Free Motion for Disbursement of Funds - District Court of Colorado - Colorado

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 1 of 14

EXHIBIT B SUMMARY OF BILLINGS July 1, 2006 through September 30, 2006

I.

CASE BACKGROUND

On October 26, 2005, the United States District Court for the District of Colorado appointed Patten, MacPhee & Associates, Inc. of Denver, Colorado (the "Receiver") as a receiver in the civil action brought by the United States Securities and Exchange Commission ("SEC") against Kenneth Roy Weare a/k/a Roy Weaver, J & K Global Marketing Corporation and AAA-Auction.com, Inc. ("Defendants"). According to the Order Appointing Receiver dated October 26, 2005, The Receiver was appointed by the Court to: · Compare Access database to summaries of deposit items listing investors names and identification numbers in order to make a determination as to which investors made deposits and received monies in order to identify the full group of potential Claimants; Devise an efficient and comprehensive method of establishing the current location of the approximately 23,000 investors; Establish a claims procedure by determining the form of notice to be sent to investors and the information investors need to submit to establish their claim, the length of time for investors to submit claims and the necessary proof investors must submit to support their claim; Give notice to investors to begin claims process through email and, if necessary, postal mail, along with developing the necessary tools, such as web pages, for collecting data from potential Claimants; Receive claims from investors and evaluate the validity of claims; Prepare distribution proposal assigning investors a pro rata share of funds after costs of the distribution plan have been deducted and submit the distribution proposal to the Court for approval; Give notice to claimants of process to contest final distribution plan; and, Administer distribution of funds from registry of the Court in coordination of the Clerk's office.

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Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 2 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 2 II. SCOPE OF ACTIVITIES AND RELATED PROFESSIONAL FEES

This is the fourth application for professional fees and expenses. More detailed descriptions of the activities undertaken by the Receiver are provided in the Receiver's quarterly reports for the calendar quarters ended December 31, 2005, March 31, 2006 and June 30, 2006. The Receiver also expects to complete and file with the Court on or about October 15, 2006, the Receiver's quarterly report for the calendar quarter ended September 30, 2006. Through the period covered by this fee application, we have performed the following: · Reviewed electronic data files received from the SEC containing contact information for potential Claimants; Analyzed database for duplicate entries and compared to alternative sources of electronic data provided by the SEC; Met with representatives of the SEC to discuss the various issues pertaining to this matter and collect additional data and documentation; Began development of framework for capturing and ensuring the accuracy and authenticity of contact information for the pool of potential Claimants; Met with the website designer / database programmer to outline objectives of website and determine data to be collected; Took possession of additional documents obtained by the SEC during its investigation; Established a toll-free Investor Helpline for investors to leave information and send faxes to the Receiver; Established a website for the Receiver: www.jkgolbalreceivership.com and an email address for the Receiver: [email protected]; Worked with representatives of the SEC to establish a link between the portion of its website devoted to the J&K Global Marketing Corporation / AAA-auction, Inc. matter and the Receiver's website in order to add credibility to the Receiver's website;

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Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 3 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 3 · Established a post office box for the Receiver: PO Box 18309, Denver, Colorado 80218; On or about April 5, 2006, completed the website design in anticipation of the broadcast email notification to solicit investors to register their current contact information and the contact information of known participants in the investment fraud via the Receiver's website; Prepared the text and sent broadcast emails to a sample group of 567 investors on April 6, 2006 and to the more than 22,000 remaining investors on April 25, and 26, 2006; Routinely responded to email and voicemail requests from victims of the investment fraud; Continue to send broadcast emails to victims who have valid email addresses, but who have not yet registered at the Receiver's website; On or about June 9, 2006, sent 8,294 letters to potential claimants in the United States notifying them to register at the Receiver's website; On or about June 30, 2006, mailed 5,069 letters to potential claimants located in more than 90 countries other than the United States notifying them to register at the Receiver's website; On or about July 27, 2006, mailed an additional 1,633 letters to potential claimants identified as having moved within the past five years in accordance with the National Change of Address Report obtained by the Receiver, as well as those addresses previously considered non-CASS verified and corrected by the Receiver's staff; Created a database of bank account activity derived from various spreadsheets compiled by the SEC; Consulted with the SEC on preliminary issues and concerns regarding the format of the claims process;

