Cochell Motion to Modify Ct Order Deyning Request for Appt of Counsel

 
 
1 
 
 
 
IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF TEXAS 
DALLAS DIVISION 
NETSPHERE, INC., Et. Al.           § 
        Plaintiffs,             §   
vs.                         §  Civil Action No. 3-09CV0988-F 
                          §  HEARING REQUESTED 
JEFFREY BARON, Et. Al.           § 
        Defendants            § 
 
MOTION TO MODIFY COURT ORDER OR, IN THE ALTERNATIVE, TO 
WITHDRAW REQUEST FOR APPOINTMENT AS COUNSEL, AND REQUEST FOR 
EXPEDITED CONSIDERATION OF MOTION THEREON 
 
Movant,  Stephen  Cochell,  requests  modification  of  the  Court’s  Order,  Docket  1056 
Denying    Stephen  Cochell’s  Request  for  Appointment  as  Counsel  to  Oppose  the  Liquidating 
Trust  But  Granting  Stephen  Cochell  the  Right  to  Appear  as  Counsel  for  Jeffrey  Baron  in 
Connection with Creation of Liquidating Trust to provide for payment, through fee applications 
to  the  court  and  payment  by  the  Receiver,  for  services  rendered  on  behalf  of  Mr.  Baron  in 
connection  with  opposition  to  creation  of  the  Liquidating  Trust.      At  the  time  of  hearing,  the 
Court  did  not  indicate  that  it  would  deny  counsel’s  motion  for  appointment  and  to  submit 
application(s)  for  fees to  be  paid  through the  Receiver.    The  Court’s  order leaves  the  issue  of 
covering  “fees  and  expenses…for  a  later  time.”    If  the  Court  had  so  indicated, counsel  would 
have declined representation for the reasons set out below.    
Mr. Baron is not allowed to retain and pay counsel as his assets are under receivership.  
Counsel was requested by Mr. Baron to seek appointment as counsel to oppose creation of the 
Liquidating Trust and request fees through the Court, as counsel cannot, as a solo practitioner, 
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 1 of 6   PageID 60696

 
 
2 
 
afford to fund complex litigation on behalf of Jeffrey Baron.  The funding provided is inadequate 
to  cover  the  amount  of  time  and  resources  necessary  to  provide  adequate  legal  services  for 
Jeffrey Baron during discovery and arguments on the issue of the Liquidating Trust before the 
Bankruptcy Court  and  the  District  Court.    It  is  far  from  certain  that  Mr.  Baron  will  have  any 
assets at the end of the day.  First, the Receiver acknowledged, in open court, that his “estimate” 
of  a  return  of  $2,000,000  is  contingent  on  Mr.  Baron  dropping  his  appeals.    The  Receiver’s 
monthly  fees  have  been  substantial  and  one  must  assume  that  the  appeal  will  go  forward  on 
November 7, 2012, which  may be followed  by remand,  rehearing or  other results.   There  was 
discussion  about  Mr.  Baron  receiving  a  $600,000  payment  under  the  Global  Settlement 
Agreement  along  with  a  $15,000  per  month  licensing  fees  for  a  domain  site.    However, 
Netsphere’s  attorney,  Mr.  McPete,  stated  that  the  $600,000  payment  would  not  be  made.  
Moreover, it is unclear whether the payments of $15,000 per month will continue if the domain 
names are part of the assets being sold by the Receiver or if McPete's client declines to continue 
these  payments,  in  addition  to  declining  payment  of  the  $600,000.00.      Moreover,  Mr.  Baron 
appears  to  have  potential  obligations  that  have  not  been  addressed,  such  as  for  his  appellate 
counsel's fees.  
Neither the Receiver nor the Trustee will be limited to a $25,000 budget in their attempt 
to obtain approval of the Liquidating Trust and confirmation of a Chapter 11 Plan, based on the 
Liquidating Trust.  Based on the approach that the Trustee and Receiver have suggested that they 
will take with  discovery, the  discovery of  documents and  depositions in this  case will be time 
consuming  and  expensive.    Opposing  Counsel  have  indicated  that  five  depositions  of  fact 
witnesses are needed, in addition to two or more expert witnesses.  If the Receiver intends to use 
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 2 of 6   PageID 60697

