vemma receiver motion
DESCRIPTION
Vemma Receiver MotionTRANSCRIPT
JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected]
GARY OWEN CARTS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected]
Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
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UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
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Case No. CV-15-01578-PHX-JJT
NOTICE OF MOTION AND FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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Federal Trade Commission,
Plaintiff,
v.
Vemma Nutrition Company, et al.,
Defendants.
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22 PLEASE TAKE NOTICE that Robb Evans and Robb Evans & Associates LLC, the
former Temporary Receiver in the above-captioned matter ("Receiver"), hereby moves the
Court for an order approving and authorizing payment of the fees and expenses of the
Receiver and the Receiver's counsel incurred from the inception of the temporary
receivership on August 21, 2015 through the closing and wind up of the temporary
receivership ("Expense Period"). This Motion is the Receiver's first and final motion for
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JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected] GARY OWEN CARIS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected] [email protected] Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Federal Trade Commission,
Plaintiff,
v. Vemma Nutrition Company, et al.,
Defendants.
Case No. CV-15-01578-PHX-JJT NOTICE OF MOTION AND FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
PLEASE TAKE NOTICE that Robb Evans and Robb Evans & Associates LLC, the
former Temporary Receiver in the above-captioned matter (“Receiver”), hereby moves the
Court for an order approving and authorizing payment of the fees and expenses of the
Receiver and the Receiver's counsel incurred from the inception of the temporary
receivership on August 21, 2015 through the closing and wind up of the temporary
receivership ("Expense Period"). This Motion is the Receiver's first and final motion for
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 1 of 11
approval and payment of the Receiver's fees and expenses and those of its counsel based
on the Court's Order entered September 18, 2015 (Doc. No. 118) which had the effect of
dissolving the temporary receivership, imposing a monitorship over the Corporate
Defendants Vemma Nutrition Company ("Vemma") and Vemma International Holdings,
Inc. (collectively, the "Vemma Entities"), and appointing Robb Evans and his company
Robb Evans & Associates LLC as the Monitor.
By this Motion, the Receiver specifically seeks an order for approval of the fees and
expenses of the Receiver and its counsel incurred during the Expense Period, including
fees of $192,987.60 and costs of $19,466.99 of the Receiver and fees of $79,247.55 and
costs of $2,749.97 incurred for the services of the Receiver's counsel, and for payment
thereof from the assets of the Receivership Defendants presently held in the Receiver's
possession, custody and control pursuant to Section XIX of the Order Filed under Seal
entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership Order") appointing the
Receiver as temporary receiver, which fees and expenses include estimated fees and
expenses of the Receiver and its counsel to be incurred in connection with the wind up of
the temporary receivership and discharge of the Receiver. To the extent that the actual
fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
the Vemma Entities the excess amount.
This Motion is made pursuant to the Temporary Receivership Order and based on
this Notice of Motion and Motion, the supporting memorandum of points and authorities
attached hereto, the supporting declarations of Kenton Johnson and Gary Owen Caris filed
concurrently herewith, the proposed order attached to the electronic filing and lodged
concurrently herewith, on the pleadings, records and files of the Court of which the
Receiver requests the Court take judicial notice pursuant to Rule 201 of the Federal Rules
of Evidence, including without limitation the Report of Temporary Receiver's Activities
filed on September 4, 2015 (Doc. No. 50) and the testimony of Kenton Johnson at the
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approval and payment of the Receiver's fees and expenses and those of its counsel based
on the Court's Order entered September 18, 2015 (Doc. No. 118) which had the effect of
dissolving the temporary receivership, imposing a monitorship over the Corporate
Defendants Vemma Nutrition Company ("Vemma") and Vemma International Holdings,
Inc. (collectively, the "Vemma Entities"), and appointing Robb Evans and his company
Robb Evans & Associates LLC as the Monitor.
By this Motion, the Receiver specifically seeks an order for approval of the fees and
expenses of the Receiver and its counsel incurred during the Expense Period, including
fees of $192,987.60 and costs of $19,466.99 of the Receiver and fees of $79,247.55 and
costs of $2,749.97 incurred for the services of the Receiver's counsel, and for payment
thereof from the assets of the Receivership Defendants presently held in the Receiver's
possession, custody and control pursuant to Section XIX of the Order Filed under Seal
entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership Order") appointing the
Receiver as temporary receiver, which fees and expenses include estimated fees and
expenses of the Receiver and its counsel to be incurred in connection with the wind up of
the temporary receivership and discharge of the Receiver. To the extent that the actual
fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
the Vemma Entities the excess amount.
This Motion is made pursuant to the Temporary Receivership Order and based on
this Notice of Motion and Motion, the supporting memorandum of points and authorities
attached hereto, the supporting declarations of Kenton Johnson and Gary Owen Caris filed
concurrently herewith, the proposed order attached to the electronic filing and lodged
concurrently herewith, on the pleadings, records and files of the Court of which the
Receiver requests the Court take judicial notice pursuant to Rule 201 of the Federal Rules
of Evidence, including without limitation the Report of Temporary Receiver's Activities
filed on September 4, 2015 (Doc. No. 50) and the testimony of Kenton Johnson at the
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September 15, 2015 hearing on plaintiffs motion for a preliminary injunction, and on such
other evidence and arguments as may be presented by the Receiver hereafter in support of
this Motion.
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5 DATED: September 21, 2015 DENTONS US LLP
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7 By: /s/Gary Owen Caris
Gary Owen Caris (admitted pro hac vice) Lesley Anne Hawes (admitted pro hac vice) 300 south Grand Avenue, 14th Floor Los Angeles, CA 90071 Tel: 213.688.1000 Fax: 213.243.6330 Email: [email protected]
Joshua S. Akbar (AZ Bar No. 025339) 2398 E. Camelback Road, Suite 850 Phoenix, AZ 85016 Tel: 602.508.3900 Fax: 602.508.3914 Email: [email protected]
Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
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September 15, 2015 hearing on plaintiff's motion for a preliminary injunction, and on such
other evidence and arguments as may be presented by the Receiver hereafter in support of
this Motion.
DATED: September 21, 2015 DENTONS US LLP
By: /s/Gary Owen Caris
Gary Owen Caris (admitted pro hac vice)
Lesley Anne Hawes (admitted pro hac vice)
300 south Grand Avenue, 14th
Floor
Los Angeles, CA 90071
Tel: 213.688.1000
Fax: 213.243.6330
Email: [email protected]
Joshua S. Akbar (AZ Bar No. 025339)
2398 E. Camelback Road, Suite 850
Phoenix, AZ 85016
Tel: 602.508.3900
Fax: 602.508.3914
Email: [email protected]
Attorneys for Former Temporary Receiver
Robb Evans and Robb Evans & Associates
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 3 of 11
MEMORANDUM OF POINTS AND AUTHORITIES
I. STATEMENT OF RELEVANT FACTS
On August 21, 2015, the Court issued an order under seal for a temporary
restraining order, asset freeze, and appointment of a temporary receiver, among other
relief, against defendant Vemma Nutrition Company ("Vemma") and other defendants
named in the action (Doc. No. 25) (the "Temporary Receivership Order"). The Temporary
Receivership Order appointed Robb Evans and Robb Evans & Associates LLC
("Receiver") as temporary receiver over Vemma, Vemma International Holdings, Inc.
