Case No.: 11-11152 (SMB) (Bankr. S.D.N.Y. Jul. 2, 2012)

From Casetext: Smarter Legal Research

In re West End Fin. Advisors, LLC

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

Jul 2, 2012

Case No.: 11-11152 (SMB) (Bankr. S.D.N.Y. Jul. 2, 2012)

Opinion

Case No.: 11-11152 (SMB)

07-02-2012

In re: WEST END FINANCIAL ADVISORS, LLC, et. al., Debtors.

ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK PC. Attorneys for Debtors A. Mitchell Greene, Esq. Of Counsel ARENT FOX LLP Attorneys for Mark S. Radke Peter V. B. Unger, Esq. Mark S. Radke, Esq. Of Counsel KLESTADT & WINTERS, LLP Attorneys for Official Committee of Unsecured Creditors Tracy L. Klestadt, Esq. Fred Stevens, Esq. Joseph C. Corneau, Esq. Of Counsel TRACY HOPE DAVIS United States Trustee Brian Masumoto, Esq. Of Counsel U.S. SECURITIES AND EXCHANGE COMMISSION Alistaire Bambach, Esq. Neal Jacobson, Esq. Of Counsel

STUART M. BERNSTEIN

Chapter 11 (Substantively Consolidated)

MEMORANDUM DECISION AWARDING FINAL

FEES AND REIMBURSEMENT OF EXPENSES

APPEARANCES:

ROBINSON BROG LEINWAND GREENE

GENOVESE & GLUCK PC.

Attorneys for Debtors

A. Mitchell Greene, Esq.

Of Counsel

ARENT FOX LLP

Attorneys for Mark S. Radke

Peter V. B. Unger, Esq.

Mark S. Radke, Esq.

Of Counsel

KLESTADT & WINTERS, LLP

Attorneys for Official Committee of Unsecured

Creditors

Tracy L. Klestadt, Esq.

Fred Stevens, Esq.

Joseph C. Corneau, Esq.

Of Counsel

TRACY HOPE DAVIS

United States Trustee

Brian Masumoto, Esq.

Of Counsel

U.S. SECURITIES AND EXCHANGE

COMMISSION

Alistaire Bambach, Esq.

Neal Jacobson, Esq.

Of Counsel
STUART M. BERNSTEIN
United States Bankruptcy Judge:

The matter before the Court concerns the remaining objections to two of the several final fee applications filed in these confirmed cases. The debtors' attorneys, Robinson Brog Leinwand Greene Genovese & Gluck P.C. ("Robinson Brog"), seek final fees and expenses in the amounts of $2,151,281.50 and $43,968.39, respectively. Arent Fox LLP ("Arent Fox"), the attorneys for Mark S. Radke, Esq. the Independent Monitor ("Monitor") appointed by the District Court, originally sought an award of pre-petition fees and expenses in the amounts of $32,792.84 and $8,004.06, respectively, and an award of post-petition fees and expenses in the amounts of $283,941.06 and $20,249.19, respectively.

The debtors and the Official Committee of Unsecured Creditors (the "Committee") objected to Arent Fox's application, and the United States Trustee and the Securities & Exchange Commission ("SEC") objected to Robinson Brog's application. Having considered these objections and conducted my own review of the parties' applications, I conclude that Robinson Brog is entitled to a final award of fees and expenses, respectively, in the amounts of $1,926,074.42 and $43,968.39. Arent Fox is entitled to a final award of fees and expenses, respectively, in the amounts of $173,953.65 and $17,121.35.

BACKGROUND

This has been a contentious case involving many disputes, but the following discussion is limited to what is necessary to understand the disposition of the pending fee applications. In 2000, William Landberg formed West End Financial Advisors, LLC as an investment and financial management company, and eventually established forty-two limited partnership funds as investment vehicles. Landberg provided advice to investors and induced them to invest in these funds. It appears that Landberg operated these entities to some extent as a Ponzi scheme although they did make many legitimate investments, and he was eventually replaced as Chief Executive Officer by Ray Heslin in June 2009.

On January 20, 2011, the SEC commenced an action in the United States District Court for the Southern District of New York (the "District Court Action") against three affiliated investment firms and four of West End's former or current senior officers, including Landberg. (See Securities and Exchange Commission v. Landberg, 11 CV 00404 (PKC) (S.D.N.Y. 2011).) The SEC sought various forms of relief, including an injunction preventing the defendants from associating with any securities brokers, alleging fraud, misuse of client assets and other securities laws violations.

On or about February 10, 2011, District Judge P. Kevin Castel appointed Radke, a partner in Arent Fox, as Monitor of West End Financial Advisors LLC, West End Capital Management LLC, and Sentinel Investment Management Corporation (collectively defined in the District Court's order as the "Company"). (Amended Stipulation & Order, dated Feb. 10, 2011 ("ASO").) Paragraph 2 of the ASO imposed the following duties on Radke:

a. to review and approve the design of a liquidating plan to distribute the Company's assets if the Company becomes a debtor under the Bankruptcy Code (in which case the Company will apply to the Bankruptcy Court for the continuation of Radke as Monitor);
b. to review all fees, expenses and transactions engaged in or incurred by the Company since May 2009;
c. to review investment decisions made on behalf of the Company since May 2009;
d. to review the Company's financing and investment advisory arrangements with third parties since May 2009;
e. to review and approve any expense accrued by the Company subsequent to the date of the ASO in excess of $25,000 per item;
f. to review all future non-incidental and official communications by the Company to investors; and
g. to review the Company's plans to identify and pursue claims against third parties.

Paragraph 3 of the ASO spelled out the billing rates for Radke, his partner Peter Unger, Esq., and the associates in their law firm, required Radke to render monthly bills to the Company and the SEC, and directed Radke to submit his bills to the Court for approval when the accumulated fees reached $100,000.

Approximately one month later, on March 15, 2011, and with the exception of West End Cash Liquidity Fund I L.P. and West End Dividend Strategy Fund I. L.P., each of the debtors filed chapter 11 petitions in this Court. On June 9, 2011, West End Cash Liquidity Fund I L.P. filed its chapter 11 petition, and on July 6, 2011, West End Dividend Strategy Fund I L.P. filed its chapter 11 petition. By order dated July 25, 2011, the debtors' estates were partially substantively consolidated. Robinson Brog, the firm that had represented the debtors pre-petition, was eventually retained to represent the debtors in the chapter 11 cases.

