Doc 140 - Receivership of Diversified Lending Group

Transcription

Case 2:09-cv-01533-R-SS Document 140
Filed 10/23/09 Page 1 of 38
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DAVID A. GILL, Receiver
2 2029 Century Park East, Third Floor
Los Angeles, California 90067-2904
3 Telephone: (310)277-0077
Facsimi1e: (310) 277-5735
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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Case No. CV 09-01533-R-JEMx
NOTICE OF MOTION AND
MOTION OF RECEIVER FOR
AUTHORITY TO EMPLOY AND
PAY BRY A~ GONZALEZ,
VARGAS & \jONZALEZ BAZ,
S.C. AS SPECIAL MEXICAN
COUNSEL; MEMORANDUM OF
POINTS AND AUTHORITIES;
AND DECLARATION OF DAVID
A. GILL IN SUPPORT THEREOF
Date: November 16,2009
Time: 10:00 a.m.
Place: Courtoom 8
312 North Spring Street
Los Angeles, CÆ
22 TO THE HONORABLE MANUEL L. REAL, UNITED STATES DISTRICT
23 JUDGE AND TO THE PARTIES IN INTEREST:
24 NOTICE IS HEREBY GIVEN that on November 16,2009, at 10:00 a.m., or
25 as soon thereafter as the matter may be heard, in Courtoom "8" of the United States
26 Distrct Court, located at 312 North Spring Street, Los Angeles, California 90012,
27 before the Honorable Manuel L. Real, United States Distrct Judge, David A. Gil,
28 the Permanent Receiver in the above-captioned case ("Case") will, and hereby does,
-1MOTION FOR AUTHORITY TO EMPLOY AND PAY BRYAN-GONZALEZ
343453.03 (XPJ 25176A
1 move the Cour for authority to employ and pay Bryan, Gonzá1ez Vargas &
2 Gonzá1ez Baz, S.C. as special Mexican counseL.
3 NOTICE IS HEREBY FURTHER GIVEN, that this Motion is made on the
4 grounds that I believe that the employment of the proposed special counsel is
5 necessary for the effective administration of the assets of the receivership estate in
6 order to advise me in connection with preserving and collecting collateral of
7 Diversified Lending Group, Inc. ("DLG"), in Mexico and to advise me regarding title
8 issues and the sale of a condominium in Mexico.
9 In addition to this Notice of Motion and Motion, this Motion is further based
10 on the attached Memorandum of
Points and Authorities, the Declaration of
David A.
11 Gill, the record in this Case, and upon such other grounds as may properly be
12 presented to the Court at the hearing on the Motion.
13 NOTICE IS HEREBY FURTHER GIVEN, that Local Rule 67-9 requires that,
14 not later than 14 days before the date designated for the hearing on the Motion, any
15 part who opposes this Motion file with the Court and serve upon me such opposing
16 part's response to this Motion. Failure to comply with this requirement, as set forth
17 in the Local Rules of the Distrct Court, may be deemed by the Court to be consent to
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18 the granting of this Motion.
20 Dated: October l-2009
21 DA VI A. LL, Receiver
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I.
3 INTRODUCTION
1 MEMORADUM OF POINTS AND AUTHORITIES
4 I am the duly appointed Permanent Receiver for Diversified Lending Group,
5 Inc. ("Diversified") and Applied Equities, Inc. ("AEI"), and their subsidiaries and
6 affiliates, including those specifically named in the amended preliminary injunction.
7 In order to perform my duties, specifically to deal with real propert issues that have
8 arisen in Mexico, I believe that it is necessar to employ counsel in Mexico. By the
9 Motion, I seek authority to employ the law firm of Bryan, Gonzá1ez Vargas &
10 Gonzá1ez Baz, S.C., and to pay said counsel amounts already incurred in the amount
11 of$5,801.25 for legal fees and $580.13 for associated costs in advising me to date,
12 and to pay said counsel a retainer of $1 0,000 to secure payment of fees and costs
the
13 going forward, which fees and costs will ultimately be subject to approval of
14 Court.
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II.
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RELEVANT FACTS
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A.
Procedural Historv
On March 4,2009, the Securities and Exchange Commssion ("SEC") filed a
Complaint (the "Complaint") in the SEC Action, alleging two fraud claims for relief
against Defendants Diversified, AEI, and Bruce Friedman ("Friedman"), as well as
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Relief Defendant Tina M. P1acourakis ("P1acourakis") (collectively, the
23 "Receivership Defendants,,).1
24 At the time it filed the Complaint, the SEC also filed in the SEC Action an ex
25 parte application (the "TRO Application") for a temporary restraining order and for
26 orders: (1) freezing assets, (2) appointing a temporary receiver, (3) prohibiting the
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1 Request for Judicial Notice (filed concurently herewith), at ir 1.
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1 destrction of documents, (4) granting expedited discovery, and (5) requiring
2 accountings, and for an order to show cause re preliminary injunction and
3 appointment of a permanent receiver.2
4 On March 4,2009, this Court granted the TRO Application and, among other
5 things, appointed me as Temporary Receiver.3 On March 10,2009, pursuant to a
6 stipulation by Mr. Friedman and no opposition by the other parties, the Court granted
7 the SEC Application and entered the Preliminary Injunction Order, thereby
8 appointing me as the Permanent Receiver, among other things.4 As a result, the
9 March 4 Order was amended and superseded by two additional orders of the Court.
10 One such order was entered on March 10,2009, appointing me as Permanent
11 Receiver. Another order was entered on March 31, 2009, and, among other things,
12 clarified that MMHIM, Inc., is a wholly owned subsidiary of the Receivership
13 Defendants and that its assets are subject to my administration pursuant to the Order
14 of
March 10,2009.5
March 4,2009, as amended and supplemented by the Order of
15 Following my appointment, I learned that Diversified had taken as collateral
16 certain propert located in Mexico and that the underlying loan obligation was in
17 default. I had also negotiated the assignment of a 50% interest of Bruce Friedman in
18 a condominium in Mexico to me. Both of these assets, discussed in more detail
19 below, will require the assistance of counsel in Mexico to preserve and to ultimately
20 liquidate.
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22 B. The San Felipe~ Mexico Property
23 In December 2007, Diversified loaned approximately $4.2 million to Club
24 Acquisition Company ("CAC"), which was reportedly secured by propert in
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2 Request for Judicial Notice, at ir 2.
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1 Mexico and guaranteed by principals Patrick Butler and Frank W oltius. The loan
2 balance of$3,705,822 was due on December 14, 2008. I caused to be conducted
3 employee interviews and reviewed documents made available to me in order to
4 ascertain the facts relating to this transaction. The documents have turned out to be
5 incomplete but I believe the facts relating to this matter are that the loan was made to
6 develop sixty-six lots originally zoned as multi-family and later changed to zoning
which
7 for single-family residences in San Felipe, Baja California, Mexico, many of
8 are beachfront properties. Diversified could not perfect its security interest in the
9 sixty-six lots as collateral due to the re-zoning process, so Diversified purported to
10 take a security interest in a different project in Mexico known as Long Beach. Long
11 Beach was alleged to be worth $20 million at the time of the loan. Diversified was to
12 obtain a security interest in the CAC lots as collateral when the zoning was
13 completed at which time the lien on Long Beach was to be released. I am advised
its loan with
14 that CAC defaulted and requested an extension for the repayment of
15 Diversified in early 2009.
16 Prior to my appointment, DLG had employed other counsel to document the
17 loan and perfect liens on the propert. I have obtained the files of prior counsel
18 which unfortnately do not appear to contain documentation regarding the perfection
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the liens. Prior counsel and I have determned that prior counsel should not
20 represent me as special counsel relative to this matter.
21 It has become necessary to employ special counsel in Mexico to evaluate my
22 rights with respect to the property, perfect Diversified's lien interest to the extent not
23 already done, and to commence foreclosure proceedings, if appropriate.