(collectively, the "Vemma Entities") and their successors and assigns, subsidiaries, and
related entities ("Receivership Defendants"). The powers and duties of the Receiver are
detailed in Section XII of the Temporary Receivership Order and include, among other
duties, taking possession and control of the Receivership Defendants' management and
business premises and all assets of the Receivership Defendants, wherever located, taking
all steps the Receiver deems necessary or advisable to preserve the assets of the
Receivership Defendants and prevent loss, engaging attorneys and others as the Receiver
deems necessary or advisable for the Receiver to perform its duties, and paying expenses
necessary or advisable for the Receiver to carry out its duties. Temporary Receivership
Order, Section XII.A-E and J. The Receiver was also authorized to engage attorneys, with
the compensation of the Receiver and its counsel to be approved on motion to the Court
and paid from assets of the Receivership Defendants in the Receiver's possession and
control. Temporary Receivership Order, Section XII.I and XIX.
The hearing on the motion of the plaintiff Federal Trade Commission ("FTC") for a
preliminary injunction was initially scheduled to be held on September 3, 2015. The
parties made a stipulated motion to continue the preliminary injunction hearing on August
31, 2015, and on September 1, 2015, the Court entered an order continuing the preliminary
injunction hearing to September 15, 2015 and extending the provisions of the Temporary
Receivership Order through 2:00 p.m. on September 18, 2015. Order entered September 1,
2015 (Doc. No. 40).
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MEMORANDUM OF POINTS AND AUTHORITIES
I. STATEMENT OF RELEVANT FACTS
On August 21, 2015, the Court issued an order under seal for a temporary
restraining order, asset freeze, and appointment of a temporary receiver, among other
relief, against defendant Vemma Nutrition Company ("Vemma") and other defendants
named in the action (Doc. No. 25) (the "Temporary Receivership Order"). The Temporary
Receivership Order appointed Robb Evans and Robb Evans & Associates LLC
("Receiver") as temporary receiver over Vemma, Vemma International Holdings, Inc.
(collectively, the "Vemma Entities") and their successors and assigns, subsidiaries, and
related entities ("Receivership Defendants"). The powers and duties of the Receiver are
detailed in Section XII of the Temporary Receivership Order and include, among other
duties, taking possession and control of the Receivership Defendants' management and
business premises and all assets of the Receivership Defendants, wherever located, taking
all steps the Receiver deems necessary or advisable to preserve the assets of the
Receivership Defendants and prevent loss, engaging attorneys and others as the Receiver
deems necessary or advisable for the Receiver to perform its duties, and paying expenses
necessary or advisable for the Receiver to carry out its duties. Temporary Receivership
Order, Section XII.A-E and J. The Receiver was also authorized to engage attorneys, with
the compensation of the Receiver and its counsel to be approved on motion to the Court
and paid from assets of the Receivership Defendants in the Receiver's possession and
control. Temporary Receivership Order, Section XII.I and XIX.
The hearing on the motion of the plaintiff Federal Trade Commission ("FTC") for a
preliminary injunction was initially scheduled to be held on September 3, 2015. The
parties made a stipulated motion to continue the preliminary injunction hearing on August
31, 2015, and on September 1, 2015, the Court entered an order continuing the preliminary
injunction hearing to September 15, 2015 and extending the provisions of the Temporary
Receivership Order through 2:00 p.m. on September 18, 2015. Order entered September 1,
2015 (Doc. No. 40).
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 4 of 11
At the September 15, 2015 hearing, the Court heard a full day of testimony and
argument, including testimony of the Receiver's representative, Kenton Johnson. On
September 18, 2015, shortly before the Temporary Receivership Order was to expire, the
Court issued its Order of that date, granting in part and denying in part the FTC's motion
for a preliminary injunction. Order entered September 18, 2015 (Doc. No. 118). Under
the Court's September 18, 2015 Order, the Court imposed a monitorship, rather than a
receivership, over the Vemma Entities. The Receiver is therefore in the process of
transitioning control of the Receivership Defendants and their assets back to the pre-
receivership management. This fee motion is the first of two motions that will complete
the transition to the monitorship and the wind up of the receivership estate. This Motion is
brought on an expedited basis because, as explained below, counsel for the Vemma
Entities objected to the Receiver retaining any funds to pay allowed fees and expenses,
despite the clear language in the Temporary Receivership Order.
The Temporary Receivership Order provides that the Receiver and those hired by
the Receiver pursuant to the Order, including counsel, are entitled to compensation for fees
and expenses incurred in connection with the receivership which are to be paid "solely
from the Assets now held by or in the possession or control, or which may be received by,
the Receivership Defendants." Temporary Receivership Order, Section XIX. Further, the
Receiver was authorized to make payments from receivership assets that the Receiver
deemed necessary or advisable to carry out the provisions of the Temporary Receivership
Order. Temporary Receivership Order, Section XII.J.
The Receiver performed the tasks detailed in the Temporary Receivership Order.
The activities of the Receiver during the Expense Period are detailed in large part in its
Report of Temporary Receiver's Activities for the Period August 24, 2015 through
September 4, 2015 filed with the Court on September 4, 2015 (Doc. No. 50) ("Receiver's
Report") and include the activities reflected in the information included in the Receiver's
Report which was required by the Temporary Receivership Order, including the analysis
of extensive business and financial records, the interview of employees and principals of
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At the September 15, 2015 hearing, the Court heard a full day of testimony and
argument, including testimony of the Receiver's representative, Kenton Johnson. On
September 18, 2015, shortly before the Temporary Receivership Order was to expire, the
Court issued its Order of that date, granting in part and denying in part the FTC's motion
for a preliminary injunction. Order entered September 18, 2015 (Doc. No. 118). Under
the Court's September 18, 2015 Order, the Court imposed a monitorship, rather than a
receivership, over the Vemma Entities. The Receiver is therefore in the process of
transitioning control of the Receivership Defendants and their assets back to the pre-
receivership management. This fee motion is the first of two motions that will complete
the transition to the monitorship and the wind up of the receivership estate. This Motion is
brought on an expedited basis because, as explained below, counsel for the Vemma
Entities objected to the Receiver retaining any funds to pay allowed fees and expenses,
despite the clear language in the Temporary Receivership Order.
The Temporary Receivership Order provides that the Receiver and those hired by
the Receiver pursuant to the Order, including counsel, are entitled to compensation for fees
and expenses incurred in connection with the receivership which are to be paid "solely
from the Assets now held by or in the possession or control, or which may be received by,
the Receivership Defendants." Temporary Receivership Order, Section XIX. Further, the
Receiver was authorized to make payments from receivership assets that the Receiver
deemed necessary or advisable to carry out the provisions of the Temporary Receivership
Order. Temporary Receivership Order, Section XII.J.
The Receiver performed the tasks detailed in the Temporary Receivership Order.
