No. 15-10341

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JEFFREY BARON, ET AL

Appellants

vs.

DANIEL J. SHERMAN, ET AL

Appellees

Appeal from the United States District Court

for the Northern District of Texas, Dallas Division

Docket No. 3:09-CV-988

APPELLANT, JEFFREY BARON’S BRIEF

ENDERGRAFT & SIMON,

LLP

Leonard H. Simon

Texas Bar No. 18387400

William P. Haddock

Texas Bar No. 00793875

2777 Allen Parkway, Suite 800

Houston, TX 77019

Tel. 713-528-8555

Fax. 713-868-1267

Attorneys for Appellant,

Jeffrey Baron

Case: 15-10341 Document: 00513219780 Page: 1 Date Filed: 10/05/2015

No. 15-10341

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JEFFREY BARON, ET AL

Appellants

vs.

DANIEL J. SHERMAN, ET AL

Appellees

CERTIFICATE OF INTERESTED PERSONS

Pursuant to Fifth Circuit Rule 28.2.1, the undersigned counsel of

record for Appellant, Jeffrey Baron, certify that the following listed per-

sons have an interest in the outcome of the case. These representations

are made in order that the Judges of this Court may evaluate possible

disqualification or recusal.

Appellants:

• Jeffrey Baron

Represented by:

Leonard H. Simon

William P. Haddock

Pendergraft & Simon, LLP

2777 Allen Parkway, Suite 800

Houston, TX 77019

Tel. 713-528-8555

Fax. 713-868-1267

Case: 15-10341 Document: 00513219780 Page: 2 Date Filed: 10/05/2015

• Novo Point, LLC Paul Raynor Keating

173 Balmes 2/2

08006 Barcelona SPAIN

Tel. 34.93.368.0247

Fax. 34.93396.0810

• Quantec, LLC Paul Raynor Keating

173 Balmes 2/2

08006 Barcelona SPAIN

Tel. 34.93.368.0247

Fax. 34.93396.0810

Appellees:

• Peter S. Vogel

Represented by:

Christopher D. Kratovil

Dykema Gossett PLLC

1601 Elm Street, Ste. 3000

Dallas, Texas 75201

Tel. 214-462-6458

Fax. 214-230-2528

• Gardere Wynne Sewell LLP Debbie E. Green

Gardere Wynne Sewell LLP

1717 Main Street, Ste. 4000

Dallas, Texas 75201

Tel. 214-999-4285

Fax. 214-999-3285

Other Interested Parties:

• Daniel J. Sherman, Trustee

Represented by:

Lee Morris

Munsch, Hardt, Kopf & Harr PC

500 N. Akard St., Ste. 3800

Dallas, TX 75201-6659

Tel. 214-855-7521

Fax. 214-978-5322

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iii

• Dykema Gossett PLLC Christopher D. Kratovil

Dykema Gossett PLLC

1717 Main Street, Ste. 4000

Dallas, Texas 75201

Tel. 214-462-6455

Fax. 214-462-6401

• Munsch, Hardt, Kopf & Harr

Lee Morris

Munsch, Hardt, Kopf & Harr PC

500 N. Akard St., Ste. 3800

Dallas, TX 75201-6659

Tel. 214-855-7521

Fax. 214-978-5322

• Netsphere, Inc., et al. John W MacPete

P.O. Box 224726

Dallas, TX 75222

Tel. 214/564-5205

/s/ Leonard H. Simon

Leonard H. Simon

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STATEMENT REGARDING ORAL ARGUMENT

Appellant respectfully requests an oral argument under Fed. R. App.

P. 34(a). The Appellant believes this case meets the standards in Rule

34(a)(2) for oral argument in that:

a. This appeal is not frivolous;

b. Some of the dispositive issues raised in this appeal, in par-

ticular the unique issues of: (1) whether Receivership fees

and expenses can be charged against parties and assets that

were not within the jurisdiction of the trial court; and (2) the

related due process issues, have not been authoritatively de-

cided within this Circuit; and

c. As described in this brief, the decisional process may be sig-

nificantly aided by oral argument.

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TABLE OF CONTENTS

Certificate of Interested Persons .......................................................................... i

Statement Regarding Oral Argument ............................................................... iv

Index of Authorities ............................................................................................. xv

Statement of Jurisdiction ....................................................................................... 1

Issues Presented ....................................................................................................... 2

Statement of the Case ............................................................................................. 4

A. Introduction ....................................................................................... 4

B. The Underlying Litigation ................................................................ 6

C. The Parties Settled All Controversies .............................................. 7

D.The unjustified and illicit attack upon Jeffrey Baron ..................... 9

E. The BC’s issuance of a show cause order against Baron

and its Report and Recommendation to the DC ............................ 11



F. Baron’s receivership was instituted and perpetuated

with malice and wrongful purpose on the part of

Sherman, Trustee, his attorneys and Vogel. .................................. 13



1. Sherman and MHKH hatched the receivership in

retaliation for Baron objecting to MHKH’s Fee

Application, and Vogel aided and abetted their

scheme ......................................................................................... 13



2. The meretricious circumstances surrounding the

entry of the Receivership Order on November 24,

2010. ............................................................................................ 14



3. Vogel immediately seized Baron’s files and fired

Baron’s AV rated lawyer. ........................................................... 17



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4. Vogel threatens Baron and then appoints himself

Baron’s counsel. .......................................................................... 17



5. Vogel dismisses Baron’s objection to MHKH’s fee

application. .................................................................................. 18



G.The DC authorizes Vogel to take control of the LLCs,

over which the DC had no subject matter jurisdiction. ................. 19



H.Vogel and the DC deny Baron the constitutional right

to hire competent legal counsel of his choosing and the

DC forces Baron to conduct a hearing on his Motion to

Vacate Order Appointing Receiver and in the

Alternative, Motion for Stay Pending Appeal without

adequate counsel. ............................................................................ 20



1. Events leading up to the entry of the Order Denying

Vacate or Stay Motion ................................................................ 21



2. Baron’s due process rights were violated when the

DC refused to permit him to engage competent

counsel ......................................................................................... 22



3. The Order Denying Vacate or Stay Motion was not

an appealable order, and it has no effect ................................... 23



I. Baron promptly appealed the receivership orders and

all fee orders, expeditiously prosecuted the appeals,

and never acquiesced in the payment of Receivership

expenditures. ................................................................................... 24



J. Sherman, Vogel and their Lawyers Branded Baron a

“Vexatious” Litigant in Retaliation for Objecting to

their Fee Applications and appealing the Receivership

Order and Fee Orders. .................................................................... 24



1. Baron’s success in his litigation has come at great

cost to him and his family. ......................................................... 25



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vii

2. Despite Vogel and Sherman’s defamatory rhetoric

that Baron was vexatious, they never sought to

enforce any litigation abuse prevention statute or

rule. ............................................................................................. 26



3. Vogel and Sherman resort to making false

statements to deceive courts in an effort to denigrate

and destroy Baron. ...................................................................... 28



K.Vogel, Sherman and their legal professionals’ self-

serving efforts induce Judge Furgeson to extend the

receivership when the cash exceeded threefold the

amount of claims. ............................................................................ 28



L. This Court issued its

Netsphere I

Opinion on December

18, 2012, and found that the entry of the Receivership

Order was an abuse of discretion and reversed the

entry of the Receivership Order. .................................................... 32



M.Two hours after the Court issued the

Netsphere 1

Opinion, Baron was thrown into an involuntary

bankruptcy proceeding in an attempt by his opponents

to moot this Court’s ruling. ............................................................. 33



2. An Order for Relief is entered. ................................................... 34

3. The Appeal and reversal of the Order for Relief ....................... 34

N.The Netsphere I panel denies all pending motions and

issues 8 mandates ........................................................................... 35



O.The Advisory on past and pending Receiver

disbursements ................................................................................. 37



P. The DC puts the process of re-determining the

Receiver’s professional fees and expenses on an

exceedingly fast track. ..................................................................... 38



1. The 2013 Fee Applications ......................................................... 40

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viii

2. The court consistently denies Baron’s

Requests/Motions to seek funding for attorney and

expert witness fees, for permission to conduct

discovery, and to continue the matter to enable him

to present a viable defense to the fee applications .................... 43



3. The Objections to the Fee Applications ..................................... 45

4. The hearing & post-hearing briefing on the 2013 Fee

Applications ................................................................................ 46



5. The DC enters the 5/29/2013 Final Fee Order .......................... 47

Q.$700,000 of additional fees and expenses paid out of

receivership assets were not re-evaluated by the DC as

required by

Netsphere I

. ................................................................. 48

R. Vogel Continues to Collect Appellants’ Property ........................... 48

S Vogel is Directed to File Additional Fee Applications

and An Accounting .......................................................................... 49



T. The DC gives control of the LLCs’ assets to non-party

Lisa Katz on grounds that Baron lacked standing to

object. ............................................................................................... 53



U.Vogel files the 2014 Fee Request and Final Accounting. .............. 57

V. The Vogel Final “Accounting” ......................................................... 58

W The Vogel Final Accounting Discloses $$11,404,021.72

in Expenditures ............................................................................... 61



X Vogel’s 2014 Fee Request Exceeds the Cap Imposed by

the

Netsphere I

Mandate. ............................................................... 62

Y The March 27, 2015 Memorandum Opinion and Order. ............... 63

Z While the Netsphere I Panel was deliberating the case,

Appellees were Frantically Selling Receivership

Property ........................................................................................... 65



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AA. Vogel’s Operation of Appellants’ Business and

Misconduct ....................................................................................... 67



BB. Vogel’s Fraud in Obtaining Fees ................................................ 68

Summary of the Argument .................................................................................. 70

argument ................................................................................................................. 72

I. The DC Violated Baron’s Fifth Amendment Due Process Rights ....... 72

A. The Right to Retain Counsel is Implicit in the Fifth

Amendment ..................................................................................... 74



B. The DC violated Baron’s due process rights by

initiating the receivership under dubious

circumstances. ................................................................................. 77



C Baron’s due process rights were violated when the DC

refused to allow him to engage competent counsel in

connection with the hearing on the Vacate or Stay

Motion. ............................................................................................. 77



D.Baron’s due process rights were violated when the DC

routinely granted motions filed by the opposition that

substantially effected Baron without permitting him to

respond. ............................................................................................ 78



E The DC violated Baron’s due process rights and abused

its discretion by forcing baron to defend the 2013 Fee

Applications and the 2014 Fee Request on an

unreasonably accelerated basis, refusing to allocate

funding to pay counsel or an expert witness, and

refusing to grant a continuance ...................................................... 78



1. The 2013 Fee Application ........................................................... 78

2. The 2014 Fee Request ................................................................ 81

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F. The deceit fostered by Vogel and Sherman before the

panel and then perpetuated in the opinions of this

Court deprives Baron of his life, liberty and property

without due process of law. ............................................................. 82



1. Many misrepresentations were adopted by the panel

in the

Netsphere I

opinion and by the DC. ................................ 82

2. The panel’s finding that Jeffrey Baron was a

“vexatious” litigant was a result of Sherman and

Vogel’s fabrications.. ................................................................... 87



3. The Netsphere panel was clearly erroneous in: (a)

finding that Baron’s actions increased the fees and

expenses of the Receiver. ............................................................ 88



4. The cumulative effect of these false representations

was to deprive Baron of his Fifth Amendment

Rights to Due Process. ................................................................ 89



G.The taking of Baron’s assets, including the LLC’s

assets, amounted to an unconstitutional taking of

property without due process.......................................................... 90



II. SEIZING AND DISBURSING PROPERTY NOT SUBJECT TO

A DISPUTE BEFORE THE COURT AND NOT WITHIN THE

COURT’S JURISDICTION VIOLATES THE FOURTH

AMENDMENT. .............................................................................................. 91



III. The Panel In Netsphere I Erred in Determining That The DC

Had The Equity Jurisdiction To Award Fees And Expenses

Against The Assets Of Baron or the LLCs, In Any Amount. ................ 93



A. Analysis of Facts and Law Decided in the Netsphere I

Case .................................................................................................. 93



B. Without subject matter jurisdiction, a DC is powerless

to assess a receiver’s professional fees and expenses

against assets illegally seized. ........................................................ 96



1. Fifth Circuit Precedent ............................................................... 97

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2. Supreme Court Precedent .......................................................... 98

C. The

Netsphere I

panel’s reliance upon Palmer v. Texas

was misplaced. ................................................................................. 99



D.The

Netsphere I

panel’s reliance on

Potts II

was

misplaced. ...................................................................................... 100



E. The Law of the Case Doctrine does not bar this Court

from reconsidering the ruling in part II of

Netsphere I

decision: a court can never be barred from questioning

subject matter jurisdiction. ........................................................... 100



1. It is a fundamental concept that a court not having

jurisdiction of the res and/or the parties cannot

affect the res or the parties by its decree. ............................... 101



2. Parts I and II of the

Netsphere I

opinion are

inconsistent and cannot be reconciled. .................................... 102



3. It would be manifestly unjust for this Court to

perpetuate this clearly erroneous legal conclusion

adopted in Part II of the

Netsphere I

opinion. ........................ 104

4. Appellees’ Demonstrable Fraud on the Court

Requires Reconsideration ......................................................... 104



5. Denial of Due Process Compels Reconsideration of

Netsphere I

. ............................................................................... 105

IV. The DC Failed to Follow This Court’s Mandates Issued In

Netsphere I. .................................................................................................... 105

A. The Mandate Rule prohibits a DC from straying from

an appellate court’s directive ........................................................ 106



B. Even if the DC had the equity jurisdiction to award

receivership fees and expenses, the DC failed to follow

the mandate of the Netsphere I panel in the exercise of

such equity jurisdiction. ................................................................ 107



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xii

C. The standard for applying equity in instances of

improvidently appointed receivers has been clearly

established. .................................................................................... 108



D.The “discounts” ordered by the DC did not comply with

the law or the mandates issued in

Netsphere I

. .......................... 109

E. As a matter of law, the fees incurred by a losing party

to a litigation cannot be borne by the prevailing party. .............. 110



F. The 2013 Fee Applications and the 2014 Fee Request

violated the Court’s mandates. ..................................................... 113



G.The DC violated the mandates by failing to reconsider

all of the professional fees and expenses and failing to

reconsider payments made to other professionals. ...................... 114



H.The DC violated the mandates by awarding fees and

expenses in favor of Sherman’s attorneys, MHKH, in

the amount of $379,761.18. ........................................................... 115



1. In

Netsphere I

, this Court reversed the order

awarding the Ondova bankruptcy trustee’s fees and

expenses. ................................................................................... 116



2. The DC correctly ruled, on January 2, 2013, that no

more fees and expenses would be awarded to the

Ondova bankruptcy trustee and that disgorgement

was in order ............................................................................... 117



3. The DC did a 180 degree turn, disavowing the

January 2, 2013 Advisory. ........................................................ 117



I The DC violated the mandates by awarding fees in

excess of the $1,600,000 fee cap. ................................................... 118



J. The DC violated the mandates by refusing to return

the assets of the LLCs to their rightful owner, and by

refusing to make a determination of the rightful owner

of the LLCs. ................................................................................... 122



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xiii

K.The DC violated the mandates of the panel in

Netsphere I

by granting broad and sweeping releases

to Vogel and others. ....................................................................... 125



1. Vogel and his professionals acted as trustees for

Appellants’ assets ..................................................................... 126



2. Vogel and his privies concealed their dealings with

Appellants’ assets ..................................................................... 128



L. The DC violated the Mandate Rule in

Netsphere I

creating exclusive jurisdiction over claims relating to

parties and assets over which the panel held that the

DC had no subject matter jurisdiction to begin with. ................. 129



M.The DC’s grant of broad, sweeping releases and

creation of an exclusive continuing jurisdiction

provisions not only violate the mandate but are in

conflict with the DC’s prior pronouncements............................... 130



N.The DC violated the mandates by refusing to order the

return of Appellants’ books and records seized by Vogel ............ 131



O.The DC approved a wholly deficient accounting.......................... 132

P. The DC violated the mandates by failing to

expeditiously wind-down the receivership and return

assets to Appellants ...................................................................... 133



V. The DC Abused Its Discretion By Awarding Fees Under

Patently Defective Fee Applications ........................................................ 133



A. Block billing practices rendered the Fee Applications

defective as a matter of law .......................................................... 133



1. A receiver and his lawyers must meet a high

standard before receiving compensation ................................. 134



2. Gardere’s fee application is wholly deficient ........................... 136

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xiv

3. Dykema’s fee application is just as deficient as

Gardere’s ................................................................................... 138



4. Vogel’s time entries are the most deficient. ............................ 139

5. Vogel’s 2014 Fee Request is deficient. ..................................... 140

C. A Receiver Has a Duty to segregate his expenditures ................ 140

D. Fees for work performed after receivership deemed

illegal are not compensable ........................................................... 141



E. Disgorgement Required for Breaches of Fiduciary

Duty................................................................................................ 141



VI. The DC Erred in Making Findings of Fact Unsupported by the

Record ............................................................................................................ 142



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INDEX OF AUTHORITIES

Cases

Atlantic Trust Co. v. Chapman, 208 U.S. 360 (1908) ........................ 96, 98, 102

B.,Inc. v. Miller Brewing Co.,

663 F.2d 545, 548 (5th

Cir.1981). ........................................................................................... 129

Bank of Commerce & Trust Co. v. Hood,

65 F.2d 281 (5th Cir. 1933) .................................................................. 140

Bank of Commerce & Trust Co. v. Hood, 65 F.2d 281 (5th Cir.

1933) ................................................................................................... 140

Baronv.Schurig,

No.3:13‐CV‐3461,2014WL25519(N.D.Tex.Jan.2,2014) ................... 34

Baron v. Schurig

, No. 3:13-CV-3461, 2014 WL 25519, at *1

(N.D. Tex. Jan. 2, 2014, Lindsay, J) ................................................... 34

Baum v

Blue Moon Ventures, LLC

, 513 F.3D 181 (5

Cir.

2008) .................................................................................................... 27

Beach v. Macon Grocery Co., 125 F. 513 (5th Cir. 1903) ................... 96, 97, 102

Beaubouef v. Beaubouef

(In re Beaubouef ), 966 F.2d 174,

178 (5th Cir. 1992) ............................................................................ 142

Camara v. Municipal

Court of City and County of San

Francisco

, 387 U.S. 523, 528 (1967) ................................................... 92

Chambers v. Nasco, Inc.,

501 U.S. 32 (1991) ............................................................................... 26

Citizens Bank of Louisianna v. Cannon, 164 U.S. 319, 324 (1896) .................. 102

Cochrane v. W.F. Potts Son & Co., 47 F.2d 1026, 1029 (5th

Cir.1931) ....................................................................................... passim

Case: 15-10341 Document: 00513219780 Page: 16 Date Filed: 10/05/2015

xvi

Collins v. Baptist Mem’l Geriatric Ctr

., 937 F.2d 190, 194

(5th Cir. 1991) ................................................................................... 143

Commodity Futures Trading Comm’n v. Morse

762 F.2d 60 (8th Cir. 1985) ................................................................. 93

Connecticut v. Doehr,

501 U.S. 1 (1991) ............................................................................. 79, 90

Crowe v. Smith

, 261 F.3d 558, 562 (5th Cir.2001) ................................ 106

Denius v. Dunlap

, 330 F.3d 919, 926 (7th Cir. 2003) ........................... 122

Deputy v. Lehman Bros., Inc.,

345 F.3d 494 (7th Cir. 2003) ................................................................. 106

Dodson v. Huff (In re Smyth), 207 F.3d 758 (5th Cir. 2000) ........................... 127

Fall v. Eastin

215 U.S. 1 (1909) ............................................................................... 101

Fed. R. Evid. 201(b)(2) ............................................................................ 122

First Nat. Bank v. Southern Cotton Oil Co., 86 F.2d 33, 34 (5th

Cir. 1936) ............................................................................................ 111

Garrett v. First National Bank & Trust Co. of Vicksburg,

Miss

153 F.2d 289, 292

(5th Cir.1946) ............................................ 132

Gene & Gene, L.L.C. v. BioPay, L.L.C.,

624 F.3d 698 (5th Cir. 2010) ................................................................. 101

General Universal Sys., Inc. v. Hal, Inc., 500 F.3d 444, 453 (5th

Cir. 2007) ............................................................................................ 106

Godfrey v. Powell, 159 F.2d 330 (5th Cir.1947) ............................................ 109

Goldberg v. Kelly,

397 U.S. 254 (1970) .......................................................................... 74, 80

Grupo Mexicano de Desarrollo

SA v. Alliance Bond Fund,

Inc.,

527 U.S. 308 (1999) ..................................................................... 92

Case: 15-10341 Document: 00513219780 Page: 17 Date Filed: 10/05/2015

xvii

Hardt v. Reliance Standard Life Ins. Co.,

560 U.S. 242 (2010) .............................................................................. 111

Harris v. Sentry Title Co., Inc.,

806 F.2d 1278, 1279 (5th

Cir. 1987) ........................................................................................... 107

In re Blackwood Assoc., L.P

., 165 B.R. 108, 111 (Bankr.

E.D.N.Y.1994) ................................................................................... 138

In re Fredeman Litigation

, 843 F.2d 821, 824;

Gandy

Nursery, Inc. v. US

, 318 F.3d 631, 636 (5th Cir. 2003) ..................... 93

In re Imperial “400” National, Inc., 432 F.2d 232, 237 (3rd

Cir.1970) ............................................................................................. 134

In re Marcuse & Co.,

11 F.2d 513 (7th Cir. 1926) .................................................................. 112

In re Marcuse & Co., 11 F.2d 513, 516 (7th Cir. 1926) ......................... 109, 112

In re Middle West Utilities Co.,

17 F.Supp. 359 (D.C. Ill. 1936) ............................................................. 115

In re Southmark Corp.,

163 F.3d 925, 929 (5

Cir. 1999) ...................... 96

In United States v. Larchwood Gardens, Inc., 420 F.2d 531, 534–35

(3rd Cir. 1970) ............................................................................... passim

Kearney v. Auto-Owners Ins. Co.,

713 F.Supp.2d 1369 (M.D. Fla. 2010) ................................................... 134

Lion Bonding & Surety Co. v. Karatz, 262 U.S. 640, 641-2 (1923) 96, 98, 99, 102

LondonRecordsv.DeGolyer,

217F.2d574,(5thCir.1954) .................................................................. 23

Lopez v. Current Dir. of Tex. Econ. Dev. Comm’n

, 807 F.2d

430, 434 (5th Cir. 1987) .................................................................... 142

Matthews v. Eldridge,

424 U.S. 319 (1976) ................................................................................ 80

Case: 15-10341 Document: 00513219780 Page: 18 Date Filed: 10/05/2015

xviii

Mosser v. Darrow, 341 U.S. 267, 272-73 (1951) and for failure

to pay taxes.

n re Texas Pig Stands, Inc

., 610 F.3d

937 (5th Cir, 2010) ............................................................................ 127

Neville v. Eufaula Bank & Trust Co. (In re U.S. Golf Corp.),

639 F.2d 1197(5th Cir. 1981) ................................................................ 137

New York Life Ins. Co. v. Brown, 84 F.3d 137, 143 (5th Cir. 1996) ................ 130

Nowell v. International Trust Co., 169 F. 497, 505 (9th Cir.1909) ................. 135

Pegram v. Herdrich,

530 U.S. 211, 224 (2000) ...................................... 128

Planned Parenthood of Greater Texas Surgical Health

Services v. Abbott II,

748 F.3d at 583, 604 (5

Cir.

