Vemma Receiver Motion

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 1 of 11
1 JOSHUA S. AKBAR (AZ Bar No. 025339)

DENTONS US LLP
2 2398 East Camelback Road, Suite 850
Phoenix, Arizona
Arizona 85016-9016
85016-9016
3 Tel.: 602.508.3900
Fax: 602.508.3914
4 Email: joshua.akbar@dentons.com
joshua.akbar@dentons.com
5 GARY OWEN
OWEN CARTS
CARIS (admitted pro hac vice)
LESLEY ANNE HAWES (admitted pro hac vice)
6 DENTONS US LLP
300 S. Grand Avenue, Suite 1400

7 Los Angeles, California 90071-3124, United States
Telephone: 213.688.1000
8 Facsimile: 213.243.6330
Email: gary.caris@dentons.com
gary.caris@dentons.com
9
lesley.hawes@dentons.com
10 Attorneys for Former Temporary Receiver
Robb Evans and Robb Evans & Associates
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12
UNITED STATES DISTRICT COURT
13
DISTRICT OF ARIZONA
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15 Federal Trade Commission,
Case No. CV-15-01578-PHX-JJT
16
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
17
Plaintiff,
v.
18 Vemma Nutrition Company, et al.,

19
Defendants.
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PLEASE TAKE NOTICE that Robb Evans and Robb Evans & Associates LLC, the
former Temporary Receiver in the above-captioned matter
matter (Receiver),
("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
This Motion
Motion is
is the
the Receiver's first and final motion for
receivership ("Expense Period"). This
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1 approval and payment of the Receiver's fees and expenses and those of its counsel based
2 on the Court's Order entered September 18, 2015 (Doc. No. 118) which had the effect of
3 dissolving the temporary receivership, imposing a monitorship over the Corporate
4 Defendants Vemma Nutrition Company ("Vemma") and Vemma International Holdings,
5 Inc. (collectively, the "Vemma Entities"), and appointing Robb Evans and his company
6 Robb Evans & Associates LLC as the Monitor.
By this Motion, the Receiver specifically seeks an order for approval of the fees and
8 expenses of the Receiver and its counsel incurred during the Expense Period, including
9 fees of $192,987.60 and costs of $19,466.99 of the Receiver and fees of $79,247.55 and
10 costs of $2,749.97 incurred for the services of the Receiver's counsel, and for payment
11 thereof from the assets of the Receivership Defendants presently held in the Receiver's
12 possession, custody and control pursuant to Section XIX of the Order Filed under Seal
13 entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership Order") appointing the
14 Receiver as temporary receiver, which fees and expenses include estimated fees and
15 expenses of the Receiver and its counsel to be incurred in connection with the wind up of
16 the temporary receivership and discharge
discharge of
of the
the Receiver.
Receiver. To the extent that the actual
17 fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
18 the Vemma Entities the excess amount.
19
This Motion is made pursuant to the Temporary Receivership Order and based on
20 this Notice of Motion and Motion, the supporting memorandum of points and authorities
21 attached hereto, the supporting declarations of Kenton Johnson and Gary Owen Caris filed
22 concurrently herewith, the proposed order attached to the electronic filing and lodged
23 concurrently herewith, on the pleadings, records and files of the Court of which the
24 Receiver requests the Court take judicial notice pursuant to Rule 201 of the Federal Rules
25 of Evidence, including without limitation the Report of Temporary Receiver's Activities
26 filed on September 4, 2015 (Doc. No. 50) and the testimony of Kenton Johnson at the
27
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1 September 15, 2015 hearing on plaintiff's

plaintiffs motion for a preliminary injunction, and on such
2 other evidence and arguments as may be presented by the Receiver hereafter in support of
3 this Motion.
4
5 DATED:
DATED:September
September 21,
21, 2015
2015
DENTONS US LLP
7
By:
8
9
10
11
12
13
/s/Gary Owen Caris

Gary Owen Caris (admitted pro hac vice)
Lesley Anne Hawes (admitted pro hac vice)
th
Floor
300 south Grand Avenue, 14
14th
Los Angeles,
Angeles, CA
CA 90071
Tel: 213.688.1000
213.688.1000
Tel:
Fax: 213.243.6330
213.243.6330
Fax:
Joshua S. Akbar (AZ Bar No. 025339)
2398 E. Camelback Road, Suite 850
Phoenix,
AZ 85016
Phoenix, AZ
Tel: 602.508.3900
602.508.3900
Tel:
Fax: 602.508.3914
602.508.3914
Fax:
Email: joshua.akbar@dentons.com
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Attorneys for Former Temporary Receiver

