Richard Altomare ~ Supreme Court Case

Below is the full text version of the Appeal to the United States Supreme Court on behalf of Richard Altomare against the Securities and Exchange Commission. This is a landmark case and story on the perils of naked short selling, an inefficient regulatory agency that failed to stop it (SEC), and the unconstitutional actions taken by the SEC to silence one company (Universal Express) and its Chairman and CEO, Richard Altomare, from being recognized for his whistle blower status and voice of reason, clarity, and truth against injustice.


No. 08A696
____________________

In The
Supreme Court of the United States

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RICHARD A. ALTOMARE,
CHRIS G. GUNDERSON,

Petitioners,

U.S. SECURITIES AND EXCHANGE COMMISSION,

Respondent.

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On Petition For Writ Of Certiorari To The United
States Court Of Appeals For The Second Circuit

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PETITION FOR WRIT OF CERTIORARI

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CARL E. PERSON, Esq.
Representing Petitioners:
Richard A. Altomare and Chris G. Gunderson,
325 W. 45th Street – Suite 201
New York NY 10036-3803
(212) 307-4444, fax: (212) 307-0247
QUESTIONS PRESENTED FOR REVIEW

Pursuant to Rule 14.1(a), this petition for a writ of certiorari to the Second Circuit in appeal case SEC v. Universal Express, Inc. 07-2407-cv whose November 13, 2008 Summary Order (see Appendix Page 1) that is sought to be reviewed by the Petitioners listed in the Caption is respectfully submitted on the following questions presented for review:

1. Did the courts below err in failing to dismiss the SEC’s case against the Company and its officers on the basis that such case was an attempt by the SEC to obtain review of orders of the Bankruptcy Court which review is prohibited by the Bankruptcy Code?

2. Did the courts below on summary judgment for the Securities and Exchange Commission (the “SEC”) without any hearing or testimony ignore the core issue of the naked shorting scandal underlying Petitioners case which naked shorting scandal long covered-up by the SEC in favor of culpable Wall Street interests has become a significant aspect of the present financial crisis?

3. Did the courts below err in failing to award summary judgment to the Company and its officers in their good-faith reliance on the immunities and protections afforded by the United States Bankruptcy Code and the provisions of the Company’s Reorganization Plan specifically designed by the Bankruptcy Court to combat the naked shorting scandal and to immunize and protect the Company and its officers in their good faith actions after the SEC denied assistance to the Company to combat the naked shorting scandal?

4. Did the courts below err in failing to give credence to and take judicial notice of the long-term naked shorting scandal by Wall Street interests of the shares of small public companies over the last eight years which destroyed thousands of those companies and the investments of millions of ordinary Main Street investors and of the securities regulator’s failure to enforce existing regulations against this practice and its cover-up of the naked shorting scandal underlying the present financial crisis?

5. Did the courts below err in failing to recognize the important provisions of the United States Bankruptcy Code relied upon by the Company and the Petitioners to combat the naked shorting scandal and the opinions of the United States Supreme Court in over 140 cases upholding the provisions and immunities of the Bankruptcy Code and the powers of the Bankruptcy Courts?

6. Did the courts below err in depriving the Petitioners of their Sixth Amendment rights to have a jury assess their good faith efforts to save the Company and its investors from the naked shorting scandal?

LIST OF ALL PARTIES

Pursuant to Rule 14.1(b), a list of all Defendant parties to the proceeding SEC v. Universal Express, Inc. et al. (SDNY) 04-cv-2322 in the Southern District of New York taken on appeal to the Second Circuit in appeal case SEC v. Universal Express, Inc. 07-2407-cv whose November 13, 2008 Summary Order (see Appendix Page 1 “App. 1”) that is sought to be reviewed by the Petitioners listed in the Caption, and there is no corporate entity petitioner herein for this petition for a writ of certiorari; other parties are:

Plaintiff / Respondent:

U.S. SECURITIES AND EXCHANGE COMMISSION,

Represented by:

The Solicitor General of the United States
Room 5614 Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20530-0001

Defendants:

• UNIVERSAL EXPRESS, INC.,
• MARK S. NEUHAUS,
• GEORGE J. SANDHU,
• SPIGA, LTD., and
• TARUN MENDIRATTA,

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW……..i

LIST OF ALL PARTIES……………………………iii
TABLE OF AUTHORITIES…….…………………….vi
OPINIONS BELOW………………………………………1
JURISDICTION…………..……………………….������..1
CONSTITUTIONAL PROVISIONS………..……….2
STATUTES INVOLVED���………….………..………..3
STATEMENT OF CASE………………………………….9
REASONS FOR GRANTING THE WRIT…………9
I. Overview���…………………………………………….9
II. Importance of the Issue……………………..11
III. Erroneousness of Decision below in failing to apply settled Supreme Court Precedents in over 140 cases………………….16
CONCLUSION…………………���……………………….34

APPENDICIES

2nd Circuit Summary Order filed Nov. 13, 2008 in 07-2407-cv 04-cv-2322 SEC v. Universal Express, Inc

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FINAL JUDGMENT AGAINST UNIVERSAL EXPRESS, INC., RICHARD A. ALTOMARE AND CHRIS G. GUNDERSON filed March 3, 2007 in 04-cv-2322 SEC v. Universal Express, Inc

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OPINION AND ORDER filed February 21, 2007 in 04-cv-2322 SEC v. Universal Express, Inc

TABLE OF AUTHORITIES

Cases:

United States v Energy Resources Co., Inc. et al , 495 U.S. 545, 110 S. Ct. 2139, 10-9 L. Ed. 2d 580 (May 29, 1990) 6,16; McMillan v. McNeill, 17 U.S. 209, 210 (1819);  Patterson v. Winn, 30 U.S. 233, 241 (1831);  Nelson v. Carland, 42 U.S. 265, 267 (1843);�� Ex Parte Christy, 44 U.S. 292, 297, 298  (1845); Fowler v. Hart, 54 U.S. 373, 375  (1851); Morgan v. Thornhill, 78 U.S. 65, 66  (1870); Cleveland Insurance Company v.  Globe Insurance Company, 98 U.S. 366, 369  (1878); Barton v. Barbour 104 U.S. 126, 134  (1881); Dushane v. Beall, 161 U.S. 513, 515  (1896); Bardes v. First Nat. Bank, 178 U.S.  524, 534, 535 (1900); White v. Schloerb, 178  U.S. 542, 547 (1900); Mueller v. Nugent, 184  U.S. 1,13 (1901); Whitney v. Wenman 198  U.S. 539, 550, 551-552 (1905); Babbitt v.  Dutcher, 216 U.S. 102, 105 (1910); Acme  Harvester Co. v. Beckman Lumber Co., 222  U.S. 300, 312 (1911); United States Fidelity  & Guaranty Co. v. Bray, 225 U.S. 205, 217  (1912); Robertson v. Howard, 229 U.S. 254,  261, 262 (1913); Hull v. Burr, 234 U.S. 712,  717 (1914); Weidhorn v. Levy, 253 U.S. 268,  271-273 (1920); Taylor v. Voss, 271 U.S. 176,  190 (1926); Weil v. Neary, 278 U.S. 160, 171,  172 (1929); Ex parte Baldwin, 202 U.S. 610,  616-617 (1934); Local Loan Co. v. Hunt, 292  U.S. 234, 240 (1934); Continental Illinois  Nat. Bank & Trust Co. of Chicago v. Chicago  R. I. & P. Ry. Co., 294 U.S. 648, 675 (1935);  Louisville Joint Stock Land Bank v. Redford,  295 U.S. 555, 585 (1935); Meyer v. Kenmore  Hotel Co., 297 U.S. 160, 165 (1936); Schwartz  v. Irving Trust Co., 299 U.S. 456, 462, 463  (1937); Wayne United Gas Co. v. Owens  Illinois Glass Co., 300 U.S. 131, 136 (1937);  Wright v. Vinton Branch of Mountain Trust  Bank, 300 U.S. 440, 446, 447 (1937); Wright  v. Union Central Life Ins. Co., 304 U.S. 502,  518 (1938); Connecticut Railway & Lighting  Co. v. Palmer, 305 U.S. 493, 502 (1939);  Taylor v. Standard Gas & Electric Co., 306  U.S. 307, 323 (1939); Popper v. Litton, 308  U.S. 295, 303-304 (1939); Securities and  Exchange Com’n v. U.S. Realty & Imp. Co.,  310 U.S. 434, 455 (1940); American United  Mut. Life Ins. Co. v. City of Avon Park, Fla.,  311 U.S. 138, 145 (1940); Sampsell v.  Imperial Paper & Color Corp., 313 U.S. 215,  220 (1941); Prudence Realization Corp. v.  Geist, 316 U.S. 89 (1942); Young v. Higbee  Co., 324 U.S. 204, 214 (1945); Order of Ry.  Conductors of America v. Pitney, 326 U.S.  561, 566-567 (1946); Heiser v. Woodruff, 327  U.S. 726, 731, 732 (1946); Vanston  Bondholders Protective Committee v. Green,�������������������� 329 U.S. 156 162 (1946); United States  National Bank et al. v. Chase National Bank,  et al., 331 U.S. 28, 36 (1947); Williams v.  Austrian, 331 U.S. 642, 648 (1947); Callaway  v. Benton, 336 U.S. 132, 149 (1949); National  Ins. Co. v. Tidewater Co., 337 U.S. 582, 655  (1949); Manufacturers Trust Co. v. Becker,  338 U.S. 304, 310, 311-312 (1949); Katchen v.  Landy, 382 U.S. 323, 327 (1966); Protective  Committee for Independent Stockholders of  TMT Trailer Ferry v. Anderson, 390 U.S. 414,  424 (1968); Palmore v. United States, 411  U.S. 389, 409 (1973); Curtis v. Loether, 415  U.S. 189 195 (1974); Butner v. U.S., 440 U.S.  48, 55-56 (1979); Fullilove v. Klutznick, 448  U.S. 448, 472-473 (1980); Northern Pipeline  Const. Co. v. Marathon Pipeline Co., 458 U.S.  50, 55, 56-60 (1982); U.S. v. Whiting Pools,  Inc., 462 U.S. 198, 206, 210 (1983); NLRB v.  Bildisco & Bildisco 465 U.S. 513, 527-528  (1984); Ohio v. Kovacs, 469 U.S. 274, 280  (1985); Kelly v. Robinson, 479 U.S. 36, 46  (1986); Norwest Bank Worthington v. Ahlers,  485 U.S. 197, 200 (1988); United States v.  Ron Pair Enterprises, Inc. 489 U.S. 235, 245-�� 246 (1989); Granfinanciera, S.A. v. Nordberg,  492 U.S. 33, 70-71 (1989); Pennsylvania Dept  of Public Welfare v. Davenport, 495 U.S. 552,  563 (1990); Langenkamp v. Culp, 198 U.S.  42, 44-45 (1990); Grogan v. Garner, 498 U.S.  279, 286-287 (1991); Johnson v. Home State  Bank, 501 U.S. 78, 88 (1991); Dewsnup v.  Timm, 502 U.S. 410, 418 (1992); Hollywell  Corp. v. Smith, 503 U.S. 47, 55 (1992); Taylor v. Freeland & Kronz, 503 U.S. 638, 645���� (1992); Patterson v. Schumate, 504 U.S. 753,  760 (1992); Pioneer Inv. Services Co. v.  Brunswick Associates Ltd. Partnership, 507  U.S. 380, 389 (1993); BFP v. Resolution Trust  Corporation, 511 U.S. 531, 546 (1994); U.S.  Bancorp Mortg. Co. v. Bonner Mall  Partnership, 513 U.S. 18, 20 (1994); Celotex  Corp. v. Edwards, 514 U.S. 300, 303-307  (1995); Things Remembered, Inc. v. Petrarca,  516 U.S. 124, 133 (1995); United States v.  Noland, 517 U.S. 535, 539 (1996); Bank of  America Nat. Trust and Sav. Ass’n v. 203  North LaSalle Street Partnership, 526 U.S.  434, 438 (1999); Hartford Underwriters Ins.  Co. v. Union Planters Bank, N.A., 530 U.S. 1,  8, 9 (2000); Miller v. French, 530 U.S. 327,  360, 361 (2000); FCC v. NextWave Personal  Communications Inc., 537 U.S. 293, 302  (2003); Till v. SCS Credit Corp. 541 U.S. 465,  482 (2004); Central Virginia Community  College v. Katz, 546 U.S. 356, 359 (2006);  Marshall v. Marshall, 547 U.S. 293, 306  (2006); Marrama v. Citizens Bank of  Massachusetts, 549 U.S. 365, 367, 375 (2007);  Travelers Casualty and Sur. Co. of America  v. Pacific Gas & Elec. Co., 549 U.S. 443, 454  (2007); Florida Dept. of Revenue v. Piccadilly  Cafeterias, Inc., 128 S.Ct. 2326,������������������ 2336, 2340 (2008)