The activities of the Receiver during the Expense Period are detailed in large part in its
Report of Temporary Receiver's Activities for the Period August 24, 2015 through
September 4, 2015 filed with the Court on September 4, 2015 (Doc. No. 50) ("Receiver's
Report") and include the activities reflected in the information included in the Receiver's
Report which was required by the Temporary Receivership Order, including the analysis
of extensive business and financial records, the interview of employees and principals of
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 5 of 11
the Receivership Defendants and evaluation of the business enterprise. Temporary
Receivership Order, Section XVII. The Receiver's activities were also described to the
Court in part through the testimony of Kenton Johnson of the Receiver's office who
appeared and testified at deposition on September 11, 2015 and the preliminary injunction
hearing on September 15, 2015. In the interests of expediting the determination of this
Motion and minimizing expense to the receivership estate, the Receiver has not described
at length all of the Receiver's activities conducted during the Expense Period herein and in
the supporting declarations of the Receiver and its counsel which are identified in the time
records of the Receiver and counsel filed in support of this Motion, but will provide further
narrative detail to the Court upon request.
The Receiver also incurred and paid $358,293.05 in business operating expenses,
primarily for payroll, employee benefits and insurance premiums. All of these expenses
are itemized on the financial report attached to the accompanying declaration of Kenton
Johnson as Exhibit 1.
The Receiver's counsel's activities during the Expense Period including advising the
Receiver regarding a number of legal issues that arose in connection with the
administration of the temporary receivership estate, including assisting the Receiver in
obtaining turnover by BMO Harris Bank of receivership funds so that the Receiver could
pay employee payroll expenses, addressing employee benefits issues, addressing numerous
requests and demands by the defendants for information, documents and discovery
regarding the receivership estate, coordinating deposition dates and representing the
Receiver at the deposition of Kenton Johnson, successfully objecting to a document
production request and appearing at a telephonic hearing on an emergency discovery
motion brought by the Vemma Entities, and attending the preliminary injunction hearing
on September 15, 2015.
The Receiver and its counsel continue to incur fees and expenses in the wind up of
the temporary receivership estate and the turnover of possession and control of the Vemma
Entities' business premises, assets and documents. On September 18, 2015, the Receiver
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the Receivership Defendants and evaluation of the business enterprise. Temporary
Receivership Order, Section XVII. The Receiver's activities were also described to the
Court in part through the testimony of Kenton Johnson of the Receiver's office who
appeared and testified at deposition on September 11, 2015 and the preliminary injunction
hearing on September 15, 2015. In the interests of expediting the determination of this
Motion and minimizing expense to the receivership estate, the Receiver has not described
at length all of the Receiver's activities conducted during the Expense Period herein and in
the supporting declarations of the Receiver and its counsel which are identified in the time
records of the Receiver and counsel filed in support of this Motion, but will provide further
narrative detail to the Court upon request.
The Receiver also incurred and paid $358,293.05 in business operating expenses,
primarily for payroll, employee benefits and insurance premiums. All of these expenses
are itemized on the financial report attached to the accompanying declaration of Kenton
Johnson as Exhibit 1.
The Receiver's counsel's activities during the Expense Period including advising the
Receiver regarding a number of legal issues that arose in connection with the
administration of the temporary receivership estate, including assisting the Receiver in
obtaining turnover by BMO Harris Bank of receivership funds so that the Receiver could
pay employee payroll expenses, addressing employee benefits issues, addressing numerous
requests and demands by the defendants for information, documents and discovery
regarding the receivership estate, coordinating deposition dates and representing the
Receiver at the deposition of Kenton Johnson, successfully objecting to a document
production request and appearing at a telephonic hearing on an emergency discovery
motion brought by the Vemma Entities, and attending the preliminary injunction hearing
on September 15, 2015.
The Receiver and its counsel continue to incur fees and expenses in the wind up of
the temporary receivership estate and the turnover of possession and control of the Vemma
Entities' business premises, assets and documents. On September 18, 2015, the Receiver
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 6 of 11
and counsel conferred with defense counsel to transfer the keys to the business premises
that afternoon and to address the status of assets and control of the business. The Receiver
has worked to facilitate lifting the freeze of bank accounts and notifying other interested
third parties of the termination of the temporary receivership by issuing e-mail notices to
those financial institutions and others of the Court's September 18, 2015 Order. The
Receiver advised counsel for the defendants that the Receiver would be holding funds
sufficient to satisfy estimated outstanding administrative expenses of the estate, including
the fees and expenses of the Receiver and its counsel, pursuant to the provisions of the
Temporary Receivership Order, before turning the remaining funds over to the defendants.
Counsel for the Vemma Entities objected to the Receiver retaining any funds, necessitating
the bringing of this Motion on an expedited basis. In addition to the requested approval
and payment of the fees and expenses of the Receiver and its counsel, the Receiver is also
reserving an additional $111,224.92 for estimated business operating expenses believed to
have been incurred during the temporary receivership period as itemized on the financial
report, Exhibit 1 to Kenton Johnson's declaration. These are estimated and, where
applicable, prorated amounts. The Receiver is prepared to pay to the Vemma Entities this
amount from the funds held by the Receiver provided the Court enters an order discharging
and releasing the Receiver and the receivership estate from any liability for non-payment
of these liabilities upon notice to the affected creditors as part of the wind up motion it will
file. The Receiver and counsel worked over the weekend to identify pending
administrative expenses, and on September 21, 2015, the Receiver arranged for a wire
transfer to the Vemma Entities in the sum of $35,707.68.
The initial stages of a temporary receivership proceeding are labor intensive and
involve numerous activities by the Receiver and counsel to gain control of assets and
records and to evaluate the business, financial structure and operations of the Receivership
Defendants as required under the Temporary Receivership Order. These activities are
performed under extreme time exigencies, as the Temporary Receivership Order required a
detailed report regarding the Receivership Defendants to be prepared and filed prior to the
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and counsel conferred with defense counsel to transfer the keys to the business premises
that afternoon and to address the status of assets and control of the business. The Receiver
has worked to facilitate lifting the freeze of bank accounts and notifying other interested
third parties of the termination of the temporary receivership by issuing e-mail notices to
those financial institutions and others of the Court's September 18, 2015 Order. The
Receiver advised counsel for the defendants that the Receiver would be holding funds
sufficient to satisfy estimated outstanding administrative expenses of the estate, including
the fees and expenses of the Receiver and its counsel, pursuant to the provisions of the
Temporary Receivership Order, before turning the remaining funds over to the defendants.
Counsel for the Vemma Entities objected to the Receiver retaining any funds, necessitating
the bringing of this Motion on an expedited basis. In addition to the requested approval
and payment of the fees and expenses of the Receiver and its counsel, the Receiver is also
reserving an additional $111,224.92 for estimated business operating expenses believed to
have been incurred during the temporary receivership period as itemized on the financial
report, Exhibit 1 to Kenton Johnson's declaration. These are estimated and, where
applicable, prorated amounts. The Receiver is prepared to pay to the Vemma Entities this
amount from the funds held by the Receiver provided the Court enters an order discharging
and releasing the Receiver and the receivership estate from any liability for non-payment
of these liabilities upon notice to the affected creditors as part of the wind up motion it will
file. The Receiver and counsel worked over the weekend to identify pending
administrative expenses, and on September 21, 2015, the Receiver arranged for a wire
transfer to the Vemma Entities in the sum of $35,707.68.
