18-10509-shl doc 1430 filed 03/06/20 entered …...recorded journal entries to write off inventory...

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WHITLEY PENN, LLP Gary A. Scarborough 3600 N. Capital of Texas Hwy Bldg B, Suite 250 Austin, TX 78746 Accountant to the Chapter 11 Trustee UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

In re: FIRESTAR DIAMOND, INC., et al.

Debtors.1

Chapter 11 No. 18-10509 (SHL)

(Jointly Administered)

FOURTH MONTHLY STATEMENT OF FEES AND EXPENSES OF WHITLEY PENN, LLP,

AS ACCOUNTANT TO THE TRUSTEE, PURSUANT TO BANKRUPTCY CODE SECTIONS 330 AND 331 FOR THE PERIOD

FROM NOVEMBER 1, 2019 THROUGH JANUARY 31, 2020

Name of Applicant: WHITLEY PENN, LLP

Authorized to Provide Professional Services to:

Richard Levin, Chapter 11 Trustee

Effective Date of Retention: 11/7/2018

Period for Which Compensation and Reimbursement is Sought:

November 1, 2019 through January 31, 2020 (“Statement Period”)

Objection Deadline: March 21, 2020

Compensation Sought as Actual, Reasonable and Necessary for Statement Period for all debtors:

$41,677.00

1 The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Firestar Diamond, Inc. (2729), Fantasy, Inc. (1673), and Old AJ, Inc. f/k/a A. Jaffe, Inc. (4756).

18-10509-shl Doc 1430 Filed 03/06/20 Entered 03/06/20 15:03:36 Main Document Pg 1 of 14

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Reimbursement of Expenses Sought as Actual, Reasonable and Necessary for Statement Period for all debtors:

$0.00

Compensation Payable After Objection Deadline (80%):

$33,342.00

Reimbursement of Expenses Payable After Objection Deadline (100%)

$0.00

TIME SUMMARY BY PROFESSIONAL

Name Position Hourly Rate Hours Total Compensation Gary Scarborough Partner $400 35.4 $14,160.00 Steven Chesser Senior Accountant $195 72.0 $14,040.00 Cameron Pollard Staff Accountant $170 76.5 $13,005.00 Cashe Beck Administrative Assistant $115 2 $230.00 Margaret Miller Administrative Assistant $115 2.1 $242.00 TOTAL 188.0 $41,677.00

TIME SUMMARY BY CATEGORY

Billing Category/Company Blended Hours Total Tax Preparation (Firestar Diamond, Inc.) $220.50 91.90 $20,264.00 Tax Preparation (A. Jaffe, Inc.) $222.80 96.10 $21,413.00 TOTAL 188.0 $41,677.00

Attached hereto as Exhibit A are contemporaneously maintained time entries for each

individual providing services for the Statement Period. In accordance with the Order Pursuant to

Sections 105(a) and 331 of the Bankruptcy Code, Bankruptcy Rule 2016 and Local Rule 2016-1

Establishing Procedures for Monthly Compensation and Reimbursement of Expenses of Professionals,


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dated March 29, 2018 (the “Interim Compensation Order”) [Docket No. 82], Whitley Penn LLP

hereby submits this fourth monthly fee statement (the “Fourth Monthly Fee Statement”),

seeking compensation for services rendered and reimbursement of expenses incurred as

accountant to the Chapter 11 Trustee, for the period from November 1, 2019 through January

31, 2020. By this Fourth Monthly Fee Statement, Whitley Penn LLP seeks payment in the

amount of $33,342.00, which is comprised of (i) eighty percent (80%) of the total amount of

compensation sought for actual and necessary services rendered during the Statement Period

and (ii) reimbursement of one hundred percent (100%) of actual and necessary expenses

incurred in connection with such services during the Statement Period.

NOTICE AND OBJECTION PROCEDURES

Notice of this Fourth Monthly Fee Statement shall be given by email or hand or overnight

delivery upon: (a) the Debtors’ counsel, Klestadt Winters Jureller Southard & Stevens, LLP, 200

West 41st Street, 17th Floor, New York, New York 10018, attn.: Ian R. Winters and Joseph C.

