-1-
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., ET. AL. §
Plaintiffs §
§ Civil Action No. 3-09CV0988-F
v. §
JEFFREY BARON, ET. AL. §
Defendants. §
MOTION FOR LEAVE TO FILE:
MOTION TO REQUEST CORRECTION OF THE RECORD AND
CLARIFICATION REGARDING SECRET EX PARTE PROCEEDINGS TO
INSTALL VOGEL AS RECEIVER OVER BARON AND TO CONFIRM
AND APPROVE A STATEMENT OF THE SECRET EX PARTE
PROCEEDINGS THAT WERE HELD
JEFFREY BARON respectfully moves this Court to grant leave to file the
following motion for the Court to (1) confirm and clarify that an ex parte hearing was
held to install Peter Vogel as receiver over Baron, (2) to clarify certain issues regarding
the ex parte proceedings, and (3) to confirm and approve a statement of the secret ex
parte proceedings which were held.
1. This Honorable Court has ordered [Doc 359] that Baron is required to file
motions for leave in order to file motions. Further, this Court has directed that the
undersigned shall not present matters to the Court on behalf of Novo Point LLC or
Quantec LLC [Doc 392 at p. 28].
2. This Honorable Court has previously entered findings of record
inconsistent with the possibility that an ex parte hearing was held to impose a
receivership over Baron, and instead has indicated that the receivership order installing
Vogel as receiver over Baron was entered after Sherman filed his motion [Doc 123] to
appoint Vogel receiver. Similarly, Sherman has expressly and emphatically denied
that
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 1 of 12 PageID 58830
-2-
any ex parte proceedings were held, and Vogel has accused Counsel of suggesting 'wild
eyed' theories with regard to the assertion that ex parte proceedings were held to place
Baron into receivership.
3. However, despite the statements to the contrary, at this point there is a
reasonable basis to believe that, in fact, prior to Sherman’s filing of his motion [Doc 123]
an ex parte hearing was held involving both Sherman (and/or his counsel) and Vogel, and
that a concerted effort has been made to maintain the secrecy of those proceedings,
including Sherman's fraudulent statements that no such proceedings where held, and
Vogel's argument that allegations of such secret, ex parte proceedings are 'wild eyed'
'unsubstantiated allegation'.
4. Thus, if a secret ex parte hearing to install Vogel as receiver over
Baron was in fact held with the participation of this Honorable Court, request is
hereby made to correct the record to reflect that such a hearing was held, and when.
5. Notably, if this Honorable Court corrects the record and confirms that an ex
parte hearing was held involving this Honorable Court and Sherman and/or his counsel,
that will establish that Sherman has been dishonest in his pleadings relating to this case
and the receivership. It will also establish that Vogel has breached his duty of candor to
the Court of Appeals by failing to apprise the Court of Appeals of the truth regarding the
proceedings in this case.
6. The briefing deadline for Baron on appeal is currently set at June 29, 2012.
If leave is granted by this Honorable Court, request is made for the Court to enter the
requested correction and clarifications, and approval of the statement of the ex parte
proceedings, at least four days prior to that date. Accordingly, request is respectfully
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 2 of 12 PageID 58831
-3-
made that the clarification and approval of the statement of the proceedings be entered no
later than June 25, 2012.
7. If leave is granted, motion is made for an order clarifying the following
issues:
a. Was an ex parte hearing held to install Peter Vogel as receiver over Jeffrey
Baron?
b. What is the reason the ex parte proceedings were held off the record
?
c. What is the reason Baron was not notified of the hearing, prior to the hearing
or after the hearing was held ?
d. Did the Court issue ex parte directives as to the hearing or the receivership
motion ?
e. Who attended the hearing, when was it held, and how long did it last ?
f. What was said at the hearing, and by whom ?
g. What material was provided to the Court at the hearing ?
h. What was Vogel's role at the hearing ?
i. Whether the Court has had other ex parte
communication with Sherman,
Vogel, or the Bankruptcy Judge over the course of the Netsphere litigation, and
if so, when, and what was discussed ?