One week after the initial chapter 11 filings, the office of the United States Trustee filed a motion to appoint a chapter 11 trustee ("Trustee Motion"). (ECF Doc. # 8.) The SEC joined in the Trustee Motion. (See Joinder of the U.S. Securities and Exchange Commission to Motion by United States Trustee for Order Directing Appointment of Chapter 11 Trustee or, in the Alternative, Converting These Cases to Chapter 7, dated Mar. 22, 2011 (ECF Doc. # 13).) Although Radke did not formally join in the motion, he submitted a declaration in support of the SEC's joinder, taking on an active role as an advocate, and ultimately, a witness on behalf of the United States Trustee and the SEC. (See Declaration of Mark S. Radke in Support of Joinder of U.S. Securities and Exchange Commission to Motion by United States Trustee for Order Directing Appointment of Chapter 11 Trustee or, in the Alternative, Conversion of the Cases to Chapter 7, dated Mar. 24, 2011 (ECF Doc. # 21).)

The Court conducted several days of evidentiary hearings in connection with the Trustee Motion. The debtors subpoenaed documents from Radke, and he, his law firm and the debtors spent a significant amount of time fighting over objections to the subpoena, and ultimately, presenting those objections to the Court for resolution. In addition, and as noted, Radke testified as a fact witness during the hearings. The Trustee Motion was no longer pressed once the parties began to make progress on a consensual plan, and was withdrawn after the debtors confirmed the plan on January 26, 2012.

In the meantime, by order dated July 29, 2011 (the "Freeze Order"), District Judge Castel suspended Radke's duties under the ASO as of July 27, 2011, but directed the "Company" to apply to the Bankruptcy Court to retain Radke as the Monitor with the duties set forth in the ASO, as amended by the Freeze Order, nunc pro tunc to March 15, 2011, the petition date. The debtors made the motion on August 12, 2011 (ECF Doc. # 203), and by order dated September 8, 2011 (the "Radke Retention Order"), this Court authorized the retention of Radke pursuant to sections 105 and 363 of the Bankruptcy Code, nunc pro tunc to the petition date "as the Debtor's independent monitor under the specific terms of the ASO and the Freeze Order." (ECF Doc. # 214.) The Radke Retention Order expressly required Radke to apply to this Court for compensation and reimbursement of expenses pursuant to section 330 of the Bankruptcy Code, and that "[s]uch application shall be subject to the Office of the United States Trustee's guidelines for compensation and reimbursement of expenses and the approval of this Court under 11 U.S.C. § 330."

After confirmation, the Court heard the applications by the various professionals for final compensation and reimbursement of expenses. It resolved all but two from the bench, and reserved decision on the applications filed by Robinson Brog and Arent Fox.

DISCUSSION

A. Introduction

Bankruptcy Code § 330 authorizes a bankruptcy court to award reasonable compensation to a fee applicant based on the actual, necessary services, and to reimburse him for his actual, necessary expenses. 11 U.S.C. § 330(a)(1). The relevant criteria include the following:

(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title;
(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed;
(E) whether the [professional] is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and
(F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.

11 U.S.C. § 330(a)(3).

The fee applicant bears the burden of proof on its claim for compensation. Houlihan Lokey Howard & Zukin Capital v. High River Ltd. P 'ship, No. 05 Civ. 5726 (BSJ), 2007 WL 1217268, at *2 (S.D.N.Y. Apr. 24, 2007); Zeisler & Zeisler, P.C. v. Prudential Ins. Co. of Am. (In re JLM, Inc.), 210 B.R. 19, 24 (B.A.P. 2d Cir. 1997); In re Keene Corp., 205 B.R. 690, 695 (Bankr. S.D.N.Y. 1997). Even in the absence of an objection, the Court has an independent duty to scrutinize the fee request. In re Busy Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 841 (3d Cir. 1994). The applicant must submit contemporaneous time records, although a computerized printout summary, in lieu of the original time slips, will suffice. Masterwear Corp. v. Angel & Frankel, P.C. (In re Masterwear Corp.), 233 B.R. 266, 278 & n.14 (Bankr. S.D.N.Y. 1999).

The standards for time records are contained in this Court's Fee Guidelines, as amended, and the guidelines issued by the Executive Office of United States Trustees. See 28 C.F.R., pt. 58, App. A (2011) ("UST Guidelines"). At bottom, proper time record keeping is necessary to enable the court to determine the reasonableness of the work that has been performed. Generally, fee applications, standing alone, must contain sufficient detail to demonstrate compliance with § 330. UST Guidelines, (b). Any uncertainties due to poor record keeping are resolved against the applicant. In re Poseidon Pools of Am., 216 B.R. 98, 100-01 (E.D.N.Y. 1997). Time records must be broken down by project. UST Guidelines, (b)(4)(i). Entries concerning communications (e.g., telephone calls, letters) should identify the parties and the nature of the communication. Id., (b)(4)(v). Entries relating to conferences or hearings should identify the subject of the hearing, and explain, where appropriate, why more than one professional from the applicant participated. Id. Finally, multiple project services rendered on the same day should be listed in separate entries unless the aggregate daily time does not exceed one half hour. Id. Alternatively, and consistent with the practice followed here prior to the adoption of the UST Guidelines, the applicant may "lump" his daily project entries provided he indicates parenthetically the amount of time spent on each activity.

A court does not determine "reasonableness" through hindsight. In re Brous, 370 B.R. 563, 570 (Bankr. S.D.N.Y. 2007). A decision reasonable at first may turn out wrong in the end. The test is an objective one, and considers "what services a reasonable lawyer or legal firm would have performed in the same circumstances." In re Ames Dep't Stores, Inc., 76 F.3d 66, 72 (2d Cir. 1996) (citing In re Taxman Clothing Co., 49 F.3d 310, 315 (7th Cir. 1995) (Posner, J.)); accord In re Angelika Films 57th, Inc., 227 B.R. 29, 42 (Bankr. S.D.N.Y. 1998); In re Keene Corp., 205 B.R. at 696; In re Drexel Burnham Lambert Group, Inc., 133 B.R. 13, 23 (Bankr. S.D.N.Y. 1991).

The rules that govern fee awards and time record keeping in bankruptcy mirror those that apply in non-bankruptcy cases. Courts outside of bankruptcy generally apply the "lodestar" method under which they arrive at a fee "by multiplying 'the number of hours reasonably expended on the litigation . . . by a reasonable hourly rate.'" Kirsch v. Fleet St., Ltd., 148 F.3d 149, 172 (2d Cir. 1998) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The fee applicant bears the burden of proof to demonstrate the reasonableness and necessity of its services. Allende v. Unitech Design, Inc., 783 F. Supp. 2d 509, 512 (S.D.N.Y. 2011) ("As the fee applicant, plaintiffs 'bear[] the burden of documenting the hours reasonably spent by counsel, and the reasonableness of the hourly rates claimed.'") (internal citation omitted); Tokyo Electron Arizona, Inc. v. Discreet Indus. Corp., 215 F.R.D. 60, 62 (E.D.N.Y. 2003) ("The party seeking reimbursement bears the burden of proving the reasonableness and necessity of hours spent and rates charged.") (citing New York State Ass'n for Retarded Children v. Carey, 711 F.2d 1136 (2d Cir. 1983)). "Applications for fee awards should generally be documented by contemporaneously created time records that specify, for each attorney, the date, the hours expended, and the nature of the work done." Kirsch, 148 F.3d at 173.

