DUGABOY INVESTMENT TRUST'S RESPONSE TO EMERGENCY MOTION IN LIMINE – Page 1

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Deborah Deitsch-Perez

Michael P. Aigen

STINSON LLP

2200 Ross Avenue, Suite 2900

Dallas, Texas 75201

Telephone: (214) 560-2201

Facsimile: (214) 560-2203

Email: deborah.deitschperez@stinson.com

Email: michael.aigen@stinson.com 

COUNSEL FOR THE DUGABOY INVESTMENT 

TRUST

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re 

HIGHLAND SELECT EQUITY FUND, 

L.P.

Debtor.

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Case No. 23-31039-mvl7

(Chapter 7)

THE DUGABOY INVESTMENT TRUST'S RESPONSE TO 

EMERGENCY MOTION IN LIMINE OF HIGHLAND CAPITAL MANAGEMENT, L.P. 

TO (I) EXCLUDE RECUSAL EVIDENCE AND ARGUMENT IN CONNECTION WITH 

DEBTORS' MOTION TO TRANSFER CASE TO DALLAS DIVISIONAL OFFICE, OR 

(II) IN THE ALTERNATIVE, ADJOURN HEARING

PRELIMINARY STATEMENT1

Highland Capital Management, L.P. (“HCMLP”), a creditor in this case and the manager 

of Highland Select Equity Master Fund, L.P. (the “Debtor”), filed an emergency motion in limine 

(the "MIL") three days before the scheduled hearing on Debtor’s motion to transfer this case to 

Judge Jernigan, who presides over the post effective date HCMLP bankruptcy. HCMLP belatedly 

filed its MIL despite knowing about the evidence it seeks to exclude (the “Evidence”) since it 

 

1This response is being filed in both this case, Case No. 23-31037-swe7 and in the bankruptcy case of Highland Select 

Equity Fund GP, L.P. Case No.23-31039-mv17 (together, the “Highland Select Cases”). 

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received Dugaboy’s response to the motion to transfer on July 10, 2023, Dugaboy’s Witness and 

Exhibit list on July 17, 2023, and Dugaboy’s (unanswered) request to discuss and resolve any 

objections to evidence on July 17, 2023.2 HCMLP’s motion in limine can and should be denied 

for its tactical delay alone. HCMLP’s tactical delay – and its prejudicial effect on Dugaboy – is 

also why its alternative request for adjournment must be denied.

As a matter of substance, HCMLP’s motion in limine is also deficient. As shown below, 

the evidence HCMLP seeks to exclude shows the very real likelihood that a well-founded motion 

to recuse will justifiably be made in each case transferred to Judge Jernigan, making such transfer 

inefficient.

ARGUMENT

I. The Motion To Transfer Should Not Be Adjourned

1. The Select Debtors, based on their filed schedules, are insolvent. There are two 

material creditors – The Dugaboy Investment Trust (“Dugaboy”) and insider HCMLP. HCMLP’s 

CEO James Seery signed the voluntary petitions for bankruptcy of both Select Debtors. [Dkt. 1]. 

While HCMLP’s Motion purports to “preserve[ ] vital estate and Court resources” [Dkt. 52 at ¶21], 

Dugaboy is the only material non-insider beneficiary of the estate.

2. On June 12, 2023, Debtor filed its Motion to Transfer/Reassign Case, asking the 

Court transfer the Highland Select case to Chief Judge Jernigan. [Dkt. 9]. On July 10, Dugaboy 

filed its opposition to the Motion on several grounds, including that if the case were transferred to 

Judge Jernigan, Dugaboy would have to seek to recuse her due to her prior violations of canons of 

 

2 See email from Jeremy Root to counsel for the parties dated July 17, 2023, annexed hereto as Exhibit 5 [App. 025].

Exhibits referenced herein are attached to the Appendix in Support of the Dugaboy Investment Trust's Response to 

Emergency Motion in Limine.

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judicial ethics. [Dkt. 17 at ¶20 et seq.]. Dugaboy attached the opinion of judicial ethics expert 

Professor Steve Leben (“Professor Leben” or “Leben”) in support. [Dkt. 20 at Ex. 5].

3. On July 14, 2023, HCMLP filed its Response and Joinder to Motion to 

Transfer/Reassign Case [Dkt. 26].3 The same date, Dugaboy filed its Witness and Exhibit List, 

which specifically listed former Professor Leben as a witness and included his Expert Report as 

an exhibit. [Dkt. 32]. HCMLP also filed its Witness and Exhibit List on July 14 [Dkt. 30], as did 

the Debtor, who listed James Seery, the person controlling the Debtors, as a witness. [Dkt. 31].

4. Although there was no matter pending that required judicial attention, on 

September 7, 2023, the Debtors in the Highland Select Cases, presumably at HCMLP’s request, 

and without consulting counsel for Dugaboy in advance, demanded that the motions to transfer be 

set for hearing.4 As a result, the hearings on the motions to transfer were set for 10:30 am5and 

1:30 pm on October 19, 2023, before their respective judges.6 Counsel for HCMLP specifically 

represented that they were available on October 19 in an email that included Mr. Morris, who 

apparently now finds the schedule inconvenient.7 However, as soon as the hearing was set, 

Dugaboy prepared for the hearing to take place on that date, including purchasing airline tickets 

and making travel arrangements for its expert witness, Professor Leben, to travel from Kansas 

City, Missouri to attend the hearing.