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1 C. The Cancun~ Mexico Property
2 When Mr. Friedman filed his personal asset list with the Court in March 2009,
3 he identified an interest in propert in "LaHaia.,,6 My investigation has revealed that
4 this is a condominium in a development in Cancun, Quintana Roo, Mexico.
5 Although Mr. Friedman's name is not on title to this propert, he alleges that he has
6 an agreement that he owns a 50% interest in this propert with Jeffrey AppeL. The
7 purchase price for the propert was $680,000, and I am advised that Mr. Friedman
8 contrbuted 50% of the purchase price. I continue to investigate the source of the
9 funds used; however, Mr. Friedman and Mr. Appel have agreed that Mr. Friedman's
10 50% interest in the propert will be assigned to me. I require counsel to document
11 the transfer of the interest from Mr. Friedman to me and to thereafter handle all
12 issues arising in connection with the sale of this propert.
14 III.
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15 THE COURT SHOULD APPROVE EMPLOYMENT OF
16 BRYAN~ GONZÁLEZ VARGAS & GONZÁLEZ BAZ~ S.C.
17 The code sections and rules applicable to the employment of counsel in
18 bankrptcy proceedings are made applicable to this case by virte of Local Rule 66attorneys. ..that do not
20 hold or represent an interest adverse to the estate, and that are disinterested persons,
19 8.7 ".. .
the trstee, with the court's approval, may employ.. .
21 to represent or assist the trstee in carring out the trstee's duties under this title."s
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25 6 Request for Judicial Notice, at ir 6. '
26 of
7 Pursuant to Local Rule 66-8, titled Permanent and Temporary Receivers - Administration
Estate, "Except as otherwise ordered by the Court, a receiver shall administer the estate as nearly
8 11inD.S.C.
§ 327(a).
27 as possible
accordance
with the practice in the administration of estates in bankptcy."
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1 Additionally, pursuant to rule 2014 of
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the Federal Rules of
Bankptcy
Procedure,
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( a) Application for an order of employment.
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An order approving the employment of attorneys. . . pursuant to §
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327.. .ofthe Code shall be made only on application of
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application shall be filed and...a copy of
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transmitted by the applicant to the United States trstee. The
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application shall state the specific facts showing the necessity for the
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employment, the name of the person to be employed, the reasons for the
the trstee... The
the application shall be
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selection, the professional services to be rendered, any proposed
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arrangement for compensation, and, to the best of the applicant's
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knowledge, all of
the person's connections with the debtor, creditors,
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any other part in interest, their respective attorneys and accountants,
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the United States trstee, or any person employed in the office of the
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United States trstee. The application shall be accompanied by a
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verified statement of the person to be employed setting forth the
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person's connections with the debtor, creditors, any other part in
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interest, their respective attorneys and accountants, the United States
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trstee, or any person employed in the office of the United States
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trstee.
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(b) Services rendered by member or associate of firm of attorneys or
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accountants.
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If, under the Code and this rule, a law partership or corporation is
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employed as an attorney.. .
any parter, member, or regular associate of
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1 the partership (or J corporation... may act as attorney. . . so employed,
2 without further order of the court. 9
3 In this Case, I desire to confirm the employment of Bryan, Gonzá1ez Vargas &
4 Gonzá1ez Baz, S.C. ("Bryan-Gonzá1ez") as my special counsel in Mexico to assist
5 me in the performance of my duties as Permanent Receiver with respect to the San
6 Felipe and Cancun properties. I required, as of August 3,2009, and stil require the
7 assistance of local counsel in Mexico for legal services in connection with the
the properties in San Felipe and Cancun.
8 administration and disposition of
9 Specifically, I require local counsel to advise me with respect to local rules,
10 regulations and procedures relative to the real properties and to perform the duties
Mexico. Finally, to the extent that any litigation matters
11 required under the laws of
12 arise relative to these two properties, I anticipate that I wil utilize the services and
13 expertise of
Bryan-González to handle said litigation. 10
14 To the best of my knowledge, Bryan-Gonzá1ez and its principals and
15 employees: (a) do not hold or represent any interest adverse to me, the Receivership
16 Defendants, the creditors, or the receivership estate; (b) have no connection with the
17 Receivership Defendants, the creditors, any other party in interest, their respective
18 attorneys and accountants, the Securities and Exchange Commssion, or any judge in
California; (c) are
19 the United States District Court for the Central Distrct of
20 disinterested persons as that term is defined in 11 U.S.C. § 101(14) and used in 11
21 U.S.C. § 327(a); and (d) hold no pre-receivership claims against the receivership
22 estate.
23 The engagement agreement between Bryan-González and me is attached
24 hereto as Exhibit 2 (the "Agreement"). 11 The Agreement provides for payment of
25 costs of $2,000 and a retainer of $1 0,000, but that all fees and costs shall be subject
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9 Fed. R. Ban. Proc., R. 2014.
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10 Declaration of
11 Declaration of
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David A. Gill, at ir 2, Exhibit "1."
David A. Gil, at ir 3, Exhibit "2."
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343453.03 (XP) 25176A
1 to approval by the Court. I wil file subsequent applications for authority to pay
2 Bryan-Gonzá1ez not more frequently than every 120 days.
4 iv.
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5 THE COURT SHOULD AUTHORIZE PAYMENT TO
6 BRYAN~ GONZÁLEZ VARGAS & GONZÁLEZ BAZ~ S.C.
7 It was necessary for me to obtain the services of 10ca11ega1 counsel in Mexico
8 in order to preserve the rights the Receivership Estate may have with respect to the
9 properties in San Felipe and Cancun. As of August 3, 2009, Bryan-González has
10 been assisting me in evaluating my rights with respect to the San Felipe and Cancun
11 properties. I am seeking authorization to pay Bryan-Gonzá1ez $5,801.25 for legal
12 fees and $580.13 for associated costs incurred as of August 3,2009, by the firm in
13 advising me regarding both of the real propert issues which have arisen in Mexico.
14 12
15 Additionally, consistent with the Agreement, I also seek authority to pay
16 Bryan-Gonzá1ez a retainer in the amount of$10,000. The retainer will be held by
17 Bryan-Gonzá1ez as security to pay fees and costs as may subsequently be allowed by
18 the Court.
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V.
20
CONCLUSION
21 Based upon the foregoing, I request authorization to employ and pay Bryan-
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22 González as set forth herein and for any other relief the Court deems appropriate.
24 Dated: October If, 2009 _
25 II DA V A. G L, Receiver
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12 Declaration of
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David A. Gil, at ir 4, Exhibit "3."
-9-
343453.03 (XP) 25176A
DECLARATION OF DAVID A. GILL
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Filed 10/23/09 Page 10 of 38
I, David A. Gill, declare as follows:
1. I have personal knowledge of the facts in this declaration and, if called
as a witness, I could competently testify to these facts.
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2. A tre and correct copy of a detailed description of Bryan, Gonzá1ez
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Vargas & Gonzá1ez Baz, S.C.'s ("Bryan-Gonzá1ez") qualifications, and its rates and
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cost schedule is attached hereto as Exhibit "I."
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3. A tre and correct copy of engagement agreement between Bryan9
Gonzá1ez and me is attached hereto as Exhibit "2."
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4. A tre and correct copy of
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billing invoice reflecting Bryan-Gonzá1ez's
legal fees and costs associated with their services performed on my behalf with
respect to this matter is attached hereto as Exhibit "3."
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I declare under penalty of
perjury under the laws of
the United States of
15 America that the foregoing is tre and correct.
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Executed at Los Angeles, California, on October Ji, 2009.
