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confusion, the Court en banc will review certain of the
actions taken by Lynch and restate certain portions of
the adjudication.
It is undisputed that all of the payments made to
anyone connected with the recovery of the bonds were
made by Lynch. Upon his recovering the bonds, Lynch
took control of them and from the proceeds disbursed a
total of $720,761.19. He made a wire transfer from his
Kidder, Peabody account to Reardon's Kidder account in
the amount of $220,000, leaving Lynch with $500,761.19.
He then paid Reardon an additional $30,950.00, which
made Reardon's total receipts the sum of $250,950.00,
and which left Lynch with $469,811.19.
From the $469,811.19, Lynch paid the law firm of
Groen & Smolow, Esquires, $95,000, and paid an
additional $7,500 in costs. Of the $95,000 payment to
the law firm, Lynch allocated the payment $45,000 for
general services to the estate on behalf of Orlando and
$50,000 for services to him in connection with the
recovery of the bonds. He does not contend that he
should be allowed a credit for the $50,000 payment and
agrees that it is an expense he must bear from his fee.
He does contend, however, that he should have been
given credit for the payment of $45,000. Deducting the
$45,000 payment and the $7,500 payment, Lynch was left
with a total of $417,311.19.
Of the payments made after the wire transfer of
$220,000 to Reardon, the auditing judge disallowed him
a credit of $7,500 because he was unable to itemize
those costs. We find no error in that disallowance.
However, the auditing judge did not allow Lynch any
credits for the payment of $45,000 to Groen & Smolow,
which payment the auditing judge found to be a
legitimate estate expense, and for the additional
payment of $30,950 to Reardon. The auditing judge's
failure to allow Lynch credits for those payments was
error and has affected the total amount of the money
which Lynch must refund to the estate.
In his adjudication, the auditing judge found that
a reasonable fee for Lynch is $401,256.10, or 35% of
the market value of the bonds he recovered. The
auditing judge then "surcharged" Lynch the difference
between $500,761.19 (the amount remaining to Lynch
after the $220,000 transfer to Reardon) and
$401,256.10, for a total surcharge of $99,505.09.
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