Stephen R. Cochell

The Cochell Law Firm, P.C.

7026 Old Katy Road, Ste. 259

Houston, Texas 77096

Telephone: (713)980-8796

Facsimile: (214) 980-1179

srcochell@cochellfirm.com

ATTORNEY FOR JEFFREY BARON

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

IN RE:

JEFFREY BARON,

DEBTOR.

________________________________

JEFFREY BARON,

Movant,

vs.

GERRIT PRONSKE, et al.,

Respondents.

§ Bankruptcy Case No. 12-37921

MOTION FOR EMERGENCY HEARING ON MOTION TO STAY

ORDER FOR RELIEF IN INVOLUNTARY CASE PENDING APPEAL

AND APPOINTMENT OF INTERIM TRUSTEE

COMES NOW Jeffrey Baron (“Baron”) and files this Motion for an Emergency Hearing

(the “Emergency Hearing Motion”) on the Motion to Stay (the “Stay Motion”) the Order for

Relief in Involuntary Case (NDTX Bankr. Case No. 12-37921-sgj7 Dkt (“Bankr. Dkt.”) 240). In

support hereof, Baron would respectfully show as follows:

1. On December 18, 2012 (the “Petition Date”), several parties (“Petitioning

Creditors”) filed an involuntary chapter 7 bankruptcy petition (the “Involuntary Petition”)

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 1 of 6

against Baron in this Bankruptcy Court. (Bankr. Dkt. 1.)

2. This involuntary proceeding was filed approximately two hours after the Fifth

Circuit Court of Appeals (the “Fifth Circuit”) entered an order (the “Reversal Order”) on the

same date: (a) reversing an earlier order appointing a receiver (the “Receiver”) over all of Mr.

Baron’s personal assets (the “Receivership Order”), previously entered by the United States

District Court for the Northern District of Texas (the “District Court”) on November 10, 2010, in

a separate lawsuit styled Netsphere, Inc. v. Baron, 703 F.3d 296 (5

Cir 2012) (the “Lawsuit”)

and (b) instructing the District Court to wind down the receivership estate and direct the receiver,

after satisfaction of certain expenses incurred by the receiver, to expeditiously return the property

held and managed by the receiver (the “Receivership Property”) to Baron. See Netsphere, Inc.,

703 F.3d at 313. This never happened. In point of fact, it has been 8 months since the Reversal

Order and the Receiver is still in possession of the Receivership Property, including property that

is exempt from the bankruptcy estate. (See Bankr. Dkt. Nos. 239 and 240.)

3. On June 26, 2013, after an evidentiary hearing where Baron was represented by

an attorney with a limited engagement agreement, the Bankruptcy Court entered the Order for

Relief which effectively terminated Baron’s legal representation when it adjudicated the

involuntary chapter 7 proceeding against Baron as appropriate and subjected Baron to such

proceedings. (See Bankr. Dkt. Nos. 239, 240, 241 and 243.)

4. The Receiver is now seeking direction from the Bankruptcy Court to turn over all

the property in his possession to a chapter 7 trustee (the “Trustee”), despite the Fifth Circuit’s

clear direction to turn over property to Baron. The Receiver is even seeking direction from the

Bankruptcy Court, without ever filing an adversary proceeding, to turn over property that does

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 2 of 6

not belong to Baron and therefore never entered into the bankruptcy estate. All of these efforts

are transparent and aimed solely at contravening the Reversal Order and making sure that Baron

has absolutely no funds in which to hire counsel to represent him in any proceeding, including

this involuntary case, the Lawsuit and the appeal of the Order for Relief, as discussed below.

5. On July 8, 2013, Baron filed a Notice of Appeal, commencing the appeal of the

Order of Relief, pursuant to 28 U.S.C. § 158(a). (Bankr. Dkt. 253.) Baron currently has two other

requests for interlocutory appeals pending before the District Court for Northern District of

Texas regarding the Bankruptcy Court’s prior orders ruling that (a) the Petitioning Creditors—

nonjudgment creditors—had standing to initiate the involuntary bankruptcy, and (b) the

bankruptcy court had jurisdiction to adjudicate the involuntary case. (Bankr. Dkt. Nos. 111, Case

No. 3:13-cv-01745, and Docket 112, Case No. 3:13-cv-01746.) Baron expects to

consolidate all of the appeals in the District Court.