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q¡ AVID
r A. GILL
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Filed 10/23/09 Page 11 of 38
EXHIBIT II i II
0.0 (XP)
Filed 10/23/09 Page 12 of 38
Bryan, González Vargas & González Baz
t"1exican and Latin American Lawyers
Profile of the Firm
March 2009
New York
Matamoros
San Diego
Chihuahua
Mexico City
Tijuana
Reynosa
La Paz Mexicali
EXHIBIT (t i ))
Juárez
Monterrey
Cabo EI Paso
l) i 4
'J ,Ai.. J.
Filed 10/23/09 Page 13 of 38
HISTORY OF THE LAW FIRM
The firm has its origins in 1945 with the merger of a banking and corporate
practice. It was founded by Chilton Bryan, Aureliano Gonzalez Vargas and David
Haber in Mexico City and relocated its offices to Ciudad Juarez, Chihuahua in
1946. The dynamic evolution of Mexican economic policy over the years has
meant that effective legal counsel is characterized by scope and depth of
experience as well as flexibility in responding to change as Mexico continues on the
path toward joining the ranks of the industrialized countries of the world. Since
the decade of the 1960's the Firm has played a prominent role in the formulation
and implementation of Mexican developme'nt policy, to include the northern border
economic expansion programs such as the Maquiladora ("In-Bond") Program as
well as participation in private debt restructuring and corporate planning projects
necessitated by economic conditions in Mexico during the 1980's. Today, Bryan,
S.c., is actively involved in the economic liberalization policies that are propelling
Mexico into the mainstream of the world economy. Such movement has been
further stimulated by the North American Free Trade Agreement, the United States
and Canada. It is note worthy to mention that the Firm provided guidance to one
of the governments based on its years of experience representing the business
interests of international clients in Mexico.
The economic crisis of the 1980's and of 1994 affected not only Mexico, but many
Latin American countries. Because of this situation, legal skills requiring expertise
in finance and planning matters became critical to corporate success, while at the
same time the impact of industrialization on environmental quality gave birth to an
important and complex body of new law in Mexico. Economic liberalization has
opened up a wide range of investment opportunities and options for foreign
investors and is also producing new legislation at an unprecedented rate in all
fields of law. New international agreements on communications, rules of legal
procedure, energy and trade - to mention a few - have become a part of the
Mexican legal system.
The Firm has adapted to these changes and has expanded its practice to effectively
respond to changing conditions as they arise. Offices of the firm are located in
most of Mexico's growth areas, enabling Bryan, S.C. provides on-site legal services
where needed. Our New York office opened in 1989, provide foreign clients a
clearing house for legal assistance concerning their Mexican interests in areas such
as banking, securities, investments into Mexico, mergers, acquisitions and -- in
general - Mexican business law as well as coordinating the legal affairs of our
clients throughout Latin America in the most important industrial centers of Mexico.
We opened our San Diego office on September 2006, Mexicali in early 2007, La Paz
in 2007, Los Cabos in 2008 and recently in EI Paso, Texas (our third office in the
United States) on February 2009. We have also established consulting agreements
with leading law firms in Europe, Asia and Latin America. We are members of
Eurojuris International a very prestigious organization in 630 cities in more than 40
countries worldwide.
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This approach to the practice of law has enabled us to participate in transactions
such as international development financing for a Latin American country through
multinational institutional resources and structuring banking and insurance laws for
individual third world countries.
Our philosophy as the premier law firm in Mexico is to offer our clients the finest in
legal services based on sound legal analysis and experience. On-going
relationships with Mexican government agencies at the national, state and local
levels and continuing education programs for our professionals enables the Firm to
remain at the "cutting edge" of the practice of law in Mexico, and our unique
consulting affiliate assists foreign investors a hassle free experience when settingup operations in Mexico.
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THE PRACTICE
Bryan, González Vargas & González Baz and affiliates ("Bryan") has focused for
many years on representing the business interests of foreign investors in Mexico
and Latin America. Clients of the Firm include large, internationally recognized,
publicly-held corporations as well as small, closely-held companies active in highly
specialized niche markets. The Firm employs an integrated approach in providing
legal services which clearly recognizes that client business requirements frequently
involve resolution of issues in several different areas of law. Practice Groups have
been established in the Firm to meet these challenging conditions and to provide
the most effective utilization of resources with which to deal with complex,
interdisciplinary matters of law. The Practice Group Coordinators of Bryan have
had extensive experience in managing and coordinating the work of legal
professionals in each of the Firm's offices on behalf of clients with diverse business
interests.
Business and economic conditions in a global marketplace are continually evolving;
In order to provide enhanced responsiveness to clients under these conditions, the
Firm has developed an in-house international legal staff representing a signatory
nation to the North American Free Trade Agreement. In conjunction with the Firm's
Practice Group organizational structure, this team approach places Bryan at the
forefront of legal professionalism in Mexico.
Having represented foreign investors in Mexico for many years and having served
as advisors to the Canadian government during the negotiation of the North
American Free Trade Agreement (NAFTA), the Firm has developed extensive
experience in dealing with agencies of the Mexican government at all levels:
national, state and locaL. This expertise in regulatory affairs, in conjunction with
the Firm's strong ties to Mexican business and industry, enhances the ability of
Bryan to serve the needs of its international clients in a highly professional,
comprehensive manner.
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PRACTICE AREAS
Antitrust
The Antitrust Practice of Bryan Gonzalez Vargas & Gonzalez Baz and affiliates ("Bryan")
provide advise to its clients regarding domestic, international and multinational matters in the
antitrust field, including mergers, acquisitions that are covered by Mexican and foreign statues
and agencies, Mexican and foreign, We have represented clients against legal actions from the
United States, the European Union and the Orient involving issues in Mexico and in Latin
America. In addition to Mexican and Latin American Attorneys, Bryan employs full-time staff
former bankers, accountants, auditors, engineers and economists who are experts in all types of
antitrust issues.
Asset Management
The recent turmoil in the world market has created new areas of concern to companies
doing business abroad: how to detect and protect distressed assets located in foreign countries.
The professionals at Bryan have brought together a team in the field of structured finance,
bankruptcy, as well as tax and customs litigation to create an interdisciplinary area of expertise
to advice clients in how to detect distressed assets in Mexicoi as well as to provide a solution to
this increasing problem.
We focus in the protection of distressed assets abroad, including:
Detection of distressed assets;
Foreclosures, asset disposition and other creditor/debtor defenses;
Tax liens;
Impact of international bankruptcies in distressed assets;
Negotiating and advising with regard to distressed loans;
International Tax and Customs compliance.
Together, our team of experts can work with you in finding practical and creative
alternatives for the disposition of distressed assets in Mexico.
In summary, current market circumstances require Companies to identify possible threats
to assets located in Mexico before the situation becomes unmanageable. Our Asset Management
Team is on your side to ensure that all steps are taken to protect your distressed assets in
Mexico.
Business Law
Our team of experts is well versed in the Incorporation of companies, including the
Corporate Structuring; Preparation of Articles of Incorporation and By-laws; Securing permits
required to incorporate and operate; Legal aspects of business planning and documenting stock
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issuance - both public and private offerings; Corporate mergers; Divestitures; Receivership and
liquidation; Acquisition and divestment of corporate assets and shares and Competition law
requirements, and Initial Public Offerings.
Communications
Permits and operational licenses and authorization for systems and equipment;
International and domestic telecommunication systems, satellite systems, systems franchises;
also, bids and proposals for supply projects. We assisted a major mobile operator in entering the
Mexican market by buying a local operator.
