IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., §
MANILA INDUSTRIES, INC., AND §
MUNISH KRISHAN §
§
PLAINTIFFS, §
§
V. § CIVIL ACTION NO. 3:09-CV-0988-F
§
JEFFREY BARON AND §
ONDOVA LIMITED COMPANY, §
§
DEFENDANTS. §
FEE APPLICATION FOR RECEIVER AND RECEIVERSHIP PROFESSIONALS
Based on this Court’s Scheduling Order of April 5, 2013 [Docket No. 1220] Peter S.
Vogel, Receiver over Jeffrey Baron and the Receivership Parties (the “Receiver”), files this Fee
Application for the reimbursement of fees and expenses incurred by the Receiver and the
Receiver’s Professionals as detailed in this Fee Application and previous filings before this
Court.
I. RECEIVERSHIP PROFESSIONALS
Based on the recommendation of the Honorable Stacey Jernigan, judge in the Ondova
Bankruptcy (In re Ondova Ltd. Co., No. 09-34784), on November 24, 2010 Mr. Daniel J.
Sherman, Trustee in the Ondova Bankruptcy, filed an Emergency Motion of Trustee for
Appointment of a Receiver Over Jeffrey Baron. On November 24, 2010 this Court issued the
Order Appointing Receiver (the “Receivership Order”) [Docket No. 124] which included
authority for the Receiver to “…choose, engage, and employ attorneys, accountants, appraisers,
and other Independent contractors and technical specialists (collectively, “Professionals”) …
Receiver deems advisable or necessary…” Receivership Order, p. 8. As a result of the
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FEE APPLICATION FOR RECEIVER AND RECEIVERSHIP PROFESSIONALS Page 2
Receivership Order, from November 24, 2010 until today the Receiver has dedicated time almost
daily to the Receivership estate, which work has been extremely complex and involves a unique
set of circumstances created by Mr. Baron’s vexatious behavior in this Court, and many other
Courts. As the Court is well-aware, the Receiver has hired many Professionals in the ensuing
litigation and for the management of the Receivership estate as listed in chronological order:
Professionals
Purpose
Beginning Date
Ending Date
Gardere Wynne Sewell LLP
Counsel for the Receiver
November 2010
July 2012
13 law firms outside of Texas
Served as local counsel
for the filing of 28 USC
§754 miscellaneous
actions to reach
Receivership assets
December 2010
Present
Thomas Jackson
Counsel for Receivership
parties Novo Point, LLC
and Quantec, LLC
December 2010
March 2011
Joshua Cox
Counsel for Receivership
party Quantec, LLC
December 2010
Present
James Eckels
Counsel for Receivership
party Novo Point, LLC
December 2010
Present
Jeffrey Harbin
Manager of Receivership
parties Novo Point, LLC
and Quantec, LLC
December 2010
February 2011
Gary Lyon
Counsel for the Receiver
December 2010
Present
Grant Thornton LLP
CPAs for Receivership
December 2010
Present
Martin Thomas
Counsel for Jeffery
Baron in the Ondova
Bankruptcy
December 2010
September 2012
Damon Nelson
Manager of Receivership
parties Novo Point, LLC
and Quantec, LLC
February 2011
Present
Dykema Gossett PLLC
Counsel for the Receiver
July 2012
Present
Matt Morris
Expert Witness for
Confirmation Hearing in
Ondova Bankruptcy
October 2012
Present
The Receiver has contracts with the Receivership Professionals to pay their fees and expenses
subject to the approval of the Court. Over the course of the Receivership, since November 24,
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FEE APPLICATION FOR RECEIVER AND RECEIVERSHIP PROFESSIONALS Page 3
2010, the Receiver paid the Receivership Professional fees and expenses pursuant to fee
applications and order of this Court, as stated in the chart that follows below. Also the Court did
not approve the payment of all fees and expenses requested by the Receiver including reserving
portions of certain fees and expenses until the conclusion of the Receivership for Counsel
Gardere and Dykema, and the Receiver. Both Gardere and Dykema are filing separate pleadings
in support of their fees and expenses. The chart that follows identifies fees and expenses,
payments, and outstanding balances of Receivership Professionals to date:
Receivership Professional
Fee Applications
Made to the
Court
Amount of
Monies Paid
Pursuant to
Court Order
Gardere Wynne Sewell LLP
$2,010,862.22
$1,479,571.05
13 law firms outside of Texas
