United States Securities and Exchange Commission v. Qin
- Lorna Schofield
- 1:20-cv-10849
- U.S. District Court · Southern District of New York
- 2
In United States SEC v. Qin, Judge Schofield granted the receiver’s fee application for work performed during the application period.
The court-appointed receiver and the Receiver Team were authorized to receive the requested fees and expenses; the receivership estate was affected because its funds could be used for those payments.
What happened
United States Securities and Exchange Commission v. Qin concerns a court-appointed receiver’s request to approve fees and expenses for work performed from July 1 through September 30, 2022. The receiver requested payments for BakerHostetler, Ankura Consulting Group, the Law Office of Dennis O. Cohen, and Miller Kaplan Arase.
The application described work operating the receivership estate, collecting its property, creating a claims portal, investigating possible cryptocurrency-related property, and preparing a motion about the deadline for claims. The Securities and Exchange Commission reviewed and approved the application and invoices.
Judge Schofield granted the Seventh Fee Application and authorized the receiver to make the requested payments. The court found that the work was complex, time-intensive, and beneficial to the receivership estate, and noted that the hourly rates included significant discounts and fee write-offs.
The detailed version
- United States Securities and Exchange Commission v. Qin · No. 1:20-cv-10849
- Lorna Schofield
- Feb. 10, 2023
Background
On January 21, 2022, the court appointed Robert A. Musiala, Jr., of Baker & Hostetler LLP as receiver in the action. A receiver is a person appointed by a court to manage property or affairs involved in a case. On December 30, 2022, the receiver submitted the Seventh Fee Application, seeking approval of fees and expenses incurred from July 1 through September 30, 2022.
The application sought approval of payments of $619,931.14 to BakerHostetler, $359,638.78 to Ankura Consulting Group, LLC, $3,875.00 to the Law Office of Dennis O. Cohen, PLLC, and $3,614.00 to Miller Kaplan Arase, LLP. These entities were collectively referred to as the Receiver Team. The receiver and the Receiver Team submitted invoices describing their work.
Court’s Analysis
The court explained that a receiver who reasonably and diligently performs court-assigned duties is entitled to fair compensation for services and expenses. It evaluates the reasonableness of a fee application by considering factors including the complexity of the problems, the benefit to the receivership estate, the quality of the work, and the time records. The court also gave substantial weight to the Securities and Exchange Commission’s review and approval of the application and invoices.
The billing records showed that the Receiver Team performed complex, time-intensive work operating the receivership estate and collecting receivership property. During the application period, the team drafted and filed a motion to establish a deadline for claims, launched an electronic claims portal, interviewed witnesses, and investigated claims involving possible receivership property in the form of cryptocurrencies. The court also noted that the hourly rates were significantly discounted from the ordinary rates of the receiver and Ankura, and that the application reflected fee discounts and write-offs.
Ruling
Judge Schofield ordered that the Seventh Fee Application is granted. The receiver was authorized to make payments for the total amounts requested in the application.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.