Statutes:

11 U.S.C. ������������������������������������������������1123(b)(5)
11 U.S.C. §1129(a)(11)
11 U.S.C. §101 et seq., particularly §§1123, 1125, 1109.
11 U.S.C. §1125(d)
11 U.S.C. §1109(a)
11 U.S.C. §1123

Other:

House Report No. 95-595, 1978 Acts, to Public Law 95-598, November 6, 1978, 92 Stat. 2633
PETITION FOR WRIT OF CERTIORARI

Petitioners Richard A. Altomare and Chris
G. Gunderson, respectfully pray that a writ of
certiorari issue to review the summary order below.

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OPINIONS BELOW

The order of the United States Court of Appeals for the Second Circuit in appeal case SEC v. Universal Express, Inc. 07-2407-cv whose November 13, 2008 Summary Order appears at App. 1 to the Petition.

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JURISDICTION

The United States Court of Appeals for the Second Circuit decided Petitioners’ case on November 13, 2008. Petitioners have timely filed this petition for certiorari with the Jan 29, 2009 Application (08A696) to extend the time to file a petition for a writ of certiorari from February 11, 2009 to April 12, 2009, was granted by Justice Ginsberg on February 17, 2009 extending the time to file until April 13, 2009. Petitioner invokes this Court’s jurisdiction under 28 U.S.C. �� 1254(1).

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CONSTITUTIONAL PROVISIONS

Sixth Amendment – Trial by jury and rights of the accused; Confrontation Clause, speedy trial, public trial, right to counsel:

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district where in the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.

Seventh Amendment – Civil trial by jury. In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law.

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STATUTES INVOLVED

The Company and its officers acted in good faith reliance on the following language in Section 1123 of the Bankruptcy Code, 11 U.S.C. §1123, among others:

“(a) Notwithstanding any otherwise applicable non-bankruptcy law, a plan shall
* * *

(5) provide adequate means for the plan’s implementation such as
* * *

(j) issuance of securities of the debtor . . . for cash, for property, for existing securities, or in exchange for claims or interests, or for any other appropriate purpose; . . . (emphasis added).

Once the Bankruptcy Court determined that the Company’s Reorganization Plan contained �������adequate information,” the Company and its officers acted in good faith reliance on Section 1125 of the Bankruptcy Code, which states that once such a finding is made by the Bankruptcy Court, no other law or rule governed the Company’s conduct. 11 U.S.C. ��1125(d) states, as follows:

���Whether a disclosure statement required under subsection (b) of this section contains adequate information is not governed by any otherwise applicable non-bankruptcy law, rule, or regulation, but an agency or official whose duty is to administer or enforce such a law, rule, or regulation may be heard on the issue of whether a disclosure statement contains adequate information. Such an agency or official may not appeal from, or otherwise seek review of, an order approving a disclosure statement.” (Emphasis added)

Moreover, the company and its officers are made specifically immune from suit arising from the issuance of securities under the Reorganization Plan and the 1994 Stock Incentive Plan pursuant to the safe harbor provisions of Section 1125(e), which provides in pertinent part:

�������������������������������A person . . . that participates, in good faith and in compliance with the applicable provisions of this title, in the offer, issuance, sale, or purchase of a security, offered or sold under the plan, . . . is not liable, on account of such . . . participation, for violation of any applicable law, rule or regulation governing . . . the offer, issuance, sale, or purchase of securities. (Emphasis added).

This is unequivocal black letter statutorily imbued immunity in this case for the Company and
its officers.

The SEC’s civil suit against the Company and its officers, including its request for preliminary and permanent injunctions, are improper attempts by the SEC to appeal the orders and decrees of the Bankruptcy Court, including the orders approving the “First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code” (the “Disclosure Statement”), the First Amended Plan of Reorganization, the Confirmation Order and the 1994 Stock Incentive Plan.