Compliance & Corporate Governance
Our Corporate Governance practice combines professionals from our corporate, litigation
and executive compensation departments to provide advice regarding the governance of publiC
and private companies and the ever evolving lesponsibilities of their Directors and Senior
Management. We have vast experience in all aspects of corporate governance of Mexico, the
United States of America, as well as Latin America, including:
* Advice to Boards of Directors, as well as Committees of Boards of Directors
regarding governance and compliance matters, in disclosure requirements and in
evaluation systems;
OI Guidance in the creation of our client's Audit Committee with the purpose of
assisting the Board of Directors to oversight the integrity of the company's
compliance with applicable laws and regulations;
& the establishment or modification of governance documents to comply with current
requirements and best practices, including the best practices for boards of
directors, committees, directors and senior officers,
OI the establishment and documentation of disclosule controls and procedures in
Mexico pursuant to the Sarbanes-Oxley Act of 2002,
4' structuring executive compensation plans to meet new Mexican and United States
legislative and regulatory requirements,
& conducting internal investigations by companies, boards of directols and audit
committees, and
f) responding to informal and formal SEC and Mexican Regulatorls investigations.
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Commercial-Business
Supply, distribution, representation and production contracts; Contracts and regulatory
compliance related to research and development and technology transfer contracts; Leases of
equipment and machinery; Acquisition and divestments of fixed assets.
Crisis Management
Bryan has proven to be able to undertake immediate "hands-on" in corporate crises
originating or involving Mexican managers, companies and boards of directors, In crises
circumstances which affect their owners, wherever they be in the world. We have been able to
expeditiously put-in-place attorneys, accountants, financial experts and Investigators to be able
to advise management, the boards of directors and Mexican and foreign regulatory agencies of
the facts in any given case. We do this in an integrated team structure regardless of the expertise
required, and we can do this because we have offices in the principal industrial and financial cities
of Mexico and frequently coordinate such work throughout Latin-America. The fact that Spanish is
the language predominantly spoken throughout Latin-America facilitates our understanding of the
local issues at stake and communication with the local operation, company, branch, institution
and government; and we also coordinate any and all criminal defense undertaken against any
one of our foreign clients including those derived from purported money laundering and
international trade fraud.
Customs & International Trade
Legal guidance for compliance with Mexican Import-Export Regulations, working closely
with both Customs authorities and Customs brokers to assist clients in obtaining and maintaining
the proper import-export documentation; Securing special permits and rulings for import/export
transactions; Design and Implementation of compliance programs called for by United States and
Mexican Customs legislation and authorities. Our team of experts are well versed in the
following:
United States, Mexico, and Latin America Free Trade Zones;
Free Trade Agreements;
Export programs (IMMEX previously called MaqUiladoras);
Customs (import and exports) and trade audits;
Customs litigation;
Classification of goods;
Special import permits;
Incoterms; and
General customs and trade advise.
Our Customs & International Trade team provides our clients with the required expertise
to succeed in their foreign trade ventures.
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Energy Resources
Preparation of contracts in the Electrical Petrochemical Industry; Co-generation projects;
Investment in electric (including eolic) and natural gas utilities in Mexico; Regulatory compliance.
Processing all Federal, State and Municipal permits and authorizations required for their
operation.
Entertainment
For over 60 years the firm has advised foreign motion picture, television, performers,
directors, composers, producers, writers and chorographers in their investments, filming,
performing and/or distributing activities in Mexico. We have assisted them with structuring the
actions, pictures, performances, etc., from a corporate, labor and tax point of view and have
defended tax and labor and employment claims against them. Furthermore, Bryan has advised
foreign clients with all the required permits for their performance in Mexico (from immigration
and customs to local operation permits and licenses) and structured their taxation structure in
Mexico. Our Intellectual Property Practice lawyers work very closely with this Practice Group.
Environmental & Sustainable Development
Counsel on environmental requirements and preparation of applications for necessary
permits and approvals including those of waste management; Negotiations for the acquisition of
environmental systems technology; Design of environmental compliance programs and
environmental audits to identify problem areas; Hazardous materials handling, import, export
and transportation requirements.
Processing all type of domestic (Federal, State and Municipal) permits, approvals and
Country Registrations in order that gas containment and treatment Projects may qualify for the
origination, generation, purChase and sale of Carbon reduction credits pursuant to the Agreement
of the parties to the Kyoto Protocol to Reduce Greenhouse Gas Emissions.
This Practice Group has a great deal of experience in the following:
litigation;
waste management issues;
Complex project development and
Carbon bonds matters under the Kyoto Protocol.
8
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Filed 10/23/09 Page 20 of 38
Environmental litigation
We represent clients in large, complex cleanup litigations involving a small number of
parties¡ each of whom, consequently, faces major financial risks. In the course of working on
these matters, we have developed general know-how in almost all areas of cleanup litigation,
with extensive knowledge in a number of areas that are very diffcult to litigate. Our capabilities
in these litigations are supplemented by the experience we have gained in several other areas of
our environmental litigation practice. We have a major environmental bankruptcy practice in
which we have acted as national Mexican environmental counsel for many clients.
Finance! Banking & Securities
Structuring bond issues; Debt restructuring; Stand-by and revolving credit facilities;
Domestic and international foreign trade credits; Business development financing for industrial
tourism, real estate, and other projects; Bills of exchange, letters of credit, promissory notes;
Guaranty and acceptance facilities; Venture capital financing, including foreign participation;
Private debt placement and its restructuring in Mexico and abroad; Aircraft and shipping leases
and financing structures. Due dilligence for issuance of securities.
Gaming
Bryan has represented companies and financial institutions in the planning, government
permitting, management, financing, acquisition and divestiture of projects of this nature
throughout Mexico.
Government & Regulatory rllatters
Representation before governmental regulatory bodies related to permits, licenses and
approvals; Preparation and filing of periodic reports and records; Negotiations concerning use of
new technology and systems subject to regulation; Privatization of Government-owned
enterprises.
The Firm has processed and advised foreign clients in all types of government bids
including those at Petroleos Mexicanos (Pemex), the Federal Energy Commission (known as CFE)
and Mexico City, including the first ever concessions of airports by a foreign investor and
acquisition of concessions of highways.
Immigration
Preparation of documents needed for temporary, permanent and residence permits; Work
visas for foreigners; Preparation and processing of applications for temporary foreign employees
and their dependents coming into Mexico; Representation of non-immigrant foreigners resident in
Mexico concerning renewals, housing, household goods, automobiles, and other issues relating to
residency in Mexico; Preparation and processing of change of status from non-immigrant to
9
019
Filed 10/23/09 Page 21 of 38
immigrant and to resident alien, Our Tax lawyers work very closely with this Practice Group in
matters pertaining to taxation of foreigners working in Mexico.
Insurance & Bonds
Design of insurance benefit packages for employees; Counsel regarding insurance
contracts and bonding needs; Risk assessment relating to coverage and social security
requirements; Claims representation, negotiation, and litigation; Establishing foreign owned
insurance companies in Mexico.
Intellectual Property & Franchising
Registrations of patents and trademarks and necessary renewals; Searching for
trademarks; Transfer of intellectual property rights agreements; Assistance in negotiations for
franchising and licensing agreements; Patent and trademark litigation,
International Tax
Bryan daily advice multinational companies on tax planning and implementation
associated with cross-border transactions involving Mexico and jurisdictions throughout LatinAmerica. Wherever in Latin-America we do not have licensed attorneys, we count on local tax
counsel we have worked with successfully. Our work covers multi-country acquisitions and
divestitures, financial structuring and restructures, transfer pricing and fully attending disputes
derived there from. We are well acquainted with the 40 Tax Treaties executed by Mexico, Brazil,
Argentina, Chile, Venezuela and most of Latin-America involving our clients' investments and
work with them on a day-to-day basis in order to achieve the best structures available without
risks.
International & North American Trade! Dumping & Unfair Trade Practices
Bryan provides counsel on trade matters, including the North American Free Trade
Agreement (NAFTA) and the 40 Tax Treaties of which Mexico is part of; Letters of credit and bills
of exchange; Import/Export requirements; Structure unfair practices, dumping and countervailing
duty issues; Mexican, Canadian, United States and Latin-American Customs related issues.
The International Trade Group has assisted and defended multinational clients in
antidumping and countervailing duty procedures in Mexico and those initiated in the United
States and in the European Union. We provide advice in matters pertaining to the embargo of
Cuba in compliance issues and in enforcement actions.