2014) .................................................................................................. 142

Powellv.UnitedStates,849F.2d1576,1582(5thCir.1988) .......................... 74

PSL Realty Co. v. Granite Investment Co.,

395 N.E.2d 641

(Ill. 1979) ........................................................................................... 141

R.B. Potashnick v. Port City Construction Co.,

609 F.2d 1101 (5th Cir. 1980) ................................................................. 74

Reynolds v. Stockton

140 U.S. 254 (1891

)

........................................................................... 101

Reynolds v. Stockton

, 140 U.S. 254, 268–69 (1891) .............................. 101

Rhode Island v. Massachusetts

37 U.S. 657 (1838) ............................................................................. 101

SchurigJetelBeckettTackett,etal.v.Baron,FifthCircuit

AppellateCaseNo.14‐10092 ................................................................ 34

Seastrunk v. Darwell Integrated Technology, Inc.,

No. 3:05-CV-0531, 2009 WL 2705511 (N.D.Tex. Aug. 27,

2009) ................................................................................................... 134

Severance v. Patterson, 566 F.3d 490, 501 (5th Cir. 2009) ............................... 91

Case: 15-10341 Document: 00513219780 Page: 19 Date Filed: 10/05/2015

xix

Smyth v. Asphalt Belt Ry. Co., 267 U.S. 326, 330 (1925) ............................... 102

Soldal v. Cook County Ill., 506 U.S. 56, 61 (1992) ........................................... 91

Speakman v. Bryan,

61 F.2d 430 (5th Cir. 1932) ................................................................... 109

Speakman v. Bryan, 61 F.2d 430, 431 (5

Cir. 1932) .............................. passim

Texas Catastrophe Prop. Ins. Assoc. v. Morales,

975 F.2d 1178 (5th Cir. 1992) ................................................................. 74

Texas State Teachers Ass’n v. Garland Indep. Sch. Dist.,

489 U.S. 782 (1989) .............................................................................. 134

Tucker v. Baker, 214 F.2d 627 (5th Cir. 1954) .............................................. 109

United States Catholic Conference v. Abortion Rights

Mobilization, Inc.

, 487 U.S. 72 (1988) .............................................. 101

United States Catholic Conference v. Abortion Rights Mobilization,

Inc., 487 U.S. 72, 77 (1988) ................................................................... 102

United States v. Becerra,

155 F.3d 740, 752 (5th Cir. 1998) ............... 106

United States v. Castillo

, 179 F.3d 321, 330 (5th Cir. 1999) ................ 106

United States v. Code Products Corp., 362 F.2d 669, 673 (3d

Cir.1966) ............................................................................................. 135

United States v. Jacobsen, 466 U.S. 109, 113 (1984) ........................................ 91

United States v. Jardine,

81 F.2d 747 (5th Cir. 1936) .................................................................. 102

United States v. Kellington,

217 F.3d 1084 (9th Cir. 2000) ............................................................... 105

United States v. Larchwood Gardens, Inc.,

420 F.2d 531 (3rd Cir. 1970) ................................................................ 112

Vaccarov.UnitedStates,461F.2d626,635(5thCir.1972) ............................ 75

Case: 15-10341 Document: 00513219780 Page: 20 Date Filed: 10/05/2015

Veeder v. Public Service Holding Corp.,

51 A.2d 321 (Del. 1947) ....................................................................... 115

Woods v. City National Bank & Trust Co. of Chicago,

312

U.S. 262 (1941) .................................................................................. 141

World-Wide Volkswagen Cop. V. Woodson, 444 U.S. 286, 291

(1980) .................................................................................................... 73

No table of authorities entries found.Other Authorities



45 Am. Jur., Receivers § 278 (1956) ........................................................... 109

75 C.J.S., Receivers, § 389(a), p. 1064 ........................................................ 134

Fed. R. App. P. 4 ......................................................................................... 1

George G. Bogert et al

., The Law of Trusts and Trustees §

543, at 219 (2008) ...................................................................... 127, 132

Restatement (Third) of Trusts (Third) § 78 (2007) ............................. 127

Case: 15-10341 Document: 00513219780 Page: 21 Date Filed: 10/05/2015

TO THE HONORABLE JUDGES OF THE UNITED STATES COURT

OF APPEALS FOR THE FIFTH CIRCUIT:

Appellant Jeffrey Baron respectfully submits this Appellant’s Brief

showing the following in support of reversing the

Order on Receivership

Professional Fees

STATEMENT OF JURISDICTION

Appellant initiated this appeal by timely filing a

Notice of Appeal to

United States Court of Appeals for the Fifth Circuit

on April 16, 2015.

Record Excerpt 2. This appeal is from a final order of the District

Court. On March 27, 2015, the district court below (“DC”) issued a

Memorandum Opinion and Order and an Order administratively clos-

ing case. Record Excerpts 12 and 10, respectively. This constituted a

Final Order over which this Court has jurisdiction pursuant to 28

U.S.C. §1291. All of the interlocutory orders entered in this case are

now also final and appealable, including the orders in Record Excerpts

3-9 and 11.

Case: 15-10341 Document: 00513219780 Page: 22 Date Filed: 10/05/2015

ISSUES PRESENTED

1. Whether the DC violated the Fifth Amendment when it pre-

vented Jeffrey Baron from accessing to his funds to pay coun-

sel during contentious, complex proceedings.

2. Whether charging fees against property that was wrongfully

seized without jurisdiction and without probable cause vio-

lates the Fourth or Fifth Amendments.

3. Whether the precedent of this Court and the Supreme Court

precludes charging expenses of an unlawful receivership

against property over which the court lacks subject matter

jurisdiction.

4. Whether the decision in

Netsphere I

was clearly erroneous in

determining that the DC had the equity jurisdiction to award

fees and expenses against the assets of Baron, Novo Point

and Quantec, where the Court had determined that the DC

lacked subject matter jurisdiction in the first instance

5. Whether the DC can ignore controlling precedent from the

Supreme Court and this Court in awarding fees to a vacated

receiver and his professionals without a showing that the fees

conferred a benefit to the estate.

6. Whether the DC is permitted to disregard this Court’s man-

date in

Netsphere, Inc. v. Baron

, in awarding excessive fees

and expenses to Vogel and the professionals hired by him and

to Sherman, the party who moved for the receivership.

7. Whether a vacated receiver, as a matter of law, can charge

the estate for work that he and his professionals performed

vindicating their personal interests, including services in-

volved in prosecuting fee applications to the DC and defend-

ing them.

Case: 15-10341 Document: 00513219780 Page: 23 Date Filed: 10/05/2015

8. Whether the lower court, on remand, is permitted to engage

in proceedings and actions that are not specified in this

Court’s mandate

9. Whether, as a matter of law, fiduciaries can receive broad re-

leases of liability without an agreement for such releases and

without disclosure of their activities and when the lower

court lacks jurisdiction to grant such releases.

10. Whether the lower court violated the Fifth Amendment and

abused its discretion by forcing Jeffrey Baron to respond to

and defend over 16,000 pages of fee applications on a seven

day schedule while preventing him access to his funds to pay

counsel or experts.

11. Whether certain findings made by the DC, in the absence of

any supporting evidence, is an abuse of discretion.

12. Whether it was an abuse of discretion for the DC to award

fees under patently defective applications that do not satisfy

prevailing law on the requirement for proving up allowable

fees and expenses against receivership assets.

13. Whether the DC was clearly erroneous in adopting certain

enumerated findings of fact, many of which were made with-

out hearing any evidence or conducting a hearing, and based

on applications that are not verified.

Case: 15-10341 Document: 00513219780 Page: 24 Date Filed: 10/05/2015

STATEMENT OF THE CASE

A. Introduction

 Thiscasehasoftenbeendescribedasa“trainwreck”bymanyfamiliar

withitshistory.Whatbegan asasimple partnershipdisputewaspushed 

off the tracks when a bankruptcy trustee of a corporate chapter 11 case,

DanielJ. Sherman(“Sherman”)andhisattorneys, Munsch,Hardt, Kopf&

Harr

 PC (“MHKH”) dissatisfied with an effectuated settlement with Ap‐

pellantJeffrey Baron (“Baron”), met ex parte with District Judge Royal

Furgeson, under circumstances that are nearly  unimaginable  and con‐

vincedJudgeFurgeson,inanofftherecordexpartemeeting,tohaveallof

Baron’sassetsplacedintoareceivership,

despitethoseassetsnotbeingthe

subjectof the litigation,fortheexpresspurpose of preventing Baron from

objectingtotheirfeesandtheirlootingtheOndovabankruptcyestate.

After review, this Court reversed, holding that “a court lacks subject matter juris-

diction to impose a receivership over property that is not the subject of an underly-

ing claim or controversy.”

Netsphere,

at 703 F.3d at 306, 310.

Case: 15-10341 Document: 00513219780 Page: 25 Date Filed: 10/05/2015

 Thisrelativelysimpledisputewasmanipulatedinamyriadofwaysby

Sherman’s lead lawyer, Raymond Urbanik (“Urbanik”), who, Baron be‐

lieves,wasdesperatelyattemptingtogeneraterevenuesforhisfirmsothat

hecouldmaintain hisjobwithMHKH.

ThreedaysafterBaronlodgedan

object to the fee application filedbyMHKH intheOndovacase,Urbanik,

in a desperateattempt to blocksaidobjection and all future objectionsto

hisfirm’sfees,causedtobefiledanadmittedlyunlawfulappointmentofa

receiverovernotonlyall

oftheassetsofBaronbutalsooverBaronhimself.

After seizing over $10 million of Baron’s money,

 using most of it to pay

themselves,Vogel,Sherman,MHKH,GardereandDykema Gossett PLLC

(“Dykema”)failedtopayasinglepennytoanycreditorinthereceivership

orintheOndovacase,whichisnowadministrativelyinsolvent.

 Seekingtocorrectthiswrong,thisCourtcourageouslyreversedVogel’s

appointmentandthemillions

ofdollarsinfeepayments.Now,threeyears

Urbanik is no longer working for MHKH, and the “word on the street” is that Ur-

banik was forced to leave.

“Baron” is used shorthand here for Baron, Novo Point and Quantec.

Case: 15-10341 Document: 00513219780 Page: 26 Date Filed: 10/05/2015

later,Baron has not receive d back any of his moneyorproperty,with the

exception of some exempt assets. The shocking story of how this could

haveoccurredisdiscussedherein.

B. The Underlying Litigation

 AcontroversyaroseoverajointventurebetweenJeffreyBaronandre‐

lated entities, including Ondova Limited Company (“

Ondova”),

 and

Munish Krishan and two of his related entities, including Netsphere, Inc.

(“NetsphereParties”).Litigationensued.

 On May 28, 2009, the Netsphere Parties filed a suit against Bar‐

on/Ondova in thedistrict court below (“NetsphereDC Case”), alleging that

Baron/Ondova breached a settlement agreement.Baron/Ondova alleged

thatthe

NetspherePartieswereinbreachbyrefusingtopay the$4million

requiredunderthetermsthereof.



Ondova is a domain name registration company that maintains necessary infor-

mation for the operation of domain names on the internet.

ROA.139‐152

Case: 15-10341 Document: 00513219780 Page: 27 Date Filed: 10/05/2015

 NeitherNovoPoint,LLC  nor Quantec, LLC (the “LLCs”) were named

parties in the Netsphere DC Case,

 nor were  there allegations as against

them.

 Ondova filed chapter 11, and Sherman was appointed as the trustee.

Sherman hired the law firm MHKH, who designated Urbanik as lead

counsel.

C. The Parties Settled All Controversies

 InJune2010,theparties reached a global settlement,whichwasdocu‐

mentedinaMutualSettlementandRelease

Agreement(the“GSA”).



 The GSA provided for Baron’s affiliated companies to retain over

230,000incomeproducingInternetdomainnamesandadditionalrevenue,



anditwasintendedtoprovideBaronafreshstart,topayOndova’sadmin‐

istrativeandunsecuredcreditorsinfull,toresolvetheOndovaChapter11

708 F.3d 296, 311 (hereinafter

Netsphere I

)

ROA 1692-1841-entire GSA.

ROA.1696 ($1.250,00 + deferred payment of $600,000 to Village Trust); ROA.1700

(describing PokerStar Revenue which amounted to approximately $500,000);

ROA.1697 (describing division of approximately 700,000 domain names)

Case: 15-10341 Document: 00513219780 Page: 28 Date Filed: 10/05/2015

Casethroughaconversion ordismissal,andtoreturncontrolofOndovato

Baron.

 Most importantly for Baron,  the GSA was intended to re solve  the

NetsphereDCCaseandotherlawsuits throughjointstipulationsofdismis‐

salwithprejudice.

TheGSAannexedfourdismissalswithprejudice,one

of which, Exhibit “K”, was a “StipulatedDismissal WithPrejudice”of the

NetsphereDCCase.



 TheGSAprovidedforpaymentstoOndovaintheapproximateamount

of $1,700,000.00, which, along with other funds onhand, was sufficient to

payalladministrativeclaimsandunsecuredcreditorsinfull.



 TheGSAwasapprovedbytheBConJuly28,2010.

13

Thereafter,inAu‐

gust and September 2010, the assets were transferred and the cash was

ROA.4102 (Sherman’s counsel testified: “The negotiation was to pay the debts and

givethekeysbacktoBaron.Butthatdidn'thappen”.)

See See

ROA.1705 - requirement of MHKH to file the Stipulated Dismissal.

See

also:

ROA. 1788-1796.

See ROA.1804-1813 for a fully executed copy of Exhibit K.

ROA.1696, 1700 (payments from Village Trust to Chapter 11 Trustee); SROA.??

(Monthly Operating Report), ROA. In September 2010, after receiving payment un-

der the GSA Sherman held over $2 million in cash to pay the estimated $800,000 in

scheduled claims. Ondova should have emerged from bankruptcy with approximate-

ly $1 million in cash to finance its reorganized operations. )

Case: 15-10341 Document: 00513219780 Page: 29 Date Filed: 10/05/2015

paid to Ondova. Baron and his affiliated entities fully complied with the

GSA.

 All four dismissals were executed by the parties and del ivered to

MHKHnolaterthantheearlypartofSeptember2010.Undersection10of

theGSA,MHKHwasdirectedtofileallfourdismissaldocumentsprompt‐

ly after receipt of same.

 MHKH, without explanation or authority,failed

tofilethedismissalastotheNetsphereDCCase.

D. The unjustified and illicit attack upon Jeffrey Baron

 In October 2010, Sherman and Urbanik began aggressively soliciting

new claims

 from other lawyers that had formerly represented various

parties in the Netsphere litigations.

Sherman invited lawyers who had

notmade  claimsandhadbeenpaidinfull,tomakeclaimsintheOndova

ROA.1683-1689 (Order Approving Settlement Agreement)

See

ROA.24596, SROA??sherman testimony10-28-2010, ROA.26117-26118.

ROA.1704‐1705.

The bar date for making claims in the bankruptcy had long passed. ROA.1429-

1430.

The 10 year long dispute involved over 40 parties and over 100 lawyers.

Case: 15-10341 Document: 00513219780 Page: 30 Date Filed: 10/05/2015

bankruptcyfor“substantialcontribution”totheOndovaestate.

Sherman

and Urbanik even recruited these lawyers to assist in the solicitation of

more lawyers.They eventually succeeded in getting two firms to make

claimsagainstBaronandOndova.Thiswasa“farcry”fromthedozensof

lawyersShermanandUrbanikrepresentedtotheBC,theDCandthe

Fifth

Circuit that Baron  was “hiring and firing” without paying them.

These

representationswerefalse,andintheend,onlyonelawfirmmadeaclaim

thatwasactuallyallowedbythecourt.



 InSeptember2010,ShermanandUrbanik begantomisrepresentbefore

theBCandDCthatBaronwas engagedindisruptiveconductandwasat‐

temptingtonullifytheGSA.



ROA.24588-24590 (declaration of Jay Kline and Blake Beckham).

(ROA.24654, 24649, 35392, 3898-“nineteen lawyers”, )

SROA.??(bankruptcy docket)

ROA.5979-5983;

See

Argument I-G-1, infra, at p __.

Case: 15-10341 Document: 00513219780 Page: 31 Date Filed: 10/05/2015

E. The BC’s issuance of a show cause order against Baron and its

Report and Recommendation to the DC

 Bankruptcy Judge Jernigan issued an order on September 17, 2010,

commandingBarontoappearandshowcausewhyhewasnotin contempt

of the BC’s order approving the GSA, which directed the parties to fulfill

alloftheirrespectiveobligationsundertheGSA.

 On September 22, 2010,

the BC commenced a three ‐day evidentiary

hearing at which Baron  and other parties, including Sherman, testified.



At the end of the hearing, the BC did not find that Baron was guilty of

breaching the GSA or moving assets offshore, and no order was entered

findingorconcludingthatBaronwasincontempt.

Ultimately,thisCourt

cametothesameconclusions.SeeArgumentI‐F‐1,infra,atp82.

 During the course of the hearing, Sherman, Vogel and their lawyers

recommended to  the BC that Vogel be appointed “mediator” to mediate

theclaimsthatShermansolicited.

ROA.24660

ROA.24654-24662

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 On October 13, 2010, the  BC issued a Report and Recommendation to

theDC.Notably,despite Appellees’misrepresentationstotheDCandthis

Court, the BC did not recommend the appointment of a receiver, and

ShermanandhisattorneyswerenotunderanymandateoftheBCtopur‐

sueanyreceivershipaction.

Thesedeceptionsunderminedtheefficacyof 

thedecisionoftheCourtinNetsphereI.SeeArgumentI‐F‐1,infra,atp82.

 OnOctober19,2010,theDCenteredanorderadoptingtheBC’sReport

andRecommendation,

andappointedVogelasamediator.



 Baron complied with the DC’s order to mediate the former attorneys’

allegedclaims.However,ShermanandVogelallegedBaronwasnotcoop‐

eratingwiththemediatorandwasobstructingthemediationefforts.These

allegationsweresubsequentlydebunkedbySherman,himself.



ROA.1842-1852

ROA.1027

ROA.1028 (Order amended on Mary 25, 2010 – ROA.1032)

ROA.26083; ROA.3986-3988.

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F. Baron’s receivership was instituted and perpetuated with

malice and wrongful purpose on the part of Sherman, Trustee, his

attorneys and Vogel.

1. Sherman and MHKH hatched the receivership in retaliation for

Baron objecting to MHKH’s Fee Application, and Vogel aided

and abetted their scheme

 TheideaofplacingBaron intoareceivershipwasconceivedbyUrban‐

ik,VogelandShermanwhen,onNovember19,2010,Baronobjectedtothe

Third Fee Application filed by MHKH in the Ondova chapter 11.

 That

sameday,inretaliation,Urbanik,incooperationwithShermanandVogel,

spent2½hoursdraftingthemotiontoputBaronintoreceivershipandto

specifically appoint Vogel, who was then special master and mediator in 

thecase.



ROA.24650 (See docket 521); ROA.10659-10660. At the point in time Sherman decided to

place Baron into a receivership, there were enough funds in the Ondova bankruptcy estate to pay

in full all Administrative Claims, Priority Claims and Unsecured Claims. However, as we sit

here today, not one creditor in the Ondova case has been paid with the exception of MHKH and

Sherman, Sherman’s accountant and certain other administrative creditors. The Ondova estate is

and has been administratively insolvent for over 3 years..

ROA.317;ROA.10659‐10660.

Case: 15-10341 Document: 00513219780 Page: 34 Date Filed: 10/05/2015

 Thenextday,onNovember23,2010,insteadofseekingthefurtherin‐

volvementoftheBCandgivingBaronanopportunitytobeheard,Urbanik

and Sherman, in conspiracy with Vogel, unilaterally spent two and a half

hoursplanningtoplaceBaronintoareceivership.



2. The meretricious circumstances surrounding the entry of the

Receivership Order on November 24, 2010.

 OnNovember24,2010,UrbanikandShermanhadanexpartemeeting

with Judge Furgeson, sometime before 1:15 p.m.

 at which he signed the

OrderAppointingVogel Receiver(the“ReceivershipOrder”).

32,

However,

theDC’sdocketsheetsdonotreflectthatahearingeveroccurred.

Itwas

anexparte,off ‐the‐record,secretmeeting,unreportedtothepublic.Unex‐

ROA.10659–10660.

ROA.10659-60,;For email sent by Mr. Ubanik to ICANN reporting time Receiver-

ship Order entered

See

ROA.14569-71. Urbanik, another lawyer from MHKH,

Sherman and probably Vogel met Judge Ferguson sometime before 1:15 p.m. With

no motion on file, and without notice being given to Baron or his counsel, these law-

yers presented Judge Ferguson with the Receivership Order, and Judge Ferguson

signed it, apparently at 1:15 pm. (ROA.14736–37).

ROA.1136-1149. Billing Statements of MHKH. ROA.6778-6779 – See entries of

RJU and DLR for 11/24/10. The time records indicate that Urbanik and another

lawyer at MHKH attended a hearing on the Receivership Motion

ROA.36

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plainably,theMotiontoAppointaReceiverhadnotevenfileduntilseveral

hours later, without any notice to Baron or a hearing.

 The metadata in‐

formationonthepdfversionoftheReceivershipMotionfiledwithPACER

showsthatthe motionwascreatedat2:07p.m,nearly50minutesafterthe

ReceivershipOrderwasapparently presentedtoandsignedbyJudgeFur‐

geson.

AccordingtothePACERtimestamp,themotionwasfiledat3:40

p.m.CST,atleast2½hoursafterthesecretmeetingwithJudgeFurgeson

occurredandtheReceivershipOrderwassigned.



 TheReceivershipMotionwasunverified,wasunsupportedbyanydec‐

larations or affidavits, and was filed as an “emergency” motion, notwith‐

standing that there were no emergency circumstances that existed or that

ROA.1033‐1037.

See

Unsworn Declaration of Gary N. Schepps describing forensic examination of

the documents. ROA.14569. This can be independently verified by downloading a

copy of the Receivership Motion from PACER, going to “Properties” in the “File” tab

of Adobe Acrobat.

At 3:54 p.m., Urbanik sent an email to ICANN, the international internet regis-

try, in which he reported that, at 1:15 p.m. CST on November 24, 2010, the Receiv-

ership Order had been signed by the DC and Vogel had been appointed receiver.

ROA.14736–38.

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wereevenreportedinthemotion.

Notranscriptofanyhearingor meet‐

inginchamberswithJudgeFurgesonexists.NonoticewasgiventotheBC

ortoBaron.Norecordofsuchexpartemeetingorhearingappearsonthe

docket.Theseeventsarebothextraordinaryandtroubling.

 Inthe exparte motionfor

theappointment ofareceiver,Shermanand

UrbanikdisingenuouslyarguedthatbecauseBaronwasviolatingtheDC’s

mediation order and breaching the GSA, and that the DC needed to ap‐

pointVogelasreceivertosothatVogelcould“stepintotheshoes”ofBar‐

on and perform the obligations

that Baron was supposedly breaching.



Sherman later admitted under oath that he manufactured these asser‐

tions, and that Baron never even had any obligation to Sherman or

Ondova.BothShermanandVogelknewthatthelawyerscausedthemedi‐

ationtofail,butdeliberatelymisledtheDCintobelievingthatitwasBaron

whohad

causedthemediationtofail.



ROA.1033‐1037.

ROA.1036.

ROA.26113-26114, 26118, 26083; ROA.3986-3988.

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3. Vogel immediately seized Baron’s files and fired Baron’s AV

rated lawyer.

 In a “blitzkrieg”,Vogel immediately seizedall of Baron’s funds‐‐more

than$1.9million,

impoundedhisexemptassetsaswell,confiscatedallof

hislegaldocumentsandseized26entitiesthatwereallegedtobeownedor

controlledbyBaron.

Atthesametime,VogelfiredBaron’s“AV ” ratedtri‐

alcounsel.



4. Vogel threatens Baron and then appoints himself Baron’s

counsel.

 IncrediblyGarderesentBaronathreateningemailonDecember

2,2010,stating:

The receiver is furthermore instructing you as follows: First,

you are expressly prohibited from retaining any legal counsel.

Shouldyouretainanylegalcounsel,VogelmaymovetheCourt

tofindyouincontemptofthereceivership

Order.



ROA.29040

By March 2011, Vogel had confiscated approximately $1,900,000 in Baron’s

personal cash, and about $600,000 of the LLCs’ cash. SROA.??

ROA.1169‐1172

ROA.3348‐3351.

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 Incredibly, Vogel then instructed Baron that Vogel himself was ap‐

pointedbythecourttobeBaron’slawyer

andmandatedthatBaron’sre‐

questto thecourtforindependenttrial counselbedenied.

Asabsurdas

thisseemed,Sherman’scounsellaterexplainedtothecourt

“Andthereason whytheCourthasputinplaceareceivership

is to address Baronʹs desire for due process which is a pretty 

extremedesirefordueprocess.”

ROA.34877

5. Vogel dismisses Baron’s objection to MHKH’s fee application.

 Meanwhile,onDecember1,2010,one

weekafterVogelwasappointed,

heaccompaniedShermantotheBC,whereheannouncedthathehadsup‐

planted Baron and his interests, and withdrew Baron’s objection to

MHKH’s fee application.

