Letter to Judge Furgeson from Schepps Doc 364

G A R Y   N.  S C H E P P S 
 
A T T O R N E Y   &   C O U N S E L O R  
 
DRAWER 670804 
DALLAS, TEXAS 75367 
                                                                                                                        TELEPHONE
                                                                                                                 
       FACSIMILE 
214-210-5940
 
214-347-4031
 
 
March 14, 2011 
 
VIA EMAIL (and PACER) 
 
Hon. Judge W. Royal Furgeson, Jr. 
United States District Judge 
1100 Commerce Street, Room 1359 
Dallas, Texas  75242-1001 
 
    Re:  3-09CV0988-F;  Netsphere, Inc., et al v. Jeffrey Baron, et al 
 
Your Honor, 
 
    The  goal of this  letter, a  very brief post hearing letter brief, is for your honor to 
win.   
 
    To  my  take,  the  direction  of  the  hearing  last  Friday  seemed  to  shift  when  Mr. 
MacPete suggested that terminating the receivership would mean that Jeff would “win”, 
and implicitly your honor would “lose”.   
 
    If  such  an  argument  shifts  the  balance  in  any  decision  with  this  case,  it  may  be 
time to take a step back.    
 
    We want your honor to win.   
 
    Your honor ordered that a mediation would be held on the attorney fee disputes.   
 
    Then,  the  day  the  mediation statements from the lawyers were due, Mr. Urbanik 
filed  a motion to  stop  that.   Mr.  Urbanik  represented in  his  motion that the bankruptcy 
judge recommended a receivership if Jeff proceeded pro se.  Your honor can measure Mr. 
Urbanik’s representation against the recommendation of the bankruptcy court.   The two 
pieces don’t fit.   
 
    Your  honor  laid  out  a  clear  path  in  the  show  cause  order.    When  this  court 
terminates the receivership and holds money in ‘escrow’, the fee disputes can be resolved 
in their normal course– without receivership. 
 
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Hon. Judge W. Royal Furgeson, Jr. 
March 14, 2011 
Page 2 
__________________________________ 
 
 
 
    Today,  in  addition  to  the  non-exempt  cash  that  has  been  seized  by  the  receiver, 
there is approximately $630,000.00 in additional ‘escrow’ funds held by Mr. Sherman in 
the bankruptcy proceedings.  There is more than reasonable security for the disputed fees. 
 
    If  your  honor  holds  firm  to  the  course  laid  out  in  the  show  cause  order,  the 
issues can be resolved by your honor’s existing order to mediate the fee disputes. 
 
    Your honor ordered  that  a  mediation would be held on the attorney fee disputes.  
Terminating the receivership and enforcing your honor’s order on mediation, gets us out 
of the mud, and, puts the case back on the track your honor set down from the start.  
It accomplishes your honor’s goal, and your honor wins. 
 
 
    Obviously, if the goal is to empty Jeff’s pockets or fill the pockets of the receiver 
and  his  firm,  then  the  receivership  is  the  way  to  “win”.    It  is  not  surprising  that  the 
receiver would argue to extend the receivership– just a little more, and then just a little 
more. 
 
     However, your honor should be aware that from the start our hand has been out 
offering  cooperation,  and  calling  the  receiver  to  walk  with  us  on  the  path  out  of 
receivership.    
 
    Attached is an important e-mail exchange from December 15.  It tells the story in 
black and white. 
 
    As shown by the December 15, 2010 e-mail, my hand was extended to work with 
the receiver by cooperation to achieve your honor’s goals.  Also shown by the e-mail, the 
receiver slammed the door– rejecting even initial steps for cooperation.   
 
  In  slapping  down  the  low  cost  hand  of  cooperation,  the  receiver's  counsel  was 
determined  to  take  another  path,  charging  forward  against  his  'foe'  who  "baits",  tells 
"blatant lies", and is "time-wasting".           
           
    The emails are attached and your honor can weigh my words, and the words of the 
receiver.           
           
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Hon. Judge W. Royal Furgeson, Jr. 
March 14, 2011 
Page 3 
__________________________________ 
 
 
 
    The subject line sitting on top of my letter is “Steps to get there voluntarily”.  
          