10
o~~o
Filed 10/23/09 Page 22 of 38
Labor & Employment
Preparation of Individual Labor Contracts and Collective Bargaining Agreements;
Representation before the Federal and State Conciliation and Arbitration Boards; Structure for
Employee Benefit Plans; Planning for investment of employee funds; Proceedings and
negotiations with the Mexican Institute of Social Security and Workers Housing Fund Authority
matters and for preparing and enforcing all type of agreements with individuals and Unions
throughout Mexico. This is one of the largest Practice Groups of the firm with attorneys In all of
its offices.
The firm is a well known for Its defense of management from labor and employment suits.
The Firm has only defended Management In all its history.
Bryan successfully defended the first-ever labor suit brought in the United States against a
United States multinational company under NAFTA rules derived from Its working practices In Its
Industrial facility in Mexico.
Latin American Practice
Coordination of all types of legal matters in Latin America on behalf of clients including,
trade, Investments, mergers and acquisitions; Crisis Management; Analysis of national business
climates In Latin America; Project planning and structuring; Mergers and Acquisitions;
Divestitures; Risk assessment and financing.
The Firm has been active In Latin America for over four decades. We recently participated
In drafting a set of export laws for Paraguay. In addition, our attorneys are frequently Involved In
numerous corporate finance deals, representing banks, underwriters and Issuers.
The Firm has had a dedicated Latin America Group since 1990, which Includes attorneys
fluent In Portuguese, English and Spanish. In addition to our core group of corporate, banking
and project finance lawyers, our Latin America practice utilize the firm's experience In many other
practice areas¡ including tax, Sarbanest-Oxley and governance¡ bankruptcy-restructuring,
technology, intellectual property, litigation-arbitration, regulatory Investigation and enforcement,
structured finance, antitrust and real estate. Over the years we have developed working
relationships with specialists in most fields In the most significant cities In Latin America that
assure a prompt, efficient and timely response to the legal needs of our clients.
litigation
Today's legal and regulatory environment is one in which litigation can threaten a
company's very existence. Our Firm has extensive experience with such large-scale¡ "bet-thecompany" matters, and we are recognized for our ability to handle our clients' most critical
litigation issues. The firm can rapidly assemble a focused, Integrated and efficient team to
address all Important aspects of a client's problem and to handle numerous cases in multiple
jurisdictions and forums.
11
n~)
" ;. 4
.1
Filed 10/23/09 Page 23 of 38
Our attorneys have experience in numerous industries, including Banking; Energy;
Financial services; Health Care, Insurance; Manufacturing; Mortgage; Pharmaceutical; Real
Estate; Retail; Technology; Commercial dispute negotiation for settlement; Commercial and civil
litigation; Criminal proceedings; Administrative appeals against government rulings; Arbitration
and conciliation proceedings; Domestic and international enforcement of foreign judgments;
Assistance for defense against foreign claims; Conflict of laws; Judicial review petitions on court
and administrative judgments; Bankruptcies and suspension of payments, alternate dispute
resolutions and agrarian.
Maritime
Charter parties and marine insurance; Tourism-related projects: marinas, fishing charters,
etc.; Ship building and sales; Registrations and license; Maritime liens; Law of the Sea Issues.
Mergers & Acquisitions
Bryan is a recognized leader among Mexican law firms involved in mergers and
acquisitions and other major transactions in Mexico. The fact that we have 10 offices in the
major Industrial and financial centers in Mexico have allowed us to maintain a position of
leadership in this field.
We frequently advise many of the largest corporations worldwide, Mexican and foreign
banks and other financial institution in mergers and acquisitions, and we also represent many
small clients that due few similar transactions during their corporate life. We provide the same
experience, know-how, ingenuity and dedication to all matters regardless or size in which the
firm is involve.
The scope of services that Bryan provide allow us to provide our clients with kindly and in
timely efficient matter and coordinate advise In all areas of Mexican law involved, including, but
no limited to:
Finance
Foreign Investment Registry Approvals, if required
Corporate compliance requirements, if any,
Environmental and sustainable growth
Labor and Employment issues
Antitrust and Unfair business practices
Rea i Estate
Tax
12
t) :7
K~~
Filed 10/23/09 Page 24 of 38
Mining & Natural Resources
Preparation and negotiation for applications to obtain exploration, exploitation and
processing concessions; Compliance with regulatory requirements; Structuring of secqridary
petrochemical projects, aquaculture, and wood and paper processing enterprises; Venture capital
financing and foreign investment; Structure related to natural resource use; Preparation and
negotiation of technology contracts related to natural resource processing; Lease contracts for
equipment and machinery.
Outsourcing
This Practice Group has been advising clients in all aspects of their projects, principally
commercial, financial and industrial for over 35 years throughout all Mexico and Latin America,
including the corporate, tax, international trade and governmental approval processes of the
appropriate legal structure, and their acquisition and divestiture. We advise in vendor selection
screening, drafting and negotiation of the required' agreements; post-closing work and
termination thereof.
The firm has several former Managers of Facilities of Multinational clients working full time
in these matters.
Pension Funds
The firm has developed a team of corporate and tax lawyers, accountants and auditors
who have been became specialized in advising non-Mexican pension funds, however they might
be called, in order to take advantage of the Mexican Income Tax treatment when they are
incorporated in a country with whom Mexican has signed a Treaty to Avoid Double Taxation, in
their real estate acquisitions, sales, divestitures, constructions, all other Improvements, projects
and developments etc., whether they be residential, commercial, industrial or tourism.
Real Estate (including Agrarian Law)
Industrial, commercial and residential purchases and leases; Trust structuring for border
and coastal restricted zones; Title search and analyses of prior land use; real estate acquIsition,
transfer and property taxes, their negotiation and litigation; Preparation and negotiation of
purchase agreements; Representation in quiet title actions and adverse possession proceedings;
Structuring for development projects; Industrial, tourism, commercial, and residential
construction and engineering contracts; Mortgage and other real estate finance and Zoning
Issues. All Issues pertaining to and processing privatization of Ejídos.
The Firm is well known for advising and representing its multinational clients in their
industrial, residential, commercial and tourism acquisitions, divestitures and projects and
developments throughout Mexico. Many of the clients of the firm are Pension (or however they
might be called) Funds who take advantage of the favorable Mexican Income Tax treatment when
13
ti r) ('~
,,) Iv J
Filed 10/23/09 Page 25 of 38
they are incorporated in a country which has signed a Treaty to Avoid Double Taxation with
Mexico and are registered with the Mexican IRS.
The firm was counsel to the United States Department of State in the first-ever permit for
a Foreign Government to beneficially acquire real-estate outside Mexico City and most recently in
structuring the acquisition of 252 square miles of land including 40 miles of beach front, for a
tourism development in Baja California Sur.
Sports
Bryan has advised individuals in their contracts with teams in Mexico and throughout
Latin-America for over 25 years and in their sponsorship Agreements and disputes and foreign
teams in their acquisition and/or sale of players, and in their disputes. The firm has advised in
the financing of stadiums in Mexico and has procured Mexican Visa's for players, trainers and
referee's.
Tax
Bryan offer a broad based of services because of our experience of all aspects of tax law in
Mexico in international transactions, specially with those 40 countries with who Mexico has
executed Tax Treaties to Avoid Double Taxation. Our purpose is to provide value-added solutions
in this field.
We have experience in Income Tax and its refunds; Value Added Tax and its refunds; Flat
Tax and its refunds and Social Security Tax and its refunds; Employee Housing Fund Tax and its
refunds, and the Payroll Taxes in all the 31 States plus Mexico City and in their litigation, as welL.
We also have a recognized position in matters of Import Duties which in Mexico are part of the
Income Tax structure and in their litigation.
We frequently carry out Transfer Pricing Studies and negotiate profits factors with the
Federal Government and participate in their international implications.