 MHKH and Urbanik had achieved their objec‐

tive: Baron’s objection to their fee application was removed, and Baron 

At an on-the-record meeting with Baron, Vogel proclaimed “I am the counsel for

Jeff Baron. And that is what the judge said.” ROA.29048.

In response to request for Baron to have counsel, Vogel stated: “Fine. You re-

quested. Request denied.” ROA.29049.

The “fix” was obviously in; ROA.3928.

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would never again be permitted to object to MHKH’s fees in the Ondova

case.

G. The DC authorizes Vogel to take control of the LLCs, over

which the DC had no subject matter jurisdiction.

 When Vogel confiscated the LLCs’ assets, they owned approximately

230,000 valuable domain names, which, according to Sherman, had value

inexcessof$100,000,000.00.



 Seeking additional assets for his receivership, Vogel moved the DC to

“clarify”theReceivershipOrdertopersuadetheDCthatithadintendedto

include the LLCs despite no indication that the DC had such intentions.



The DC granted the order and Vogel took possession and control of the

LLCs.

 Both companies are limited liability companies formed under the

laws of the Cook Islands, and they are in good standing. Both companies

areownedentirelybytheVillageTrust,whichisatrustcreatedunderthe 

ROA.2145

ROA.1175.

ROA.3392‐3399.

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laws of the Cook Islands.Baron is a primary beneficiary of the Village

Trust.TheLLCsformtheprincipalassetsoftheVillageTrust;therefore,the

valueoftheLLCsareofsubstantialimportance toBaron,formingthecor‐

pusfromwhichhehopestoderiveanybenefitoutofthe

VillageTrust.

H. Vogel and the DC deny Baron the constitutional right to hire

competent legal counsel of his choosing and the DC forces Baron

to conduct a hearing on his Motion to Vacate Order Appointing

Receiver and in the Alternative, Motion for Stay Pending Appeal

without adequate counsel.

 ManyofthecriticismsofBaronmadebytheNetsphereIpanelarebased

on an Order Denying Emergency Motion to VacateOrderAppointingRe‐

ceiverandintheAlternative,MotionforStayPendingAppeal(the“Order

DenyingVacateorStayMotion”),enteredby

theDConFebruary4,2011.



ROA.4881-4901

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1. Events leading up to the entry of the Order Denying Vacate or

Stay Motion

 VogelconfiscatedBaron’sassets,legaldocumentsandrecordsimmedi‐

ately upon his appointment as receiver and fired his trial counsel. Mean‐

while, Vogel and Gardere threatened Baron with contempt if he even

attempted to engage trial counsel and told Baron that Vogel, himself was

theonlyattorneythat

Baronwaspermittedtohave.



 Nevertheless,shortlyaftertheReceivershipOrderwasentered,Baron’s

volunteer appellate counsel, Gary Schepps, filed an Emergency Motion to

VacateOrderAppointingReceiverandintheAlternative,MotionforStay

PendingAppeal(the“VacateorStay Motion”),

whichtheDCsetforhear‐

ing in early January 2011. Schepps promptly advised the DC that he was

notequippedtohandlethematterandthatBaronneededexperiencedand

specialized counsel to conduct discovery and prepare to defend the very 

ROA.1169-1172; ROA.3348-3351; ROA.29040; ROA.29048.

ROA.1160-1172;

see also

ROA.1169–1172 (Declaration of Jeff Baron).

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seriouschargesthatwerebeingassertedbySherman.ROA.2176‐2180.Said

motionwasdenied.ROA.3013–3016.

 ThehearingontheVacateorStayMotionwas heldonJanuary4,2011.

ROA.34447.Scheppsappearedat the hearing with an associate, Peter Bar‐

rett, who assistedSchepps and agreedthat he would not

be compensated

forhisefforts.BarrettrefusedtomakeanappearanceforBaron.Then,after

a very unusual colloquy between Barrett and the DC, the DC unilaterally

declaredthat.Barrettwasthereforallpurposes.



 BarrettattemptedtorepresentBaronwhiletellingtheDCthatthiswas

oneofthemostcomplexlitigationshehadeverseeninhislifeandthathe

wasnotequippedtohandleit.(ROA.34670).

2. Baron’s due process rights were violated when the DC refused

to permit him to engage competent counsel

 Deprived of all his assets, forbidde n from entering into agreements,

forbidden from hiring

 counsel, and the DC having denied his requests to

engage counsel, Baron, at this very stressful and important hearing, was

ROA.34462; ROA.34462-34466; ROA.34466

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forcedtoaccepttherepresentationofalawyerwhowas,byhisownadmis‐

sion, incompetent, and incapable of providing an adequate defense for

Baron.

3. The Order Denying Vacate or Stay Motion was not an

appealable order, and it has no effect

 Following the hearing, the DC entered the Order Denying Vacate or

StayMotiononFebruary3, 2011,whichincludedvitriolic findingsoffact,

mostly

unsupportedby therecord,andoccasionallysupportedbytestimo‐

nyatthehearing,whereBaronwasdenieddueprocess.



 Thepanel inNetsphereI seizedupon  thisinterlocutoryorder asabasis

for determining that Baron engaged in “vexatious” litigation tactics.

Netsphere,703F.3dat304.However,theorder was neither appealable  nor

beforetheCourt.E.g.,LondonRecordsv.DeGolyer,217F.2d574,574–75(5th

Cir.

1954).Infact,theorderwasnever appealed,andwasnotripeforcon‐

siderationbytheCourtNetsphereI.

ROA.4881–48923

Case: 15-10341 Document: 00513219780 Page: 44 Date Filed: 10/05/2015

I. Baron promptly appealed the receivership orders and all fee

orders, expeditiously prosecuted the appeals, and never

acquiesced in the payment of Receivership expenditures.

 Baron promptly appealed the Receivership Order and over the course

ofthenexttwoyears,filedtenadditionalappealsplusonepetitionforwrit

of mandamus promptly appealing from numerous orders entered by the

DC,predominantlydealingwiththeawardoffeesandexpensestoVogel,

Sherman and their

 respective professionals, as set forth in the Table at‐

tached as Appellants’ Record Excerpt 16. These eleven appeals and one

originalproceedingwereconsolidated,andresolvedonDecember18,2012,

whenthisCourtreleaseditsopinioninNetsphere.

J. Sherman, Vogel and their Lawyers Branded Baron a

“Vexatious” Litigant in Retaliation for Objecting to their Fee

Applications and appealing the Receivership Order and Fee

Orders.

 Appellees immediately embarked upon a malevolent effort to brand

Baron a “vexatious litigant”.However, the only conduct Baron was

“guilty” of engaging in was to contest MHK H’s fee application with the

Case: 15-10341 Document: 00513219780 Page: 45 Date Filed: 10/05/2015

BC,appealtheReceivershipOrder,andobjectto the fee applications filed

by Sherman, Vogel and their respective retinue of professionals.

 54

In all,

Baronappealed69unfavorableandimprovidentdecisionsoftheDC,allof

whichwerereversedbythisCourtinNetsphereI.

1. Baron’s success in his litigation has come at great cost to him

and his family.

 Like a persistent whistleblower, Baron has withstood a seemingly im‐

possible struggle, and he and his family have been unjustly vilified and

havesufferedimmensely.

Baronhasbeencastigated,defamedandbludg‐

eonedrepeatedlyandrelentlesslybyaretinue ofhighlycapable large‐firm

lawyers, Vogel, Gardere, Sherman, and MHKH, who were paradoxically

Baron’sfiduciaries.BecauseBaronhadthetemeritytodefytheirwill,these

sophisticatedandviciousprofessional litigantspunished Baronforhisde‐

fiancebyfalselybrandinghima“vexatiouslitigant”.

 Without money or adequate counsel, Baron’s efforts to combat these

professionallitigants’liesandmisrepresentationshasbeennearlyimpossi‐

Peter Vogel is a partner in Gardere.

Case: 15-10341 Document: 00513219780 Page: 46 Date Filed: 10/05/2015

ble. However, despite their relentless and scurrilous attacks on Baron for

fouryears,theyultimatelyfailed.

2. Despite Vogel and Sherman’s defamatory rhetoric that Baron

was vexatious, they never sought to enforce any litigation

abuse prevention statute or rule.

 While Appellees manufacturedcontroversyaftercontroversy to blame

on Baron in order to provide cover while they breached their obligations

undertheGSAanddepletedBaron’sassetstopaytheirfees,theirlies

were

unsupportable.Like wailing banshees, Appellees groused and whined

aboutBaronandhisallegedvexatiousbehavior,butneveroncefiledasin‐

glemotionrequestingthattheDCorBCdeterminethatBaron’scounselvi‐

olated 28 U.S.C. §1927, by engaging in vexatious conduct, or th at Baron 

and/orhiscounsel

engagedinconductsanctionableunderFederalRule11,

orthatBaronand/orhiscounselengagedinthekindofconductthatwould

justifytheimposition of sanctionsutilizing the inherentpower of a DC or

BCtosanctionlitigantsunderChambersv.Nasco,Inc.

Likewise,Appellees

501 U.S. 32 (1991).

Case: 15-10341 Document: 00513219780 Page: 47 Date Filed: 10/05/2015

neverattemptedtohave Baron designated as a “vexatious litigant” under

Chapter 11 of the Texas Civil Practice & Remedies Code.

 Indeed, Baron

has never been held to be in contempt of any order of any court.

 In the

absenceofanyrecordcitationsto“badbehavior”onBaronorhiscounsel’s

part,intheabsenceofanyorderholdingBaronincontempt,andintheab‐

sence of any attempt tohavetheseissuesproperly adjudicated under any

ofthelitigationabusepreventionstatutesandrules

availabletoAppellees,

theseallegationscannotbe,andnevershouldhavebeen,takenseriouslyby 

thepanelinNetsphereI.

 Sherman,MHKHandVogelinvokedareceivershipoverBaron,oneof

themostdraconianremediesavailableunderlaw,withoutevenattempting

The purpose of a “vexatious litigant “designation is to prevent litigants who file

repeated frivolous lawsuits, as plaintiff, to continue doing so, as explained by this

court in

Baum v

Blue Moon Ventures, LLC

, 513 F.3D 181, 189 (5

Cir. 2008).

Baron has not been accused of filing a single lawsuit. Instead he has only defended

himself. The fact that he was forced to hire numerous lawyers to defend against the

multitude of complex proceedings brought against him in numerous jurisdictions,

does not meet the standards required by this court for a litigant to be charged with

being “vexatious litigant”.

The panel in

Netsphere I

recognized this fact (“At oral argument in the appeal, it

seemed conceded that no clear order existed”).

Netsphere,

703 F.3d at 311.

See

Sec-

tion E,

supra,

at __.

Case: 15-10341 Document: 00513219780 Page: 48 Date Filed: 10/05/2015

alessersanctionorseeking theadviceandconsentofthe BC.HadAppel‐

leescomplaintshadanounceoflegitimacy,theywouldhavesoughtrelief

throughanyofthewidearrayofremediesavailabletothem,insteadofby

meansof anex partemeetingwithadistrict judgeunder

dubious circum‐

stances,whereBaronhadnoopportunitytobeheardorotherwise defend

himselfagainstthefalsecharges.

3. Vogel and Sherman resort to making false statements to

deceive courts in an effort to denigrate and destroy Baron.

 ShermanandVogelresortedtomanufacturing alitanyofdemonstrable

liestothisCourt,theDCandtheBCwhicharechronicledingreaterdetail

inArgumentI‐F,

infra,atp82.

K. Vogel, Sherman and their legal professionals’ self-serving

efforts induce Judge Furgeson to extend the receivership when

the cash exceeded threefold the amount of claims.

 Althoughthecash thatVogelseizedfrom Baron attheonset of the re‐

ceivership exceeded threefold the total amount of claims, Vogel, Sherman

and their respective legal counsel consistently obstructed and thwarted

Case: 15-10341 Document: 00513219780 Page: 49 Date Filed: 10/05/2015

Baron’s numerous attempts to secure payment for the receivership claim‐

ants by placing sufficient money into the registry of the court and termi‐

nate the receivership. The examples below are a small sample of such

malicious,self‐servingefforts.

 Four months after the institution of the Receivership, in March, 2011,

Vogel had $1.9 million of Baron’s personal funds plus $900,000belonging

to the LLCs, while the total claims against the Receivership amounted to

$926,160.53.



 Recognizingthis,theDCembarkedupon a course to terminatethere‐

ceivership,andsuasponteorderedVogel“toshowcausewhy theReceiver

shouldnotplacethemonies[Vogel]gainedaccesstointheregistryofthe

Court and terminate the receivership over Baron.”

 On March 2, 2011,

JudgeFurgesonnoted:

Additionally,itisreportedthatthusfarVogelhasgainedaccessto

20outofthe25accountscontainingtheBaronFunds,totalingap‐

proximately$1.9million....TheprimarypurposeoftheCourtʹsRe‐

SROA.??(vacated order)ROA.5360,

(SROA.?? vacated order).

Case: 15-10341 Document: 00513219780 Page: 50 Date Filed: 10/05/2015

ceivershipOrder,wastogainaccesstoBaronʹsfundstoensurethat

theunpaidattorneysclaimsagainsthimcouldberesolvedsothatthe

bankruptcyactioncouldbeclosedandthepartiesʹsettlementcould

becompliedwith.ItappearsthatVogelhasgainedaccesstoan

amountthatwilllikely

coveralloftheoutstandingunpaidattorneys’

claims.



Id.

60



 At a hearing on the order to show cause on March 11, 2011, Urbanik

andShermanvehementlyobjectedtoterminatingthereceivership,making

ahostofargumentswhichhavebeenlargelyfoundtobefalse.



 Ultimately,JudgeFurgeson,inthefaceoftheselargefirmlawfirmma‐

chines making largely unanswered, vociferous arguments, obviously did

not have the courage of his convictions to carry through with what he

knew was the right thing to do: pay any legitimate creditors for whose

benefit the receivership

 had allegedly been implemented, and dismiss the

. At that time, after payments of over $500,000 in professional fees to himself

and MHKH, Sherman still held $1,275.080.59 for the Ondova estate and receivables

net of doubtful accounts amounted to $756,379.73; ECF Doc 586, Case No. 09-

34784-SGJ, at 6 (SROA.??)

ROA.34788, 34796.-34799, 34803, 34813,34827, 34831 (hearing transcript of

march 2011). Baron did not have adequate counsel, properly funded, to counter

these vicious attacks and help Judge Furgeson to carry out his intended course of

action.

Case: 15-10341 Document: 00513219780 Page: 51 Date Filed: 10/05/2015

receivership, and based largely on these false, self‐serving arguments, the

DC reversed course and decided to allow the receivership to co ntinue  in‐

definitely.



 Meanwhile,Vogel andhiscounsel,Gardere,filedmotionsto sellmore

oftheLLCs’assetsandtoliquidate Baron’sexemptIRA accounts,

which

they fervently argued was necessary in order to obtain even more money

forthemselves.

 Baron then offered another solution.He offered to obtain a loan to

fundtheclaimsandendthereceivership.Accordingly,Baronrequestedthe

DC for permission to obtain a loan.

 The DC initially granted Baron’s re‐

questonMay9,2011but,againVogelandGardereobjectedtoBaron’sat‐

tempt to resolve the Receivership, moving the DC to reconsider—

ROA.5763.

ROA.5593, SLROA (Docket 480).

ROA.7829-7830.

See

also ROA.6859-6868.

Case: 15-10341 Document: 00513219780 Page: 52 Date Filed: 10/05/2015

incredibly,filingsuchmotionexparte,underseal.

Again,theDCreversed

itselfuponVogelandSherman’srelentlessurging.

L. This Court issued its

Netsphere I

Opinion on December 18,

2012, and found that the entry of the Receivership Order was an

abuse of discretion and reversed the entry of the Receivership

Order.

 ThePanelinNetsphereIheldthattheimpositionofthereceivershipwas

anabuseofdiscretion.ThepenultimaterulingoftheCourtwasthat:

ThejudgmentappointingthereceiverisREVERSEDwithdirec‐

tions to vacate the receivership and discharge the receiver, his

attorneysandemployees,and

tochargeagainstthecashinthe

receivershipfundtheremainingreceivershipfeesinaccordance

withthisopinion.



NetsphereI,703F.3dat315.



ROA.8099-8101; SLROA (docket 581); Baron’s objection to the ex parte, sealed order

is found at ROA.9130-9135.

Case: 15-10341 Document: 00513219780 Page: 53 Date Filed: 10/05/2015

M. Two hours after the Court issued the

Netsphere 1

Opinion,

Baron was thrown into an involuntary bankruptcy proceeding in

an attempt by his opponents to moot this Court’s ruling.

 Approximately two hours after this Court issued its Opinion in

Netsphere—long before the issuance of the mandates on April 19, 2013—

andinviolationoftheReceivershipOrder,whichwasnotimmediatelydis‐

solvedfollowingtheNetsphereOpinion,eightoftheattorneyparticipantsin

thereceivershipaction(the“Petitioning

Attorney s”),ledbyGerritPronske,

filedaninvoluntarybankruptcypetitionunderChapter7oftheBankrupt‐

cyCode,againstBaron(“BaronInvoluntaryBankruptcy”).



 NotwithstandingtheNetsphere Opinionandmandate,TheDCordered

thatnoassetsofBaronwouldbereturnedtoBaronduringthependencyof

theBankruptcy.



ROA.1147-1148 (injunction against bankruptcy); (SROA.?? Invol docket). The case

was filed in the United States BC for the Northern District of Texas, Dallas Divi-

sion under case no. 12-37291.

ROA.27906-27907. 27670-27671.

Case: 15-10341 Document: 00513219780 Page: 54 Date Filed: 10/05/2015

2. An Order for Relief is entered.

 OnJune26,2013,theBCenteredanOrderforReliefintheBaron Invol‐

untaryBankruptcy,whichwasreversedonJanuary,22014.

Thus,asare‐

sultoftheBaronInvoluntaryBankruptcyCase,Baronremainedinfinancial

lockdown.

3. The Appeal and reversal of the Order for Relief

 Baron perfected an appeal of the Order for Relief to the DC on July 8,

2013. The DC entered a final judgment on January 2, 2014, reversing the

OrderforRelief,accompaniedby 

anAmendedMemorandumOpinionand

Order.

ThisjudgmentandopinionwasappealedtothisCourt.SeeSchurig

JetelBeckettTackett,etal.v.Baron,FifthCircuitAppellateCaseNo.14‐10092.

The“thejudgmentofthe[DC]wasaffirmedwithregardtovacatingthefee

order and reversed with regard to dismissing theinvoluntary‐bankruptcy

action,”

andwas“remandedtoDCforremandtoBCforatrialonwhether

Baron v. Schurig

, No. 3:13-CV-3461, 2014 WL 25519, at *1 (N.D. Tex. Jan. 2,

2014, Lindsay, J). Baron would ask this Court to take judicial notice of this opinion,

which is included in Appellants’ Record Excerpt 20.

Id.

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a bona‐fide dispute exist[ed] as to creditorsʹ fees.”In the Matter of Jeffrey

Baron,593Fed.Appx.356,362(5

Cir.2014).Thepartiesultimatelysettled,

andthisCourtdismissedtheappealasmoot.



N. The Netsphere I panel denies all pending motions and issues 8

mandates

 This Court denied all petitions for rehearing on April 4, 2013, and is‐

sued eight Mandates on April 19, 2013, which were filed with the DC on

April24,2013.



TheDCwasobligedtofollowthefollowingmandateofthisCourt:

1. the DC would be required to meaningfully discount receivership

professional fees from what would have been reasonable under a

proper receivership;

2. the amount of all fees and expenses would have to be reconsid-

ered by the DC;

3. any other payments made from the receivership fund might also

be reconsidered as appropriate;

See

ECF Doc 00512912971 in Appellate Case No. 14-10092. Baron would ask this

Court to take judicial notice of this order, which is included in Appellants’ Record

Excerpt 21,

See

footnote __, supra.

Each of the Mandates dealt with one or more of the 11 consolidated appeals in

Netsphere I

. ROA.27774-27788.

See

Chart included as Appellants’ Record Ex-

cerpt16.

Case: 15-10341 Document: 00513219780 Page: 56 Date Filed: 10/05/2015

4. the new determination by the DC of reasonable fees and expens-

es to be paid to the receiver, should the amount be set at more

than has already been paid, would be paid from the $1.6 million

in cash on hand as of November 2012;

5. to the extent the cash on hand was insufficient to satisfy fully

what is determined to be the reasonable charges by Vogel and

his attorneys, those charges would go unpaid;

6. no further sales of domain names or other assets would be per-

mitted;

7. non-cash assets in the receivership were to be “expeditiously re-

leased to Baron or the entity owning same

under a schedule to

be determined by the DC for winding up the receivership; and

8. The judgment appointing the receiver was reversed with direc-

tions to vacate the receivership and discharge the receiver, his

attorneys and employees, and to charge against the cash in the

receivership fund the remaining receivership fees in accordance

with this opinion

Netsphere I,

703 F.3d at 313-314 & 315.



On December 31, 2012, the

Netsphere I

panel issued an order of clarification

(“Order of Clarification”). In the Order of Clarification, the panel stated:

“Our utilization of a shorthand reference to Baron did not in any way af-

fect the ownership of assets that were brought into the receivership. As-

sets are to be returned as appropriate to Baron or other entities that

were subject to the receivership.”

ROA.26174

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

O. The Advisory on past and pending Receiver disbursements

 OnJanuary2,2013,twoweeksaftertheissuanceoftheNetsphereOpin‐

ion,theDCissued,sua sponte, an Advisory on Past and Pending Receivership

Disbursements(“Advisory”)intheNetsphereDCCase.

TheDCspecifically

statedandconcludedthefollowing:

‐ ThefeesincurredbyVogelandtheGarderelawfirminrep‐

resentingVogelashiscounselwill be re‐evaluated andpaid

atfiftypercent(50%).

‐ The fees incurred by the Dykema law firm in representing

Vogel will be reevaluated

and paid at ninety‐five percent

(95%).

‐ All payments to the Trustee or Trustee’s counsel will be en‐

tirelydisgorgedandmustbepaidbacktotheReceivership.

‐ Allother miscellaneousrequestsforpayments, including for

experts, will be reviewed on an individual basis at a later

date.

ROA.26284–26286.

Case: 15-10341 Document: 00513219780 Page: 58 Date Filed: 10/05/2015

(ROA.26285).PriortotheAdvisory,nobriefing was requested, no sta‐

tusconferencewasheldorevidenceconsideredinahearing.



P. The DC puts the process of re-determining the Receiver’s

professional fees and expenses on an exceedingly fast track.

 Judge Furgeson’s retirement was imminent. With his last day on the

federal bench—May 31, 2013—quickly approaching, Judge Furgeson put

there ‐determinationoffeesmatteronanexceedinglyfasttrack.

OnApril

5,2013,JudgeFurgesonenteredaSchedulingOrder, whichsetthefollow ‐

ingdeadlines:

1. All final fee applications had to be filedon or before Wednes‐

day,April17,2013(the“2013FeeApplications”)..

2. Baronwasgiveneightdaystofileobjectionstothesame.



3. The pre‐trial hearing on the fee applications was set for April

29,2013.

ROA.102–105.

As Judge Furgeson stated to the parties on May 9, 2013, “Of course you know—all

of you know why I’m wanting to do this now given I won’t be on the bench at the

end of this month and given I have lived with this case for so long. I think I have a

perspective that would be very difficult for any judicial officer to pick up, and so

that’s why I think I need to do this.” ROA.35303 at ll.20-21; ROA.27978.

This was subsequently extended to May 6, 2013. (ROA.119).

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4. ThetrialonthefinalfeeapplicationswassetonMay8,2013.

ROA.26962.

 Atthesametime,Baronwasdirectedtocomplywiththeabovesched‐

ule,the DC, in conjunction  withtheBC,had ordered Baron andall ofthe

parties in the Netsphere DC Case and

in the Baron Involuntary Case to a

complex multi‐party mediation.

Ultimately the parties spent approxi‐

mately three weeks in  intensive mediation during April and early May

2013—in‐personandbytelephone.

Additionally,Baron wasunderorders

from the BC to prepare for a trial on the Involuntary Bankruptcy  Case,

which was, at that time, scheduled to go to trial in the latter part of May

2013.



