Case 09-23658-EPK Doc 374 Filed 01/04/11 Page 1 of 7

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA
WEST PALM BEACH DIVISION
In re: Chapter 11

QSGI, INC. Case No.: 09-23658-EPK

QSGI-CCSI, INC. Case No.: 09-23659-EPK
QUAL TECH SERVICES GROUP, INC. Case No.: 09-23660-EPK
(Jointly Administered)
Debtor.
_________________________________________/

SUMMARY OF FIRST INTERIM FEE APPLICATION OF

MICHAEL A. KAUFMAN, P.A. AS DEBTOR-IN-POSSESSION’S ATTORNEY

1. Name of applicant: MICHAEL A. KAUFMAN, P.A.

2. Role of applicant: Counsel for Debtors

3. Name of certifying professional: Michael A. Kaufman, Esq.

4. Date case filed: July 2, 2009

5. Date of application for employment: August 17, 2010 [D.E. # 293]

6. Date of order approving employment: September 22, 2010, nunc pro tunc to August 10, 2010
[D.E. # 326]

7. If debtor’s counsel, date of Disclosure of Compensation form: N/A

8. Date of this application: December 31, 2010

9. Dates of services covered: August 10, 2010 to

December 31, 2010

10. If case is chapter 7, amount trustee has on hand: N/A

Fees...

11. Total fee requested for this period (from Exhibit 1) $88,103.00

12. Balance remaining in fee retainer account, not yet awarded ($0.00)

13. Fees paid or advanced for this period, by other sources ($0.00)

14. Net amount of fee requested for this period $88,103.00

Expenses... $29,508.92

15. Total expense reimbursement requested for this period $29,508.92

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16. Balance remaining in expense retainer account, not yet received ($10,000.00)

17. Expenses paid or advanced for this period, by other sources ($0.00)

18. Net amount of expense reimbursements requested for this period $19,508.92

19. Gross award requested for this period (#11 + #15) $117,611.92

20. Net award requested for this period (#14 + #18) $107,611.92

21. If Final Fee Application, amounts of net awards requested in interim Applications but not previously

awarded (total from History of Fees and Expenses, following pages): $N/A

22. Final fee and expense award requested (#20 + #21) $N/A

History of Fees and Expenses

1. Dates, sources, and amounts of retainers received:

Dates Sources Amounts For fees or costs?

10/01/2010 Debtor1 $3,000.00 Costs

10/06/2010 Debtor $7,000.00 Costs

2. Dates, sources, and amounts of third party payments received:

Dates Sources Amounts For fees or costs?

3. Prior fee and expense awards... N/A

Prior Fee Awards Prior Expense Awards

First interim application...

Dates covered by first application: N/A N/A
Amount of fees requested: N/A N/A
Amount of expenses requested: N/A N/A
Amount of fees awarded: N/A N/A
Amount of expenses awarded: N/A N/A
Amount of fee retainer authorized to be used: N/A N/A
Amount of expense retainer authorized to be used: N/A N/A

1 The $3,000.00 was transferred into the Applicant’s Trust Account from Shraiberg, Ferrara & Landau, the Debtors’ prior
attorneys.

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Prior Fee Awards Prior Expense

Awards
Fee award, net of retainer N/A N/A
Expense award, net of retainer N/A N/A
Date of first award: N/A N/A
Amount of fees actually paid: N/A N/A
Amount of expense reimbursement actually paid: N/A N/A
Amount of fees requested but not awarded,
that applicant wishes to defer to final fee application: N/A N/A
Amount of expenses requested but not awarded,
that applicant wishes to defer to final fee application N/A N/A

Fee Application

Michael A. Kaufman, P.A., counsel to the Debtors, applies for interim compensation for fees for services

rendered and costs incurred in this Chapter 11 proceeding. This application is filed pursuant to 11 U.S.C. §330 and

Bankruptcy Rule 2016, and meets all of the requirements set forth in the Guidelines incorporated in Local Rule

2016-1(B)(1). The exhibits attached to this application, pursuant to the Guidelines, are:

Exhibits “1-A” and “1-B”- Summary of Professional and Paraprofessional Time.

Exhibit "2" - Summary of Requested Reimbursements of Expenses.