In order to provide the best tax service in the most expedite and efficient manner to our
clients, we have a Team of expert attorneys, accountants, auditors and economists reading able
to service the needs in all of our offices at any point in time, in a bilingual and international
business environment.
Also, we are very active in Income tax matters of foreigners and foreign companies in and
all aspects of Permanent Establishment of foreign entities.
We also have a great deal of experience in tax planning including transfer pricing, tax
credits, .intercompany pricing agreements; Mexican accounting, work that is considered tax
exempt, tax audits, certifications for international trade, importations and Mexican social
security; All aspects of litigation in this field, mediation and negotiation with the Federal, State
and/or Municipal Governments, real estate acquisition and properties taxes, their negotiation and
14
024
Filed 10/23/09 Page 26 of 38
litigation, and all aspects derived from the Treaties to Avoid Double Taxation, including the use of
Pension or Retirement Funds (however they might be called) in their real estate investments in
Mexico.
Tourism
Preparation of time-sharing contracts and regulations for time-share companies;
Structure of joint ventures and foreign investment projects related to tourism (hotels,
condominiums, shopping centers, airports, marinas, etc.); Infrastructure development;
Representation before regulatory authorities; Negotiation regarding coastal and other specialized
land-use zones; Preparation of operational gUidelines related to tourism and consumer protection
issues. These attorneys work very closely with our Real Estate experts.
T ra nsportati on
Equipment and license permit applications; Structure of private truck fleet acquiSition and
operation; Joint venture structure for public works subcontracting projects relating to
transportation; Cross border shipping operations.
White Coilar Crime and Corporate Investigations Practice - Mexico and Latin Arnerica
The White Collar Crime and Corporate Investigations Practice of Bryan has had a great
deal of experience in representing multinational companies, boards of directors, management and
shareholders in connection with all kinds of investigations from the governments of Mexico and
most others in Central and South America, enforcement procedures internal investigations and
white collar regulatory and/or criminal investigations. In several of these cases litigation
occurred. Bryan has assisted its international clients in all actions, responses and procedures
derived there from.
The Practice Group comprises over 20 attorneys, Accountants, Auditors, former bankers,
forensic accounting experts, etc., in our offices throughout Mexico and the United States and our
affiliates throughout Latin America, and has been active for more than six years.
Bryan has both filed and processed civil and criminal claims against former officers and
employees of its clients and defended and participated in the defense of its multinational clients,
their board of directors, senior officials and management against claims from Mexican, Latin
American, European and United States federal and state enforcement authorities, in all their
phases.
Bryan has been retained many times to conduct internal investigations of purported
illegalities, in the accounting, purchasing, shipping and invoicing issues and has worked and
coordinated efforts with regulatory agencies and authorities all over the world.
15
n"lJø.~~
Filed 10/23/09 Page 27 of 38
OFFICE LOCATIONS
444 Madison Avenue, Suite 805
Merrill Lynch Building
701 B Street, Suite 228
New York, NY 10022 USA
TeL.: +1 (212) 355-5400
San Diego, CA 92101 USA
Fax: +1 (212) 355-5999
TeL.: +1 (619) 233-0000
newyork(gbryanlex. com
Fax: +1 (619) 230-8800
sandieg o(g brya n lex. com
EdifiCio CNCI
Av. Batallól1 de San Patricio 109 Sur
Pi so 17, Valle Oriente
Calle Séneca 425, Polanco
11560 Mexico, D.F., México
66240 San Pedro Garza García,
TeL.: +52 (55) 5279-3600
(Monterrey), N.L., México
Fax: +52 (55) 5279-3610
TeL.: +52 (81) 8048-4500
mexi CO(g bryanlex. com
Fax: +52 (81) 8048-4509
monterrey(gbryanlex. com
Centro Corporativo Centura
Blvd. Agua Caliente 10611, 3er. Piso
22420 Tijuana, Baja California, México
Calle Lilas 7
87330 H. Matamoros, Tamaulipas, México
TeL.: +52 (664) 686-4924
TeL.: +52 (868) 813-6000
Fax: +52 (664) 686-1984
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US Mailing Address: P.O. Box AA
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tij uana (gbryanlex. com
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Suite #464
Brownsville, TX 78520
matamoros(g bryan lex. com
Edificio González Elizondo
Calle Ortiz Rubio 801-11
Av. Ejército Nacional 6515
Col. EI Marqués
32607 Ciudad Juárez, Chihuahua, México
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TeL.: +52 (899) 922-7101
Fax +52 (899) 922-7105
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U.S. Mailing Address:
PMB 119 4009 N. 23rd. St. Suite B
McCallen, TX 78504-4104
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EI Paso, TX 79948-1501
bryanjrZ(gbryanl ex .com
reynosa (g bryan lex. co m
Calle Presa el Gral1ero No. 2108
Col. Lomas del Santuario
Calzada Independencia 1211-C
31250 Chihuahua, Chihuahua, México
Centro Cívico
TeL. +52 (614) 430-0076
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P.O. Box 2028
Calle Madero No. 2054
Calexico, CA 92232
Col. Centro
23000 La Paz, BCS, México
TeL.: +52 (612) 123-3000
m exica Ii (Qì brya n lex. com
Fax: +52 (612) 122-4932
lapaz(g bryan
Plaza Villas del Sol, Suite 4
lex .com
Blvd. Lázaro Cárdenas sIn,
el 31 de Marzo y Bordo
Wells Fargo Plaza
Col. Centro
23456 Cabo San Lucas, BCS, México
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cabo(gbryanlex.com
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EI Paso, TX 79901 USA
TeL.: +1 (915) 351-9300
Fax.: +1 (915) 351-9500
www.bryanlex.com
17
026
Filed 10/23/09 Page 28 of 38
HOURLY RATES
TIJUANA
DOLLARS
ATTORNEY
RATE
149 JUDITH ANNETTE WILSON MOLINA
$ 250.00
170 ESTELA BAÑUELOS SALAZAR
$ 175.00
176 FERNANDO DE LA GARZA MARTINEZ
$ 195.00
235 CLEMENTE PAREDES HERREJON
$ 150.00
457 FRIDA GARCIA MARIN
$ 195.00
515 LAURA FIERROS ALDAMA
$ 150.00
517 JESUS VARGAS FLORES
$ 300.00
529 RAFAEL DUEÑAS MARTINEZ
$ 150.00
530 MITCHELL ALVAREZ LÓPEZ
$ 150.00
544 JESUS EFRAIN MEJIA CERVANTES
$ 150.00
546 CHRISTIAN LIMON GARCIA
$ 195.00
550 HECTOR BERRELLEZA PALMA
$ 160.00
583 FRANCISCO GARCIA CACERES
$ 250.00
$ 240.00
581 JOSE M. RAMIREZ BILBAO
PARALEGALS
RATE
539 EMMANUEL AGUILAR IZQUIERDO
$ 65.00
582 ALBERTO JOEL SANCHEZ CRUZ
$ 65.00
027
Filed 10/23/09 Page 29 of 38
EXHIBIT II 2 II
0.0 (XP)
Filed 10/23/09 Page 30 of 38
Bryan, González Vargas & González Baz, S.C.
