September 11, 2009 / 12:31 AM / 10 years ago

Judge cuts Stanford receiver fee request

DALLAS (Reuters) - A federal judge in Texas on Thursday did not grant the full $27 million in fees requested by the receiver in charge of alleged swindler Allen Stanford’s estate, saying more details were needed on some expenses.

Ralph Janvey, the receiver in the case, had asked the court for the funds to pay lawyers, forensic accountants and others helping him to untangle Stanford’s records and to locate assets.

U.S. District Judge David Godbey in Dallas approved about $20 million in fees. “We need to be sure there is adequate information to assess the bills,” Godbey told the court.

The judge rejected some $2.1 million in travel expenses and professional fees that were not fully detailed. He said it may be paid at a later date.

The U.S. Securities and Exchange Commission and investors had opposed Janvey’s fee application, arguing he was spending too lavishly to recover funds that ultimately should be returned to the firm’s clients. They also said parts of the fee application lacked detail, and argued for more clarity.

“We don’t know how much is being spent on particular activities,” David Reece, an attorney with the SEC told the judge.

But Janvey and his attorneys defended their fee request, saying their task is monumental.

Sorting out Stanford’s businesses is “challenging, difficult, litigious, expensive and thankless,” Kevin Sadler, an attorney working for the receiver told the hearing.

But going forward, the receiver should be more mindful of the estate’s dwindling assets, Judge Godbey said.

Cash on hand totaled $81.1 million as of July 30 and Janvey’s fee application covers services rendered only through May 31, according to court filings.

Godbey also asked that Janvey and his lawyers prepare a budget, and go over it with the SEC and John Little, the examiner in the case who represents the interests of investors.

“The judge has ruled, and he’s the judge,” Janvey told Reuters after the hearing.

Stanford faces civil and criminal charges related to a $7 billion Ponzi scheme.

He has denied any wrongdoing and is in jail awaiting trial.

The civil cased is filed in federal court in Dallas, 3:09-cv-00298-N Securities and Exchange Commission v. Stanford International Bank Ltd et al.

Reporting by Anna Driver; editing by Carol Bishopric

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