Lumping or block billing, a timekeeping practice that involves including multiple services in a single, aggregated time entry without any breakdown of the time spent on each service, complicates a court's efforts "to gauge the reasonableness of time expended on each activity." Ass'n of Holocaust Victims for Restitution of Artwork & Masterpieces v. Bank of Australia Creditanstalt, No. 04 Civ. 3600 (SWK), 2005 WL 3099592, at *5-6 & n.9 (S.D.N.Y. Nov. 17, 2005); accord LV v. New York City Dep't of Educ., 700 F. Supp. 2d 510, 525 (S.D.N.Y. 2010) ("[B]lock-billing can make it 'exceedingly difficult for courts to assess the reasonableness of the hours billed. In such circumstances courts have found it appropriate to cut hours across the board by some percentage.'") (internal citations omitted); Williams v. New York City Hous. Auth., 975 F. Supp. 317, 327 (S.D.N.Y. 1997) ("Fee applicants should not ''lump' several services or tasks into one time sheet entry because it is then difficult, if not impossible, for a court to determine the reasonableness of the time spent on each of the individual services or tasks provided . . . . It is not the court's job to decipher time entries and guess how much time each activity took . . . . It is the responsibility of the applicant to make separate time entries for each activity.'") (quoting Poseidon Pools, 180 B.R. at 731) (citations omitted).

Similarly, vague and ambiguous descriptions of work done prevent the court from assessing the reasonableness of the work, and should be eliminated or reduced. Cosgrove v. Sears, Roebuck & Co., No. 81 CIV. 3482 (AGS), 1996 WL 99390, at * 3 (S.D.N.Y. Mar. 7, 1996) ("[M]any of the descriptions of the work performed are vague, including entries such as 'review of file,' 'review of documents' and 'review of [adversary's] letter.' There can be no meaningful review of time records where the entries are too vague to determine whether the hours were reasonably expended.") (citations omitted); Dotson v. City of Syracuse, No. 5:04-CV-1388 (NAM/GJD), 2011 WL 817499, at *24 (N.D.N.Y. Mar. 2, 2011) ("Descriptions of work such as 'review of file', 'review of documents' and 'review of letters' are vague and do not permit a court to evaluate the reasonableness of the services."); Schruefer v. Winthorpe Grant, Inc., No. 99 Civ. 9365 (GBD)(AJP), 2003 WL 21511157, at *3 (S.D.N.Y. July 2, 2003) (imposing overall reduction of 10% based on vague time entries including "various phone conferences," "review file," "legal research," and "case administration").

"[C]ourts have recognized that it is unrealistic to expect a trial judge to evaluate and rule on every entry in an application [and] have endorsed percentage cuts as a practical means of trimming fat from a fee application." New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d at 1146. To address problems like block billing and vagueness, courts routinely apply across the board reductions. United States Football League v. Nat'l Football League, 887 F.2d 408, 415 (2d Cir. 1989) (affirming across the board reduction for vague time entries); Colon v. City of New York, Nos. 09 CV 0008 (JBW), 2012 WL 691544, at *21 (E.D.N.Y. Feb. 9, 2012) (collecting cases); Reiter v. Metro. Transp. Auth. of the State of New York, No. 01 Civ. 2762 (GWG), 2007 WL 2775144, at *15 (S.D.N.Y. Sept. 27, 2007) (collecting cases); Klimbach v. Spherion Corp., 467 F. Supp. 2d 323, 332 (W.D.N.Y. 2006) (applying a 10% across the board reduction for vague billing entries); Ass'n of Holocaust Victims, 2005 WL 3099592, at *7 (reducing lodestar amount by 25% to account for instances of block billing, vagueness and excess).

B. Robinson Brog Application

1. Introduction

The United States Trustee and the SEC have lodged objections to the Robinson Brog application. The principal objection by both is directed at the services rendered in opposing the Trustee Motion. According to the SEC, the time charges aggregated approximately $210,606. (Objection of Securities and Exchange Commission to Fee Application of Robinson Brog Leinwand Greene Genovese & Gluck P.C., dated Feb. 8. 2012 ("SEC Objection"), at 3 (ECF Doc. # 332).) The bases of the objection are two-fold: the services did not benefit the estate, see 11 U.S.C. § 330(a)(3)(C), and rendered Robinson Brog an interested person. See 11 U.S.C. § 328(c). The SEC also objects to the $43,063 in fees generated by Robinson Brog in prosecuting a motion in the District Court objecting to the Monitor's fees and seeking to remove the Monitor. The United States Trustee and SEC argue that the Court should reduce the fees relating to the Examiner and his report, described below, and essentially surcharge Robinson Brog for the fees incurred by the Committee and the SEC. Finally, the United States Trustee argues that Robinson Brog's time records fail to substantiate the firm's services in accordance with the principles set down by this Court's fee guidelines and the UST Guidelines.

The SEC argues that I should disallow all fees on this basis. (SEC Objection at 9.)

2. Resolution of Objections

a. The Trustee Motion

"The cornerstone of Chapter 11 is the presumption that the debtor-in-possession will be permitted to operate its business after filing, unless there is cause for the appointment of a trustee." Hansen, Jones & Leta, P.C. v. Segal, 220 B.R. 434, 458 (D. Utah 1998). The Bankruptcy Code nevertheless allows the Court to displace the debtor-in possession and appoint a chapter 11 trustee "for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case," 11 U.S.C. § 1104(a)(1), or "if such appointment is in the interests of creditors, any equity security holders, and other interests of the estate." 11 U.S.C. § 1104(a)(2). Under Bankruptcy Code § 1104(e), added in 2005, the United States Trustee must move for the appointment of a trustee if he or she has

reasonable grounds to suspect that current members of the governing body of the debtor, the debtor's chief executive or chief financial officer, or members of the governing body who selected the debtor's chief executive or chief financial officer, participated in actual fraud, dishonesty, or criminal conduct in the management of the debtor or the debtor's public financial reporting.

Landberg appointed Ray Heslin, the president of the debtors, to his position, and I assume that this relationship prompted the Trustee Motion one week into the case.

