Case Document 186 Filed 06/16/15 Page 1 of 20 John F. Kurtz, Jr., ISB No. 2396 Hawley Troxell Ennis Hawley LLP 877 Main Street, Suite 1000 PO. Box 1617 Boise, ID 83701-1617 Telephone: 208.344.6000 Facsimile: 208.954.5232 Email: ikurtz@hawlevtrox.ell.corn Attorneys for Receiver, R. Wayne Klein UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO SECURITIES AND EXCHANGE COMMISSION, and COMMODITY FUTURES TRADING COMMIS ION, Plaintiffs, V. DAREN L. PALMER and TRIGON GROUP, INC. Defendants. Civ. No. (dks) Civ. No. (dks) The Honorable Edward J. Lodge MOTION FOR ORDER: (1) APPROVING THE FINAL STATUS REPORT AND ACCOUNTING, (II) APPROVING PAYMENT OF FIFTH AND FINAL DISTRIBUTION, APPROVING PAYMENT OF FEES AND EXPENSES (FOR THE PERIOD FROM OCTOBER 1, 2013), AND (IV) CLOSING RECEIVERSHIP CASE AND MEMORANDUM IN SUPPORT R. Wayne Klein, the Court?Appointed Receiver (the ?Receiver?) of Trigon Group, Inc. (?Trigon?) and all the assets of Daren L. Palmer (the ?Receivership Entities? and/or ?Palmer?), hereby submits this status report and motion and memorandum in support seeking approval to: 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 2 of 20 1. Make a fifth and final distribution of $397,000.00 to allowable claimants; 2. Pay fees and expenses of the Receiver and his counsel for the period since October 1, 2013; 3. Close the Receivership Estate; and 4. Take actions necessary to wind down and close the Receivership Estate. MEMORANDUM IN SUPPORT I. STATUS REPORT AND FINAL ACCOUNTING A. Background of the Receivership. This case began on February 26, 2009 with companion lawsuits filed by the SEC and CFTC alleging the Trigon and Palmer were operating a Ponzi scheme.1 The same day, the Court appointed the Receiver to take control of Trigon and the assets of Palmer.2 Final judgments were entered against Mr. Palmer and Trigon in the SEC matter on July 19, 2010 and against Palmer in the CFTC matter on October 4, 2010. On May 24, 2011, Palmer pleaded guilty to two criminal counts for his conduct in operating Trigon. He was sentenced on September 20, 2011 and remains incarcerated. B. Status Reports. The Receiver has filed twenty-five quarterly status reports. The most recent report, covering the period from January 1, 2015 to March 31, 2015, was filed on April 23, 2015.3 C. Litigation Developments Since March 31, 2015. Since March 31, 2015, there have been two developments of note. First, Sight Sound By Design completed payment of the UDSC Case No. 4:09~cv~00075, DKT No. 1. 2 UDSC Case No. DKT No. 8. 3 UDSC Case No. DKT No. 184. MOTION FOR ORDER Page 2 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 3 of 20 $40,000.00 it owed in its settlement with the Receiver. Second, the Receiver agreed with Stephan Lawson to accept $10,000.00 in satisfaction of the judgment entered against him. This settlement was based on financial hardship demonstrated by Lawson. A Notice of Settlement was filed with the Court on June 11, 2015.4 With receipt of these funds, all of the litigation commenced by the Receiver has been completed and all. judgments collected or settled. D. Property Sales Since March 31, 2015. Since the date of the prior status report, the final property held in the Receivership Estate?the vacant commercial lot on Eagle Road in Meridian, Idaho?sold at auction. The net proceeds from the sale, $56,423.93, were deposited into the Receivership bank account. E. Financial Summary. Since March 31, 2015, the Receivership has received 106,423.93 from the sale of the Southstone property in Meridian, Idaho and settlement payments from Sight and Sound By Design and Stephan Lawson. The amount of funds in the Receivership bank accounts as of June 12, 2015 is $444,427.02. F. Final Accounting. The following tables categorize and summarize the total funds recovered by the Receiver and the total expenditures since the beginning of the Receivership: . SOURCES OF FUNDS .. ..