The initial stages of a temporary receivership proceeding are labor intensive and
involve numerous activities by the Receiver and counsel to gain control of assets and
records and to evaluate the business, financial structure and operations of the Receivership
Defendants as required under the Temporary Receivership Order. These activities are
performed under extreme time exigencies, as the Temporary Receivership Order required a
detailed report regarding the Receivership Defendants to be prepared and filed prior to the
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 7 of 11
preliminary injunction hearing. It is important that the Receiver's analysis, findings and
conclusions be made available to the Court and interested parties in sufficient time to allow
them to evaluate the Receiver's Report for the preliminary injunction hearing. The
Receiver's fees and expenses and those of its counsel are reasonable and appropriate under
the circumstances, were incurred in performing the Receiver's express powers and duties
under the Temporary Receivership Order and should be approved and ordered paid
forthwith from the remaining receivership assets in the possession of the Receiver.
II. THE FEES AND EXPENSES OF THE RECEIVER AND COUNSEL
SHOULD BE APPROVED AND PAID FORTHWITH FROM THE
REMAINING RECEIVERSHIP ASSETS HELD BY THE RECEIVER
The assets of the receivership are the source of payment of administrative expenses
of a receivership estate, including the fees and costs of the receiver and professionals
employed by the receiver. See, e.g. Federal Trade Commission v. Slimamerica, 2008 WL
5435892 (S.D. Fla. 2008) (in which fees and costs were awarded to the receiver's counsel
in a first fee application based on a provision in the temporary restraining order which is
virtually identical to Section XIX of the instant Temporary Receivership Order). As
explained in the leading receivership treatise, Clark on Receivers: "The costs and expenses
of preserving, administering and realizing the property or fund must be paid out of the
property or fund....The appointing court pledges its good faith that all duly authorized
obligations incurred during the receivership shall be paid." 2 Clark on Receivers § 637,
pp. 1052-1053 (3rd ed. Rev. 1992). As the Eleventh Circuit noted in Securities and
Exchange Commission v. Elliott, 953 F.2d 1560, 1576 (11th Cir. 1992): "...there is an
implied understanding that the court which appointed him and whose officer he is will
protect his right to be paid for his services, to be reimbursed for his proper costs and
expenses."
The Receiver's extensive work to perform the powers and duties set forth in the
Temporary Receivership Order are described in the Receiver's Report, the testimony of
Kenton Johnson and this Motion and are itemized in the billing records attached to the
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preliminary injunction hearing. It is important that the Receiver's analysis, findings and
conclusions be made available to the Court and interested parties in sufficient time to allow
them to evaluate the Receiver's Report for the preliminary injunction hearing. The
Receiver's fees and expenses and those of its counsel are reasonable and appropriate under
the circumstances, were incurred in performing the Receiver's express powers and duties
under the Temporary Receivership Order and should be approved and ordered paid
forthwith from the remaining receivership assets in the possession of the Receiver.
II. THE FEES AND EXPENSES OF THE RECEIVER AND COUNSEL
SHOULD BE APPROVED AND PAID FORTHWITH FROM THE
REMAINING RECEIVERSHIP ASSETS HELD BY THE RECEIVER
The assets of the receivership are the source of payment of administrative expenses
of a receivership estate, including the fees and costs of the receiver and professionals
employed by the receiver. See, e.g. Federal Trade Commission v. Slimamerica, 2008 WL
5435892 (S.D. Fla. 2008) (in which fees and costs were awarded to the receiver’s counsel
in a first fee application based on a provision in the temporary restraining order which is
virtually identical to Section XIX of the instant Temporary Receivership Order). As
explained in the leading receivership treatise, Clark on Receivers: “The costs and expenses
of preserving, administering and realizing the property or fund must be paid out of the
property or fund….The appointing court pledges its good faith that all duly authorized
obligations incurred during the receivership shall be paid.” 2 Clark on Receivers § 637,
pp. 1052-1053 (3rd
ed. Rev. 1992). As the Eleventh Circuit noted in Securities and
Exchange Commission v. Elliott, 953 F.2d 1560, 1576 (11th
Cir. 1992): “…there is an
implied understanding that the court which appointed him and whose officer he is will
protect his right to be paid for his services, to be reimbursed for his proper costs and
expenses.”
The Receiver's extensive work to perform the powers and duties set forth in the
Temporary Receivership Order are described in the Receiver's Report, the testimony of
Kenton Johnson and this Motion and are itemized in the billing records attached to the
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 8 of 11
declarations supporting the Motion. The Receiver's work to wind up the estate includes
transferring possession and control of the keys to the premises, notifying financial
institutions and third parties of the order concluding the temporary receivership and
imposing a monitorship in the spirit of cooperation with the defendants, ensuring necessary
third party payments for employee benefits and third party vendors providing goods and
services to the temporary receivership estate are paid, and preparing the necessary motions
to approve and pay the Receiver's and counsel's fees and expenses, to wind up the estate
and discharge the Receiver and its Receiver's bond. The Receiver has retained the assets
of the Receivership Defendants in the Receiver's possession and control sufficient to
satisfy the actual and estimated administrative expenses incurred by the temporary
receivership estate, including the fees and expenses of the Receiver to date and those the
Receiver anticipates will be incurred to wind up the temporary receivership pursuant to
Section XIX of the Temporary Receivership Order and the foregoing authorities. The
Receiver anticipates filing a motion to wind up the temporary receivership and discharge
the Receiver within the next two weeks.
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declarations supporting the Motion. The Receiver's work to wind up the estate includes
transferring possession and control of the keys to the premises, notifying financial
institutions and third parties of the order concluding the temporary receivership and
imposing a monitorship in the spirit of cooperation with the defendants, ensuring necessary
third party payments for employee benefits and third party vendors providing goods and
services to the temporary receivership estate are paid, and preparing the necessary motions
to approve and pay the Receiver's and counsel's fees and expenses, to wind up the estate
and discharge the Receiver and its Receiver's bond. The Receiver has retained the assets
of the Receivership Defendants in the Receiver's possession and control sufficient to
satisfy the actual and estimated administrative expenses incurred by the temporary
receivership estate, including the fees and expenses of the Receiver to date and those the
Receiver anticipates will be incurred to wind up the temporary receivership pursuant to
Section XIX of the Temporary Receivership Order and the foregoing authorities. The
Receiver anticipates filing a motion to wind up the temporary receivership and discharge
the Receiver within the next two weeks.
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 9 of 11
III. CONCLUSION
Based on the foregoing, and the pleadings filed in support hereof, the Receiver
respectfully requests that the Court grant relief as requested in the Motion.
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5 DATED: September 21, 2015 DENTONS US LLP
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7 By: /s/Gary Owen Caris
Gary Owen Caris (admitted pro hac vice) Lesley Anne Hawes (admitted pro hac vice) 300 South Grand Avenue, 14th Floor Los Angeles, CA 90071 Tel: 213.688.1000 Fax: 213.243.6330 Email: [email protected]
Joshua S. Akbar (AZ Bar No. 025339) 2398 E. Camelback Road, Suite 850 Phoenix, AZ 85016 Tel: 602.508.3900 Fax: 602.508.3914 Email: [email protected]
Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
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III. CONCLUSION
Based on the foregoing, and the pleadings filed in support hereof, the Receiver
respectfully requests that the Court grant relief as requested in the Motion.