Corneau, and Forchelli Deegan Terrana LLP, 333 Earle Ovington Blvd., Suite 1010, Uniondale,

New York 11553, attn.: Gerard R. Luckman; (b) the Office of the United States Trustee, 201 Varick

Street, Suite 1006, New York, New York 10014, attn.: Richard Morrissey; and (c) Baker & Hostetler

LLP, 45 Rockefeller Plaza, 14th Floor, New York, New York 10111-01000, Attn: Jorian L. Rose, (the

“Counsel to Examiner”) (each a “Notice Party” and collectively, the “Notice Parties”).

Objections to this Fourth Monthly Fee Statement, if any, must be served upon the Notice

Parties, and by hand or overnight delivery upon Whitley Penn, LLP, 3600 N. Capital of Texas

Hwy, Bldg. B., Suite 250, Austin, Texas 78746, Attn: Gary Scarborough,, no later than March 21,

2020 at 4:00 p.m. (Eastern Time) (the “Objection Deadline”), setting forth the nature of the

objection and the specific amount of fees or expenses at issue. If no objections to this Fourth

Monthly Fee Statement are received by the Objection Deadline, the Trustee shall promptly pay


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Whitley Penn LLP 80% of the fees and 100% of the expenses identified in this Fourth Monthly Fee

Statement.

To the extent that an objection to this Fourth Monthly Fee Statement is received on or

before the Objection Deadline, the Trustee shall withhold payment of that portion of this Fourth

Monthly Fee Statement to which the objection is directed and promptly pay the remainder of the

fees and expenses in the percentages set forth above. To the extent such an objection is not

resolved, it shall be preserved and scheduled for consideration at the next interim fee application

hearing.

RESERVATION OF RIGHTS

Whitley Penn LLP reserves the right to amend the fees and expense reimbursement

sought herein in the event that a subsequent review of Whitley Penn LLP’s records reveals that

additional professional services were rendered or expenses incurred which were not processed

in advance of this Fourth Monthly Fee Statement. In the event such amendments are required,

Whitley Penn LLP reserves the right to seek such additional fees or expenses in any subsequent

fee applications or monthly fee statements.

Dated: Austin, Texas March 6, 2020

Whitley Penn, LLP

By: ________________________________________ Gary A. Scarborough 3600 N. Capital of Texas Hwy Bldg B, Suite 250 Austin TX 78746 Telephone: (737) 931-8212 Email: [email protected] Accountant to the Chapter 11 Trustee


EXHIBIT A

TIME/EXPENSE RECORDS


Pay Online: whitleypenn.com/makeapayment

February 24, 2020A. Jaffe, Inc.Attn: Richard Levin, Chapter 11 Trustee919 3rd AveNew York, NY 10022

Invoice: 414007 Client: 706856.07____________________________________________________________________________________

Professional services rendered through January 31, 2020:

Corporate 11/11/2019 1120 Preparation Recorded journal entries to write off inventory to cost of goods sold; Populated federal return and then start to enter in the overpayment and extension payment information for the state returns Pollard 4.00 $170.00 $ 680.01

11/11/2019 1120 Preparation Cleared review notes Chesser 1.00 $195.00 195.00

11/12/2019 1120 Preparation Marked all state returns as final year and work on the apportionment percentage for each state Pollard 1.00 $170.00 170.00

11/13/2019 1120 Preparation Corrected state returns to have the correct apportionment percentage and ready for e-file Pollard 0.50 $170.00 85.00

11/15/2019 1120 Preparation Prepared state returns to get them ready for e-file; Created a grouping schedule from the 2019 year end trial balance; Added adjusting journal entries to write off remaining balance sheet items to cancellation of debt; Entered information into tax return

and started to clear diagnostics Pollard 5.00 $170.00 850.01

11/18/2019 1120 Preparation Prepared adjusting journal entries to write-off all balance sheet accounts to cancellation of debt income and distributions; Input into the tax return and get state returns ready to file Pollard 2.75 $170.00 467.51

11/18/2019 1120 Preparation Conference to discuss fixed assets; Cleared review notes Chesser 3.00 $195.00 585.01


Whitley Penn LLPA. Jaffe, Inc. Invoice No. 414007 Page 2____________________________________________________________________________________