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Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 4 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 4 · Consulted with personnel at the SEC to identify alternative methods for contacting potential claimants. The SEC has agreed to allow us to send an email from one of their computer servers to claimants who have previously not responded to our solicitations to register their current contact information; Prepared a preliminary draft of the claim form and provided a copy to the SEC; Developed preliminary recommendations to be discussed first with the SEC and then submitted to the Court in the form of a motion concerning (1) further efforts to identify and locate investors; (2) a proposed process and timetable for submission of claims by investors; (3) the level of proof required of investors to support their claims; (4) the methodology to be employed by the Receiver for validating claims; and, (5) any other matters raised by the SEC or the Court's Order Appointing Receiver; and, Met with Receiver's counsel to prepare motions for substantive consolidation of J&K Global Marketing Corporation and AAA-Auction.com, Inc. and to discuss the various motions necessary for the Court to establish the claims procedures and deadlines.

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Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 5 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 5 Communication and/or Reports to the Court Hours billed in this category relate to the preparation, review, revision and submission of quarterly reports to the Court that present and discuss the Receiver's activities for the quarter.
Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
4.0

Cumulative Hours
5.5

Rate
$250

Hours
1.5

Fees
$375.00

Fees
$1,000.00

Fees
$1,375.00

$250

8.5

$2,125.00

0.0

$0.00

8.5

$2,125.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 10.0

$0.00 $2,500.00

0.0 4.0

$0.00 $1,000.00

0.0 14.0

$0.00 $3,500.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 6 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 6 Project Planning and Coordination Included in the hours billed in this category are meetings and telephone conferences pertaining to establishing a framework for notifying and collecting information regarding potential Claimants.
Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
24.9

Cumulative Hours
31.9

Rate
$250

Hours
7.0

Fees
$1,750.00

Fees
$6,225.00

Fees
$7,975.00

$250

14.4

$3,600.00

15.5

$3,875.00

29.9

$7,475.00

$100

3.5

$350.00

0.0

$0.00

3.5

$350.00

$100

0.0

$0.00

7.7

$770.00

7.7

$770.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 24.9

$0.00 $5,700.00

0.5 48.6

$25.00 $10,895.00

0.5 73.5

$25.00 $16,595.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 7 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 7 Website and/or Database Development and Testing Included in the hours billed in this category are meetings and telephone conferences with the website and database developers. These discussions related to the data to be captured from the potential claimant pool, validation of such data, the establishment of user names and passwords of individuals and entities contained in the database seized by the SEC during its investigation. Also included are time spend preparing narrative for the website and designing, formatting and implementation of the screens to be placed on the website.

Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
11.1

Cumulative Hours
11.1

Rate
$250

Hours
0.0

Fees
$0.00

Fees
$2,775.00

Fees
$2,775.00

$250

0.0

$0.00

18.3

$4,575.00

18.3

$4,575.00

$100

0.0

$0.00

6.6

$660.00

6.6

$660.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 0.0

$0.00 $0.00

0.0 36.0

$0.00 $8,010.00

0.0 36.0

$0.00 $8,010.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 8 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 8 Communication and/or Meeting with the SEC Included in the hours billed in this category are meetings and telephone conferences with attorneys and/or other staff at the SEC. These meetings pertain to the SEC's investigation into the fraud engaged in by the Defendants, the SEC's steps in recover data related to the fraud, and our gaining an understanding of the work completed by the SEC in conjunction with its involvement with this matter.

Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
1.5

Cumulative Hours
5.5

Rate
$250

Hours
4.0

Fees
$1,000.00

Fees
$375.00

Fees
$1,375.00

$250

1.0

$250.00

3.3

$825.00

4.3

$1,075.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 5.0

$0.00 $1,250.00

0.0 4.8

$0.00 $1,200.00

0.0 9.8

$0.00 $2,450.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 9 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 9 Communication and/or Meeting with Counsel for the Receiver Included in the hours billed in this category are meetings and telephone conferences with the Receiver's attorney. These meetings and telephone calls relate to the preparation for procedural motions for the claims process and all relevant court filings required to establish the claims process and procedures.
Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
0.00

Cumulative Hours
2.25

Rate
$250

Hours
2.25

Fees
$562.50

Fees
$0.00

Fees
$562.50

$250

2.25

$562.50

0.00

$0.00

2.25

$562.50

$100

0.00

$0.00

0.00

$0.00

0.00

$0.00

$375

0.00

$0.00

0.00

$0.00

0.00

$0.00

$50

0.00 4.50

$0.00 $1,125.00

0.00 0.00

$0.00 $0.00

0.00 4.50

$0.00 $1,125.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 10 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 10 Communication and/or Meeting with Investors Included in the hours billed in this category are review and responses to emails sent to the Receiver by investors, as well as listening and responding, via email, to voicemails. Also included in this category are unsolicited phone calls from investors answered by representatives of the Receiver.
Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
10.00

