Universal Express et al Motion Reconsideration March 8th, 2007

Below is the 23 page Universal Express et al motion for reconsideration of the denial of their motion for partial summary judgment of dismissal the granting of the plaintiff's motion for partial summary judgment.

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BARRY SCHAEVITZ, ESQ (BS-3405)
JACOB MEDINGER & FINNEGAN, LLPLocal Counsel for Defendants Universal
Express, Inc., Richard A. Altomare andChris G. Gunderson
1270 Avenue of the Americas, 31st Floor
New York, NY 10020

(212) 332-7773 (telephone)
(212) 332-7239 (facsimile)
and
ARTHUR W. TIFFORD, ESQ.
TIFFORD AND TIFFORD, P.A.
Lead Counsel for Defendants Universal
Express, Inc., Richard A. Altomare andChris G. Gunderson
1385 N.W. 15th Street
Miami, FL 33125

(305) 545-7822 (telephone)
(305) 325-1825 (facsimile)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

CASE NO. 04-CV-02322-GEL

U.S. SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

v.
UNIVERSAL EXPRESS, INC., etc., et al.,

Defendants.
_______________________________________________/

MOTION OF DEFENDANTS UNIVERSAL EXPRESS, INC.,
RICHARD A. ALTOMARE AND CHRIS G. GUNDERSON
FOR RECONSIDERATION OF THE
DENIAL OF THEIR MOTION FOR PARTIAL SUMMARY JUDGMENT OF
DISMISSAL THE GRANTING OF THE PLAINTIFF’S MOTION FOR
PARTIAL SUMMARY JUDGMENT
(ELECTRONICALLY FILED)


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Defendants Universal Express, Inc. (“Universal” or “USXP”),
Richard A. Altomare (“Altomare”) and Chris G. Gunderson
(“Gunderson”), by their undersigned attorneys and pursuant to
Rule 56, Federal Rules of Civil Procedure, respectfully move for
reconsideration of the Court’s February 21, 2007 order in the
above styled civil action awarding a partial summary judgment to
the Plaintiff and denying their motion for partial summary
judgment of dismissal. (D.E. #172). As demonstrated in the
following and the memorandum of law, the Court overlooked or
misperceived pertinent facts of record and the applicable
provisions of the bankruptcy code which require reconsideration.
On reconsideration this Court should conclude that (i) there
exists no genuine issues of material fact as to Defendants’
motion, (ii) as a matter of law, Universal, Altomare and
Gunderson are entitled to the dismissal of the Complaint’s First
Claim For Relief, which alleges violations of §§ 5(a) and 5(c)
of the Securities Act of 1933, 15 U.S.C. §§ 77e(a)1 and 77e(c),2

1 Section 5(a) of the Securities Act of 1933, 15 U.S.C. §
77e(a), is entitled “Sale or delivery after sale of unregisteredsecurities” and provides:

Unless a registration statement is in effect as to a

security, it shall be unlawful for any person,

directly or indirectly--

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or (iii) questions of fact required trial by jury on the good
faith reliance issues.

DISCUSSION

I THE FACTUAL SETTING; STATEMENT OF UNDISPUTED FACTS.

As their statement of undisputed facts the movants
incorporate by reference the factual setting below, the facts
set forth in the below memorandum of law, the deposition and the

(1) to make use of any means or instrumentsof transportation or communication ininterstate commerce or of the mails to sell
such security through the use or medium ofany prospectus or otherwise; or
(2) to carry or cause to be carried throughthe mails or in interstate commerce, by anymeans or instruments of transportation, anysuch security for the purpose of sale or fordelivery after sale.
2 Section 5(c) of the Securities Act of 1933, 15 U.S.C. §

77e(c), is entitled “Necessity of filing registration statement”

and provides:

It shall be unlawful for any person, directly orindirectly, to make use of any means or instruments oftransportation or communication in interstate commerceor of the mails to offer to sell or offer to buythrough the use or medium of any prospectus orotherwise any security, unless a registrationstatement has been filed as to such security, or whilethe registration statement is the subject of a refusalorder or stop order or (prior to the effective date ofthe registration statement) any public proceeding orexamination under section 77h of this title.

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declaration of Chris G. Gunderson and its exhibits.

Universal was organized in the State of Delaware on January
16, 1986. It merged into Packaging Plus Services, Inc. (“PPS”),
a Nevada corporation, on April 2, 1986, and filed in the State
of Nevada on June 2, 1986. The Nevada corporation survived the
merger and changed its domicile to the State of Delaware was but
a dormant public company organized on April 8, 1983 as Silver-
Gold Reclamation, Ltd.

On December 19, 1991, PPS filed for reorganization under
Chapter 11, Bankruptcy Code, in the U.S. Bankruptcy Court,
Eastern District of New York (“the Bankruptcy Court”). In re:
Packaging Plus Services, Inc., Debtor, Case No. 191-18486-260
(Hon. Conrad B. Duberstein, U.S. Bankruptcy Judge). Thereafter,
the Bankruptcy Court removed all officers and directorships of
PPS and installed Altomare as its President and Chief Executive
Officer, which positions he continues to hold.

