Appellants Limited Objection to Receiver’s First App Doc 231

RESPONSE TO [DOC#190]  - Page 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., § Civil Action No. 3-09CV0988-F
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN,  §
Plaintiffs.  §
§
v.  §
§
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
APPELLANT’S LIMITED OBJECTION TO THE RECEIVER'S FIRST 
APPLICATION FOR REIMBURSEMENT OF FEES INCURRED BY
RECEIVERSHIP PROFESSIONAL JOSHUA COX [DOC#190]  
TO THE HONORABLE ROYAL FURGESON, U.S. DISTRICT JUDGE:
COMES NOW, Appellant Jeffrey Baron and makes this limited objection to 
the  Receiver's  First  Application  For  Reimbursement  Of  Fees  Incurred  By 
Receivership Professional Joshua Cox [Doc#190].
1. Mr. Baron has appealed the order appointing the receiver [Doc #136]. 
2. The  filing  of  a  notice  of  appeal  is  an  event  of  jurisdictional 
significance—  it  confers  jurisdiction  on  the  Court  of  Appeals  and  divests  the 
district court of its control.  Griggs v. Provident Consumer Discount Co., 459 U.S. 
56, 58 (1982).  The divesture of jurisdiction of the trial court involves those aspects 
of the case appealed.  Id.
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RESPONSE TO [DOC#190]  - Page 2
3. The  powers  of  the  district  court  over  the  matter  appealed  from, 
pending appeal are limited to maintaining the status quo and do not to extend 
to the point that the district court can divest the Court of Appeals from jurisdiction 
while the issue is before the Court of Appeals on appeal. Coastal Corp. v. Texas 
Eastern Corp., 869 F.2d 817, 820 (5th Cir. 1989).
4. Accordingly, pending appeal the district court is without jurisdiction to 
dispose of any of Mr. Baron’s assets which were seized by the receiver.  See e.g., 
Taylor v. Sterrett, 640 F.2d 663, 668 (5th Cir. 1981)  (“[T]he District Court was 
divested  of  jurisdiction  only  as  to  matters  relating  to  the  April  27  and  May  12 
orders and  subsequent  orders  and,  for  that  reason,  fees  cannot  be  recovered  for 
work relating to these orders”); Dayton Indep. School Dist. v. US Mineral Prods. 
Co.,  906  F.2d  1059,  1063  (5th  Cir.  1990)  (“A  district  court  does  not  have  the 
power to ‘alter the status of the case as it rests before the Court of Appeals’.”). 
5. Further,  Mr.  Baron  has  no  responsibility  for  the  liabilities  or 
administrative fees or costs relating to any other receivership entity.   Mr. Baron’s 
assets cannot be  used to pay the expenses of another party that was placed  into 
receivership.  Moreover,  the  scope  of  the  receivership  extends  to  Mr.  Baron’s 
exempt property, and distribution of such exempt property would be unlawful.
6. To the extent that the requested fees are bona fide expenses incurred by  the 
LLC entities in the ordinary course of their business activities, (and so long as the 
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RESPONSE TO [DOC#190]  - Page 3
LLC entities are paying the bill), the Court clearly has jurisdiction to ensure the 
ongoing operation of the LLC entities– as that is the status quo.  Accordingly, no 
objection is made to that portion of the requested fees which are bona fide expenses 
incurred by the LLC entities in the ordinary course of business and to be paid for 
by those entities.
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
State Bar No. 00791608
Drawer 670804
Dallas, Texas 75367
(214) 210-5940
(214) 347-4031 Facsimile
APPELLATE COUNSEL FOR 
JEFFREY BARON
CERTIFICATE OF SERVICE
This  is  to  certify  that  this  was  served  on  all  parties  who  receive  notification 
through the Court’s electronic filing system.
/s/ Gary N. Schepps
Gary N. Schepps
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