Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 1 of 17 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No.: 03-80612 CIV-MARRA/HOPKINS SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MICHAEL LAUER, LANCER MANAGEMENT GROUP, LLC, and LANCER MANAGEMENT GROUP II, LLC, Defendants, and LANCER OFFSHORE, INC., LANCER PARTNERS, LP, OMNIFUND, LTD., LSPV, INC., and LSPV, LLC, Relief Defendants. / SUMMARY OF RECEIVER’S FORTY-FIRST AND FINAL APPLICATION FOR AUTHORIZATION TO PAY RECEIVER’S FEES AND COSTS FROM RECEIVERSHIP FUNDS1 1 From the inception of this Receivership through March 31, 2012, the Receiver was located at the offices of Hunton & Williams LLP (“H&W”). Thus, the Receiver’s first thirty-five fee applications were filed together with H&W’s, and H&W likely will seek (in its forty eighth and final fee application), final authorization for the payment of fees related to those earlier fee applications. As of April 1, 2012, the Receiver relocated from H&W’s offices to the offices of Bilzin Sumberg Baena Price & Axelrod LLP (“Bilzin”). As a result, the Receiver’s thirty-sixth through fortieth fee applications were filed by Bilzin. As of July 6, 2015, the Receiver relocated from Bilzin’s offices to the offices of Hogan Lovells (“Hogan”). Thus, the Receiver files this Forty-First and Final Fee Application covering the time period of July 6, 2015 through August 31, 2015. Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 2 of 17 Case No. 03-80612-CIV-MARRA/HOPKINS 1. Name of Applicant Marty Steinberg, Esq., Receiver 2. Role of Applicant Receiver 3. Name of certifying professional Marty Steinberg, Receiver 4. Date Case Filed July 8, 2003 5. Date of Order appointing Receiver July 10, 2003 6. Date of this Application October 2, 2015 7. Date of services covered July 6, 2015 through August 31, 2015 Fees… 8. Total fee requested for this period (from Exhibit 1-A) $3,758.40 9. Balance remaining in fee retainer account, not awarded $0.00 10. Fees paid or advanced for this period, by other sources $0.00 11. Net amount of fee requested for this period $3,758.402 Expenses… 12. Total expense reimbursement requested for this period $0.00 13. Balance remaining in expense retainer account, not received $0.00 14. Expenses paid or advanced for this period, by other sources $0.00 15. Net amount of expense reimbursements requested for $0.00 this period 16. Gross award requested for this period (#10 + #14) $3,758.40 17. Net award requested for this period (#13 + #17) $3,758.40 2 The Receiver originally incurred $4,176.00 in fees during the application period. This total reflects a 10% reduction in fees as previously agreed by the Receiver and the Group Plaintiffs. 2 Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 3 of 17 Case No. 03-80612-CIV-MARRA/HOPKINS UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No.: 03-80612-CIV-MARRA/HOPKINS SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MICHAEL LAUER, LANCER MANAGEMENT GROUP, LLC, and LANCER MANAGEMENT GROUP II, LLC, Defendants, And LANCER OFFSHORE, INC., LANCER PARTNERS, LP, OMNIFUND, LTD., LSPV, INC., and LSPV, LLC, Relief Defendants. / RECEIVER’S FORTY-FIRST AND FINAL APPLICATION FOR AUTHORIZATION TO PAY RECEIVER’S FEES AND COSTS FROM RECEIVERSHIP FUNDS Marty Steinberg, Esq., court-appointed receiver (the “Receiver”) of Lancer Management Group, LLC (“LMG”), Lancer Management Group II, LLC (“LMG II”), Lancer Offshore, Inc. (“Offshore”), Omnifund, Ltd. (“Omnifund”), LSPV, Inc. (“Offshore LSPV”), LSPV, LLC (“Partners LSPV”), Alpha Omega Group, Inc. (“Alpha Omega”) CLR Associates, LLC (“CLR”), and G.H. Associates, LLC (“G.H. Associates”) (collectively, the “Receivership Entities”), and formerly the responsible person for Lancer Partners, L.P. (“Partners” and together with the Receivership Entities, the “Lancer Entities”), pursuant to the Court’s Order Appointing Receiver 3 Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 4 of 17 Case No. 03-80612-CIV-MARRA/HOPKINS dated July 10, 2003 (the “Receivership Order”), and the Case Management Order dated January 8, 2004 (the “CMO”), hereby requests the Court to enter a final order approving all fees and expenses of the Receiver for the dates of July 6, 2015 through August 31, 2015 in the amount of $3,758.40 for fees and $0.00 for expenses, for a total award of $3,758.40 (the “Final Application”). DESCRIPTION OF SERVICES BY RECEIVER The Receiver is responsible for the oversight of all aspects of this extensive receivership, including investor relations. During the application period, the Receiver reviewed and revised the motion to close the Receivership and prepared for and attended a hearing on pending matters. The Receiver also participated in meetings regarding strategy and case administration as well as case management decisions. COMPENSATION This Court has the power to appoint a receiver and to award the receiver and his