There is no per se rule that legal services provided by the debtor's attorney in the defense of a trustee motion, even an unsuccessful defense, are not compensable. See In re Del Monico, No. 04 B 38235, 2006 WL 345013, at *4 (Bankr. N.D. Ill. Feb 15, 2006) ("[I]f the decision to oppose the motion [to appoint a chapter 11 trustee] was in the best interest of the estate at the time, compensation would still be appropriate regardless of the ultimate outcome.") (emphasis in original); In re Spanjer Bros., Inc., 191 B.R. 738, 752 (Bankr. N.D. Ill. 1996) ("The Court therefore rejects the contention that a debtor's attorney who opposes appointment of a trustee, and loses, should not receive any compensation for this time expended fighting that appointment."); cf JLM, Inc., 210 B.R. at 25 ("If there is a reasonable basis for contending that the estate will benefit by opposing conversion or taking a position on other control-related matters, compensation will not be denied.").

Similarly,

the mere fact that an attorney for a debtor opposes and loses a motion for the appointment of a trustee under § 1104(a)(2) does not ipso facto demonstrate that the attorney is representing the interests of the debtor's principals and management to the exclusion of the creditors, and thus breaches a fiduciary duty owed to the debtor.

Spanjer Bros., 191 B.R. at 751. A debtor's management enjoys the presumptive right to manage the debtor's affairs, and does not violate the law by opposing a trustee motion. The debtor's attorney acts on the instructions of the debtor's management, and there is no basis to question the attorney's disinterestedness absent evidence that the attorney represented the debtor's management or insiders rather than the interests of the debtor at the direction of management. Id. at 751-52.

The SEC argues that the opposition was intended to perpetuate Heslin in office, and incidentally, to protect Robinson Brog's financial interest as attorney for the debtor-in-possession. The SEC points to the pre- and post-petition history citing the adversarial relationship fostered by Heslin and Robinson Brog, and their efforts to avoid SEC oversight. In addition, the SEC and the United States Trustee argue that the debtors could have proposed the same plan earlier in the case. They instead delayed, proposing a plan only after the Court denied the debtors' motion for a judgment on partial findings at the close of the United States Trustee's direct case, see FED R. CIV. P. 52(c), and it appeared that Heslin might be displaced.

To be sure, this was a contentious case, and each side contributed. Nevertheless, the fact remains that the United States Trustee brought an immediate motion to appoint a chapter 11 trustee, leaving little time to the debtors to do anything other than gear up to defend it. The debtors were certainly not required to "roll over" simply because the United States Trustee and the SEC challenged Heslin's continued management of the debtor's affairs. Moreover, as discussed below, Robinson Brog had sent a draft plan to the Monitor, in accordance with the ASO, which the Monitor ignored. The debtors thereafter filed a plan within one month after the Freeze Order eliminated the requirement in the ASO that the Monitor must approve of the plan.

Furthermore, I reject the contention that Robinson Brog acted other than at the direction of Heslin to represent the debtors' interests. The Government's argument regarding Robinson Brog's motives and its lack of disinterestedness could apply to every instance in which a debtor and its counsel oppose a motion to appoint a chapter 11 trustee or to convert a case. And although the Court denied the debtors' motion for a directed verdict, it did not do so based on "clear and convincing" evidence that cause existed under Bankruptcy Code § 1104(a)(1), but instead, denied the motion under the "best interest of creditors" test embodied in Bankruptcy Code § 1104(a)(2). (Tr. (4/12/11) at 98-102.) Finally, the Court never decided the Trustee Motion because the confirmation of the debtors' plan rendered it moot.

The one exception concerned Heslin's initial direction to the debtors' bookkeeper to reallocate a portion of his salary to his wife, who also worked for the debtors, to protect his eligibility for disability payments. However, Heslin unilaterally reversed the reallocation, and his W-2 for that year reported all of his compensation. (Transcript of the hearing held April 12, 2011 ("Tr. (4/12/11)"), at 98 (ECF Doc. # 92).)

In the end, the interests of the creditors and investors were best served by the continuation of the debtors' management and Robinson Brog's representation notwithstanding that this also inured to the benefit of Heslin and the firm. The debtors were able to confirm a complex plan that garnered the overwhelming support of all of the constituencies. I doubt that a chapter 11 trustee and new counsel, facing a steep learning curve, could have reached the same result in the same time. It is unfortunate that this overall goal could not have been accomplished in a quicker and cheaper fashion, but the level of contention and amount of litigation made this impossible. Robinson Brog did not do anything different from what other debtors' counsel would have done under similar circumstances. The firm's services opposing the Trustee Motion were reasonable, ultimately benefitted the estate by keeping management in place, and did not rob the firm of its disinterestedness simply by defending the motion.

b. The Freeze Order

The SEC also objects to the fees incurred in the proceedings that led to the Freeze Order. According to the SEC, the debtors moved by order to show cause signed by District Judge Castel on July 18, 2011, to remove the Monitor and object to his fees. The motion papers included a 24-page attorney affidavit along with 36 exhibits. (SEC Objection at 14.)

On the July 27 return date, District Judge Castel expressed his displeasure with both sides. Paragraph 2(a) of the ASO directed the Company in the event of a bankruptcy filing to "make the appropriate application to the [bankruptcy] court for the continuance of Mr. Radke as the Independent Monitor." The ASO contemplated that if bankruptcy ensued, most if not all of the issues regarding the Monitor, including his continuation and compensation, would be handed off to this Court. (See District Court Transcript at 22, 26.) As of July 27, 2011, more than four months after the petition date, the debtors had not yet made the motion, blaming the Monitor's refusal to supply an affidavit of disinterestedness. (Id. at 2-3.) The Monitor contended that he refused to provide the affidavit because he had consulted with bankruptcy lawyers at his firm who told him it was not needed. (Id. at 22-23.) District Judge Castel criticized both parties for failing to bring their inability or refusal to comply with the ASO to his attention, or seek relief from the ASO.

A copy of the July 27, 2011 transcript (the "District Court Transcript") is attached as Exhibit B to the debtors' Response to Objections of United States Trustee and Securities and Exchange Commission to Final Application of Robinson Brog Leinwand Greene Genovese & Gluck P.C. for Compensation and Reimbursement of Expenses, dated Feb. 13, 2012 (ECF Doc. # 346).