$19,559.41
$19,559.41
Thomas Jackson
$69,007.50
$69,007.50
Joshua Cox
(See Exhibit A)
$61,968.75
$53,235.60
James Eckels
(See Exhibit B)
$64,787.50
$61,637.50
Jeffrey Harbin
$13,913.62
$13,913.62
Gary Lyon
$16,462.50
$16,462.50
Grant Thornton LLP
(See Exhibit C)
$121,390.53
$109,301.53
Martin Thomas
$95,285.52
$95,285.52
Damon Nelson
(See Exhibit D)
$306,262.92
$287,962.92
Dykema Gossett PLLC
$1,550,776.00
$398,893.91
(Held in Trust
$737,276.73)
Matt Morris
(See Exhibit E)
$54,572.50
$0.00
TOTALS
$4,384,848.97
$3,342,107.79
II. RECEIVERSHIP FEES AND EXPENSES
Separate and apart from the Receivership Professionals, the Receiver submitted
applications for fees and expenses from September 1 through October 31, 2012 and December 1-
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FEE APPLICATION FOR RECEIVER AND RECEIVERSHIP PROFESSIONALS Page 4
28, 2012 as detailed in the invoices attached as Exhibit F. [Doc. #1122] Also not previously
filed with the Court are invoices for the Receiver for January, February, and March 2013 which
are attached as Exhibit G. For the convenience of the Court all invoices filed for the Receiver
from November, 2010 through December 31, 2012 are attached as Exhibit H. The following
chart is a summary of the fees and expenses of the Receiver, amounts paid, and outstanding
monies owed:
Receiver
Fee Applications
Made to the Court
Amount of Monies
Paid
Pursuant to Court
Order
Amount of
Monies
Outstanding
Peter S. Vogel
$1,250,680.00
$708,926.00
$527,576.00
III. RECEIVERSHIP’S RECOMMENDATION
On December 18, 2012 the Fifth Circuit issued its Opinion (the “Opinion”) directing this
Court to Wind-Down the Receivership:
In light of our ruling that the receivership was improper, equity may well require
the fees to be discounted meaningfully from what would have been reasonable under a
proper receivership. Fees already paid were calculated on the basis that the receivership
was proper. Therefore, the amount of all fees and expenses must be reconsidered by the
district court. Any other payments made from the receivership fund may also be
reconsidered as appropriate.
We also conclude that everything subject to the receivership other than cash
currently in the receivership, which Baron asserts in a November 26, 2012 motion
amounts to $1.6 million, should be expeditiously released to Baron under a schedule to be
determined by the district court for winding up the receivership. The new determination
by the district court of reasonable fees and expenses to be paid to the receiver, should the
amount be set at more than has already been paid, may be paid from the $1.6 million.
Opinion, Pages 27-28.
The Receiver recommends that the Receiver and all Receivership Professionals retain the
monies already paid under the Receivership, and that the unpaid monies owed to the Receiver
and Receivership Professionals be paid to each on a pro-rata basis from the monies in the
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Receivership estate. Depending on the funds available, this pro-rata distribution could result in a
meaningful and significant discount to the Receiver and Receivership Professionals. As of
January 8, 2013, the Receiver reported in his inventory accounts of an aggregate value of
$2,952,953.90. Some of those accounts, while denominated IRA accounts, may in fact not be
exempt from creditors. Until there is a determination as to the exempt nature of those accounts
and aggregate amount of cash held in non-exempt accounts, the amount of the funds is unclear at
this time.
If there are enough monies in the Receivership estate to pay the Receiver and the
Receivership Professionals all monies due them, then the excess may be paid to Mr. Baron or his
creditors as this Court or the Bankruptcy Court may determine.
Respectfully submitted,
By: /s/ Peter S. Vogel
Peter S. Vogel
State Bar No. 20601500
1601 Elm Street, Suite 3000
Dallas, Texas 75201
(214) 999-3000
(214) 999-3422 Facsimile
RECEIVER, PETER S. VOGEL
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served via the
Court’s ECF system on all counsel of record on April 17, 2013.
By: /s/ Peter S. Vogel
Peter S. Vogel
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