DATED: September 21, 2015 DENTONS US LLP
By: /s/Gary Owen Caris
Gary Owen Caris (admitted pro hac vice)
Lesley Anne Hawes (admitted pro hac vice)
300 South Grand Avenue, 14th
Floor
Los Angeles, CA 90071
Tel: 213.688.1000
Fax: 213.243.6330
Email: [email protected]
Joshua S. Akbar (AZ Bar No. 025339)
2398 E. Camelback Road, Suite 850
Phoenix, AZ 85016
Tel: 602.508.3900
Fax: 602.508.3914
Email: [email protected]
Attorneys for Former Temporary Receiver
Robb Evans and Robb Evans & Associates
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 10 of 11
CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
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Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
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18 A/Christina O'Meara Christina O'Meara
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
/s/Christina O'Meara Christina O'Meara
Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 11 of 11
JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected]
GARY OWEN CARTS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected]
Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
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UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
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Case No. CV-15-01578-PHX-JJT
DECLARATION OF GARY OWEN CARIS IN SUPPORT OF FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
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Federal Trade Commission,
Plaintiff,
v.
Vemma Nutrition Company, et al.,
Defendants.
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21 I, Gary Owen Caris, declare:
1. I am an attorney at law duly admitted to practice before the courts of the
State of California and have been admitted to practice pro hac vice before this Court in this
matter. I am a member of Dentons US LLP ("Dentons"), the attorneys for the former
Temporary Receiver, Robb Evans and Robb Evans & Associates LLC ("Receiver"),
appointed as temporary receiver for defendants Vemma Nutrition Company ("Vemma"),
Vemma International Holdings, Inc. (collectively the "Vemma Entities"), and their
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JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected] GARY OWEN CARIS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected] [email protected] Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Federal Trade Commission,
Plaintiff,
v. Vemma Nutrition Company, et al.,
Defendants.
Case No. CV-15-01578-PHX-JJT DECLARATION OF GARY OWEN CARIS IN SUPPORT OF FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
I, Gary Owen Caris, declare:
1. I am an attorney at law duly admitted to practice before the courts of the
State of California and have been admitted to practice pro hac vice before this Court in this
matter. I am a member of Dentons US LLP ("Dentons"), the attorneys for the former
Temporary Receiver, Robb Evans and Robb Evans & Associates LLC ("Receiver"),
appointed as temporary receiver for defendants Vemma Nutrition Company ("Vemma"),
Vemma International Holdings, Inc. (collectively the "Vemma Entities"), and their
Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 1 of 5
successors and assigns, subsidiaries, and related entities ("Receivership Defendants"). I
am lead counsel for the Receiver. I have personal knowledge of the matters set forth in
this declaration, and if I were called upon to testify as to these matters, I could and would
competently testify based upon my personal knowledge.
2. I have been the primary attorney from Dentons representing the Receiver
since the temporary receivership commenced. I reviewed and assisted the Receiver in
finalizing its Report of Temporary Receiver's Activities filed on September 4, 2015 (Doc.
No. 50) ("Receiver's Report"). I addressed disputes concerning discovery propounded to
the Receiver by Vemma, including coordinating a deposition of the Receiver's
representative Kenton Johnson, attending that deposition, successfully objecting to
Vemma's request for production of documents and appearing at a telephonic hearing on
September 8, 2015 on Vemma's emergency motion to address various discovery disputes.
I attended the full-day preliminary injunction hearing on September 15, 2015 as counsel
for the Receiver at which the Receiver's representative Kenton Johnson testified.
3. I have also assisted the Receiver in transitioning possession and control of
the assets and documents back to the Receivership Defendants after the Court issued its
Order on September 18, 2015 (Doc. No. 118) effectively dissolving the temporary
receivership and ordering the imposition of a monitorship over the Vemma Entities, with
Robb Evans and Robb Evans & Associates LLC appointed as monitor. On September 18,
2015, I conferred with John Craiger, counsel for the defendants, to discuss transition issues
and coordinate the Receiver's delivery of keys to the premises, and I provided advice to the
Receiver regarding other transition issues. Dentons has prepared the Receiver's first and
final fee motion which this declaration supports, and Dentons will be preparing and filing a
motion to wind up the temporary receivership and discharge the Receiver and its bond
within the next two weeks in order to conclude the administration of the receivership
estate. Other attorneys at my firm have assisted the Receiver as well, including Joshua
Akbar who acted as local counsel in Phoenix for the Receiver and other attorneys who
provided assistance regarding employee benefits related issues. This motion is being filed
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successors and assigns, subsidiaries, and related entities (“Receivership Defendants”). I
am lead counsel for the Receiver. I have personal knowledge of the matters set forth in
this declaration, and if I were called upon to testify as to these matters, I could and would
competently testify based upon my personal knowledge.
2. I have been the primary attorney from Dentons representing the Receiver
since the temporary receivership commenced. I reviewed and assisted the Receiver in
finalizing its Report of Temporary Receiver's Activities filed on September 4, 2015 (Doc.
No. 50) ("Receiver's Report"). I addressed disputes concerning discovery propounded to
the Receiver by Vemma, including coordinating a deposition of the Receiver's
representative Kenton Johnson, attending that deposition, successfully objecting to
Vemma's request for production of documents and appearing at a telephonic hearing on
September 8, 2015 on Vemma's emergency motion to address various discovery disputes.
I attended the full-day preliminary injunction hearing on September 15, 2015 as counsel
for the Receiver at which the Receiver's representative Kenton Johnson testified.
3. I have also assisted the Receiver in transitioning possession and control of
the assets and documents back to the Receivership Defendants after the Court issued its
Order on September 18, 2015 (Doc. No. 118) effectively dissolving the temporary
receivership and ordering the imposition of a monitorship over the Vemma Entities, with
Robb Evans and Robb Evans & Associates LLC appointed as monitor. On September 18,
2015, I conferred with John Craiger, counsel for the defendants, to discuss transition issues
and coordinate the Receiver's delivery of keys to the premises, and I provided advice to the
Receiver regarding other transition issues. Dentons has prepared the Receiver's first and
final fee motion which this declaration supports, and Dentons will be preparing and filing a
motion to wind up the temporary receivership and discharge the Receiver and its bond
within the next two weeks in order to conclude the administration of the receivership
estate. Other attorneys at my firm have assisted the Receiver as well, including Joshua
Akbar who acted as local counsel in Phoenix for the Receiver and other attorneys who
provided assistance regarding employee benefits related issues. This motion is being filed
Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 2 of 5
on an expedited basis because in our phone call on September 18, 2015 Mr. Craiger
objected to the Receiver holding any money to pay allowed fees and expenses,
notwithstanding the language in the order which appointed the temporary receiver.
4. Attached hereto collectively as Exhibit 1 are copies of time records by the
attorneys and paralegal at Dentons who performed work on this receivership case. The
time records itemize and detail the hours spent and the work performed by those attorneys.
The time records attached hereto as Exhibit 1, as well as the time records for the Receiver, its
members and staff, have been redacted by my firm where appropriate to preserve descriptions
containing confidential, sensitive, tactical, strategic, attorney-client privileged and/or attorney
work-product information. Attached hereto as Exhibit 2 is a summary of the billing rates for
each of the attorneys and paralegal who performed work on the file, the total hours spent
by those attorneys and paralegal and the total fees incurred for the services of the attorneys
and paralegal at Dentons in this matter from the inception of the temporary receivership
through and including September 18, 2015.
5. My firm has incurred time after September 18, 2015 to prepare the
Receiver's first and final fee motion and supporting pleadings and will continue to incur
time in assisting the Receiver in transitioning control of the estate and its assets back to the
Receivership Defendants as well as in preparing a motion to approve the wind up of the
receivership estate and discharge of the Receiver and its bond. I have reviewed the
estimates for my firm's fees and expenses through the closing of the estate, and I believe
those estimates are fair and accurately reflect the likely potential fees and costs that my
firm may incur through the wind up of the estate.