Paragraph 2(a) of the ASO also required Radke to "review and approve the design of a plan of distribution to liquidate and distribute the Company's assets." The debtors sent Radke a draft plan on May 3, 20111, but he essentially ignored it because he viewed it as "bare bones" and insufficient. (Id. at 18-19.) The District Court stated that Radke should have at least acknowledged receipt of the plan and if appropriate, explained that he declined to comment on it. (Id. at 19-20.) In addition, paragraph 3(d) of the ASO directed Radke to submit monthly bills to the debtors and the SEC, and submit the bills for District Court approval when the fees accumulated $100,000.00. He failed to do so, blaming the delay on his computer system. District Judge Castel admonished Radke for not seeking relief from the monthly bill requirement. (Id. at 21.) Furthermore, when he finally submitted bills to the SEC, he failed to share them with the debtors. (Id. at 28-29.) He also failed to advise the debtors when his fees hit $100,000.00. (Id. at 22.) Finally, when Radke provided a draft report to the SEC, he did not also send a copy to the debtors. (Id. at 29-30.)

The District Court ultimately concluded that the debtors failed to comply with the ASO and the Monitor acquiesced in that non-compliance. (Id. at 26-27.) The debtors should have applied to the Bankruptcy Court to retain the Monitor, and the Monitor should have presented his fee application to the Bankruptcy Court. (See id. at 22.) Consequently, the Monitor sought approval of his fees in the wrong court, and District Judge Castel declined to rule on the application. The debtors were directed to take immediate steps in the Bankruptcy Court to retain the Monitor nunc pro tunc to the petition date. Finally, with the agreement of all parties, the Monitorship was "frozen," and the debtors' were relieved of the requirement that the Monitor approve the plan. (See id. at 36-38.) The Freeze Order followed.

The proceedings before District Judge Castel epitomized the parties' penchant for litigation as a substitute for communication. Both sides ignored their obligations under the ASO. The issues—the execution of an affidavit of disinterestedness, the motion to retain the Monitor in the Bankruptcy Court, the need for the Monitor's approval of the plan—should have been resolved through a chambers conference to the extent that they could not have been resolved through a telephone call. By late July, the parties had stood down from the Trustee Motion, they were making progress negotiating a plan, and the Monitor's role had faded into the background. The debtors nonetheless decided to initiate emergency litigation. Obviously, the part of the debtors' motion objecting to the Monitor's fees was entirely unnecessary. It should have been made in this Court, as it eventually was, but for the debtors' failure to seek the Monitor's retention.

On the other hand, the need for the Monitor's approval of the plan presented a potentially serious obstacle to progress in the case. The debtors had sent a draft plan to the Monitor in early May, but he ignored it. Once the requirement for his approval was eliminated under the Freeze Order, the case moved much more quickly to a successful conclusion. Given the tenor of the case, I remain unconvinced that the Monitor would have surrendered the approval requirement as willingly as he did when pressed by District Judge Castel. Thus, it was reasonable and necessary for the debtors to seek that relief. In short, although the fee objection aspect of the debtors' motion was entirely unnecessary, the motion to eliminate the approval requirement was necessary. Accordingly, 50% of the time spent on the motion, $21,531.50 will be allowed, and the remaining 50% will be disallowed.

c. The Fee Examiner Litigation

Bankruptcy Code § 327(a) requires that counsel for the debtor must be disinterested and not hold or represent an interest adverse to the estate. A disinterested person is one who does not hold a claim against the estate or have an interest materially adverse to the estate. 11 U.S.C. § 101(14). When the debtors sought to retain Robinson Brog as bankruptcy counsel, the United States Trustee objected arguing that the firm had conflicts with the estate that precluded its retention. The firm faced a disgorgement claim in connection with its pre-petition fees. It also faced potential preference liability. Finally, it had received funds from Chartis Specialty Insurance Company ("Chartis"), the debtors' insurer, but had failed to account satisfactorily for those funds.

Robinson Brog suggested a compromise that had been adopted in Exco Res., Inc. v. Milbank, Tweed, Hadley & McCloy LLP (In re Enron), No. 02 Civ. 5638 (BSJ), 2003 WL 223455 (S.D.N.Y. Feb. 2, 2003). There, the Bankruptcy Court had authorized the Official Committee of Unsecured Creditors to retain Milbank, Tweed, Hadley & McCloy LLP ("Milbank") as its counsel in the bankruptcy proceedings. A creditor subsequently filed a motion to disqualify Milbank. It alleged, among other things, that Milbank had received preferences, and therefore, held an interest adverse to the unsecured creditors.

The District Court affirmed the Bankruptcy Court's conclusion that the preferences did not require disqualification. The examiner appointed in the Enron case would determine whether Milbank received a preference, Milbank waived its right to litigate the preference issue, and agreed to be bound by the examiner's determination. The Bankruptcy Court had concluded and the District Court concurred that Milbank's agreement to be bound by the examiner's determination resolved the argument that Milbank held an adverse interest. Id. at *9.

Robinson Brog made a similar proposal to resolve the objections to its retention, and agreed to be bound by that determination without further litigation. Accordingly, upon motion of the United States Trustee, the Court ordered the appointment of an examiner to investigate whether Robinson Brog should disgorge any pre-petition fees, whether the firm received preferences that could be recovered by the estates and whether Robinson Brog should be surcharged based on the failure to fully account for $825,000 received from Chartis. (Order Directing the Appointment of an Examiner Pursuant to Section 1104(c) of the Bankruptcy Code, dated June 16, 2011 (ECF Doc. # 157).) The United States Trustee appointed Albert Togut, Esq. as examiner.

Togut rendered his Fee Examiner's Report (the "Report") (ECF Doc. # 261) on December 8, 2011, after first providing a draft to Robinson Brog and affording the firm the opportunity to comment. The Report reflects a conscientious effort to perform his duties in a fair and balanced manner. It concluded that the pre-petition fees should be reduced by $163,472.71 based on insufficient substantiation, and that Robinson Brog had received a preference in the amount of $254,045.06. In substance, Robinson Brog owed the estate $417,517.77. (Id. at 49.) The examiner also rejected Robinson Brog's argument that it should be permitted to set off $132,967.66 in fees that it had previously waived. (Id. at 49-50.)

This should have ended the matter, but Robinson Brog filed an objection to the Report, challenging many of the examiner's findings and conclusions. (Objection to the Acceptance of the Fee Examiner's Report, dated Dec. 12, 2011 (ECF Doc. # 262).) The objection triggered a response from the SEC which complained that Robinson Brog had agreed to abide by the Report and waived any right to object. (Response of Securities and Exchange Commission to Objection by Robinson Brog Leinwand Greene Genovese & Gluck P.C. to Examiner's Report, dated Dec. 21, 2011 (ECF Doc. # 268).) In light of the opposition and the Court's statements, Robinson Brog withdrew its objection to the Report at the hearing.

