the conclusion that the real reason for the Hedge Funds' objections to t,he settlemenL. is their recognition that, even though they were victims of Dreier's frauds, they were also the seeming recipients of fraud proceeds, and hence the bankruptcy creditors (including other victims) may have claims against t.he Hedge Funds in the form of so-ca11ed avoidance actions that, as a result of the proposed settlement, the Chapter l-1 Trustee will be free to pursue without. any fear that any recoveries will revert to the United States. This is hardly a reason for rejecting the set.t.Iement. Whatever the merits of the hypothesized avoidance act.ions, they will only serve to more perfectly resolve the relative rights of victims and creditors in accordance with the laws of the The Court United stat.es. Thus, despite the foregoing objections, the Court finds that. t.he Coordination Agreement is reasonable and in the best, interests of victims coIlectiveIy. As there appears to be no objectj-on before t.his Court to the cSO Consent Order, which will make $30.9 million available for vict.ím restitution, t.he Court approves that. agreement as wel1.1 As to the Chapter 7 Trustee stipulatíons, although the Hedge Funds object to the pa)¡ment of ten percent of real property proceeds to the Chapter 7 Trustee, this objection strikes the Court as yet another manifestation of their concern about funding the bankrupt.cy trustees' litigation efforts, which the court finds t.he 1 Insofar as there are objections to the Bar Ord,er,s preclusion of victim or creditor actions against GSo, see Tr. 11, such object.ions are to be addressed by the Bankruptcy court in the f irst inst.ance. Case 0:09-cr-60331-JlC Document 94-1- Entered on FLSD Docket O3l15l20t0 Page 10 of L3 unpersuasive for the reasons noted above. Because this amount is fair compensation for the Chapter 7 Trustee,s sale of these properties and. his enÈitlement to the personalty therein, the Court approves these stipulat.ions. Fina1ly, as there is no objection to the Fortress Stipulation, and because the GovernmenL's policy of eschewÍng forfeíture from \rnet losers" makes sense, the Court approves that stipulat j-on as weII. The final matter to be resolved is the motion of an individual victim, Paul Gardi, to modify the Second Amended Restitution Order's scheme of pro rata distribution in order to provide Gardi with special priority. Gardi alleges that Dreier, who Gardi's lawyer, forged Gardi's signature to a settlement agreement between ,JA¡ÍA (a hedge fund) and a company controlled by Gardi, and then arranged for JANA to wire the settlement funds, in the amount of $6.3 million, into a trust account controlled by Dreier, who then used the funds for himself. Gardi claims that he is entitled t.o priority over other victims because he is an individual as opposed to an institutional investor, because the theft of his settlement funds is different in nature from the note fraud losses experienced by the Hedge Funds, and because the relative economic impact of Gardi's losses is more substantial than the impact on insÈitutional victims was Several affected parties have responded by arguing, amongt other things, that Gardi's motion to amend the Second Amended Restitution order is untimely or otherwise procedurally improper; that Gardi was not the only individual vÍctim L0 harmed by Dreíer, s Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket O3lO5l2OL0 Page 11 of 13 misappropriation or other misuse of escrowed funds; Èhat Gardi's loss should not be considered to have been suffered by an individual-, since the settlement was with his company; that Gardi's financial sophistication is not unlíke that of an institutional invest,or; t.hat JANA, rather than Gardi, was the true victim of this particular fraud; and that there is no principled basis for treating Gardi's Ioss as different in kind from the losses experienced by Dreier's other victims. The Government has taken the position that a pro rata share is appropriate because "no victim Ís any more or less deserving here of the restitution." Tr. 16. Finally, in an intermediate position, the representative of the bankrupÈcy estates of 36Onetworks (USA) Inc. and its affiliates (tfre "36Onetworks Representative") has submj-tted. a response id.entifying the 360networks estates as similarly situated to Gardi in that they were victims of theft by Dreier in his capacity as their lawyer, a¡ld urgies the Court to distinguísh between "clienÈ" victims and "note fraud" victims by providing client victims with priority. wil-l that the procedural object.ion to Gardj-'s submissions would ultimately not prevail and will instead proceed to the und.erlyíng merits. There is nochj-ng per se unfair about a pro rata distribution; Èhe Second Circuit has endorsed this approach as particularly appropriate for frauds like Dreíer's involving a Ponzi scheme or the comminglíng of similarly situated victims' assets. see sEC v. credit Bancorp rnc., 2go F.3d Bo, BB-89 (2d Cir. 2002) . It is clear from the responses that Gardj- is not the only "client" víctim of Dreier's frauds or to whom Dreier owed The