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emergency motion for stay pending appeal

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Stephen R. Cochell
The Cochell Law Firm, P.C.
7026 Old Katy Road, Ste. 259
Houston, Texas 77096
Telephone: (713)980-8796
Facsimile: (214) 980-1179
srcochell@gmail.com
Counsel for Jeffrey Baron
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: §
§ Case No. 09-34784-SGJ
ONDOVA LIMITED COMPANY, § (Chapter 11)
§ Emergency Relief Requested
§
Debtor §
JEFFREY BARON’S EMERGENCY MOTION FOR STAY PENDING APPEAL
TO THE HONORABLE JUDGE OF SAID COURT:
Jeffrey Baron (“Baron”) Appellant, files this Motion for Stay Pending Appeal and would
show this Court as follows:
1. On October 26, 2012 this Court entered its Order Granting Trustee’s Motion for
An Order Approving Proposed Auction Procedures [Document No. 878] (the “Order”) which
granted the Trustee authority to sell certain property which presumably include two portfolios of
domain names from Novo Point, L.L.C. and Quantec, L.L.C. to obtain funds for the Estate.
2. Jeffrey Baron seeks a stay pending appeal before this court pursuant to
Bankruptcy Rule 8005. The criteria for a stay pursuant to Rule 8005 are well established. The
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MOTION OF JEFFREY BARON FOR STAY PENDING APPEAL Page - 2
Movant must show: (1) likelihood of success on the merits, (2) irreparable injury if the stay is not
granted, (3) absence of substantial harm to the other parties from granting the stay and (4)
service to the public interest from granting the stay. Hunt v. Bankers Trust Co., 799 F. 2d 1060,
1067 (5
th
Cir. 1986). With regard to the likelihood of success prong, a movant should only have
to present a substantial case on the merits. S.C. of Okaloosa, Inc., 2006 U.S. Dist. LEXIS 57187
(W.D. La. 2006).
3. As this Motion is filed, Mr. Baron has not yet filed his statement of issues on
appeal. Without limiting the issues to be presented on appeal, there are substantial legal
questions presented including, but not limited to whether the Court has jurisdiction over the
domain name or whether the pending appeal of the receivership orders to the Fifth Circuit Court
of Appeals deprives this court of jurisdiction to sell the assets, whether the Bankruptcy Court has
jurisdiction over non-debtor assets (i.e. the domain name portfolios), and whether the court erred
in granting a sale of assets without taking any evidence on the need for the auction, the
commercial reasonableness of the Stalking Horse bid of $4.1 million, the need for a full
valuation of the assets prior to the auction, the marketing plan and adequacy of notice to
potentially qualified bidders in the domain name market, the limitations on type and format
information provided to potential qualified bidders (excluding electronic information), the
excessive escrow amount of $500,000 required for a qualified bidder to be allowed inspection of
a list of 153,000 domain names and then be required to conduct due diligence within the
relatively brief time period allowed between access to the domain name list and the November 9,
2012 auction date, the severe loss that would be incurred if the domain name portfolios were sold
in one “batch” versus sale as individual or smaller groups of domain names over a longer period
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MOTION OF JEFFREY BARON FOR STAY PENDING APPEAL Page - 3
of time, there was no immediate need to sell the domain name portfolios, whether limitations on
expedited discovery deprived Jeffrey Baron of due process, the Stalking Horse bidder is not a
bona fide purchaser and has interfered with discovery in the instant case, and that the value of the
portfolios would not decline if the auction were deferred to later date.
4. The Court has authorized the sale of an asset which does not belong to the Estate
and is the property of a non-debtor.
5. Likelihood of Success. The Trustee did not present evidence at the hearing but
simply relied on the argument of counsel. The Trustee and the Receiver acknowledge that the
Novo Point and Quantec portfolios are property of the Receiver, not the Estate. The Trustee did
not present evidence showing that it had a right to sell the property of a non-debtor, that such a
sale should be conducted outside the ordinary course of business, or that there was a need to sell
the entire group of more than 153,000 domain names this week for the Stalking Horse bid
starting at $4.1 million, rather than sell the domain names in three months, or over a period of an
extended period of time to obtain the fair market value of the estate.
6. Irreparable injury to Jeffrey Baron. As demonstrated in the record of hearing
before the Court, and Jeffrey Baron’s objections to the Chapter 11 Plan and Motion to Strike or
to Continue Auction (Document No. 895, filed under seal) Jeffrey Baron believes that the $4.1
million Stalking bid grossly understates the value of the Novo Point and Quantec portfolios, that
the value of the domain names will not decline over the short term period of six months or a
year. Should the Trustee sell the domain names and it is later determined, as Mr. Baron alleges,
that the Trustee cannot sell the property of a non-debtor, that the auction procedures limited
and/or chilled the number of qualified bidders able to participate in the auction, and/or that the
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MOTION OF JEFFREY BARON FOR STAY PENDING APPEAL Page - 4
conduct of the Stalking Horse bidder interfered and compromised the judicial process leading up
to the auction, Mr. Baron will have no remedy for his loss. Mr. Baron can only be made whole
through the rightful return of the domain names to Novo Point and Quantec.
7. No substantial harm to interested parties. For the same reasons as stated
above, the attorneys and the Estate have little risk of actual loss. Because the domain names
belong to Novo Point and Quantec, the Estate will have suffered no loss as it did not have any
ownership rights in the first instance. Because the value of the domain names will not decline in
the short term, no harm will occur to the Estate.
8. Substantial national importance. This is a case of substantial national
importance. The court is attempting to seize and liquidate tens of millions of dollars in non-
estate assets of a creditor without due process. The liquidation would substantially harm the
creditors of Novo Point and Quantec who will be left without recourse, as well as the taxing
authorities to whom two years past due taxes are due for both entities.
WHEREFORE, PREMISES CONSIDERED, Jeffrey Baron prays that this Court grant
his Motion for Stay Pending Appeal and for such other and further relief to which it may show
himself justly entitled. Request is respectfully made for a ruling on this motion by 9:00PM on
November 6, 2012.
Dated: November 6, 2012
Very respectfully,
/s/ Stephen R. Cochell
Stephen R. Cochell
The Cochell Law Firm, P.C.
Texas Bar No. 24044255
7026 Old Katy Rd., Ste 259
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MOTION OF JEFFREY BARON FOR STAY PENDING APPEAL Page - 5
Houston, Texas 77096
(713)980-8796 (phone)
(713)980-1179 (facsimile)
srcochell@cochellfirm.com
CERTIFICATE OF SERVICE
This is to certify that, on November 6, 2012, a copy of the above was served on all
counsel of record through the Court’s ECF filing system.
! ! ! ! ! !
/s/ Stephen R. Cochell
Stephen R. Cochell
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