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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC.,
MANILA INDUSTRY, INC.,
AND MUNISH KRISHAN
PLAINTIFFS,
v.
JEFFREY BARON AND
ONDOVA LIMITED COMPANY,
DEFENDANTS
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CIVIL ACTION NO. 3:09-cv-0988-L
JEFFREY BARON’S REJOINDER –
REPLIES OF VOGEL AND NOVO POINT AND QUANTEC
(ECF DOCUMENTS 1359 AND 1360)
TO THE HONORABLE SAM A. LINDSAY,
UNITED STATES DISTRICT JUDGE:
NOW COMES, Jeffrey Baron (“Baron”), and hereby files this Rejoinder Replies of
Vogel and Novo Point and Quantec, and for cause would respectfully show:
I.
INTRODUCTION
1. In Case No. 3:13-cv-03461-L (the “Order for Relief Appeal”), on January 2,
2014, this Court entered an Amended Memorandum Opinion and Order. ECF Document 52. In
the Amended Memorandum Opinion, this Court “revers[ed] the bankruptcy court’s June 25,
2013, Order for Relief, and remanded the case to the bankruptcy court for the limited purpose of
dismissal of the involuntary bankruptcy case and consideration as to whether attorney’s fees, or
damages should be awarded under 11 U.S.C. § 303(i).
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2. In the Order for Relief Appeal, this Court entered an order on February 3, 2014,
denying the Motion for Stay Pending Appeal filed by the Petitioning Creditors. ECF Document
62.
3. No Motion for Stay Pending Appeal has been filed in the Fifth Circuit, and there
is no stay pending appeal in effect at this time regarding the Court’s Amended Memorandum
Opinion.
4. In Case No. 3:09-cv-00988-L (the “Netsphere District Court Case”), this Court
entered an Order on January 6, 2014, directing the Receiver to take necessary steps to wind down
and terminate the Receivership created in this case and return all Receivership assets to Jeffrey
Baron (“Baron”) or the entities from which the assets were received by March 7, 2014. ECF
Document 1351.
5. On January 24, 2014, the Receiver filed a Preliminary Status Report and Request
for Scheduling Conference (the “Receiver Report”). ECF Document 1352.
6. On February 4, 2014, this Court directed Jeffrey Baron to file a response to the
Receiver Report on or before February 11, 2014. Mr. Baron timely filed his response. ECF
Document 1356.
7. Novo Point, LLC and Quantec, LLC (the “LLCs”) filed a response to the
Receiver Report on February 3, 2014, and then filed a reply on November 18, 2014 (the “LLCs
Reply”). ECF Document 1360.
8. On February 14, 2014, the Receiver filed a Corrected Reply Concerning
Responses of Jeffrey Baron, Novo Point, which Mr. Baron did file.
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9. This Rejoinder responds to the Vogel Reply and the LLCs Reply, and will dispel
any questions regarding the issues raised in said replies regarding the disposition of the LLCs
and their assets.
II.
BACKGROUND
1. On November 24, 2010, the District Court in the captioned case entered an order
establishing a receivership over the assets of Jeffrey Baron (“Baron”) (the “Receivership
Order”), and appointed Peter S. Vogel as the receiver (the “Receiver”).
2. Pursuant to the Receivership Order and subsequent orders of the District Court,
Peter S. Vogel, as a receiver, took control over and possession of the personal assets of Baron,
including his assets exempt under Texas law (the “Baron Personal Assets”).
3. Pursuant to the Receivership Order and subsequent orders of the District Court,
Peter S. Vogel, as a receiver, took control over and possession of numerous entities (the
“Entities”), including, but not limited to, the following:
Village Trust, a Cook Islands Trust
Novo Point, LLC (“Novo Point”), a Cook Islands LLC
Quantec, LLC (“Quantec”), a Cook Islands LLC
Equity Trust Company IRA19471
Daystar Trust, a Texas Trust
Belton Trust, a Texas Trust
Novo Point, Inc., a USVI Corporation
Iguana Consulting, Inc, a USVI Corporation
Diamond Key, LLC
Quasar Services, LLC
Javelina, LLC
HCB, LLC, a Delaware LLC
HCB, LLC, a Virgin Islands LLC
Realty Investment Management, LLC, a US Virgin Islands LLC
Blue Horizon LLC
Simple Solutions, LLC
Asiatrust Limited
Southpac Trust Limited
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Stowe Protectors, Ltd.
