Case 3:09-cv-00988-F Document 987 Filed 06/18/12 Page 1 of 3 PageID 58982
IN
THE
UNITED STATES
DISTRICT
COURT
FOR
THE
NORTHERN
DISTRICT
OF
TEXASl\2
JUH
18
Pi;
12:
01
DALLAS DIVISION
NETSPHERE, INC., §
MANILA INDUSTRIES, INC., AND §
MUNISH KRISHAN §
PLAINTIFFS, §
v.
JEFFREY
BARON AND
ONDOV A
LIMITED
COMPANY,
DEFENDANTS.
§
§
§
§
§
§
CIVIL
ACTION
NO. 3:09-CV-0988-F
ORDER
REGARDING
MOTION
TO
CLARIFY
INSTRUCTION
TO
RECEIVER
ON PAYMENTS
TO
FORMER
BARON ATTORNEYS
BEFORE THE COURT
is
Receiver's Motion to Clarify Instruction to Receiver on
Payments to Former Baron Attorneys (Docket No. 980). Because
of
the importance
of
the issue, the Court has given this matter priority. The Court granted the Trustee's
Motion to Lift Stay Imposed by this Court's Order
of
May 24, 2011 for two primary
purposes:
1)
progressing the underlying litigation, and 2) addressing matters impacting
the administration
of
the Receivership. In determining which administrative acts the
Receiver may now perform, the Court will first consider how best to preserve the status
quo for appeal. In some instances preserving the status quo will require granting the
Receiver leave to complete the proposed action. In others, it will require setting money
aside or taking other action to ensure a fair result
is
obtained by all parties upon
resolution
of
those matters now on appeal. After due consideration, the Court is
of
the
opinion that payments should not be made at this time to the Former Baron Attorneys, in
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Exhibit D1 Page 1 of 3
EXHIBIT D 1
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order to preserve the amounts on hand until the Court
of
Appeals for the Fifth Circuit can
rule on the pending appeal.
A brief review
of
the history
of
this matter
is
in order. After the Ondova
Bankruptcy was filed, this action was stayed in order for the Bankruptcy Court to resolve
the issues in bankruptcy. As the Bankruptcy Court was employing her best efforts to do
so, the case became overwhelmed by a revolving door
of
lawyers entering and exiting the
proceedings at the behest
of
Jeffrey Baron, the other Defendant in the instant action
before this Court. Given that the Bankruptcy Court manages a docket
of
approximately
4,000 cases, the disruption to the work
of
that Court threatened the administration
of
her
entire docket. At the same time, claims by Baron's attorneys against the Ondova estate
threatened to completely bury the ability
of
the Bankruptcy Court to resolve the
bankruptcy itself.
So
that the Bankruptcy Court could accomplish her work in the one
case and adequately administer her docket
of
all her cases, this Court created the
Receivership. Also, to try to deal with the numerous claims for fees and expenses
of
the
numerous lawyers that Baron had hired and fired, the Court set up a procedure to receive
and adjudicate the claims, again in order to relieve the burden on the Bankruptcy Court.
Again, the goal was to give the Bankruptcy Court the ability to complete the bankruptcy
case.
At no point did this Court decide that the Receivership would continue passed the
time needed to achieve its goals. The Court also was at the time and still
is
of
the opinion
that the Receivership was the least restrictive way
of
achieving its goals, including the
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Exhibit D1 Page 2 of 3
Case 3:09-cv-00988-F Document 987 Filed 06/18/12 Page 3 of 3 PageID 58984
resolution
of
the claims by the Baron lawyers. Since one
of
the appeals
of
Receivership
Orders deals with the Court's decision regarding those claims, Baron should be able to
contest the decision before funds are distributed.
At the same time, given the importance
of
the appeal to the former Baron
attorneys, those attorneys should be afforded the opportunity to have their voice heard
before the Court
of
Appeals. Exactly how that would be accomplished
is
not within the
purview
of
this Court.
Accordingly, it
is
ORDERED that no funds be distributed to the former Baron
attorneys until the completion
of
the appeal. Those funds now available will be
segregated and set aside by the Receiver until a decision is made by the Court
of
Appeals.
It is further ORDERED that the Receiver notify the former Baron attorneys
of
this
decision,
of
the appeal, and
of
the Court's view that they,
as
a group, should intervene in
the appeal
of
their issue
so
that the Court
of
Appeals has a clear understanding
of
their
stake in this matter.
IT
IS
SO
ORDERED.
Signed this
;!fa
y
of
June, 2012.
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