Cumulative Hours
12.00

Rate
$250

Hours
2.00

Fees
$500.00

Fees
$2,500.00

Fees
$3,000.00

$250

12.60

$3,150.00

36.20

$9,050.00

48.80

$12,200.00

$100

115.50

$11,550.00

83.10

$8,310.00

198.60

$19,860.00

$375

0.00

$0.00

0.00

$0.00

0.00

$0.00

$50

30.55 160.65

$1,527.50 $16,727.50

22.25 151.55

$1,112.50 $20,972.50

52.80 312.20

$2,640.00 $37,700.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 11 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 11 Communications - Miscellaneous Hours billed in this category relate to communications meetings with parties other than counsel and investors, such as vendors or suppliers.

Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
1.2

Cumulative Hours
1.2

Rate
$250

Hours
0.0

Fees
$0.00

Fees
$300.00

Fees
$300.00

$250

0.0

$0.00

4.6

$1,150.00

4.6

$1,150.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.3

$30.00

0.3

$30.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 0.0

$0.00 $0.00

0.0 6.1

$0.00 $1,480.00

0.0 6.1

$0.00 $1,480.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 12 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 12 Database Verification and Analysis ­ Bank Account Activity Hours billed in this category relate to the compilation, verification, and ongoing analysis and modification of an electronic database created from various MS Excel workbooks and spreadsheets prepared by the SEC based on its review and analysis of bank account statements and enclosures by the either seized from the Defendants or directly subpoenaed from the banks. Also included in this category is the review of source documents related to the validation and supplementation of this database.

Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
34.0

Cumulative Hours
63.0

Rate
$250

Hours
29.0

Fees
$7,250.00

Fees
$8,500.00

Fees
$15,750.00

$250

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

1.3 30.3

$65.00 $7,315.00

0.0 34.0

$0.00 $8,500.00

1.3 64.3

$65.00 $15,815.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 13 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 13 Database Verification and Analysis ­ Investor Related Activity Hours billed in this category relate to the verification and ongoing analysis and maintenance of an electronic database seized from the Defendants which contains an accounting of cash deposits and withdrawals as well as contact and identification information of investors. Also included in this category is the review of documents related to the validation and supplementation of this database.

Current Application Biller
John Paul A nderson M ichael D . B urns S tephanie L. K atz Jan L. Loser Leslie A . P atten C arolyn J. P haris T otals

Previous Applications Hours
34.0

Cumulative Hours
34.0

Rate
$250

Hours
0.0

Fees
$0.00

Fees
$8,500.00

Fees
$8,500.00

$250

0.0

$0.00

9.9

$2,475.00

9.9

$2,475.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$100

0.0

$0.00

0.0

$0.00

0.0

$0.00

$375

0.0

$0.00

0.0

$0.00

0.0

$0.00

$50

0.0 0.0

$0.00 $0.00

0.0 43.9

$0.00 $10,975.00

0.0 43.9

$0.00 $10,975.00

Case 1:01-cv-00645-JLK

Document 144-4

Filed 11/22/2006

Page 14 of 14

SEC v. J&K Global Marketing Corp., et al. Exhibit B, Summary of Billings July 1, 2006 through September 30, 2006 Page 14 III. SUMMARY OF PROFESSIONAL FEES The names and hourly rates of all professionals and para-professionals who billed time on this matter is contained at Exhibit A. Attachment 1 contains a summary of professional fees in chronological order by month, and includes detail by biller and by category for period July 1, 2006 through September 30, 2006. Attachment 3 contains copies of all PMA billing statements governed by the application for fees and expenses for the same period. IV. SUMMARY OF EXPENSES Attachment 2 contains a detailed listing of expenses by category for the period July 1, 2006 through September 30, 2006. V. CONCLUSION The Receiver believes that the requested fees and expenses are reasonable and necessary to complete the task required and discharge his duties in this matter. The Receiver has charged reasonable rates based upon the customary compensation charged by comparably skilled professionals charged with similar fiduciary duties. Further, the Receiver believes the requested fees and expenses are reasonable and necessary considering the complexity of the financial and accounting issues involved. The Receiver has reviewed the billing statements to ensure that they are reasonable and necessary.