-. .. Trigon assets (brokerage account) $813.04 Daren Palmer real estate, other assets $2,206,287.08 Funds recovered from family members $353,430.58 Overpaid investors $518,750.88 Credit card companies $800,500.00 Charitable contributions $483,193.30 Other fraudulent or improper transfers $2,686,187.13 Refunds, reimbursement of expenses paid $13,172.31 Interest earned on receivership accounts $18,911.46 Total funds recovered $7,081,245.78 4 UDSC Case No. 4:09-cv-00075, DKT No. 185. MOTION FOR ORDER Page 3 44.549000114910442 Case Document 186 Filed 06/16/15 Page 4 of 20 .-.. - .. APPROVED Investor distributions $4,807,382.38 $5,204,382.38 Property expenses $262,310.09 $262,310.09 Property lien payoffs $220,000.00 $220,000.00 Family support payments to Mrs. Palmer $16,000.00 $16,000.00 Administrative expenses, tax preparation $27,671.12 $27,671.12 Bank fees $746.66 $746.66 Professional fees (receiver and legal) $1,302,708.51 1,345,051.08 Total funds expended $6,636,818.76 $7,076,161.33 Net (amount currently in bank) $444,427.02 $5,084.45 II. A. FIFTH AND FINAL DISTRIBUTION OF FUNDS TO CLAIMANTS Prior Distributions. The first distribution to claimants was approved by the Court on March 7, 2011 and paid by the Receiver on March 10, 2011.5 This first distribution was in the amount of $3,018,252.33, consisting of $1,018,252.33 paid to objectors and other claimants who otherwise would not have received any payments as part of the first distribution and $2,000,000.00 to 24 claimants who qualified to receive distributions under the ?rising tide? distribution methodology approved by the Court. A second distribution in the amount of $300,000.00 was approved on March 2, 2012,6 a third distribution in the amount of $800,000.00 was approved on September 21, 2012,7 and a 5 UDSC Case No. 4:09-cv-00075, DKT No. 130. 6 UDSC Case No. 4:09mcv-00075, DKT No. 145. A total of $300,000.01 was paid. 7 UDSC Case No. 4:09_ch00076, DKT No. 110 MOTION FOR ORDER - Page 4 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 5 of 20 fourth distribution in the amount of $689,130.04 was approved on January 22, 2014.8 Total distributions to date have been $4,807,382.38. B. Proposed Fifth and Final Distribution. The Receiver proposes to make a fifth and final distribution in the amount of $397,000.00. If approved, this fifth distribution will have resulted in the payment to investors of the total amount of $5,204,382.38. The prior and proposed distributions are summarized in the table below: 3/10/11 3/10/11 3/5/12 9/24/12 1/23/14 Pro sed Total Ob'ectors Allowable claimants Allowable claimants Allowable claimants Allowable claimants Allowable claimants Allowable claimants $1,018,252.33 $2,000,000.00 $300,000.01 $800,000.00 $689,130.04 $397,000.00 $4,186,130.05 $9,991,300.40 $9,991 300.40 $9,991,300.40 $9,991,300.40 $9,991,300.40 $9,991,300.40 20.02% 3.00% 8.01% 6.90% 3.97% 41.90% The Receiver recommends that the final distribution amount be paid to the following allowable claimants in the amounts listed in the far right column in the table below: [11:53 ClziitnA?muht -. :joistributioa*?31. 1' 2001 2,162,500.00 585,857.83 85,926.00 2030 105,000.00 32,591.25 4,172.13 2017 312,582.50 114,042.38 12,420.33 2032A 94,000.00 35,605.85 3,735.05 2003 2,738,700.00 1,116,101.63 108,821.06 2035 37,500.00 15,602.19 1,490.05 2002 1,000,000.00 416,058.46 39,734.57 2004 25,000.00 10,401.46 993.36 2006 200,000.00 83,211.69 7,946.91 2007 50,000.00 20,802.92 1,986.73 8 UDSC Case NO. 4:09-cv-00075, DKT N0. 