United States Securities and Exchange Commission v. Holzhueter, Loren et al

Filing 268

ORDER regarding 259 Quarterly Motion for Attorney Fees. Signed by District Judge James D. Peterson on 5/8/17. (jat)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
ISC, INC., d/b/a INSURANCE SERVICE CENTER, and
THE ESTATE OF LOREN W. HOLZHUETER,
Defendants,

ORDER
15-cv-45-jdp

and
HONEFI, LLC, ARLENE HOLZHUETER, and
AARON HOLZHUETER,
Relief Defendants.
The Court has considered the Quarterly Fee Application for the Period from January 1,
2017 through March 31, 2017 of: (I) Michael S. Polsky, Esq., Court-Appointed Receiver for
ISC, Inc., Honefi, LLC, and the Life Insurance Proceeds; (II) Beck, Chaet, Bamberger & Polsky,
S.C. as Counsel to the Receiver; and (III) Cowie Management Group, as Consultant to the
Receiver (the “Quarterly Fee Application”) submitted by the Receiver, Beck, Chaet, Bamberger
& Polsky, S.C. (“BCBP”), and Cowie Management Group. The parties request fees and costs
for work performed for Phase I, fees and costs for worked performed for Phase II, and a third
category of fees and costs for general case administration tasks. The parties request that the
Court award the case administration fees from the Phase I funds. Pursuant to the Court’s
receivership order, Dkt. 196, the $200,000 Phase I set-aside is reserved for fees and costs
incurred in performing Phase I tasks, and the court will award the miscellaneous case
administration fees from the Phase II funds.

With that in mind, the Court HEREBY ORDERS THAT:
1. Pursuant to this Court’s Order Appointing Receiver dated October 20, 2016
(Docket No. 196), Michael S. Polsky, Esq., (the “Receiver”) was duly appointed to
serve as Receiver for ISC, Inc. (“ISC”), Honefi, LLC (“Honefi”), and the proceeds
from the policies insuring Loren W. Holzhueter’s life (the “Life Insurance
Proceeds”) (collectively, the “Receivership Estate”), effective October 20, 2016.
2. Pursuant to the Order Appointing Receiver and the Order Approving the Receiver’s
Motion to Employ entered January 31, 2017, the Receiver has retained the
attorneys and other professionals of BCBP and Cowie Management Group
(collectively, the “Retained Personnel”) to assist him in performing his duties as
Receiver.
3. Before filing, the Receiver submitted the Quarterly Fee Application to the Securities
and Exchange Commission (the “Commission”) for review, as required by the
“Billing Instructions for Receivers in Civil Actions Commenced by the U.S.
Securities and Exchange Commission” (the “SEC Billing Instructions”).
4. During the Subject Quarter, the Receiver and BCBP devoted 542.2 hours and Cowie
Management Group devoted 133.1 hours to the performance of necessary and
valuable services on behalf of the Receivership Estate which were in the best
interests of the beneficiaries of the Receivership Estate.
5. During the period from October 20, 2016 through December 31, 2016 (the “Prior
Quarter”), Cowie Management Group devoted 132.6 hours to the performance of
necessary and valuable services on behalf of the Receivership Estate which were in
the best interests of beneficiaries of the Receivership Estate. Cowie Management

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Group did not submit a Fee Application for the Prior Quarter and has not been paid
any fees or expenses incurred during the Prior Quarter.
6. Based upon the time, nature, extent, and value of the services performed by the
Receiver and the Retained Personnel, the responsibilities assumed by the Receiver,
the rates charged by the Receiver and the Retained Personnel, the results achieved
to date, and the costs of comparable services, the compensation for services rendered
and reimbursement of expenses sought in the Receiver’s Quarterly Fee Application
are reasonable, necessary and commensurate with the skill and experience required
for the activities performed.
7. The fair value of services rendered by the Receiver and BCBP during the Subject
Quarter is $179,052.50. This amount includes $97,435.00 for services rendered and
$558.63 for expenses incurred in connection with the Phase I Distribution (the
“Phase I Fees”). This amount also includes $81,617.50 for services rendered and
$609.90 for expenses incurred in connection with the Phase II Distribution and
other case administration tasks (the “Phase II Fees”).
8. The fair value of services rendered by Cowie Management Group during the Subject
Quarter is $19,965.00. This amount includes $6,255.00 in Phase I Fees and
$13,710.00 in Phase II Fees. The fair value of services rendered by Cowie
Management Group during the Prior Quarter is $19,890.00. This amount includes
$1,230.00 in Phase I Fees and $18,660.00 in Phase II Fees.
9. Pursuant to the Order Appointing Receiver and the SEC Billing Instructions, the
Receiver is authorized to pay the interim Phase I Fees for the Subject Quarter and
any unpaid interim Phase I Fees from the Prior Quarter to the Retained Personnel,

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subject to a 20% holdback, from the Life Insurance Proceeds, up to $200,000.00 in
aggregate. Specifically, the Receiver is authorized to pay $78,394.90 to BCBP and
$5,988.00 to Cowie Management Group from the Life Insurance Proceeds.
10. Also pursuant to the Order Appointing Receiver and the SEC Billing Instructions,
the Receiver is authorized to pay the interim Phase II Fees for the Subject Quarter
and any unpaid interim Phase II Fees for the Prior Quarter to the Retained
Personnel, subject to a 20% holdback, from ISC and Honefi assets and/or sale
proceeds. Specifically, the Receiver is authorized to pay $65,781.92 to BCBP and
$25,896.00 to Cowie Management Group from ISC and Honefi assets and/or sale
proceeds.
Entered May 8, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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