    The words I used were:  “Based on  the  email tree it looks like we now have our 
first step to reaching an agreement to stay the receivership.  Hopefully we can take more 
steps and get there voluntarily.”           
           
    My  hand was  out expressly offering full cooperation to take the steps necessary.  
My hand was fully extended offering cooperation.   But cooperation takes two sides.         
           
    Your  honor  can  weigh the  words  of the receiver.   The receiver  responded to my 
extended hand by explaining: 
 
              “There is no first step to reaching any agreement”.           
           
    Again, in the receiver’s own words the receiver’s course was clear, “There is no 
first step to reaching any agreement.”          
           
    And  the  receiver  pushed  further,  taking  a  clearly  offensive,  attacking  stance  in 
response  to  an  offer  to  cooperate.    The  receiver's  words  “Your  declaration  contains 
blatant lies”,  “you bait me”,  “time-wasting e-mail to discuss it further”.           
           
    The  mountain  of  fees  generated  are  built  upon  a  course  from  the  receiver’s  side 
were “there is no first step to reaching  any  agreement”.   Such fees are unnecessary and 
unreasonable.   Each  day  of  the  continuing  receivership  serves  no purpose other than to 
provide  the  receiver  and  his  firm  more  opportunity  for  generating  an  ever  growing 
mountain of fees. 
 
    I believe your honor is well aware of that.     
 
 
                              Very truly yours, 
 
                              /s/ Gary N. Schepps 
                              Gary N. Schepps 
                              Counsel for Jeff Baron 
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
 
From: GOLDEN, BARRY [mailto:bgolden@gardere.com]  
Sent: Wednesday, December 15, 2010 9:35 PM 
To: 'Gary Schepps' 
Cc: VOGEL, PETER; LOH, PETER; BLAKLEY, JOHN DAVID; 'Urbanik, Raymond'; Corky Sherman; Jeff Baron; 'Jeff 
Harbin'; 'jamesmeckels'; 'Damon Nelson'; 'Roossien, Dennis'; 'Joshua Cox'; 'tpj@dfwlawyer.com' 
Subject: FW: Steps to get there voluntarily - IMMEDIATE ATTENTION REQUIRED 
  
Mr. Schepps, 
  
There is no first step to reaching any agreement to stay the receivership.   
  
To be clear, the decision on managing the Receiver Assets does not belong to you.  Nor does it belong to 
Mr. Harbin, Mr. Jackson, or Mr. Baron.  Pursuant to the Receiver Order, it belongs solely to Mr. Vogel.  
Mr. Vogel may choose to consider the declaration of Mr. Baron; Mr. Vogel may choose not to consider 
the declaration of Mr. Baron.  It is up to him. 
  
Your declaration contains blatant lies, but I will not let you bait me into a time-wasting e-
mail to discuss 
it further.  We can all have our say at Friday’s hearing. 
  
Barry Golden 
Counsel for the Receiver 
  
From: Gary Schepps [mailto:legal@schepps.net]  
Sent: Wednesday, December 15, 2010 8:20 PM 
To: GOLDEN, BARRY; VOGEL, PETER; LOH, PETER; BLAKLEY, JOHN DAVID 
Subject: Steps to get there voluntarily - IMMEDIATE ATTENTION REQUIRED 
  
Gentleman, 
 
Based on the email tree it looks like we now have our first step to reaching an agreement 
to stay the receivership. 
 
Hopefully we can take more steps and get there voluntarily. 
 
 
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Mr. Baron is 100% in agreement to carrying out the management decisions of the Novo 
Point, L.L.C. and Quantec, L.L.C. manager, Jeff Harbin.  
 
 
Accordingly, as you all have been requesting, we tender Mr. Baron's declaration as a 
beneficiary of the trust owning the companies, consenting to the deletion and release this 
month of the domains as Mr. Harbin directs. 
 
 
I again stress that my role is limited to the appeal and stay of the receivership order. 
Please do not attempt to pull me in to matters beyond that narrow scope.  
 
 
I am not in contact with the Fabulous registrar, I do not represent the LLCs, and I leave it 
to you to timely notify the registrar to release/delete the November domains as Mr. 
Harbin directs. 
 
Yours truly, 
 
Gary Schepps 
 
 
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