Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 1 of 12

Transcription

1 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 1 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION SECURITIES AND EXCHANGE COMMISSION, v. Plaintiff, BRIAN A. BJORK, ESTATE OF JOEL DAVID SALINAS, J. DAVID GROUP OF COMPANIES, INC., J. DAVID FINANCIAL GROUP, L.P., SELECT ASSET MANAGEMENT, LLC, SELECT CAPITAL MANAGEMENT, LLC, SELECT ASSET FUND I, LLC, AND SELECT ASSET PRIME INDEX FUND, LLC, Defendants. CIVIL ACTION NO. 4:11-cv-2830 RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER'S FEES AND EXPENSES, (2) ATTORNEY'S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT TO THE HONORABLE KEITH P. ELLISON, UNITED STATES DISTRICT COURT: Steven A. Harr ( Receiver ), the Receiver appointed by the Court in these proceedings, files his Unopposed Eleventh Interim Application to Allow and Pay: (1) Receiver's Fees and Expenses, (2) Attorney's Fees and Expenses, and (3) Other Professional Fees and Expenses and Brief in Support for same states as follows: I. BACKGROUND 1. On August 1, 2011, the United States Securities and Exchange Commission ("SEC") filed its Complaint and requested the appointment of a Receiver. On that same date, the Court appointed Steven A. Harr to serve as Receiver and he has functioned in that capacity since. 2. Mr. Harr is an attorney with the law firm of Munsch Hardt Kopf & Harr, P.C. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 1 of 12

2 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 2 of 12 ("MHKH"). The Order permitted Mr. Harr to retain members of his firm and any other professionals considered to be reasonable and necessary by the Receiver to fulfill his obligations to the Court. As part of his duties, the Receiver employed the accounting firm of BDO USA, LLP f/k/a UHY Advisors FLVS, Inc. ( BDO ) to assist the Receiver with a variety of services. These services include the financial investigation of the Receivership entities, operation of the Receivership assets and accounting for the Receivership estate. 3. This application seeks the Court's approval of the fees and expenses incurred by the Receiver and MHKH for the period of February 1, 2015 August 15, 2015 and BDO for the period of January 16, 2015 August 15, This application is being filed to comply with the policies governing receivers as established by the Securities and Exchange Commission. Although early applications were filed approximately every 90 days, this application covers seven months due to the reduced amount of time, effort and fees in this matter and to conserve estate resources. II. SUMMARY OF WORK OF THE RECEIVER AND PROFESSIONALS TO DATE 4. A Preliminary Report (Dkt. 25) was filed by the Receiver on September 27, Shortly thereafter, a Second Interim Report (Dkt. 35) was filed on November 3, A Third Interim Report (Dkt. 47) was filed by the Receiver on February 7, A Fourth Interim Report (Dkt.72) was filed on May 21, A Fifth Interim Report (Dkt. 99) was filed September 10, A Sixth Interim Report (Dkt. 111) was filed on December 12, A Seventh Interim Report (Dkt. 135) was filed April 16, An Eight Interim Report (Dkt # 155) was filed September 17, The Ninth Interim Report (Dkt# 185) was filed on February 19, The Tenth Interim Report (Dkt#203) was filed on February 3, These reports more fully describe the work and accomplishments of the Receiver to date. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 2 of 12

3 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 3 of The financial results of the work of the Receiver for the period ending July 31, 2015, are shown in a form, known as a "SFAR", which is required by the Securities and Exchange Commission and is attached herein as Exhibit "A." The SFAR shows Cash and Cash Equivalents of $292,434, Investments of $1,700,000 and Other Assets or Uncleared Funds of $321, The work of the Receiver and his counsel during this period has been to continue to put in motion the actions necessary to address the remaining set of assets and liabilities and the state and federal taxes posed by this situation. During the period covered by this application, the Receiver has incurred fees and expenses with respect to his activities as Receiver and with respect to MHKH as follows: PERIOD HOURS FEES EXPENSES TOTALS 02/01/ /15/ $8, $ $9, /16/ /15/ $12, $ $12, /16/ /15/ $22, $ $22, /16/ /15/ $11, $ $11, /16/ /15/ $8, $ $8, /16/ /15/ $13, $ $13, /16/ /15/ $14, $1, $15, TOTALS $90, $4, $94, Exhibit "B," which is attached and incorporated herein by reference, conveys the following information for the time period of February 1, 2015 through August 15, 2015: a. The number of hours worked by each attorney and staff member on a particular day; b. The work performed by each attorney and staff member; c. The rates for each person rendering service in this matter (all of which represent at least a 10% discount from the firm's standard rates), and the involvement of the Receiver and MHKH attorneys and staff in this case during the six months covered by this application during which a total of more than 290 hours of attorney, staff and Receiver time has been expended. For this period, the Receiver's fees average a blended rate of approximately $31 an hour. 8. In addition to the work of the Receiver and his counsel, the Receiver has RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 3 of 12