Section 1125(d), Title 11 of the Bankruptcy Code provides, as follows ��� “Whether a disclosure statement…contains ‘adequate information’ is not governed by any otherwise applicable nonbankruptcy law, rule or regulation, but an agency or official whose duty is to administer or enforce such law, rule or regulation may be heard on the issue of whether a disclosure statement contains adequate information. Such an agency or official may not appeal from, or otherwise seek review of, an order approving a disclosure statement.”
(Emphasis added)

Section 1109(a) of Title 11 specifically prohibits the SEC from appealing, on its own behalf, any judgment, order or decree in the reorganization case, as follows:

“The Securities and Exchange Commission may raise and may appear to be heard on any issue in a case under this chapter, but the Securities and Exchange Commission may not appeal from any judgment, order, or decree entered in the case.��� (Emphasis added).

The Supreme Court also recognizes in great number of its decisions over the years cited herein that Bankruptcy Courts, as courts of equity have broad powers, as evidenced by the Supreme Court’s following discussion of the Bankruptcy Code in the signal Energy Resources case, infra:

“The Code [Bankruptcy Code], however, grants the bankruptcy courts residual authority to approve reorganization plans including ‘any … appropriate provision not inconsistent with the applicable provisions of this title.’ 11 U.S.C. §1123(b)(5); see also §1129. The Code also states that bankruptcy courts may ‘issue any order, process, or judgment that is necessary or appropriate to carry out the provisions’ of the Code. §105(a).”

The Court also recognizes the Bankruptcy Court’s authority to include in Reorganization Plans any provision to fulfill the Bankruptcy Court’s overriding responsibility underpinning the Bankruptcy Court’s approval of Reorganization Plans to assure itself that the reorganization will succeed. (11 U.S.C. ����������1129(a) (11). The Bankruptcy Code is replete with provisions that cover post-confirmation matters, some of which are as follows:

§1123. “Contents of Plan”

“(a) Notwithstanding any otherwise applicable non-bankruptcy law, a plan shall-
***
(5) provide adequate means for the plan���s implementation, such as –
***
(B) transfer of all or any part of the property of the estate to one or more entities, whether organized before or after the confirmation of such plan;
***
(E) …modification of any lien;
(F) …modification of any indenture or similar instrument;
(G) curing or waiving of any default;
(H) extension of a maturity date or a change in an interest rate or other term of outstanding securities;
(I) amendment of the debtor’s charter;
(J) issuance of securities…for any other purpose.

(b) Subject to subsection (a) of this section, a plan may-

***
(6) include any other appropriate provision not inconsistent with the applicable provisions of this title.”

In addition, the Bankruptcy Code provides many other examples of future effectiveness of orders and rulings of the Bankruptcy Court. See for example:

��1113. “Rejection of collective bargaining agreements”
§1114. ���Payment of insurance benefits to retired employees” “Subchapter III – Post confirmation Matters���
§1141. Effect of confirmation
§1142. Implementation of plan
��1143. Distribution
§1144. Revocation of an order of confirmation
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STATEMENT OF CASE REASONS FOR GRANTING THE WRIT:

I. Overview

Pursuant to Rule 14.1(g), this petition for a writ of certiorari is respectfully submitted based upon the following statement of the case:

This case involves the failure of the SEC to stop naked shortsellers from destroying Universal Express, Inc. (“Universal”) and thousands of other small publicly-traded companies.

The naked shortsellers, operating as gangs usually from or with Wall Street houses such as Bear, Stearns, would attack the stock of small companies with comparatively small amounts of publicly-traded stock for the purpose of driving the stock down, and pushing the company into bankruptcy.

The purpose of pushing them into bankruptcy was to be able to keep the proceeds of the naked short sale, because it was widely assumed by naked short sellers that they did not have to report any cover transaction when the short-traded company filed for bankruptcy.

From the company’s standing, the driving down of the company’s stock price destroyed the ability of the company to obtain credit lines, and destroyed existing credit lines.

Universal and Appellants on numerous occasions complained to the SEC about these illegal practices, but the SEC always helped the naked shortsellers. First, by doing nothing, and then by attacking Universal and the Appellants.

Universal, through Appellants, sought to counter the naked shortsellers’ moves by raising money through the issuance and sale of new common stock through the bankruptcy exemptions and immunities under the Bankruptcy Code. This was done to offset the loss of credit lines caused by the naked shortsellers’ attacks on Universal’s stock price and as a result its ability to obtain financing.

Universal sued some of the naked shortsellers and obtained two judgments totaling $700,000,000, which the SEC took away by forcing us out of business and selling Universal’s assets for about $35,000.

Universal had the right to issue stock under the bankruptcy exemptions, as a company that had
come out of bankruptcy, and the SEC wholly disregarded the rights of Universal and the Appellants and went to the aid of the illegal shortsellers. It might be observed that in due course the wolfpack turned on one of its own. When Bear Stearns was having financial difficulty, the naked shortsellers (presumably not including any traders from Bear Stearns) were there to drive Bear Stearns out of business.

II. Importance of the Issue

This case presents a significant aspect of the present financial crisis, the naked shorting scandal. The naked shorting of the shares of small public companies by Wall Street interests over the last eight years has destroyed thousands of those companies and the investments of millions of ordinary Main Street investors.

The securities regulator failed over the last eight years to take any effective steps against this national shorting scandal. Only on July 15, 2008 and September 15, 2008 did the SEC finally admit that naked shorting was a huge national problem in connection with the financial meltdown and the failure of major financial institutions. At that point, the SEC sought to protect from the naked shorting scandal the Wall Street interests that were doing the naked shorting for more than eight years who had now turned on each other in their insatiable greed.