135. MOTION FOR ORDER - Page 5 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 6 of 20 2008 55,500.00 23,091.24 2,205.27 2009 420,000.00 174,744.55 16,688.52 2012 100,000.00 41,605.85 3,973.46 2013 250,000.00 104,014.62 9,933.64 2016 160,000.00 66,569.36 6,357.53 2022 250,000.00 104,014.62 9,933.64 2023 378,000.00 157,270.10 15,019.67 2024 500,000.00 208,029.23 19,867.28 2025 125,000.00 52,007.30 4,966.82 2026 35,000.00 14,562.04 1,390.71 2027 898,787.00 373,947.94 35,712.91 2028 11,000.00 4,576.64 437.08 2029 20,000.00 8,321.17 794.69 2033 62,730.90 26,099.72 2,492.59 Total 9,991,300.40 3,789,130.04 397,000.00 APPLICATION FOR APPROVAL OF FEES AND EXPENSES OF THE RECEIVER AND COUNSEL Through this application, the Receiver, on behalf of himself, Klein Associates, PLLC, and Hawley Troxell, the Receiver?s counsel, is requesting approval of compensation for services provided to the Receivership Estate between October 1, 2013 and June 10, 2015, the date this application was submitted to the SEC and CFTC for review (?Application A. Prior Distributions. The prior fee application approved by the Court was on January 7, 2014, for the one?year period from October 1, 2012 to September 30, 2013.10 Fees and expenses for work performed since October 1, 2013 have not been paid. B. Work Performed Since October 1, 2013. As described in status report numbers twenty through twenty five, significant accomplishments have been achieved since October 9 The Receiver expended a relatively small amount of out-of-pocket expenses during the Application Period relating to travel for the hearing before the Ninth Circuit Court of Appeals. He is not seeking reimbursement for these expenses. ?0 UDSC Case No. 4:09-cv-00076, DKT No. 132 (Order Approving Ninth Fee Application). MOTION FOR ORDER - Page 6 4.4549000174910442 Case Document 186 Filed 06/16/15 Page 7 of 20 2013, making the closing of the Receivership Estate possible. The notable accomplishments since October 2013 include: 0 Settlement of litigation with Capital One ($55,500 payment and dismissal of Capital One?s appeal), it The marketing and sales of the final three properties in the Receivership Estate: the Idaho Falls mansion in net proceeds), the Ammon Road property and the Southstone property 0 Collecting the $40,000 owed on the Sight and Sound Design settlement, 0 Winning affirmance of Doyle Beck?s appeal of the judgment obtained against him and collecting on the judgment 0 Selling the last personal property asset of the Receivership 0 Obtaining a judgment against Stephan Lawson and filing garnishments that led to settlement with Lawson (in the amount of 0 Obtaining approval for and sending the fourth distribution to investors in January 2014 - Preparing and filing six interim status reports, and 0 Preparing this final report and motion to terminate the Receivership Estate and to make a final distribution of assets. C. Summary of Fees and Expenses. 1. Receiver, Klein Associates. During the Application Period, the Receiver and employees of Klein Associates spent 85.2 hours administering the Receivership Estate. The Receiver seeks total earned fees of $19,440.50. An additional 13.6 hours were spent by the MOTION FOR ORDER Page 7 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 8 of 20 Receiver and his staff on this matter which are not being billed to the Receivership Estate. A summary of these fees is attached as Exhibit A. A detailed invoice describing the work performed by the Receiver and his staff on a daily basis has been provided to the SEC and CFTC and are being filed with the Court under seal. The detailed invoices are not being made public because they include investment and personal information about investors, describe negotiating stances taken by the Receiver, and include information subject to the attorney-client privilege. 2. Hawley Troxell. During the Application Period, counsel for the Receiver spent 101.6 billable hours providing legal services for the Receiver and the Receivership Entities. Hawley Troxell seeks total earned fees of $18,789.50. Hawley Troxell is also seeking reimbursement of $4,112.57 in expenses incurred on behalf of the Receivership Estate during the Application Period.11 A summary of these fees and expenses is attached as Exhibit B. A detailed invoice describing the work performed by Hawley Troxell on a daily basis has been provided to the SEC and CFTC and are being filed with the Court under seal. The detailed invoices are not being made public because they include investment and personal information about investors, describe negotiating