Motion to Stay the Receivership Fee Disputes.

 
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IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF TEXAS 
DALLAS DIVISION 
 
NETSPHERE, INC.,       § 
MANILA INDUSTRIES, INC., and   § 
MUNISH KRISHAN,       §  
Plaintiffs.                     § 
  § Civil Action No. 3-09CV0988-F 
  v.   §   
  §  
JEFFREY BARON, and      §   
ONDOVA LIMITED COMPANY,    § 
  Defendants.          § 
 
MOTION FOR LEAVE TO FILE: MOTION TO STAY RECEIVERSHIP 
PENDING APPEAL  
 
TO THE HONORABLE JUDGE ROYAL FURGESON: 
COMES  NOW  JEFF  BARON,  and  moves  this  Court  to  grant  leave  to  file 
the  following  motion  to  stay  the  receivership  pending  appeal  because  there  is  no 
reasonable basis to keep the receivership in place in light of the procedural posture 
of the case. 
1.  On May 24, 2011, this Court entered an Order [Doc 586] advising the parties 
that  this  Court  is  stayed  from  taking  further  action  in  the  matters  involved  in  the 
appeals taken on May 18, 2011. 
2.  This  Court  previously  entered  an  Order  on  March  2,  2011  [Doc  338], 
advising  that  the  primary  purpose  of  continuing  the  receivership  was  to  “ensure 
that  the  unpaid  attorneys  claims  against  him  could  be  resolved  so  that  the 
bankruptcy action could be closed”.   That matter is included in the appeal. 
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3.  The bankruptcy trustee has filed an adversary action in the bankruptcy court 
against  Mr.  Emke  regarding  “servers.com”.
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    The  filing  of  the  new  adversary 
action  and  the  shortly  expected  counterclaims  will  prevent  the  closing  and 
resolution  of  the  bankruptcy  case  for  some  time  to  come—until  discovery  is 
completed and a trial is held on that adversary action.   Resolution of the attorneys 
fees  claims  will  therefore  not allow  the  immediate  closing  of  the  bankruptcy  case 
(assuming  arguendo  the  claims  would otherwise  have an impact on the closing  of 
the bankruptcy case).
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4.  Accordingly,  in  light  of  the  current  procedural posture  of  this  case,  there  is 
no reasonable basis to continue the receivership.  
5.  This  Court  may  take  security  for  staying  the  receivership,  if  this  Court 
determines such security appropriate. 
6.  The claims currently listed total $853,000.00 [Doc 562].   
7.  Jeff  has  $630,000.00  of  his  money  held  in  escrow  in  the  bankruptcy  court, 
                                                
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  Note  should  be  taken  that  Mr. Emke had been  represented  by Mr.  Vogel’s law  firm  when  he 
sued Ondova with respect to “servers.com”, and that  dispute  was still pending when this Court 
decided to appoint Mr. Vogel as special master in this case.  The twisted interrelations between 
Vogel,  Gardere,  Ondova,  Baron,  and  Emke  have  become  untenable  with  respect  to  Mr. 
Sherman’s  latest  litigation.    Because  of the clear  conflict  of  interest  involved,  it  is  not  possible 
for Vogel to properly act to defend Jeff Baron’s interests in the bankruptcy court with respect to 
Sherman’s  new  litigation  over  the  prior  “servers.com”  litigation.    Since  Gardere  represented 
Emke  against  Ondova  and  Jeff  Baron,  Gardere  and  Vogel  cannot  now  represent  any  party’s 
interest against Emke relating to the very same matter. 
2
 Notably, since November 2010 Jeff Baron has been 100% neutralized in the bankruptcy 
court,  and  the  bankruptcy  court  recognizes  no  rights  in  that  court  on  Mr.  Baron’s  behalf 
recognizing only the receiver as holding all of Mr. Baron’s rights in that court.  Yet, in the more 
than  6  months  that  have  passed,  Mr.  Sherman  has  not  closed  down  the  bankruptcy,  and  has 
instead made great pains to expand the bankruptcy and prevent it from being closed, for example 
by recently initiating an adversary action against Mr. Emke. 
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with  approximately  half  of  the  sum  specifically  held  as  security  with  respect  to 
resolution  of  the  Pronske  claim.  Accordingly,  in  addition  to  the  $630,000.00 
currently  held  in  the  bankruptcy  case,  an  injunction  prohibiting  the  liquidation  of 
$223,000.00 in Jeff’s stocks would provide full security for the entire claims total.
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8.  There are also grounds that security in a substantially reduced amount would 
also  be  reasonable,  if  security  is  required.    Although  no  discovery,  no  expert  to 
provide an opinion in support of Mr. Baron, and no investigation has been allowed, 
over  $672,000.00  of  the  $853,000.00  in  ‘claims’  have  already  been  shown 
groundless as a matter of law:
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a.  With  respect  to  the  Broome  claim,  Broome’s  own  evidence 
clearly  establishes  that  he  agreed  to  a  $10,000.00  per  month  cap  on 
fees incurred in any month.  Broome’s claim is based on the irrefutably 
false  representations  of  Broome  that  his  contract  contained  no  such 
provision. 
b.  With  respect  to  the  Crandall  claim,  Crandall’s  invoice  that 
explicitly states Crandall is  billing  at  a  flat rate  proves  that  she was 
working at a  flat rate  (for which she was fully paid) and not the hourly 
$300/hour rate she now claims.  
                                                
