UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION

Transcription

1 SECURITIES AND EXCHANGE COMMISSION, UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION Plaintiff, v. RICHARD W. DAVIS, JR., Defendant, and CASE NO. 3:16-CV-285 SECOND APPLICATION FOR COMPENSATION TO MIDDLESWARTH BOWERS & COMPANY, LLC, ACCOUNTANTS FOR THE RECEIVER DCG REAL ASSETS, LLC, et al., Relief Defendants. A. Cotten Wright as Receiver (the Receiver ) for the assets of DCG Real Assets, LLC; DCG Commercial Fund I, LLC; H20, LLC; DCG PMG, LLC; DCG PMF, LLC; Finely Limited, LLC; DCG Funds Underwriting, LLC; DCG ABF Management, LLC; DCG Funds Management, LLC; Davis Capital Group, Inc.; Davis Financial, Inc.; DCG Partners, LLC; DCG Real Estate Development, LLC; Huntersville Plaza Phase One, LLC; Huntersville Plaza Phase Two, LLC; North Lake Business Park, LLC; and Richard Davis Enterprises, LLC (collectively, the Receivership Defendants ), through counsel, hereby submits this to Second Application for Compensation for Middleswarth Bowers & Company, LLC, Accountants for the Receiver, for the period of April 12, 2017 through July 11, 2017, and respectfully represents as follows: 1. On June 8, 2016, the Court entered its Temporary Receivership Order appointing the Receiver in this case. (Doc. No. 8). Subsequent Orders were entered on August 5, 2016 and September 22, 2016 (together with the Temporary Receivership Order, the Receivership 1 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 1 of 11

2 Order ) whereby the Receivership was made permanent for the Receivership Defendants. (Doc. Nos. 50 and 64). 2. Pursuant to the Receivership Order, the Receiver is authorized to retain professionals, including accountants, to assist in carrying out her duties as Receiver. Receivership Order, 27. On June 13, 2016, the Court entered an Order authorizing the Receiver to employ Middleswarth, Bowers & Company, LLC ( Bowers ) as accountants for the Receivership estate. Id. at 28. The Receivership Order provides that the Receiver and her professionals: are entitled to reasonable compensation and expense reimbursement from the Receivership Defendants as described in the Billing Instructions for Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission (the Billing Instructions ) agreed to by the Receiver. Such compensation shall require the prior approval of the Court, and the combined total compensation and expense reimbursement to be paid to the Receiver and Retained Personnel shall not exceed 30% of the net value of the Receivership Property. 3. Attached hereto as Exhibit C is documentation itemizing the fees and expenses incurred by Bowers in connection with its representation of the Receiver for the period of April 12, 2017 through July 11, The Receiver contends that Bowers has spent the following time in performing the services referred to herein as accountants for the Receiver, and she is informed and believes that Bowers services rendered as accountants for the Receiver are reasonably worth the sum as set forth below and that Bowers should be allowed and paid said sum as fees and as a cost of this estate: Professional Hours Rate Total Edward P. Bowers, Partner.65 $285 $ Laurie LeGrand, Associate 6.10 $225 $1, Michael T. Bowers, Accountant 7.30 $225 $1, Akiko Bowers, Bookkeeper 0.00 $85 $ Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 2 of 11

3 Total: $3, Expenses $ 9.10 Total Fees & Expenses: $3, Attached hereto as Exhibit A is a summary of prior fee applications for Bowers. Attached as Exhibit B of the fees and expenses as set forth above. 5. The SEC Guidelines limit the compensation and expense reimbursement available to the Receiver and her professionals to thirty percent (30%) of any net recovery. The Receiver respectfully requests that this Application be approved on the understanding that any payment of Court-approved fees and expenses will be limited to 30% of net future recoveries. 6. The Receiver respectfully submits that the services for which Bowers seeks compensation were necessary for, and beneficial to, the orderly administration of the Receivership Estate. WHEREFORE, the Receiver prays that the Court will enter an Order allowing compensation of $3, and reimbursement of expenses of $9.10 to Bowers as accountants for the Receiver; authorizing the payment of any allowed fees and expenses from the funds of the Receivership estate in accordance with the SEC Guidelines and Billing Instructions; and granting such further relief as is just and proper. Dated this 18th day of July, Exhibit A Summary of Prior Fee Applications Exhibit B- Summary of User Time /s/ A. Cotten Wright A. Cotten Wright (State Bar No ) Grier Furr & Crisp, PA 101 North Tryon Street, Suite 1240 Charlotte, North Carolina Phone: Fax: cwright@grierlaw.com Attorneys for the Receiver 3 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 3 of 11

4 Exhibit C Bowers Invoice for Application Period Exhibit D Receiver s Certification 4 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 4 of 11