stances taken by the Receiver, and include information subject to the attorney?client privilege. In addition, Hawley Troxeil has voluntarily waived recovery of $895.62 in fees that were earned. The waived amounts are identified in the detailed invoices. MOTION FOR ORDER Page 8 445490001 .7491044.2 Case Document 186 Filed 06/16/15 Page 9 of 20 3. Total. Total fees and expenses requested are as follows: Em Expenses Mal Receiver and Klein Associates $19,440.50 $0.00 $19,440.50 Hawley Troxell $18,789.50 $4,112.57 $22,902.07 Total $38,230.00 $4,112.57 $42,342.57 D. Request for Court Approval, Review by SEC and CFTC. Pursuant to on page 5 of the Order Appointing a Receiver in the SEC action12 and IV.G of the Order Granting Motion for Statutory Restraining Order in the CFTC action,13 the Receiver submitted to the SEC and CFTC drafts of this Motion and copies of the detailed invoices for the fees and expenses for review. The SEC has advised the Receiver that it has no objections to the fee application.14 The Receiver respectfully requests approval of the fees and expenses incurred by the Receiver and his professionals as set forth herein and authorizing the Receiver to pay such amounts in connection with termination of the Receivership Estate. IV. CLOSING THE RECEIVERSHIP ESTATE A. The Receivership Estate is Ready to be Terminated. The Receivership Estate should be terminated now because: 1) all assets of the Receivership Estate have been liquidated,15 2) all litigation commenced by the Receiver has been concluded, 3) all appeals of judgments obtained by the Receiver have been resolved, 4) all judgments obtained by the ?3 UDSC Case No. 4:09?cv?00075, DKT No. 8. ?3 UDSC Case No. 409431400076, DKT No. 8 . The CFTC has not given any comments to the Receiver and the Receiver has no reason to believe the CFTC has any objections to the fee application or other components of this motion. ?5 This excludes the Trigon computer delivered to the Receiver by Palmer. MOTION FOR ORDER Page 9 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 10 of 20 Receiver have been collected in whole or in compromised amounts, and 5) all claims and objections against the Receivership Estate have been resolved. As a result, there is no further work for the Receiver to accomplish beyond paying the final administrative expenses, distributing the remaining funds of the Receivership Estate, and carrying out the termination of the Receivership Estate (including filing final tax returns and disposing of Receivership records). B. Authorization to the Receiver to Abandon or Turn Over Records Held by the Receiver. Because all litigation, appeals, claims, and collections relating to the Receivership Estate have been resolved, there is no need for the Receiver to retain records of the Receivership Estate for an extended time. The Receiver requests that the Court enter an order providing that any interested party that wishes to take custody and control of the documents currently in the possession of the Receiver, and who demonstrates a legitimate interest in the documents and an intent to protect confidential information contained in those documents, has thirty (30) days after entry of the Court?s order to make arrangements with the Receiver, at the other party?s own expense, to take control of the documents. If no party makes a claim to the documents within thirty (30) days after entry of the order, the Receiver should be authorized to dispose of the documents when he has no further need of them. C. Discharge. The Receiver asks that the Receiver, his counsel, and their agents be discharged of any liability to any person or entity for actions taken in good faith in carrying out the Receiver?s administration of the Receivership Estate and the exercise of his powers, duties, and responsibilities in connection therewith. This discharge and release of all claims, liabilities, and duties should be effective upon payment of final administrative expenses, final distribution of funds, and the