On February 18, 1994, on the Bankruptcy Court confirmed
PPS’s Plan of Reorganization (“the Chapter 11 Plan”).
Thereafter PPS changed its name to Universal Express, Inc., and
Gunderson was appointed as its General Counsel, which position
he has held to this date.
II THE STATUTORY FRAMEWORK

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Three sections of the Bankruptcy Code control the

disposition of this case upon trial by jury, and these

provisions supersede any section of the securities laws of the

United States offered by the Plaintiff. These sections and

§1123, 1125 and 1145.

Section 1123, Bankruptcy Code, 11 U.S.C. §1123, provides in

pertinent part:

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

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

(j) issuance of securities of the debtor…for cash, forproperty, for existing securities, or in exchange for
claims or interests, or forany other appropriate purpose;…(emphasis added)
Section 1125, Bankruptcy Code, 11 U.S.C. § 1125, is

entitled “Post petition disclosure and solicitation” provides in

pertinent part:

(e) A person that solicits acceptance or rejection ofa plan, in good faith and in compliance with theapplicable provisions of this title, or 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 orsold under the plan, of the debtor, of an affiliateparticipating in a joint plan with the debtor, or of a
newly organized successor to the debtor under the

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plan, is not liable, on account of such solicitation
or participation, for violation of any applicable law,
rule, or regulation governing solicitation of
acceptance or rejection of a plan or the offer,
issuance, sale, or purchase of securities.
(emphasis added.


Section 1145, Bankruptcy Code, 11 U.S.C. § 1145, is

entitled “Exemption from Securities Laws” and in pertinent part

provides:

(a) Except with respect to an entity that is anunderwriter as defined in subsection (b) of thissection, section 5 of the Securities Act of 1933 and
any State or local law requiring registration foroffer or sale of a security or registration or
licensing of an issuer of, underwriter of, or brokeror dealer in, a security do not apply to—
(1) the offer or sale under a plan of asecurity of the debtor, of an affiliateparticipating in a joint plan with thedebtor, or of a successor to the debtor
under the plan--
(A) in exchange for a claimagainst, an interest in, or aclaim for an administrative
expense in the case concerning,
the debtor or such affiliate; or
(B) principally in such exchangeand partly for cash or property;
(2) the offer of a security through anywarrant, option, right to subscribe, orconversion privilege that was sold in the
manner specified in paragraph (1) of thissubsection, or the sale of a security uponthe exercise of such a warrant, option,
right, or privilege;

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(3) the offer or sale, other than under aplan, of a security of an issuer other thanthe debtor or an affiliate, if--
(A) such security was owned bythe debtor on the date of the
filing of the petition;
(B) the issuer of such securityis--
(I) required to filereports under section 13or 15(d) of theSecurities Exchange Actof 1934; and
(ii) in compliance withthe disclosure and
reporting provision ofsuch applicable section;
and
(C) such offer or sale is of
securities that do not exceed--
(I) during the two-yearperiod immediatelyfollowing the date ofthe filing of thepetition, four percentof the securities of
such class outstandingon such date; and
(ii) during any 180-dayperiod following suchtwo-year period, onepercent of thesecurities outstandingat the beginning of such180-day period; or
(4) a transaction by a stockbroker in a
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security that is executed after a

transaction of a kind specified in paragraph

(1) or (2) of this subsection in suchsecurity and before the expiration of 40days after the first date on which suchsecurity was bona fide offered to the publicby the issuer or by or through anunderwriter, if such stockbroker provides,
at the time of or before such transaction bysuch stockbroker, a disclosure statementapproved under section 1125 of this title,
and, if the court orders, informationsupplementing such disclosure statement.
(emphasis added)
III THE PLAN’S EXHIBIT “I”

Exhibit “I” to the Chapter 11 Plan, entitled “1994 Stock

Option Plan”, also regularly referred to by Universal as the

“Stock Incentive Plan”, provided in pertinent part:

This Plan shall be known as the “1994 Stock OptionPlan”, (the “Plan”). The purpose of this Plan is toprovide a method to give incentive to those persons orentities who, in the sole and absolute discretion ofthe Board of Directors of Packaging Plus Services,
Inc., a Delaware corporation (“the Company”), are
responsible for the management, growth, and/orprotection of the Company’s business and who are
making and can continue to make substantialcontributions to the success of the Company’s businessincluding, but not limited to, present and futureofficers, directors, employees, consultants,
franchisees and professional advisors of the Companyor any future Parent or Subsidiary.