4 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 4 of 12 principally employed BDO, successor to UHY, as accountants to serve the Receivership. Their work can generally be described as: Analysis of the need for and the substantial time and effort to prepare a wide range of tax returns for the receivership entities; Negotiation and elimination of all late penalties and interests otherwise charged to the estate s entities to date for not filing tax returns; Serving as the Receiver s controller; Assisting the Receiver with claims against net winners; and Preparing interim reports of operations and asset recoveries and reports for the Receiver. The fees and expenses incurred during the Period with respect to BDO are as follows: PERIOD HOURS FEES EXPENSES TOTALS 01/16/ /15/ $48, $51.24 $48, /16/ /15/ $13, $0.00 $13, /16/ /15/ $12, $0.00 $12, /16/ /15/ $11, $0.00 $11, /16/ /15/ $7, $0.00 $7, /16/ /15/ $4, $0.00 $4, /16/ /31/ $6, $ $7, TOTALS $105, $ $105, Exhibit "C," which is attached and incorporated herein by reference for all purposes, conveys the following information for the time period of January 16, 2015 through August 15, 2015: a. The number of hours worked by each BDO accountant and staff member on a particular day; b. The work performed by each accountant and staff member; c. The rates for each person rendering service in this matter, and involvement of BDO and staff in this case during the four month period covered by this application during which a total of more than 555 hours of BDO and staff time have been expended. BDO has provided services to the Receivership at a blended rate of approximately $ an hour. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 4 of 12

5 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 5 of 12 III. JOHNSON FACTORS 10. In support of this request for allowance of compensation and reimbursement of expenses, the Receiver and MHKH respectfully direct this Court's attention to those factors generally considered by Courts in awarding compensation to professionals for services performed in connection with the administration of a receivership estate. As stated by the Sixth Circuit Court of Appeals in Reed v. Rhodes, 179 F.3rd 453, 471 (6th Cir. 1999), "The primary concern in an attorney's fee case is that the fee awarded be reasonable." See Blum v. Stenson, 465 U.S. 886, 893 (1984). A reasonable fee is "one that is adequate to attract competent counsel " Id. (internal citation omitted). Under the twelve factor test enunciated by the Fifth Circuit in Johnson v. Georgia Hwy. Express, Inc., 488 F.2d 714, 717 (5th Cir. 1974), and adopted by the Supreme Court in Hensley v. Eckerhart, 461 U.S. 424, 432 (1983), a court must first determine the loadstar amount by multiplying the reasonable number of hours billed by a reasonable billing rate. Johnson, 488 F.2d at 717. That amount can then be adjusted by the "Johnson Factors". Those factors as applied to the services rendered in this case by the Receiver, MHKH and BDO are addressed below: a. The time and labor required. The Receiver, MHKH and BDO respectfully refer the Court's attention to their itemized billings which detail the involvement of the Receiver, MHKH attorneys and the accountants in this case during the seven month period covered by this application during which a total of more than 290 hours of attorney, staff and Receiver time have been expended and more than 555 hours of accountant and accounting staff time have been expended. A substantial amount of the accounting time has been devoted to the process of preparing tax returns and negotiating with the IRS with regard to penalties and interest charged as a result of the late filing of the returns. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 5 of 12

6 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 6 of 12 b. The novelty and difficulty of the questions. Many of the tasks involve factual and legal questions which are of substantial complexity. The issues associated with the real estate, tax returns, possible fraudulent transfers and the great concern of the investors for their potential losses posed many novel and difficult operating issues as well as legal and factual questions. These issues have been constantly developing. The Receiver and MHKH have had to become knowledgeable and keep current of daily ongoing events. These issues required regular attention, but the work has slowed significantly in light of the substantial liquidation of the estate assets. c. The requisite skill to perform the service. The Receiver believes that the services performed in this case have required individuals possessing considerable experience in business transactions, investment fraud, insurance, workouts, litigation, tax, equity receiverships, real estate, lending and negotiations. The Receiver, MHKH and BDO have considerable experience in these areas. d. The preclusion of other employment due to the acceptance of the case. The Receiver, MHKH and BDO have not declined any representation solely because of their services as Receiver, counsel or accountant for the Receiver. e. The customary fee. The average hourly rates sought herein are at least commensurate with the rates charged by other practitioners of similar experience levels in the Southern District of Texas. In the case of the Receiver and his counsel, the rates below are their average standard hourly rates discounted by at least ten percent (10%). During the time period covered by this application, the following lawyers at MHKH have performed legal services on behalf of the Receiver with respect to these proceedings. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 6 of 12