Court assume arsuendo 11 Case 0:09-cr-60331--JlC Document 94-1 Entered on FLSD Docket 03/05/2010 Page 12 of t3 fiduciary d.ut.ies, and each case doubtless has its own nuances. Addit.ionally, the "note fraud" victims are only immediately the Hedge Funds; iE is the investors in these funds, including individuals, charitable and educational institutions, ult.imate "note f raud" victims. and many others who are the The truth is t.hat a f raud as large and egregious as Drej-er's is lÍke an earthquake that savages its vj-ctims at random and is followed by a series of aftershocks that destroyssti11furtherassets.Anya1ternativetothe@ approach would entail a cost.ly and extensive inquiry into the circumstances of each victim's 1oss, which would likely devol-ve into a war of recriminations, to the detriment of all concerned. Accordingly, the Court denj-es Gardí's motion and confirms the p rata distribution scheme set forth in the Second Amended Rest.iEution Order. For the foregoing reasons, the Court hereby reaffirms its Memorand.um of January 29, Agreement, the GSO 2OLO and. approves the Coordínation Consent Order, the Chapter 7 Trustee St.ipulations, and the ForEress Stipulation. The Clerk of t.he Court is directed to close the entrÍes numbered L02 and 106 on the docket of thÍs case.2 2 Still pending before the Court are Lhree petítions filed pursuant to 2L U.S.C. S 853(n) for ancillary hearings to det.ermine third party interesEs in property subject to forfeiture. Motion practice ís underway with respect to the GovernmenL's mot,ion to dismiss the petition f iled by t.he 360networks Representative. A1so, the Hedge Funds, in a series of letters submít.ted to the relevanE Courts and the GovernmenE, set fort.h several arguments why t.he petiEion filed by Heathfield Capit.al Limit.ed ("Heathfie1d") should be dismissed. While these arguments will be consj-dered if and when the Court reaches the merits of the Heathfield petit.íon, they provide no reason to defer approval of the sett.lement agreements discussed herein. l2 Case 0:09-cr-60331--JlC Document 94-1 Entered SO ORDERED. Dated: New york, Ny February 5, 201,0 13 on FLSD Docket 03/05/201-0 Page L3 of 13 _li c6ae€CIgse0803slÀilKH DDooumEhg4Ð EEüÉsdóorFESS[DDdökêog01lEIøÐ0O pâggd_tb66 UNITED STATES DTSTRICT COURT SOUTHERN DISTRTCT OF FLORIDA Case No, 99-8125-Cr-HURLEY/Johnson (s) (s) UNITED STATES OF A}4ERTCA Plaintiff V. FREDERICK C. BRANDAU GARLAND HOGAN/ MARY AI'TNE BILLINGHURST FINANCIAL FEDERATED TITLE ÂuG 9 zfigj CAFLOS r¡x u.t. ofsT. cT. JUEHT(¿ & TRUST, INC., ASSET SECURITY CORPORATION/ GÄRY J. PIERCE, and CST AG/ LTD. RAPIIAEL R. LEVY, AMER]CAN BENEFTTS SERVTCES/ JEFFREY A. PAINE, WANDA T]RA,DO, ALAN RIC}IARD LEWIS/ IVAN BURGOS, ZANE BALSAM, JUAN .ARROYO, HARVEY BR-ANDAU/ and CHERYL POINDEXTER, Defendants. ORDER APPROVING MEMOR.A,},IDUM AGREEMENT AND APPOINTTNG RECEIVER This matter comes before the Court pursuant to the motion filed by the United States to approve the Memorandum of Agreement entered into between the United States and John Rozyak, Esq., and _iI @ae€09SG08033:ÀIIKH DDcroumehg4Ð EEffisdôorFEBSDDdckþOgtr;ílîløÐO0 PRgg€ãb66 appoint John Kozyak as Receiver and as substitute custodian for the U.S. Marshals Service of the real property in this case. The Court/ upon consideration of the motion filed by the United States, finds that to protect the interesLs of the United States in the forfeited property under the circumstances of this case, it is necessary and appropriate for the court pursuant to 21 U.S.C. SB53(g) to appoint a Receiver who will maintain, preserve, and se11 cerLain forfeited assets, and assist in distributing proceeds to victims in restitution. Therefore, for qood cause shown, it is hereby: ORDERED AND AD.JUDGED: States' motj-on is granted. 1. The United 2. The Memorandum of Agreement between the United States and Esq., is approved and .lohn Rozyak, Esq., is appointed Receiver in this case and substitute custodian for the U.S. Marshals Service of the real property which has been forfeited John Kozyak, pursuant to the preliminary order of forfeiture dated May 31, 2000. The following personal property is excl-uded from the jurisdiction of the Receiver: conveyances, bank accounts/ currency, negotiable instruments or the like identified in the First Superseding Indictment. a condition of this appointment, the Receiver will post and maintain throughout the course of the appointment an 3 initial . -A,s performance bond in the amount of $500,000.00. At such @as€CI9se08023áÀIlKH DDåunoehg4sg EEüÉsdóoTFEBSDDJkÞogÁüsÆaooo pEtss€bb66 time as the account or accounts established pursuant to this order and the order appointing John Kozyak Receiver contain in aggregate shall immediately increase the bond to equal the amount of money being held in the receiver more than $500,000.00, the Receiver accounts. 