8. Jointly, request is made for the Court to confirm and approve the following
statement of the proceedings, as follows:
a. On 11/24/10 at approximately 12pm, secret ex parte proceedings were
held involving this Court, Peter Vogel, and Daniel Sherman.
b. At that time, Vogel and Sherman requested this Court to install
Vogel as receiver over Baron.
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 3 of 12 PageID 58832
-4-
c. During the ex parte proceedings Vogel and Sherman represented to
the Court the following:
i. That Baron had caused the Court Ordered mediation,
undertaken to resolve various former attorney fee disputes, to
fail.
ii. That as a matter of bankruptcy law, a creditor was responsible
to reimburse the Bankruptcy Estate for the 'substantial
contribution' claims made by his attorneys.
iii. That Baron had not paid many of his attorneys and they were
making 'substantial contribution' claims which would place the
bankruptcy estate at risk.
iv. That as a matter of Bankruptcy Law, Baron would be required
by law to indemnify the bankruptcy estate for any payments
made to his attorneys under their substantial contribution
claims.
v. That because under Bankruptcy Law Baron was obligated to
indemnify the Bankruptcy Estate for any payments made by
the estate in payment of Baron’s attorneys substantial
contribution claims, this Court needed to maintain jurisdiction
over Baron's assets so that the Bankruptcy Estate could be
repaid.
vi. That Baron had not paid his Bankruptcy Attorney Martin
Thomas, and thereby caused Thomas to withdraw as his
bankruptcy counsel.
vii. That the Bankruptcy Judge recommended a receiver be placed
over Baron if he fired Thomas.
d. During the ex parte proceedings Vogel and Sherman failed to disclose
to the Court the following matters:
i. The attempt to place Baron into receivership began in response
to Baron's filing an objection to Sherman's attorney fee request
in the Bankruptcy Court.
ii. That Baron had, through the ‘global settlement agreement’
funded approximately two million Dollars into the Ondova
estate, and had also waived his claim for more than a million
Dollars due him for repaying a loan he guaranteed for Ondova,
on which Ondova had defaulted.
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 4 of 12 PageID 58833
-5-
iii. That Sherman had promised to immediately pay off all of the
creditors and return Ondova to Baron with approximately one
million Dollars in the bank, and all its assets intact.
iv. That instead of doing what he promised in order to induce
Baron to fund the Ondova estate with a net three million dollar
cash infusion, Sherman failed to pay the creditors and ran up
hundreds of thousands of dollars in attorneys fees, to which
Baron objected.
v. That when Baron objected to Sherman’s attorneys’ fee
application, Sherman immediately responded by working to
have Vogel installed as receiver over Baron.
vi. That they had had ex parte communications regarding the
receivership prior to contacting the Court.
vii. That the plan was for Vogel to immediately withdraw the
objection to Sherman’s attorneys’ fee application, if installed
as receiver.
viii. That the Ondova had more than sufficient funds in the bank to
pay all of the Ondova creditors, and approximately a million
dollar cash surplus beyond that.
ix. That Sherman and/or Vogel had actively solicited attorneys to
make ‘claims’ against Baron, attempting to persuade attorneys
to submit claims even after the attorneys explained that Baron
owed them no money.
e. The Court signed the Order installing Vogel as receiver over Baron
[Doc 124] at the ex parte
hearing. The Order was provided to the Court,
ex parte by Sherman.
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 5 of 12 PageID 58834
-6-
WHEREFORE Jeffrey Baron respectfully prays that this Honorable Court grant
the relief requested.
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
(972) 200-0000
(972) 200-0535 fax
Drawer 670804
Dallas, Texas 75367
E-mail: legal@schepps.net
APPELLATE COUNSEL
FOR JEFFREY BARON
CERTIFICATE OF SERVICE
This is to certify that this document was served this day on all parties who receive
notification through the Court’s electronic filing system.
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 6 of 12 PageID 58835
3.
The statements
in
paragraph 3 of the Response are also false. There
is
no
"special relationship· between Judge Ferguson and the Trustee, and there have been
no
ex
parte secret proceedings of any kind.