ROA.26979

ROA.26979.35293.

SROA.?? (

See involuntary bankruptcy docket, ECF Doc. 77)

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1. The 2013 Fee Applications

 The Sherman, Trustee Fee Application.Despite not being employed

by the  receivership, Sherman filed his final fee application on April 17,

2013,requestingatotalamountof$1,219,775.68,consistingof$1,203,329.50

in professional fees and $16,446.18 in reimbursable expenses, of which

$379,761.18 had already beenpaid by the Receiver.

 This Fee Application

totaled301pages.

 The Gar dere Fee Application.On April 17, 2013, the Vogel’s former

generalcounselandcurrentemployer,Garderefiledafinalfeeapplication

requesting a total amount of $2,010,862.22, consisting of $1,956,737.00 in

professional fees and $54,125.42 in reimbursable expenses, of which

$1,479,571.95 had already been paid by Vogel.

 This Fee Application in‐

corporated19priorFeeApplications,thustotaling15,775pagesofFeeAp‐

The fee applications described in this Section ___are collectively referred to herein

as the “4/17/2013

Fee Applications

.”

ROA.26980‐26981.

ROA.27286‐27317.

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plications.

 Gardere makes no attempt to advise theCourt or Baron as to

the total amount of fees and expenses incurred and paid for each task

Gardere undertook for the Receiver, and no attempt to segregate the ex‐

pendituresbywhichoftheAppellants’estatestheyareassociated.

 Dykema Fee Application.

On April 17, 2013, Vogel’s current general

counsel, Dykema Gossett PLLC (“Dykema”), filed a “final” fee application

requestingatotalamountof$1,550,776.00throughMarch2013(netofvol‐

untary and court‐directed 5  percentreduction), consisting of $1,526,694.00

in professional fees and $24,082.00 in expenses, of which $737,276.73 was

ECF no. 193 (ROA.3470-3486) – 16 pages; ECF no. 258 (ROA.4573-4673) – 100

pages; ECF no. 324 (ROA.5379-5530) – 151 pages; ECF no. 418 (ROA.6307-6480) –

173 pages; ECF no. 491 (ROA.7212-738)] – 170 pages; ECF no. 493 (ROA.7517-

7666) – 149 ECF no. 606 (ROA.8946-9128) – 182 pages; ECF no. 648 (ROA.9758-

10167) – 409 pages; ECF no. 678 (ROA.11513-12001)– 488 pages; ECF no. 698

(ROA.12703-13152)– 449 pages; ECF no. 713 (ROA.13622-14101) – 479 pages; ECF

no. 750 (ROA.15335-15846) – 511 pages; ECF no. 781 (ROA.16678-17218]) – 520

pages; ECF no. 840 (ROA.17861-18442) – 581) pages; ECF no. 853 (ROA.18903-

19366)– 463) pages; ECF no. 877 (ROA.20239-??– 10,515 pages; ECF no. 879

(ROA.20762-20911) – 154 pages; ECF no. 993 (ROA.23800-24014) – 214 pages; ECF

no. 1035 (ROA.24545-24565) –20 pages. This totals 15,775 pages of Fee Applications

filed by Gardere, including the Fee Application filed on April 17, 2013.

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onhandinDykema’strustaccount,and$398,893.91hadbeenpaidby Vo‐

gel.

ThisFeeApplicationtotaled103pages.

 Vogel’sFeeApplication.Claiming thathewasexemptfromtheestab‐

lishedrequirementsofdisclosurerequiredbyattorneybillings,Vogel filed

“final” applications requesting approval of the fees and expenses of him‐

self,thefeesandexpensesofformergeneralcounselforVogel,thefeesand

expensesofVogel’scurrentgeneralcounsel,Dykema,andthefeesandex‐

pensesofnumerousother

professionals.

ThisFeeApplicationtotaled245

pages.

 Thetotalfeesandexpensesrequestedaresetforth ontheTableinclud‐

edinAppellants’RecordExcerpt14.

 TheDCaffordedBaronaminisculeamountoftimetoreviewandana‐

lyze over 16,000 pages of fee applications covering a time period

that

spanned29monthsandcoveredthousandsoftimeentries.

ROA.27564‐27667.

ROA.27318‐27563

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 Importantly, the DC did not reevaluate of additional expenses in the

approximate amount of $5,500,000.00 purportedly paid to the LLCs, but

neverevaluatedbytheDC.



2. The court consistently denies Baron’s Requests/Motions to

seek funding for attorney and expert witness fees, for

permission to conduct discovery, and to continue the matter

to enable him to present a viable defense to the fee

applications

 AtthehearingonApril4,2013,whichresultedintheentryofaSched‐

uling Order on April 5, 2013, Baron’s counsel requested funding for the

purposeofpayinghisattorneyfeesandexpertwitnessfeesneededtocon‐

test the attorneys’ fees.

 Deprived of his assets and without any proper

fundingtomountadefensetorespondtothe2013FeeApplications,Baron

filedamotionwiththecourt,onApril 17,2013,attemptingtoseekfunding

topayhisprofessionalfeesnecessarytoproceedforwardwithhisdefense

A chart identifying expenditures disclosed in Vogel’s “final accounting” is included

as Appellants’ Record Excerpt 14.

ROA.27679.

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of the 2013 Fee Applications.

The next day the court summarily denied

hisrequestwithouthearing.



 Two day s  later, on April 19, 2013, Appellant Baron filed a Motion for

Discovery,forContinuance and toReconsiderFunding forJeffreyBaron’sCoun‐

sel.

Thecircumstancesdescribedinthemotionweregraveandmeritedre‐

lief.IntheMotion,Baron’scounselexplainedthathewasrelativelynewto

the case and could not possibly prepare for the hearing involving thou‐

sandsifnottensofthousandsofbillingentriesonsuchshortnotice,with‐

out

 funding and withoutfunds for an expert. Baronreasonably requested

funding from the receivership estate, which held his assets, including his

exempt property assets, to pay his counsel and to hire  an expert witness,

requested permission to conduct limited discovery, and requested a con‐

tinuancetoprepareforthehearing,

ROA.27282–27284.

ROA.27670‐27671.

ROA.27679–27698.

Case: 15-10341 Document: 00513219780 Page: 65 Date Filed: 10/05/2015

 JudgeFurgesondeniedtheMotionwithoutahearing.

ThusBaronwas

deprivedofafairandreasonable opportunitytopresentadequatelyhisob‐

jections to over $5 million in fee applications, all of which had been and

wereexpectedtobepaidoutofpropertythatwaswrongfullyseizedbythe

DC,withoutjurisdiction.

 OnMay8,2013,

thefirstdayofthehearing,SteveCochell,Baron’sun‐

paidcounsel,orallymovedforacontinuancecitingcompellingreasonsfor

such request, which included the fact that the parties had spent the prior

twoweeksinamediationorderedbythe DCandBCinwhichthe parties

were

attemptingtosettletheentirecase.

Thecourtdeniedthemotion.



3. The Objections to the Fee Applications

 Thepartiesfiledthefollowingobjectionstothe2013FeeApplications:

1. The Receiver’s Objection to Trustee’s Fee Application.

ROA.27732‐27734.

ROA.27718–27724.

ROA. 26963, 26965 35297-35298.

ROA.35298.

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2. TheReceiver’sSupplementalResponseandObjection,objecting

totheOndovaTrustee’sFeeApplication.ROA.27735‐27740.

3. The Petitioning Creditors’ Omnibus Comment to Receivership

Professionals’FeeApplications.ROA.27791‐27797.

4. Baron’s Preliminary Objections to Trustee, Trustee’s Counsel,

ReceiverandReceiver’sCounselFeeClaims.ROA.27798‐27812.

5. Netsphere Parties’ Objections to the

 Attorney Fee Requests in

ConnectionWiththeWind‐UpoftheReceivership.ROA.27821‐

27825.

4. The hearing & post-hearing briefing on the 2013 Fee

Applications

 From May 8, 2013 through May 10, 2013,

 the court held hearings on

the2013FeeApplications,andfollowingthehearingsonthe2013FeeAp‐

plications,thepartiesfiledthefollowingbriefs:

1. Vogel and Dykema  Consolidated Post‐Hearing Brief.

ROA.27826‐27835.

2. ShermanLetterBrief.ROA.27886‐27889.

3. Baronfiledthefollowingpost‐hearingbriefs:

The Transcript for the May 8, 2013 hearing is located at ROA.35290-34546 (This

Transcript is erroneously dated May 9, 2013 on the first page, but this is the date of

the hearing as reflected on the Docket Sheet-ROA.127).

For May 9, 2013, the Transcript is at ROA.35493-35593.

For May 10, 2013, the Transcript is at ROA.31583–31668.

Case: 15-10341 Document: 00513219780 Page: 67 Date Filed: 10/05/2015

a. Response to the Receiver’s Post‐Hearing Briefing.

ROA.27890‐27902.

b. ReplytoTrustee’sLetterBrief.ROA.27903‐27904.

c. SupplementalArgumentonFees.ROA27916‐27919.

4. The Petitioning Creditors filed a Supplemental Objection to

the2013ApplicationforAllowanceandSubsequentPayment

ofCompensationforServicesandReimbursementof Expens

‐

es to Dykema Gossett PLLC, as Attorneys for Peter S. Vogel.

ROA27922‐27.

5. The DC enters the 5/29/2013 Final Fee Order

 On May 29, 2013, the DC entered its Order on Receivership Professional

Fees(“5/29/2013Final FeeOrder”).

ThedecisionoftheDCinthe2013Final

Fee Order provided for discounts that were not meaningful and that vio‐

latedthe mandateoftheCourt.ThediscountsapprovedbytheDCareset

forthontheTableincludedasAppellants’RecordExcerpt17.

ROA.27931‐76

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Q. $700,000 of additional fees and expenses paid out of

receivership assets were not re-evaluated by the DC as required

Netsphere I

 Vogel’s2013FeeApplicationincludedfeesandexpensesofadditional

professionalsrepresentedat least $957.310.68paid out of the receivership

estate,noneofwhichwerereevaluatedinthe2013FeeOrderorinanyoth‐

erorder,inviolationoftheNetsphere1mandate.



R. Vogel Continues to Collect Appellants’ Property

 Inviolation,oratleastinignoranceofthemandates’directive,theDC

failedto wind‐downthereceivershipfor overtwomore yearsandcontin‐

uedtopermitVogeltocontinuecollectingmoneybelongingtoAppellants.

ROA.27320; The only mention to these fees in the 2013 Final Fee Order is a sin-

gle sentence: “To the extent that the Court has authorized payment to these profes-

sionals in the past, the Court finds that these were also appropriate and need not be

reduced in any way.” ROA.27964. In the 2013 Final Fee Order, the court makes

note of its interlocutory Order Granting Motion for Fee Application for the Receiver

in Regard to Certain Miscellaneous Receiver Professionals, granting full payment of

118,125.55.without any findings of reasonableness, necessity or whether these fees

benefited the estate.ROA.27920.

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In fact, Vogel continued to collect approximately $250,000.00 per month,

whichbelongedtooneormoreofAppellants.



S Vogel is Directed to File Additional Fee Applications and An

Accounting

 DespiteVogelandhisprofessionalsalreadyhavingbeenpaidinexcess

ofthecapimposedbythisCourtinNetsphereI(the“FeeCap”),onJanuary

6, 2014, the DCentered an order directing Vogel to file a finalaccounting

and an application for additional payments of fees, and

 further ordering

Vogel to advise the court if he would be unable to return the assets by

March 7, 2014 nearly two yearsafter the Netsphere I panel issued its man‐

datesinNetsphereI.



 Despite his employing over 25 lawyers and two accounting firmsdur‐

inga3½yearperiodatfeesofover$5.5million,VogelfiledaPreliminary

StatusReportonJanuary24,2014averring,interalia,that:1)hecouldnot

 ROA.30563‐30566; ROA.29606, ROA.29690‐29708, ROA.30591‐30594. Although Vogel

blames thefailure onBaron, Vogel was amoving force behind the continuation ofthe

receivershipandtheimpositionoftheInvoluntaryBankruptcy,asexplainedinfra.

ROA.28974-28975

Case: 15-10341 Document: 00513219780 Page: 70 Date Filed: 10/05/2015

determinewhowastheownerofth eLLCs,;2)hepossessedvoluminous

receivership records and requested a show cause process where Baron

would have to provethathe is entitled tothereturn of the documents;3)

he had accumulated “more than 800” Third Party Actions against the do‐

main

 name assets, which would overwhelm the recipient of those  assets;

and4)theCourtshouldpayadditionalprofessionalfeestohisprofession‐

alsandestablishadate ofMarch1,2014forhimselfand his professionals

tofile“final”feerequests.



 After the DC entered an order on February 4, 2014 requiring Baron to

fileanyresponsebyFebruary11,2014,Baroncomplied,asserting,interalia,

that1)VogelhasneverattemptedtoprotectBaronandthereceivershipas‐

sets from specious claims of the involuntary bankruptcy or any others;

2)

theDCshouldexpeditiouslywind‐upthereceivershipandreturnallassets

anddocuments toBaronandthemanageroftheLLCs;3)800intellectual

propertyclaimsagainsttheLLCs’createdduringVogel’stenureshouldbe 

stayedforoneyear;4)SincethisCourt’scaponfeesmandatedinNetsphere



ROA.28981-28982; ROA.28983; ROA.28985

Case: 15-10341 Document: 00513219780 Page: 71 Date Filed: 10/05/2015

Ihadbeenreached,Vogelandhisprofessionalsshouldnotbeawardedany

additional fees; 5) The LLCs’ assets should be returned to their rightful

ownerandnottoLisa Katz;and6)SinceVogelhadalreadybeenpaidap‐

proximately $5.2 million after representing to the DC that he completely



fulfilled his duties and obligations to marshal assets and fully inv estigate

theirsource (which Vogel  determinedwas Baron),no further proceedings

to determine whether Lisa Katz had any rights to these assets was re‐

quired.

100



 Baronfurtherpointedoutinasur‐replythattherewasnoreal contro‐

versyastotheownershipoftheLLCsbecauseVogelhadalreadyreported

that:

TheNovoPointandQuantecentitiesareLLCsultimatelyowned

andcontrolledbytheVillageTrust.Inthetrustdeedestablishing

the

 Village Trust it is incontrovertible that Baron is identified as

boththesettlorandthebeneficiaryoftheVillageTrust.



ROA.29024; ROA.29025-29050.



100

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 Vogel then filed his Status Report on Feb 28, 2014, again complaining

that he could not comply without joining additional parties, engaging  in

extensivediscovery andhearings because,asheclaimed:“Despite theRe‐

ceiver’sbesteffortstoinvestigatethelawfulownershipofcertainReceiver‐

shipAssets,Vogelhasbeen

unabletoconclusivelydeterminetowhom or

what entities certain of the Receivership Assets should appropriately and

lawfully be returned”,

101

 and needed to make additional payments to an

accounting firm to complete the required accounting.

102

 This is incredible

since Vogel represented to the  DC that he had already employed over 25

lawyers,workingover10,000hoursinthiscaseforfouryearsatachargeto

the receivership estate of over $5.5 million, thoroughly examining every

minute detail about the receivership assets and their ownership,

and yet

when it came time to returning the assets, Vogel claimed that he did not

knowtowhomtheybelong.

101

ROA.29122

102

ROA.29125, 29122: ROA.28976-28986, 29121

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 AccordingtoVogel,hewasfurtherimpededfromeffectuatingawind‐

downbecausehisaccountingfirmallegedlyrequiredpaymentinadvance

to complete the accounting, despite his already having employed two ac‐

counting firms which had been paid at least $121,390.153.

103

 As explained

infra, Vogel’s accountants received the additional payment that Vogel re ‐

quested,butneverperformedabonafideaccounting.

T. The DC gives control of the LLCs’ assets to non-party Lisa Katz

on grounds that Baron lacked standing to object.

 The DC entered its order on February 28, 2014

104

, rejecting Baron’s re‐

quests, ruling,inter alia, that: 1) Vogel’s request to conduct a show cause

proceedingtodeterminetheownershipoftheLLC’sassetswasdenied;

105



2)theassetsofNovoPointandQuantecwouldbeturnedovertonon‐party

LisaKatz despiteherclearlackofauthority;

106

3)Vogelwouldonlyreturn

103

ROA.28976‐28986,29121;27320‐‐seeentryforGrantThornton;;29125

104

ROA. 29135-29146,

105

ROA.29143,

106

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Baron’s non‐cash assets to Baron, excluding return of any of Appellants’

cash;and4)Vogelcouldsubmitadditionalfeeapplicationstorecoveraddi‐

tionalfees,despiteVogelalreadyhavingbeenpaidin excessoftheFeeCap

determined by  the panel in Netsphere I.

107

Moreover, the DC (Lindsay, J)

statedthathewouldenteranorderreleasingVogelandallpersonsassoci‐

ated with him from “further liabilities” despite never having even dis‐

closed many of the activities he engaged in while acting in his trustee

capacity.

108



 Concerning Katz—despite ruling that “the court will not considerevi‐

denceorconductproceedingsregardingtheownershipofNovoPointLLC

or Quantec LLC or the companies’ assets that are at issue” and that “any

such determination is outside of the court’s jurisdiction.”, the DC deter‐

mined that all of

 Novo Point and Quantec’s assets would be given to the

custodyofLisaKatz,overthe objection ofBaron.Thiswas outrageousin

lightofthisCourts’repeatedstatementsinNetsphereIthattheseLLCassets

107

ROA.29145

108

ROA.29144

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wereindirectlyownedbyBaronthroughbeingtheprimarybeneficiaryof

theVillageTrust,andthattheassetstransferredtotheLLCsundertheGSA

wereforthebenefitofBaron.

109



 Baron filed a motion for reconsideration,

110

 requesting that the DC re‐

consideritsorder,explainingthat:1)Ms.Katzhadneverprovidedanyev‐

idence that she had any authority to act as an agent for the LLCs; 2) this

Court’s Mandate in Netsphere required Vogel to return Baron’s assets to

Baron; and 3) the DC

lacked jurisdiction to provide sweeping releases to

Vogelandhispriviesinthereceivershipinthewakeofareceivershiporder

109

For example, the Court stated that “[t]hese consolidated interlocutory appeals

arise from the district court's appointment of a receiver over Jeffrey Baron's person-

al property and entities he owned or controlled.”

Netsphere I,

703 F.3d at 301 (em-

phasis in bold added). The Court further stated that under the GSA, “[t]he odd-

numbered names were assigned to Quantec, LLC, for Baron's benefit.”

Id.

at 303

(emphasis in bold added). Again the Court stated that “[t]he receivership also in-

cluded business entities owned or controlled by Baron, including Novo Point, LLC

and Quantec, LLC.”

Id.

, at 310 (emphasis in bold added). In describing the Village

Trust, the Court stated that it was “a Cook Islands entity which owned Novo Point,

LLC and Quantec, LLC. Its trustee is SouthPac, which is also a Cook Islands entity,

and Baron is the trust's sole beneficiary.”

Id.

at 303 (emphasis in bold added). The

DC had no basis for disregarding Baron’s objections.

110

The Motion was made on an emergency basis because the LLC’s assets were

about to be transferred to the control of Lisa Katz, who lacked any authority and

was working against the interests of the LLCs.

Case: 15-10341 Document: 00513219780 Page: 76 Date Filed: 10/05/2015

thatthepanelinNetsphere1hadorderedvacated,therebynullifyingitsex‐

istenceandeffectiveness.

111



 Additionally,BaronremindedtheDCthatVogelhadalreadybeenpaid

morefeesthanthe$1.6millioncapimposedinNetsphereI.

112



 TheDCdeniedBaron’smotiontoreconsiderthedisposalofBaron’sas‐

sets to Katz  on grounds that Baron did not have standing, despite the

court’sseizureoftheLLCsassetsbasedon thegrounds thattheassetsbe‐

longed to Baron,

113

 and notwithstanding that Vogel had admitted Baron

wastherightfulowneroftheassets.

114

OntheissueraisedbyBaronregard‐

ing this Court’s mandated fee cap, the DC, at that time, confirmed that it

would not deviate  from the Netsphere I mandate, statingʺIn accordance

withtheFifthCircuit’sdirective,anyfurtheramountspaidforreceivership

111

ROA.29165‐29176.

112

ROA.29174.

113

ROA.29201.

114

See

ROA.28977 - fn 2 (Vogel’s counsel stated: “The Novo Point and Quantec enti-

ties are LLCs ultimately owned and controlled by the Village Trust. In the trust

deed establishing the Village Trust it is incontrovertible that Baron is identified as

both the settlor and the beneficiary of the Village Trust.”).

Case: 15-10341 Document: 00513219780 Page: 77 Date Filed: 10/05/2015

expenses will be paid from and limitedto the $1.6 million in receivership

cashassetsonhandasoftheFifth Circuit’sDecember18,2012opinion.”

115



However,asexplainedinfra,theDClaterreversedcourse.

 Regarding the issue of releasing Vogel and his professionals, the DC

stated that it would be “fatuous” not to provide full releases for all acts

performed while acting “within the scope of authority” of the court’s or‐

ders, without even excepting

 liability for wrongful acts such as breach of

fiduciaryduty,withoutrecognizingthatthisCourtdeterminedthattheDC

hadnosuchauthority

116

),andnotwithstanding thatthepanelinNetsphereI

mandatedthevacationoftheReceivershipOrder,thusleavingVogelwith‐

outtheprotectionofactingpursuanttovalidordersoftheDC.

U. Vogel files the 2014 Fee Request and Final Accounting.

OnApril 14,2014,afterbeing paid $5 million, Vogel filed his Request

for Approval of Final

 Accounting, Application for Payment and Request

115

ROA.29201-29202.

116

ROA.29202.

Case: 15-10341 Document: 00513219780 Page: 78 Date Filed: 10/05/2015

for Order of Final Discharge (the “2014 Fee Request”), seeking additional

payment of fees to himself and his professionals in the amount of

$$907,100.62(ROA.30962)andsubmittingwhathepurportedtobea“final

accounting” for three years of financial activity inall of the receivership’s

affairs (“the Vogel Final Accounting”)

117

The following day, Vogelfileda

Supplementthereto(the“2014FeeRequestSupplement”).

118

Vogel’sre‐

quest was unverified and unquestionably exceeded the cap on fees im‐

posedbythisNetsphereIpanel.

V. The Vogel Final “Accounting”

 TheVogelFinalAccountingconsistedmostlybankstatementsandlittle

else.For example, the accounting for Baron’s assets consisted entirely of

twoscanttablesof Baron’sbankaccounts, containingonly

twofiguresfor

each account, namely, the original balance and the balance as of July 12,

117

ROA.30700‐30959.

118

ROA.30960to30984.

Case: 15-10341 Document: 00513219780 Page: 79 Date Filed: 10/05/2015

2013.

119

The Vogel Final Accounting did not even identify Baron’s assets,

except bank account balances, and did not contain a profit/loss, balance

sheet or similar accounting report.

120

 Further, the Vogel Final Accounting

containednomentionwhatsoeveroftheactivitiesofthe26additionalenti‐

tiesthatVogelhadpossessionofduringthereceivership.

 TheVogelFinalAccountingfortheLLCsconsistsofasinglepage,titled

“AccountingSnapshot”,whichsummarizedthebankingactivity forasin‐

gle

 month along with a single page printout of the online bank account

statement.

121

. It too did contain any of the components of a bona fide ac‐

counting,not containingprofit/loss figures,notcategorizing orsummariz‐

ingexpensesorrevenues,andnotevenidentifyingtheassetsoftheLLCs.

Indeed, Baron filed objections to the 2014 Fee Request and Vogel

Final Accounting, and on July 23, 2014 and filed a supplement to the

119

ROA.29337-29340.

120

Vogel also submitted what he labeled “supporting documents” to his “account-

ing”, consisting of bank statements and other miscellaneous data, this is only a doc-

ument dump of raw data that is neither explained nor verified, and is not

categorized in any manner in which useful information can be deduced.

121

ROA.29346-29347

Case: 15-10341 Document: 00513219780 Page: 80 Date Filed: 10/05/2015

objections (the “Baron’s Objections to 2014 Fee Request and Account-

ing”).