professionals fees for their services and expenses incurred in the performance of their duties. See Donovan v. Robbins, 588 F. Supp. 1268, 1272 (N.D. Ill. 1984) (“[T]he receiver diligently and successfully discharged the responsibilities placed upon him by the Court and is entitled to reasonable compensation for his efforts.”). See also SEC v. Elliott, 953 F. Supp. 1560 (11th Cir. 1992) (receiver is entitled to compensation for performance of his duties). The determination of fees to be awarded is largely within the discretion of the trial court. See Monaghan v. Hill, 140 F.2d 31 (9th Cir. 1944). Such discretion, however, is predicated upon the assumption that careful consideration is given to all evidence pertaining to the value of the attorneys’ services in light of the factors relevant to a determination. These factors are set forth in In re Norman v. Housing Authority of City of Montgomery, 836 F.2d 1292 (11th Cir. 1988), as follows: (1) the time and labor properly employed by the attorneys in processing the case; (2) 4 Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 5 of 17 Case No. 03-80612-CIV-MARRA/HOPKINS the quality of services rendered; (3) the scope of the activity and conspiracy under attack; (4) the financial risk involved; (5) the magnitude, complexity and novelty of the issues involved; (6) the beneficial results obtained; and (7) the degree to which, if any, efforts were supported by prior governmental action. The Receiver requests that the Court consider these factors in determining reasonable compensation for the services rendered on behalf of the receivership estates, as summarized below: a. Time and Labor Required - The exhibits attached to this Application include Exhibit 1 - Summary of Professional Time, Exhibit 2 - Detailed Time Entries-Redacted. The Exhibits and narrative descriptions in this Notice evidence the time and labor employed in processing this case. b. Novelty and Difficulty of the Issues and Questions Presented - Due to the nature of this case, it was necessary for the Receiver to employ professionals that are experienced and familiar with securities, insolvency, hedge funds, bankruptcy, tax, general litigation, commercial transactions, fraud, negligence, professional malpractice, BVI law and a host of other practice areas. Insofar as there have not been many SEC imposed receiverships involving hedge funds, many of the issues presented in this proceeding are novel. The Receiver has worked closely with these professionals and has been involved in the analysis and resolution of many of these novel and complex issues. c. Skill Requisite to Perform the Legal Services Properly - In order to perform the services in connection with this complex matter, the Receiver’s and his professionals skill and experience in the areas of negligence, fraud, securities, hedge funds, bankruptcy, insolvency, federal receivership, litigation, tax, commercial transactions and malpractice were required. 5 Case 9:03-cv-80612-KAM Document 2996 Entered on FLSD Docket 10/02/2015 Page 6 of 17 Case No. 03-80612-CIV-MARRA/HOPKINS d. Preclusion From Other Employment - Although this case has required an extensive investment of professional time, it has not been necessary for the Receiver to turn away other work. e. Hourly Rates - The hourly rates charged by the Receiver are at or below the customary rates charged by attorneys of comparable skills in the Southern District of Florida. f. Whether the Fee is Fixed or Contingent - The Receiver’s compensation in this matter is subject to final Court approval. The Receiver has not received any compensation for his services or unreimbursed costs incurred during the Application Period. g. The Limitations Imposed By The Client or the Circumstances - This case has imposed significant time limitations on the Receiver because of the need to resolve many issues rapidly, efficiently and economically. This effort has been hampered by the number and frequency of securities transactions undertaken by the Lancer Entities prior to the Receivership and the lack of adequate internal bookkeeping for such transactions. In addition, the administrative tasks required to manage the Funds require extensive monitoring. h. The Amount Involved and the Results Obtained - The above narrative, together with the exhibits attached hereto, detail the time, nature and extent of the professional services rendered by the Receiver for the benefit of the investors and creditors. i. The Experience, Reputation and Ability of the Receiver - The Receiver is an established, experienced attorney with substantial experience in the substantive areas of law required by this proceeding including fraud, securities, tax, hedge funds and litigation. j. The Undesirability of the Case - The Receiver firmly believes this case is complex, difficult and challenging, as well as extremely important to investors, creditors and the SEC.