United States Securities and Exchange Commission v. Qin
- Clarke
- 1:20-cv-10849
- U.S. District Court · Southern District of New York
- 3
In SEC v. Qin, Judge Clarke granted in part and denied in part a receiver’s fee application.
The court’s order affected the receiver and the receiver team by determining the amounts they were authorized to receive from the receivership.
What happened
In United States Securities and Exchange Commission v. Qin, the court reviewed the receiver’s request for payment of fees and expenses incurred from July 1 through September 30, 2023. The request covered work by BakerHostetler, Ankura Consulting Group, the Law Office of Dennis O. Cohen, and Miller Kaplan Arase.
The receiver’s team reported work involving cryptocurrency and other receivership assets, including investigating potential claims, seeking the return of property, analyzing financial information, obtaining records, and deposing a witness. The court noted that it had previously denied part of the receiver’s request to recover about $3 million in assets, while granting recovery of about $529,000.
Judge Jessica G. L. Clarke granted in part and denied in part the fee application. She held back 20% of the fees and expenses because substantial work involved the partly unsuccessful motion to recover assets, authorizing payments of $491,384.03 to BakerHostetler, $130,244.52 to Ankura, $10,950 to the Law Office of Dennis O. Cohen, and $1,702.40 to Miller Kaplan Arase.
The detailed version
- United States Securities and Exchange Commission v. Qin · No. 1:20-cv-10849
- Clarke
- Apr. 26, 2024
Background
On January 21, 2022, Robert A. Musiala, Jr. of BakerHostetler was appointed receiver in the action. A receiver is a person appointed by a court to manage or recover property involved in a case. The receiver submitted the Eleventh Fee Application, seeking approval of fees and expenses incurred from July 1 through September 30, 2023.
The application requested $614,230.04 for BakerHostetler, $162,805.65 for Ankura Consulting Group, LLC, $13,687.50 for the Law Office of Dennis O. Cohen, PLLC, and $1,702.40 for Miller Kaplan Arase, LLP. The receiver and the other members of the receiver team submitted invoices describing their work. The Securities and Exchange Commission reviewed and approved the application and invoices.
Court’s Analysis
The court explained that a receiver who reasonably and diligently performs the court-assigned duties may receive fair compensation. In evaluating the request, the court considered the complexity of the work, its benefit to the receivership estate, the quality of the work, and the time records. The court also gave significant weight to the SEC’s approval of the application.
The court found that the receiver team performed substantial and complex work benefiting the receivership. The listed work included resolving potential claims against third parties; discussing a freeze of cryptocurrency receivership property; negotiating for the return of property; analyzing investor and asset data; obtaining records from two foreign-based cryptocurrency exchanges; investigating third parties believed to possess receivership property; and deposing a key witness.
The court also considered the receiver’s motion to compel turnover of assets. The court had granted turnover of approximately $529,000 but denied turnover of approximately $3 million because the receiver had not adequately shown that the larger amount was receivership property. Because a significant portion of the fee application concerned that partly unsuccessful motion, the court held back 20% of the fees and expenses. The court noted that percentage reductions are a practical way to reduce a fee application without evaluating every billing entry individually.
Disposition
The court granted in part and denied in part the Eleventh Fee Application. It authorized payment of $491,384.03 to BakerHostetler, $130,244.52 to Ankura, and $10,950.00 to the Law Office of Dennis O. Cohen. Because Miller Kaplan’s invoice did not reflect work related to the motion to compel, the court authorized its full requested payment of $1,702.40.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.