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MEMORANDUM OF POINTS AND AUTHORITIES
2 I.
STATEMENT OF RELEVANT FACTS
On August 21, 2015, the Court issued an order under seal for a temporary
4 restraining order, asset freeze, and appointment of a temporary receiver, among other
5 relief, against defendant Vemma Nutrition Company ("Vemma") and other defendants
6 named in the action (Doc. No. 25)
25) (the
(the "Temporary
"Temporary Receivership
Receivership Order").
Order"). The Temporary
7 Receivership Order appointed Robb Evans and Robb Evans & Associates LLC
8 ("Receiver") as temporary receiver over Vemma, Vemma International Holdings, Inc.
9 (collectively, the "Vemma Entities") and their successors and assigns, subsidiaries, and
10 related entities ("Receivership Defendants").
The powers
powers and duties of the Receiver are
Defendants"). The
11 detailed in Section XII of the Temporary Receivership Order and include, among other
12 duties, taking possession and control of the Receivership Defendants' management and
13 business premises and all assets of the Receivership Defendants, wherever located, taking
14 all steps the Receiver deems necessary or advisable to preserve the assets of the
15 Receivership Defendants and prevent loss, engaging attorneys and others as the Receiver
16 deems necessary or advisable for the Receiver to perform its duties, and paying expenses
17 necessary or advisable for the Receiver
Receiver to
to carry
carry out
out its
its duties.
duties. Temporary Receivership
18 Order, Section XII.A-E and J. The
The Receiver
Receiver was
was also
also authorized
authorized to engage attorneys, with
19 the compensation of the Receiver and its counsel to be approved on motion to the Court
20 and paid from assets of the Receivership Defendants in the Receiver's possession and
21 control. Temporary
Temporary Receivership
Receivership Order,
Order, Section XII.I and XIX.
22
The hearing on the motion of the plaintiff Federal Trade Commission ("FTC") for a
23 preliminary injunction was initially scheduled

scheduled to
to be
be held
held on
on September
September 3,
3,2015.
2015. The
24 parties made a stipulated motion to continue the preliminary injunction hearing on August
25 31, 2015, and on September 1, 2015, the Court entered an order continuing the preliminary
26 injunction hearing to September 15, 2015 and extending the provisions of the Temporary
27 Receivership Order through 2:00 p.m. on
on September
September 18,
18, 2015.
2015. Order entered September 1,
28 2015 (Doc. No. 40).
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At the September 15, 2015 hearing, the Court heard a full day of testimony and
2 argument, including testimony of

of the
the Receiver's
Receiver's representative,
representative, Kenton
Kenton Johnson.
Johnson. On
3 September 18, 2015, shortly before the Temporary Receivership Order was to expire, the
4 Court issued its Order of that date, granting in part and denying in part the FTC's motion
5 for a preliminary
preliminary injunction.
injunction. Order entered September 18,
18, 2015
2015 (Doc.
(Doc. No.
No. 118).
118). Under
6 the Court's September 18, 2015 Order, the Court imposed a monitorship, rather than a
7 receivership, over the Vemma
The Receiver is therefore in the process of
Vemma Entities.
Entities. The
8 transitioning control of the Receivership Defendants and their assets back to the pre9 receivership management. This
This fee
fee motion
motion is
is the
the first
first of
of two
two motions that will complete
10 the transition to the monitorship
monitorship and
and the
the wind
wind up
up of
of the
the receivership
receivership estate.
estate. This Motion is
11 brought on an expedited basis because, as explained below, counsel for the Vemma
12 Entities objected to the Receiver retaining any funds to pay allowed fees and expenses,
13 despite the clear language in the Temporary Receivership Order.
14
The Temporary Receivership Order provides that the Receiver and those hired by
15 the Receiver pursuant to the Order, including counsel, are entitled to compensation for fees
16 and expenses incurred in connection with the receivership which are to be paid "solely
17 from the Assets now held by or in the possession or control, or which may be received by,
18 the Receivership Defendants."
Defendants." Temporary Receivership Order,
Order, Section
Section XIX.
XIX. Further, the
19 Receiver was authorized to make payments from receivership assets that the Receiver
20 deemed necessary or advisable to carry out the provisions of the Temporary Receivership
21 Order. Temporary
Receivership Order, Section XII.J.
22
The Receiver performed the tasks detailed in the Temporary Receivership Order.
23 The activities of the Receiver during the Expense Period are detailed in large part in its
24 Report of Temporary Receiver's Activities for the Period August 24, 2015 through
25 September 4, 2015 filed with the Court on September 4, 2015 (Doc. No. 50) ("Receiver's
26 Report") and include the activities reflected in the information included in the Receiver's
27 Report which was required by the Temporary Receivership Order, including the analysis
28 of extensive business and financial records, the interview of employees and principals of
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1 the Receivership Defendants and

and evaluation
evaluation of
of the
the business
business enterprise.
enterprise. Temporary
2 Receivership Order, Section XVII.
The Receiver's
Receiver's activities
activities were also described to the
XVII. The
3 Court in part through the testimony of Kenton Johnson of the Receiver's office who
4 appeared and testified at deposition on September 11, 2015 and the preliminary injunction
5 hearing on September 15, 2015.
In the
the interests
interests of
of expediting the determination of this
2015. In
6 Motion and minimizing expense to the receivership estate, the Receiver has not described
7 at length all of the Receiver's activities conducted during the Expense Period herein and in
8 the supporting declarations of the Receiver and its counsel which are identified in the time
9 records of the Receiver and counsel filed in support of this Motion, but will provide further
10 narrative detail to the Court upon request.