Royal Gable 3129 Trust
CDM Services, LLC
Quantec, Inc., a USVI Corporation
Shiloh, LLC, a Delaware Limited Liability Company
Novquant, LLC, a Delaware Limited Liability Company
Manassas, LLC, a Texas Limited Liability Company
Domain Jamboree, LLC, a Wyoming Limited Liability Company
ID Genesis, LLC, a Utah Limited Liability Company
Domain Jamboree, LLC.
The Baron Personal Assets, the Entities and the assets of the Entities shall hereinafter be referred
to as the “Receivership Assets”.
4. On December 18, 2012, the Fifth Circuit Court of Appeals in a case styled
Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012) (the “Fifth Circuit Decision), vacated the
Receivership, specifically ruling:
“The judgment appointing the receiver is REVERSED with directions to vacate
the receivership and discharge the receiver, his attorneys and employees, and to
charge against the cash in the receivership fund the remaining receivership fees in
accordance with this opinion.”
5. The Fifth Circuit issued a Mandate to the District Court in the captioned case on
April 19, 2013.
6. The Receiver Report, at page 4, indicates that prior to this Court’s dismissal of the
Baron involuntary bankruptcy case,
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the Receiver gave authority to access Baron’s IRA accounts
to the interim Baron Bankruptcy Trustee, Mr. John Litzler, and that Baron’s IRA accounts can be
turned over to Baron by Litzler. Mr. Baron can find nothing in the record that authorized the
Receiver to give such access or authority to Mr. Litzler.
III.
THERE ARE NO ALLEGED DISPUTES

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7. The Court should keep in mind that there is no controversy as to the proper
disposition of Jeffrey Baron’s personal assets. Such assets should be returned to Mr. Baron.
8. As to the LLCs, the Receiver has admitted the following in his Initial Report:
“The Novo Point and Quantec entities are LLCs ultimately owned and controlled
by the Village Trust. In the trust deed establishing the Village Trust it is
incontrovertible that Mr. Baron is identified as both the settlor and the beneficiary
of the Village Trust.”
See Footnote 2 on page 2 of the Receiver’s Initial Report, ECF Document 1352.
9. Thus, by virtue of the Receiver’s own admission, the following matters are
uncontroverted: (a) Jeffrey Baron owns his personal assets and to the extent they are in the
possession of the Receiver or the Bankruptcy Trustee, they can and should be returned to Mr.
Baron by March 7, 2014, or earlier, and the Bankruptcy Trustee and Receiver should quitclaim
any interest they may have in such assets to Mr. Baron; (b) the assets, including cash, owned by
the LLCs and the other Entities are owned by the LLCs and such Entities, and the Receiver and
Trustee simply need to quitclaim any interest they have in and to such assets; (c) the LLCs are
owned by Village Trust, and any interest held by the Receiver in and to the LLCs simply need to
be quitclaimed to the Village Trust, by and through its duly appointed trustee, RPV Limited.
10. As the Court can see from the Assignments and Resolutions attached hereto as
Exhibit “1”, RPV Limited is the current trustee of the Village Trust (the “Village Trust
Trustee”), and is the sole member of the LLCs. Lisa Katz does not have any authority to act on
behalf of either of the LLCs, and the LLC’s current counsel, Christopher Payne, has been
directed by the Village Trust Trustee to withdraw the Reply filed at ECF Document 1390. There
are no corporate documents to the contrary.
IV.
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THIS COURT LACKS SUBJECT MATTER
JURISDICTION TO RESOLVE THE ALLEGED DISPUTES
11. “Federal courts are courts of limited jurisdiction; without jurisdiction conferred by
statute, they lack the power to adjudicate claims.” In re FEMA Trailer Formaldehyde Products
Liability Litigation, 668 F.3d 281, 286 (5th Cir. 2012) (citing Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994)). The Fifth Circuit in Netsphere, Inc. v. Baron 703 F.3d 296,
313-14 (5th Cir. 2012) held that the District Court neither had the jurisdiction to appoint the
Receiver in this case, nor the authority to do so, and then vacated the receivership order.