5. Friday at 5:39 pm, three business days before the hearing, HCMLP sent an email 

notifying Dugaboy that (a) HCMLP will be filing a Motion in Limine the following Monday 

 

3 HCMLP also filed a Supplemental Response on September 25, 2023 [Dkt. 40].

4 See email from Hudson Jobe to Dawn Harden and Jenni Bergreen dated September 7, 2023, annexed hereto as 

Exhibit 2 [App. 009 - 010].

5 See email from Ms. Bergreen to Mr. Jobe dated September 18, 2023 correcting hearing time to 10:30 am before 

Judge Everett, annexed hereto as Exhibit 3 [App. 012].

6 See email from Ms. Harden to Mr. Jobe dated September 18, 2023 setting 1:30 pm hearing before Judge Larson, 

annexed hereto as Exhibit 2 [App. 004].

7 See email from George Demo to counsel for the parties dated September 13, 2023, annexed hereto as Exhibit 4 [App. 

019].

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(October 16) to exclude the Leben Report first disclosed in July, (b) that if and only if Dugaboy 

did not consent to excluding its own evidence, then the hearing should be continued because 

HCMLP’s counsel Mr. Morris will be traveling for a hearing in Delaware the next day, and (c) but

“[i]f all parties agree that the hearings on the motions to re-assign will not be evidentiary hearings, 

we are happy moving forward on October 19.”

8

 

6. This is not a scheduling conflict warranting a continuance; HCMLP is “happy 

moving forward” on a non-evidentiary hearing. Rather, HCMLP did not think to file a motion in 

limine earlier, apparently is concerned the Court will not entertain its tardy Motion, and is 

scrambling for a solution. Therefore, HCMLP has a scheduling conflict that will appear if 

Dugaboy insists on presenting Professor Leben’s testimony, but disappear if Dugaboy agrees to 

withdraw such testimony. See Dkt. 51 (Motion in Limine) at ¶36. 

7. HCMLP seeks to preclude evidence about which it has known for months and to 

reschedule a hearing that it set more than a month ago, causing others to prepare and incur 

expenses. To make matters worse, HCMLP has been aware of the evidentiary nature of this hearing 

since at least July 14, 2023, when Dugaboy filed its Witness and Exhibit List, which specifically 

listed Professor Leben as a witness and included his Opinion Letter as an exhibit. [Dkt. 32]. Still 

worse, on July 17, 2023, Dugaboy sent an email to counsel for HCMLP and the Debtors asking 

about objections to any exhibits and witnesses filed by the parties and specifically asking if any 

party had any objections to the witnesses and exhibits on Dugaboy’s lists.9 HCMLP only

responded to that email on October 13, 2023, attempting to sandbag Dugaboy with its demand 

 

8 See email from counsel for HCMLP to counsel for Dugaboy and others dated October 13, 2023, annexed here to as 

Exhibit 1 [App. 002]. 

9 See email from Jeremy Root to counsel for the parties dated July 17, 2023, annexed hereto as Exhibit 5 [App. 025].

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three business days before the scheduled hearing. HCMLP’s tactics should not be countenanced, 

and its motion should be denied. 

II. The Evidence HCMLP Seeks To Exclude Is Material And Necessary

8. HCMLP makes four arguments as to why it believes that the Evidence should be 

excluded. One, HCMLP argued that any evidence of bias is irrelevant because it is not a specific 

enumerated factor to be considered when deciding a motion to transfer or reassign. Two, HCMLP 

argued that the Evidence is irrelevant because this Court cannot recuse Judge Jernigan. Three, 

HCMLP argues that Dugaboy cannot relitigate the recusal issue in this Court. And, fourth, HCMLP 

argues that considering the recusal issue would be a waste of judicial, estate and party resources 

since there is relatively little at stake in these cases

9. The central flaw in HCMLP's arguments is its premise that Dugaboy is asking this 

Court to recuse Judge Jernigan. Dugaboy, in fact, is seeking to do the opposite. Dugaboy is seeking 

to prevent HCMLP and the Debtors from engaging in prohibited judge shopping. Recusal will only 

become an issue if these cases are transferred to Judge Jernigan.

10. Bankruptcy Rule 1001 requires matters to be “construed, administered, and 

employed by the court and the parties to secure the just, speedy, and inexpensive determination of 

every case and proceeding.” Transferring this case to Judge Jernigan would not result in “the just, 

speedy, and inexpensive determination” of the case because Dugaboy will have no choice but to 

seek to recuse Judge Jernigan for all of the reasons described in Dugaboy’s opposition to the 

Motion to Transfer. 