11
The Receiver also incurred and paid $358,293.05 in business operating expenses,
12 primarily for payroll, employee benefits

benefits and
and insurance
insurance premiums.
premiums. All of these expenses
13 are itemized on the financial report attached to the accompanying declaration of Kenton
14 Johnson as Exhibit 1.
15
The Receiver's counsel's activities during the Expense Period including advising the
16 Receiver regarding a number of legal issues that arose in connection with the
17 administration of the temporary receivership estate, including assisting the Receiver in
18 obtaining turnover by BMO Harris Bank of receivership funds so that the Receiver could
19 pay employee payroll expenses, addressing employee benefits issues, addressing numerous
20 requests and demands by the defendants for information, documents and discovery
21 regarding the receivership estate, coordinating deposition dates and representing the
22 Receiver at the deposition of Kenton Johnson, successfully objecting to a document
23 production request and appearing at a telephonic hearing on an emergency discovery
24 motion brought by the Vemma Entities, and attending the preliminary injunction hearing
25 on September 15, 2015.
26
The Receiver and its counsel continue to incur fees and expenses in the wind up of
27 the temporary receivership estate and the turnover of possession and control of the Vemma
28 Entities' business premises, assets
assets and
and documents.
documents. On September 18, 2015, the Receiver
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1 and counsel conferred with defense counsel to transfer the keys to the business premises
2 that afternoon and to address the status
status of
of assets
assets and
and control
control of
of the
the business.
business. The Receiver
3 has worked to facilitate lifting the freeze of bank accounts and notifying other interested
4 third parties of the termination of the temporary receivership by issuing e-mail notices to
5 those financial institutions and others
others of
of the
the Court's
Court's September
September 18,
18, 2015
2015 Order.
Order. The
6 Receiver advised counsel for the defendants that the Receiver would be holding funds
7 sufficient to satisfy estimated outstanding administrative expenses of the estate, including

8 the fees and expenses of the Receiver and its counsel, pursuant to the provisions of the
9 Temporary Receivership Order, before turning the remaining funds over to the defendants.
10 Counsel for the Vemma Entities objected to the Receiver retaining any funds, necessitating
11 the bringing of this Motion on an
In addition
addition to the requested approval
an expedited
expedited basis.
basis. In
12 and payment of the fees and expenses of the Receiver and its counsel, the Receiver is also
13 reserving an additional $111,224.92 for estimated business operating expenses believed to
14 have been incurred during the temporary receivership period as itemized on the financial
15 report, Exhibit 1 to Kenton Johnson's
Johnson's declaration.
declaration. These are estimated and, where
16 applicable, prorated amounts. The
The Receiver
Receiver is
is prepared
prepared to pay to the Vemma Entities this
17 amount from the funds held by the Receiver provided the Court enters an order discharging
18 and releasing the Receiver and the receivership estate from any liability for non-payment
19 of these liabilities upon notice to the affected creditors as part of the wind up motion it will
20 file. The
The Receiver
Receiver and
and counsel
counsel worked
worked over
over the weekend to identify pending
21 administrative expenses, and on September 21, 2015, the Receiver arranged for a wire
22 transfer to the Vemma Entities in the sum of $35,707.68.
23
The initial stages of a temporary receivership proceeding are labor intensive and
24 involve numerous activities by the Receiver and counsel to gain control of assets and
25 records and to evaluate the business, financial structure and operations of the Receivership
26 Defendants as required under the Temporary
Receivership Order.
Order. These activities are
27 performed under extreme time exigencies, as the Temporary Receivership Order required a
28 detailed report regarding the Receivership Defendants to be prepared and filed prior to the
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1 preliminary injunction hearing. ItIt is

is important
important that
that the Receiver's analysis, findings and
2 conclusions be made available to the Court and interested parties in sufficient time to allow
3 them to evaluate the Receiver's Report
Report for
for the
the preliminary
preliminary injunction
injunction hearing.
hearing. The
4 Receiver's fees and expenses and those of its counsel are reasonable and appropriate under
5 the circumstances, were incurred in performing the Receiver's express powers and duties
6 under the Temporary Receivership Order and should be approved and ordered paid
7 forthwith from the remaining receivership assets in the possession of the Receiver.
8 II.
THE FEES AND EXPENSES OF THE RECEIVER AND COUNSEL
SHOULD BE APPROVED AND PAID FORTHWITH FROM THE
10
REMAINING RECEIVERSHIP ASSETS HELD BY THE RECEIVER
11
The assets of the receivership are the source of payment of administrative expenses
12 of a receivership estate, including the fees and costs of the receiver and professionals
13 employed by the receiver. See, e.g. Federal Trade Commission v. Slimamerica, 2008 WL
14 5435892 (S.D. Fla. 2008) (in which fees and costs were
counsel
were awarded
awarded to
to the
the receivers
receiver's counsel
15 in a first fee application based on a provision in the temporary restraining order which is
16 virtually identical to Section XIX
XIX of
of the
the instant
instant Temporary
ReceivershipOrder).
Order). As
17 explained in the leading receivership treatise, Clark on Receivers: "The
The costs
costs and
and expenses
expenses
18 of preserving, administering and realizing the property or fund must be paid out of the
19 property
property or
appointing court
court pledges
pledges its
its good
good faith
faith that
that all duly authorized
or fund.The
fund....The appointing
20 obligations
obligations incurred
incurred during
during the
the receivership
receivership shall
shall be
bepaid.
paid." 22 Clark on Receivers 637,
rd
21 pp. 1052-1053 (3
As the
the Eleventh
Eleventh Circuit noted in Securities and
(3rd ed. Rev. 1992). As
22 Exchange Commission v. Elliott, 953 F.2d 1560, 1576 (11th