7 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 7 of 12 NAME RATE LICENSE & PRACTICE Steven A. Harr (Receiver) Sameer Karim (general issues) Christopher Jordan (real estate issues) Christopher Speer (general issues) Robert Kibby (general issues) $ per hour $ per hour $ per hour $ per hour $ per hour Licensed in Texas in 1980 and admitted to practice law before all state and federal courts in the State of Texas. Licensed in Texas in 2011 and admitted to practice law before all state courts in the State of Texas. Licensed in Texas in 2013 and admitted to practice law before all state and federal courts in the State of Texas. Licensed in Texas in 1993 and admitted to practice before all state courts in the State of Texas. Licensed in Texas in 1987 and admitted to practice before all state courts in the State of Texas. Additionally, the following paralegals and timekeepers assisted the Receiver: NAME RATE SCOPE OF INVOLVEMENT Mary Jo Martin (paralegal handling the majority of the investor questions and concerns) Meg Wingert (paralegal) Lindsay McNeil (law clerk) $ per hour $ per hour $ per hour Rendered valuable service in connection with the communications with investors and responding to investor contact and maintenance of information posted on the Receiver's website. Handled corporate issues. Handled general issues. f. Whether the fee is fixed or contingent. The Receiver, MHKH and BDO's fees are fixed insofar as monies exist by way of Receivership assets from which to pay such fees. Payment of such fees, however, is subject to Court approval. g. Time limitations imposed by the Client or other circumstances. The time requirements of the Receiver during the period covered by this application have been declining with an occasional uptick in activity to close certain matters. The Receiver and his staff continue to address the issues associated with the assets, taxes, strategic analysis and negotiation to sell or obtain payoffs on the various notes and investments held by Select Asset Fund I and Select Asset Prime Index Fund, responding to investors, addressing new issues RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 7 of 12

8 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 8 of 12 presented and their effect on the investors, monitoring and updating the Receiver's website, and attending to voic communications, investor responses and reporting information as necessary to the Court. The time investment of the estate s accountants has significantly increased due to the large number of state and federal tax returns that have been filed during the period in question. All tax return related work is now completed but has given rise to the assessment of penalties and interest by the IRS for the late filing of the returns. BDO has been successful to date in negotiating with the IRS to reverse all assessments of penalties and interest, saving the estate in excess of $100,000. h. The amount involved and the results obtained. During the period covered by this application, the Receiver and his lawyers and paralegals have handled the following matters: 1. Continued to review as needed the legal documents, including documents maintained by the Defendants and obtained from investors or third-parties, regarding the assets of the Receivership; 2. Negotiate for and collect on the new SMIG loan made in 2014 in association with the sale of a Receivership asset; 3. Negotiate and extend the time for payment on the Gassaway settlement in light of delays in the process of selling the property used to pay the estate; 4. Sold the New Ulm vacant lot property; 5. Invested substantial time and effort on a wide range of tax returns required by law, attention to the penalties and interest charged by the IRS and produced documents to the IRS; 6. Seek permission of the Court and work with the claims team to issue a second interim distribution to the investors. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 8 of 12

9 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 9 of Maintain an information website for all interested investors, creditors and others to provide for on-going communications, updated pleadings filed in the proceeding, and an address for questions and inquiries; 8. The Receiver has renewed the Certificates of Deposits holding the larger sums of the receivership corpus, all deposited in the CDARS program; investors on claims issues; investigation of the entities; litigation with the third. 9. Responded to and assisted with numerous and constant questions from 10. Attended to the many questions and issues related to the financial 11. Filed suit against three net winners, settled with two and began active i. The experience, reputation and ability of the attorneys. MHKH is a broadbased commercial firm with vast experience in the handling of matters generally related to civil trial law, dispute resolution, bankruptcy, corporate, real estate and general workout matters. The practice of the attorneys specifically in this case regularly includes the representation of investors and other persons involved in business transactions in which investors or other parties are victims or aggrieved in some fashion. The Receiver and other attorneys at MHKH have also served as Receiver and counsel in other large SEC Receiverships involving investor fraud on a worldwide basis. The reputation of the Receiver and MHKH attorneys is recognized and respected in their community in Texas. j. The undesirability of the case. The service as Receiver and the representation of the Receiver incident to this case has not been undesirable. k. The nature and length of the professional relationship with the client. MHKH did not represent the Receiver in these proceedings prior to being retained in these proceedings. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 9 of 12

10 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 10 of 12 l. Award in similar cases. MHKH believes that the fees requested in this case are less than or equal to those which have been awarded in similar cases in this district. IV. SEC CERTIFICATION 11. I have read the Application and to the best of my knowledge, information and belief formed after reasonable inquiry, the Application and all fees and expenses therein are true and accurate and comply with the Billing Instructions (with any exceptions specifically noted in the Certification and described in the Application); all fees contained in the Application are based on the rates listed in the Applicant s fee schedule attached hereto and such fees are reasonable, necessary and commensurate with the skill and experience required for the activity performed; the Application has not included in the amount for which reimbursement is sought the amortization of the cost of any investment, equipment, or capital outlay (except to the extent that any such amortization is included within the permitted allowable amounts set forth herein for photocopies and facsimile transmission); and, in seeking reimbursement for a service which the Applicant justifiably purchased or contracted for from a third party (such as copying, imagining, bulk mail, messenger service, overnight courier, computerized research, or title and lien searches), the Applicant requests reimbursement only for the amount billed to the Applicant by the third-party vendor and paid by the Applicant to such vendor. If such services are performed by the receiver, the receiver will certify that it is not making a profit on such reimbursable service. 12. Pursuant to Local Rule CV-7, the Receiver advises the Court that the Plaintiff Securities and Exchange Commission has no objection to the relief requested in this Motion. V. CONCLUSION WHEREFORE, PREMISES CONSIDERED, the Receiver requests that this Court approve all of the fees and expenses as set forth herein and for such other and further relief, RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 10 of 12