filing of final tax returns for the Receivership Estate. MOTION FOR ORDER Page 10 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 11 of 20 D. Establishment of Reserve for Closing Tasks. The Receiver requests approval by the Court for him to establish a reserve in the amount of $5,084.4516 (the ?Reserve?) and to make payments from the Reserve to tax professionals, the Receiver, Hawley Troxell, or other outside vendors for costs in connection with those winding-down actions taken after the payment of administrative fees and expenses (addressed above in Part 111).17 This likely will include fees for the preparation and submission of tax returns, destruction of documents, and the payment of fees and expenses of the Receiver and his counsel incurred after filing of this motion (including time spent seeking approval of this motion). The order should provide that the SEC and CFTC may require the Receiver to report to them on expenditures from the Reserve. Any surplus reserve remaining after the payment of outstanding fees and expenses shall be turned over to the SEC for disposition according to its policies and procedures. E. Outstanding Tax Returns Due. Tax preparers engaged by the Receiver are in the process of preparing 2014 tax returns. A final tax return for 2015 will also need to be prepared and filed. The Receiver requests an order authorizing him to prepare and submit post- receivership tax returns as the Receiver determines to be necessary or appropriate and to pay for the services of those tax preparers from the Reserve. F. Retention of Jurisdiction. The Court should retain jurisdiction over all matters relating to the Receiver and the Receivership Estate, including any matters relating to the distribution of funds approved in connection with termination of the Receivership Estate, after 16 This amount would be supplemented by any interest earned on the Receivership bank accounts until the funds are distributed. '7 The Receiver paid $2,703.22 to an outside accounting firm for preparation of 2013 tax returns. Returns for 2014 and 2015 will need to be filed by the Receiver. Thus, the Reserve amount is likely to be exhausted simply by tax preparation fees. MOTION FOR ORDER - Page 11 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 12 of 20 the Receivership is closed. CONCLUSION The Receivership has accomplished its purposes and should be closed. The Receiver asks that the Court enter an order containing the terms described in this motion. A proposed order is attached as Exhibit C. DATED this day of June, 2015. HAWLEY TROXELL ENNIS HAWLEY LLP . F. Kurtz, Attorneys for the Receiver, R. Wayne Klein MOTION FOR ORDER - Page 12 44549.0001.7491044.2 Case Document 186 Filed 06/16/15 Page 13 of 20 CERTIFICATE OF SERVICE ff I HEREBY CERTIFY that on this a/g day of June, 2015, I electronically filed the foregoing MOTION with the Clerk of the Court using the system which sent a Notice of Electronic Filing to the following persons: Karen L. Martinez Tanya Beard Securities and Exchange Commission 351 South West Temple, Suite 6.100 Salt Lake City, UT 84101 martinezk sec. gov Counsel for Plainti? Securities and Exchange Commission Alison B. Wilson John W. Dunfee Division of Enforcement Commodity Futures Trading Commission 1155 2lst Street, NW. Washington, DC. 20581 jdunfee@cftc.gov awilson@cftc.gov Counsel for Plainti?? Commodity Futures Trading Commission AND, I HEREBY CERTIFY that I have served the foregoing document to the following Registered Participants (list names and addresses): Daren L. Palmer, #13952-023 Taft Correctional Institution PO Box 7001 Taft, CA 93268 Defendant Alan Conilogue Deputy Attorney General State of Idaho PO Box 83720 Boise, ID 83720-0031 Local Counsel for Plainti?fs JUS. Mail, Postage Prepaid Hand Delivered Overnight Mail E-mail Telecopy Mail, Postage Prepaid Hand Delivered Overnight Mail E-mail Telecopy Jo??h F. Kurtz, Jr. MOTION FOR ORDER - Page 13 44.549000174910442 Case Document 186 Filed 06/16/15 Page 14 of 