5 EXHIBIT A SUMMARY OF PRIOR FEE APPLICATIONS Application Date Accountant Fees Applied For Accountant Fees Received Order Date 04/21/17 3, , /08/17 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 5 of 11

6 EXHIBITB USER TIME SUMMARY Fees: Title Hours Rate Total - Edward P. Bowers Partner , Michael T. Bowers Partner , Laurie LeGrand Associate , Aldko Bowers Book;eeper Expenses: Total Fees 3, PACER Charges 9.10 Archive Storage Fees 0.00 Total Expenses Total Fees & Expenses 3, Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 6 of 11

7 Exhibit C DCG Real Assets LLC INVOICE NO.: DATE: CLIENT CODE: IN 07/17/ PAGE NO.: 1 FOR PROFESSIONAL SERVICES RENDERED: HOURS AMOUNT TAX ISSUES 05/12/17 05/25/17 Laurie C. LeGrand 4.30 Review PACER activity for FMV assets and undisclosed liabilities (3.10). Start developing working trial balance sheet for Form 1120SF 2016 tax returns (1.20). Laurie c. LeGrand 1.80 Record assets according to PACER and Trust records to develop a balance sheet. TOTAL FEES: ACCOUNTING SERVICES 04/12/17 04/13/17 07/10/17 07/11/17 Michael T. Bowers Prepare 1st quarter Edward P. Bowers.45 fund report for SEC reporting.15 Review quarterly report Michael T. Bowers.10 to C Wright re: 2nd quarter 2017 activity ledger Michael T. Bowers.25 Review 2nd quarter ledger and prepare status report for SEC reporting TOTAL FEES: FORENSIC ACCOUNTING 05/30/17 06/28/17 07/10/17 EXPENSES: Michael T. Bowers.35 Work on accessing flash drive. Call to C.Wright. Edward P. Bowers.50 Meeting with M.Martinez re: books and records available, Quickbooks advantages if data files obtained, and work needed. Michael T. Bowers 6.15 Work on restoring 28 Quickbook backup files and removing passwords on DCG related entities. Review each Quickbook file for data range and make notes. TOTAL FEES: Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 7 of 11

8 Exhibit C DCG Real Assets LLC INVOICE NO. : DATE: CLIENT CODE: IN 07/17/ PAGE NO.: 2 FOR PROFESSIONAL SERVICES RENDERED: HOURS AMOUNT 05/31/17 PACER Charges - May TOTAL EXPENSES: 9.10 AMOUNT DUE: Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 8 of 11

9 EXHIBIT D Receiver s Certification 1 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 9 of 11

10 SECURITIES AND EXCHANGE COMMISSION, UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION Plaintiff, v. RICHARD W. DAVIS, JR., Defendant, and DCG REAL ASSETS, LLC, et al., CASE NO. 3:16-CV-285 RECEIVER S CERTIFICATION IN SUPPORT OF FIRST APPLICATION FOR COMPENSATION TO MIDDLESWARTH BOWERS & COMPANY, LLC, ACCOUNTANTS FOR THE RECEIVER Relief Defendants. A. Cotten Wright, the Receiver for the estates of the Receivership Defendants herein, hereby certifies as follows with respect to the First Application for Compensation to Middleswarth Bowers & Company, LLC, Accountants for the Receiver and the invoice attached thereto as Exhibit B: 1. This Certification is made in compliance with the Billing Instructions for Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission (the SEC Guidelines ). 2. I am an attorney licensed to practice law in the State of North Carolina and the United States District Court for the Western District of North Carolina. I am a member of the law firm of Grier Furr & Crisp, PA ( GFC ). 3. I have read and am familiar with Bowers application for compensation and reimbursement of expenses for the period of April 12, 2017 through July 11, 2017 (the Application ). To the best of my knowledge, information and belief formed after reasonable 1 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 10 of 11

11 inquiry, the Application and all fees and expenses set forth therein are true and accurate and comply with the SEC Guidelines. 4. All fees contained in the Application are based on the rates listed in the Bowers fee schedule included in Ex. B, and such fees are reasonable, necessary and commensurate with the skill and experience required for the activity performed. 5. Bowers has not included in the amount for which reimbursement is sought the amortization of the cost of any investment, equipment, or capital outlay in any request for expense reimbursement. 6. In seeking reimbursement for a service which Bowers justifiably purchased or contracted for from a third party (such as copying, imaging, bulk mail, messenger service, overnight courier, computerized research, or title and lien searches), Bowers requests reimbursement only for the amount billed to Bowers by the third-party vendor and paid by Bowers to such vendor. 7. Bowers does not seek payment for time spent preparing the Application or any documentation in support of the same. This is the 18th day of July, /s/ A. Cotten Wright A. Cotten Wright Receiver 2 Case 3:16-cv GCM Document 127 Filed 07/19/17 Page 11 of 11