122

InBaron’s Objections to 2014 Fee Request and Accounting,Bar‐

on objected on grounds that the Vogel Accounting Report, which 

encompassedfeesandexpensesinexcessof$11million:

a. was,inreality,merelyanindecipherabledocumentdumpof

1,500 pages of mostly bank statements, fundamentally

flawed by pervasive inconsistencies and unidentified ex‐

pensesandrevenues;



b. didnotprovideasummaryofrevenueorexpenses;



c. didnotprovideasummaryofrevenueorexpensesbycate‐

gory;



d. did notprovide a summaryofrevenueor expenses bypay‐

ee;and



e. didnotsegregaterevenuesorexpensesbyreceivershipenti‐

ty.



ROA. 31607-31612; 30995-31178, 



122

Case: 15-10341 Document: 00513219780 Page: 81 Date Filed: 10/05/2015

W The Vogel Final Accounting Discloses $$11,404,021.72 in

Expenditures

According to the Vogel Final Accounting and a supplement containing

proof of additional payments to Vogel, Vogel spent $11,404,021.72

123

cash belonging to Baron and the LLCs (the “Total Expenditures”)

124

which $5,581,445.46 was been paid to Vogel and his professionals.

125

The

remaining$5,822,576.26(the“RemainingExpenditures”)hadnotprevious‐

lybeendisclosedtoAppellantsandhasneverbeenreevaluatedbytheDC

inviolationofthisCourt’smandateinNetsphereI.

126



 

123

See

Table included as Appellants’ Record Excerpt 15.

124

See

Id.

(Becauseofthelackof informationandorganizationof theVogel FinalAc‐

counting, Baron can only represent that these figures are based solely upon the infor‐

mationcontainedtherein.)

125

SeeTableincludedas Appellants’RecordExcerpt14.

126

See

Table included as Appellants’ Record Excerpt 15.

Case: 15-10341 Document: 00513219780 Page: 82 Date Filed: 10/05/2015

X Vogel’s 2014 Fee Request Exceeds the Cap Imposed by the

Netsphere I

Mandate.

 Afterbeing paid over $5 million in fees,

127

 Vogel and his professionals

requestedanadditional$901,888.12inprofessionalfees.

128

Inhis2014Final

Fee Request, Vogel justified exceeding the cap imposed by this Court’s

mandate in Netsphere I by alleging that this Court mistakenly excluded

itemssuch asthevalueofclaimsagainstthirdpartiesanddiscountstofee

payments in this Court’s definition of “cash”. Vogel argued that

these

clearly non‐cash items should be  counted as cash for the purposes of ex‐

ceedingthe$1.6millioncap,whileatthesametimeadmittingthatthees‐

tate’s“cashonhand”inDecember2012excludedtheseitems.

129

Moreover,

thes2014FeeRequestwasunverifiedandnohearingonthematterwasev‐

erheld.

127

Inclusive of professionals, including MHKH.

128

ROA.30724-30726

129

ROA.30962—

see

footnote 4; Vogel incorrectly alleged this amount appropriately

includes … and withholdings from Domain Holdings Group of monthly monetizer

payments of approximately $150,000.00 for the month of December 2012);

Case: 15-10341 Document: 00513219780 Page: 83 Date Filed: 10/05/2015

 In objecting to the 2014 Final Fee Request, Baron explained that the

Netsphere I panel’smandate required thatVogel’s feeswere limited to the

cash on hand in December 2012, and that since Vogel had taken an addi‐

tional $1,579,953.88 in cashsince theissuanceof the Netsphere Imandates,

he could not possibly be paid any more fees.

130

. Baron further explained

thatVogelshouldnotbepaidadditionalmoneyforfeeshechargedforin‐

volvement in the involuntary bankruptcy since Vogel was a primary pro‐

ponentofthebankruptcy,andthenmassivelybilledBaron’sestatewhenit

failed.

131



Y The March 27, 2015 Memorandum Opinion and Order.

 Based on Vogel’s unverified 2014 Fee  Request, and without holding a

hearingadducingevidence,theDCentereditsMemorandumOpinion and

Order of March 27, 2015 (the “3/27/2015 Memorandum Opinion and Or‐

130

ROA.30999-31001.

131

Vogel billed a combined rate of over $1,900 per hour for four senior level attor-

neys to sit in a room for days during mediation when one attorney would have been

sufficient. Similarly Vogel overstaffed status conferences and hearings with three or

four senior level attorneys when a single attorney would have been sufficient.

Case: 15-10341 Document: 00513219780 Page: 84 Date Filed: 10/05/2015

der”),grantingadditionalfeestoVogel.

132

TheDCdefiedthemandatesis‐

sued by the Netsphere I panel in numerous respects, disregarding the  Fee

CapsetbytheNestphereIpanel(ROA.33580),strangely applyingaformula

that included adding a $600,000 uncollectable accounts receivables

(ROA.33581)totheamountofcashonhand,andsubstitutingthisfigure

for

theFeeCapdeterminedinNetsphereI,therewithprovidingjustificationfor

exceeding the cap. After doing so, the DC paradoxically ordered that it

wouldnotreducethe$600,000claimtojudgment.

133



 With only vague comments about its adequacy, the court granted Vo‐

gel’s request for approval of the Vogel Final Accounting

134

. Further, with‐

out acknowledging any of the existing or potential claims against Vogel

andhisprofessionalsforsuchactsasbreachoffiduciarydutyorfraud,the 

132

ROA.33572-33593—entire order: ROA.33589—fee award; In justifying the rea-

sonableness of the fees, the DC nappropriately stated,

inter alia

, “[]the Receiver,

and the Receiver’s professionals, have received a fair amount of unwarranted nega-

tive publicity and treatment at the hands of Baron and his supporters” and “Baron’s

conduct hiring and firing numerous attorneys [without paying them]”. The DC had

no verified or unverified pleadings before it where such allegations were asserted,

held no hearing, received no evidence regarding such matters..ROA.33577.

133

ROA.33586

134

ROA.33590

Case: 15-10341 Document: 00513219780 Page: 85 Date Filed: 10/05/2015

DC granted sweeping releases of all liability, except for gross negligence,

not only to Vogel, but also to a broad categor y  of third parties including

“independent contractors”.

135

 The DC alsocreateda new continuing juris‐

dictionschemeoverallclaimsevertobemadebyanyparty regardingthe

receivershipundercircumstanceswherethisCourthadpreviouslyheldin

NetsphereInosuchjurisdictionexisted.

136



 Additionally, theDC overruledall of Baron’s objections, including his

requestforVogeltoreturnBaron’spersonalandbusinessdocuments.

137



Z While the Netsphere I Panel was deliberating the case,

Appellees were Frantically Selling Receivership Property

 In the fall of 2012, as this Court was preparing to issue its Opinion in

Netsphere I, Appellees and Sherman intensified their efforts to dismantle

Baronandthe LLCsandmoottheappeal,franticallyarrangingliquidation

135

ROA.

136

ROA.33592

137

ROA.33591-33592; 29146

Case: 15-10341 Document: 00513219780 Page: 86 Date Filed: 10/05/2015

of all of Appellees’ remaining assets and billing the receivership estate at

anastounding$$300,000permonth.

138



 This Court enjoined Vogel and Sherman from completing the sale

(ROA.25589‐25590),butnotbefore theVogel‐Shermanteamrackedupover

$700,000inbilling fortheirfeverishandfailedattempttofiresaleallofthe

remaining assets in the receivership, precisely during the time that the

NestphereI

Panelwasdeliberatingitsdecision.

139

,

140



 Intheend,theDCawardedAppelleesapproximately$600,000inaddi‐

tionalfeesforthisastonishingwasteofAppellantsassets.

141



138

ROA.25928

139

ROA.25540‐25545; ROA.25597‐25606; ROA.25500-25515 (3d Dykema Motion for

Atty Fees), ROA. 25742-25762 (4

Dykema Motion for Atty Fees), ROA.25928-

25948 (5

Dykema Motion for Atty Fees).

140

For additional examples of Vogel, Sherman and their legal teams’ efforts liqui-

dating Appellants’ remaining assets

See

ROA.25796-25805, 25502, 25507-25513,

25843-25845, 25857, 25934-25981, 25919-25925.defici

141

ROA.?

Case: 15-10341 Document: 00513219780 Page: 87 Date Filed: 10/05/2015

AA. Vogel’s Operation of Appellants’ Business and Misconduct

On November 24, 2014, Baron and the LLCs filed suit against Vo-

gel and Gardere complaining about their gross misconduct. Baron re-

quests that the court take judicial notice of said complaint as amended

Baron et al v. Vogel et al

, No. 3:2015cv00232 - Document 32 (N.D.

Tex. 2015).

The complaint asserts that,after Vogel moved to have the LLCs

added to the receivership and seizing approximately $1 million in cash

and over $100 million in assets, he proceeded to engage in intentionally

and/or recklessly harmful management actions with respect to the LLCs

and their assets including but not limited to:

a) VogelandGardere’sconcealedsalesofAppellants’assetstoinsiders

atpenniesonthedollar.

142,,143



b) VogelandGardere’sfailuretouseduediligenceindestroyingover

$50,000,000oftheLLCs’assetsbyavoidingthepaymentofrenewal

142

Vogel filed numerous

sealed ex parte

Motions to sell Appellants assets. These

documents are located in the Sealed Record on Appeal to which Appellants do not

have access.

143

ROA.22031, 17481‐17507, 17520, 17514, SROA.?? (Case:11‐10501 Document:

00511742749 Page: 12 Date Filed: 01/31/2012); ROA.2145—Sherman admitted “These

names have both high revenue potential and can be sold individually – sometimes

for in excess of $1 million a piece.”.

Case: 15-10341 Document: 00513219780 Page: 88 Date Filed: 10/05/2015

feesontheirassets,inordertopaythemselvesadditionalfeesusing

Plaintiff’sseized,scarcecashresources.

144



c) VogelandGardere’sconspiracywithShermanto:1)enableSherman

tobepaidover$1milliondollarsofPlaintiffs’moneyintheBCand

DC;2)enableSherman,VogelandGarderetopromoteandsponsora

liquidatingplan,wherebyallofAppellants’assetswouldbeliquidat‐

edforthe

primarybenefitprimarilyofAppellees.

145





d) EngagingiswrongfulintentionallytortiousactivitiestosupportVo‐

gelandGardere’slootingoftheLLCsandtheirassetsaswellasBar‐

on’sassets.



e) FailedandrefusedtopayapennyintaxesasrequiredbytheInternal

RevenueCode

BB. Vogel’s Fraud in Obtaining Fees

Judge Furgeson awarded fees to Vogel and his professionals based

on the belief that Vogel had obtained assets from 17 business around

the country and has been managing those 17 nationwide businesses for

the past two years.

146

. Vogel’s subsequent filings in which he includes a

“final accounting” and “complete receivership inventory” are wholly in-

144

ROA.3400.(Vogel’s Report which lead to this order ROA.??)

145

ROA.24874-24919

146

ROA.27957.

Case: 15-10341 Document: 00513219780 Page: 89 Date Filed: 10/05/2015

consistent with such facts and contain no information concerning the 17

entities that Vogel claimed to have been managing.

Judge Furgeson also believed that Vogel had been incredibly suc-

cessful in defending the third party domain names disputes (referred to

as UDRP complaints) and that Vogel prevailed on every case, believing

Vogel’s statements that “Gardere and the other attorneys it hired to ac-

complish this task were incredibly successful and no names were lost

during their representation”.

147

Then, in subsequent filings, Vogel admitted to failing to defend 800

“pending and threatened Third Party [domain name disputes]” (which

resulted in losing some UDRP disputes by failing to offer any defense on

the merits of any of the claims).

148

Accordingly, it appears that Vogel’s prior representations about

acquiring the assets of 17 entities around the country, operating those

147

ROA.27957-27958; ROA.35811.

148

ROA.28983-28984

Case: 15-10341 Document: 00513219780 Page: 90 Date Filed: 10/05/2015

businesses and vigilantly defending hundreds of domain name disputes

are demonstrable frauds on the court.

SUMMARY OF THE ARGUMENT

The DC violated Baron’s Fifth and Fourth Amendment rights by

(a) refusing to permit Baron to use his funds to retain counsel and ex-

perts to defend himself in critical and complex proceedings, (b) granting

complex, opposed motions filed by Baron’s adversaries without permit-

ting Baron time to respond or by providing negligible time to respond,

and (c) failing to return his seized assets under highly questionable cir-

cumstances while the court lacked the requisite subject matter jurisdic-

tion and personal jurisdiction.

Baron’s constitutional rights were further inadvertently abridged by

the panel in

Netsphere I

making findings that were based on false rep-

resentations made to them by Baron’s adversaries, Appellees herein.

The Panel In

Netsphere I

erred in determining that the DC had the

equity jurisdiction to award fees and expenses against the assets of

Baron or the LLCs, in any amount, where the panel had also deter-

mined that the DC lacked subject matter jurisdiction in the first in-

Case: 15-10341 Document: 00513219780 Page: 91 Date Filed: 10/05/2015

stance. Parts I and II of the

Netsphere I

opinion are in conflict, and

cannot be reconciled. The law of the case doctrine does not prevent re-

lief here since the error concerns subject matter jurisdiction, and it

would be manifestly unjust to perpetuate this conflict and the error it

has caused.

The DC failed to follow the mandates issued by the panel in

Netsphere I

by (a) failing to “meaningfully discount” the professional

fees and expenses, (b) failing to order Vogel and his professionals to

present billing statements that segregated by task the fees and expens-

es incurred, and by failing to segregate the fees and expenses on an es-

tate by estate basis, (c) failing to require the professionals to show that

their services benefited the various estates and failing to require the

professionals to show that such fees and expenses would have been in-

curred by the owners had the receivership not been instituted, (d) fail-

ing to reconsider all of the fees and expenses of the various

professionals, (e) awarding fees and expenses to Sherman and his at-

torneys when same, by admission of the DC, were not allowable under

the law, (f) failing to abide by the mandated fee cap, (g) granting broad

and sweeping releases without jurisdiction, (h) creating exclusive juris-

Case: 15-10341 Document: 00513219780 Page: 92 Date Filed: 10/05/2015

diction retention provisions where, as admitted by the DC, no subject

matter jurisdiction existed, (i) refusing to return the assets of the LLCs

to their rightful owner, (j) refusing to return to Baron his books and

records, and (k) failing to expeditiously wind down the receivership pro-

ceeding and return Baron’s assets to him.

The DC abused its discretion by awarding fees under patently defec-

tive fee applications.

Finally, the DC made findings of fact that were clearly erroneous

under egregious circumstances. In many cases, no hearings were held

and no evidence, sworn or unsworn, was considered by the DC.

Argument

ARGUMENT

THE DC VIOLATED BARON’S FIFTH AMENDMENT DUE PROCESS

RIGHTS

FIFTH AMENDMENT

Case: 15-10341 Document: 00513219780 Page: 93 Date Filed: 10/05/2015

“NO PERSON … [SHALL BE] DEPRIVED OF LIFE, LIB-

ERTY, OR PROPERTY WITHOUT DUE PROCESS OF

LAW;”

The guarantee of due process for all citizens requires the government to

respect all rights, guarantees, and protections afforded by the U.S. Consti-

tution and all applicable statutes, before the government can deprive a per-

son of life, liberty, or property. Due process essentially guarantees that a

party will receive a fundamentally fair, orderly, and just judicial proceed-

ing.

Due process requires that a party must be subject to the personal juris-

diction of a court before a court may adjudicate said party’s rights or take

such party’s assets. World-Wide Volkswagen Cop. V. Woodson, 444 U.S. 286,

291 (1980). In effect, the panel in Netsphere I held that the DC never ob-

tained personal jurisdiction over the LLCs.

149

The DC violated Mr. Baron’s right to due process of law by, among oth-

er things, seizing all of his property on November 24, 2010, under highly

unusual circumstances; prohibiting him from engaging counsel; failing to

provide cash from his own assets at critical stages in the receivership pro-

149

Netsphere I,

703 F.3d at 310.

Case: 15-10341 Document: 00513219780 Page: 94 Date Filed: 10/05/2015

ceeding so that he could engage adequate counsel and experts, and depriv-

ing him of adequate notice of motions and a reasonable opportunity to be

heard regarding the sale and disposition of his property and of hearings

regarding fee applications.

A. The Right to Retain Counsel is Implicit in the Fifth Amendment

This Court has held that “the right to retained counsel in civil litigation

is implicit in the concept of the fifth amendment due process.” R.B. Potash-

nick v. Port City Construction Co., 609 F.2d 1101, 1117 (5th Cir. 1980). Coun-

sel can help delineate the issues, present the factual contentions in an

orderly manner, conduct cross-examination, and generally safeguard the

interests of the recipient. Goldberg v. Kelly, 397 U.S. 254, 270–71 (1970). The

right to counsel in civil matters “‘includes the right to choose the lawyer

who will provide the representation.’” Texas Catastrophe Prop. Ins. Assoc. v.

Morales, 975 F.2d 1178, 1181 (5th Cir. 1992) (quoting McCuin v. Texas Power

& Light Co., 714 F.2d 1255, 1257 (5th Cir. 1983)).

When a party is denied the opportunity to be heard and present evi‐

dencetosupporttheircontentions,theresultingerrorisnotharmless.Pow‐

ellv.UnitedStates,849F.2d1576,1582(5thCir.

1988).ThisCourthasruled

Case: 15-10341 Document: 00513219780 Page: 95 Date Filed: 10/05/2015

thatbasicconstitutionalrights to a fair trial can neverbe treatedasharm‐

less error. Vaccaro v. United States, 461 F.2d 626, 635 (5th Cir. 1972). These

rightsinclude,forexample,therighttocounsel,andanimpartialjudge.Id.

at635n.47.

 Baronwasprohibitedfrom

transactinganybusiness,keeping anymon‐

ey that he earned, cashing  any checks that he received, using any credit

cards,incurringanydebtandfromremovinganyofhispropertyfromthe

Northern District of Texas.Such constitutional rights were unlawfully

suspendedfromNovember24,2010,toatleastJanuary2014

whenthe DC

acknowledgedthattheinvoluntarybankruptcy againstBaronwasprohib‐

ited and established a timetable for winding down the voided receiver‐

ship.

150



 Duringthisentiretime,BaronwasthreatenedwithcontemptbyVogel

and Gardere, if he attempted to engage trial counsel, while, at the  same

150

See

Section F-3 of the Statement of the Case, at p 17.

Case: 15-10341 Document: 00513219780 Page: 96 Date Filed: 10/05/2015

time,beingsubjectedtoalitigationonslaughtbyarmiesoflawyersfunded

byover$8,000,000.00belongingtoAppellantsandOndova.

151



 Baron’sunpaidappellate counselrepeatedlyexplainedthedue process

crisistothecourt,

152

andlikewise,Baronmovedforaccesstohismoneyin

ordertopaycounseltorepresenthim.

153

However,theDCrejectedvirtual‐

lyeveryeffort.

154



 The DC refused to allow Baron’s appellate counsel to be paid during 

thependencyofthereceivershipappeal,

155

and,attherequestofanoppos‐

151

See

Section F-4 of the Statement of the Case, at p 17.

152

ROA.4862-4869; ROA.4865-4866.; For more examples,

see

ROA.34755-34756,

ROA.24994-24998.

153

ROA.2178, ROA.4865-4866; ROA.4862-4870.;ROA.6600, 6613; ROA.10435-

10437, 26928-26930.

154

E.g., ROA.3013-3016, 5129.

155

ROA.2178, 34647-34648; ROA.4865-4866; ROA.5129; Gary Schepps made a lim-

ited appearance and advised the court that Baron did not have the ability to pay

counsel, expert witnesses, or conduct discovery because all of his assets were tied up

in the receivership. ROA.7713-7715, 34867-34869.

Case: 15-10341 Document: 00513219780 Page: 97 Date Filed: 10/05/2015

ingparty,sealedBaron’smotioninwhichherequestedfundstopaycoun‐

sel.

156



B. The DC violated Baron’s due process rights by initiating the

receivership under dubious circumstances.

The bizarre nature of the circumstances surrounding the appointment

of Vogel as receiver on November 24, 2010 are set forth in detail in Sections

F-1 and F-2 of the Statement of the Case, supra, at pp 13-17.

C Baron’s due process rights were violated when the DC refused

to allow him to engage competent counsel in connection with the

hearing on the Vacate or Stay Motion.

The events leading up to the entry of the Order Denying Vacate or Stay

Motion have been addressed in Section H of the Statement of the Case, su-

pra, at p 20-24.

156

ROA.34647-34648; ROA.8210.

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D. Baron’s due process rights were violated when the DC

routinely granted motions filed by the opposition that

substantially effected Baron without permitting him to respond.

In over 100 instances, the DC denied Baron an opportunity to respond

to opposed motions and requests for relief against Baron’s interests, rou-

tinely granting such requests within hours or within a few days of being

filed by the opposition.

157

See chart included as Appellants’ Record Excerpt

19, which analyzes opposed motions granted in under 21 days.

E The DC violated Baron’s due process rights and abused its

discretion by forcing baron to defend the 2013 Fee Applications

and the 2014 Fee Request on an unreasonably accelerated basis,

refusing to allocate funding to pay counsel or an expert witness,

and refusing to grant a continuance

1. The 2013 Fee Application

Baron was not only forced to defend against the 2013 Fee Applications

on an incredibly accelerated basis, but also was simultaneously forced to

defend himself in a multi-party/multi-day mediation of the receivership

157

Local Rule 7.1 (e) of the Northern District of Texas provides for 21 days to respond to

an opposed motion

Case: 15-10341 Document: 00513219780 Page: 99 Date Filed: 10/05/2015

case and the involuntary case, and to defend himself in a complex involun-

tary bankruptcy trial that was set to be heard in the middle of May 2013,

against yet another team of highly skilled lawyers—all this while Baron

was deprived of the use of any of his funds to hire counsel.

158

(ROA.27475–

77, 27872–99, 27911–17, 27156–58, 31088–89).

The issues were extraordinarily complex, and the documents and evi-

dence were voluminous. As noted at Section P of Statement of the Case,

supra, at p _, Vogel and Sherman and their counsel presented over 16,000

pages of Fee Applications, in excess of $5 million in billings, incorporating

substantial hours of time and a myriad of time entries. To defend against

the Fee Applications on the accelerated time schedule set by the DC re-

quired a team of experienced lawyers familiar with the issues along with

testifying experts.

There can be no doubt that the procedural protections mandated by the

Due Process Clause of the Fifth Amendment were violated. See, e.g., Con-

necticut v. Doehr, 501 U.S. 1, 11–12 (1991) (holding that due process protec-

158

Except for $25,000 release by the DC to pay for a retainer for bankruptcy counsel

after Baron’s bankruptcy counsel of choice was denied his requested retainer of

$100,000 by the BC.

Case: 15-10341 Document: 00513219780 Page: 100 Date Filed: 10/05/2015

tion is merited when there is deprivation of property and deprivation need

not be “complete, physical, or permanent” to merit protection but that

“even the temporary or partial impairments to property rights that attach-

ments, liens, and similar encumbrances entail are sufficient to merit due

process protections.”).

Baron was entitled to a meaningful opportunity to be heard in his de-

fense of the 2013 Fee Applications, and to have had the use of his assets to

engage the proper professionals necessary for such defense. See, e.g., Mat-

thews v. Eldridge, 424 U.S. 319, 333 (1976) (The right to be heard “before be-

ing condemned to grievous loss of any kind . . . is a principle basic to our

society” and the “fundamental requirement of due process is the right to

heard at a meaningful time and in a meaningful manner”).

What constitutes a “meaningful” opportunity to be heard varies with

the circumstances and the interest at stake. Due Process, “unlike some legal

rules, is not a technical conception with a fixed content unrelated to time,

place and circumstances.” Mathews, 424 U.S. at 334; see also Goldberg, 397

U.S. at 268–69 (“the opportunity to be heard must be tailored to the capaci-

ties and circumstances of those who are to be heard”). In the present litiga-

tion, however, the effect of the DC’s rigid freeze on funds for Baron’s

Case: 15-10341 Document: 00513219780 Page: 101 Date Filed: 10/05/2015

defense including funds to his counsel, for experts and other costs and ex-

penses precluded Baron from mounting all but a minimal defense and pre-

vented him from having any meaningful opportunity to be heard.