6. The billing rates charged by Dentons in this case reflected in the summary
attached hereto as Exhibit 2 are discounted at 10% from the standard rates charged by
Dentons in non-federal equity receivership cases.
7. I am a partner of Dentons and am familiar with the methods and procedures
used to create, record and maintain billing records for the firm's clients. The time record
summaries attached hereto collectively as Exhibit 2 are computerized time records
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on an expedited basis because in our phone call on September 18, 2015 Mr. Craiger
objected to the Receiver holding any money to pay allowed fees and expenses,
notwithstanding the language in the order which appointed the temporary receiver.
4. Attached hereto collectively as Exhibit 1 are copies of time records by the
attorneys and paralegal at Dentons who performed work on this receivership case. The
time records itemize and detail the hours spent and the work performed by those attorneys.
The time records attached hereto as Exhibit 1, as well as the time records for the Receiver, its
members and staff, have been redacted by my firm where appropriate to preserve descriptions
containing confidential, sensitive, tactical, strategic, attorney-client privileged and/or attorney
work-product information. Attached hereto as Exhibit 2 is a summary of the billing rates for
each of the attorneys and paralegal who performed work on the file, the total hours spent
by those attorneys and paralegal and the total fees incurred for the services of the attorneys
and paralegal at Dentons in this matter from the inception of the temporary receivership
through and including September 18, 2015.
5. My firm has incurred time after September 18, 2015 to prepare the
Receiver's first and final fee motion and supporting pleadings and will continue to incur
time in assisting the Receiver in transitioning control of the estate and its assets back to the
Receivership Defendants as well as in preparing a motion to approve the wind up of the
receivership estate and discharge of the Receiver and its bond. I have reviewed the
estimates for my firm's fees and expenses through the closing of the estate, and I believe
those estimates are fair and accurately reflect the likely potential fees and costs that my
firm may incur through the wind up of the estate.
6. The billing rates charged by Dentons in this case reflected in the summary
attached hereto as Exhibit 2 are discounted at 10% from the standard rates charged by
Dentons in non-federal equity receivership cases.
7. I am a partner of Dentons and am familiar with the methods and procedures
used to create, record and maintain billing records for the firm’s clients. The time record
summaries attached hereto collectively as Exhibit 2 are computerized time records
Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 3 of 5
prepared contemporaneously with the services rendered by each attorney and paralegal
billing time to this matter. These computerized records are prepared in the ordinary course
of business by the attorneys and paralegals employed by the firm who have a business duty
to accurately record their time spent and services rendered on the matters on which they
perform work. In the normal course of business after the conclusion of the calendar month
to which the time records pertain, the time records are transferred into a computerized
billing program that generates monthly invoices under the supervision of the firm's
accounting department. The time records attached as Exhibit 2 are the "raw" computerized
time records which record the time spent and the narrative text of the services rendered,
because no monthly invoice has been prepared for the partial month of September 2015
and the August 2015 invoice is in the process of being finalized for transmission to the
client in this case. Based upon my experience with the firm, I believe that Dentons'
methods and procedures for recording and accounting for time and services for its clients
are reliable and accurate.
8. I have over 35 years' experience as a business and commercial litigator and
also have extensive experience as a bankruptcy attorney representing creditors in Chapter
11 and Chapter 7 bankruptcy cases. For more than sixteen years I have also specialized in
representing receivers in federal equity receiverships. I believe my firm's rates and the
amount incurred by the Receiver for the services rendered during the Expense Period are
reasonable and appropriate based on the nature of the services rendered, the quality and
amount of services provided, the complexity of the issues involved and other factors under
the circumstances.
I declare under penalty of perjury that the foregoing is true and correct and that this
declaration was executed this 21st day of September 2015 at Los Angeles, California.
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prepared contemporaneously with the services rendered by each attorney and paralegal
billing time to this matter. These computerized records are prepared in the ordinary course
of business by the attorneys and paralegals employed by the firm who have a business duty
to accurately record their time spent and services rendered on the matters on which they
perform work. In the normal course of business after the conclusion of the calendar month
to which the time records pertain, the time records are transferred into a computerized
billing program that generates monthly invoices under the supervision of the firm’s
accounting department. The time records attached as Exhibit 2 are the "raw" computerized
time records which record the time spent and the narrative text of the services rendered,
because no monthly invoice has been prepared for the partial month of September 2015
and the August 2015 invoice is in the process of being finalized for transmission to the
client in this case. Based upon my experience with the firm, I believe that Dentons'
methods and procedures for recording and accounting for time and services for its clients
are reliable and accurate.
8. I have over 35 years’ experience as a business and commercial litigator and
also have extensive experience as a bankruptcy attorney representing creditors in Chapter
11 and Chapter 7 bankruptcy cases. For more than sixteen years I have also specialized in
representing receivers in federal equity receiverships. I believe my firm’s rates and the
amount incurred by the Receiver for the services rendered during the Expense Period are
reasonable and appropriate based on the nature of the services rendered, the quality and
amount of services provided, the complexity of the issues involved and other factors under
the circumstances.
I declare under penalty of perjury that the foregoing is true and correct and that this
declaration was executed this 21st day of September 2015 at Los Angeles, California.
/s/Gary Owen Caris GARY OWEN CARIS
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
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Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
/s/Christina O'Meara Christina O'Meara
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JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected]
GARY OWEN CARTS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected]
Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
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UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
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Case No. CV-15-01578-PHX-JJT
DECLARATION OF KENTON JOHNSON IN SUPPORT OF FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
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Federal Trade Commission,
Plaintiff,
v.
Vemma Nutrition Company, et al.,
Defendants.
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I, Kenton Johnson, declare:
1. I am a member of Robb Evans & Associates LLC and a deputy to the former
Temporary Receiver, Robb Evans and Robb Evans & Associates LLC ("Receiver"),
appointed as temporary receiver for defendants Vemma Nutrition Company ("Vemma"),
Vemma International Holdings, Inc. (collectively the "Vemma Entities"), and their
successors and assigns, subsidiaries, and related entities ("Receivership Defendants"). I
am one of the senior members of the Receiver's staff with primary responsibility for the
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JOSHUA S. AKBAR (AZ Bar No. 025339) DENTONS US LLP 2398 East Camelback Road, Suite 850 Phoenix, Arizona 85016-9016 Tel.: 602.508.3900 Fax: 602.508.3914 Email: [email protected] GARY OWEN CARIS (admitted pro hac vice) LESLEY ANNE HAWES (admitted pro hac vice) DENTONS US LLP 300 S. Grand Avenue, Suite 1400 Los Angeles, California 90071-3124, United States Telephone: 213.688.1000 Facsimile: 213.243.6330 Email: [email protected] [email protected] Attorneys for Former Temporary Receiver Robb Evans and Robb Evans & Associates
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Federal Trade Commission,
Plaintiff,
v. Vemma Nutrition Company, et al.,
Defendants.