The SEC denied for over eight years that naked shorting was a problem and failed to take any effective action to prevent the issuance of trillions of counterfeit and unregistered shares sold into the market by vulturous Wall Street interests in the names of small public companies (but not shares issued by such companies) destroying their market prices.

As a result of this regulatory failure and cover-up by the SEC of the naked shorting scandal, bordering on criminality, thousands of middle-class, Main Street small public companies were destroyed and forced into bankruptcy by the naked shorters, millions of small investors lost their life savings and hundreds of thousands of employees lost their jobs.

Universal Express, Inc. was one of those thousands (estimated to be 10,000) small public companies destroyed by the naked shorters, in league with the SEC, over the last eight years.

Universal, its President and CEO Mr. Richard A. Altomare and Mr. Gunderson, its General Counsel, have been prominent whistleblowers against naked shorting for over ten years and the SEC has over the same period sought to harass, destroy and silence them on behalf of the naked shorters, culminating on May 2, 2008 at the behest of the SEC in the brutal incarceration by the court (Lynch, J.) of Mr. Altomare in solitary confinement for 83-days for purged civil contempt, which Mr. Altomare established was improper.

The Office of the Inspector General of the SEC (the “OIG���) is currently investigating important aspects of this entire matter. These include the conflicts of the receiver appointed by the court (Lynch, J.) at the request of the SEC, Jane Moscowitz of Florida, who had previously represented prominent naked shorters and who denied the existence of the naked shorting scandal and who in a few days destroyed a viable and growing small public company Universal Express, with a market capitalization of over 111 Million Dollars in 2006, by selling off and giving away in a few days its businesses and assets without proper auction or bidding processes for a few thousand dollars.

The OIG is also investigating allegations that the then Regional Director of the Denver Office, George B. Curtis, perjured himself in a letter to Senator Nelson on the Universal case among other things denying the existence of the naked shorting scandal.

It is also estimated that since naked shorters never need to produce or cover their positions with actual shares of companies thus forced into bankruptcy, their gains from these illegal activities were never reported to the Government and tax revenues sufficient to pay off the National Debt were lost.

For over eight years it is clear that the SEC’s culture is to defer to and not to regulate powerful Wall Street elites, but only to focus on small, less powerful interests. This is so though its Charter mandates protection for ordinary investors, not brokers and hedge funds. The revolving door of the SEC leading to huge salaries with these same Wall Street elites fosters this lack of regulation culture.

On September 18, 2008, Presidential Candidate Senator John McCain called for the firing of Chairman Cox for failing to regulate the naked shorting scandal.

On December 18, 2008, President-Elect Obama, in nominating the new SEC Chairman, stated that the SEC, as the regulator assigned to oversee Wall Street had failed to regulate and had “dropped the ball” over the years, substantially causing the present financial crisis.

On January 27, 2009, the Senate Banking Committee at hearings accused the SEC of a total failure to regulate Wall Street, including the Madoff scandal.

On February 4, 2009, the House Financial Services subcommittee determined at hearings that the SEC had totally failed to regulate Wall Street in the interest of the American people and that the SEC has operated only to protect Wall Street institutions and not ordinary Main Street investors as it is charged in its charter.

On March 18, 2009, the Office of Inspector General of the SEC issued a report finding that the SEC had failed to regulate the naked shorting scandal, that naked short selling was a significant factor in the financial collapse and that the SEC had ignored over 5,000 complaints on naked shorting from investors during a twelve-month period.

The Company, Universal Express, Inc. and its officers, having failed to obtain the assistance of the SEC from a virulent attack on the Company by the naked shorters, sought to protect the Company and its investors by relying on the provisions of its Reorganization Plan and the United States Bankruptcy Code, specifically designed for this protection.

The courts below in an avalanche of hubris in favor of the SEC failed to consider or discuss in detail in connection with the summary judgment (Lynch, J.) without any hearing or testimony these
important provisions of the Bankruptcy Code and the opinions of the United States Supreme Court in
over 140 cases upholding the provisions and immunities of the Bankruptcy Code and the powers of the Bankruptcy Court; see, especially, cases listed in the Table of Authorities on pages v through ix.

This case thus represents the supremacy of the United States Bankruptcy Code and the powers and orders of the Bankruptcy Court in the implementation of a Confirmed Plan of Reorganization for the Company over SEC jurisdiction and rules, in connection with the naked short selling scandal and its substantial impact in causing the present financial crisis.

This case also represents the clear protections and immunities for the Company and its officers afforded by the Bankruptcy Code and the provisions provided by the Bankruptcy Court in the Company’s Reorganization Plan to afford them protections from the national scandal of naked shorting, which protections the SEC refused to provide leading to the destruction of the Company and thousands of other small public companies.

III. Erroneousness of Decision below in failing to apply settled Supreme Court Precedents in over 140 cases

The signal United States Supreme Court Case United States v Energy Resources Co., Inc. et al., 495 U.S. 545, 110 S. Ct. 2139, 10-9 L. Ed. 2d 580 (May 29, 1990), greatly supports the positions of the Company and its officers in its reasoning and referencing a number of favorable Bankruptcy Code provisions.

The Supreme Court’s holding discusses and approves the broad powers of the Bankruptcy Court as a court of equity under the Bankruptcy Code.

The Court also recognizes the in futuro application of pre-confirmation orders to postconfirmation
applications, as do many of the Bankruptcy Code provisions. In this case, payouts over a five or six year period of employment taxes, appointing a trustee for that specific purpose (in one of the cases) and ordering the IRS to first apply these payments, also in futuro, to trust fund debts, despite IRS policy and regulations.

