The Federal Court of Appeals for the Fifth Circuit overturned the bankruptcy auction (pdf) of the 150,000+ domain name owned by Jeff Baron and Ondova and found that Receivership set up by a lower court should never have been set up in the first place.
You may recall that 150,000+ domain names of Jeff Baron and Ondova was sold by a bankruptcy court just last month for $5.2 Million dollars.
The court which stayed the bankruptcy sale just two weeks ago by this ruling now ruled that no closing may occur, and the stay is made permanent.”
“The appeals arise from the district court’s appointment of a receiver over Jeffrey Baron’s personal property and entities he owned or controlled. The district court sought to stop Baron’s practice of regularly firing one lawyer and hiring a new one. This practice vexed the litigation involving Baron’s alleged breaches of a settlement agreement and a related bankruptcy. It also created new claims in bankruptcy by unpaid attorneys. Baron appealed the receivership order and almost every order entered by the district court thereafter.”
“We hold that the appointment of the receiver was an abuse of discretion and REVERSE and REMAND.Here are some of the more interesting parts of the 30 page opinion:
Jeff Baron and Munish Krishan formed a joint venture involving the ownership and sale of internet domain names. Disputes arose between the venturers, resulting in at least seven lawsuits.
In April 2009, after four mediation attempts and several years of litigation, Baron, Krishan, and other parties signed a Memorandum of Understanding (“MOU”) settling all disputes.
Soon, Baron and one of his companies, Ondova Limited Company, allegedly breached the MOU.
In May 2009, Krishan and his company, Netsphere, Inc., filed a lawsuit in the United States District Court for the Northern District of Texas to enforce the MOU. That suit is the one from which the current appeals have been brought.
In June 2009, the district court entered a preliminary injunction to compel Baron’s compliance with the MOU. That injunction was later amended to include a $50,000 per day penalty for a violation. The injunction was entered to prevent deletion of domain names and to force compliance with parts of the MOU. The district court also began expressing concern with the multitude of lawyers appearing for Baron, concerns that would continue in the months ahead.In July 2009, Netsphere moved to have Baron held in contempt for violating the preliminary injunction.
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