Cir. 1992):
1992): there
"...there is
(11th Cir.
is an
an
23 implied understanding that the court which appointed him and whose officer he is will
24 protect his right to be paid for his services, to be reimbursed for his proper costs and
25 expenses.
expenses."
26
The Receiver's extensive work to perform the powers and duties set forth in the
27 Temporary Receivership Order are described in the Receiver's Report, the testimony of
28 Kenton Johnson and this Motion and are itemized in the billing records attached to the
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1 declarations supporting the Motion.

The Receiver's
Receiver's work to wind up the estate includes
Motion. The
2 transferring possession and control of the keys to the premises, notifying financial
3 institutions and third parties of the order concluding the temporary receivership and
4 imposing a monitorship in the spirit of cooperation with the defendants, ensuring necessary
5 third party payments for employee benefits and third party vendors providing goods and
6 services to the temporary receivership estate are paid, and preparing the necessary motions
7 to approve and pay the Receiver's and counsel's fees and expenses, to wind up the estate
8 and discharge the Receiver and its
The Receiver has retained the assets
its Receiver's
Receiver's bond.
bond. The
9 of the Receivership Defendants in the Receiver's possession and control sufficient to
10 satisfy the actual and estimated administrative expenses incurred by the temporary
11 receivership estate, including the fees and expenses of the Receiver to date and those the
12 Receiver anticipates will be incurred to wind up the temporary receivership pursuant to
13 Section XIX of the Temporary Receivership
Receivership Order
Order and
and the
the foregoing
foregoing authorities.
authorities. The
14 Receiver anticipates filing a motion to wind up the temporary receivership and discharge
15 the Receiver within the next two weeks.
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1 III.
CONCLUSION
III. CONCLUSION
2
Based on the foregoing, and the pleadings filed in support hereof, the Receiver
3 respectfully requests that the Court grant relief as requested in the Motion.
4
5 DATED:
DATED:September
September 21,
21, 2015
2015
DENTONS US LLP
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By:
8
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12
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/s/Gary Owen Caris

Gary Owen Caris (admitted pro hac vice)
Lesley Anne Hawes (admitted pro hac vice)
th
Floor
300 South Grand Avenue, 14
14th
Los Angeles,
Angeles, CA
CA 90071
Tel: 213.688.1000
213.688.1000
Tel:
Fax: 213.243.6330
213.243.6330
Fax:
Joshua S. Akbar (AZ Bar No. 025339)
Phoenix,
AZ 85016
Phoenix, AZ
Tel: 602.508.3900
602.508.3900
Tel:
Fax: 602.508.3914
602.508.3914
Fax:
Email: joshua.akbar@dentons.com
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Attorneys for Former Temporary Receiver

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CERTIFICATE OF SERVICE
I hereby certify that on September 21, 2015, I electronically transmitted the attached
3 document to the Clerk's office using the CM/ECF System for filing and transmittal of a
4 Notice of Electronic Filing to the following CM/ECF registrants:
5 Angeleque P. LinvilleAnne
Anne Dorman LeJeune

6 Emily B. Robinson
Jason C. Moon
7 Federal Trade Commission
1999 Bryan Street, Suite 2150
8 Dallas, TX
TX 75201
Attorneys for Plaintiff
9
10
11
John R. Clemency
12 Lindsi Michelle Weber
Gallagher & Kennedy PA
13 2575 E. Camelback Road, Suite 1100
Phoenix,
AZ 85016
Phoenix, AZ
14 Attorneys for Defendant Benson K. Boreyko
15
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
Phoenix, AZ
Attorneys for Defendant Tom Alkazin and
Bethany Alkazin
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A/Christina O'Meara
/s/Christina
Christina O'Meara
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Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 1 of 5

DENTONS US LLP
Phoenix, Arizona
Arizona 85016-9016
85016-9016
3 Tel.: 602.508.3900
Fax: 602.508.3914
5 GARY OWEN
OWEN CARTS
6 DENTONS US LLP

Telephone: 213.688.1000
8 Facsimile: 213.243.6330
9
11
12
13
DISTRICT OF ARIZONA
14
16
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
17
Plaintiff,
v.