11 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 11 of 12 general and special, at law or in equity, to which the Receiver, MHKH and BDO may show themselves justly entitled. RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 11 of 12

12 Case 4:11-cv Document 218 Filed in TXSD on 08/26/15 Page 12 of 12 DATED: August 26, 2015 Respectfully submitted, MUNSCH HARDT KOPF & HARR, P.C. /s/ Steven A. Harr Steven A. Harr SDTX Bar No MUNSCH HARDT KOPF & HARR, P.C. 700 Milam, Suite 2700 Houston, Texas (713) (telephone) (713) (telecopy) x THE RECEIVER CERTIFICATE OF SERVICE I certify that a copy of the foregoing was filed electronically with the Clerk via the CM/ECF system. Notice of this filing will be sent to all parties by operation of the Court s electronic filing system. Houston, Texas, this 26 th day of August, By: /s/ Steven A. Harr Steven A. Harr RECEIVER S UNOPPOSED ELEVENTH INTERIM APPLICATION TO ALLOW AND PAY (1) RECEIVER S FEES AND EXPENSES, (2) ATTORNEY S FEES AND EXPENSES, AND (3) OTHER PROFESSIONAL FEES AND EXPENSES, AND BRIEF IN SUPPORT - PAGE 12 of 12

13 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 1 of 4 EXHIBIT A

14 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 2 of 4 STANDARDIZED FUND ACCOUNTING REPORT for J. David Financial, et. al. - Cash Basis Receivership; Civil Court Docket No CV Reporting Period 5/01/2015 to 7/31/2015 FUND ACCOUNTING (See Instructions): Detail Subtotal Grand Total Line 1 Beginning Balance (As of 5/01/2015): $ 2,420,065 Increases in Fund Balance: Line 2 Business Income $ - Line 3 Cash and Securities - Line 4 Interest/Dividend Income - Line 5 Business Asset Liquidation 37,000 Line 6 Personal Asset Liquidation - Line 7 Third-Party Litigation Income - Line 8 Miscellaneous - Other - Total Funds Available (Lines 1 8): 37,000 $ 2,457,065 Decreases in Fund Balance: Line 9 Disbursements to Investors - - Line 10 Disbursements for Receivership Operations Line 10a Disbursements to Receiver or Other Professionals (56,104) Line 10b Business Asset Expenses (86,824) Line 10c Personal Asset Expenses - Line 10d Investment Expenses (36) Line 10e Third-Party Litigation Expenses 1. Attorney Fees 2. Litigation Expenses Total Third-Party Litigation Expenses - Line 10f Tax Administrator Fees and Bonds - Line 10g Federal and State Tax Payments - Total Disbursements for Receivership Operations (142,964) Line 11 Disbursements for Distribution Expenses Paid by the Fund: Line 11a Distribution Plan Development Expenses: 1. Fees: Fund Administrator..... Independent Distribution Consultant (IDC) Distribution Agent Consultants.... Legal Advisers..... Tax Advisers Administrative Expenses 3. Miscellaneous Total Plan Development Expenses Line 11b Distribution Plan Implementation Expenses: 1. Fees: Fund Administrator.... IDC Distribution Agent.... Consultants... Legal Advisers..... Tax Advisers.. 2. Administrative Expenses 3. Investor Identification: Notice/Publishing Approved Plan..... Claimant Identification.... Claims Processing... Web Site Maintenance/Call Center Fund Administrator Bond 5. Miscellaneous 6. Federal Account for Investor Restitution (FAIR) Reporting Expenses Total Plan Implementation Expenses Total Disbursements for Distribution Expenses Paid by the Fund Line 12 Disbursements to Court/Other: Line 12a Investment Expenses/Court Registry Investment System (CRIS) Fees Line 12b Federal Tax Payments Total Disbursements to Court/Other: Total Funds Disbursed (Lines 9 11): (142,964) Line 13 Ending Balance (As of 7/31/2015): $ 2,314, /08/08

15 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 3 of 4 STANDARDIZED FUND ACCOUNTING REPORT for J. David Financial, et. al. - Cash Basis Receivership; Civil Court Docket No CV Reporting Period 5/01/2015 to 7/31/2015 Line 14 Ending Balance of Fund Net Assets: Line 14a Cash & Cash Equivalents $ 292,434 Line 14b Investments 1,700,000 Line 14c Other Assets or Uncleared Funds 321,667 Total Ending Balance of Fund Net Assets $ 2,314,101 OTHER SUPPLEMENTAL INFORMATION: Detail Subtotal Grand Total Report of Items NOT To Be Paid by the Fund: Line 15 Disbursements for Plan Administration Expenses Not Paid by the Fund: Line 15a Plan Development Expenses Not Paid by the Fund: 1. Fees: Fund Administrator..... IDC.... Distribution Agent Consultants.. Legal Advisers. Tax Advisers.. 2. Administrative Expenses 3. Miscellaneous Total Plan Development Expenses Not Paid by the Fund Line 15b Plan Implementation Expenses Not Paid by the Fund: 1. Fees: Fund Administrator... IDC... Distribution Agent... Consultants..... Legal Advisers..... Tax Advisers Administrative Expenses 3. Investor Identification: Notice/Publishing Approved Plan..... Claimant Identification.... Claims Processing... Web Site Maintenance/Call Center Fund Administrator Bond 5. Miscellaneous 6. FAIR Reporting Expenses Total Plan Implementation Expenses Not Paid by the Fund Line 15c Tax Administrator Fees & Bonds Not Paid by the Fund Total Disbursements for Plan Administration Expenses Not Paid by the Fund Line 16 Disbursements to Court/Other Not Paid by the Fund: Line 16a Investment Expenses/CRIS Fees Line 16b Federal Tax Payments Total Disbursements to Court/Other Not Paid by the Fund: Line 17 DC & State Tax Payments Line 18 No. of Claims: Line 18a # of Claims Received This Reporting Period.. - Line 18b # of Claims Received Since Inception of Fund Line 19 No. of Claimants/Investors: Line 19a # of Claimants/Investors Paid This Reporting Period Line 19b # of Claimants/Investors Paid Since Inception of Fund Note: Asset values are estimated based on books and records of estate. These amounts may change upon further analysis during the course of the receivership. Receiver: By: Date: (signature) (printed name) (title) 2 9/08/08