11/19/2019 1120 Preparation Cleared diagnostics to file state returns Pollard 0.25 $170.00 42.50

11/21/2019 1120 Preparation Cleared review notes; Updated cost of good sold deduction Chesser 2.00 $195.00 390.00

11/25/2019 1120 Preparation Reviewed adjusted trial balance and compared to client, provided monthly operating reports; Reviewed equity roll forward workpaper; Prepared workpaper review notes; Reviewed state tax returns; Prepared review notes Chesser 5.00 $195.00 975.01

11/26/2019 1120 Preparation Cleared review comments for state tax returns to e-file Pollard 1.50 $170.00 255.00

11/27/2019 1120 Preparation Corrected state returns to flow properly and ready for e-file;

Worked on state tax due and refund spreadsheet to reconcile totax returns

Pollard 3.00 $170.00 510.01

12/06/2019 1120 Preparation Worked on clearing review comments in order to file state returns. Made additional adjusting journal entries to account for April activity Pollard 2.75 $170.00 467.51

12/09/2019 1120 Preparation Made additional adjusting journal entries to accrue for April activity; Updated federal and state returns accordingly Pollard 3.50 $170.00 595.01

12/10/2019 1120 Preparation Worked on state tax matters and related apportionment Scarborough 0.70 $400.00 280.00

12/10/2019 1120 Preparation Closed review notes; Signed off on workpapers; Compared current year state returns to prior year Chesser 4.50 $195.00 877.51

12/12/2019 1120 Preparation Closed review notes Chesser 1.25 $195.00 243.75

12/16/2019 1120 Preparation Consolidated all entities and create consolidated engagement binder and tax return; Worked on reconciling the consolidated tax return to the trial balances Pollard 3.50 $170.00 595.01



12/18/2019 1120 Preparation Worked on consolidated trial balance and matching it to the consolidated tax return; Worked on grouping schedule for reconciliation purposes Pollard 3.00 $170.00 510.01

12/30/2019 1120 Preparation Created eliminating journal entry to eliminate the inter-company transactions; Cleared state e-filing diagnostics in order to e-file Pollard 4.00 $170.00 680.01

01/02/2020 1120 Preparation Final review of accounting and related adjustments to reconcile to monthly operating reports Scarborough 2.40 $400.00 960.01

01/02/2020 1120 Preparation Final review of federal tax return, review of book to tax differences Scarborough 3.20 $400.00 1,280.01

01/02/2020 1120 Preparation Final review of Forms 5472 and related schedules for international reporting Scarborough 1.30 $400.00 520.01

01/02/2020 State Corporation Prep Final review of state returns for CA, FL, HI, IL, KY, MD, MA, MN, NJ, PA, UT, MI and NY Scarborough 2.80 $400.00 1,120.01



01/06/2020 1120 Preparation Worked on tax return matters Scarborough 0.75 $400.00 300.00

01/06/2020 1120 Preparation Conference to discuss tax treatment of various items; Cleared review notes Chesser 6.00 $195.00 1,170.01

01/07/2020 1120 Preparation Conference to discuss consolidation; Updated workpapers and tax return Chesser 4.25 $195.00 828.76

01/07/2020 1120 Preparation Updated the return to a stand-alone entity; Updated the schedule

G and the ownership information Pollard 1.25 $170.00 212.50


Whitley Penn LLPA. Jaffe, Inc.Invoice No. 414007 Page 4

____________________________________________________________________________________

01/08/2020 State Corporation PrepReviewed changes to state returns and related allocations

Scarborough 2.60 $400.00 1,040.01

01/08/2020 1120 PreparationUpdated workpapers and state tax returns

Chesser 3.25 $195.00 633.76

01/09/2020 1120 PreparationCleared review notes; Update workpapers and tax return

Chesser 4.25 $195.00 828.76

01/11/2020 1120 PreparationFinalized return

Scarborough 0.80 $400.00 320.00

01/11/2020 State Corporation PrepFinalized state returns for CA, FL, HA, Ill, KY, MD, MA, MN, NJ,NY, NYC, PA, UT and MI

Scarborough 2.60 $400.00 1,040.01

01/13/2020 1120 PreparationSaved and organized all return files, confirmed all pages, e-file formsand signature pages are correct; Correspondence with client

MillerM 1.00 $115.00 115.00

01/13/2020 1120 PreparationFinalized and sign returns

Scarborough 0.60 $400.00 240.00

01/13/2020 1120 PreparationProcessing multiple state returns

Beck 1.00 $115.00 115.00

01/14/2020 1120 PreparationUpdated address on all federal and state returns

Chesser 0.50 $195.00 97.50

01/15/2020 1120 PreparationE-File.

