When the court-appointed Receiver submitted a fee application for $294,452, Vemma weren’t happy about it.

Back in control of their company following the Receiver’s temporary stint, Vemma argued that Robb Evans & Associates’ (REA) fees were “excessive”.

Rather than the near $300,000 REA had requested, Vemma insisted the cost of the work performed by REA ‘
would be no greater than $100,000
‘.

Judge Tuchi has been deliberating on a decision regarding the requested fees for some weeks now, with a decision finally handed down yesterday.

The decision itself weighs in favor of REA receiving $236,966, a reduction of $57,486.

Perhaps the most interesting excerpt from Tuchi’s decision however, is the detailing of Vemma’s financial woes prior to REA’s Receivership appointment.

Before we get into that, let’s take a look at Vemma’s arguments in favor of reducing REA’s fees.

Two broad arguments in favor of a fee reduction were made by Vemma, with Judge Tuchi shooting them both down.

The Court concluded that the Vemma’s first basis for reducing the award – its attack on the way REA carried out its duties under the TRO – was unavailing.

Vemma contend that REA failed in its duties as Temporary Receiver by ceasing operations of Vemma’s multilevel marketing program and resisting entreaties by its executives to continue operating.

According to Vemma, this action was in error because it did not maintain the “status quo” of the business.

This argument fails.

As the Court noted at the October 21 hearing, the TRO required the Temporary Receiver to preserve, to the extent possible, the status quo of the assets, not to maintain the status quo of the business.

Moreover, as quoted above, the TRO required the Temporary Receiver to make a good faith determination whether it could operate the business “profitably and lawfully, if at all.”

The Court concludes the Temporary Receiver did just that.

It considered the findings the Court had made in the TRO about the operation of the Receivership Defendants prior to August 21, 2015, and the prohibitions against certain business and communication practices that the Order imposed.

From that Order, the Temporary Receiver quite reasonably concluded that it could not “lawfully” operate the business as it had been operated before.

Vemma also urge that the Temporary Receiver’s performance was deficient, and therefore requires a fee reduction, because it did not pay certain or all of the bills outstanding during the pendency of the temporary receivership.

Vemma point out specifically REA’s failure to make payments on the lease for Receivership Defendants’ Tempe headquarters, on the lease for a Kenworth tractor, and on their line of credit with Wells Fargo Bank.

But as REA notes, this picture is deceiving in that
some of these shortfalls or defaults had commenced before the temporary receivership was instituted.

The Kenworth tractor was already one payment in arrears at commencement of the receivership, and the Wells Far

🤖 Quick Answer

What was Vemma's financial condition before the Receiver's appointment?
Vemma was in poor financial state prior to the Receiver's intervention. The company faced significant financial difficulties that necessitated court-appointed oversight through Robb Evans & Associates' Receivership to stabilize operations and manage assets during this critical period.

Why did Vemma dispute the Receiver's fee application?
Vemma contested the $294,452 fee request submitted by the Receiver, arguing the charges were excessive. The company contended that the actual cost of services performed should not exceed $100,000, significantly less than the amount claimed by Robb Evans & Associates.

What was the court's final decision on the Receiver's fees?
Judge Tuchi ruled in favor of the Receiver, awarding $236,966 instead of the requested $294,452. This represented a reduction of $

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