4. Mr. Schepps, the attorney who filed this appeal, has filed dozens of papers
in
the
Bankruptcy Court, the District Court and the Fifth Circuit Court of Appeals
in
which
he
repeats
these and other
ties
. They are all part of a strategy
by
which
Mr
. Schepps and his client, Jeffrey
Baron, are attempting
to
interfere with the administration of justice and continue a series of
frauds
on
the courts that has been
in
progress for at least six years, the highlights of which are
described below.
5.
On
February 4,
2011
Judge Ferguson entered his order confirming the
appointment of a receiver for
all of Jeffrey Baron's assets, finding that Baron had engaged
in
fraud and vexatious litigation conduct over a peri
od
of many years. (Docket
No.
268
in
Case
Number 3:09-cv-00988-F).
6.
On
June
27,
2011 the Fifth Circuit Court of Appeals deni
ed
one of several
Motions
to
Stay filed
by
Mr.
Schepps
on
behalf of Mr. Baron and cautioned him that further
frivolous
filings might lead
to
the imposition of sanctions. (Order of June
27,
2011
in
Consolidated Appeals 10-11202 and 11-10113).'
7. During a hearing before Bankruptcy Judge Jernigan held
on
December 5,
2011
,
Mr.
Schepps refused
to
answer questions about his deliberately obstructive conduct, pleading
the Fifth Amendment. A few of the questions and his answers
allow the Court
to
infer, as Judge
Jernigan inferred, that Mr.
Schepps' conduct was and is
in
deliberate defiance
of
the orders of
the court and done with the worst possible motives:
2 The Court should note that these appeals are part
of
Mr. Schepps efforts
to
create confusion and delay.
At present
Mr.
Schepps has filed seven appeals from more than 60 orders entered
in
Case No. 3:09-cv·
00988-F.
He
files a notice of appeal for every order,
no
matter what its substance
in
that case. More
recently Mr.
Schepps began filing appeals from orders
in
the Bankruptcy - this is one
of
six such appeals.
Three were struck
by
Judge Ferguson because Mr. Schepps had no authority
to
file them. One of the
remaini
ng
three has already been transferred to Judge Ferguson. The other was only recently docketed
and the Trustee has not yet filed a Motion
to
Transfer, though a motion will
be
fil
ed
shortly.
APPELLEE'S NOTICE OF RELATED CASE AND REQUEST TO TRANSFER CASE - Page 2
Case 3:12-cv-00387-B Document 4 Filed 02/17/12 Page 2 of 5 PageID 1419Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 7 of 12 PageID 58836
Transcript at page
111
-15
5
...
you filed
the
notices
of
appeal and other documents
in
6 deliberate defiance
of
Judge
Jernigan's orders; isn't that true?
7
A.
This is a criminal contempt proceeding, and I'm not
8 testifying.
I'm asserting
my
Fifth Amendment privilege.
9
Q . Your intention, when you filed these orders, was to create
10 disruption, confusion, and expense
in
the bankruptcy process;
11
isn't that true?
12
A. This is a criminal contempt proceeding, and I'm
not
13
testifying. I'm asserting
my
Fifth
Amendment
privilege.
Transcript at page
111-16
6
..
. Petfinders, LLC was a Texas limited liability company that
7 you created; isn't that true?
B
A. This is a criminal contempt proceeding, and I'm not
9 testifying.
I'm asserting
my
Fifth Amendment privilege.
10 Q .
When
you created Petfinders, LLC you did it at the direction
11
of
Jeff
Baron; isn't that true?
12 A. This is a criminal contempt proceeding, and
I'm
not
13 testifying. I'm asserting
my
Fifth
Amendment
privilege.
14
Q.
It's also true, isn't
it,
that when you created Petfinders,
15 LLC it was a strategy that you personally devised in order to
16
find a way
to
create additional disruption
of
the
bankruptcy
17 proceedings?
18
A.
This is a criminal contempt proceeding, and I'm not
19 testifying.
I'm asserting
my
Fifth
Amendment
privilege.
Transcript at page
111
-
19
to
111-20
25 Q .
Mr
. Schepps, you have filed several Rule 2019 disclosures
in
1 this court. It's true, isn't it, that the information
in
it is
2
all false?
3 A This is a criminal contempt proceeding, and I'm not
4 testifying. And
I'm asserting
my
Fifth
Amendment
privilege.