4. fn carrying out his responsibilitÍes, the Receiver shall have the followlng pohrers and duties: a. protect the interest of the United Stat.es in the forfeited real estate listed in the order of forfeiture. b. Manage, maintain, preserve, and SeI-l- the forfeited rea.l- property consisLent with the of Agreement upon appropriate motion of the United States and entry of an order by this Court authorizing any sale. Any order of sale will reguire that the net proceeds of sale be Memorandum deposited in one or more inLerest bearing accounts established by the Receiver under the jurisdiction of this Court. The net proceeds are def ined as the sal-es price l-ess the actual- costs incurred by the United States and/or the Receiver in the seizure, storaqe, maintenance, and sal-e of the forfeited asset authorized to be sol-d. c. Prepare and del-iver a monthly written financial report to A¡tonia J. Barnes, Assistant U.S. Attorney. The report will be provided to the U.S. Attorneys Office no later than 30 days after the month that the report covers. The written report will summarize the tasks performed by the Receiver and the time spent in performing these tasks. The report also wil-I itemlze with respect to each asset¡ âDy and alI mortgage pa\rments, rents and other income col-l-ected pertaining to the forfeited assets, and detail alI expenses and charges incurred and aging accounts payable, including supporting documentation for all expenses and charges. d. The Receiver shaII have the authority to hire vendors to perform services and provide products in connection with the maintenance, preservation, and sale of the forfeited real estate consistent with the approved budget. The Receiver shalÌ require al-I vendors/ except vendors providing public utÍJ_ity services to the properties, Lo execute a non-affiliation affidavit in the form approved by Antonia J. Barnes, J\ssisLant U.S. Altorney, as provided for in the Memorandum of Agreement prior to the service being perf ormed or product being supplied . lrlhere the Uni ted States, througrh its representative Antonia J. Barnes,, Assistant U.S. Attorney and the Receiver cannot agree on a vendor or a cost or is not within the amounts permitted by the approved budget or which is not for an item inc-l-uded in the expense proposal, which approved budget, the Receiver shall make application to the Court for approval of the vendor or the amount and/or type of cost or expense at issue. 4. Even though the Receiver wiII be responsible for the maintenance, preservatlon and saÌe of only the forfeited real C6ae€0g&c08025lHIIKH DDJasÌeBh94€9 EEüÉmdóoTFEESDDJtÞ ogwutøøfroo pâ9g6õb66 property, this wil-l- not preclude using the services of the Receiver to effectuate the distribution of restitutíon payments from the proceeds of both the real- and personal property forfeited in this case, 5. The proposed budget 6. No funds sharr be spent except is approved. as (1) approved under the budget adopted as part of this order, or (z) agrreed to in writing between Antonia J. Barnes, Assistant u.s. Attorney, and the t QT (3) , in the event the United States and the Receiver cannot reach agreement, as approved by t.his Court. 1. [¡ùhere the United States, through its repr'esentative Antonia J. Barnes, Assistant U.S. Attorney/ and the Receiver cannot agree to (1) reimbursement of maintenance expenses, which are Receiver defined in the United States'motion to include utilities and j-nsurance premiums, for which monies were expended prior to the approval of the budget by this Court or (Z) pa¡rment f or legal services rendered by Kozyak Tropin & Throckmorton, p.4., related to the forfeited assets, then the Receiver shaII file any application of the disputed items for approval with this court prior to any final distribution of the proceeds from the sale of the forfeited assets. 8. The Receiver may seek and may be paid compensation for aII duties performed and services rendered related to real property and personal- property covered by the 5 Memorandum of Agreement and to @ae€09s-ut8035JÀilKH DDoornreBhg4€9 EEüÉsdóo1FEES[DDobkþ08&5i?øooo pHgg6ôb66 the distribution of the proceeds of the real- property and personal- property for restitution, in an amount not to exceed 3e" of the net proceeds from the sale of the real property. The application will follow the Guidelines for Fees and Disbursements for Professionals in the Southern District of Florida in Bankruptcy Cases. Any dispute regarding the amount of the fee payable to the Receiver shall- be presented to the United States Distrlct Court for resoiution through application for the payment of the fee by the Receiver. The Receiver will be entitled to appfy for his compensation (1) upon the resolut.ion of aII third party claims to the real- property with respect to which the Receiver is authorized to act in this matter and (2) at the time that the proceeds from the sale of the forfeited property are ready for distribution. 9. The Receiver shal-l fil-e any applications for approval with this Court and the United States shall file any responses or objections to the Receiver's application in accordance with FIa. L,R. 1"1. DONE ÀND ORDERED County, Fl-orida, this in Chambers in West Palm Beach, S/¿- day of DANIEL T.K. H UNITED STATES cc: Antonia J. Barnes, AUSA Stephen Carlton, AUSA Ellen Cohen, AUSA , ISTRICT S.D. PaIm Beach 2000. .]UDGE

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