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12. In the Netshphere v. Baron case, the Fifth Circuit repeatedly held that the District
Court lacked jurisdiction over Mr. Baron’s personal assets and the assets of Novo Point LLC and
Quantec, LLC. Here are a few of the references to the Fifth Circuit’s clear and unequivocal
statements:
“equity does not allow a receivership to be imposed over property that was
not the subject of the underlying dispute.” Id, at 306.
“Here, the only assets that were the subject matter of the dispute were the
domain names that were to be transferred under the settlement agreement.
They were transferred.” Id.
“A court lacks jurisdiction to impose a receivership over property that is
not the subject of an underlying claim or controversy.” Id., at 310 (citing
Cochrane v. W.F. Potts Son & Co., 47 F.2d 1026, 1029 (5th Cir.1931)).
“A court has undeniable authority to control its docket but not through
creating a receivership over assets, including personal assets, that were not
the subject of the litigation.” Id. at 311.

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“We conclude that the receivership improperly targeted assets outside the scope of litigation to pay claims of
Baron's former attorneys and control Baron's litigation tactics. This was an improper use of the receivership
remedy. The order appointing a receiver is vacated.” Netsphere, Inc., 703 F.3d at 311.
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“The receivership ordered in this case encompassed all of Baron's personal
property, none of which was sought in the Netsphere lawsuit or the
Ondova bankruptcy other than as a possible fund for paying the unsecured
claims of Baron's current and former attorneys that had not been reduced
to judgment. The receivership also included business entities owned or
controlled by Baron, including Novo Point, LLC and Quantec, LLC.
Although Novo Point and Quantec were listed as parties on the global
settlement agreement, they were never named parties in the Netsphere
lawsuit or the Ondova bankruptcy. We conclude the district court could
not impose a receivership over Baron's personal property and the assets
held by Novo Point and Quantec. Id.
13. Thus, even if there was a dispute regarding the disposition of the LLCs, this Court
does not have jurisdiction over such disputes.
V.
THE COURT SHOULD “STOP THE BLEEDING”
- FEES AND EXPENSES INCURRED BY THE RECEIVER
AFTER THE FIFTH CIRCUIT’S DECISION IN DECEMBER 2012
14. Moreover, the Court would be doing the Receiver a favor by not engaging in the
resolution of these disputes. The Fifth Circuit held in the Netsphere v Baron case as follows:
“We also conclude that everything subject to the receivership other than cash
currently in the receivership, which Baron asserts in a November 26, 2012 motion
amounts to $1.6 million, should be expeditiously released to Baron under a
schedule to be determined by the district court for winding up the receivership.
The new determination by the district court of reasonable fees and expenses to be
paid to the receiver, should the amount be set at more than has already been paid,
may be paid from the $1.6 million. To the extent the cash on hand is insufficient
to satisfy fully what is determined to be the reasonable charges by the receiver
and his attorneys, those charges will go unpaid. No further sales of domain names
or other assets are authorized.”
Netsphere v. Baron, 703 F.3d at 313–14. From a review of the transcript, it appears that the
Receiver and his professionals have already received more than the $1,600,000 that was on hand
as of November 26, 2012, and any additional fees and expenses must go unpaid as mandated by
the Fifth Circuit.
VI.
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THE WIND DOWN OF THIS VACATED RECEIVERSHIP
SHOULD NOT BE DELAYED, AND THE RECEIVERSHIP ASSETS
CAN AND SHOULD BE RETURNED NO LATER THAN MARCH 7, 2014.