The Court also recognizes the Bankruptcy Court’s authority to include in Reorganization Plans “any appropriate provision not inconsistent with the applicable provisions of this title.” (11 U.S.C. §1123(b)(5) and to include any provision to fulfill the Bankruptcy Court’s overriding responsibility underpinning the Bankruptcy Court’s approval of the Reorganization Plan to assure itself that the reorganization will succeed. (11 U.S.C. ����������1129(a) (11).

This discussion and the referenced provisions are especially significant for the long term success of a developing small public company and the in futuro protections and procedures to assure such success, including, in the instant case, the Stock Incentive Plan, deemed necessary by the Bankruptcy Court to assure that company�����s future success and protection from manipulation arising from the naked shorting scandal.

The Supreme Court, significantly, decided the issues in this case with respect to two separate corporate “fresh start” reorganizations by two separate Bankruptcy Courts in Rhode Island and Massachusetts, consolidated by the First Circuit, confirming the First Circuit decisions in those two cases.

The Supreme Court also recognizes that Bankruptcy Courts, as courts of equity have broad powers, as evidenced by Supreme Court’s following discussion of the Bankruptcy Code:

“The Code [Bankruptcy Code], however, grants the bankruptcy courts residual authority to approve reorganization plans including ‘any … appropriate provision not inconsistent with the applicable provisions of this title.’ 11 U.S.C. ��1123(b)(5); see also ��1129. The Code also states that bankruptcy courts may ‘issue any order, process, or judgment that is necessary or appropriate to carry out the provisions’ of the Code. §105(a).”

Universal Express, Inc., a developing small public company, was reorganized under a Confirmed Plan of Reorganization in 1994.

Under the Plan, Mr. Richard A. Altomare, who was not involved with prior management, was appointed by the Bankruptcy Court as the manager of the reorganization. Mr. Altomare worked closely with the Bankruptcy Court for three years, without any compensation or payment of expenses, and upon the successful reorganization of the Company, was appointed by the Bankruptcy Court as the Company’s Chairman, President, CEO and sole director.

Mr. Altomare was awarded a long term employment agreement by the Bankruptcy Court and given broad powers under the Plan for the future development of the Company.

Mr. Gunderson joined the Company in 1995 as its General Counsel. Mr. Gunderson has an unblemished record at the Bar for more than 44 years. He is a graduate of Columbia University School of Law where he was a Harlan Fiske Stone Scholar.

Universal Express, Inc., had developed, grown and been successful and recognized despite the unrelenting attack for many years by naked short sellers, Wall Street financial interests, brokers, hedge funds and market makers who sold into the market in the name of the Company billions of unregistered, phantom and counterfeit shares, collapsing the Company’s stock price from $2 to 2 cents per share and, thereafter, keeping the Company’s stock price well below fractions of a cent.

Universal Express, Inc., its President and its General Counsel, proved that naked short selling existed upon the attack by the naked shorter sellers on the Company’s shares in 1998. The General Counsel showed by statistics that the volume of the Company’s shares traded was 11 times the Company���s outstanding shares and more than 68 times its average daily volume.

20 State court juries in Florida in 2001 and 2003 awarded the Company verdicts exceeding a total of $700,000,000 against naked short sellers. In a press release issued in September, 2003, the Company stated that if ordinary people (jurors) understand that “you can’t sell what you don���t own and never deliver,” which is naked shorting and counterfeiting of shares, “why can’t the SEC understand��������������� this national problem.

Within a month after the Company’s second jury verdict against the naked shorters and the very wide publicity attending the Company’s verdicts, an embarrassed SEC, through its Denver office, commenced a program of harassment against the Company, with more than 13 subpoenas for documents. The Company initially volunteered to provide information on contracts for proposed acquisitions and funding sources for those acquisitions. Before these documents were even received by the attorneys at the Denver office of the SEC, they were calling those acquisition candidates����� and funders’ senior officers, threatening them with reprisals so that they would move away from the Company. This pattern of intimidation of the Company was in full swing and successful since several large proposed acquisitions were terminated. The harassment of the Company and its officers, as whistleblowers on naked shorting, and the harassment of its business partners and potential business partners and funders, continued unabated thereafter and continue today in the form of this civil suit.

The Company, its President and General Counsel were determined not to be bullied by a conflicted regulatory agency, which has failed the investing public on this national naked shorting scandal in favor of Wall Street interests, in a clear violation of its Charter to protect investors.

The Company, its President and General Counsel did not violate the Federal Securities Acts by causing the Company to issue shares of stock which had not been registered with the SEC. To the contrary, those shares had been issued pursuant to a Chapter 11, Bankruptcy Code, Plan of Reorganization, which Plan had been confirmed by the Bankruptcy Court and such shares were exempt from the registration requirements of the Securities Acts.

The SEC’s essential misstatement in its civil action against the Company and its officers is its description of Universal’s common stock issuance to certain persons as “illegal, unregistered… shares”. In support of its complaint the SEC represented that a search of its databases disclosed no registrations for the shares in question. What the SEC did not inform the lower court is that the subject Universal shares were duly and legally issued and sufficiently registered pursuant to law. The law involved was not and is not the normal domain of the SEC, the Securities Acts, but the United States Bankruptcy Code, 11 U.S.C. 101 et seq., particularly §§1123, 1125 and 1109.

The daily recapitalization of the Company caused by the naked shorting of the Company’s shares gave the Company the clear right under the Reorganization Plan, the Bankruptcy Court’s Orders and the Bankruptcy Code to cover those counterfeit and totally unregistered naked shorted shares with shares of the Company properly issued under its Reorganization Plan and the provisions of the Bankruptcy Code.

The Company’s Reorganization Plan, including the operable provisions covering the issuance of shares, were filed with the SEC a number of times during the Reorganization of the Company.

The General Counsel provided another copy to the SEC Denver attorneys in response to their subpoena of August, 2003 requesting documents on the issuance of shares by the Company.