In sharp contrast to Baron’s complete deprivation of funds to defend

himself, Baron’s well-financed adversaries were represented by over 25

highly paid lawyers with large and prestigious law firms, and accounting

firms engaged by Vogel.

159

2. The 2014 Fee Request

With respect to the 2014 Fee Request, Baron was given eight days to

prepare an objection to the Vogel Final Accounting and 2014 Fee Request.

The “accounting” contained 20 exhibits and 1365 pages, and the 2014 Fee

Request contained 34 pages of argument and eight exhibits containing 260

pages. Both were unverified, and no sworn evidence was attached. Fur-

ther, there was no time to take depositions or for discovery, and the DC did

not conduct a hearing to hear oral arguments or receive evidence. In sec-

tion VII of Baron’s 4/22/2014 Objection, Baron objected and requested ad-

159

Interested parties are entitled to the opportunity to rebut the proof offered by the

receiver. 65

Am. Jur

. 2d Receivers § 275

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ditional time.

160

Again, Baron’s due process rights were trampled upon by

the DC.

F. The deceit fostered by Vogel and Sherman before the panel

and then perpetuated in the opinions of this Court deprives Baron

of his life, liberty and property without due process of law.

Allowing Vogel, Sherman and Gardere’s litany of fabrications to be

perpetuated in the opinions of this Court deprives Baron of his life, liberty

and property without due process of law. .

1. Many misrepresentations were adopted by the panel in the

Netsphere I

opinion and by the DC.

Vogel and Sherman misrepresented that Bankruptcy Judge Jernigan

had recommended the institution of the receivership, and that they simply

carried out her wishes. An example of this appears in Vogel’s 2013 Fee Ap-

plication. ROA.27511.

Sherman made similar fabrications to provoke the receivership.

(ROA.22336-7).

160

ROA.31016.

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Baron was harmed by such false statements because in Netsphere I, the

panel erroneously found and/or concluded that “no party ‘provoked‘ the

receivership” because “the BC recommended a receiver, and the trustee

then moved in DC for the appointment as recommended.”

161

In fact there is nothing in the bankruptcy record of Ondova where

Bankruptcy Judge Jernigan ever made such a recommendation. More to

the point, Bankruptcy Judge Jernigan has now denied that she recom-

mended a receivership. In a hearing on February 11, 2015, Judge Jernigan

stated:

“ . . . So you correctly clarified what yes, it's frustrated me a time

or two when I've read it in a Fifth Circuit opinion. I didn't rec-

ommend it.”

SROA.___.

This erroneous finding made in the Netsphere I panel opinion not only af-

fected the panel’s decision, but it has been used repeatedly to deprive Bar-

on of his constitutional right to pursue causes of action against Vogel,

Sherman and their counsel for wrongfully invoking the receivership as

161

Netsphere I,

703 F.3d at 312.

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against him. Incredible as it may seem, this Court, in a recent opinion in

Appellate Case No. 13-10696 repeated this falsehood yet again.

162

Similarly, Sherman misrepresented that he was obligated to move for

the appointment of a receiver over Baron because Baron continued to hire

and fire lawyers after Judge Jernigan’s Report and Recommendation.

163

However, this too was false, as the Ondova docket sheets reflect that there

were no substitutions of counsel or appearances of new counsel from and

after the BC entered the Report and Recommendation on October 12, 2010.

(ROA.24843–47).

164

Nevertheless, the panel in Netsphere, adopted Sherman’s falsification

when it stated:

“Baron continued to hire and fire attorneys, causing the bank-

ruptcy trustee to move for the appointment of a receiver over

162

See

Opinion in Appellate Case No. 13-10696, filed August 14, 2015, ECF Doc

00513155610. On page 3 of the Opinion, the Panel, citing Netsphere I, again con-

cluded:

“Eventually, on the recommendation of the BC, the DC appointed Peter

S. Vogel as receiver over Baron.”

163

ROA.1033-1037.

164

See

Ondova docket sheets, (ROA24842–47). There is no indication that Baron

had fired counsel or hired counsel from October 12, 2010 to November 24, 2010, as

had been represented by Sherman, Trustee in the Receivership Motion and to this

Court.

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Baron, followed soon by the DC's ex parte appointment of a re-

ceiver.”

Netsphere, 703 F.3d at 308.

Clearly, the Netsphere I panel was presented with a formidable task,

sorting out Vogel and Sherman’s numerous fabrications and innuendos.

For example, Sherman and Vogel falsely represented that Baron was shift-

ing assets offshore beyond the jurisdiction of the BC in an effort to support

their decision to put Baron in a receivership. However, the panel complete-

ly debunked this additional oft-repeated accusation stating:

“there [was] no record evidence brought to [the court’s] attention

that any discrete assets subject to the settlement agreement were

being moved beyond the reach of the court,”

Netsphere I, 703 F.3d at 307.

Vogel and Sherman also repeatedly accused Baron of failing to transfer

the domain names in accordance with the GSA. Again panel debunked

this oft-repeated accusation stating:

“[n]either the trustee nor Vogel . . . pointed to record evidence

that Baron failed to transfer the domain names in accordance with

the agreement,”

Id., 703 F.3d at 307.

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Vogel and Sherman repeatedly misrepresented before all tribunals that

Baron was threatening to nullify the GSA. Again the panel stated:

“We do not, though, find evidence that Baron was threatening to

nullify the global settlement agreement by transferring domain

names outside the court’s jurisdiction.”

Id., 703 F.3d at 307–8.

Vogel and Sherman also invented the falsehood that Baron had been

repeatedly held in contempt by the courts below. However, this too was

debunked by the panel:

“If the DC entered a sufficiently specific order, it could have held

Baron in contempt, imposed a fine or imprisoned him for “diso-

bedience ... to its lawful ... command.” 18 U.S.C. § 401. At oral ar-

gument in the appeal, it seemed conceded that no clear order

existed. Instead, the receiver and trustee cited only to hearings at

which the DC admonished Baron not to hire or fire any more at-

torneys.”

Id., 703 F.3d at 311.

Further, at Sherman’s provocation, the BC held a hearing on its Order

to Show Cause Why Jeffrey Baron Should Not be Held Contempt, span-

ning several days, where Baron was subjected to examination by the Bank-

ruptcy Judge, numerous lawyers and law firms (ROA.24845-28450). No

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contempt was found and no order holding Baron in contempt was ever en-

tered.

165

Again and again, Vogel and Sherman and their lawyers repeated these

falsehoods to the BC, the DC and this Court. These repeated, false repre-

sentations evoked behavior of the judges below that was calamitous to

Baron and violated his constitutional rights. As an example of this behav-

ior, see Judge Furgeson’s comments at ROA.30450–51, explaining that the

proceeding would inevitably “bring Mr. Baron to a penurious condition”.

2. The panel’s finding that Jeffrey Baron was a “vexatious”

litigant was a result of Sherman and Vogel’s fabrications..

Perhaps the most scurrilous accusation made by Vogel and Sherman

and adopted by the panel in Netsphere I is that Baron was a “vexatious” liti-

gant. For the reasons stated in Section J of the Statement of the Case, supra,

at pp 24-28, this was untrue.

165

ROA.24845–50

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3. The Netsphere panel was clearly erroneous in: (a) finding that

Baron’s actions increased the fees and expenses of the

Receiver.

The panel in Netsphere found that “to a large extent, Baron's own ac-

tions resulted in more work and more fees for Vogel and his attorneys,”

166

and then concluded that “[f]or these reasons, charging the current receiver-

ship fund for reasonable receivership expenses, without allowing any addi-

tional assets to be sold, is an equitable solution.” Netsphere, 703 F.3d at 313.

However, the publishing of such statement, in and of itself, violates Baron’s

due process rights. The only actions Baron ever took were to file objections

to the Receivership Order in the form of the Vacate or Stay Motion, file ob-

jections to the DC’s award of attorney fees to the Receiver, the Trustee and

their respective professionals, file objections to the DC’s approval of sales

of assets owned by the LLCs, and to appeal 70 orders improvidently en-

tered by the DC, 69 of which were reversed by this Court in Netsphere I.

Baron should not be punished because this caused more work and more

fees for Vogel and his attorneys. Baron’s actions were appropriate, and he

166

Netsphere,

703 F.3d at 313.

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was doing nothing more than partaking in his constitutional right to de-

fend himself on the trial court level, and his statutory right to appeal the

orders of the DC. Moreover, Baron did everything humanly possible to

terminate the receivership under circumstances where sufficient funds

would be made available to fund the payment of the alleged claims of the

attorneys, for whose benefit the receivership was instituted in the first in-

stance. See Section K of the Statement of Case, supra, at pp 28-32.

In United States v. Larchwood Gardens, Inc., 420 F.2d 531, 534–35 (3rd Cir.

1970), the receiver and his professionals made similar arguments, which

were unequivocally rejected.

4. The cumulative effect of these false representations was to

deprive Baron of his Fifth Amendment Rights to Due Process.

Standing alone, perhaps one of these false representations might not

have violated Baron’s Fifth Amendment constitutional rights. However,

the false statements were numerous, and they were repeatedly made before

the BC, the DC and this Court. These false representations tarnished the

image of Baron in the eyes of the courts he was before. When combined

with Baron’s inability to engage legal counsel to defend against these at-

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tacks, and experts needed at critical junctures in this multi-year litigation,

the threats of contempt if he even attempted to engage trial counsel, the

confiscation of his legal documents and the total depletion of his cash and

non-cash assets, this conduct has undeniably resulted in a deprivation of

Baron’s Fifth Amendment right to due process.

G. The taking of Baron’s assets, including the LLC’s assets,

amounted to an unconstitutional taking of property without due

process.

The Fifth Amendment to the United States Constitution provides that

private property shall not be taken without providing due process. Con-

necticut v. Doehr, 501 U.S. 1, 11–12 (1991) (holding that due process protec-

tion is merited when there is deprivation of property and deprivation need

not be “complete, physical, or permanent” to merit protection but that

“even the temporary or partial impairments to property rights that attach-

ments, liens, and similar encumbrances entail are sufficient to merit due

process protections.”).

For all of the reasons stated above, Baron was deprived of his constitu-

tional due process rights every step of the way.

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Additionally, the DC’s grant of broad and sweeping releases and provi-

sions for retention of jurisdiction over all claims and causes of action Baron

might assert against nearly anyone remotely related to this failed receiver-

ship to seek redress of the wrongs that have been done to him and for the

losses he has suffered is yet another example of how Baron’s property

rights have been eviscerated without due process. See Argument IV-L & M,

infra, at pp 129-131.

II.

SEIZING AND DISBURSING PROPERTY NOT SUBJECT

TO A DISPUTE BEFORE THE COURT AND NOT WITHIN

THE COURT’S JURISDICTION VIOLATES THE FOURTH

AMENDMENT.

The Fourth Amendment protects persons’ property against unreasona-

ble seizure. Severance v. Patterson, 566 F.3d 490, 501 (5th Cir. 2009). The

Court defined “seizure” of property as occurring when “there is some

meaningful interference with an individual’s possessory interests in that

property.” Id quoting from United States v. Jacobsen, 466 U.S. 109, 113

(1984); Soldal v. Cook County Ill., 506 U.S. 56, 61 (1992). Baron’s assets and

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those of the LLCs were arbitrarily seized without just cause by a DC having

no subject matter jurisdiction to do so, in violation of the Fourth Amend-

ment. Camara v. Municipal

Court of City and County of San Francisco

387 U.S. 523, 528 (1967). The Supreme Court has cautioned that the

exercise of court power over property not subject to a dispute pled before

the court “would place the whole rights and property of the community

under the arbitrary will of the Judge”.

Grupo Mexicano de Desarrollo

SA v. Alliance Bond Fund, Inc.,

527 U.S. 308, 332 (1999).

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III.

THE PANEL IN

ETSPHERE

RRED

IN DETERMINING THAT

THE DC HAD THE EQUITY JURISDICTION TO AWARD FEES

AND EXPENSES AGAINST THE ASSETS OF BARON OR THE

LLCS , IN ANY AMOUNT.

The Court should applies a de novo standard for questions of law and

an abuse of discretion standard for the discretionary aspects of fee allow-

ances.

167

A. Analysis of Facts and Law Decided in the Netsphere I Case

In Section I of Netsphere I opinion, entitled “Propriety of the Receiver-

ship Order,”

168

the panel determined, based on its prior opinion in Cochrane

v. W.F. Potts Son & Co., 47 F.2d 1026, 1029 (5th Cir.1931) (Potts I), that “equi-

ty does not allow a receivership to be imposed over property that was not

the subject of the underlying dispute,” and that “a court lacks subject mat-

167

See

In re Fredeman Litigation

, 843 F.2d 821, 824;

Gandy Nursery, Inc. v. US

318 F.3d 631, 636 (5th Cir. 2003);

Commodity Futures Trading Comm’n v.

Morse

, 762 F.2d 60, 63 (8th Cir. 1985).

168

Netsphere I,

703 F.3d at 305-11.

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ter jurisdiction to impose a receivership over property that is not the sub-

ject of an underlying claim or controversy.”

169

Appellee Gardere has con-

ceded this point.

170

Relying on Potts I, the panel in Netsphere I concluded that “the district

could not impose a receivership over Baron’s personal property and the as-

sets held by Novo Point and Quantec.” Netsphere I, 703 F.3d at 310.

In Section II of the Netsphere I opinion, the panel looked to the second

Potts decision, W.F. Potts Son & Co. v. Cochrane, 59 F.2d 375, 377–78 (5th Cir.

1932) (Potts II) as well as other precedent in the Fifth Circuit, to support its

conclusion that “equity is the standard” in assessing costs in the case of an

improperly created receivership.

171

In Potts II, recognizing that: 1) the DC

had jurisdiction over some of the property; 2) The circumstances surround-

ing the appointment of the receiver amounted to “almost a public calami-

169

Id.,

703 F.3d at 306, 310.

170

Appellee Gardere stated in its principal brief filed in Appeals Case 13-10696, on

October 27, 2014, Document: 00512816545, page 27:

“While this court agreed that the DC did not have jurisdiction to impose a

receivership over assets held by Novo Point and Quantec—and indeed

over any of Baron’s personal property”

171

Netsphere I, 703 F.3d

at 312.

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ty”; 3) the interested parties acquiesced to the receivership for nearly six

months; and 4) the receivership had paid certain expenses that “inured di-

rectly to its benefit”, such as repairs and additions to the property, this

Court determined that the estate should be charged some costs, but only

those costs that either “inured directly to its benefit” or “those rightfully in

charge of it would have had to pay” had a receiver not been appointed

. Id

at 379.

As supported by the authorities below, the panel in Netsphere I erred

when it determined that: 1) the DC had the equity jurisdiction to award

fees and expenses of the receivership against the assets of Baron and the

LLCs, in any amount, where the panel had also determined that the DC

lacked subject matter jurisdiction in the first instance, and 2) the DC could

equitably charge Baron and the LLCs with costs without demonstrating

that those costs “inured a benefit to the relevant estate”.

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B. Without subject matter jurisdiction, a DC is powerless to assess

a receiver’s professional fees and expenses against assets illegally

seized.

The jurisdiction issues in this case are paramount and should not be

disregarded by this Court. As this Court has stated, “no pussy-footing

around is allowed on jurisdictional issues.”

172

This Court need only review its decisions in Beach v. Macon Grocery Co.,

125 F. 513 (5th Cir. 1903) and Speakman v. Bryan, 61 F.2d 430, 431 (5

Cir.

1932), and the Supreme Court decisions in Atlantic Trust Co. v. Chapman,

208 U.S. 360 (1908) and Lion Bonding & Surety Co. v. Karatz, 262 U.S. 640,

641-2 (1923) for controlling authority in this case. Based on the heavy

weight of this precedent, this Court must reverse and render, and hold that

the DC, having found that it lacked subject matter jurisdiction over the per-

sonal assets of Baron and the LLCs, had no authority to award receivership

professional fees and expenses to be paid out of the assets of such illegally

attached assets.

172

In re Southmark Corp.,

163 F.3d 925, 929 (5

Cir. 1999).

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1. Fifth Circuit Precedent

In 1903, in the Beach case, this Court considered the same issue that is

presented in the instant appeal. In Beach, the property of a nonparty, Miss

Dixon, was seized in a receivership imposed because of conduct of Mr.

Beach. The receivership was reversed and vacated. However, the receiver

incurred expenses which he wanted paid. As an equitable solution, the trial

court allowed some receivership expenses to be paid out of Miss Dixon’s

property. The panel in Beach reversed and ruled as follows:

“[T]he receiver has, by no law, been imposed upon the defend-

ant. Neither is there any equitable principle which should re-

quire him to pay, before he can secure a return of his property,

the expenses of the unlawful proceeding by which it has been

taken and withheld from his possession. To require that pay-

ment from him or his property would be a wrong which the

court has neither the power nor the disposition to inflict upon

him. It may be a hardship upon the receiver himself, but it is

one of the risks which he has voluntarily assumed.”

173

Beach, 125 F. at 515 (emphasis in bold added).

In 1932, this Court spoke again. After reviewing the prior precedent in

this Court and the Supreme Court concerning invalid receivers, the panel

in Speakman v. Bryan reaffirmed the same principles and held:

173

. (emphasis added).

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We think it cannot be doubted as established that, except where

the court appointing a receiver is entirely wanting in jurisdic-

tion as a court (Lion Bonding Co. v. Karatz, 262 U. S. 640, 43 S.

Ct. 641, 67 L. Ed. 1151) the costs, expenses, and disbursements

incurred by a receiver whose appointment was improvidently

made, or who has taken wrongful possession of property, will,

upon equitable principles, be charged by the court of jurisdic-

tion against the property to the extent that they have inured to

its benefit. State of Missouri v. Angle (C. C. A.) 236 F. 644; Palmer

v. State of Texas, 212 U. S. 118, 29 S. Ct. 230, 53 L. Ed. 435; Burn-

rite Coal Co. v. Riggs, 274 U. S. 208, 47 S. Ct. 578, 71 L. Ed. 1002;

In Re Zier & Co. (D. C.) 127 F. 399; Id. (C. C. A.) 142 F. 102; W. F.

Potts Son & Co. v. Conchrane (C. C. A.) 59 F.(2d) 375.”

Speakman v. Bryan, 61 F.2d at 431 (emphasis in bold added). In the case at

bar, the DC lacked subject matter jurisdiction, and, therefore, there was no

basis for applying equitable principles to charge against the property

wrongfully seized the fees and expenses of Vogel and his professionals.

2. Supreme Court Precedent

In 1908, in Atlantic Trust Co. v. Chapman, the Supreme Court enunciated

the fundamental principle of receivership law that a court is prohibited

from using property of an entity not a party to the receivership or related

lawsuit to pay a receiver’s expenses. The Court said:

“If he [the receiver] has taken property into his custody under an

irregular, unauthorized appointment, he must look for his com-

pensation to the parties at whose instance he was appointed, and

the same rule applies if the property of which he takes possession

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is determined to belong to persons who are not parties to the ac-

tion, and is taken from his possession by paramount authority. As

to such property his appointment as receiver was unauthorized

and conferred upon him no right to charge it with any expenses.”

208 U.S. at 373–74 (quoting Ephraim v. Pacific Bank, 62 P. 177, 178 (Cal.

1900)).

In 1923, the Supreme Court again reaffirmed this principle in Lion Bond-

ing, where the court held:

“This court is without power to grant any part of the re-

lief sought. The DC was without jurisdiction as a federal court

to appoint receivers in, or otherwise to entertain, the Karatz

suit. For this reason, among others, the Hertz suit, a dependent

bill, was dismissed. As the lower federal courts lacked jurisdic-

tion, they are necessarily without power to make any charge

upon, or disposition of, the assets within their respective dis-

tricts.

FN1

”

Id., 262 U.S. at 641-2.

C. The

Netsphere I

panel’s reliance upon Palmer v. Texas was

misplaced.

In Lion Bonding, the Supreme Court specifically ruled that the holding

in Palmer v. State of Texas, 212 U.S. 118, 132 (1909) did not apply where the

trial court lacked the jurisdiction to impose the receivership, stating:

“The case at bar is unlike Palmer v. Texas, 212 U.S. 118, 132, up-

on which the receivers rely. In that case the costs and expenses

of a receiver erroneously appointed by the federal court were

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100

directed to be paid out of funds realized in that court. There,

the Circuit Court had jurisdiction as a federal court; but the de-

cree appointing the receiver was reversed, because it was erro-

neous.”

Id., 262 U.S. at 642.

D. The

Netsphere I

panel’s reliance on

Potts II

was misplaced.

A careful analysis of Speakman and Potts II reveals a fundamental flaw

in the Court’s analysis in Netsphere I. The Potts II panel did not distinguish

between the series E bonds, over which the Potts I panel found there was

subject matter jurisdiction, and the other bonds, over which the Potts I pan-

el found there was no subject matter jurisdiction. However, in Speakman,

issued shortly after Potts II, the Court clarified that the reason equity was

employed in Potts II was a result of the DC’s affirmative jurisdiction over

the Series E Bonds.

E. The Law of the Case Doctrine does not bar this Court from

reconsidering the ruling in part II of

Netsphere I

decision: a court

can never be barred from questioning subject matter jurisdiction.

The law of the case doctrine provides that “an issue of law or fact de-

cided on appeal may not be re-examined either by the DC on remand or by

the appellate court on a subsequent appeal.” Gene & Gene, L.L.C. v. BioPay,

Case: 15-10341 Document: 00513219780 Page: 121 Date Filed: 10/05/2015

101

L.L.C., 624 F.3d 698, 702 (5th Cir. 2010). However, there are three excep-

tions to the law of the case doctrine. A court of appeals can reexamine an

issue previously decided on appeal if “(i) the evidence on a subsequent tri-

al was substantially different, (ii) controlling authority has since made a

contrary decision of the law applicable to such issues, or (iii) the decision

was clearly erroneous and would work a manifest injustice.” Gene & Gene,

624 F.3d at 702.

1. It is a fundamental concept that a court not having

jurisdiction of the res and/or the parties cannot affect the res

or the parties by its decree.

Very early on, the Supreme Court enunciated the oft repeated funda-

mental principles that subject matter jurisdiction is required in order to

“exercise any judicial power,”

174

and that a “court, not having jurisdiction

of the res and/or the parties, cannot affect the res or the parties by its de-

cree.”

175

174

Rhode Island v. Massachusetts

, 37 U.S. 657, 718 (1838);

see also Reynolds v.

Stockton

, 140 U.S. 254, 268–69 (1891);

United States Catholic Conference v. Abor-

tion Rights Mobilization, Inc

., 487 U.S. 72, 77 (1988).

175

Fall v. Eastin

, 215 U.S. 1, 11 (1909).

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102

More recently, in United States Catholic Conference v. Abortion Rights Mo-

bilization, Inc., 487 U.S. 72, 77 (1988), the Supreme Court stated:

“The challenge in this case goes to the subject matter jurisdic-

tion of the court and hence its power to issue the order.… [this]

is not a mere nicety of legal metaphysics. It rests instead on the

central principle of a free society that courts have finite bounds

of authority, some of constitutional origin, which exist to pro-

tect citizens from the very wrong asserted here, the excessive

use of judicial power.”

Indeed, there is long-standing, unwavering precedent out of both the

Supreme Court and of this Court - that a federal court that lacks subject

matter jurisdiction, lacks the power to award costs. Citizens Bank of Louisi-

anna v. Cannon, 164 U.S. 319, 324 (1896); Smyth v. Asphalt Belt Ry. Co., 267

U.S. 326, 330 (1925); Atlantic; Lion Bonding, Beach, Potts I, Speakman; and

United States v. Jardine, 81 F.2d 747, 747–78 (5th Cir. 1936).

2. Parts I and II of the

Netsphere I

opinion are inconsistent and

cannot be reconciled.

In part I of the Netsphere I the panel recognized that the receivership

remedy is an equitable one, and determined that “equity does not allow a

receivership to be imposed over property that was not the subject of the

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103

underlying dispute.” Netsphere, 703 F.3d at 306. Then, citing Potts I,

176

the

Netsphere panel determined that “[a] court lacks jurisdiction to impose a re-

ceivership over property that is not the subject of an underlying claim or

controversy.” 703 F.3d at 310. It then concluded:

We conclude the DC could not impose a receivership over

Baron's personal property and the assets held by Novo Point

and Quantec.”