Of course the proceedings before Jud
ge
Jernigan were
not
criminal contempt proceedings
because the Bankruptcy Court
does
not
have the power
conduct
such proceedings.
The
simple
tr
uth is that Mr. Schepps would not answer these questions because
he
knows that he is acting
without authority as part
of
a
scheme
that
he
and his client
ha
ve
devised to drive
up
the costs
of
litigation and obstruct proceedings in the Bankruptcy Court, in this Court, and in the Court
of
Appeals.
8. On December
15
, 2011 Bankruptcy
Judge
Jernigan found the
Mr
. Schepps
had
no
authority to represent the Appellants and barred him from filing any further pleadings
andlor
APPEllEE'S
NOTICE OF RELATED CASE AND REQUEST
TO
TRANSFER CASE - Page 3
Case 3:12-cv-00387-B Document 4 Filed 02/17/12 Page 3 of 5 PageID 1420Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 8 of 12 PageID 58837
appeals
on
their behalf. (Docket
No.
728
in
Case Number 09-34784-sgj11
in
the Bankruptcy
Court
for
the
Northern
District
of
Texas, a
copy
of
which
is
attached
as
Exhibit
"A
").
Within
two
weeks Mr. Schepps violated that order
by
filing
a
Not
i
ce
of Appeal
and
related documents,
purportedly
on
behalf of Appellants. (Docket
No
.
742,
755
in
Case Number 09-34784-sgj11
in
the
Bankruptcy
Court
for
the
Northern
District
of
Te
xas).
Mr
. Schepps'
conduct
proves
that
he
has
no
respect
for
the
truth
and
will
misrepresent
things
whenever
he
is g
iven
the
opportun
i
ty
,
and
that
he
has
no
respect
for
the
orders
of
any
court
and
will
defy
those
orders
when
it
suits
him
or
his
client
to
do
so
.
II. PRAYER
WHEREFORE,
PREMISES CONSIDERED, the Trustee respectfully requests that this
Court
enter
an
order
:
(i)
transferring
this
Appeal
to
Judge
Furgeson;
and
(ii)
granting
the
Trustee
suc
h
other
relief
to
which
he
is
justly
entitled
.
MUNSCH HARDT KOPF & HARR, P.C.
By:
Is!
Raymond J. Urbanik
Raymond J. Urbanik
Texas Bar
No
. 20414050
Richard
Hunt
Texas Bar
No
. 10288700
3800
Lincoln
Plaza
500 N. Akard Street
Dallas,
Texas 75201-6659
Te
lephone: (214) 855-7500
Facsimile: (214) 855-7584
rurbanik@munsch
.
com
rhunt@munsch
.c
om
ATIORNEYS FOR DANIEL J. SHERMAN,
CHAPTER
11
TRUSTEE
APPELLEE'S NOTICE
OF
RELATED CASE AND REQUEST
TO
TRANSFER CASE - Page 4
Case 3:12-cv-00387-B Document 4 Filed 02/17/12 Page 4 of 5 PageID 1421Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 9 of 12 PageID 58838
Schepps - Cross/MacPete
III-94
PALMER REPORTING SERVICES
1948 Diamond Oak Way Manteca California 95336-9124 (800) 665-6251
1 THE COURT: I overrule that objection.
2 THE WITNESS: This is a criminal contempt proceeding,
3 and I'm not testifying. I'm asserting my Fifth Amendment
4 privilege.
5 BY MR. MacPETE:
6 Q. And isn't it true that you are a participant in the postings
7 on the LawandJustice.com website?
8 MR. SCHEPPS: Your Honor, may I object on the grounds
9 of relevance?
10 THE COURT: Overrule the objection.
11 THE WITNESS: This is a criminal contempt proceeding,
12 and I'm not testifying. I'm asserting my Fifth Amendment
13 privilege.
14 BY MR. MacPETE:
15 Q. And isn't it true that you have no legal or factual basis
16 for the offensive allegations that have been made on that
17 website regarding Mr. Vogel and the Honorable Judge Furgeson?
18 MR. SCHEPPS: Your Honor, may I object on the grounds
19 of relevance?
