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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AMENDED RESPONSE TO VOGEL EX PARTE MOTION
TO PREVENT FINANCING OPTIONS
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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.
1
I. ARGUMENT AND AUTHORITY
Vogel’s 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 perspective 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.
1
This responses replaces Document 00511598195 filed on 9/9/2011.
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Vogel’s Arguments Are Not Credible
Vogel makes the absurd argument that secret, private sales
2
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 personalty.
3
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 based on the receivers own reports at around $80 Million, it would make
no sense to liquidate all of those assets to pay $600,000.00 in contested claims.
Similarly, it makes no sense to liquidate $30 Million in unique domain assets for 3
2
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.
3
Notably, Vogel’s “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.
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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 Vogel’s 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, Appellants seek to
maximize the income received from the sale of any asset. 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
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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 Court’s electronic filing system.
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
COUNSEL FOR APPELLANT

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