In part II of the Netsphere I opinion, the panel concluded that equity

controls when addressing the costs created by an improper receivership.

The Netsphere I panel found that Potts II and Palmer were dispositive on this

issue. However, the Netsphere I panel failed to address the later decision of

this Court in Speakman, where the Court made it clear that equitable princi-

ples cannot be applied where the court finds that there is a want of subject

matter jurisdiction—the precise conclusion reached by the panel in part I of

the Netsphere I.

Id.

176

47 F.2d at 1029.

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104

3. It would be manifestly unjust for this Court to perpetuate this

clearly erroneous legal conclusion adopted in Part II of the

Netsphere I

opinion.

In effect, Part I of the the Netsphere I opinion was internally inconsistent

with Part II of the opinion. Therefore, it would be manifestly unjust for this

Court to perpetuate this clearly erroneous legal conclusion adopted in Part

II of the Netsphere I opinion.

4. Appellees’ Demonstrable Fraud on the Court Requires

Reconsideration

The holdings in Netsphere I, was based largely on Vogel and Sherman’s

misrepresentations of fact to this Court. Indeed, one of the Court’s funda-

mental premises in Netsphere I was that Bankruptcy Judge Jernigan rec-

ommended the appointment of a receiver, and that Sherman was merely

following her orders when he dutifully sought such appointment. As ex-

plained supra in Argument I-F-1, supra, at pp 82-87, Judge Jernigan denied

having made such recommendation.

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105

5. Denial of Due Process Compels Reconsideration of

Netsphere

This court has already held that the receivership was illegal and that

all property seized was done so wrongfully. To allow the use of illegally

seized property to pay fees once again denies Mr. Baron of his property

without due process of law. The DC’s continued failure to release this

property, as he was required to do by this court’s order, further exacerbates

the denial of Mr. Baron’s constitutional rights and should be remedied by

this court.

IV.

THE DC FAILED TO FOLLOW THIS COURT’S MANDATES ISSUED

ETSPHERE

The manner in which a lower court enforces an appellate court’s man-

date is reviewed de novo. United States v. Kellington, 217 F.3d 1084, 1092

(9th Cir. 2000). Lower courts are obligated to execute the terms of the man-

date. Where, on remand, the trial court is ordered to conduct a hearing and

enter findings of fact, such findings are reviewed on a like standard of re-

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106

view as required for findings of fact made in the original hearing. See Depu-

ty v. Lehman Bros., Inc., 345 F.3d 494, 509 (7th Cir. 2003).

A. The Mandate Rule prohibits a DC from straying from an

appellate court’s directive

This Court holds that a DC is prohibited from taking any action not

expressly directed by the Court.

United States v. Castillo

, 179 F.3d 321,

330 (5th Cir. 1999), rev'd on other grounds, 530 U.S. 120 (2000).

See al-

so,

Crowe v. Smith

, 261 F.3d 558, 562 (5th Cir.2001). A DC must

"'implement both the letter and spirit of the [appellate court's] man-

date,' and may not disregard the 'explicit directives' of that court."

United States v. Becerra,

155 F.3d 740, 752 (5th Cir. 1998) (internal

quotations omitted). More to the point, “[t]he mandate rule requires a DC

on remand to effect the [circuit court’s] mandate and to do nothing else.”

General Universal Sys., Inc. v. Hal, Inc., 500 F.3d 444, 453 (5th Cir. 2007) (cita-

tions omitted).

Where, as here, further proceedings in the DC "'are specified in the

mandate [of the Court of Appeals], the DC is limited to holding such as

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107

are directed.'"

Harris v. Sentry Title Co. Inc.,

806 F.2d 1278, 1279 (5th

Cir. 1987).

B. Even if the DC had the equity jurisdiction to award receivership

fees and expenses, the DC failed to follow the mandate of the

Netsphere I panel in the exercise of such equity jurisdiction.

In Section II of Netsphere I,

177

the panel, relying principally on the Potts

II decision, concluded that “charging the current receivership fund for rea-

sonable receivership expenses, without allowing any additional assets to be

sold, [would be] an equitable solution.”

178

Without defining “reasonable re-

ceivership expenses”, the mandates directed the DC to accomplish the

eight directives set forth in Section N of the Statement of the Case, supra, at

pp 35-37.

Beyond these generalized directives, the panel also provided guidance

on how to apply such equitable considerations by citing and relying upon

prior precedent of the Court and the Supreme Court, namely Potts II and

Palmer. The DC failed to follow these decisions.

177

Netsphere I

, 703 F.3d at 311 – 314.

178

Id.,

703 F.3d at 313.

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108

C. The standard for applying equity in instances of improvidently

appointed receivers has been clearly established.

In Potts II, the Court limited the allowance and payment of receivership

expenditures to those expenditures that the owners of the property would

have had to pay themselves had the receivership not been instituted, or ex-

penditures that resulted in an actual benefit to the receivership estate.

179

Likewise, in Palmer, the Supreme Court employed a similar equitable

standard for paying costs of an improperly imposed receivership. There,

the Supreme Court held that the receiver could only recover costs from the

funds that were created (“realized”) by the receiver.

One year later, in, Speakman, this Court reviewed the existing precedent

of the Supreme Court and this Court, including Potts II and Palmer, held

that “the costs, expenses, and disbursements incurred by a receiver whose

appointment was improvidently made, or who has taken wrongful posses-

sion of property, will, upon equitable principles, be charged by the court of

jurisdiction against the property to the extent that they have inured to its

benefit”. Speakman, 61 F.2d at 431 (emphasis in bold added).

179

Potts II,

59 F.2d

at 378–79.

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109

Two decades later, in Tucker v. Baker, 214 F.2d 627 (5th Cir. 1954), the

Court reinforced this construct, and disallowed the fees and expenses of

the receiver, “except to the extent that it is made to appear that the receiv-

er's actions and activities have enured to the benefit of the estate,” citing

Potts II. Id., at 632.

Indeed for the past 70 years, this Court, unequivocally has held that "[a

Receiver’s] allowances of fees and expenses must rest on facts showing ac-

tual benefits" Godfrey v. Powell, 159 F.2d 330 (5th Cir.1947).

The corollary to this principle is that a receiver is not entitled to com-

pensation from the estate for defending his own actions. See cases cited at

45 Am. Jur., Receivers § 278 (1956); Larchwood Gardens, 420 F.2d at 535; In re

Marcuse & Co., 11 F.2d 513, 516 (7th Cir. 1926).

D. The “discounts” ordered by the DC did not comply with the

law or the mandates issued in

Netsphere I

Among all of the fee applications considered by the DC after this

Court’s mandate in Netsphere I, the DC approved most of the fee amounts

requested by Vogel and his professional and wholly failed to reconsidered

any of the Additional Expenditures, expressly approving $5,581,445.46 to

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110

be paid directly to Vogel and his professionals and failing to even mention

the Additional Expenditures of $5,822,576.26

180

explained Record Excerpts

14‐15. In doing so, the DC failed to employ any of the requirements im-

posed by precedent, namely, that Vogel’s reimbursable fees and expenses

must inure a benefit to the estate or that such fees and expenses would

have been borne by Appellants if Vogel had not been appointed.

In fact, in presenting thousands of pages of fee applications and nu-

merous motions and arguments, Vogel and his professionals wholly failed

to show that their fees and expenses met any of such requirements. See Ar-

gument V, infra, at pp 133-14111.

E. As a matter of law, the fees incurred by a losing party to a

litigation cannot be borne by the prevailing party.

The 2013 Fee Applications and the 2014 Fee Request, which were ap-

proved by the DC, consist of time entries that are mainly for self-advocacy

services: work advocating Appellees’ positions to sustain the appointment

180

See

Charts included as Appellants’ Record Excerpts 14 &15.

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111

of Vogel on appeal, prosecuting their own fee applications and other self-

serving activities.

Aside from the clear precedent prohibiting reimbursement for such ex-

penditures in a failed receivership, this Court has held that attorney fees

may not be justly awarded out of an appellant’s funds under any circum-

stance. First Nat. Bank v. Southern Cotton Oil Co., 86 F.2d 33, 34 (5th Cir.

1936). Moreover, the Supreme Court has repeatedly reaffirmed the efficacy

of the “American Rule,” which provides that each party in a lawsuit must

bear its own attorney fees, win or lose, unless there is express statutory au-

thorization to the contrary. Hardt v. Reliance Standard Life Ins. Co., 560 U.S.

242, 252–53 (2010).

181

No statutory provision exists for the shifting of pro-

fessional fees here in favor of Vogel or Sherman, who were not the prevail-

ing parties in this receivership litigation. Allowing Sherman and Vogel to

recover their professional fees and expenses from the receivership estate,

which are Appellants’ assets, would, in effect, violate the “American Rule”

181

Paradoxically, the DC awarded $5,253,821.70 in fees and expenses to Vogel and

his professionals, in part, as a penalty for Baron successfully appealing the DC’s or-

ders, stating that Baron “swamped the Fifth Circuit with questionable appeals, the

Court finds that it would be entirely inequitable to deny these fees. Accordingly, the

Court sees no reason not to charge the Receivership estate for the additional ex-

penses incurred by Baron and Schepps's conduct.” ROA.27939.

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112

and force Appellants to pay for Vogel and Sherman’s professional fees

where they were not the prevailing parties, and in the absence of any statu-

tory basis for fee shifting.

Other circuits have addressed this issue as well. For example, the Third

Circuit applies the “American Rule” requiring that each party pay his own

expenses including receivers in defense of receivership fees. Larchwood

Gardens, 420 F.2d at 535. Likewise, the Seventh Circuit has refused to au-

thorize receivership fees when the receiver is engaging in controversy as a

litigant advocating a position where he is not acting as a neutral. In re Mar-

cuse, 11 F.2d at 516.

The fees and expenses charged by Vogel, Sherman and their respective

attorneys or other professionals in prosecuting their own fees and in de-

fending the receivership are not proper charges against, and payable out of,

the receivership estate. Such expenditures conferred no discernable benefit

upon, or enhancement of, property of the receivership estate, nor would

such expenditures have been incurred had the receivership not been insti-

tuted.

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F. The 2013 Fee Applications and the 2014 Fee Request violated

the Court’s mandates.

The 2013 Fee Applications

182

and the 2014 Fee Request

183

violated the

Court’s mandates. These fee applications did not allocate the fees and ex-

penses of such professionals to each separate litigation and non-litigation

matter handled by Vogel and each of the receivership professionals.

184

Fur-

ther, neither Vogel nor his professionals made any effort to divide the fees

requested into tasks performed.

185

These fee applications employed block

billing practices, which have been frowned upon by the courts.

186

In the 2014 Fee Request, Vogel requested additional fee payments in the

amount of $901,882.12. In the 3/27/2015 Memorandum Opinion and Or-

der, the DC granted Vogel an additional $424,857.76 in fees, which was the

entirety of the remaining assets in the receivership estate and exceeded the

182

See

section P-1 of the Statement of the Case, supra, at pp 40-43 . (the “4/17/2013

FeeApplications”)

183

See

section U of the Statement of the Case, supra, at pp__ . (the “4/14/2014Fee

Request”)

184

See

Argument V, infra, at p 57.

185

Id.

186

See

section H-2 of the Statement of the Case, supra, at p 22.

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114

fee cap set by this Court in Netsphere I. See sections V and W of the State-

ment of the Case, supra, at 57-58.

Additionally, the court never addressed the Additional Expenditures as

identified in Appellants’ Record Excerpt 15. In total, the receivership pro-

fessionals have liquidated $11,404,021.72 s of Baron and the LLCs’ cash to

pay themselves $5,581,445.46 in fees and expenses, even while the Netsphere

I panel found that it was an abuse of discretion to have created the receiv-

ership in the first instance.

187

G. The DC violated the mandates by failing to reconsider all of

the professional fees and expenses and failing to reconsider

payments made to other professionals.

Vogel’s 2013 Fee Application

188

included fees and expenses of 13 law

firms outside of Texas, and the fees and expenses of the following addi-

tional professionals: Thomas Jackson, Joshua Cox, James Eckels, Jeffrey

Harbin, Gary Lyon, Grant Thornton, LLP, Martin Thomas, Damon Nelson

and Matt Morris. These additional fees and expenses represented at least

187

Netsphere I,

703 F.3d at 302.

188

See

section P-1 of the Statement of the Case, supra, at pp40-43.

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115

$700,000 paid out of the receivership estate (ROA.27320), but none were

reevaluated by the DC, as required by Netshpere 1. Instead, the court only

reconsidered the fees and expenses of four professionals, Vogel, MHKH,

Dykema, and Gardere. (ROA.27320–27321, 27173–27474), not including

numerous fees and expenses that had been paid, but not included in the

Receiver’s fee application. (ROA.13246–58, 13943–57, 14177–91, 15661–76,

15917–32, 17146–63, 18504–23, 18239–58, 19222–40, 19456–76, 24106–43).

H. The DC violated the mandates by awarding fees and expenses

in favor of Sherman’s attorneys, MHKH, in the amount of

$379,761.18.

Where, as here, the interests of a receivership estate are adequately rep-

resented by receivership counsel, unnecessary action by others allegedly on

the receivership's behalf should not be compensated. Veeder v. Public Service

Holding Corp., 51 A.2d 321, 325–26 (Del. 1947). Even where such non-

receivership professionals make suggestions and recommendations and

render services of value to the receivership estate, unless they are receiver-

ship professionals, they cannot be paid out of the receivership estate. In re

Middle West Utilities Co., 17 F.Supp. 359, 371 (D.C. Ill. 1936). In the present

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116

case, Sherman sought the imposition of the unlawful receivership. One can

only assume that in a case where there is a wrongful receivership, the rule

prohibiting the payment of non-receivership professionals would be a

much greater hurdle to overcome, and one can only assume that when the

non-receivership professional seeking compensation is the party that insti-

tuted the wrongful receivership such hurdle would be impossible to over-

come.

1. In

Netsphere I

, this Court reversed the order awarding the

Ondova bankruptcy trustee’s fees and expenses.

By this Court’s Mandates, most if not all of the orders awarding fees

and expenses to Vogel, Vogel’s professionals and Sherman were reversed,

including, specifically, the order granting Sherman’s first fee application

(ROA 21409-10), by which the Ondova Trustee was paid $379,761.18. See

Court’s Mandate (ROA.27979–10).

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2. The DC correctly ruled, on January 2, 2013, that no more fees

and expenses would be awarded to the Ondova bankruptcy

trustee and that disgorgement was in order

On January 2, 2013, the DC issued an Advisory on Past and Pending Re-

ceivership Disbursements (the “Advisory”). In the Advisory, the DC an-

nounced:

“. . . the Trustee will be instructed to return all previously paid

amounts back to the Receiver.”

(ROA.26478) (emphasis added).

3. The DC did a 180 degree turn, disavowing the January 2, 2013

Advisory.

Inexplicably, the DC made a 180 degree turn in the 5/29/2013 Fee Or-

der and did not order the Ondova Trustee to disgorge the $379,761.18 pre-

viously awarded by the DC. The reasoning of the DC in the 5/29/2013 Fee

Order was convoluted and unconvincing. (ROA.28147 - 48).

Having found that an analysis of the Johnson factors was moot because

the fee award was prohibited by law, the court then gratuitously awarded

fees without applying the Johnson factors or considering the benefit to the

receivership estate. This is clearly erroneous. Id.

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118

If the law does not permit a non-receivership professional to recover

professional fees and expenses, as the DC concluded twice, what would the

legal basis be for awarding any fees and expenses to the Ondova Trustee’s

attorneys? The DC found that there was no contract, oral or written, be-

tween the Ondova Trustee and Receiver. The DC also determined that the

Ondova Trustee was not entitled to recover fees and expenses under a

quantum meruit cause. Id.

In directing the DC to reconsider all receivership professional fees and

expenses and meaningfully discount them, the Netsphere I panel did not di-

rect the DC to gift away assets to non-receivership professionals in a “willy

nilly” fashion, using unexplained equitable considerations as a basis for

awarding such fees and expenses. At a minimum, as to the $379,761.18

awarded to MHKH, the 5/29/2013 Fee Order must be reversed and ren-

dered in favor of Baron. Id.

I The DC violated the mandates by awarding fees in excess of

the $1,600,000 fee cap.

In the Netsphere I opinion, the panel clearly and unequivocally instruct-

ed the DC, on remand, to limit the payment of any future fees and expens-

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119

es to Vogel and his attorneys to “cash on hand” as of November 26, 2012,

which the panel in Netsphere I found was $1,600,000,

189

which Vogel admits

was only $1,196,744.31—an amount considerably less.

190

However, Vogel

has now taken the position that this was not a “fixed cap”.

Performing some metaphysical “hocus pocus”, Vogel’s analysis sug-

gests that the cash on hand on December 18, 2012, was actually

$4,106,015.08,

191

alleging that the panel in Netsphere I mistakenly excluded

items such as unliquidated claims against third parties and discounts to

fee payments in the panel’s definition of “cash”. Vogel argues that the pan-

el actually intended to include within the definition of “cash on hand”

these clearly non-cash items for the purposes of increasing the cap.

192

Baron filed his objection to the 2014 Fee Request, explaining that the

Netsphere I panel’s mandate required that Vogel’s fees were limited to the

cap set by the Court, and that since Vogel had already been paid

$1,579,953.88 since the issuance of the Netsphere I mandates, it could not be

189

Netsphere I,

703 F.3d at 313-314.

190

ROA.30736, fn 4.

191

Id.

192

See section U of the Statement of the Case, supra, at p 57.

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120

paid any more than $20,046.12 ($1,600,000 - $1,579,953.88).

193

If, as Vogel

posits, the panel did not intend to fix the fee cap at $1,600,000, then the

Court should use the actual cash on hand on December 18, 2012, as per Vo-

gel, $1,196,744.31, to determine the amount by which the fee cap was ex-

ceeded, which would result in Vogel’s obligation to return to the

receivership estate $808,067.33 ($1,196,744.31-$1,579,953.88-$424,857.76).

Based on the unverified 2014 Fee Request and Supplement, and with-

out holding a hearing or adducing evidence, the DC entered its 3/27/2015

Memorandum Opinion and Order, in which the DC granted Vogel an addi-

tional $424,857.76--the entirety of the remaining cash assets in the receiver-

ship estate.

194

The DC defied the mandates issued by the Netsphere I panel,

disregarding the Fee Cap set by the Nestphere I panel.

195

The DC strangely

applied a formula that included adding the amount of an uncollectable ac-

counts receivables of $600,000 due from the Netsphere parties (ROA.33581)

to the amount of cash on hand, and substituting this figure for the Fee Cap

193

ROA.30999-31001

194

ROA.33587.

See

footnote __, supra.

195

ROA.33580.

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121

determined in Netsphere I, thereby providing justification for exceeding the

cap. After doing so, the court, paradoxically, vacated its order requiring

Netsphere to pay the $600,000.

196

Against this backdrop, Baron’s assets have now finally been depleted to

zero. He has received nothing from the wind-down of the receivership

with the exception of his assets exempt under Texas law. For the receiver-

ship professionals to receive $5,581,445.46 for fees primarily used to defend

the receivership and their fees, as compared to Baron receiving none of his

non-exempt assets returned to him, none of the assets of the LLCs returned

to him and no records seized by Vogel returned to him does not achieve

the equitable solution the panel in Netsphere I was seeking, nor does this

satisfy the mandate to “meaningfully discount” the fees, nor does this

comport with the traditional notions of due process.

196

ROA.33585-38586.

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122

J. The DC violated the mandates by refusing to return the assets

of the LLCs to their rightful owner, and by refusing to make a

determination of the rightful owner of the LLCs.

The panel instructed the DC, on remand, that non-cash assets in the re-

ceivership were to be “expeditiously released to Baron under a schedule to

be determined by the DC for winding up the receivership.”

197

On December 31, 2012, the Netsphere I panel issued an order of clarifica-

tion (“Order of Clarification”). ECF Doc 00512097486, in Appellate Case

No. 10-11202. In the Order of Clarification, the panel stated:

“Our utilization of a shorthand reference to Baron did not in any

way affect the ownership of assets that were brought into the re-

ceivership. Assets are to be returned as appropriate to Baron or

other entities that were subject to the receivership.”

Id., at p7.

198

Notwithstanding the Netsphere I panel’s directives to return the non-

cash assets to “Baron or the other entities that were subject to the receiver-

197

Netsphere I,

703 F.3d at 313-14.

198

Baron would ask that the Court take judicial notice of this order. Fed. R. Evid.

201(b)(2).

Denius v. Dunlap

, 330 F.3d 919, 926 (7th Cir. 2003) (holding that a DC

may take judicial notice of information on an official government website. Pacer is

such a website).

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ship,” the DC entered an order on March 3, 2014,

199

in which the court re-

fused to “consider evidence or conduct proceedings regarding the owner-

ship of Novo Point LLC or Quantec LLC or the companies’ assets that are

at issue”, (ROA.29135) because “any such determination [was] outside of

the court’s jurisdiction.” (ROA.29143). Without a hearing or considering

any evidence, and over the objection of Baron, the DC determined that all

of LLC’s assets, including all of their domain names, would be given to the

custody of Lisa Katz.

Baron filed an emergency motion for reconsideration requesting that

the DC reconsider its order,

200

which the DC denied on grounds that Baron

did not have standing. This contradicted the basis upon which the DC

seized of the LLCs’ assets in December 2010, when it seized the LLCs on

the basis that the assets belonged to Baron. (ROA.29201). Additionally, the

DC did not consider this Court’s acknowledgment in Netsphere I that the

199

ROA.29135-29146

200

ROA.29165-29176. The Motion was made on an emergency basis because the

LLC’s assets were about to be transferred to the control of Lisa Katz, who lacked

any authority and was working against the interests of the LLCs.

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domain names “were assigned to Quantec, LLC, for Baron's benefit,” in the

GSA.

201

The panel also stated in the Netsphere I opinion the following:

“The trust to which Pronske was referring was the Village Trust, a

Cook Islands entity which owned Novo Point, LLC and Quantec,

LLC. Its trustee is SouthPac, which is also a Cook Islands entity,

and Baron is the trust's sole beneficiary.”

Netsphere I, 703 F.3d at 303 (emphasis added). The panel also stated:

“The receivership also included business entities owned or con-

trolled by Baron, including Novo Point, LLC and Quantec,

LLC.”

Netsphere I, 703 F.3d at 310 (emphasis in bold added). To this day Baron has

not received back any of the assets of the LLCs. In effect, Baron has lost a

business that originally had been valued at over $100,000,000. How can

this Court possibly conclude that this process was expeditious or fair and

equitable? How can the DCs actions in refusing to make this determina-

tion and failing to hold an evidentiary hearing comport with the traditional

notions of due process?

201

Netsphere I,

703 F.3d at 303.

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K. The DC violated the mandates of the panel in

Netsphere I

granting broad and sweeping releases to Vogel and others.

In the DC’s 3/27/2015 Memorandum Opinion and Order, the DC

granted broad and sweeping releases to Vogel and other related parties.

202

However, the panel in Netsphere I did not mandate that the DC consider or

grant broad and sweeping releases of all liability, not only to Vogel, but al-

so to a broad category of third parties, including “independent contrac-

tors”. The penultimate ruling and mandate of the panel in Netsphere I was

as follows:

“The judgment appointing the receiver is REVERSED with direc-

tions to vacate the receivership and discharge the receiver, his at-

torneys and employees, and to charge against the cash in the

receivership fund the remaining receivership fees in accordance

with this opinion.”

Netsphere I, 703 F.3d at 315.

There was no mandate that the DC consider and grant such broad and

sweeping releases. The panel in Netsphere I determined that the DC had no

subject matter jurisdiction over the personal assets of Baron or the assets of

the LLCs, and found that there was no subject matter jurisdiction over the

202

ROA.33590-33591.

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LLCs because they were not parties in the Netsphere DC Case. If the DC

was lacking in subject matter jurisdiction to establish the receivership in the

first instance, it is inconceivable that this Court could find now that the DC

had the jurisdiction to grant such broad and sweeping releases.

1. Vogel and his professionals acted as trustees for Appellants’

assets

Further, it is undisputed that Vogel and professionals under his aus-

pices were occupying a fiduciary relationship with Baron and the LLCs, or,

at minimum, occupied the position of constructive trustee in possession

and control of the assets of Baron and the LLCs. In fact, early on in the re-

ceivership Vogel admitted he was Baron’s attorney.