The entire episode involving the appointment of the examiner, the preparation of the Report and the litigation following Robinson Brog's objections became a point of contention during the fee hearings. In substance, the SEC and United States Trustee contend that the process was put in place at Robinson Brog's suggestion to overcome the objections to its retention, and Robinson Brog should bear all of the costs. Robinson Brog has already excised from its fee application the value of the services it expended in connection with the fee examiner matters, and this time is not included in its request for compensation. In addition, the Court indicated on several occasions that the examiner's fees would be deducted from any fee award in Robinson Brog's favor precisely for the reasons articulated by the Government. Accordingly, the Court will disallow Robinson Brog's final fee in the amount of $111,680.24, which reflects the $110,000.00 in fees awarded to Togut and his firm and $1,680.24 in expenses. (See Order Awarding Compensation and Reimbursement of Expenses for the Fee Examiner and his Counsel, dated Feb. 17, 2012 (ECF Doc. # 353).)

Finally, the SEC and the United States Trustee argue that the Court should also reduce Robinson Brog's fees by the amount of fees generated by Committee counsel in connection with Robinson Brog's objection to the Report. The SEC contends further that the fee award should be reduced by the amount of reasonable attorneys' fees attributable to the SEC's response to Robinson Brog's objection. I agree with the former but not the latter. The Committee's counsel expended services valued at $8,507.00 dealing with the examiner issues, and has been compensated by the estate for its time. Robinson Brog rather than the estate's creditors should bear those expenses for the reasons articulated above, and this amount will be disallowed from Robinson Brog's request. On the other hand, while the SEC provided reasonable and necessary services in connection with its response to Robinson Brog's objection to the Report, the creditors of the estate will not have to bear the costs. Thus, reducing Robinson Brog's award based on the value of the SEC services would simply be a penal measure that I decline to impose.

d. Recordkeeping and Substantiation

The last area of objections concerns Robinson Brog's time keeping entries. The majority of Robinson Brog's time entries satisfy the Court and UST Guidelines, but there are two exceptions. First, as identified on Schedule A, more than 10% of the firm's entries made by thirteen timekeepers involve the activity of "reviewing" documents, and total 678 hours and aggregate $282,541.69 in fees.

These entries do not include any other verb, such as "review and revise."

I interpret "review" to mean "read." See In re CCT Commc'ns, Inc., No. 07-10210 (SMB), 2010 WL 3386947, at *8 (Bankr. S.D.N.Y. Aug. 24, 2010). Conducting a reasonable review of specific documents for a necessary purpose is ordinarily compensable. Here the document being "reviewed" is sometimes described with specificity, but more often, timekeepers are "reviewing" generic categories of documents, such as "schedules," "claims" and the like, for no apparent purpose. Robinson Brog has failed to satisfy its burden of showing the reasonableness or necessity for so many people "reviewing" so many documents, many of which are described in such general terms that it is impossible to discern what the timekeeper is reviewing or why. This form of record keeping justifies a 20% across the board reduction on this category of entries, and $56,508.34 in fees is disallowed.

Second, one timekeeper (HEF) billed 134.9 hours, valued at $53,960.00, performing services identified as "attention to" some document or activity. These entries are summarized on Schedule B. In an earlier case also involving Robinson Brog, the Court concluded that another firm's use of the description "attention to" made it impossible to determine the nature of the service or the activity that it purported to describe, and disallowed 50% of those time charges. CCT, 2010 WL 3386947, at *8. I reach the same conclusion here, and disallow 50% of these time charges, or $26,980.00.

In summary, Robinson Brog sought fees aggregating $2,151,281.50, fees in the sum of $225,207.08 have been disallowed for the reasons stated above, and Robinson Brog is entitled to a final fee award in the sum of $1,926,074.42. The United States Trustee had also lodged objections to certain other time entries primarily on the ground that the descriptions in the records were inadequate. To the extent those objections or any other objections are not addressed in this opinion, they are overruled.

Finally, Robinson Brog seeks $43,968.39 as reimbursement for its expenses. No party has challenged any particular expense, and they are allowed.

C. Arent Fox Application

1. Introduction

Arent Fox filed its first and final fee application on January 6, 2012. (ECF Doc. # 285.) The application sought fees incurred from the petition date to December 31, 2011 in the sum of $283,941.06 and reimbursement of expenses in the sum of $20,249.19. The application also sought approximately $41,000 in compensation and expenses in connection with pre-petition work.

The Arent Fox application elicited several objections. The Committee argued that (1) the firm was not entitled to an allowance of fees incurred prior to the petition date, (2) the Court never authorized Radke to retain his firm, and hence, the firm should not be compensated, (3) Radke's services exceeded the scope of his appointment, (4) the Court should disallow any fees in excess of $100,000 because Arent Fox failed to apply to the District Court for approval of its fees until they reached $278,728.76, (5) Radke and his firm are not entitled to compensation for his services as a trial witness, responding to the debtors' subpoena and opposing the debtors' motion in the District Court to remove him as Monitor, (6) many of the firm's time records include lumped entries, and (7) Radke and Arent Fox incurred unreasonable and unnecessary luxury travel expenses. (Objection of the Official Committee of Unsecured Creditors to First and Final Application of Arent Fox LLP Independent Monitor of the Debtor Pursuant to Bankruptcy Code Sections [sic] 330 for Allowance of Compensation and Reimbursement of Expenses, dated Feb. 8, 2012 (ECF Doc. # 334).) The debtors joined in the Committee's objection, amplifying certain of the arguments.

During the February 15, 2012 hearing on the fee application, the Court expressed reservations about Radke's compensation for the time spent as a witness in connection with the Trustee Motion and the related subpoena, and directed him to break out that time in the firm's records. (Transcript of the hearing held Feb. 15, 2012 ("Tr. (2/15/12)"), at 49, 51 (ECF Doc. # 361).) In addition, virtually all of the time records were "lumped," but the Court offered Arent Fox the opportunity to reconstitute its time records to show the amount of time that was spent on various tasks on the same day. (Id. at 49.) The Court also directed Arent Fox to separate out its pre-petition services. (Id. at 50.)

The pervasive lumping apparently escaped the notice of the United States Trustee who did not object to Radke's fees, but nevertheless asserted a lumping objection to a di minimis number of Robinson Brog's time records.

Arent Fox submitted its supplemental papers on or about February 28, 2012 (the "Supplement"), which clarified the time records and resolved some of the issues raised by the Committee. (See ECF Doc. # 356.) Arent Fox removed the request for pre-petition fees and expenses from the application presently before the Court. It also subdivided its post-petition work into three categories reflected in three schedules: (1) the time attributable to Radke's participation as a witness at the hearing on the Trustee Motion, (2) the time attributable to responding to the debtors' subpoena and litigating with the debtors regarding the subpoena, and (3) everything else.