15. The Court’s order closing out the Receivership should include the following:
a. The Order Appointing Receiver (ECF Documents 124 & 130), the Order Granting
the Receiver’s Second Motion to Clarify the Receiver Order (ECF Document
150), the Order Granting the Receiver’s Motion to Clarify the Receiver Order
With Respect to Novo Point, LLC and Quantec, LLC (ECF Document 176),
Order Granting the Receiver’s Third Motion to Clarify the Receiver Order (ECF
Document 272), Order Granting the Receiver’s Fourth Motion to Clarify the
Receiver Order (ECF Document 287), Order Granting the Receiver’s Motion for
Order Confirming Appointment of Damon Nelson as Interim Manager of the
LLCs (ECF Document 362) and the Order Granting the Receiver’s Motion to
Appoint Damon Nelson (ECF Document 473) should be vacated.
b. On or before March 7, 2014, the Receiver and the Bankruptcy Trustee should be
directed to take all steps necessary to unfreeze Jeffrey Baron’s exempt property
IRA and other retirement accounts, including, but not limited to, sending letters,
with copies to Baron, to any and all account holders of such accounts notifying
them that neither the Receiver nor the Bankruptcy Trustee claims an interest in
such accounts or in Jeffrey Baron’s assets, exempt or otherwise.
c. On or before March 7, 2014, the Receiver should be directed to appear with Baron
at banks where the bank accounts in the name of Jeffrey Baron exist to remove
the Receiver as a signatory on such accounts and direct the bank to make Jeff
Baron the sole signer on such accounts.
d. On or before March 7, 2014, the Receiver and the Bankruptcy Trustee should be
directed to appear with Baron at banks where the Receivership accounts or
Bankruptcy Trustee’s Chapter 7 accounts exist containing funds belonging to
Jeffrey Baron to close such Receivership accounts and Trustee accounts and
deliver to Mr. Baron cashier’s checks for the amount in such accounts.
e. On or before March 7, 2014, the Receiver and any of his agents who are
signatories on the LLCs bank accounts (including Damon Nelson) should be
directed to appear with an agent duly appointed by the RPV Limited to remove as
signatories the Receiver or any of his agents (including Damon Nelson) on such
accounts and to direct the bank to make such duly appointed agent the sole signer
on such accounts.
f. On or before March 7, 2014, the Receiver and any of his agents who are
signatories on an Entity’s (other than the LLs’) bank accounts (including Damon
Nelson) should be directed to appear with the duly appointed agent for such
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Entity to remove as signatories the Receiver or any of his agents (including
Damon Nelson) on such accounts and to direct the bank to make the such Entity’s
duly authorized agent the sole signer on such accounts.
g. On or before March 7, 2014, the Receiver should be directed to execute the
attached quit claim deed (Exhibit “2”);
h. On or before March 7, 2014, the Bankruptcy Trustee should be directed to
execute the attached quit claim deed (Exhibit “3”) with respect to the Personal
Assets of Jeffrey Baron;
i. On or before March 7, 2014, the Receiver and the Bankruptcy Trustee should be
directed to deliver all other Receivership Assets in their possession or control to
their respective owners.
j. On or before March 7, 2014, the Receiver should be directed to deliver the
following documents to the duly appointed agent for the LLCs or the duly
appointed agent for each of the other Entities as the case may be:
(1) all books and records, including, but not limited to, resolutions,
regulations, minutes, and organizational documents, or any amendments
thereof, of each Entity, including the LLCs;
(2) all other executed agreements, executed documents or executed
instruments between any of the Entities or the Receiver or Damon Nelson,
or any agent or attorney for any of them, on the one hand, and any third
parties;
(3) all documents concerning asset and domain name sales of any of the
Entities, including the LLCs;
(4) all documents concerning any transactions of the Entities, including the
LLCs;
(5) all documents and electronic files and any related software concerning
financial or accounting records related to any of the Entities, including the
LLCs, including, but not limited to, all bank account statements;
(6) all documents concerning complaints (including UDRP disputes)
concerning the LLCs;
(7) all paper and electronic copies of all correspondence, email and
memoranda concerning any of the Entities, including the LLCs, regardless
of whether any privileges are claimed by the Receiver or any agent or
attorney for the Receiver;
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(8) the logins and passwords to all accounts, including but not limited to
servers and email accounts, associated with the LLCs
(9) all electronic data associated with the LLCs including data stored on
remote servers.
(10) All other assets, tangible or intangible, associated with the LLCs.
k. On or before March 7, 2014, the Receiver should be directed to deliver the
following to Jeffrey Baron or his duly appointed counsel:
(1) all bank Statements for all Receivership bank accounts from inception to
date;
(2) copies of any quickbook files or any other financial accounting software
files (including the software programs purchased with Receivership funds)
containing the books and records of the Receiver from inception to date,
including those for Entities;
(3) all paper and electronic copies of all correspondence, email and
memoranda concerning or related to the receivership to Baron, regardless
of whether any privileges are claimed by the Receiver or any agent or
attorney for the Receiver.