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 Jeff had more than a million dollars in cash in the bank, that appears to have been distributed by 
this Court for other purposes. 
4
 In reviewing groundlessness of the claims  a compelling question is  raised: Why  did  so many 
attorneys believe that their clearly groundless claims would be well received by Mr. Vogel ? 
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c.  With respect to the Pronske claim, Mr. Pronske admitted that he 
was  paid  a  fee  of  $75,000.00  up  front,  and  provided  no  contract  or 
engagement  letter.    Pronske  states  in  his  claim  affidavit  “There  are  no 
engagement  agreements  relating  to  the  representation”.    For  almost  a 
year  after  receiving  a  $75,000.00  fee  and  working  on  the  case, 
Pronske  sent  no  bill,  no  invoice,  no  demand  for  payment,  no  hourly 
work report, and no other document of any type alleging that the flat 
fee payment was actually a ‘retainer’.  Almost a year after he had been 
paid,  Pronske  suddenly  decided  that  some  two  hundred thousand dollars 
in fees which had never been billed or even reported, were suddenly past 
due and owing.   
d.  With  respect  to  the  Ferguson  claim,  Ferguson’s  claim  submission 
clearly  establishes  that  Ferguson  perjured  himself  when  he  testified 
before  the  Court.    In  his  live  testimony  Ferguson  falsely  testified  his 
agreement to be paid a flat rate covered the period only to August 21, and 
after August  21,  Ferguson’s  rate  was  $300/hour.    However,  Ferguson’s 
own  contract  –  produced  by  him  as  part  of  his  ‘claim’–  establishes 
unambiguously  that  the  flat  rate  was  through August  31.    That  rate 
(pursuant  to  the  clear  and  express  written  contract  terms,  for  all  of 
Ferguson’s  work  from  inception)  was  $22,000.00,  and  Ferguson  admits 
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he  was  paid  that  amount  in  full.  Ferguson’s  claim  submission  offers  a 
very  different  story  from  Ferguson’s  prior  sworn  live  testimony.    No 
longer does Ferguson claim he is entitled to more money than the flat fee 
he contracted for because he was required to work 99% of his time rather 
than  33%  of  his  time.    Instead,  Ferguson  now  claims  he  is  entitled  to 
more  money  than  he  contracted  for  because  he  was  ‘defrauded’.  
Ferguson’s  claim  is  that  Jeff  ‘fraudulently’  represented  that  the  money 
would  be  paid from  Jeff’s million dollar  trust and not from Jeff’s pocket 
because  Jeff  was  personally  “destitute”  (according  to  Ferguson).   
However,  the  trust’s  money  is  just  as  green  and  in  US  Dollars  just  the 
same  as  if  it  had  come  from  Jeff’s  pocket.    The  ‘fraud’  alleged  as  to 
where  the  money  to  pay  the  bill  came  from  (the  million  dollar  trust  or 
Jeff’s pocket) has no materiality as to rate agreed to by Ferguson.
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e.  With  respect  to  the  Powers  and  Taylor  claim  for  a  ‘contingency 
fee’,  pursuant  to  their  own  contract  such  a  fee  is  not  due.    Moreover, 
Mr. Taylor’s  own  email  to  Jeff  proves  they  had  not  claimed  the 
contingency  fee  at  the  time  or  immediately  after  the  global  settlement. 
Taylor  only  started  suggesting  that  a  ‘contingency’  fee  was  due 
                                                