16 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 4 of 4 STANDARDIZED FUND ACCOUNTING REPORT for J. David Financial, et. al. - Cash Basis Receivership; Civil Court Docket No CV Reporting Period 5/01/2015 to 7/31/2015 Line 1: Beginning Balance (As of 5/01/2015): Balance as of last report period ended 4/30/2015 $ 2,199,065 Adjustment of asset values unknown at beginning of receivership: J. David et al Receivership : Note Receivable - Herman A. Meyer, Jr. 196,000 (Compromise of Claims; Approved Settlement $160,000) Linda Salinas 25,000 (Compromise of Claims; Approved Settlement $10,000) Adjusted balance as of 4/30/2015 $ 2,420,065 Line 5: Business Asset Liquidation: Business asset liquidation relates primarily to the receipt of sale proceeds from the sale of the property located in New Ulm, Texas. Line 14c: Other Assets or Uncleared Funds: Net Assets or Uncleared Funds Notes Receivable: Held by Select Asset Fund I, LLC $ 215,000 Held by J David Financial et al Receivership 106, ,667 Total other assets or uncleared funds $ 321, /08/08

17 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 1 of 57 :. EXHIBIT B

18 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 2 of 57 ~MUNSCH HARDT ~ KOPF & HARR PC ATTORNEYS & COUNSELORS DALLAS I HOUSTON I AUSTIN Fax munsch.com Securities and Exchange Commission Attn: Tim McCole Burnett Plaza, Suite Cherry Street, Unit 18 Fort Worth, TX Invoice Date: File No. Invoice No. February 15, ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Total Fees for Services Rendered through February 15, $8, Total Disbursements... $ Total Amount Due This Invoice... $9, Wire Instructions: Bank of Texas, N.A. ABA Routing Number: Account Number: Swift Code: BAOKUS44 Remittance Address: Accounting Munsch Hardt Kopf & Harr, P.C. 500 N. Akard St., Suite 3800 Dallas, TX File Number and Invoice Number Required. Federal ID Number: FOR BILLING INQUIRIES, PLEASE CONTACT ACCOUNTING AT (214)

19 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 3 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No. ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/AJ. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 2 of6 February 15,2015 FEE DETAIL 01 ASSET ANALYSIS AND RECOVERY Date I nit Description 2/2/15 SSK Correspondence with J. Daves regarding forensic accounting of Buddy Meyer and Connie Elies and subsequent review of accounting from counsel for B. Meyer in preparation to present to Receiver options for claw back claims. 2/2/15 MJM Review of investor (.10); confirm that all s have been answered (.10). 2/3/15 MJM Review of investor s to confirm that all have been answered (.20). 2/3/15 SSK Correspondence with SEC regarding viability of net winner claim and likelihood of collecting. 2/3/15 SSK Prepare for and conference with S. Harr and J. Daves regarding net winner claims (.8); Correspondence with counsel for Meyer, Connie Elies, and J. Daves and the Receiver regarding filing of net winner complaint and to share details of Receiver's accounting after review of same (2.8); Make edits/revisions to Complaint based on communications and prepare Notice of Related Filing and direct filing of all (1.4); Correspondence with net winners and provide courtesy copy of Receiver's Complaint (.1). 2/4115 SSK Correspondence with Net Winner C. Elies regarding accounting information recently shared. 2/4/15 SSK Correspondence with counsel for Buddy Meyer regarding filing of Complaint. 2/4/15 MJM Receipt and review of investor advising of new addresses and to investor confirming receipt and to claims analyst forwarding new addresses (.20); review of court and attached tenth interim report (.60); to webmaster forwarding interim report and instructions for posting same on the website (.20). 2/5/15 MJM Confirm that all s have been answered (.20); Hours Amount $ $40.00 $.00 $60.00 $1, $60.00 $30.00 $ $60.00