The Reorganization Agreement and the specific operable provisions covering the issuance of shares were specifically referenced as exhibits to all of the annual reports 10-KSB’s of the Company.

On April 21, 2006, Mr. Gunderson testified extensively at his deposition held by attorneys from the SEC’s Denver Office concerning the operable provisions covering the issuance of shares of the Company’s Reorganization Plan and other documents that are an integral part of the Reorganization Plan. To stunned silence and no cross examination, the General Counsel described those documents, placed in evidence the Reorganization Plan and the other documents that are an integral part of the Plan, placed into evidence copies of the immunity from suit provisions of the Bankruptcy Code and the daily recapitalization of the Company caused by the naked shorting of the Company’s shares and the clear right of the Company to cover those counterfeit and unregistered shares by shares which the Company properly issued under its Reorganization Plan and the provisions of the Bankruptcy Code.

The securities issued by the Company under the Reorganization Plan were not required to be issued pursuant to any registration statement under the securities laws, but were lawfully and properly issued pursuant to the Company’s confirmed Plan and the provisions of the Bankruptcy Code.

As indicated, the Reorganization Plan was filed with the SEC and specifically referenced as an exhibit in the Company’s 10-KSBs filed annually with the SEC.

No other filing was required.

Similarly, the securities issued by the Company under the Stock Incentive Plan, specifically made an integral part of the Reorganization Plan and approved by the Confirmation Order of the Bankruptcy Court for the future development of the Company, were also lawfully and properly issued pursuant to the Company’s confirmed Plan and the provisions of the Bankruptcy Code.

The Stock Incentive Plan was filed with the SEC as an integral part of the Reorganization Plan and itself specifically referenced as an exhibit in the Company’s 10-KSBs filed annually with the SEC.

No other filing was required.

The SEC’s civil suit against the Company and its officers, including its request for preliminary and permanent injunctions, are improper attempts by the SEC to appeal the orders and decrees of the Bankruptcy Court, including the orders approving the “First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code” (the ���Disclosure Statement���), the First Amended Plan of Reorganization, the Confirmation Order and the 1994 Stock Option Plan (“Stock Incentive Plan”).

Section 1125(d), Title 11 of the Bankruptcy Code provides, as follows – “Whether a disclosure statement…contains ‘adequate information’ is not governed by any otherwise applicable non-bankruptcy law, rule or regulation, but an agency or official whose duty is to administer or enforce such law, rule or regulation may be heard on the issue of whether a disclosure statement contains adequate information. Such an agency or official may not appeal from, or otherwise seek review of, an order approving a disclosure statement.��� (Emphasis added)

The SEC’s suit is a clear attempt to appeal an order of the Bankruptcy Court approving the disclosure statement, including the Stock Incentive Plan.

Section 1109(a) of Title 11 specifically prohibits the SEC from appealing, on its own behalf, any judgment, order or decree in the reorganization case, as follows:

“The Securities and Exchange Commission may raise and may appear to be heard on any issue in a case under this chapter, but the Securities and Exchange Commission may not appeal from any judgment, order, or decree entered in the case.” (Emphasis added).

What could be clearer! All of the provisions of the Disclosure Statement, the First Amended Plan of Reorganization and the Stock Incentive Plan cannot in any respect be appealed from or challenged by the SEC, which is exactly what it attempts to do in its civil suit against the Company and its officers. These black letter statutory provisions enjoin the SEC from complaining in any way, other than in the Bankruptcy proceedings, of any of the provisions, judgments, orders or decrees in the Company’s confirmed reorganization case.

The SEC had the opportunity to intervene and be heard in the Company’s Bankruptcy proceeding on the protective provisions of the Stock Incentive Plan and the other relevant and related provisions of the Disclosure Statement and the First Amended Plan of Reorganization and chose not to do so. Now, the SEC cannot appeal the protective provisions provided by the Bankruptcy Court and the Bankruptcy Code through the back door of its civil suit, including its requests for injunctive relief.

House Report No. 95-595, 1978 Acts, to Public Law 95-598, November 6, 1978, 92 Stat. 2633 provides the legislative history underlining Section 1109, as follows:

“Section 1109 authorizes the Securities and Exchange Commission and any indenture trustee to intervene in the case at any time on any issue. They may raise an issue or may appear and be heard on an issue that is raised by someone else. The section, following current law, denies the right of appeal to the Securities and Exchange Commission. It does not, however, prevent the Commission from joining or participating in an appeal taken by a true party in interest. The Commission is merely prevented from initiating the appeal in any capacity.” (Emphasis added)

The shares of Universal’s common stock referred to in the Complaint in this civil action were issued in accordance with and pursuant to Exhibit “I” of the confirmed Chapter 11 Plan, defined therein as the Stock Incentive Plan.

The Universal shares were duly and legally issued and sufficiently registered pursuant to law.

The law involved, as indicated above, was not and is not the normal domain of the SEC, the Securities Acts, but the United States Bankruptcy Code, 11 U.S.C. §101 et seq., particularly §§1123 and 1125.

The Company and its officers acted in good faith reliance on the following language in Section 1123 of the Bankruptcy Code, 11 U.S.C. ������1123, among others:

���(a) Notwithstanding any otherwise applicable non-bankruptcy law, a plan shall * * *

(5) provide adequate means for the plan’s implementation such as * * *

(j) issuance of securities of the debtor . . . for cash, for property, for existing securities, or in exchange for claims or interests, or for any other appropriate purpose; . . . (emphasis added).