 
 
3 
 
more  than  one  expert  witness,  it  would  be  necessary  to  evaluate  the  need  to  retain  a  rebuttal 
expert witness, and perhaps request funds for such an expert.  
The  discovery  period  spans  five  weeks  followed  by  intense  preparations  for  the 
confirmation  hearing  before  Judge  Jernigan.    Preparation  of  the  Motion  to  Appoint  [1054] 
involved research and preparation, as well as appearance at hearing before this Court  and then 
the Bankruptcy Court.  As stated at that time, due to the complexity of the matter, counsel will 
need to employ an associate and possibly a paralegal to assist in focusing on the legal and factual 
issues  presented  to  the  Court.    Simply  stated,  counsel  cannot  simultaneously  acquaint  himself 
with the facts supporting or refuting the need for a liquidating trust, litigate in the bankruptcy and 
district  court  and  adequately contest  this  matter  with  “one hand  tied  behind  his  back” through 
lack of resources.  The number of depositions, the need to interview and retain an expert witness 
underscores  the  need  for  Mr.  Baron’s  counsel  to  have  access  to  additional  funds  to  cover  all 
expenses and fees in the six week period prior to the confirmation hearing.  The travel costs in 
conducting the  discovery and  hearings  will  require several  thousand  dollars  excluding  costs of 
accomodations if  overnight stays are required.   Based on prior history, it appears the Receiver 
and the Trustee can be expected to field at least two to three lawyers to prepare for depositions 
and hearings.  Based on the above, counsel estimates that providing cost-effective representation 
will range between $60,000 to $70,000.  Under the circumstances of this case,  counsel requests 
the Court increase the amount of the retainer to the estimated fees of $60,000 to assure payment.  
Counsel will, of course, maintain detailed time records to substantiate costs and fees.   Counsel 
respectfully  submits  that  the  amount  of  retainer  for  expert  fees  be  increased  by  an  additional 
$25,000,  as  counsel  must  locate  a  witness  who  has  the  ability,  and  will  set  aside  the  time 
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 3 of 6   PageID 60698

 
 
4 
 
necessary to value 150,000 domain  names within a three week period.   Counsel does not have 
much time to “shop” experts to drive bargain expert rates. 
If the Court is not disposed to requiring counsel fees to be paid by the receivership estate 
to  Mr.  Baron’s  attorney,  counsel  has  no  economic  alternative  but  to  withdraw  his  request  to 
represent Mr. Baron in this matter, as he cannot ethically discharge his duties to Mr. Baron, as 
well as satisfy professional commitments to other clients.   Mr. Cochell respectfully submits that 
he should be paid with the same level of priority as the attorneys for the Receiver and Trustee. 
WHEREFORE, Stephen Cochell requests the Court modify the Court’s Order [1056] to 
provide for appointment of Stephen Cochell and to provide for payment of his fees and costs by 
the Receiver, as necessary.  Alternatively, Mr. Cochell withdraws his request for appointment as 
counsel in this matter. 
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 
Houston, Texas 77096 
(713)980-8796 (phone) 
(713)980-1179 (facsimile) 
srcochell@cochellfirm.com 
 
CERTIFICATE OF COMPLIANCE 
 
  This is to certify, that on October 2, 2012, the undersigned contacted counsel for the 
Trustee and the Receiver by email and generally sought concurrence in the relief sought.  
Counsel for the Trustee responded stating that the Trustee would not oppose counsel submitting  
   
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 4 of 6   PageID 60699

 
 
5 
 
attorney’s fees to the court for approval.  Counsel did not receive a response from the Receiver. 
         
 
/s/Stephen R. Cochell 
Stephen R. Cochell 
 
CERTIFICATE OF SERVICE 
 
  This is to certify that, October 3, 2012, a copy of this Motion was served on all counsel 
through the Court’s ECF system.   
           
  
/s/ Stephen R. Cochell 
Stephen R. Cochell 
 
               
 
     
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 5 of 6   PageID 60700

 
 
6 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
Case 3:09-cv-00988-F   Document 1063   Filed 10/03/12    Page 6 of 6   PageID 60701