20 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 4 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No. ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 3 of6 February 15, 2015 Date I nit Description forward to claims analyst regarding address update (.10). 2/6/15 MJM s to and from webmaster regarding website ISSUeS. 2/9115 MJM Review and respond to investor /15 MJM Review of from John Y ouens at BDO regarding accounting issue (.10); review of prior invoices and s regarding said issues and to Mr. Youens regarding same (30); review and respond to investor regarding status of potential litigation and other issues and s with Steve Harr regarding same (.30) 2/10/15 SSK Review correspondence between Receiver and Wells Fargo regarding unidentified funds transfer. 2/11/15 SSK Correspondence with counsel for B. Meyer regarding resolution and subsequent correspondence with S. Harr regarding the same. 2112/15 MJM Review of investor (.10); review ofupdates and documents posted on website (.20). 2/12/15 SSK Correspondence with Receiver regarding offer received from B. Meyer. 2112/15 SSK Correspondence with process service coordinator regarding efforts to locate Linda Salinas/Buddy Meyer (.2); Review correspondence with counsel for Gasaway regarding extension (.1). Hours Amount $40.00 $40.00 $ $30.00 $ $60.00 $60.00 $90.00 Total For $2, CASE ADMINISTRATION Date In it Description Hours 2/10/15 SSK Conduct necessary research, review prior related 0.80 filings, and draft Receiver's Motion to Approve Second Interim Distribution. 2112/15 SSK Conduct research and prior pertinent filings and 4.40 draft Receiver's Motion for Second Interim Amount $ $1,320.00

21 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 5 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No. ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 4 of6 February 15, 2015 Distribution. 2/13/15 SSK Continue to conduct research and prior pertinent filings and draft Receiver's Motion for Second Interim Distribution $ Total For $2, STATUSREPORTS Date In it Description Hours 2/2/15 SSK Review and make edits/revisions to Receiver's 0.40 Tenth Interim Report and correspond with Receiver regarding same. 2/3/15 SSK Final edits/revisions to Status Report based on 0.30 adjustment in net winner litigation and direct filing of same. 2/10/15 SSK Review and make edits/revisions Receiver's 0.40 Tenth Interim Fee Application and correspond with Receiver regarding same. Amount $ $90.00 $ Total For $ J. DAVID ADMINISTRATION Date I nit Description Hours 2/2/15 SAH to Mike Watson for help on wire transfer; 1.60 exchange with Mr. Daves regarding same (.3); finalize Tenth Interim report and provide to Mr. Karim for filing (1.1); arrange call with Dan Kuhn and Alan Edgin for status on the payments for SMIG (.2). 2/3/15 SAH Call with Dan Kuhn and Alan Edgin regarding 0.90 plans for payment of the SMIG loan (.4); call with Sameer Karim and Jesse Daves regarding net winner plans (.5). 2/10/15 SAH Review notices from the IRS; send same with 2.80 communications to Amy Hume at BDO (.6); prepare Modification and Extension Agreement for Gassaway matter; same to Chris Johnson for review and initiate process for Amount $ $ $1,234.80

22 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 6 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No. ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 5 of6 February 15, 2015 motion to approve (.9); complete tenth interim report and approve for filing (1.1); communications with Wells Fargo regarding lost cashier's check and confirm status to Jesse Daves (.2). 2/11/15 SAH Attend to power of attorney for IRS discussion (.2). 2112/15 SAH Review Buddy Meyer offer; respond with options to Mr. Karim (.3); request and review of CD maturity dates to coordinate with distribution (.2). 2113/15 SAH Compose Extension and Modification; to Mr. Johnson; complete Fee Application and ready for filing ( 1.1 ) $88.20 $ $ Total For $3, ASSET ANALYSIS AND RECOVERY Date Init Description Hours Amount 2/2/15 SSK Review Janvey's First Amended Complaint Against Aitken and Thacker and make edits/revisions to Complaint Against Certain Net Winners based upon same and correspond with Tim McCole of the SEC to confer regarding filing of same. (NO CHARGE) 1.00 NO CHARGE Total For $0.00 Total Hours: Total Fees:... $8, TIMEKEEPER SUMMARY Title Timekeeper Name In it Rate Hours Total Shareholder Barr, Steven A. SAH $3, Associate Karim, Sameer S. SSK $5, Paralegal Martin, Mary J o MJM $580.00

23 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 7 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No. ****** Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 6 of6 February 15,2015 DISBURSEMENTS SUMMARY Postage... $3.78 Filing Fee... $ Service Of Process... $ Long Distance... $6.65 Overtime... $60.00 Research... $27.12 Total Disbursements: $960.05

24 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 8 of 57 ""f MUNSCH HARDT ""KOPF & HARR PC ATIORNEYS & COUNSELORS DALLAS I HOUSTON I AUSTIN 500 N. Akard Street Suite 3800 Dallas, Texas Main 214J'l Fax ,7584 munsch.com Securities and Exchange Commission Attn: Tim McCole Burnett Plaza, Suite Cherry Street, Unit 18 Fort Worth, TX Invoice Date: File No. Invoice No. March 17, Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Total Fees for Services Rendered through March 15, $12, Total Disbursements... $ Total Amount Due This Invoice... $12, Wire Instructions: Bank of Texas, N.A. ABA Routing Number: Account Number: Swift Code: BAOKUS44 Remittance Address: Accounting Munsch Hardt Kopf & Harr, P.C. 500 N. Akard St., Suite 3800 Dallas, TX File Number and Invoice Number Required. Federal ID Number: FOR BILLING INQUIRIES, PLEASE CONTACT ACCOUNTING AT (214)

