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Sullivan & Worcester LLP Announces Court Order Scrutinizing WexTrust Receiver’s Fee ApplicationS&W Press Release, December 16, 2008BOSTON, Mass…On December 15, 2008, in response to objections raised by Sullivan & Worcester LLP attorneys, a Manhattan federal judge issued an Order scrutinizing a fee application by a court-appointed receiver, Timothy Coleman, and his law firm, Dewey & LeBeouf. Together, Attorney Coleman and his firm applied recently for more than $2.2 million in payments for the first 20 days of service, all in August, in which they provided services for a receivership established when the principals of WexTrust Capital, of Illinois, were arrested on fraud charges. The SEC brought a case against WexTrust and its principals, stating that it was the largest “affinity” fraud of its type, targeting Orthodox Jews and raising more than $300 million from more than 1,000 investors. Barry S. Pollack, a partner of Sullivan & Worcester LLP and a former federal prosecutor, represents G&H Partners AG, which had made investments in WexTrust operations and is one of the larger victim-creditors in the receivership. In response to today’s order, Pollack stated, “we are pleased that the Court is questioning the fee application, to which we had raised a strong objection.” Pollack added, “unfortunately, many investors are not represented by counsel so they are not in a position to file objections with the Court. While the SEC chose Mr. Coleman and then remained passive when, as WexTrust’s receiver, he hired his own law firm at the expense of the victim-investors, it still surprises me that the SEC sat back in the face of such an outrageous fee application for just the first 20 days of what has now been four months of work by the firm.” The Order noted that Mr. Coleman had expressed in writing, early on, his intention to undertake the matter as a discounted representation in the public interest and one in which his law firm was willing to offer a discount. Nevertheless, as the Order concluded, there was no discount by his firm on fees for legal services beyond a discount on Mr. Coleman’s own fees. The Order contemplates responses by the SEC and the receiver to many questions raised by the Court. Pollack added, “How Attorney Coleman and the SEC respond, as well as the Court’s final order on the subject, may determine whether victims of WexTrust receive anything substantial from the receivership or whether it will just amount to a professional services’ field day.” ### Contact:
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