Exhibit "3" - The applicant's complete time records, in chronological order, by activity code category,

for the time period covered by this application. The requested fees are itemized to the tenth of an hour.

The applicant believes that the requested fee, of $88,103.00 for 308.40 hours worked, is reasonable

considering the twelve factors enumerated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Circuit

1974), made applicable to bankruptcy proceedings by In re First Colonial Corp. of America, 544 F.2d 1291 (5th Cir.

1977), as follows:

The Time and Labor Required: The within summary along with the exhibits attached hereto, details

the time, nature and extent of the professional services of the Applicant rendered by the Applicant on behalf of the

Debtor and for the benefit of the Debtor’s bankruptcy estate during the period covered by this Application. The total

number of hours expended by the Applicant is 308.40. The total amount of hours worked is evidence of the extensive

time dedicated to this matter by the Applicant on a wide variety of legal issues presented in this case throughout the

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period covered by this Application.

The Novelty and Difficulty of the Services Rendered: The issues which have arisen in this case

during the period covered in this Application have demanded a high level of skill and knowledge. The Applicant spent

considerable time researching, review and/or drafting pleadings and documents for the benefit of the bankruptcy estate.

The majority of the time spent on this case consisted of the preparation and amendment of the Disclosure Statement

and Plan as well as time spent on the resolution of the Securities and Exchange Commission’s informal objections to

the proposed Disclosure Statement and Plan of Reorganization, which cost the estate substantial legal fees and costs.

The Skill Requisite to Perform the Services Properly: Throughout the period covered by this

Application, the Applicant has been able to demonstrate substantial legal skills and proficiency in the areas of

bankruptcy law, commercial transactions, debtor-creditor rights, secured transactions and negotiation.

The Preclusion of Other Employment by the Professional Due to the Acceptance of the Case: The

Applicant has dedicated a significant amount of time throughout its representation of the Debtor as set forth in detail

in Exhibit “1”. The Applicant is not aware of any other specific employment which has been precluded as a result of

accepting this case. However, had the Applicant not accepted employment in this case, the time spent on the within

case would have been spent on other matters from which the Applicant would have drawn an hourly compensation on

a current basis.

The Customary Fee: The hourly rate billed by the Applicant as set forth in Exhibit 1 and 2 is $350.00

per hour for Michael A. Kaufman, Esq., and Son K. Le, Esq.; $295.00 per hour for associates and $110.00 per hour for

paraprofessionals, which is customary for professionals and paraprofessionals in the Southern District of Florida of

similar skill and experience for this type of case.

The hourly rates billed by the Applicant for professionals and paraprofessionals are as follows:

Initials Name Hourly Rate

ATTORNEYS
MAK MICHAEL A. KAUFMAN $350.00
SKL SON K. LE $350.00
SML SUSANNA M. LEHMAN $295.00
PEP PAIGE E. PROVENZANO $295.00
PARAPROFESSIONALS
ALR ANA L. RODRIGUEZ $110.00
LW LISA WALKER $110.00

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Whether the Fee is Fixed or Contingent: The Applicant’s compensation in this matter is billed on an

hourly basis subject to a fee application subject to Court approval. The fee can be fixed if the Applicant elects to accept

equity in the Reorganized Debtor upon the Court’s approval of same.

Time Limitations Imposed by the Client or Other Circumstances: The circumstances and issues

surrounding this case imposed serious time constraints on the Applicant due to the necessity for quick and efficient

resolution of significant issues.

The Experience, Reputation, and Ability of the Professional: The Applicant is an established law firm

and is experienced in matters of this kind and is well known to this Court. Michael A. Kaufman, Esq., is admitted to

the bar in Florida, New York and Washington D.C. The Applicant practices bankruptcy law in Florida and New York

on a regular basis. Son K. Le, Esq., is admitted to the bar in New York and Louisiana and has vast experience in

complex bankruptcy matters. Susanna M. Lehman, Esq. is admitted to the bar in Florida. Paige E. Provenzano, Esq.

is admitted to the bar in New York and Florida. The members of the Applicant working on this case are all experienced

in matters of this kind. The Applicant is a reputable firm which has demonstrated ability in the fields of bankruptcy,

litigation and business reorganization.