Abogados
Av. Ej;~;~~ti~¡;-i~:~¡~i;~~;~~~o; 6515
Edif¡CiO c:r-cr
Carle Séneca No. A-25, PG~?nco
32607 Cd. 1u¿rez~ Chih'l Méxko
Av, 6at¿;îión de San Patricio No. 109
Fiso 17, Vaile Oti(~r:te
TeL. ~. 52 (6S6) 6A9..6500
~':,(;.i .;. 52 (556) 649"ÓS44
66240 San Pedro Garza Garda
11560 Méx1cQ, O.f., Méxko
'reI. ., 52 (55) 5279..3600
(Montene'ds N.Li Mexico
Fax + 52 (55) 5279-3r~10
mexico(E-1:bryan lex .com
~.(), Sox i 501
Tei. .~. 52 (81) 8048-4500
Ei t'è3;~(): TX 79948~1501
Fax + .52 (81) 8048.4509
Calle U!as No.7, Colonia Jardin
t;iy l) nj ,'z(ç~ l.l:ya:: i ex. cü:n
mon te!'reyi~b;,y a !'lex. con;
87330 H. Matamorosi Tamps'f Méxìco
C¡:¡lle Pre,;Ç¡ dei G:l;.ne;o No. 210B
EdifiCic Gonzáiez Elizondo
V~x + 52 (868) 013..7000
Colonia Lomas dei Saritu::rio
He Ortli. Rubic 301-H
88501 Reynosa, Tamps,s Méx.ic;o
TeL. ., 52 (899) 922-7101
rr;lit"¡i inoros(q;t)ryan lex ,C(.)n1
.T:.:;L. ., 52 (368) fH3-6000
31250 Chihuahua, Chih.( México
TeL. .. 52 (614) 430..0076
Fox l' 52 (514) 43U-OU79
ch ih ua h u a I§ brya n lex.c
(¡"H,;: ~"¡at1f.~ro No. 20S4, Of,Ci:'h1 F
l'1cAH.e¡), T".. 78504-41u4
r ey:,w.::a E~~ brya:,1 Ii-~x ,('.,Hn
444 i~1ad¡son Avenue, Suite 80S
New York, NY 10022 USA
TeL.; 1 (212; 355-5400
Fax .~'L (212) 355..5999
23000 La Paz( B.C.S., México
.'re!. .; 52 (612) 123..3000
fax .¡. 52: (612) 122--\"932
Blvd. AgUE Canent;.; No. 10611..303
ia pa,Z(g'bryanlsK. com
TeL. ~ 52 (664) 6S6-4924
~~!"na V¡¡l(;s i.1ei Sol, Suite 4
Brownsville, TX 78523
Fax .;. 52 (B99) 922.7105
PI'1ß 1194009 N. 23rd. St". Suite 6
COi. C~nrr6
Blvd. Lá2eiro Cárd;:nas sfn,
('/31 fie l'1ar2.0 t Borde, Cole:,ia Cøntro
23456 Cabo Si'1f'l Lucas, a.c.s.( MéxÍf..~o
P.O. Box 4978
(a
Cs!"tro Ccrporat¡vo Centura
ne-wyorki,~) bryan ¡ex .con)
22420 Tijuana, B.C., México
f;1errHi ¡..y:ict: ßl!j¡d~nÇJ
Fax., 52 (664) 686..1984
San Diego, CA 92101 USA
P,D.Box AA
Chida Vista, CA 91912
tljUana t.91bryai1Iex. corn
Tel. g. F,.nc + 52 (624) 1.43-8282
'701 e. Stn=:el", SU1t;-: 22B
TeL +1 (619) ~,:33..00G()
F;jx +1 (619) .DQ..8S0Ü
sandiegc(Qbj'yaniex .com
Calzada Inde¡:endencía No. 1211-C
catio~tPb:yan¡ex .C0l11
Centro Ch.'ico
21000 MexícaH, a.c'J Méxi(;o
TeL & Fax .¡. 52 (686) 582-3680
meKica¡¡j"1bryanhax .com
www.bryanlex.com
July 20, 2009
Mr. David A. Gill
Receiver in the matter of Securities and Exchange Commission vs. Diversified Lending Group,
Inc., et al.
2029 Century Park East, Third Floor
Los Angeles, CA 90067
DAGCCdqdk.com
Re: Engagement Letter
File: P-31-a
Dear Mr. Gill:
We would like to provide you with our engagement letter setting out the terms in which this Firm
will represent and provide legal services to David A. Gil, a Receiver in the matter of Securities
and Exchange Commission vs. Diversified Lending Group, Inc., et al. and how our biling and
other procedures to this respect will be handled. We would appreciate your reading this letter
and returning a signed copy to us.
Our services will include (i) providing an opinion with respect to the status and validity of certain
mortgage agreements relating to properties located in San Felipe, Baja California, Mexico and
all
legal advice and work necessary to perfect and/or enforce same, and (ii) providing an opinion
with respect to securing 50% interest on a certain condominium located in Cancun, Quintana
Roo, Mexico and all
legal advice and work necessarytodocument same under Mexican law.
Furthermore, our engagement may be extended to ~nclude litigation services. However,
separate arrangements must be agreed to for those services.
EXHIBIT II i.))
Of!8
Filed 10/23/09 Page 31 of 38
Abogados
Mr. David A. Gill
Inc., et al.
July 20,2009
Page 2. '
To provide the services described above, we wil require a retainer in the amount of
US$10,000.00 Dollars, which shall be paid upon court approval of this agreement.
For our services you will be biled in accordance with our standard biling rates established by
this Firm for the attorney involved in the matter; these range from $150.00 to $300.00 Dollars per
hour depending on the lawyer in care of the case. These billng rates are as of the date of this
letter, and if they were to be increased during our engagement we wil advise of such
beforehand, in which case you should be biled at the increased rate for work performed after
the effective date of the increase.
During the course of our representation, it may be necessary for this Firm to incur into certain
costs and expenses on your behalf, such as copying, long distance telephone calls, fax service,
etc., that may be required in the attention to your matters; these costs would be biled to you with
our monthly charge for services. In that regard, we require you to prepay travel expenses,
governmental duties, etc.; therefore, we wil appreciate receiving US$2,000.00 Dollars to be
handled as a revolving fund for expenses.
It is a policy of this Firm to bil our clients monthly for services performed and costs incurred
during the preceding month. Notwithstanding, in light ofthe fact that payment of our fees is
subject to approval by the District Court for the Central District of California, located in the City of
Los Angeles, California, United States of America, you agree to apply to the court approximately
every six months for approval of the total amount of fees accumulated thereof. Unless you were
to have a question or objection to said billing, we kindly request that payment be due
made
immediately upon approval by the referenced District Court. If payment is not timely
following court approval of payment of fees and costs, we may charge interest for delayed
payment at the rate of 2% per month and/or we may have to withdraw from the matter.
You may dismiss us from our engagement at any time, provided that unless and until you
provide written notice of our dismissal we will continue to perform the services in the terms
described in this letter. We may withdraw from our representation in the matter, if the proper
payment is not remitted in a timely manner after court allowance of fees and costs, or if we
determine it is necessary for any reason set forth under Mexican law and practice pertaining to
professional ethics and responsibility for the attorney's withdrawal from representation of client.
Upon a dismissal or withdrawal, we will have no further obligation to you. You wil be entitled to
all files, records, and documents in this Firm's possession relating to your matters upon payment
of all legal fees, advanced costs and expenses incurred in your behalf including all costs and
expenses incurred by this Firm in retaining copies of such documents for our permanent files.
This engagement agreement and the services hereunder are rendered exclusively in the
Mexican territory and any meeting. with client abroad wil be conducted exclusively on a
promotional basis and will have the purpose to obtain information for the services to be rendered
for client in Mexico.
029
Filed 10/23/09 Page 32 of 38
Abogados
Mr. David A. Gill
Inc., et al.
July 20, 2009
Page 3.
The parties acknowledge that this agreement is subject to court approval by the District Court
located in the City of Los Angeles, California, United States of America; therefore, the parties
agree that to enforce any provision of the agreement, the United States District Court for the
Central District of California shall retain jurisdiction.
If the terms of this letter are acceptable, please sign a copy of same and return it to us.
Respectfully,
BRYAN, GONZALEZ VARGAS Y GONZALEZ BAZ, TIJUANA, S.C.
