Amended Response to Vogel Ex Parte Motion to Prevent Financing Options

  
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  Vogel’s  motion  to  sell  the  assets  of 
Novo Point, LLC and Quantec, LLC, Appellants make this response to Vogel’s “ex 
parte  motion”  7/01/2011  SEALED  MOTION  for  reconsideration  of  order 
regarding financing Options.
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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 receiver’s 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.   Vogel’s 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  receiver’s  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, Vogel’s 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