No. 10-11202
In the
United States Court of Appeals
for the Fifth Circuit
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NETSPHERE, INC. Et Al,
Plaintiffs
v.
JEFFREY BARON,
Defendant-Appellant
v.
ONDOVA LIMITED COMPANY,
Defendant-Appellee
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Appeal of Order Appointing Receiver in Settled Lawsuit
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Cons. w/ No. 11-10113
NETSPHERE INC., Et Al, Plaintiffs
v.
JEFFREY BARON, Et Al, Defendants
v.
QUANTEC L.L.C.; NOVO POINT L.L.C.,
Appellants
v.
PETER S. VOGEL,
Appellee
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Appeal of Order Adding Non-Parties Novo Point, LLC
and Quantec, LLC as Receivership Parties
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From the United States District Court
Northern District of Texas, Dallas Division
Civil Action No. 3-09CV0988-F
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RESPONSE TO VOGEL EX PARTE MOTION
TO PREVENT FINANCING OPTIONS
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Case: 10-11202 Document: 00511598195 Page: 1 Date Filed: 09/09/2011
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TO THE HONORABLE FIFTH CIRCUIT COURT OF APPEALS:
COMES NOW Appellants, and subject to the preliminary Fifth Amendment
objection and motion previously filed in this cause, and subject to the responses
and motion previously filed with respect to Vogels motion to sell the assets of
Novo Point, LLC and Quantec, LLC, Appellants make this response to Vogels ex
parte motion 7/01/2011 SEALED MOTION for reconsideration of order
regarding financing Options.
I. ARGUMENT AND AUTHORITY
Vogels Motion is Clearly Not of an Indifferent Receiver as Required by Law
As a matter of well-established law, a receiver is an officer of the court
which appoints him and must be an indifferent person between parties. E.g.,
Booth v. Clark, 58 US 322, 331 (1855); Phelan v. Middle States Oil Corp., 154
F.2d 978, 991 (2d Cir.1946) (A receiver ... owes a duty of strict impartiality, or
`undivided loyalty,' to all persons interested in the receivership estate, and must not
`dilute' that loyalty.). From the prospective of an indifferent receiver, it should
not matter whether a party obtains a loan in order to have a receivership stayed or
dissolved. In simple language, it is none of the receivers business. Yet, Vogel has
invested an extraordinary amount of effort to prevent the dissolution or stay of the
instant receivership.
Case: 10-11202 Document: 00511598195 Page: 2 Date Filed: 09/09/2011
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Vogels Arguments Are Not Credible
Vogel makes the absurd argument that secret, private sales
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will generate
higher sales prices than a public auction. Vogel, however, can offer no explanation
as to why a purchaser who is willing to pay a set price in a private sale would not
pay that same price in a public auction. At a minimum, assets for which there is a
private bidder can be placed on auction with a reserve price equal to the private
sale price. Public auction is not some crazy idea thought up by Appellants counsel.
Rather, public auction is the Congressionally mandated and long accepted means
of selling property by court decree. Pursuant to 28 U.S.C. §2004, the requirements
of 28 U.S.C. §2001 (including the requirement of sale though public auction),
apply to personality.
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Vogel makes the similarly absurd argument that the Appellants would seek
to minimize the return of the liquidation of receivership assets in order to prevent
claimants from being paid. Vogels argument makes no sense. Since the assets
of Novo Point, LLC, and Quantec, LLC, if sold at reasonable value, have been
valued by the receivers own reports at around $80 Million, it would make no
sense to liquidate all of the assets to pay $600,000.00 in contested claims.
Similarly, it makes no sense to liquidate $30 Million in unique domain assets for 3
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Vogel has not disclosed his relationship to the proposed purchasers, or the relationship between
his law firm and its clients to the proposed secret purchasers.
2
Notably, Vogels professional, Mr. Nelson, set up a procedure to sell domains through
auctions that included specific marketing and advertising of the domains before holding the
auction. Vogel has had months to engage in such marketing, but has refused, insisting that the
assets should be sold to his personally selected buyers in secret, private sales.
Case: 10-11202 Document: 00511598195 Page: 3 Date Filed: 09/09/2011
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cents on the dollar to friendly purchasers, as Appellants strongly suspect Vogel
desires to do. Notably, although the District Court ORDERED Vogel to do so, he
refused to disclose the names of the domains he desires to sell, the amounts, or the
identity of the purchasers. (See page 1 of Vogels motion). Vogel clearly does not
want this information uncovered, nor does Vogel want to allow the Appellants to
secure alternative purchasers, nor to allow the Appellants avoid liquidation of the
assets by posting bond. Vogel raises all sorts of accusations against Appellants
counsel, and makes all sorts of unsupported claims and allegations. Still Vogel
cannot explain why the Appellants would prefer the liquidation of $80 Million in
assets to pay $600,000.00 in alleged claims. More naturally, if assets are to be
liquidated, a single asset worth $1 Million should be sold for $1 Million, instead of
30 assets worth $30 Million being sold for $1 Million to insiders in private, secret
sales.
WHEREFORE, Vogels motion should be in all things denied and overruled.
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
5400 LBJ Freeway, Suite 1200
Dallas, Texas 75240
(214) 210-5940 - Telephone
(214) 347-4031 - Facsimile
Email: legal@schepps.net
COUNSEL FOR APPELLANTS
Case: 10-11202 Document: 00511598195 Page: 4 Date Filed: 09/09/2011
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CERTIFICATE OF SERVICE
This is to certify that this motion was served this day on all parties who receive
notification through the Courts electronic filing system.
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
COUNSEL FOR APPELLANT
Case: 10-11202 Document: 00511598195 Page: 5 Date Filed: 09/09/2011

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