19
Defendants.
20
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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
am aa member
member of
of Dentons
Dentons US
US LLP
LLP ("Dentons"),
("Dentons"), the attorneys for the former
matter. IIam
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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1 successors and assigns,

assigns, subsidiaries,
subsidiaries,and
andrelated
relatedentities
entities (Receivership
("Receivership Defendants).
Defendants"). II
2 am lead counsel for the Receiver. II have
have personal
personal knowledge
knowledge of the matters set forth in
3 this declaration, and if I were called upon to testify as to these matters, I could and would
4 competently testify based upon my personal knowledge.
5
2.
2.
I have been the primary attorney from Dentons representing the Receiver
6 since the temporary receivership commenced.

reviewed and assisted the Receiver in
commenced. II reviewed
7 finalizing its Report of Temporary Receiver's Activities filed on September 4, 2015 (Doc.
8 No. 50) ("Receiver's Report"). II addressed
addressed disputes
disputes concerning
concerning discovery propounded to
9 the Receiver by Vemma, including coordinating a deposition of the Receiver's
10 representative Kenton Johnson, attending that deposition, successfully objecting to

11 Vemma's request for production of documents and appearing at a telephonic hearing on
12 September 8, 2015 on Vemma's emergency motion to address various discovery disputes.
13 I attended the full-day preliminary injunction hearing on September 15, 2015 as counsel
14 for the Receiver at which the Receiver's representative Kenton Johnson testified.
15
3.
3.
I have also assisted the Receiver in transitioning possession and control of
16 the assets and documents back to the Receivership Defendants after the Court issued its
17 Order on September 18, 2015 (Doc. No. 118) effectively dissolving the temporary
18 receivership and ordering the imposition of a monitorship over the Vemma Entities, with
19 Robb Evans and Robb Evans & Associates
Associates LLC
LLC appointed
appointed as
as monitor.
monitor. On September 18,
20 2015, I conferred with John Craiger, counsel for the defendants, to discuss transition issues
21 and coordinate the Receiver's delivery of keys to the premises, and I provided advice to the
22 Receiver regarding other transition
Dentons has prepared the Receiver's first and
transition issues.
issues. Dentons
23 final fee motion which this declaration supports, and Dentons will be preparing and filing a
24 motion to wind up the temporary receivership and discharge the Receiver and its bond
25 within the next two weeks in order to conclude the administration of the receivership
26 estate. Other
Other attorneys
attorneys at
at my
my firm
firm have
have assisted
assisted the
the Receiver as well, including Joshua
27 Akbar who acted as local counsel in Phoenix for the Receiver and other attorneys who
28 provided assistance regarding employee
employee benefits
benefits related
related issues.
issues. This motion is being filed
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1 on an expedited basis because in our phone call on September 18, 2015 Mr. Craiger
2 objected to the Receiver holding any money to pay allowed fees and expenses,
3 notwithstanding the language in the order which appointed the temporary receiver.
4
4.
Attached hereto collectively as Exhibit 1 are copies of time records by the
5 attorneys and paralegal at Dentons who

who performed
performed work
work on
on this
this receivership
receivershipcase.
case. The
6 time records itemize and detail the hours spent and the work performed by those attorneys.
7 The time
time records
recordsattached
attachedhereto
heretoasasExhibit
Exhibit1,1,asaswell
wellasasthe
thetime
timerecords
recordsfor
forthe
the Receiver,
Receiver, its
8 members and staff, have been redacted by my firm where appropriate to preserve descriptions
9 containing confidential, sensitive, tactical, strategic, attorney-client privileged and/or attorney
10 work-product
work-product information.
information.Attached
Attachedhereto
heretoas
asExhibit
Exhibit22isisaa summary
summary of
of the
the billing rates for
11 each of the attorneys and paralegal who performed work on the file, the total hours spent
12 by those attorneys and paralegal and the total fees incurred for the services of the attorneys
13 and paralegal at Dentons in this matter from the inception of the temporary receivership
14 through and including September 18, 2015.
15
5.
5.
My firm has incurred time after September 18, 2015 to prepare the
16 Receiver's first and final fee motion and supporting pleadings and will continue to incur
17 time in assisting the Receiver in transitioning control of the estate and its assets back to the
18 Receivership Defendants as well as in preparing a motion to approve the wind up of the
19 receivership estate and discharge
discharge of
of the
the Receiver
Receiver and
and its
its bond.
bond. I have reviewed the
20 estimates for my firm's fees and expenses through the closing of the estate, and I believe
21 those estimates are fair and accurately reflect the likely potential fees and costs that my
22 firm may incur through the wind up of the estate.
23
6.
6.
The billing rates charged by Dentons in this case reflected in the summary
24 attached hereto as Exhibit 2 are discounted at 10% from the standard rates charged by
25 Dentons in non-federal equity receivership cases.
26
7.
7.
I am a partner of Dentons and am familiar with the methods and procedures
27 used
used to
The time
time record
record
to create,
create, record
record and
and maintain
maintain billing
billing records
recordsfor
forthe
thefirms
firm's clients.
clients. The
28 summaries attached hereto collectively as Exhibit 2 are computerized time records
DENTONS US LLP
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1 prepared contemporaneously with the services rendered by each attorney and paralegal
2 billing time to this matter. These
These computerized
computerized records
records are
are prepared
prepared in the ordinary course
3 of business by the attorneys and paralegals employed by the firm who have a business duty
4 to accurately record their time spent and services rendered on the matters on which they
5 perform work. In
In the
the normal
normal course
course of
of business
business after
after the
the conclusion
conclusion of the calendar month
6 to which the time records pertain, the time records are transferred into a computerized
7 billing
billing program
program that
that generates
generates monthly
monthly invoices
invoices under
under the
the supervision
supervision of
of the
the firms
firm's
8 accounting department. The
The time
time records
records attached
attached as
as Exhibit 2 are the "raw" computerized
9 time records which record the time spent and the narrative text of the services rendered,
10 because no monthly invoice has been prepared for the partial month of September 2015
11 and the August 2015 invoice is in the process of being finalized for transmission to the
12 client in this case. Based
Based upon
upon my
my experience
experience with
with the firm, I believe that Dentons'
13 methods and procedures for recording and accounting for time and services for its clients
14 are reliable and accurate.
15
8.
II have
experience as
as aa business
business and
and commercial
commercial litigator
have over
over 35
35 years
years' experience
litigator and
and
16 also have extensive experience as a bankruptcy attorney representing creditors in Chapter

