Securities and Exchange Commission v. Path America, LLC et al

Filing 513

FIFTH ORDER REGARDING FEE APPLICATIONS by Judge James L. Robart granting fee applications filed at Dkt. Nos. 489 491 494 495 496 497 . (PM)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 SECURITIES AND EXCHANGE COMMISSION, 11 Plaintiff, CASE NO. C15-1350JLR FIFTH ORDER REGARDING FEE APPLICATIONS 12 v. 13 PATH AMERICA, LLC, et al., 14 Defendants. 15 Before the court are six fee applications: (1) the fifth interim fee application of 16 Receiver Michael A. Grassmueck (“the Receiver”) for $62,532.00 in fees and $2,262.38 17 in costs, which seeks an order authorizing disbursement of 80% of the requested fees and 18 costs (Dkt. # 496); (2) the fourth interim fee application of Caron Architecture, LLC 19 (“Caron”), which is the contracted architect for the Potala Shoreline and Potala Village 20 Kirkland projects, for $14,113.75 in fees and $449.52 in costs, which seeks an order 21 authorizing disbursement of 80% of the requested fees and costs (Dkt. # 494); (3) the 22 ORDER- 1 1 fifth interim fee application of the Receiver’s general counsel, Allen Matkins Leck 2 Gamble Mallory & Natsis, LLP (“Allen Matkins”), for $334,626.75 in fees and $1,071.95 3 in costs, which seeks an order authorizing disbursement of 80% of the requested fees and 4 costs (Dkt. # 495); (4) the fifth interim fee application of Financial Forensics, the 5 Receiver’s forensic accountants, for $13,014.00 in fees and $12.45 in costs, which seeks 6 an order authorizing disbursement of 80% of the requested fees and costs (Dkt. # 497); 7 (5) the fifth quarterly application for compensation from the Receiver’s immigration 8 counsel, Baker Donelson, for $7,438.50 in fees and $23.67 in costs, which seeks an order 9 authorizing disbursement of 80% of the total requested fees and costs (Dkt. # 491); and 10 (6) the fifth quarterly fee application for the Receiver’s local counsel, Karr Tuttle 11 Campbell, P.S. (“Karr Tuttle”), for $12,369.00 in fees and $918.50 in costs, which seeks 12 an order authorizing disbursement of 80% of the total requested fees and costs (Dkt. 13 # 489). 14 Counsel for the Receiver filed all of the foregoing motions on February 14, 2017. 15 (See Dkt. ## 489, 491, 494-97.) Plaintiff Securities and Exchange Commission does not 16 oppose any of the fee applications. (SEC Resp. (Dkt. # 502) at 1.) Defendants Lobsang 17 Dargey and Relief Defendant Path Othello, LLC (collectively, “Defendants”) oppose the 18 fee applications in part, arguing that the Receiver and his attorneys and consultants have 19 engaged in “continued needless dissipation of assets.” 1 (Def. Resp. (Dkt. # 503) at 1.) 20 21 1 On March 3, 2017, the court entered final judgment against Mr. Dargey and Path Othello, LLC. (Final Judg. (Dkt. # 509).) Nevertheless, the court considers Defendants’ 22 objections to the fee applications at issue here. ORDER- 2 1 Defendants also assert that there “has not been sufficient progress to justify” the 2 Receiver’s expenditures. (Id. at 3.) Defendants argue that, instead of awarding the 3 Receiver and Allen Matkins 80% of the requested amounts, as provided for in the Order 4 Appointing Receiver, 2 the court should award these two entities only 50% of their 5 requested fees and expenses. (Id. at 10.) Defendants cite no evidence in support of their 6 objection to these two fee applications. (See generally id.) In contrast to Defendants’ 7 dearth of evidence, both the Receiver and Allen Matkins provide detailed descriptions of 8 the work they performed during the fourth quarter of 2016. (See Grassmueck Decl. (Dkt. 9 # 496-2); Grassmueck Group Invoice to Path America (Dkt. # 496-1); Allen Matkins Fee 10 App. Ex. A (attaching Preliminary Billing Form, which consists of almost 80 pages of 11 detailed time entries); Zaro Decl. (Dkt. # 495-2).) Accordingly, the court overrules 12 Defendants’ objections to the foregoing fee applications. 13 The court finds that (1) the fees and costs requested in each of the fee applications 14 listed above are reasonable and necessary, (2) the notice of the fee applications was 15 appropriate, (3) the fee applications are made in accordance with the Order Appointing 16 Receiver (see Ord. Appoint. Rec. ¶¶ 55-59), and (4) the services provided were of 17 substantial benefit to the Receivership Estate. Accordingly, the court GRANTS the fee 18 applications listed above (Dkt. ## 489, 491, 494-97) and APPROVES on an interim basis 19 the following application amounts: 20 21 2 (See Ord. Appoint. Rec. (Dkt. # 88) ¶ 20 (“Quarterly Fee Applications may be subject to a holdback in the amount of 20% of the amount of fees and expenses for each application filed 22 with the [c]ourt.”).) ORDER- 3 1 Applicant: Period: Fees: Costs: Total: 2 Receiver Michael October 1, 2016, $62,532.00 $2,262.38 $64,794.38 A. Grassmueck through 3 December 31, 2016 4 Caron October 1, 2016, $14,113.75 $449.52 $14,563.27 through 5 December 31, 2016 6 Allen Matkins October 1, 2016, $334,626.75 $1,071.95 $335,698.70 through 7 December 31, 2016 8 Financial October 1, 2016, $13,014.00 $12.45 $13,026.45 Forensics through 9 December 31, 2016 10 Baker Donelson October 1, 2016, $7,438.50 $23.67 $7,462.17 through 11 December 31, 2016 12 Karr Tuttle October 22, $12,369.00 $918.50 $13,287.50 2016, through 13 December 31, 2016 14 The court further AUTHORIZES the Receiver to disburse the following 15 16 17 percentages of the foregoing approved fees and costs at this time, as described below: (1) The court AUTHORIZES the Receiver to disburse $51,835.50 to the Receiver, which is 80% of the approved fees and costs; 18 19 (2) The court AUTHORIZES the Receiver to disburse $11,650.62 to Caron, which is 80% of the approved fees and costs; 20 21 (3) The court AUTHORIZES the Receiver to disburse $268,558.96 to Allen Matkins, which is 80% of the approved fees and costs; 22 ORDER- 4 1 (4) The court AUTHORIZES the Receiver to disburse $10,421.16 to Financial 2 3 Forensics, which is 80% of the approved fees and costs; (5) The court AUTHORIZES the Receiver to disburse $5,969.74 to Baker 4 5 Donelson, which is 80% of the approved fees and costs; and (6) The court AUTHORIZES the Receiver to disburse $10,630.00 to Karr Tuttle, 6 7 which is 80% of the approved fees and costs. Dated this 23rd day of March, 2017. 8 10 A 11 JAMES L. ROBART United States District Judge 9 12 13 14 15 16 17 18 19 20 21 22 ORDER- 5

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