Case No. CV-15-01578-PHX-JJT DECLARATION OF KENTON JOHNSON IN SUPPORT OF FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
I, Kenton Johnson, declare:
1. I am a member of Robb Evans & Associates LLC and a deputy to the former
Temporary Receiver, Robb Evans and Robb Evans & Associates LLC ("Receiver"),
appointed as temporary receiver for defendants Vemma Nutrition Company ("Vemma"),
Vemma International Holdings, Inc. (collectively the "Vemma Entities"), and their
successors and assigns, subsidiaries, and related entities (“Receivership Defendants”). I
am one of the senior members of the Receiver’s staff with primary responsibility for the
Case 2:15-cv-01578-JJT Document 120-4 Filed 09/21/15 Page 1 of 5
activities of the Receiver and have personally participated in the Receiver's activities
during the temporary receivership from the inception of the temporary receivership on
August 21, 2015 to the present and completing the administration of the receivership estate
in light of the Court's Order entered September 18, 2015. I have personal knowledge of
the matters set forth in this declaration, and if I were called upon to testify as to these
matters, I could and would competently testify based upon my personal knowledge.
2. The Receiver was appointed temporary receiver pursuant to the Court's
Order Filed Under Seal entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership
Order"). On September 4, 2015, the Receiver filed its Report of Temporary Receiver's
Activities (Doc. No. 50) ("Receiver's Report"). The Receiver's Report details the
Receiver's activities during the temporary receivership, and the Receiver's Report reflects
the Receiver's detailed analysis of extensive business and financial records, the business
operations of the Receivership Defendants, interviews with employees and principals of
the Receivership Defendants and other activities upon which the Receiver's Report is
based.
3. On September 11, 2015, I continued to prepare for my deposition and was
deposed for a total of approximately seven hours, and on September 15, 2015, I appeared
and provided testimony on behalf of the Receiver at the full day hearing on plaintiff
Federal Trade Commission's motion for a preliminary injunction. On September 18, 2015,
the Court issued its Order (Doc. No. 118) which had the effect of dissolving the temporary
receivership and imposing a monitorship over the Vemma Entities, appointing Robb Evans
and Robb Evans & Associates LLC as the Monitor.
4. This declaration is filed in support of the Receiver's first and final motion for
approval and payment of fees and expenses of the Receiver and its counsel from the
inception of the temporary receivership on August 21, 2015 through the wind up of the
temporary receivership ("Expense Period"). The Receiver specifically seeks an order for
approval of the fees and expenses of the Receiver and its counsel incurred during the
Expense Period, including fees of $192,987.60 and costs of $19,466.99 of the Receiver,
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activities of the Receiver and have personally participated in the Receiver's activities
during the temporary receivership from the inception of the temporary receivership on
August 21, 2015 to the present and completing the administration of the receivership estate
in light of the Court's Order entered September 18, 2015. I have personal knowledge of
the matters set forth in this declaration, and if I were called upon to testify as to these
matters, I could and would competently testify based upon my personal knowledge.
2. The Receiver was appointed temporary receiver pursuant to the Court's
Order Filed Under Seal entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership
Order"). On September 4, 2015, the Receiver filed its Report of Temporary Receiver's
Activities (Doc. No. 50) ("Receiver's Report"). The Receiver's Report details the
Receiver's activities during the temporary receivership, and the Receiver's Report reflects
the Receiver's detailed analysis of extensive business and financial records, the business
operations of the Receivership Defendants, interviews with employees and principals of
the Receivership Defendants and other activities upon which the Receiver's Report is
based.
3. On September 11, 2015, I continued to prepare for my deposition and was
deposed for a total of approximately seven hours, and on September 15, 2015, I appeared
and provided testimony on behalf of the Receiver at the full day hearing on plaintiff
Federal Trade Commission's motion for a preliminary injunction. On September 18, 2015,
the Court issued its Order (Doc. No. 118) which had the effect of dissolving the temporary
receivership and imposing a monitorship over the Vemma Entities, appointing Robb Evans
and Robb Evans & Associates LLC as the Monitor.
4. This declaration is filed in support of the Receiver's first and final motion for
approval and payment of fees and expenses of the Receiver and its counsel from the
inception of the temporary receivership on August 21, 2015 through the wind up of the
temporary receivership ("Expense Period"). The Receiver specifically seeks an order for
approval of the fees and expenses of the Receiver and its counsel incurred during the
Expense Period, including fees of $192,987.60 and costs of $19,466.99 of the Receiver,
Case 2:15-cv-01578-JJT Document 120-4 Filed 09/21/15 Page 2 of 5
and fees of $79,247.55 and costs of $2,749.97 incurred for the services of the Receiver's
counsel, and for payment thereof from the assets of the Receivership Defendants presently
held in the Receiver's possession, custody and control pursuant to Section XIX of the
Temporary Receivership Order, which fees and expenses include estimated fees and
expenses of the Receiver and its counsel to be incurred in connection with the wind up of
the temporary receivership and discharge of the Receiver. To the extent that the actual
fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
the Vemma Entities the excess amount.
5. Attached hereto as Exhibit 1 is a financial report prepared by the Receiver
concerning the receipts and disbursements of the temporary receivership estate and the fees
and costs of the Receiver and counsel incurred and anticipated to be incurred during the
Expense Period. As more particularly set forth in Exhibit 1, the Receiver incurred and
paid $358,293.05 in business operating expenses, primarily for payroll, employee benefits
and insurance premiums. In addition to the requested approval and payment of the fees
and expenses of the Receiver and its counsel, the Receiver is also reserving an additional
$111,224.92 for estimated business operating expenses believed to have been incurred
during the temporary receivership period as itemized on the financial report, Exhibit 1 to
Kenton Johnson's declaration. These are estimated and, where applicable, prorated
amounts. The Receiver is prepared to pay to the Vemma Entities this amount from the
funds held by the Receiver provided the Court enters an order discharging and releasing
the Receiver and the receivership estate from any liability for non-payment of these
liabilities upon notice to the affected creditors as part of the wind up motion it will file.
Attached hereto collectively as Exhibit 2 are true and correct copies of time records of the
Receiver's members and staff reflecting the services rendered by the Receiver during the
temporary receivership.
6. The billing rates charged in this case reflected in the billing records filed in
support of the Motion for the Receiver, the Receiver's members and senior accounting
staff are discounted at 10% from the rates charged by the Receiver's firm in private sector
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and fees of $79,247.55 and costs of $2,749.97 incurred for the services of the Receiver's
counsel, and for payment thereof from the assets of the Receivership Defendants presently
held in the Receiver's possession, custody and control pursuant to Section XIX of the
Temporary Receivership Order, which fees and expenses include estimated fees and
expenses of the Receiver and its counsel to be incurred in connection with the wind up of
the temporary receivership and discharge of the Receiver. To the extent that the actual
fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
the Vemma Entities the excess amount.
5. Attached hereto as Exhibit 1 is a financial report prepared by the Receiver
concerning the receipts and disbursements of the temporary receivership estate and the fees
and costs of the Receiver and counsel incurred and anticipated to be incurred during the
Expense Period. As more particularly set forth in Exhibit 1, the Receiver incurred and
paid $358,293.05 in business operating expenses, primarily for payroll, employee benefits
and insurance premiums. In addition to the requested approval and payment of the fees
and expenses of the Receiver and its counsel, the Receiver is also reserving an additional
$111,224.92 for estimated business operating expenses believed to have been incurred
during the temporary receivership period as itemized on the financial report, Exhibit 1 to
Kenton Johnson's declaration. These are estimated and, where applicable, prorated
amounts. The Receiver is prepared to pay to the Vemma Entities this amount from the
funds held by the Receiver provided the Court enters an order discharging and releasing
the Receiver and the receivership estate from any liability for non-payment of these
liabilities upon notice to the affected creditors as part of the wind up motion it will file.
