Vemma Receiver Motion

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]

[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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DENTONS US LLP LOS ANGELES

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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


DISTRICT OF ARIZONA


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





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


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]

[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]


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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]

[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


Attorneys for Former Temporary Receiver

Robb Evans and Robb Evans & Associates


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).


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


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


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


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


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.


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]

[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]


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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 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


Attorneys for Former Temporary Receiver

Robb Evans and Robb Evans & Associates


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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/s/Christina O'Meara Christina O'Meara




[email protected]


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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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Plaintiff,

v.


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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DISTRICT OF ARIZONA


Plaintiff,


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




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


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


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.


declaration was executed this 21st day of September 2015 at Los Angeles, California.

/s/Gary Owen Caris GARY OWEN CARIS






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[email protected]


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DISTRICT OF ARIZONA

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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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Plaintiff,

v.


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




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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DISTRICT OF ARIZONA


Plaintiff,


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




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


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,


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





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





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


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.


declaration was executed this day of September 2015 at Sun Valley, California.

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18 KENTON JOHNSON

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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.


declaration was executed this ___ day of September 2015 at Sun Valley, California.

KENTON JOHNSON






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DISTRICT OF ARIZONA


Plaintiff,

v.


Defendants.


[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

USW 805278521.1

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DISTRICT OF ARIZONA


Plaintiff,


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


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.











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Documents

Vemma Receiver Motion