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  Notably,  Ferguson  has  been  sued  on  multiple  occasions  and  was  repeatedly  found  guilty  of 
wrongfully  causing  literally  millions  of  dollars  in  losses  to  others.  Ferguson  at  the  time  he 
approached  Jeff  for  work,  was  in  the  process  of  escaping  ultimate  liability  for  the damages  he 
caused and was adjudged to have caused, by his use of the bankruptcy rules to obtain a discharge 
of his liability. 
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(originally  for  half  the  current  amount  claimed)  after  Pronske  began  his 
‘scorched earth’ policy against Jeff.  
f.  With  respect  to  the  Lyon  claim  for  $300/per  hour  (ie,  seeking 
$260/hour  above  the  $40/hour  he  was paid),  Lyon’s own  email
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  proves 
without ambiguity that his hourly rate was the $40/hour he was paid 
and not the $300/hour now claimed. 
g.  With  respect  to  the  Schurig  claim,  Schurig’s  ‘claim’  affidavit 
admits  that  99%  of  her  ‘claim’  is  for  work  done  on  behalf  of 
“Asiatrust”,  (a  company  owned  by  Ms.  Schurig’s  colleague)  that  is 
neither owned, nor controlled by Jeff Baron, and has itself filed claims 
against Jeff and/or Ondova.  Notably, Ms. Schurig has, per her ‘claim’ no 
contract with Asiatrust for the $100,000+ fees claimed due from them.
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h.  With respect to the Garrey claim, Mr. Garrey’s own claim evidence 
establishes  that  he  worked  at  most  two  weeks  and  that  his  monthly 
billing rate was capped at $8,500.00.  $1,000,000.00 (one Million) was 
originally  claimed  as  the  amount  of  Garrey’s  claim  for  two  weeks  of 
alleged work, and the current claim of $52,000.00 is equally as frivolous. 
                                                
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 Bragging about his $40/hour fee providing ‘more bang for the buck’ and seeking more work on 
Baron’s behalf. 
7
 The gross failure to provide a documented accounting for the $2,000,000.00 Mr. Baron placed 
with Ms. Schurig to hold in trust and which has now been reported “gone” has been addressed in 
prior motions. 
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i.  With respect to the Friedman and Hall claims, not a single page of 
documentation was provided to the undersigned counsel in support of the 
claims.    Mr.  Vogel  and  his  partners  have  represented  that  all  of  the 
materials  they  received  were  turned  over  to  the  undersigned.   
Accordingly,  the  Friedman  claim  and  the  Hall  claim  are  wholly 
unsupported. 
9.  For further cause, the argument of Mr. Baron’s appellate briefing is attached 
hereto as Exhibit “A” and incorporated herein by reference. 
 
WHEREFORE,  Jeff  Baron  requests  the  Court  to  immediately  stay  the 
receivership pending resolution of the issues on appeal to the Fifth Circuit.  
  
Respectfully submitted, 
 
  /s/ Gary N. Schepps 
Gary N. Schepps 
Texas State Bar No. 00791608 
Drawer 670804 
Dallas, Texas 75367 
(214) 210-5940 - Telephone 
(214) 347-4031 - Facsimile 
E-mail: legal@schepps.net 
COUNSEL FOR JEFF BARON 
 
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CERTIFICATE OF SERVICE 
This is to certify that this document was served this day on all parties who receive 
notification through the Court’s electronic filing system. 
CERTIFIED BY:  /s/ Gary N. Schepps 
            Gary N. Schepps 
 
 
 
 
CERTIFICATE OF CONFERENCE 
This is to certify that the undersigned conferred with counsel for: (1) Mr. Vogel by 
email  and the receiver  takes  no position and does  not oppose  the relief requested, 
and (2) Mr. Sherman by email and they oppose.   
CERTIFIED BY:  /s/ Gary N. Schepps 
            Gary N. Schepps 
 
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