In its subsequent objection, joined in by the Committee, the debtors continued to press their objections to Arent Fox's fee application. According to the debtors, the Supplement still failed to comply with the UST Guidelines and section 330 of the Bankruptcy Code, the reconstructed non-contemporaneous time records were unreliable and should be subject to "strict scrutiny," and the additional detail still included lumped, vague and non-compensable time entries. (See Debtors' Supplemental Objection to the Additional Time Record Detail Submitted by the Independent Monitor and his Counsel in Connection with their Fee Application, dated Mar. 2, 2012 (ECF Doc. # 359).) The debtors also marked up the records supplied by the applicant indicating its specific objections to particular entries.

2. Resolution of the Objections to Fees

Several of the issues raised by the Committee require only brief comment. First, Arent Fox has withdrawn its request for pre-petition fees and expenses from its pending application. Second, Arent Fox is entitled to compensation for its reasonable and necessary services representing Radke although the firm was not formally retained by an order of this Court. The ASO expressly contemplated that members and associates of Arent Fox would assist Radke in the performance of his duties. It established the billing rate for Radke's partner, Unger, (ASO at ¶ 3(b)), and identified the range of acceptable billing rates for the firm's associates. (Id. at ¶ 3(c).) The Radke Retention Order (at ¶ 2) provided for his retention nunc pro tunc to the petition date "under the specific terms of the ASO and the Freeze Order." It was not intended to modify the provisions of the ASO that contemplated Radke's use of members and associates of his firm, and it was unnecessary for him to make a separate application in this Court to retain his firm.

Third, I decline to penalize Arent Fox for its failure to submit a fee application to the District Court until its fees reached nearly $280,000.00. I do not condone the failure, but the debtors and the Committee have not been prejudiced. They do not contend that the District Court would have vacated or limited Radke's appointment as Monitor once the fees reached $100,000, and they have had ample opportunity to object to the fees on the merits.

Fourth, I decline to disallow the time spent by Arent Fox responding to the debtors' order to show cause in the District Court. The debtors initiated that litigation, the order to show cause imposed tight time constraints, and Arent Fox's response was reasonable under the circumstances. In addition, the across the board reduction discussed below effectively reduces the allowed amount of time dealing with this matter.

The remaining objections, on the other hand, have greater merit and illustrate two general problems with the Arent Fox application. With three exceptions, Radke's role as Monitor was essentially a passive one. He was directed to "review" the debtors' distribution plan, "review" all fees, expenses, investments decisions, transactions, financing and investment advisory arrangements with third parties since May 2009, "review" all future non-incidental and official communications to the investors and "review" the debtors' plans to identify and pursue claims against third parties. (ASO at ¶ 2.) The three exceptions involved Radke's role in approving the design of the distribution plan, (id.), approving any expense in excess of $25,000 per item, (id.), and reporting to the District Court. (Id. at ¶ 5.)

Radke certainly had to keep informed regarding the bankruptcy in his role as Monitor. Thus, he or a member of his firm would be expected to attend the multi-day hearings on the Trustee Motion in order to "monitor" the proceedings. Nevertheless, Radke exceeded his role and duties as Monitor, and Arent Fox rendered services that were unreasonable and unnecessary to those duties, when Radke became a de facto party to and advocate for the Trustee Motion. The chapter 11 cases were filed on March 15, 2011, the Trustee Motion was filed one week later, and the SEC sought to join in the Trustee Motion on March 24, 2011. During that nine day period (March 15 to March 24), Radke worked with the SEC and the United States Trustee to prepare a declaration that the SEC eventually submitted in support of its motion to join in the Trustee Motion. Radke subsequently testified as a fact witness in the direct case on the Trustee Motion based on what he had learned as Monitor, and in connection with his testimony, responded to the debtors' subpoena and engaged in unsuccessful litigation regarding the assertion of privilege with respect to certain of the responsive documents. (See Transcript of the hearing held Mar. 31, 2011, at 4-7 (ECF Doc. # 106).)

I do not mean to suggest that it was inappropriate for Radke to testify as a fact witness or object to the debtors' subpoena. If he had relevant evidence to give, he was obliged to give it. If the debtors sought documents that he had a reasonable basis to believe were privileged, he had the right to resist disclosure. Nevertheless, Radke's role as de facto party, advocate and trial witness exceeded his duties as Monitor, and the costs should not be borne by the debtors' creditors. Tab 2, Schedule A to the Supplement shows that Radke and the firm billed the aggregate amount of $21,000.00 in connection with Radke's participation as a witness during the trial of the Trustee Motion. Tab 2, Schedule B to the Supplement indicates that Arent Fox billed the aggregate amount of $39,867.00 in connection with its services relating to the trial subpoena and resulting litigation. These fees are disallowed.

Finally, several of the entries in Tab 3, Schedule C to the Supplement expressly or impliedly relate to Radke's preparation of the declaration submitted in support of the SEC's joinder in the Trustee Motion during the first nine days of the case. These entries aggregate $5,632.00, and are disallowed.

The disallowed time, by date, timekeeper and amount are as follows: 3/16/11 (Unger-$487.00; Radke-$682.50); 3/18/11 (Radke (four entries)-$525.00, $105.00, $157.50, $367.50); 3/22/11 (Radke (three entries)-$525.00, $1,575.00, $420.00); 3/24/11 (Radke (two entries)-$525.00 ("Work on draft declaration for bankruptcy court"), $262.50).

The second general problem with the Arent Fox time records concerns the quality of the record keeping and the failure to satisfy the substantiation requirements. The Radke Retention Order stated that the firm's recordkeeping must comply with the UST Guidelines. The Radke Retention Order was signed on September 8, 2011. Although Radke's retention under the order was made nunc pro tunc to the March 15, 2011 petition date, virtually all of the services were performed prior to then and under the ASO.

The parties have sparred over whether it would be fair to force Arent Fox for to meet the UST Guidelines. The dispute is immaterial because even if the UST Guidelines did not apply, the Arent Fox application would still have to satisfy the record keeping requirements imposed on fee applicants outside of bankruptcy, including the requirement for contemporaneous time records that are neither vague nor lumped.

The balance of the time recorded in Tab 3, Schedule C to the Supplement, which I compute to be $217,442.06, reflects the product of after-the-fact efforts to "unblock" the time entries following the February 15, 2012 hearing. To this extent, they are reconstructed rather than contemporaneous. Moreover, even if the time entries attached to the Supplement were considered contemporaneous, their accuracy would be suspect. Most of the entries are billed in half-hour or whole-hour increments. Arent Fox's Tab 3, Schedule C includes 390 separate time entries, of which 256 meet these criteria. This indicates that time was recorded in round numbers without any significant effort to detail the actual time spent on services.