17 11 and Chapter 7 bankruptcy cases.
For more
more than
than sixteen
sixteen years I have also specialized in
cases. For
18 representing
representing receivers
rates and
and the
the
receivers in
in federal
federal equity
equity receiverships.
receiverships. II believe
believe my
my firms
firm's rates
19 amount incurred by the Receiver for the services rendered during the Expense Period are
20 reasonable and appropriate based on the nature of the services rendered, the quality and
21 amount of services provided, the complexity of the issues involved and other factors under
22 the circumstances.
23
I declare under penalty of perjury that the foregoing is true and correct and that this
24 declaration was executed this 21st day of September 2015 at Los Angeles, California.
25
26
/s/Gary Owen Caris

OWEN CARTS
CARIS
GARY OWEN
27
28
DENTONS US LLP
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ANGELES
LOS
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1
2
Brian R. Booker
Edward A. Salanga
John S. Craiger
John A. Harris
Devin D. Quigley
Quarles & Brady LLP
Holdings, Inc.
Anne Dorman LeJeune

6 Emily B. Robinson
Jason C. Moon
8 Dallas, TX
TX 75201
9
10
11
John R. Clemency
Phoenix,
AZ 85016
Phoenix, AZ
Keith Beauchamp
Marvin C. Ruth
Phoenix,
AZ 85004
Phoenix, AZ
Bethany Alkazin
15
16
17
A/Christina O'Meara
/s/Christina
Christina O'Meara
18
19
20
21
22
23
24
25
26
27
28
DENTONS US LLP
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DENTONS US LLP
Phoenix, Arizona
Arizona 85016-9016
85016-9016
3 Tel.: 602.508.3900
Fax: 602.508.3914
5 GARY OWEN
OWEN CARTS
6 DENTONS US LLP

Telephone: 213.688.1000
8 Facsimile: 213.243.6330
9
11
12
13
DISTRICT OF ARIZONA
14
16
DECLARATION OF KENTON
JOHNSON IN SUPPORT OF FIRST
AND FINAL MOTION FOR
COUNSEL
17
Plaintiff,
v.

19
Defendants.
20
21
22
I, Kenton Johnson, declare:
23
1.
I am a member of Robb Evans & Associates LLC and a deputy to the former
24 Temporary Receiver, Robb Evans and Robb Evans & Associates LLC ("Receiver"),
25 appointed as temporary receiver for defendants Vemma Nutrition Company ("Vemma"),
26 Vemma International Holdings, Inc. (collectively the "Vemma Entities"), and their
27 successors
successors and
and assigns,
assigns, subsidiaries,
subsidiaries,and
andrelated
relatedentities
entities (Receivership
("Receivership Defendants).
Defendants"). II
28 am
am one
one of
staff with
with primary
primary responsibility
responsibility for
for the
of the
the senior
senior members
members of
of the
the Receivers
Receiver's staff
the
DENTONS US LLP
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1 activities of the Receiver and have personally participated in the Receiver's activities
2 during the temporary receivership from the inception of the temporary receivership on
3 August 21, 2015 to the present and completing the administration of the receivership estate
4 in light of the Court's Order
Order entered
entered September
September 18,
18, 2015.
2015. I have personal knowledge of
5 the matters set forth in this declaration, and if I were called upon to testify as to these
6 matters, I could and would competently testify based upon my personal knowledge.
2.
2.
The Receiver was appointed temporary receiver pursuant to the Court's
8 Order Filed Under Seal entered August 21, 2015 (Doc. No. 25) ("Temporary Receivership
9 Order"). On
On September
September 4,
4, 2015,
2015, the
the Receiver
Receiver filed
filed its Report of Temporary Receiver's
10 Activities (Doc. No. 50) ("Receiver's