MillerM 0.10 $115.00 11.50

01/29/2020 1120 Preparation Prepared state returns for paper filings not able to e-file

Chesser 1.25 $195.00 243.7821,213.00



Consulting - Tax 11/13/2019 Tax Consulting Assisted with supporting schedules as requested for NY inquiry Scarborough 0.50 $400.00 200.00

200.00

Current Amount $ 21,413.00

0 - 30 31- 60 61 - 90 91 - 120 Over 120 Balance 21,413.00 (908.95) 0.00 631.65 885.15 22,020.85

DUE UPON RECEIPT Late fees applied on past due balances Please include invoice number with remittance

Remittance Address:640 Taylor Street, Suite 2200 Fort Worth,Texas 76102

[email protected] 817.259.9798


mailto:[email protected]


Pay Online: whitleypenn.com/makeapayment

February 24, 2020Firestar Diamond Inc.Attn: Richard Levin, Chapter 11 Trustee919 3rd AveNew York, NY 10022

Invoice: 414018 Client: 706856.08

____________________________________________________________________________________

Professional services rendered through January 31, 2020:

Corporate11/01/2019 1120 Preparation

Worked on tax return preparation mattersScarborough 0.50 $400.00 $ 200.00

11/18/2019 1120 PreparationWorked on tax return matters and outstanding questions

Scarborough 0.60 $400.00 240.00

11/20/2019 1120 PreparationCreated account grouping schedule and look for any fixed assetadditions; Exported depreciation schedule from the tax softwareand reviewed income statement breakdown for when fixed assetswere liquidated

Pollard 2.00 $170.00 340.00

11/22/2019 1120 PreparationDisposed of all fixed assets in the tax software and generate theForm 4797 for disposal loss; Created federal tax journal entries torecord tax depreciation and for non-deductible expenses; Inputinto the tax return from the grouping schedule and create theSchedule M-3.

Pollard 5.50 $170.00 935.01

12/09/2019 1120 PreparationWorked on reconciling retained earnings and enter into the taxsoftware to generate a federal return

Pollard 2.00 $170.00 340.00

12/09/2019 1120 PreparationWorked on tax matters related to consolidation and state filings

Scarborough 0.85 $400.00 340.00

12/10/2019 1120 PreparationMarked state returns final and update apportionment percentages;Cleared diagnostics in the tax software in order to file all of thestate tax returns

Pollard 3.50 $170.00 595.01


Whitley Penn LLPFirestar Diamond Inc. Invoice No. 414018 Page 2____________________________________________________________________________________

12/11/2019 1120 Preparation Created adjusting journal entries to write-off all balance sheet accounts and liquidation of stock; Input into the tax software and made sure state returns are ready to be e-filed Pollard 4.75 $170.00 807.51

12/12/2019 1120 Preparation Reviewed tax workpapers and federal pro forma return; Prepared review notes Chesser 4.00 $195.00 780.01

12/12/2019 1120 Preparation Rolled forward 2018 engagement binder and enter in activity into the tax software; Worked on reconciling equity accounts Pollard 1.50 $170.00 255.00

12/13/2019 1120 Preparation Worked on Section 263A inventory cost of goods sold calculation; Created federal tax journal entries to reconcile book to tax differences and cleared review comments Pollard 7.00 $170.00 1,190.01

12/13/2019 1120 Preparation Discussed review notes with staff Chesser 0.75 $195.00 146.25

12/16/2019 1120 Preparation Worked on consolidated return and get states ready for their final return; Worked on apportionment allocation between states Pollard 2.50 $170.00 425.01