25 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 9 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 2 of8 March 17,2015 FEE DETAIL 01 ASSET ANALYSIS AND RECOVERY Date I nit Description 2/16115 SSK Review prior Gasaway related filings, correspondence between Harr & counsel for Gasaway, Settlement and Compromise with Gasaway, Modification and Extension Agreement executed with Gasaway and draft Motion seeking approval of the Extension Agreement and correspond with Receiver regarding same. 2/16/15 SSK Draft response and counteroffer to settlement offer received from Buddy Meyer. 2/18/15 SSK Correspondence with process server regarding failure to serve Linda Salinas and need to locate secondary address. 2/18/15 SSK Follow up regarding status of response to counter-offer to be received from Buddy Meyer's counsel. 2/19/15 MJM Respond to investor (.10); review of documents posted on website (.10). 2/20/15 MJM Review of investor s and phone messages to confirm that all have been answered (.20). 2/20/15 SSK Preparation of Certificate of Interested Parties and correspondence with Receiver regarding same (.5); Review prior correspondence and send correspondence to net winner C. Elies regarding her complaints of defective accounting and to determine if she has identified documents to support the same (.2); Conversation with C. Elies regarding net win claims and her personal accounting and review accounting items referenced during conversation thereafter (.5); Correspondence with counsel for Buddy Meyer regarding recent offer and subsequent correspondence with Receiver regarding same (.4). 2/20/15 SSK Conduct research to find alternative service address for Linda Salinas after learning of failed Hours Amount $ $ $60.00 $30.00 $40.00 $40.00 $ $180.00

26 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 10 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 3 of8 March 17, 2015 Date I nit Description service attempt. 2/23/15 SSK Review correspondence from Meyer's counsel and draft letter making Receiver's final offer to same (.6); Final edits/revisions to Gasaway Extension and Modification, gather necessary exhibits, and correspond with SEC to conference regarding same (.5). 2/23115 SSK Correspondence with J. Daves and Receiver regarding cancellation of policy for beach house. 2/24115 MJM Review and respond to investor regarding new mailing address (.10); forward to claims analyst to update address in file (.10). 2/24/15 SSK Conduct investigative research, contact Bill Morgan counsel for Robbin Salinas, and Stephanie Holcombe counsel for Christopher Salinas, to locate service address for Linda Salinas (.7); Correspondence with J. Daves and Receiver regarding execution of insurance release documents, execute same, and direct return to J. Daves (.2). 2/24/15 SSK Review information and detail received from Stephen Tomasky and Jesse Daves to support Motion to Make Second Interim Distribution, make edits/revisions to same based on detail received, and correspond with Tim McCole for conference purposes in advance of filing. 2/25/15 SSK Correspondence with Meyer's counsel (.1); Correspondence with Elies regarding documents provided negating net wins total and appraoch moving forward, review documents provided, and correspond with Receiver regarding the same (1.2); Correspondence with SEC regarding opposition to Motion to Approve Interim Distribution and Modification of Gasaway Settlement (.1). 2/25/15 SSK Review C. Elies detail, conduct research to identify authority to support collapsing of C. Elies and all related claims for MSJ, and Begin draft ofmsj relating to C. Elies claims Hours Amount $ $30.00 $40.00 $ $ $ $1,080.00

27 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 11 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/AJ. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORI( Page 4 of8 March 17,2015 Date In it Description individually. 2/25/15 MJM Review and respond to investor (.1 0); review of documents and updates posted on website (.1 0); confirm that all s and phone calls have been answered and returned (.10). 2/26/15 MJM Review of investor s and documents posted on website. 2/26/15 SSK Correspondence with counsel for Meyers regarding extension of time to respond to offer and subsequent correspondence with Receiver regarding same (.2); Correspondence with C. Elies regarding claims and documents delivered and conduct review of same in conjunction with and compare with records produced by forensic team and correspond with Receiver regarding C. Elies claims (1.2). 2/26/15 SSK Correspondence with Sarah Hail regarding Linda Salinas claim. 2/27/15 SSK Final edits/revisions to Motion to Extend Gasaway Settlement to reflect conference with SEC, gather exhibits, and direct filing; Final edits/revisions to Motion to Make Second Interim distribution to reflect conference with SEC, gather exhibits, and direct filing. 2/27/15 MJM Review and respond to investor (.10); review of documents posted on the website (.1 0). 3/2115 MJM Review of court with attached documents filed with court (.20); to webmaster forwarding documents and instructions for posting same on the website (.20). 3/2/15 SSK Multiple correspondence with counsel for Meyer regarding resolution and subsequent discussions with Receiver regarding same. 3/3/15 SSK Correspondence with Sarah Hail regarding claims against Linda Salinas; Correspondence with counsel for C. Elies regarding engagement and extension of answer deadline and documents produced to date; Conduct research regarding Hours Amount $60.00 $40.00 $ $30.00 $ $40.00 $80.00 $90.00 $270.00