The Receiver's
Receiver's Report details the
("Receiver's Report").
Report"). The
11 Receiver's activities during the temporary receivership, and the Receiver's Report reflects
12 the Receiver's detailed analysis of extensive business and financial records, the business
13 operations of the Receivership Defendants, interviews with employees and principals of
14 the Receivership Defendants and other activities upon which the Receiver's Report is
15 based.
16
3.
3.
On September 11, 2015, I continued to prepare for my deposition and was
17 deposed for a total of approximately seven hours, and on September 15, 2015, I appeared
18 and provided testimony on behalf of the Receiver at the full day hearing on plaintiff
19 Federal Trade Commission's motion for
for aa preliminary
preliminary injunction.
injunction. On September 18, 2015,
20 the Court issued its Order (Doc. No. 118) which had the effect of dissolving the temporary
21 receivership and imposing a monitorship over the Vemma Entities, appointing Robb Evans
22 and Robb Evans & Associates LLC as the Monitor.
23
4.
This declaration is filed in support of the Receiver's first and final motion for
24 approval and payment of fees and expenses of the Receiver and its counsel from the
25 inception of the temporary receivership on August 21, 2015 through the wind up of the
26 temporary receivership ("Expense
The Receiver
Receiver specifically seeks an order for
("Expense Period").
Period"). The
27 approval of the fees and expenses of the Receiver and its counsel incurred during the
28 Expense Period, including fees of $192,987.60 and costs of $19,466.99 of the Receiver,
DENTONS US LLP
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USW 805278513.1
1 and fees of $79,247.55 and costs of $2,749.97 incurred for the services of the Receiver's
2 counsel, and for payment thereof from the assets of the Receivership Defendants presently
3 held in the Receiver's possession, custody and control pursuant to Section XIX of the
4 Temporary Receivership Order, which fees and expenses include estimated fees and
5 expenses of the Receiver and its counsel to be incurred in connection with the wind up of
6 the temporary receivership and discharge
discharge of
of the
the Receiver.
Receiver. To the extent that the actual
7 fees and expenses are less than the estimated amounts, the Receiver will promptly remit to
8 the Vemma Entities the excess amount.
9
5.
5.
Attached hereto as Exhibit 1 is a financial report prepared by the Receiver
10 concerning the receipts and disbursements of the temporary receivership estate and the fees
11 and costs of the Receiver and counsel incurred and anticipated to be incurred during the
12 Expense Period. As
As more
more particularly
particularly set
set forth
forth in
in Exhibit 1, the Receiver incurred and
13 paid $358,293.05 in business operating expenses, primarily for payroll, employee benefits
14 and insurance premiums. In
In addition
addition to
to the
the requested
requested approval and payment of the fees
15 and expenses of the Receiver and its counsel, the Receiver is also reserving an additional
16 $111,224.92 for estimated business operating expenses believed to have been incurred
17 during the temporary receivership period as itemized on the financial report, Exhibit 1 to
18 Kenton Johnson's declaration. These
These are
are estimated
estimated and, where applicable, prorated
19 amounts. The
The Receiver
Receiver isis prepared
prepared to
to pay
pay to
to the
the Vemma
Vemma Entities this amount from the
20 funds held by the Receiver provided the Court enters an order discharging and releasing
21 the Receiver and the receivership estate from any liability for non-payment of these
22 liabilities upon notice to the affected creditors as part of the wind up motion it will file.
23 Attached hereto collectively as Exhibit 2 are true and correct copies of time records of the
24 Receiver's members and staff reflecting the services rendered by the Receiver during the
25 temporary receivership.
26
6.
6.
The billing rates charged in this case reflected in the billing records filed in
27 support
support of
members and
and senior
senior accounting
accounting
of the
the Motion
Motion for
for the
the Receiver,
Receiver, the
the Receivers
Receiver's members
28 staff
staff are
are discounted
discounted at
firm in
in private
at 10%
10% from
from the
the rates
rates charged
charged by
by the
the Receivers
Receiver's firm
private sector
DENTONS US LLP
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1 cases
cases as
appointment.
as of
of the
the time
time of
of the
the Receivers
Receiver's appointment.
2
7.
As a member of Robb Evans & Associates LLC, I am familiar with the
3 methods and procedures used by the Receiver and its staff and employees to record the
4 time spent rendering services to receivership estates over which Robb Evans or Robb
5 Evans & Associates LLC have been
The records
records included as Exhibit 2 hereto
been appointed.
appointed. The
6 are regularly prepared by the members, staff and employees of Robb Evans & Associates
7 LLC at or about the time of the services rendered and each of whom has a business duty to
8 accurately record the information regarding
regarding their
their services
services set
set forth
forth in
in these
these records.
records. The
9 records
records are
accounting staff
are reviewed
reviewed by
by the
the Receivers
Receiver's accounting
staff and
and summarized
summarized in
in the
the Receivers
Receiver's
10 Financial Summary, Exhibit 1 attached
Based upon my experience with Robb
attached hereto.
hereto. Based
11 Evans
methods and
and procedures
procedures for
for recording
recording
Evans &
& Associates
Associates LLC,
LLC, II believe
believe the
the Receivers
Receiver's methods
12 and accounting for time and services for the receivership estates over which Robb Evans or
13 Robb Evans & Associates LLC have been appointed are reliable and accurate.
14
I declare under penalty of perjury that the foregoing is true and correct and that this
15 declaration was executed this ___ day of September 2015 at Sun Valley, California.
16
17
18
KENTON JOHNSON
19
20
21
22
23
24
25
26
27
28
DENTONS US LLP
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1
2
Brian R. Booker
Edward A. Salanga
John S. Craiger
John A. Harris
Devin D. Quigley
Quarles & Brady LLP
Holdings, Inc.
Anne Dorman LeJeune

6 Emily B. Robinson
Jason C. Moon
8 Dallas, TX
TX 75201
9
10
11
John R. Clemency
Phoenix,
AZ 85016
Phoenix, AZ
Keith Beauchamp
Marvin C. Ruth
Phoenix,
AZ 85004
Phoenix, AZ
Bethany Alkazin
15
16
17
A/Christina O'Meara
/s/Christina
Christina O'Meara
18
19
20
21
22
23
24
25
26
27
28
DENTONS US LLP
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1
2
3
4
5
6
DISTRICT OF ARIZONA
8
Plaintiff,
10
11
v.