12/17/2019 1120 Preparation Teleconference with Alvarez and Marsal to discuss 2017 state income allocation Chesser 0.50 $195.00 97.50

12/17/2019 1120 Preparation Closed review notes Chesser 1.50 $195.00 292.50

12/17/2019 1120 Preparation Set up consolidated trial balance and consolidated return in the tax software; Started to work on diagnostics for state e-filing Pollard 2.00 $170.00 340.00

12/18/2019 1120 Preparation Worked on the consolidated trial balance match the tax return; Worked on getting state returns ready to e-file Pollard 1.25 $170.00 212.50

12/19/2019 1120 Preparation Worked on consolidated trial balance and tax return Pollard 1.50 $170.00 255.00

12/30/2019 1120 Preparation Worked on getting states qualified to e-file and clear diagnostics Pollard 2.00 $170.00 340.00



12/31/2019 1120 Preparation Worked on reconciling related party debt and write-offs;

Continued working on federal and state tax returns Scarborough 3.35 $400.00 1,340.02

01/02/2020 1120 Preparation Cleared review notes and diagnostics on the state tax returns Pollard 1.25 $170.00 212.50

01/06/2020 1120 Preparation Worked on e-filing for state returns and clear review notes Pollard 1.75 $170.00 297.50

01/07/2020 1120 Preparation Worked on tax returns and review accounting/adjustments before consolidation Scarborough 1.40 $400.00 560.01

01/08/2020 1120 Preparation Worked on consolidation matters with Fantasy and related reporting Scarborough 1.10 $400.00 440.01

01/08/2020 1120 Preparation Updated consolidated return in software Chesser 5.25 $195.00 1,023.76

01/09/2020 1120 Preparation Reviewed book to tax differences, reconciliation to MOR reports and unconsolidated returns for FDI and Fantasy Scarborough 3.35 $400.00 1,340.02

01/09/2020 1120 Preparation Cleared review notes; Updated workpapers and tax return Chesser 2.50 $195.00 487.51

01/10/2020 1120 Preparation Created pro forma federal return in order to file New Jersey state tax return for the 2016 tax year Pollard 2.00 $170.00 340.00

01/10/2020 1120 Preparation Consolidated federal and state returns; Cleared consolidation e-file diagnostics; Updated workpapers; Updated state returns Chesser 8.00 $195.00 1,560.02

01/11/2020 1120 Preparation Cleared review notes; Updated consolidated filing Chesser 5.25 $195.00 1,023.76

01/13/2020 1120 Preparation Prepared 2016, 2017, and 2018 New Jersey state tax returns Chesser 3.25 $195.00 633.76



01/13/2020 1120 Preparation Saved and organized all return files, confirmed all pages, e-file forms and signature pages are correct; Correspondence with client Miller, M 1.00 $115.00 115.00

01/13/2020 1120 Preparation Reviewed and worked on tax returns, booked to tax adjustments, accounting consolidation and related reporting Scarborough 4.80 $400.00 1,920.02

01/13/2020 State Corporation Prep Reviewed and finalized New Jersey returns for 2016, 2017 and 2018 Scarborough 0.70 $400.00 280.00

01/13/2020 1120 Preparation Finalized and signed returns Scarborough 0.50 $400.00 200.00

01/13/2020 1120 Preparation Processing multiple state returns Beck 1.00 $115.00 115.00

01/14/2020 1120 Preparation Updated address on all federal and state returns Chesser 0.50 $195.00 97.55 20,117.75

Consulting - Tax 11/07/2019 Tax Consulting Teleconference and correspondence with Alvarez and Marsal regarding New York City Department of Finance notice Chesser 0.75 $195.00 146.25

146.25

Current Amount $ 20,264.00

0 - 30 31- 60 61 - 90 91 - 120 Over 120 Balance 20,264.00 16,444.00 (16,421.28) 22.72 931.67 21,241.11

DUE UPON RECEIPT Late fees applied on past due balances Please include invoice number with remittance

Remittance Address:640 Taylor Street, Suite 2200 Fort Worth,Texas 76102

[email protected] 817.259.9798




18-10509-shl doc 1430 filed 03/06/20 entered …...recorded journal entries to write off inventory...

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