In a pivotal legal battle, This Fifth Circuit appeal against the second receivership order imposed by the Northern District of Texas has reached a critical juncture at the Fifth Circuit Court of Appeals. Mr. Timothy Barton’s legal team, led by Michael J. Edney of Hunton Andrews Kurth LLP, has formally urged the court to vacate the receivership orders immediately, citing clear legal overreach and procedural violations.
A Pattern of Judicial Overreach
In a Rule 28(j) letter submitted on February 17, 2025, Barton’s counsel responded to the Fifth Circuit’s inquiries about the appropriate legal remedy. The letter reinforces Barton’s stance that the Securities and Exchange Commission (SEC) failed to establish the clear necessity required to justify a receivership, particularly concerning real estate assets that are not at risk of surreptitious transfers. The appeal highlights fundamental flaws in the district court’s approach, including:
- Improper Legal Foundation – The district court failed to establish that the underlying loans constituted securities, a necessary determination for the case to exist in the first place.
- Lack of Justification for Receivership – The SEC did not demonstrate that less drastic alternatives were inadequate, as required by law.
- Unlawful Asset Seizure – The receivership was imposed without proper legal authority, sweeping up businesses and properties beyond any reasonable justification.
The legal filing (Fifth Circuit appeal) warns that the repeated imposition of receivership, despite the SEC’s inability to meet its burden of proof, allows the government to effectively “win by losing”—failing in court yet maintaining control over assets through prolonged legal maneuvers.
Barton’s legal team has requested that the Fifth Circuit not only vacate the receivership order in full but also assign the case to a different district judge upon remand. The letter underscores concern regarding bias and improper conduct by the presiding judge, who has demonstrated a punitive stance against Barton, even citing religious scripture as justification for his rulings. The appeal also notes the judge’s close ties to the court-appointed receiver, who was installed over the government’s recommended real estate professional, twice.
What’s at Stake?
This case is about more than just one businessman’s legal battle—it represents a fight against government overreach and the abuse of court-appointed receiverships as a punitive weapon. If the Fifth Circuit rules in Barton’s favor, it will reaffirm the necessity of due process and the limits of judicial authority in this case a district court Judge who applied extensive biased overreach against an innocent American, allowing his chosen inexperienced receiver cart Blanche while they paid themselves $3 Million dollars and never put the lenders needs ahead of their own invoices.
The next steps in this legal fight will determine whether the courts uphold fundamental rights or continue enabling unconstitutional asset seizures. Barton and his legal team remain steadfast in their commitment to ensuring that justice prevails.