Lic. Judith A. Wilson
Approved and Accepted:
By:
Mr. David A. Gill, solely in his capacity
as Receiver
Date:
030
Filed 10/23/09 Page 33 of 38
EXHIBIT II 3 II
0.0 (XP)
Filed 10/23/09 Page 34 of 38
BRYAN, GONZALEZ VARGAS & GONZALEZ BAZ, S. C .
CENTRO CORPORATIVO CENTUR
BLVD. AGUA CALIENTE 10611-303
22420 TIJUANA, B. C., MEXICO
P.O. BOX AA
CHULA VISTA, CA 91912 USA
Ll?
September 17, 2009
Billed through 09/17/09
BILL NUMBER ESP TJ 14 / 2009 149
DANING, GILL, DIAMOND & KOLLITZ, LLP
2029 CENTURY PARK EAST, THIRD FLOOR
LOS ANGELES, CA 90067
ATTN: DAVID A. GILL
RE: GENERA COUNSELING
08/03/09 546
08/03/09 546
08/03/09 546
DIVERSIFIED. Telephone conference with Shelly
Panta re documents available on mortgage
loans. Telephone conference with client re
services to be rendered. (Work performed on
July 17, 2009)
0.32 hrs
DIVERSIFIED. Telephone conference with Lahia
representative in Cancun re final deed for
Mr. Appel's condominium. Telephone conference
wi th Notary Public's office re same.
Electronic correspondence to client re same.
(Work performed on J~ly 31, 2009)
0.80 hrs
DIVERSIFIED. Telephone conferences with
Notary Public in Cancun regarding missing
pages on Mr. Appel's deed for Lahia
condominium. Review information for such
$ 62.40
$156.00
purpose.
08/03/09 546
08/05/09 546
0.60 hrs
DIVERSIFIED. Go to Public Registry and search
recordings (liens) on San Felipe property.
1.40 hrs
CANCUN PROPERTY. Review and analyze deed for
condominium in Cancun and terms of Mr.
Appel's ownership trust. Prepare report on
EXHIBIT
$117.00
$273.00
II "ì)
031
Bill number
08/17/09 546
08/18/09 546
Filed 10/23/09 Page 35 of 38
ESP TJ 14 / 2009
Page 2
options to transfer 50% interest to Receiver.
2.37 hrs
MEXICAN MORTGAGES. Review and analyze
documents provided in box by client.
3.45 hrs
MEXICAN MORTGAGES. Continue review and
analysis of documents provided in box by
$462.15
$672.75
client.
08/19/09 546
08/21/09 546
2.30 hrs
MEXICAN MORTGAGES. Continue review of
documents provided in box by client.
Telephone conference with Mexican Notary
Public re Mexican mortgages. Work on opinion
to client re same.
3.68 hrs
MEXICAN MORTGAGES. Work on opinion letter to
client re Mexican mortgages.
1. 97 hrs
08/25/09 546
$448.50
$717.60
$384.15
CANCUN CONDOMINIUM. Electronic correspondence
and telephone conference with Trustee bank
representative re signing to authorize a lien
on trust for condominium. Electronic
correspondence to client re same.
08/26/09 546
08/26/09 546
09/07/09 546
0.83 hrs
MEXICAN MORTGAGES. Work on and finalize
opinion to client re Mexican mortgages over
San Felipe properties. Send same to client.
3.60 hrs
CANCUN CONDOMINIUM. Telephone conference with
Notary Public re costs for placing a lien on
trust for condominium. Work on opinion to
client re same.
0.48 hrs
CANCUN CONDOMINIUM - Work on opinion re
status and transfer of interest in Cancun
$161. 85
$702.00
$93.60
condominium. Electronic correspondence with
09/11/09 546
Cancun public registry of property re costs
for recording transfer.
2.38 hrs
CANCUN CONDOMINIUM - Work on opinion to
client re options to transfer of 50% interest
in Cancun condominium.
1. 75 hrs
09/15/09 546
$464.10
$341.25
CANCUN CONDOMINIUM - Telephone conference
wi th trustee bank representative re ownership
trust status and current fee schedule. Work
032
Bill number
Filed 10/23/09 Page 36 of 38
ESP TJ 14 / 2009
Page 3
on opinion to client re options to transfer
interest.
1.31 hrs
CANCUN CONDOMINIUM - Finalize opinion to
client re options to transfer 50% interest in
09/17/09 546
$255.45
Cancun condominium.
TOTAL FEES
(US DLLS)
2.51 hrs
$489.45
29.75 hrs
$5,801.25
BILLING SUMMARY
546 LIMON, CHRISTIAN (TJ)
TOTAL FEES
29.75 hrs
(US DLLS)
I.V.A / V.A.T
TOTAL CHARGES FOR THIS BILLS (US DLLS)
$5,801.25
$5,801.25
$580.13
$6,381. 38
033
Filed 10/23/09 Page 37 of 38
1 PROOF OF SERVICE
2 I, Patricia Morrs, declare:
3 I am employed by the law firm ofDANING, GILL, DIAOND & KOLLITZ, LLP, in
4 of
the County of Los Angeles, State of California. I am employed in the offce of a member of the bar
this cour at whose direction the service was made. I am over the age of 18 years and am not a
pary to the within action. My business address is 2029 Centur Park East, Third Floor, Los
5 Angeles, California 90067-2904.
6
On October 23,2009, I served the followin.E_ document(s): NOTICE OF MOTION
7 AND MOTION OF RECEIVER FOR AUTHORITY TO EMPLOY AND PAY
BRYAN, GONZALEZ, VARGAS & GONZALEZ BAZA S.C. AS SPECIAL
8 MEXICAN COUNSEL; MEMORANDUM OF POINT~ AND AUTHORITIES;
AND DECLARATION OF DAVID A. GILL IN SUPPORT THEREOF on the
9 interested parties addressed as follows:
SEE ATTACHED MAILING LIST
10
11 (By Mail) I placed the document for. collection and deposit in the maiL. I am familiar with this
firm's practice for the collection and processing of correspondence for mailing. Under that
12 practice, the document would be placed in a sealed envelope and deposited with the U.S. Postal
Service on that same day with postage thereon fully prepaid at 2029 Century Park East, Third
business. The documents
13 Floor, Los Angeles, Californa 90067-2904, in the ordinary course of
served were placed in sealed envelopes and placed for collection and mailing following ordinary
14 business practices..
15 I declare under penalty of
perjury under the laws of
the State of
California and of
States of America that the foregoing is true and correct.
16
Executed on October 23,2009, at Los Angeles, California.
17
18
19
20
fiCti )n ,Ji
Patricia Morrs
(Type or print name)
I (Signatue)
21
22
23
24
25
26
27
28
-11343453.03 (XPj 25176A
the United
SERVICE LIST
1
2
Filed 10/23/09 Page 38 of 38
Attornen for U.S. Securities Exchani!:e Commission
3 John McCoy, III
Melissa Grant
4 Securities and Exchange Commssion
5670 Wilshire Boulevard 11 th Floor
5 Los Angeles, CA 90036
Inc.
6
7
8
9
Counsel for Relief Defendant~ Tina M. Placourakis
10 Bnan Mueller, Esg._
Mariscal, Weeks, McIntye & Friedlander
11 2901 N. Central Ave., Suite 200
Phoenix, Arzona 85012
12
Defendant
13 Tina M. Placourakis (Pro Se)
8913 E. Calle de 1as :ßrisas
14 Scottsdale, AZ 85255
KurEast
A. Goering
15 714
Rose Lane - Suite 200
16 Phoenix, AZ 85014
17
Chrstian Limon, Esq.
18 Bryan, Gonzalez Va~as & Gonazlez Baz, S.C.
Centro Corporativo Centura
19 B1vd~ Agua Caliente 10611-303
2242u TIJuana, B.C., Mexico
20 P.O. Box AA
Chula Vista, CA 91912
21
22
23
24
25
26
27
28
342417.01 (XP) 25176A

Doc 140 - Receivership of Diversified Lending Group

Transcription

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