One would expect that 20% of the time, or only 78 entries, would be billed in half-hour or whole-hour increments.
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Of greater concern, many of these large blocks of time contain woefully vague descriptions and lumped entries, such as "reviewing," "working" on or "drafting" various documents of general or no description, "participating" in conferences or telephone calls described in the most general way, or simply "preparing" for court, making it impossible to determine if the amount of time spent was reasonable. A sampling of these entries is annexed to this opinion as Schedule C. Under the circumstances, the Court will exercise its discretion to apply a 20% across the board reduction to the balance of the time entries in Tab 3, Schedule C that were not previously addressed. Accordingly, Arent Fox's fees are allowed in the amount of $173,953.65. The Court has considered the remaining objections, and to the extent not specifically addressed, are overruled as lacking in merit.

3. Resolution of Objection to Expenses

As noted, the debtors and the Committee also objected to the reimbursement of certain expenses sought by Arent Fox, charging that Radke and Arent Fox lawyers traveled first class between New York and Washington and stayed in expensive New York hotels. In its Supplement, Arent Fox agreed to reduce its out-of-town transportation and lodging expenses by 25% or $3,127.84. This is an appropriate resolution, and accordingly, the firm is entitled to an award of reimbursed expenses in the sum of $17,121.35.

The debtors' counsel is directed to submit a fee order consistent with this decision. Dated: New York, New York

July 2, 2012

+-----------------------------------------------------------------------------+ ¦Date ¦Timekeeper ¦Description ¦Hours ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/15/ ¦O'Neill ¦Reviewed investor emails and voicemails ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/16/ ¦Radke ¦Drafted and sent out email to West End ¦ ¦2.0 ¦ ¦2011 ¦ ¦investors re: bankruptcy ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/18/ ¦O'Neill ¦Check investor emails and summarize same ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/18/ ¦O'Neill ¦Assist with email to investors ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/18/ ¦Unger ¦Review correspondence regarding developments¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/21/ ¦Radke ¦Respond to investor emails and phone calls ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/24/ ¦O'Neill ¦Emails and telephone calls regarding ¦ ¦2.0 ¦ ¦2011 ¦ ¦bankruptcy ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/24/ ¦O'Neill ¦Drafted additional emails to investors ¦ ¦2.2 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/24/ ¦Radke ¦Review and respond to investor emails ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/28/ ¦Unger ¦Conference with Radke regarding developments¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦3/28/ ¦Unger ¦Review of materials filed in bankruptcy ¦ ¦3.0 ¦ ¦2011 ¦ ¦court proceeding ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/4/ ¦Unger ¦Review of information provided by West End ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/4/ ¦Radke ¦Review and respond to investor email ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/5/ ¦Radke ¦Conference with Unger on developments ¦ ¦2.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/18/ ¦Unger ¦Review of materials for inclusion in ¦ ¦1.5 ¦ ¦2011 ¦ ¦preliminary report of Independent Monitor ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/19/ ¦Unger ¦Review of materials for inclusion in ¦ ¦1.5 ¦ ¦2011 ¦ ¦preliminary report of Independent Monitor ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦4/21/ ¦Unger ¦Review of additional materials received from¦ ¦1.0 ¦ ¦2011 ¦ ¦Company ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦5/9/ ¦Unger ¦Review recent bankruptcy filings ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦5/9/ ¦Unger ¦Preparation for trip to attend court ¦ ¦1.0 ¦ ¦2011 ¦ ¦proceedings ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦5/24/ ¦Unger ¦Preparation for bankruptcy hearing ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦6/1/ ¦Unger ¦Review of recent bankruptcy filings ¦ ¦0.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦6/6/ ¦Unger ¦Review of materials filed in bankruptcy ¦ ¦1.0 ¦ ¦2011 ¦ ¦proceeding ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Review of recent bankruptcy court filings ¦ ¦ ¦ ¦ ¦ ¦and compared to information provided ¦ ¦ ¦ ¦ ¦ ¦directly ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦6/13/ ¦Unger ¦by company ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/20/ ¦Unger ¦Conference with government attorneys ¦ ¦1.0 ¦ ¦2011 ¦ ¦regarding developments ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/21/ ¦Unger ¦Research on Independent Monitor status ¦ ¦1.0 ¦ ¦2011 ¦ ¦issues ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/21/ ¦Radke ¦Work on memorandum in response to motion to ¦ ¦2.5 ¦ ¦2011 ¦ ¦show cause ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/22/ ¦Unger ¦Work on draft reply brief ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/26/ ¦Radke ¦Preparation for 7/27 District Court hearing,¦ ¦2.5 ¦ ¦2011 ¦ ¦reviewed briefs ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/26/ ¦Radke ¦Reviewed West End Reply brief ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/26/ ¦Unger ¦Reviewed West End reply brief and related ¦ ¦2.5 ¦ ¦2011 ¦ ¦filings ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/27/ ¦Radke ¦Preparation for court hearing ¦ ¦2.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/27/ ¦Radke ¦Conference with Unger and government ¦ ¦1.0 ¦ ¦2011 ¦ ¦attorneys ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/27/ ¦Unger ¦Preparation for court hearing ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦7/27/ ¦Unger ¦Conference with Radke and government ¦ ¦1.0 ¦ ¦2011 ¦ ¦attorneys ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦9/7/ ¦Unger ¦Preparation for 9/8 bankruptcy court hearing¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦9/8/ ¦Unger ¦Preparation for bankruptcy court hearing ¦ ¦1.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦9/8/ ¦Unger ¦Preparation at bankruptcy court hearing ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦9/8/ ¦Radke ¦Preparation for bankruptcy court hearing ¦ ¦3.0 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦9/8/ ¦Radke ¦Preparation in bankruptcy court hearing ¦ ¦1.5 ¦ ¦2011 ¦ ¦ ¦ ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Attorney ¦Rate ¦ ¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Brown ¦ ¦$595¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Radke ¦ ¦$525¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Unger ¦ ¦$487¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Angelich ¦ ¦$450¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦O'Neill ¦ ¦$235¦ +------+------------+--------------------------------------------+-------+----¦ ¦ ¦ ¦Utlik ¦ ¦$325¦ +-----------------------------------------------------------------------------+

In re West End Fin. Advisors, LLC

Opinion

Chapter 11

(Substantively Consolidated)

MEMORANDUM DECISION AWARDING FINAL

FEES AND REIMBURSEMENT OF EXPENSES

BACKGROUND

DISCUSSION

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In re West End Fin. Advisors, LLC

In re West End Fin. Advisors, LLC

Case Details

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