20 EXHEQET A - SUMMARY Receiver/Mela 8; Assedates BATE: Mme S, 2015 CLIENT: Summary of Services: Professianal Hours Rate Amount Wayne Klein 72.2 250.00 18,050.00 Wayne Klein 13.4 0.00 0.00 Randell Etherington 8.0 120.00 960.00 Randell Etheringtoa 0.2 0.00 0.00 iames Shape 0.9 120.00 108.00 Jill Howe 0.6 100.00 50.00 Keith Williams 3.5 75.00 252.50 Total 98.8 19,440.50 Total Fees Requested 19,440.50 Case Document 186 Filed 06/16/15 Page 15 of 20 EXHEBET 3 - WVGICE SUMMARY Hawiey Trexeli Fer Perloci Ociober 1, 2013 to May 31, 2015 Matter Hears Fees Costs Total General Receivership 4.8 955.00 731.42 1,686.42 Klein v. {Dean Palmer 0.2 54.00 0.90 54.90 Klein v. Beck 80.9 15,194.00 2,950.83 18,144.83 Klein v. Lawson 15.? 2,585.50 429.42 3,015.92 Taial 103.6 18,789.50 &,112.57 22302.0? Case Document 186 Filed 06/16/15 Page 16 of 20 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO SECURITIES AND EXCHANGE COMMISSION, and COMMODITY FUTURES TRADING COMMIS ION, Plaintiffs, V. DAREN L. PALMER and TRIGON GROUP, INC. Defendants. Civ. o. 09-075-E-EJ (dks) Civ. o. 09-O76-E-EJ (dks) The Honorable Edward J. Lodge ORDER: (I) APPROVING THE FINAL STATUS REPORT AND ACCOUNTING, (II) APPROVING PAYMENT OF FIFTH AND FINAL DISTRIBUTION, APPROVING PAYMENT OF FEES AND EXPENSES (FOR THE PERIOD FROM OCTOBER 1, 2013), AND (IV) CLOSING RECEIVERSHIP CASE The matter before the Court is the Receiver?s Motion for an Order: (I) Approving the Final Status Report and Accounting, (II) Approving Payment of a Fifth and Final Distribution to investors, Approving Payment of Fees and Expenses (for the Period from October 1, 2013), and (IV) Closing the Receivership Estate and Memorandum in Support (?Motion?) filed by R. Wayne Klein, the Court-Appointed Receiver of Trigon Group, Inc. and the assets of Daren L. EXHIBIT, Case Document 186 Filed 06/16/15 Page 17 of 20 Palmer. The Court has reviewed the Motion and Memorandum and the file and based thereon and for good cause shown, IT IS HEREBY ORDERED that: l. The Motion is APPROVED in its entirety. 2. Approval of Final Status Report and Accounting. The Receiver?s Final Status Report and Accounting included in the Motion is hereby approved and all actions and activities taken by or on behalf of the Receiver and all payments made by the Receiver in connection with the administration of the Receivership Estate are hereby approved and confirmed. 3. Approval of Final Distribution Payment to Claimants. The Receiver is authorized to make a final distribution payment in the amount of $397,000.00 to the twenty-four (24) allowable claimants identified in the Motion, in the amounts requested by the Motion. In connection therewith: all distribution checks issued on account of the final distribution to allowable claimants are required to be negotiated within ninety (90) days of the date of issuance (?Stale Date Deadline?), and checks returned without a valid forwarding address (for which the Receiver cannot find a valid forwarding address) or checks uncashed after the Stale Date Deadline are hereby deemed void and the Receiver is hereby authorized to turn over to the SEC any distribution payments that remain uncashed after the Stale Date Deadline. 4. Approval of Fees and Expenses. All Receivership administrative fees and expenses incurred in this Receivership proceeding, including the Receiver?s fees and expenses and those of his counsel and other professionals incurred in connection with the Receivership proceeding, are hereby approved. All administrative expenses and the Receiver?s and ORDER - Page 2 44549.0001.7491263.1 Case Document 186 Filed 06/16/15 Page 18 of 20 professionals? fees and expenses requested by the Motion, incurred during the period from October 1, 2013 through the date of the Motion, are hereby approved and authorized to be paid from assets of the Receivership Estate. 