11. As Dugaboy stated in its opposition, facing similar circumstances, one bankruptcy 

court noted that the litigants’ subjective perception of bias, even if it did not warrant 

disqualification, will continue to cause multiple motions and delays. “These delays, and the 

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interest, and this prejudice must be considered in the context of the interests of justice and judicial 

economy.” In re Krichevsky, 640 B.R. 524, 545 (E.D. N.Y. Bankr. 2022).

12. No party has identified any issue on which Judge Jernigan’s familiarity with the 

HCMLP case would present some efficiency here, much less enough efficiency to overcome the 

inefficiency inherent in putting additional cases before Judge Jernigan that will be the subject of 

motions to recuse. These are simple cases with minimal assets.

13. There is no rule for intra-district transfer of bankruptcy cases, the relief sought by 

HCMLP.10 Accordingly, HCMLP is rhetorically correct that bias is not a specifically enumerated 

factor supporting intra-district transfer of bankruptcy cases because there are no enumerated 

factors in support of the procedure HCMLP seeks. However, analyzing the authority in support 

of inter and intra-district transfers of non-bankruptcy cases, even if bias is not a factor specifically 

enumerated by courts, efficiency is, as HCMLP recognizes, one of the “most important factors” to 

be considered.11 HCMLP readily concedes that “Dugaboy can move to recuse Judge Jernigan in 

accordance with applicable rules” if the transfer motion is granted.12 It thus acknowledges that 

transferring this case will lead to inefficiencies as the recusal issues will then need to be addressed 

and considered in these bankruptcies.13 The only way to avoid the recusal issues from burdening 

these bankruptcies is to deny the transfer to Judge Jernigan.

 

10 HCMLP suggests Dugaboy previously conceded that intra-district transfers of cases are permissible. MIL DKT 51 

p.9, n.10. HCMLP fails to point out that the consolidation at issue previously was of multiple objections to the same 

report and recommendation regarding withdrawal of the reference that had been sent to several different district 

judges. See Defendants' Memorandum of Law in Support of Their Motion to Consolidate the Note Cases, Case No. 

3:21-cv-00880-C, Dkt. 17. https://www.kccllc.net/hcmlp/document/1934054211211000000000007 Nothing about 

that situation is a concession that transfer is appropriate here. 

11 MIL ¶ 28. 

12 HCMLP MIL at 9.

13 Similarly, courts have recognized that the appearance of bias can constitute the extraordinary circumstances that 

would justify the withdrawal of the reference in certain proceedings. Cooley v. Foti, No. CIV.A. 86-3704, 1988 WL 

10166, 1988 U.S. Dist. LEXIS 1131 at *5 (E.D. La. Feb. 5, 1988) (finding the magistrate judge’s personal “bias 

constitutes extraordinary circumstances and justifies the withdrawal of the [analogous] § 636[] references”). In 

Cooley, the District Court, in making its determination that there were sufficient reasons to justify vacating a reference 

to a magistrate judge based on the “possibility of bias or prejudice,” found that the “magistrate evidenced a degree of 

anger so pervasive as to amount to personal bias, even though it had its origin in litigation before the magistrate.” Id. 

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14. The evidence Dugaboy seeks to present is not for the purpose of asking this Court 

to recuse Judge Jernigan. It is for the purpose of showing that there is an ample basis for Dugaboy 

to seek to recuse Judge Jernigan if the cases are transferred. That is, Dugaboy is showing that 

there is a real threat of inefficiency, delay and additional cost if these cases are transferred.

15. In sum, because the recusal issues only will need to be addressed in this bankruptcy 

case if the transfer is granted, such transfer would certainly not be efficient or conserve judicial 

resources. The only way for the parties to avoid exactly what HCMLP claims to be attempting to 

avoid – namely, relitigation of recusal issues – is to deny the transfer to Judge Jernigan.

CONCLUSION

Dugaboy requests that the Court deny HCMLP's Emergency Motion In Limine and request 

for an adjournment in its entirety.

Dated: October 17, 2023 Respectfully submitted,

/s/ Deborah Deitsch-Perez

Deborah Deitsch-Perez

State Bar No. 24036072

Michael P. Aigen

State Bar No. 24012196

STINSON LLP

2200 Ross Avenue, Suite 2900

Dallas, Texas 75201

(214) 560-2201 telephone

(214) 560-2203 facsimile

Email: deborah.deitschperez@stinson.com

Email: michael.aigen@stinson.com

Counsel for The Dugaboy Investment Trust

 

at **5-6. The evidence of bias in that case included, among other things, sua sponte actions by the magistrate requiring 

the requesting party to show cause why he should not be sanctioned for filing answers and defenses that did not “fairly 

meet the substance of the averments denied.” Id. at 3. The actions here, although related to a motion to transfer, 

similarly demonstrate, at a minimum, a possibility of bias or prejudice that needs to be avoided, if possible.

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CERTIFICATE OF SERVICE

I certify that on October 17, 2023, a true and correct copy of the foregoing document was 

served via the Court’s Electronic Case Filing system to the parties that are registered or 

otherwise entitled to receive electronic notices in this proceeding.

/s/ Deborah Deitsch-Perez

Deborah Deitsch-Perez

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