United States District Court, E.D. California
ORDER GRANTING FOURTH INTERIM APPLICATION FOR PAYMENT
OF FEES AND REIMBURSEMENT OF EXPENSES OF RECEIVER AND HIS
PROFESSIONALS (ECF NO. 437)
LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE.
the Court is the unopposed Fourth Interim Application for
Payment of Fees and Reimbursement of Expenses (the
“Application”) filed by David P. Stapleton (the
“Receiver”), the court-appointed permanent
receiver for Defendant BIC Real Estate Development
Corporation and its subsidiaries and affiliates, including
but not limited to, WM Petroleum; Target Oil & Gas
Drilling, Inc.; Tier 1 Solar Power Company; Tier 1 Solar
Power Company, LLC; and Home Sweet Holdings (collectively,
the “Receivership Entities”), together with the
Receiver's counsel of record, Allen Matkins Leck Gamble
Mallory & Natsis, LLP (“Allen Matkins”), for
services rendered for the period of January 1, 2018 to June
30, 2018 (“Application Period”). ECF No. 437. In
his Application, the Receiver requests approval of his fees
and expenses ($175, 806.50 and $1, 823.90, respectively), and
payment of 75% of his fees ($131, 854.88) and 100% of his
expenses ($1, 823.90). ECF No. 437 at 2. The Receiver also
requests approval of Allen Matkins's fees and expenses
($128, 318.95 and $3, 709.17, respectively), and payment of
75% of its fees ($96, 239.14), and 100% of its expenses ($3,
709.17). ECF No. 437-1 at 21-22.
Securities and Exchange Commission (“SEC”)
responded to the Application indicating that they support the
requested interim payments. ECF No. 438. There were no other
responses or objections filed in response to the
STANDARD OF DECISION
determination of the amount to be awarded to a receiver and
his professionals is in the district court's sound
discretion and should be “reasonable under the
circumstances.” In re Washington Public Power
Supply Systems Sec. Litig., 19 F.3d 1291, 1296 (9th Cir.
1994); see also In re San Vicente Medical Partners,
Ltd., 962 F.2d 1402, 1409 (9th Cir. 1992) (trial court
has discretion to determine reasonable compensation for
receiver). The entitlement to reasonable compensation extends
to the professionals employed by the receiver. See
Drilling & Expl. Corp. v. Webster, 69 F.2d 416, 418
(9th Cir. 1934). “The receiver bears the burden to
demonstrate to the court [any] entitlement to [the] payment
of fees and costs in the amount requested.” SEC v.
Total Wealth Mgmt., Inc., No. 15-CV-226-BAS-DHB, 2016 WL
727073, at *1 (S.D. Cal. Feb. 24, 2016) (citing 65 Am. Jur.
2d, Receivers § 228 (2d ed. Feb. 2016 update)). The
amount of compensation to be awarded is firmly within the
discretion of the district court, and generally is a charge
upon the property or funds in receivership. Gaskill v.
Gordon, 27 F.3d 248, 253 (7th Cir. 1994).
award of interim fees is appropriate ‘where both the
magnitude and the protracted nature of a case impose economic
hardships on professionals rendering services to the
estate.'” SEC v. Small Bus. Capital Corp.,
No. 5:12-CV-03237-EJD, 2013 WL 2146605, at *2 (N.D. Cal. May
15, 2013) (citation omitted). In determining the
reasonableness of the fees and costs requested, the court
should consider the “economy of administration, the
burden that the estate may safely be able to bear, the amount
of time required, although not necessarily expended, and the
overall value of the services to the estate.” In re
Imperial ‘400' Nat'l, Inc., 432 F.2d 232,
237 (3d Cir. 1970). However, courts will “[f]requently
. . . withhold a portion of the requested interim fees
because ‘until the case is concluded the court may not
be able to accurately determine the “reasonable”
value of the services for which the allowance of interim
compensation is sought.'” Small Bus. Capital
Corp., 2013 WL 2146605, at *2 (citation omitted).
Finally, in a securities receivership, “[o]pposition or
acquiescence by the SEC to the fee application will be given
great weight.” SEC v. Fifth Ave. Coach Lines,
364 F.Supp. 1220, 1222 (S.D.N.Y. 1973).
Receiver's Requested Fees
the Application Period, the Receiver and his staff identified
and recovered Receivership assets, managed accounting and
financial matters, managed properties belonging to the
Receivership, operated and administered assets, communicated
with counsel and other necessary parties, managed the case
before the Court, and took steps to dispose of assets. The
Receiver and his staff also developed and proposed
recommendations to the Court regarding the allowance and
denial, amounts, and prioritization of claims of the
investors and other creditors of the Entities, continued
money-in/money-out accounting, among other tasks. The
Receiver had significant success in all these endeavors. The
Receiver and his staff spent approximately 991 hours working
on behalf of the Receivership Entities, at a weighted average
hourly billing rate of $177.40. ECF No. 437-1 at 7, 8-13.
fees and expenses incurred during the Application period are
documented and presented in detailed time records, which
allowed the Court to evaluate the tasks performed, hours
expended, and total fees incurred. ECF No. 437-1, Ex. A. The
Receiver has applied a discount to all time spent on this
matter, and has endeavored to use his staff efficiently to
complete the necessary tasks. ECF No. 437-1 at 7.
requested amount is reasonable given the budget range
approved by this Court for part of the Application Period.
ECF Nos. 342, 346. The SEC's support for the
Receiver's request also heavily weighs in favor of
finding that the fee application is reasonable. See SEC
v. Total Wealth Mgmt., Inc., No. 15-CV-226-BAS-DHB, 2016
WL 7242080, at *2 (S.D. Cal. Dec. 15, 2016); ECF No. 438.
light of the complexity of the matter, the degree of
responsibility involved, the business ability required, and
the number of hours expended during the Application Period,
the requested fee award is reasonable. Accordingly, the Court
approves, on an interim basis, the Receiver's request for
$175, 806.50 in fees and $1, 823.90 in expenses, and approves
payment of 75% of his fees ($131, 854.88) and 100% of his
expenses ($1, 823.90).
Allen Matkins's Requested Fees
the Application Period, Allen Matkins spent approximately
242.4 hours working on behalf of the Receivership Entities,
at a weighted average billing rate of $529.37 per hour, for
fees totaling $128, 318.85. ECF No. 437-1 at 8. In addition,
Allen Matkins incurred $3, 709.17 in expenses. Id.
The firm performed a wide range of tasks assisting the
Receiver during the relevant period, including assisting the
Receiver with preparing submissions to this Court, analyzing
and responding to motions in this action, assisting with the
legal aspects of asset recovery and ...