5. Destruction of Records. The Receiver is authorized to abandon and destroy the electronic and paper records of the Receivership Entities and of any other corporations or businesses in the Receiver?s possession, custody, or control (including records obtained by the Receiver from government agencies, banks, or other persons) if, within thirty (30) days after entry of this Order, no qualified person has made a claim to the documents pursuant to the terms described in the Motion. In effecting the destruction of records, the Receiver shall take reasonable steps to ensure that personal or confidential information is destroyed in a manner that the information cannot be read or reconstructed. 6. Abandonment of Assets. Any assets not distributed or otherwise administered by the Receiver as of the closing of the Receivership Estate, such as computers owned by Trigon, are deemed abandoned. Abandoned assets may be destroyed or discarded, without regard to title or value, in the sole and absolute discretion of the Receiver. 7. Discharge. Neither the Receiver nor any agent, employee, member, officer, independent contractor, attorney, or representative of the Receiver shall have any liability to any person or entity for any action taken in connection with carrying out the Receiver?s administration of this Receivership Estate and the exercise of any powers, duties, and responsibilities in connection therewith. Effective upon the Receiver?s completion of payment of administrative expenses, final distribution of funds, and filing of required tax returns as provided ORDER - Page 3 44549.0001.7491263.1 Case Document 186 Filed 06/16/15 Page 19 of 20 herein, the Receiver and his agents, employees, members, officers, independent contractors, attorneys, and representatives are: discharged, released from all claims and liabilities arising out of and/or pertaining to the Receivership, and relieved of all duties and responsibilities pertaining to this Receivership (with the exception of the obligation to destroy records, which duty will survive until the records destruction is complete). 8. Establishment of Reserve for Closing Tasks. The Court authorizes the Receiver to establish a reserve in the amount of $5,084.45 (plus interest that accrues on the Receivership bank accounts) (the ?Reserve?) and to make payments from the Reserve to tax professionals, the Receiver, Hawley Troxell, or other outside vendors for costs incurred in connection with those actions taken after the date from which administrative fees and expenses to wind down and close the Receivership Estate were calculated. The SEC or the CFTC may require the Receiver to report to them on expenditures from the Reserve. Any surplus reserve remaining after the payment of outstanding expenses and fees shall be remitted to the SEC for disposition according to its policies and procedures. 9. Outstanding Tax Returns. The Receiver, by and through is tax professionals, may prepare and submit any post-receivership tax returns for the Receivership Entities as the Receiver determines to be necessary or appropriate and to make payment for preparation of those returns from the Reserve. 10. Jurisdiction. This Court shall retain jurisdiction over any and all matters relating to the Receiver, the Receivership, and the Receivership Estate, including any matters relating to the distribution of funds received by the Receiver in connection with his obligations as Receiver ORDER Page 4 44549.0001.749 1263.1 Case Document 186 Filed 06/16/15 Page 20 of 20 or otherwise received after the Receivership is closed. To the extent any dispute arises concerning the Receiver?s administration of the Receivership Estate or to the extent any person or entity seeks to pursue or assert any claim or action against the Receiver or any agent, employee, member, officer, independent contractor, attorney, or representative of the Receiver, arising out of or related to this Receivership, the Court shall retain jurisdiction to hear and resolve any such dispute or claim. Dated this day of 2015. BY THE COURT The Honorable Edward J. Lodge United States District Judge ORDER - Page 5 44549.0001.749I263.1