20 THE COURT: Overrule the objection.
21 THE WITNESS: This is a criminal contempt proceeding,
22 and I'm not testifying. I'm asserting my Fifth Amendment
23 privilege.
24 BY MR. MacPETE:
25 Q. In fact isn't it true, sir, that you have absolutely no
Case 09-34784-sgj11 Doc 725 Filed 12/10/11 Entered 12/10/11 23:56:21 Desc
Main Document Page 94 of 165
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 10 of 12 PageID 58839
Schepps - Cross/MacPete
III-95
PALMER REPORTING SERVICES
1948 Diamond Oak Way Manteca California 95336-9124 (800) 665-6251
1 proof that there has ever been an ex parte meeting between Peter
2 Vogel, the receiver, and Judge Royal Furgeson?
3 MR. SCHEPPS: Your Honor, may I object on the grounds
4 of relevance?
5 THE COURT: I overrule the objection.
6 THE WITNESS: This is a criminal contempt proceeding,
7 and I'm not testifying. I'm asserting my Fifth Amendment
8 privilege.
9 BY MR. MacPETE:
10 Q. And isn't it true that, in fact, you've conspired with Mr.
11 Baron to continually engage in vexatious litigation conduct both
12 in this Court and the District Court and in the Fifth Circuit
13 for the purpose of costing my client, among others, more than $2
14 million in unnecessary fees defending the settlement agreement?
15 MR. SCHEPPS: Your Honor, may I object on the grounds
16 of relevance?
17 THE COURT: Overrule —
18 MS. LeBOEUF: And I object on the same.
19 THE COURT: Overrule the objection.
20 THE WITNESS: This is a criminal contempt proceeding,
21 and I'm not testifying. I'm asserting my Fifth Amendment
22 privilege.
23 BY MR. MacPETE:
24 Q. And isn't it true, sir, that Mr. Baron remains in breach of
25 the settlement agreement almost a year after it was entered by
Case 09-34784-sgj11 Doc 725 Filed 12/10/11 Entered 12/10/11 23:56:21 Desc
Main Document Page 95 of 165
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 11 of 12 PageID 58840
PALMER REPORTING SERVICES
1948 Diamond Oak Way Manteca California 95336-9124 (800) 665-6251
UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
BEFORE THE HONORABLE STACEY G. JERNIGAN, JUDGE
In Re: ) Case No. 09-34784-sgj11
)
) VOLUME III of the
ONDOVA LIMITED COMPANY, ) SHOW CAUSE HEARING for
) CHRISTOPHER PAYNE and GARY
) SCHEPPS; RECEIVER'S MOTION
Debtor. ) to STRIKE PLEADING and
) SECOND MOTION on the SHOW
) CAUSE ISSUE
)
) Monday, December 5, 2011
) Dallas, Texas
Appearances:
For Chapter 11 Trustee Raymond J. Urbanik, Esq.
Daniel J. Sherman: Richard Hunt, Esq.
Munsch, Hardt, Kopf & Harr PC
500 North Akard Street, Suite 3800
Dallas, Texas 75201-6659
For Peter Vogel, Peter L. Loh, Esq.
the Receiver: Barry Golden, Esq.
Gardere Wynne Sewell LLP
Thanksgiving Tower, Suite 3000
1601 Elm Street
Dallas, Texas 75201
For the Netsphere John MacPete, Esq.
parties: Ravi Puri, Esq. (via telephone)
Locke Lord Bissell & Liddell
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
For Christopher Payne: Nicole T. LeBoeuf, Esq.
Subvet James, Esq.
Shackelford, Melton & McKinley
3333 Lee Parkway, Tenth Floor
Dallas, Texas 75219
For Gary Schepps Gary Nathan Schepps, Esq.
and Petfinders, LLC: Schepps Law Firm
Drawer 670804
Dallas, Texas 75367
Case 09-34784-sgj11 Doc 725 Filed 12/10/11 Entered 12/10/11 23:56:21 Desc
Main Document Page 1 of 165
Case 3:09-cv-00988-F Document 974 Filed 06/11/12 Page 12 of 12 PageID 58841