(4) a list of all physical assets held by the Receiver, including computers,
software, peripherals, etc.;
(5) to the extent not covered above, every single asset, of whatever kind or
nature, ever received or acquired by, in the possession of, or subject to the
control of, the Receiver;
(6) all of the documents (in paper or electronic form) accumulated by the
Receiver and/or his agents or attorneys during the Receivership, including
correspondence or emails sent and received, in the possession of the
Receiver or any of his agents or attorneys or subject to their control.
l. To the extent the Receiver or any agent or attorney claims a privilege, on or
before March 7, 2014, the Receiver should be directed to deliver to Baron a
privilege log reflecting all correspondence, memoranda, emails, faxes, etc. as to
which the Receiver does claim a privilege. The Receiver shall also provide a list
of professionals or other agents of the Receiver who might retain any of the above
documents.
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m. On or before March 7, 2014, the Bankruptcy Trustee, or any of his agents or
attorneys, should be directed to deliver to Baron all of the documents (paper or in
electronic form) accumulated by the Bankruptcy Trustee and/or any of his agents
or attorneys, during his tenure as the interim or permanent Trustee in Baron’s
chapter 7 case, including emails sent and received, in their possession or subject
to their control. To the extent the Bankruptcy Trustee or any agent or attorney
claims a privilege, the Bankruptcy Trustee should be directed to, on or before
March 7, 2014, deliver to Baron a privilege log reflecting all correspondence,
memoranda, emails, faxes, etc. as to which the Bankruptcy Trustee does claim a
privilege. In addition, the Bankruptcy Trustee shall deliver to Baron a list of
professionals or other agents of the Receiver who might retain any of the above
documents.
n. The Receiver and the Bankruptcy Trustee should be directed to turn over such
documents in an orderly fashion (boxes to be numbered and a summary document
to be prepared identifying the numbered boxes and a description of the contents
within each box).
o. On or before March 7, 2014, as to any operating entities, the Receiver should be
directed to prepare turnover memoranda indicating present status of each such
entity, any upcoming events, payments required, and any other pressing issues of
which the Receiver or his agents are aware.
p. All persons or entities that have been paid in this proceeding to provide services
to the Receiver or the Entities, including but not limited to accounting firms,
domain monetizers and advisors shall fully cooperate with Mr. Baron and the duly
appointed agents of the Entities to facilitate transition of assets, records and
information.
q. Because the Receiver has failed to respond to any UDRP disputes and, pursuant to
his report, has reportedly allowed over 800 disputes to accumulate over the past
three years, it is estimated that a minimum of 12 months will be required for a
staff of three attorneys, working solely on UDRP claim responses, to handle the
backload of 800 claims resulting from the Receiver’s failure to prepare such
responses to any of the claims over the past three years. Accordingly, the Court
should enjoin any UDRP claims from being asserted against the LLCs for a
period of twelve months.
WHEREFORE, Jeffrey Baron would pray for entry of an order winding down the Baron
Receivership that is consistent with the above.
Dated: February 24, 2014
Respectfully submitted,
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/s/ Stephen R. Cochell
Stephen R. Cochell, Esq.
The Cochell Law Firm, P.C.
7026 Old Katy Road, Ste. 259
Houston, Texas 77096
Telephone: (713)980-8796
Facsimile: (214) 980-1179
srcochell@cochellfirm.com
Attorney-in-Charge for Jeffrey Baron
Leonard H. Simon, Esq.
PENDERGRAFT & SIMON, LLP
TBN: 18387400; SDOT No. 8200
Admitted to Practice in NDOT
THE RIVIANA BUILDING
2777 Allen Parkway, Suite 800
Houston, Texas 77019
Telephone: (713) 528-8555
Facsimile: (832) 202-2810
lsimon@pendergraftsimon.com
Co-counsel for Jeffrey Baron
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via ECF on all parties receiving ECF Notices in the above-captioned case on February 24, 2014.
/s/ Stephen R. Cochell
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