203

Accordingly, Vogel

is required to deal with Appellants and their assets fairly, in a fiduciary ca-

pacity and as a constructive trustee of the assets.

Consequently, releasing such a fiduciaries to be exculpated for

their breaches of the duties, without full and complete disclosure and an

203

Vogel and his counsel repeatedly acknowledged their fiduciary obligations to Ap-

pellants and at least once acknowledged that their relationship with Baron was that

of an attorney-client (“I am the counsel for Mr. Baron. And that's what the judge said. So

now we're going to move on from that. We're not hiring any new lawyers” ROA.29048).

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agreement to such exculpation by the person to whom the duty is owed,

is against public policy and a nullity.

204

205

Indeed, a trustee has a duty of undivided loyalty “to administer

the trust solely in the interest of the beneficiaries… and “the trustee is

strictly prohibited from engaging in transactions that involve self-

dealing or that otherwise involve or create a conflict between the trus-

tee's fiduciary duties and personal interests.” Restatement (Third) of

Trusts (Third) § 78 (2007).

206

In addition, “a trustee has a duty in deal-

ing with a beneficiary to deal fairly and to communicate to the benefi-

ciary all material facts the trustee knows or should know in connection

with the matter.”

Id.; see also Pegram v. Herdrich,

530 U.S. 211, 224

204

An attorney cannot exculpate himself from acts unknown at the time of the acts

nor can a court do so. The Texas Disciplinary Rules of Professional Conduct is es-

tablished by the judicial branch and expressly prohibits prospective limitations of

liability for malpractice (Rule 108(G)).

205

Even if Vogel and his professional were acting with jurisdiction and subject to

quasi-judicial immunity, this Court has held that a trustee acting in such capacity

is responsible for acts such as breaches of fiduciary duty. Dodson v. Huff (In re Smyth),

207 F.3d 758 (5th Cir. 2000); See also Mosser v. Darrow, 341 U.S. 267, 272-73 (1951) and

for failure to pay taxes.

n re Texas Pig Stands, Inc

., 610 F.3d 937 (5th Cir, 2010).

206

“The rule against self-dealing extends to transactions with a firm of which the

trustee is a member”.

George G. Bogert et al

., The Law of Trusts and Trustees §

543, at 219 (2008).

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(2000). Even if he could be exculpated for some duties of a traditional at-

torney, Vogel cannot be exculpated himself of his fiduciary duties.

2. Vogel and his privies concealed their dealings with Appellants’

assets

Here, there was no agreement among the parties to release liability and

nor could there be because Vogel and his professionals have failed to dis-

close their dealings with respect to Appellants’ assets and affairs, including

concealing the substance of tens of millions of dollars of sales and aban-

donment of Appellants’ property, repeatedly and consistently making mo-

tions to sell such property ex parte and under seal.

207

Indeed, the Sealed

Record in this case, consisting of Vogel’s sealed filings, contains at least 22

Bankers Boxes full of sealed documents, which Appellees continue to object

to Appellants attempts to view.

208

Vogel’s asset sales were made without hearings, discovery and without

proper disclosure to Baron or the LLCs. Vogel and his professionals cannot

207

See

Chart included as Appellants’ Record Excerpt 18.

208

See

ECF Doc 00513199813, filed by Vogel in this appeal on September 18, 2015.

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do this behind the curtain and then get a release without the curtain having

been lifted.

L. The DC violated the Mandate Rule in

Netsphere I

by creating

exclusive jurisdiction over claims relating to parties and assets

over which the panel held that the DC had no subject matter

jurisdiction to begin with.

In the DC’s 3/27/2015 Memorandum Opinion and Order, the DC

granted broad general jurisdiction provisions over claims and causes of ac-

tion relating to parties and assets over which the DC never had jurisdiction

in the first instance.

209

The panel in Netsphere I, however, did not mandate

that the DC establish such exclusive jurisdiction provisions. Since the DC

was lacking in subject matter jurisdiction to establish the receivership in the

first instance, it is inconceivable that this Court could approve the DC’s

creation of jurisdiction by judicial fiat where none existed by constitution

or statute in the first instance.

210

209

ROA.33592.

210

B.,Inc. v. Miller Brewing Co.,

663 F.2d 545, 548 (5th Cir.1981).

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M. The DC’s grant of broad, sweeping releases and creation of an

exclusive continuing jurisdiction provisions not only violate the

mandate but are in conflict with the DC’s prior pronouncements.

These provisions are not only in violation of this Court’s mandates,

they are also are in conflict with the DC’s own prior pronouncements. For

example, the DC observed that “A judgment is void if the court that ren-

dered it lacked jurisdiction over the subject matter or the parties.” See

Memorandum and Opinion, Lindsay, J, Case 3:13-cv-03461-L, Document

52, pp 24-5., citing New York Life Ins. Co. v. Brown, 84 F.3d 137, 143 (5th Cir.

1996).

211

Again, the DC recognized the limited scope of its jurisdiction when it

stated:

“Thus, any such determination [of ownership of the LLCs] is out-

side of the court’s jurisdiction. For the same reason, the court does

not and will not have jurisdiction in this case over any claims and

disputes regarding the ownership of the receivership.

ROA.29143

Once more, DC stated in the same Order on Show Cause:

211

Appellants would ask this this Court to take judicial notice of this court filing.

See

footnote __, supra.

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“If the court lacks jurisdiction over the disputes regarding the

ownership of the Novo Point and Quantec receivership assets, it

would seem that it also lacks jurisdiction to enjoin third-party

claims dealing with this matter, particularly those claims that

have already been filed, litigated, or arbitrated or are in the pro-

cess of being litigated or arbitrated.”

ROA.29145.

Since the DC recognized it lack of subject matter jurisdiction as being so

pervasive, then where would the DC now obtain the requisite jurisdiction

to grant releases to a receiver, his professionals and others? How could the

DC justify the creation out of “whole cloth” of an all-encompassing, con-

tinuing jurisdiction clause. Aside from its clear violation of the Mandate

Rule, the court otherwise lacked jurisdiction to make these determinations.

N. The DC violated the mandates by refusing to order the return

of Appellants’ books and records seized by Vogel

To date the DC has refused to order Vogel to return Appellants’

books and records, allowing Vogel to keep them.

212

As this court ruled that

the receivership was illegal, these documents should have been returned

immediately following this Court’s rulings in Netsphere I.

212

ROA.33591

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O. The DC approved a wholly deficient accounting

Among the duties of a trustee is a full accounting.

Garrett v. First

National Bank & Trust Co. of Vicksburg, Miss

153 F.2d 289, 292

(5th

Cir.1946) (“Whenever a trust relation between the parties is shown to

exist, the right to an accounting at reasonable periods follows as a mat-

ter of course”). “The burden is upon the trustee to show that it has per-

formed its trust and the manner of its performance”

George G.

Bogert et al

., The Law of Trusts and Trustees § 543, at 219 (2008).

The documents provided by Vogel are devoid of any of the charac-

teristics of an accounting, defined for example, in Black’s Law Diction-

ary as “the report of all items of property, income, and expenses”

prepared by the trustee for a beneficiary”. Here, Vogel did not even

identify the status of any of the other domain names that he seized

when he was appointed, not even the domain names that he apparently

sold for approximately $2 million.

A clear and comprehensive accounting is specifically mandated in

cases where the court employs equity to apportion costs in an unlawful-

ly appointed receivership. Speakman, 61 F.2d at 432.

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133

“We affirmed [in Potts II] that court's jurisdiction to hold plaintiff

to account for losses which the improvident appointment of the

receiver had caused.” (citations omitted).

P. The DC violated the mandates by failing to expeditiously wind-

down the receivership and return assets to Appellants

The DC improperly continued the receivership for approximately 2

years past the date this Court issued its mandates requiring an expeditious

termination. This permitted Vogel and his professionals to continue billing

the estate, to the detriment of Appellants.

THE DC ABUSED ITS DISCRETION BY AWARDING FEES UNDER

PATENTLY DEFECTIVE FEE APPLICATIONS

A. Block billing practices rendered the Fee Applications defective

as a matter of law

The term “block billing” refers to the method by which each lawyer en-

ters the total daily time spent working on a case, rather than itemizing the

time expended on specific tasks.

It is well established that a party does not have the right to bill for time

that is not properly documented. Texas State Teachers Ass’n v. Garland Indep.

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134

Sch. Dist., 489 U.S. 782, 784 (1989). Block billing is inadequate to support a

fee award. E.g., Kearney v. Auto-Owners Ins. Co., 713 F.Supp.2d 1369, 1378

(M.D. Fla. 2010); Seastrunk v. Darwell Integrated Technology, Inc., No. 3:05-

CV-0531, 2009 WL 2705511, at *8 (N.D.Tex. Aug. 27, 2009) (reducing award

in block billing case).

In the instant case, Vogel, Gardere and Dykema have submitted Fee

Applications supported entirely by block billing, where they fail to allocate

fees and expenses to the various tasks they were performing and fail to

segregate their fees and expenses by receivership party.

1. A receiver and his lawyers must meet a high standard before

receiving compensation

Compensation of receivers and their professionals are held to a higher

standard than lawyers billing private clients. 75 C.J.S., Receivers, § 389(a),

p. 1064. Courts emphasize the necessity that a trustee (or a receiver) must

establish the time expended and the nature of the services performed as a

precondition to receipt of compensation. In re Imperial “400” National,

Inc., 432 F.2d 232, 237 (3rd Cir.1970); Larchwood Gardens, 420 F.2d 531, 534–

35.

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135

Courts also consider the results they achieved in benefiting the estate a

“critical factor” in determining the appropriate fees. W.L. Moody, 374

F.Supp. at 480; United States v. Code Products Corp., 362 F.2d 669, 673 (3d

Cir.1966) (“Results obtained are a critical factor”).

Thus, the court must look at the activities performed by a receiver on a

task by task basis, and determine whether these benefited the estate or

whether they personally benefited the receiver. Nowell v. International Trust

Co., 169 F. 497, 505 (9th Cir.1909); Larchwood Gardens, 420 F.2d 531, 534–35.

(“neither the receivers nor their attorney are entitled to compensation for

time spent in surmounting difficulties caused by their own improper,

though well intended, course of conduct.”).

Further, courts require full disclosure from receivers, as the Su-

preme Court of Florida observed in

Gramil

Corp

., 94 So. 2d at 177.

Had the DC fully considered these factors, it would have determined

that the receiver and his professionals’ work purely benefited themselves

and provided no benefit to the estate.

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2. Gardere’s fee application is wholly deficient

Gardere’s Final Fee Application

213

makes no discernable attempt to

break down the amount of fees and expenses incurred and paid for each

task Gardere undertook for Vogel and makes no attempt to segregate

the expenditures and charge them to the estates with which they are

associated. Instead, Gardere insincerely attempts to comply with such re-

quirements in a single section of one of its fee application entitled “E.

Gardere expenses would largely have been incurred by Baron any-way.”

214

In this section, Gardere lists six main tasks performed by Gardere for the

Vogel,

215

This constitutes the only attempt to delineate the tasks Gardere

allegedly performed. However, even in this instance, Gardere’s list is fun-

damentally flawed because it fails to allocate their fees and expenses to

each task.

Gardere’s fee application suffers from yet another fatal flaw, in that the

tasks performed could have been performed at far less cost, yet Gardere

213

See

section P-1 of the Statement of the Case, supra, at pp 40-43. (“Gardere Fee

Application”)

214

ROA.27501–05

215

Albeit, these tasks are associated with Novo Point and Quantec and not Baron.

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137

billed at much higher attorney-rates for these tasks. Recognizing the ineq-

uity in this kind of behavior, this Court criticized this conduct. Neville v.

Eufaula Bank & Trust Co. (In re U.S. Golf Corp.), 639 F.2d 1197, 1201–02 (5th

Cir. 1981).

Clearly administrative tasks such as assisting with accounting, manag-

ing sales and the like, are not “legal work,” and thus cannot be billed at at-

torney rates, as Gardere has done

Gardere has stated that the firm recognizes that it and its lawyers acted

as fiduciaries of Baron.

216

As fiduciaries of Baron, it is Gardere who must

account to Baron for the fees and expenses requested or paid, task by task,

so that Baron and the DC can make a meaningful decision as whether such

fees and expenses are compensable under Potts II. Baron should not be re-

quired to analyze Gardere’s fee applications to allocate the fees and ex-

penses of Gardere, task by task. The burden of proving up its fees and

216

ROA.34954.

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138

expenses and meeting the criteria set out in Potts II clearly falls on

Gardere.

217

3. Dykema’s fee application is just as deficient as Gardere’s

Dykema’s fee application

218

219

suffers from the same infirmities as

the Gardere final fee application. In a section entitled “Dykema Gossett

PLLC’s Role in the Receivership Case,” Dykema seemingly attempts to

summarize the different tasks performed by the firm, but, like the Gardere

fee application, no attempt is made to delineate the time spent or expenses

incurred, task by task or entity by entity.

220

217

See

also

Godfrey v. Powell,

159 F.2d at 33;

Gramil Corp

., 94 So. 2d at 176-177;

In re Blackwood Assoc., L.P

., 165 B.R. 108, 111 (Bankr. E.D.N.Y.1994).

218

See

section P-1 of the Statement of the Case, supra, at pp 40-43. (the “Dykema

FeeApplication”)ROA.27761‐65.

219

In the Receivership Professionals’ Fee Application (ROA.27511–27756), in Sec-

tion II entitled “Receivership Fees and Expenses,” Vogel recites that he submitted

applications for fees and expenses from September 1, 2012–October 31, 2012, and

from December 1–28, 2012, as detailed in the invoices attached to a prior applica-

tion. (ROA.27320–27321).

Formatt

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139

4. Vogel’s time entries are the most deficient.

The time entries in Vogel’s Fee Application are far worse.

221

For ex-

ample, three invoices are attached for September, October and December

2012.

222

Approximately 45 time entries are covered in such invoices. Nearly

every single entry is identical and reads as follows:

“Review pleading, files, emails, send emails, and related con-

versations with Receiver’s counsel.”

Vogel also attaches invoices for work performed by him from the com-

mencement of the receivership on November 24, 2010, through August

2012. (ROA.27614–734). The non-specific time entries in all of these invoices

failed to delineate who Vogel talked to, for how long and why, the nature

of the tasks performed and their relationship to this case.

Vogel claims that he is exempt from the established requirements im-

posed on attorney fee applications since he did not act as counsel. Howev-

er, the DC found that Vogel was acting as “lead litigator” in criticism of

Vogel’s activities and billing practices:

221

See

section P-1 of the Statement of the Case, supra, at pp 40-43. (“Vogel’s Fee

Application”)

222

ROA.27571–92.

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140

The result was that the estate was essentially billed for two lead

litigators. This problem is confounded by the fact that Vogel's

billings were often generic and repetitive, making it difficult to

determine exactly what work was done when (sic).

(ROA.28160, 5/29/2013 Fee Order at p. 37).

5. Vogel’s 2014 Fee Request is deficient.

Vogel’s 2014 Fee Request is also deficient.

223

The deficiencies in the 2014

Fee Request, as supplemented, were identified in section VI of the

4/22/2014 Objection, and are incorporated herein by reference for all pur-

poses.

C. A Receiver Has a Duty to segregate his expenditures

Vogel is responsible to segregate receivership billings, delineating the

source of each expenditure. In Bank of Commerce & Trust Co. v. Hood, 65 F.2d

281 (5th Cir. 1933), the Court held that when a receiver is administering a

receivership for multiple estates, the responsibility to segregate expenses is

that of the receiver.

223

See

section U & V of the Statement of the Case, supra, at pp 57-58. (“Vogel files

the 4/14/2014 Fee Request and Final Accounting” and “The Vogel Final “Account-

ing”)

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141

D. Fees for work performed after receivership deemed illegal are

not compensable

In addition to the deficiencies and prohibitions concerning Vogel and

his professionals’ fee applications, it is abundantly clear that no fees could

be awarded for work provided to the receivership after this Court deter-

mined that the receivership was illegal. Approximately $800,000 has been

paid to the receiver and his professionals for work performed after the

Netsphere I decision., which clearly is not compensable.

E. Disgorgement Required for Breaches of Fiduciary Duty.

Trustees, like Vogel and the receivership professionals who have

breached their fiduciary duties is subject to disgorgement of fees.

PSL Realty Co. v. Granite Investment Co.,

395 N.E.2d 641 (Ill. 1979)

overruled by

86 Ill.2d 291, 56 Ill.Dec. 368, 427 N.E.2d 563

(1981);

Woods v. City National Bank & Trust Co. of Chicago,

312 U.S.

262 (1941).

While the issues surrounding Vogel and his professionals’

breach of fiduciary duty, negligence and fraud were not litigated in the

district court, the district court nevertheless should have recognized

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142

such breaches as described in set forth in Section N of the Statement of

the Case, supra, at p 35. in observing these professionals’ conduct dur-

ing throughout the proceedings.

VI.

THE DC ERRED IN MAKING FINDINGS OF FACT UNSUPPORTED

BY THE RECORD

Findings of fact are reviewed under a clearly erroneous standard.

Beaubouef v. Beaubouef

(In re Beaubouef ), 966 F.2d 174, 178 (5th Cir.

1992). “[T]he clearly erroneous standard requires that an appellate

court be able to discern the evidentiary basis for a trial court’s factual

finding. Only if the district court specifies which evidence it adopted

and which evidence it rejected in making its finding can we properly

and effectively apply the clearly erroneous standard.”

Planned

Parenthood of Greater Texas Surgical Health Services v. Abbott II,

748

F.3d at 583, 604 (5

Cir. 2014)

; Lopez v. Current Dir. of Tex. Econ. Dev.

Comm’n

, 807 F.2d 430, 434 (5th Cir. 1987) (citation omitted));) (“Rule

52(a) exacts neither punctilious detail nor slavish tracing of the claims

issue by issue and witness by witness, but it does require findings that

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143

are explicit and detailed enough to enable us to review them under the

applicable standard.” (quotation marks omitted).

Collins v. Baptist

Mem’l Geriatric Ctr

., 937 F.2d 190, 194 (5th Cir. 1991).

The DC made numerous erroneous findings based on unsupported

statements of opposing counsel and innuendo, all of which require rever-

sal. Record Excerpt 22 is a table of the factual findings which Baron asserts

were clearly erroneous.

CONCLUSION

The DC violated the Fifth Amendment when it prevented Jeffrey

Baron from accessing to his funds to pay counsel during contentious,

complex proceedings. Charging fees against property that was wrong-

fully seized without jurisdiction and without probable cause violates the

Fourth or Fifth Amendments. Because of these violations, the Court

must set aside the Memorandum Opinion and Order entered on March

27, 2015 and the Final Fee Order entered on May 29, 2013, Record Ex-

cerpts 12 and 5 and order the Receiver and his professionals to disgorge

the fees they have received in this case and all other expenditures made

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144

from the proceeds from the receivership estate, in total, over

$11,000.00.

See

Record Excerpts 14 and 15.

The precedent of this Court and the Supreme Court precludes charg-

ing expenses of an unlawful receivership against property over which

the court lacks subject matter jurisdiction. The decision in

Netsphere I

was clearly erroneous in determining that the DC had the equity juris-

diction to award fees and expenses against the assets of Baron, Novo

Point and Quantec, where the Court had determined that the DC lacked

subject matter jurisdiction in the first instance. Accordingly, the Court

must set aside the Memorandum Opinion and Order entered on March

27, 2015 and the Final Fee Order entered on May 29, 2013, Record Ex-

cerpts 12 and 5 and order the Receiver and his professionals to disgorge

the fees they have received in this case and all other expenditures made

from the proceeds from the receivership estate, in total, over

$11,000.00.

See

Record Excerpts 14 and 15.

Even if the DC had equity jurisdiction, it could not ignore this

Court’s mandates and controlling precedent from the Supreme Court

and this Court in awarding fees to a vacated receiver and his profes-

sionals without a showing that the fees conferred a benefit to the estate.

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145

Accordingly, the Court must set aside the Memorandum Opinion and

Order entered on March 27, 2015 and the Final Fee Order entered on

May 29, 2013, Record Excerpts 12 and 5 and remand the case to the DC

with specific instructions that all fee awards must be based on a show-

ing of benefit to the receivership estate, and such fee awards cannot in-

clude fees and expenses incurred in defending against the appeals

which Baron successfully prosecuted before this Court.

The DC cannot disregard this Court’s mandates in

Netsphere, Inc. v.

Baron

, in awarding excessive fees and expenses to Vogel and the profes-

sionals hired by him and to Sherman, the party who moved for the re-

ceivership. This Court cannot permit a vacated receiver to charge the

estate for work that he and his professionals performed vindicating

their personal interests, including services involved in prosecuting fee

applications to the DC and defending them. Accordingly, the Court

must set aside the Memorandum Opinion and Order entered on March

27, 2015 and the Final Fee Order entered on May 29, 2013, Record Ex-

cerpts 12 and 5 and remand the case to the DC with specific instruc-

tions that all fee awards must be based on a showing of benefit to the

receivership estate, and such fee awards cannot include fees and ex-

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146

penses incurred in defending against the appeals which Baron success-

fully prosecuted before this Court.

As a matter of law, fiduciaries canot receive broad releases of lia-

bility without an agreement for such releases and without disclosure of

their activities and when the lower court lacks jurisdiction to grant such

releases. This Court must reverse the March 27, 2015, Memorandum

Opinion and Order, Record Except 10, because the Court did not have

the power or authority to grant such releases or to employ exclusive ju-

risdiction provisions the likes of which were adopted by the DC.

The findings set forth in Record Excerpt 22 must be set aside be-

cause they were clearly erroneous.

Respectfully Submitted,

ENDERGRAFT & SIMON, LLP

/s/

Leonard H. Simon

Texas Bar No. 18387400

William P. Haddock

Texas Bar No. 00793875

2777 Allen Parkway, Suite 800

Houston, TX 77019

Tel. 713-528-8555 J

Fax. 713-868-1267

Attorneys for Appellant Jeffrey

Baron

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147

CERTIFICATE OF SERVICE

The undersigned certifies that the original of the Appellant Jeffrey Baron’s

Brief was electronically filed with the Clerk of the United States Court of

Appeals for the Fifth Circuit using the Appellate CM/ECF system. Accord-

ingly, counsel who have entered an appearance in this case and are regis-

tered Appellate CM/ECF users will be served electronically by the

Appellate CM/ECF system through their registered e-mail addresses.

The undersigned further certifies that a true and correct copy of this Appel-

lants’ Brief was served on counsel who do not participate in the Appellate

CM/ECF system by courier in accordance with Fed. R. App. P. 25 and

TH CIR. R. 25.

Service List:

Paul Raynor Keeting

173 Balmes 2/2

08006 Barcelona

SPAIN

Counsel for Novo Point, LLC and

Quantec, LLC

Christopher D. Kratovil

Dykema Gossett, PLLC

1717 Main Street, Suite 4000

Dallas, TX 75201

Counsel for Peter S. Vogel

Debbie E. Green

Gardere Wynne Sewell LLP

1717 Main Street, Ste. 4000

Dallas, Texas 75201

Counsel for Gardere Wynne Sewell

LLP

Lee Morris

Munsch, Hardt, Kopf & Harr PC

500 N. Akard St., Ste. 3800

Dallas, Texas 75201

Counsel for Munsch, Hardt, Kopf &

Harr PC

Case: 15-10341 Document: 00513219780 Page: 168 Date Filed: 10/05/2015

148

/s/ Leonard H. Simon

Leonard H. Simon

Dated: October 5, 2015

Case: 15-10341 Document: 00513219780 Page: 169 Date Filed: 10/05/2015

149

CERTIFICATE OF COMPLIANCE WITH RULE 32(A )

Certificate of Compliance with Type-Volume Limitation, Typeface

Requirements, and Type Style Requirements

1. This brief complies with the type-volume limitation of Fed. R. App. P.

32(a)(7)(B) because this brief contains 25,575 words, excluding the parts

of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) be-

cause this brief has been prepared in a proportionally spaced typeface

using Microsoft Word 2011 (Mac OS X) in 14 point Palatino for text, and

Helvetica Neue for headings.

/s/

Leonard H. Simon

Dated: October 5 2015

Case: 15-10341 Document: 00513219780 Page: 170 Date Filed: 10/05/2015