Once the Bankruptcy Court determined that Universal’s Reorganization Plan (the First Amended Plan of Reorganization and Disclosure Statement), including the 1994 Stock Option Plan contained “adequate information,” the Company and its officers acted in good faith reliance on Section 1125 of the Bankruptcy Code, which states that once such a finding is made by the Bankruptcy Court, no other law or rule governed Universal���s conduct. 11 U.S.C. §1125(d) states, as follows:

“Whether a disclosure statement required under subsection (b) of this section contains adequate information is not governed by any otherwise applicable non-bankruptcy law, rule, or regulation, but an agency or official whose duty is to administer or enforce such a law, rule, or regulation may be heard on the issue of whether a disclosure statement contains adequate information. Such an agency or official may not appeal from, or otherwise seek review of, an order approving a disclosure statement.” (Emphasis added)

Moreover, the company and its officers are made specifically immune from suit arising from the issuance of securities under the Reorganization Plan and the 1994 Stock Incentive Plan pursuant to the safe harbor provisions of Section 1125(e), which provides in pertinent part:

���A person . . . that participates, in good faith and in compliance with the applicable provisions of this title, in the offer, issuance, sale, or purchase of a security, offered or sold under the plan, . . . is not liable, on account of such . . . participation, for violation of any applicable law, rule or regulation governing . . . the offer, issuance, sale, or purchase of securities. (Emphasis added).

This is unequivocal black letter statutorily imbued immunity in this case for the Company and its officers.

The SEC had knowledge that the shares were properly issued pursuant to the Stock Incentive Plan of Packaging Plus Services, Inc., Universal’s former name, but ignored that fact.

The Stock Incentive Plan was specifically made an integral part of the Reorganization Plan by the Confirmation Order of the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code.

Universal and its officers believe that this case was undertaken by the SEC, following a period of intense harassment by the SEC, to gag Universal and its officers as whistleblowers from continuing their public and increasingly hostile criticism of the SEC’s failure to implement action to stop the naked short selling manipulations of the stock of small publicly traded U.S. companies, especially including Universal.

The SEC’s recent order on July 15, 2008, temporarily banning naked short selling to protect Wall Street banks is complete vindication of Universal Express and its officers in their over ten year battle against naked shorting and flies in the face of the SEC’s denial of this national scandal and failure to act for over 15 years; a scandal which has resulted in the destruction and fatal damaging of thousands of small public companies, the loss of the investments and savings of millions of ordinary shareholders and the loss of jobs for thousands of employees.

The national scandal of naked short selling, condoned and covered-up by a conflicted SEC for many years, has sucked the market capitalization from smaller public companies, including Universal Express, putting thousands of such companies out of business and destroying the investments and jobs of millions of Americans. This scandal, ignored by the SEC, has destroyed the American dream of taking small private companies’ public and growing their businesses through the growth of their stock. Thousands of developmental products, beneficial to the public, including health advances, never had a chance for the national market. Trillions of dollars were siphoned from the capitalizations of public companies by the naked shorters with the intent and result of bankrupting those companies so that the naked shorts would never have to be covered by delivery of actual shares and, as a consequence, the shorters did not have to pay any taxes on their gains; taxes that would have been large enough, as indicated above, to pay off the National Debt of the United States.

The SEC’s arrogance is unsurpassed in the annals of government regulators, complaining about the shares of our Company, which have been properly issued and clearly recorded in our public filings with the SEC for over 14 years, without any complaint by the SEC concerning such reports, while the SEC improperly permitted market-makers, broker-dealers and hedge funds to sell trillions of unregistered and counterfeit shares in companies’ names in violation of its own securities statutes, regulations and rules and the Counterfeiting Statutes of the United States.

The terms of the Stock Incentive Plan, including the expander clause permitting the Company to issue additional shares to cover the recapitalization of the Company on a daily basis caused by the humongous amount of counterfeit shares issued in the name of the Company, was itself specifically confirmed by the Bankruptcy Court pursuant to the Bankruptcy Code.

The Stock Incentive plan covers the future development of the Company for an extended period exceeding ten years or more.

The Bankruptcy Code is replete with provisions that cover post-confirmation matters, some of which are as follows:

32 11 U.S.C. §1123. “Contents of Plan���

“ (a) Notwithstanding any otherwise applicable non-bankruptcy law, a plan shall- ***

(5) provide adequate means for the plan’s implementation, such as – ***

(B) transfer of all or any part of the property of the estate to one or more entities, whether organized before or after the confirmation of such plan; ***

(E) …modification of any lien;

(F) …modification of any indenture or similar instrument;

(K) curing or waiving of any default;

(L) extension of a maturity date or a change in an interest rate or other term of outstanding securities;

(M) amendment of the debtor�����������s charter;

(N) issuance of securities�����������for any other purpose.

(b) Subject to subsection (a) of this section, a plan may- ***

(6) include any other appropriate provision not inconsistent with the applicable provisions of this title.”

In addition, the Bankruptcy Code provides many other examples of future effectiveness of orders and rulings of the Bankruptcy Court. See for example:

§1113. “Rejection of collective bargaining agreements”

��1114. “Payment of insurance benefits to retired employees����� “Subchapter III – Post confirmation Matters’

§1141. Effect of confirmation

§1142. Implementation of plan

§1143. Distribution

§1144. Revocation of an order of confirmation

CONCLUSION

For the foregoing reasons, petitioners Richard A. Altomare and Chris G. Gunderson respectfully requests that the Supreme Court grant review of this matter.

Respectfully submitted,

Dated: April 10, 2009 /s/ Carl E. Person
New York, New York __________________
CARL E. PERSON, Esq.
Representing Petitioners: Richard A. Altomare and Chris G. Gunderson,
325 W. 45th St. ������� Suite 201
New York NY 10036-3803
212-307-4444, Fax 307-0247