The Undesirability of the Case: This is not an undesirable case. The Applicant is pleased to have the

opportunity to represent the Debtor and to appear before the Court in this case.

The Nature and Length of the Professional Relationship of the Client: The Applicant had no prior

relationships with the Debtor nor did the Applicant represent the Debtor in any matter prior to this case.

Awards in Similar Cases: Applicant believes that the amount requested by the Applicant is reasonable

in comparison to awards in cases of similar scale and complexity. The compensation which the Applicant requests

comports with the mandate of the Bankruptcy Code, which directs that services be evaluated in light of comparable

services performed in non-bankruptcy cases in the community. The fee requested by the Applicant in the amount of

$88,103.00, reflects an average hourly rate of $285.68 for 308.40 hours of service. Considering the complexity of the

issues addressed during the period covered by this Application, this rate is entirely appropriate.

Michael A. Kaufman, P.A.’s fee arrangement is approximately 1.5% of the shares of stock in the

reorganized debtor or 115% of the actual fees paid one (1) year from the date of confirmation at Michael A. Kaufman,

P.A.’s sole discretion. The Court has not ruled on Michael A. Kaufman, P.A. receiving equity in the reorganized entity

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and the undersigned has not made election of being paid in the way of equity or 115% of fees one (1) year from

confirmation. Therefore, the firm requests 100% holdback of all fees awarded until a final fee application has been

filed upon confirmation of the Plan of Reorganization. The firm requests 100% of all costs expended on behalf of the

Debtors.

WHEREFORE, the applicant seeks an interim award of fees in the amount of $88,103.00 and costs in the

amount of $29,508.92. The Applicant respectfully requests the Court enter an order (1) awarding the sums listed above

with a 100% holdback of the legal fees; (2) authorizing and directing Debtors to pay the Applicant the sum of

$29,508.92, representing the total costs requested by the Applicant during this Application Period, less the sum of

$10,000.00 held by the Applicant in trust and reserved for costs, subject to paragraph one (1); (3) authorizing the

Applicant to utilize the amount of $10,000.00, held in trust by the Applicant for the Debtors, to pay down the total

amount of costs owed to the Applicant by Debtors; (4) directing the Debtors to pay the amount of $19,508.92 (costs

minus funds in retainer for costs) to the Applicant within fifteen (15) days from the date of entry of an Order on this fee

application; and (4) granting such other and further relief as the Court may deem equitable and just.

Certification
1. I have been designated by Michael A. Kaufman, P.A. (the "Applicant") as the professional

with responsibility in this case for compliance with the “Guidelines for Fee Applications for Professionals in the

Southern District of Florida in Bankruptcy Cases” (the "Guidelines").

2. I have read the Applicant's application for compensation and reimbursement of expenses (the

"Application"). The application complies with the Guidelines, and the fees and expenses sought fall within the

Guidelines, except as specifically noted in this certification and described in the application.

3. The fees and expenses sought are billed at rates and in accordance with practices customarily

employed by the Applicant and generally accepted by the Applicant's clients.

4. In seeking reimbursement for the expenditures described on Exhibit 2, the Applicant is

seeking reimbursement only for the actual expenditure and has not marked up the actual cost to provide a profit or to

recover the amortized cost of investment in staff time or equipment or capital outlay (except to the extent that the

Applicant has elected to charge for in-house photocopies and outgoing facsimile transmissions at the maximum rates

permitted by the Guidelines).

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5. In seeking reimbursement for any service provided by a third party, the Applicant is seeking

reimbursement only for the amount actually paid by the Applicant to the third party.

6. The following are the variances with the provisions of the Guidelines, the date of each court

order approving the variance, and the justification for the variance: None

Dated: January 4, 2011 MICHAEL A. KAUFMAN, P.A.

West Palm Beach, Florida Attorney for Debtors

By: /s/ Michael A. Kaufman

Michael A. Kaufman, Esquire
Florida Bar Number: 0628042
1655 Palm Beach Lakes Boulevard, Suite 1012
West Palm Beach, Florida 33401
michael@mkaufmanpa.com – Email
561-478-2878 - Telephone
561-584-5555 - Facsimile

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