Attached hereto collectively as Exhibit 2 are true and correct copies of time records of the
Receiver's members and staff reflecting the services rendered by the Receiver during the
temporary receivership.
6. The billing rates charged in this case reflected in the billing records filed in
support of the Motion for the Receiver, the Receiver’s members and senior accounting
staff are discounted at 10% from the rates charged by the Receiver’s firm in private sector
Case 2:15-cv-01578-JJT Document 120-4 Filed 09/21/15 Page 3 of 5
cases as of the time of the Receiver's appointment.
7. As a member of Robb Evans & Associates LLC, I am familiar with the
methods and procedures used by the Receiver and its staff and employees to record the
time spent rendering services to receivership estates over which Robb Evans or Robb
Evans & Associates LLC have been appointed. The records included as Exhibit 2 hereto
are regularly prepared by the members, staff and employees of Robb Evans & Associates
LLC at or about the time of the services rendered and each of whom has a business duty to
accurately record the information regarding their services set forth in these records. The
records are reviewed by the Receiver's accounting staff and summarized in the Receiver's
Financial Summary, Exhibit 1 attached hereto. Based upon my experience with Robb
Evans & Associates LLC, I believe the Receiver's methods and procedures for recording
and accounting for time and services for the receivership estates over which Robb Evans or
Robb Evans & Associates LLC have been appointed are reliable and accurate.
I declare under penalty of perjury that the foregoing is true and correct and that this
declaration was executed this day of September 2015 at Sun Valley, California.
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cases as of the time of the Receiver’s appointment.
7. As a member of Robb Evans & Associates LLC, I am familiar with the
methods and procedures used by the Receiver and its staff and employees to record the
time spent rendering services to receivership estates over which Robb Evans or Robb
Evans & Associates LLC have been appointed. The records included as Exhibit 2 hereto
are regularly prepared by the members, staff and employees of Robb Evans & Associates
LLC at or about the time of the services rendered and each of whom has a business duty to
accurately record the information regarding their services set forth in these records. The
records are reviewed by the Receiver’s accounting staff and summarized in the Receiver’s
Financial Summary, Exhibit 1 attached hereto. Based upon my experience with Robb
Evans & Associates LLC, I believe the Receiver’s methods and procedures for recording
and accounting for time and services for the receivership estates over which Robb Evans or
Robb Evans & Associates LLC have been appointed are reliable and accurate.
I declare under penalty of perjury that the foregoing is true and correct and that this
declaration was executed this ___ day of September 2015 at Sun Valley, California.
KENTON JOHNSON
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
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Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
/s/Christina O'Meara Christina O'Meara
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UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Federal Trade Commission,
Plaintiff,
v.
Vemma Nutrition Company, et al.,
Defendants.
Case No. CV-15-01578-PHX-JJT
[PROPOSED] ORDER GRANTING FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
The matter of the First and Final Motion for Approval and Payment of Fees and
Expenses of Temporary Receiver and Its Counsel ("Fee Motion") filed by Robb Evans and
Robb Evans & Associates LLC, the former Temporary Receiver in the above-captioned
matter ("Receiver"), came on regularly for determination by the Court, the Honorable John
J. Tuchi, United States District Judge presiding. The Court, having reviewed and
considered the Fee Motion and all pleadings and papers filed in support thereof, and
responses and oppositions to the Fee Motion, if any, and good cause appearing therefor,
IT IS ORDERED that:
1. The Fee Motion is granted;
2. The fees and expenses of the Receiver and the Receiver's counsel incurred
from the inception of the temporary receivership on August 21, 2015 through the closing
and wind up of the temporary receivership, including fees of $192,987.60 and costs of
19,466.99 of the Receiver, and fees of $79,247.55 and costs of $2,749.97 incurred for the
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UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Federal Trade Commission,
Plaintiff,
v. Vemma Nutrition Company, et al.,
Defendants.
Case No. CV-15-01578-PHX-JJT [PROPOSED] ORDER GRANTING FIRST AND FINAL MOTION FOR APPROVAL AND PAYMENT OF FEES AND EXPENSES OF TEMPORARY RECEIVER AND ITS COUNSEL
The matter of the First and Final Motion for Approval and Payment of Fees and
Expenses of Temporary Receiver and Its Counsel ("Fee Motion") filed by Robb Evans and
Robb Evans & Associates LLC, the former Temporary Receiver in the above-captioned
matter (“Receiver”), came on regularly for determination by the Court, the Honorable John
J. Tuchi, United States District Judge presiding. The Court, having reviewed and
considered the Fee Motion and all pleadings and papers filed in support thereof, and
responses and oppositions to the Fee Motion, if any, and good cause appearing therefor,
IT IS ORDERED that:
1. The Fee Motion is granted;
2. The fees and expenses of the Receiver and the Receiver's counsel incurred
from the inception of the temporary receivership on August 21, 2015 through the closing
and wind up of the temporary receivership, including fees of $192,987.60 and costs of
19,466.99 of the Receiver, and fees of $79,247.55 and costs of $2,749.97 incurred for the
Case 2:15-cv-01578-JJT Document 120-7 Filed 09/21/15 Page 1 of 3
services of the Receiver's counsel, are hereby approved and ordered to be paid forthwith
from the assets of the Receivership Defendants presently held in the Receiver's possession,
custody and control pursuant to Section XIX of the Order Filed under Seal entered August
21, 2015 (Doc. No. 25) appointing the Receiver as temporary receiver.
3. To the extent that the actual fees and expenses are less than the estimated
amounts, the Receiver shall promptly remit to Vemma Nutrition Company the excess
amount.
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services of the Receiver's counsel, are hereby approved and ordered to be paid forthwith
from the assets of the Receivership Defendants presently held in the Receiver's possession,
custody and control pursuant to Section XIX of the Order Filed under Seal entered August
21, 2015 (Doc. No. 25) appointing the Receiver as temporary receiver.
3. To the extent that the actual fees and expenses are less than the estimated
amounts, the Receiver shall promptly remit to Vemma Nutrition Company the excess
amount.
Case 2:15-cv-01578-JJT Document 120-7 Filed 09/21/15 Page 2 of 3
CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
/s/Christina O'Meara Christina O'Meara
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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
document to the Clerk's office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrants:
Angeleque P. LinvilleAnne Anne Dorman LeJeune Emily B. Robinson Jason C. Moon Federal Trade Commission 1999 Bryan Street, Suite 2150 Dallas, TX 75201 Attorneys for Plaintiff
Brian R. Booker Edward A. Salanga John S. Craiger John A. Harris Devin D. Quigley Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, AZ 85004-2391 Attorneys for Defendants Vemma Nutrition Company, Vemma International Holdings, Inc.
John R. Clemency Lindsi Michelle Weber Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Attorneys for Defendant Benson K. Boreyko
Keith Beauchamp Marvin C. Ruth Coppersmith Brockelman PLC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Attorneys for Defendant Tom Alkazin and Bethany Alkazin
/s/Christina O'Meara Christina O'Meara
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