6. On July 14, 2013, Baron filed the Stay Motion, seeking a stay of the Order of

Relief. (Bankr. Dkt. 287.) In the Stay Motion, Baron informed the Court that, ever since the

commencement of this involuntary case (Petition Date), he has not been able to hire competent

bankruptcy counsel to adequately represent him because his money and assets are in the

possession of the Receiver and the least expensive quote he received was $250,000 for

bankruptcy counsel. Id. The Stay Motion reveals that Baron will be substantially prejudiced if he

is forced to proceed with the involuntary proceeding, including the appeal of the Order of Relief,

without competent counsel. There are serious due process concerns, because Baron has been

stripped of his property without due process of law, and the bankruptcy Court appears positioned

to disallow Baron to access his property to hire an attorney while it approves attorney fees to his

adversaries in violation of his equal protection rights. Indeed, the Petitioning Creditors have

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 3 of 6

turned due process on its head by (a) using Baron’s assets to prosecute unliquidated claims in the

Lawsuit and in this involuntary case against him and (b) leaving Baron without means to

adequately defend himself.

7. On July 15, 2013, one of the Petitioning Creditors, without any authority from

Baron and after Baron requested the Bankruptcy Court allow him funds to hire a bankruptcy

attorney (Bankr. Dkt. 288), filed what appeared to be bankruptcy schedules and statement of

financial affairs for Baron, purporting to adequately represent Baron’s property interests. (Bankr.

Dkt. 289.) Whatever these schedules or statements reflect, they were not authorized, prepared or

signed by Baron.

8. On July 15, 2013, in front of the Receiver, the Trustee, the Petitioning Creditors

and a crowd full of other attorneys that are seeking to strip Baron of every last penny to his name

(including his 401k), Baron appeared without any counsel at a status hearing before the

Bankruptcy Court. He told the Bankruptcy Court that he has been unable to find bankruptcy

counsel because most counsel would require a substantial retainer in a complicated case such as

the instant case. Baron also informed the Bankruptcy Court that, because of lack of counsel,

accountants and other professionals (which he cannot hire) and because the Receiver is in

possession of his records, he was unable to complete the 7 day deadlines under the Order for

Relief, including filing bankruptcy schedules and statement of financial affairs, which could

easily (a) prejudice Baron’s property rights and (b) subject Baron to criminal sanctions, if

improperly prepared. (See, e.g., Bankr. Dkt. 288.)

9. Interestingly and likely because of the fact that she had not had a full opportunity

to consider the arguments in the Stay Motion, at the July 15, 2013 status conference, the

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 4 of 6

Bankruptcy Court told Baron, on the record, that he did not need counsel to represent him in this

involuntary case because it was a civil matter and there are plenty of chapter 7 cases where no

counsel is present. The Bankruptcy Court further stated that she planned to proceed “full steam

ahead” with the involuntary case, including the adjudication of property interests and any related

title 18 criminal proceedings, whether or not Baron was represented.

10. As previously mentioned in the Stay Motion, the right to hire competent

professionals has been a great necessity, as demonstrated by the fact that the appointed

receiver—which the Fifth Circuit Court of Appeals determined was wrongfully appointed—and

his professionals have accrued approximately $5.2 million in counsel fees during the

receivership while paying alleged creditors nothing. Moreover, the strategy employed by the

Petitioning Creditors—nonjudgment creditors—to freeze all of Baron’s assets and use it against

him in civil and potentially criminal proceedings, directly flies in the face of the letter and spirit

of the Fifth Circuit’s determination in the Reversal Order.

29. Each day that Baron remains in bankruptcy is a day that Baron’s Fifth and

Fourteenth amendment rights to liberty and property are being violated. Before the Order

of Relief becomes effective, a higher court should evaluate whether the Petitioning Creditors’

strategy in the Lawsuit and this involuntary case, and other orders entered by this Court,

effectively deprive Baron of his constitutional due process rights. Accordingly, in accordance

with the Local Rules for the Bankruptcy Court for the Northern District of Texas, Baron requests

an emergency hearing on the Stay Motion within 7 days of filing this Emergency Hearing

Motion. Any notice of the hearing will be given instantly to the US Trustee, the Receiver, the

Trustee, the Petitioning Creditors, and any other party in interest.

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 5 of 6

WHEREFORE, PREMISES CONSIDERED, Baron requests an emergency hearing on

the Stay Motion within 7 days and any further relief to which he may be entitled to under the law

and equity.

Dated: July 19, 2013 Very respectfully,

The Cochell Law Firm, P.C.

By: /s/ Stephen R. Cochell

Stephen R. Cochell

Texas Bar No. 24044255

7026 Old Katy Rd., Ste 259

Houston, Texas 77096

(713)980-8796 (phone)

(713)980-1179 (facsimile)

srcochell@cochellfirm.com

CERTIFICATE OF SERVICE

On this date, I electronically submitted the foregoing document with the Bankruptcy

Clerk for the U.S. District Court, Northern District of Texas, using the electronic case filing

system of the court. I hereby certify that I have served all parties who receive notification

through the electronic filing system.

/s/ Stephen R. Cochell

Stephen R. Cochell

Case 12-37921-sgj7 Doc 297 Filed 07/19/13 Entered 07/19/13 15:57:38 Page 6 of 6