28 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 12 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 5 of8 March 17, 2015 Date I nit Description counsel hired by C. Elies and background/expertise of same; Correspondence with Receiver regarding all. 3/3/15 SSK Review of Receivership mail and direct as necessary. 3/4/15 SSK Review Notices of Appearance filed by counsel for Elies (.1); Correspondence with counsel for Meyer to accept offer (.1); Review Connie Elies Unopposed Motion for Extension of Time to Respond (.1). 3/4/15 MJM Review of court and attached Orders entered by the Court (.1 0); review of from Steve Harr regarding update to website regarding second interim distribution (.10); to webmaster forwarding update and orders to be posted to the website (.20). 3/5/15 SSK Correspondence with claims and accounting team regarding timing of distribution (.1); Review Order entered by Judge Hittner granting extension of time for Elies to Answer. 3/6/15 SSK Review Joint Advisory to Court drafted by counsel for Buddy Meyer and correspond with Receiver regarding same. 3/6/15 MJM Review of documents posted on website and to webmaster regarding updates and documents to be posted. 3/9/15 MJM Review of investor s and phone messages to confirm that all have been answered. 3/9/15 SSK Review advisory filed by counsel for Buddy Meyer. 3/10/15 MJM Review and respond to investor (.10); review of documents posted on website (.10). 3/11115 MJM Receipt and review of letter from IRS regarding tax issues (.10); to Steve Harr forwarding.pdf of the letter (.1 0); review of documents posted on the website and to webmaster regarding corrections needed (.20). Hours Amount $90.00 $90.00 $80.00 $60.00 $60.00 $40.00 $40.00 $30.00 $40.00 $80.00

29 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 13 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/AJ. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page 6 of8 March 17, 2015 Date I nit Description 3/12/15 MJM Review of latest update and documents posted on website and to webmaster advising of additional corrections needed (.20); review of investor s regarding second proposed distribution and claim numbers needed and to claims administrator forwarding s for response (.20); review of responses to investors (.10). 3113/15 MJM Review of from claim administrator to investor (.1 0); confirm that all s have been answered (.10). 3/13/15 SSK Review Receivership mail and direct as necessary; Correspondence with Receiver and Daves regarding check received from Farmers Insurance in name of Robbin Salinas and make multiple inquiries regarding same SSK Correspondence with Elies counsel regarding extension oftime to respond. Hours Amount $ $40.00 $ $30.00 Total For $6, CASE ADMINISTRATION Date Init Description Hours Amount 2/16/15 SSK Multiple correspondence with Jesse Daves and Stephen Tomasky regarding information and detail needed for Motion for Approval of Second Interim Distribution; Correspondence with Receiver regarding edits/revisions to Motion and timeline for filing $ Total For $ J. DAVID ADMINISTRATION Date Init Description Hours Amount 2/16/15 SAH Communications with Mr. Johnson and Mr. Karim regarding Gassaway extension (.3); review and revise Second Motion for Interim 0.70 $308.70

30 Case 4:11-cv Document Filed in TXSD on 08/26/15 Page 14 of 57 Munsch Hardt Kopf & Harr, P.C. File No Invoice No Matter Description: SELECT ASSET MANAGEMENT LLC; J. DAVID GROUP OF COMPANIES, INC. D/B/A J. DAVID FINANCIAL GROUP, LP, BRIAN A. BJORK Page7of8 March 17, 2015 Distribution (.4). 2118/15 SAH Communications with estate accountant regarding more tax returns and how to deal with same (.3). 2/20115 SAH Review letters from the Texas Comptroller; advise and offer comment to estate accountants(.5); review offer of Buddy Meyer and discuss same with Mr. Karim (.4). 2/23115 SAH Review Gasaway settlement agreement; review shell of motion to approve Extension and Modification and compose the remaining information that needs to be included in the motion; communications with Mr. Karim regarding finalization and filing (2.5). 2/24/15 SAH Review numerous additional tax returns and attend to completion of same and filing. (1.1) 2/27/15 SAH Review of materials on tax issues, franchise issues and send same to estate accountants (.2). 3/2/15 SAH Review ofbdo invoices; to Mr. McCole at the SEC regarding same; to BDO regarding same (.7); attention to Gasaway extention (.1). 3/3115 SAH Review of situation with Connie Elies, claw back defendant and approve extension (.2). 3/4/15 SAH Call with Mr. Karim regarding status of claw back litigation and input from Linda Salinas (.2); review orders from the court and advise Gasaway of the status of approval (.1); contact estate accountant and claims team to begin process for distribution (.3); correspondence with First State Bank regarding final payments on a remaining loan (.1 ); prepare post for website regarding Court approval of distribution and timing of the next check (.6). 3/5/15 SAH Prepare for call with Mr. Karim regarding clawbacks; call with Mr. Karim. (.3) 3/9/15 SAH Call with Texas State Comptroller; to estate auditors regarding same (.4). 3111/15 SAH Communications with paralegal regarding investor questions (.2); review BDO engagement $ $ $1, $ $88.20 $ $88.20 $ $ $ $396.90