13

[PROPOSED] ORDER GRANTING
FIRST AND FINAL MOTION FOR
COUNSEL
Defendants.
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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),
matter
("Receiver"), came on regularly for determination by the Court, the Honorable John
J. Tuchi, United States District
District Judge
Judge presiding.
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.
1.
The Fee Motion is granted;
2.
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
1 services of the Receiver's counsel, are hereby approved and ordered to be paid forthwith
2 from the assets of the Receivership Defendants presently held in the Receiver's possession,
3 custody and control pursuant to Section XIX of the Order Filed under Seal entered August
4 21, 2015 (Doc. No. 25) appointing the Receiver as temporary receiver.
5
3.
To the extent that the actual fees and expenses are less than the estimated
6 amounts, the Receiver shall promptly remit to Vemma Nutrition Company the excess
7 amount.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
USW 805278521.1
2
3
4
5
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:
Angeleque P. LinvilleAnne
6 Anne Dorman LeJeune
Emily B. Robinson
7 Jason C. Moon
Federal Trade Commission
8 1999 Bryan Street, Suite 2150
Dallas, TX
TX 75201
9 Attorneys for Plaintiff
11
Brian R. Booker
Edward A. Salanga
John S. Craiger
John A. Harris
Devin D. Quigley
Quarles & Brady LLP
Holdings, Inc.
12 John R. Clemency
Lindsi Michelle Weber
13 Gallagher & Kennedy PA
14 Phoenix,
Phoenix, AZ
AZ 85016
Attorneys for Defendant Benson K. Boreyko
15
Keith Beauchamp
Marvin C. Ruth
Phoenix, AZ
Phoenix,
AZ 85004
Bethany Alkazin
10
16
17
18
/s/Christina O'Meara
Christina O'Meara
19
20
21
22
23
24
25
26
27
28
USW 805278521.1

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Vemma Receiver Motion

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Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 1 of 11

1 JOSHUA S. AKBAR (AZ Bar No. 025339)

LESLEY ANNE HAWES (admitted pro hac vice)

300 S. Grand Avenue, Suite 1400

UNITED STATES DISTRICT COURT

Case No. CV-15-01578-PHX-JJT

NOTICE OF MOTION AND FIRST

18 Vemma Nutrition Company, et al.,

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 2 of 11

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 3 of 11

1 September 15, 2015 hearing on plaintiff's

/s/Gary Owen Caris

Attorneys for Former Temporary Receiver

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 4 of 11

MEMORANDUM OF POINTS AND AUTHORITIES

STATEMENT OF RELEVANT FACTS

23 preliminary injunction was initially scheduled

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 5 of 11

2 argument, including testimony of

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 6 of 11

1 the Receivership Defendants and

10 narrative detail to the Court upon request.

12 primarily for payroll, employee benefits

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 7 of 11

7 sufficient to satisfy estimated outstanding administrative expenses of the estate, including

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 8 of 11

1 preliminary injunction hearing. ItIt is

THE FEES AND EXPENSES OF THE RECEIVER AND COUNSEL

SHOULD BE APPROVED AND PAID FORTHWITH FROM THE

REMAINING RECEIVERSHIP ASSETS HELD BY THE RECEIVER

22 Exchange Commission v. Elliott, 953 F.2d 1560, 1576 (11th

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 9 of 11

1 declarations supporting the Motion.

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 10 of 11

/s/Gary Owen Caris

Attorneys for Former Temporary Receiver

Case 2:15-cv-01578-JJT Document 120 Filed 09/21/15 Page 11 of 11

Anne Dorman LeJeune

Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 1 of 5

1 JOSHUA S. AKBAR (AZ Bar No. 025339)

LESLEY ANNE HAWES (admitted pro hac vice)

300 S. Grand Avenue, Suite 1400

UNITED STATES DISTRICT COURT

Case No. CV-15-01578-PHX-JJT

DECLARATION OF GARY OWEN

18 Vemma Nutrition Company, et al.,

I, Gary Owen Caris, declare:

I am an attorney at law duly admitted to practice before the courts of the

Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 2 of 5

1 successors and assigns,

6 since the temporary receivership commenced.

10 representative Kenton Johnson, attending that deposition, successfully objecting to

I have also assisted the Receiver in transitioning possession and control of

Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 3 of 5

Attached hereto collectively as Exhibit 1 are copies of time records by the

5 attorneys and paralegal at Dentons who

I am a partner of Dentons and am familiar with the methods and procedures

Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 4 of 5

16 also have extensive experience as a bankruptcy attorney representing creditors in Chapter

/s/Gary Owen Caris

Case 2:15-cv-01578-JJT Document 120-1 Filed 09/21/15 Page 5 of 5

Anne Dorman LeJeune

Case 2:15-cv-01578-JJT Document 120-2 Filed 09/21/15 Page 1 of 25

Case 2:15-cv-01578-JJT Document 120-2 Filed 09/21/15 Page 2 of 25