Federal Trade Commission et al v. Next-Gen, Inc. et al

Filing 328

ORDER granting 320 Temporary Receiver's Fifth Motion for Fees and Expenses. Signed on October 24, 2019, by District Judge Greg Kays. (Law clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
FEDERAL TRADE COMMISSION,
and
STATE OF MISSOURI,
Plaintiffs,
v.
NEXT-GEN, INC., et al.,
Defendants.

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Case No. 4:18-CV-00128-DGK

ORDER GRANTING TEMPORARY RECEIVER’S MOTION FOR FEES AND
EXPENSES FROM JULY 1, 2019, THROUGH AUGUST 31, 2019
Now before the Court is the Fifth Application by Eric Johnson, Receiver/Trustee, for
Allowance of Compensation for Services Rendered and Reimbursement of Actual and Necessary
Expenses for the Period July 1, 2019, through August, 31, 2019 (Doc. 320), as amended by the
Receiver’s Supplemental Suggestions in Support of the Third, Fourth, and Fifth Applications for
Allowance of Compensation for Services Rendered and Reimbursement of Actual and Necessary
Expenses (Doc. 324).

As amended,1 the Fifth Application requests authorization to pay

professional fees and reimburse expenses totaling $66,970.68. The Fifth Application also requests
authorization for the Temporary Receiver to pay such fees and expenses from receivership assets.
No party has filed any response to the request.
After carefully considering the work performed, the motion is GRANTED AS
AMENDED.

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The supplemental suggestions recalculate the requested fees for the third, fourth, and fifth applications in light of the
Court’s September 30, 2019, order denying an increase in fee rates for attorneys.

On July 17, 2018, this Court entered a Temporary Restraining Order (“TRO”) (Doc. 98).
Among other things, the TRO appointed Eric Johnson as Temporary Receiver of the Receivership
Entities2 in this case. Id. at 14. The TRO provided that the “Receiver and all personnel hired by
the Receiver . . . are entitled to reasonable compensation for the performance of duties pursuant to
this Order and for the cost of actual out-of-pocket expenses incurred by them, from the Assets now
held by, in the possession or control of, or which may be received by, the Receivership Entities.”
Id. at 24. The Court previously approved four applications for payment of fees and expenses to
the Temporary Receiver and vendors totaling $997,680.05.
The pending Fifth Application seeks: (1) $29,206.00 in fees for the Temporary Receiver;
(2) $34,617.20 in fees, plus $3,133.60 in expenses, for counsel Spencer Fane; and (3) $13.88 in
expenses for vendor UnitedLex. The total amount of fees and expenses requested is $66,970.68.
These requests cover payment for a variety of services and costs incurred by the Temporary
Receiver and his retained professionals on behalf of the Receivership Entities, including, but not
limited to: attention to the extraction of Global Check Recovery, Inc. from the Receivership Estate
(including preparation of necessary notices, pleadings, and releases), continued attention to the
transfer and liquidation of the Cabo San Lucas property, work on data preservation and disposal
of customer information related to the Receivership Entities, continued work on the wrap-up and
orderly termination of 401(k) plans, and preparation of 2018 estate and corporate tax returns.
After reviewing the record, the Court finds the amount of fees and expenses requested is
reasonable given the numerous tasks performed by the Temporary Receiver, the complexity of

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The TRO defines a Receivership Entity as any corporate Defendant, and “any other entity that has conducted any
business related to the Defendants’ distribution of deceptive sweepstakes or other prize mailers, including receipt of
Assets derived from any activity that is the subject of the Complaint in this matter, and that the Receiver determines
is controlled or owned by any Defendant.” TRO at 4-5.

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these tasks, and the lack of any objection. The Court also finds the hourly rates actually being paid
are not unreasonable.
Accordingly, the motion (Doc. 320), as amended by the supplemental suggestions (Doc.
324) is GRANTED. It is ORDERED that the Temporary Receiver may pay the following amounts
from receivership assets:
(1) $29,206.00 in fees for the Temporary Receiver;
(2) $34,617.20 in fees, plus $3,133.60 in expenses, for Spencer Fane; and
(3) $13.88 in expenses for UnitedLex.
IT IS FURTHER ORDERED that the Temporary Receiver is authorized to transfer funds
to the Temporary Receiver’s disbursement account to cover these payments.
IT IS SO ORDERED.
Date: October 24, 2019

/s/ Greg Kays
GREG KAYS, JUDGE
UNITED STATES DISTRICT COURT

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