It is anticipated that the Plan will encourage them toacquire capital stock ownership in the Company, thusgiving them a, or increasing their, proprietaryinterest in the Company, providing them with greaterincentive and encouraging their continuance in theservice, and promoting the interests, of the Company

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and all of its stockholders...
* * * * * * * * *

The shares to be issued upon exercise of options which
are granted pursuant to this Plan shall be madeavailable, at the discretion of the Board ofDirectors, either from the authorized but unissuedshares of Common Stock or from shares of Common Stock
which are reacquired by the Company, including shareswhich are purchased in the open market.

There will be reserved for use upon the exercise ofoptions which may be granted pursuant to this Plan anaggregate of 1,250,000 shares of Common Stock.

* * * * * * * * *

However,

If the number of outstanding shares of Common Stock ofthe Company shall be changed by reason of anyrecapitalization, stock split, or stock dividend, theaggregate number and kind of shares for which optionsmay thereafter be granted under this Plan and thenumber of shares subject to options theretoforegranted under and the price per share payable uponexercise of such options shall be adjusted asdetermined by the Plan Administrators, in their soleand absolute discretion, so as to reflect such change;
provided, however, that no such adjustment shall bemade by reason of the issuance of additional shares ofthe Company for services, property or money regardlessof whether the Company received adequateconsideration.

* * * * * * * * *
And,

Unless sooner terminated, this Plan shall terminate onthe tenth (10th) anniversary date of the earlier of thedate upon which this Plan is adopted or the date uponwhich this Plan is approved by the stockholders of the
Company; provided, however, that all options which are

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granted under this plan shall continue in full forceand effect until terminated in accordance with the
terms and conditions of the options and this Plan.
This Plan will be submitted to the stockholders of the
Company for approval by the holders of a majority ofthe outstanding shares of Common Stock of the Company.
(emphasis added).

IV THE CONFIRMED CHAPTER 11 PLAN

Paragraph VI.F of the confirmed Chapter 11 Plan provided:

The protection afforded by Bankruptcy Code section1125 with regard to the solicitation of acceptances orrejections of the Plan and with regard to the offer,
issuance, sale, or purchase of the Post petitionSenior Secured Notes and the New Common Stock and New
Warrants issued and distributed to the holders of
Claims and Administrative Claims or in connection with
the Plan and the Confirmation Order, shall apply tothe full extent provided by law. The entry of theConfirmation Order shall constitute the determination
by the Bankruptcy Court that Reorganized PPS, PPS, andeach of their respective officers, directors,
partners, employees, members or agents, and eachProfessional Person, attorney, accountant, or otherprofessional employed by any of them, shall have actedin good faith and in compliance with the applicableprovisions of the Bankruptcy Code pursuant toBankruptcy Code section 1125 and the federalsecurities laws. In addition, the exemption from therequirements of section 5 of the Securities Act andany state or local law requiring registration for theoffer or sale of a security provided for in BankruptcyCode section 1145 shall apply to the New Common Stock,
the New Warrants, and the Warrants Shares to be issuedunder the Plan in exchange for any Claim against orinterest in PPS. Entry of the Confirmation Ordershall also constitute an order of the Bankruptcy Courtthat the Debtor has, by virtue of its public filings,
complied with the reporting requirements of theSecurities Act of 1934 through the Effective Date.
Upon Confirmation, however, as a publicly heldcorporation the Debtor remains subject to Securities

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and Exchange Commission reporting requirements and
subsequent to Confirmation of the Plan and theReorganized PPS intends to comply with all periodicreporting requirements including Section 12(g) of theSecurities Exchange Act of 1934. (emphasis added).

V THE GUNDERSON DECLARATION

Attached to these defendants’ motion for partial summary

judgment as Exhibit “A” was the declaration and supplemental

declaration of Gunderson, the contents of which were

incorporated therein and are incorporated herein by reference

(“the Gunderson declaration”). The declaration establishes that

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.

The Plaintiff has not filed of record any evidence to contradict

Mr. Gunderson’s declaration; nor could the Plaintiff offer such

evidence in good faith. Specifically the declaration provides:

5.***The scandal is known as “Stockgate.”

6. The naked short selling manipulationsreached catastrophic financial proportions byJuly 2001, the date of the Universal’s firstmulti-hundred million dollar judgment againstsome involved in its victimization through sucha scheme combined with an advance fee swindle.
The SEC’s exposure in what has already beenpublicly exposed despite its efforts to silenceUniversal, among others, is the result of itsearning a fee on every naked short trade executed,
along with the Depository Trust Clearing Corporation(“DTCC”) and the humongous scope of the scandal
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and the billions of dollars worth of unsettled
naked short trades. The DTCC earned $425
Million in 2003 in revenues from services.
The SEC earned approximately $500 Million in
fees from all executed stock transactions.
The portion each earned from naked shorting
is currently still under investigation.


A very brief sampling of the Stockgate revelations
and condemnations are filed as [Exhibit 3].


7. The instant action is part of the patternof the retaliatory and abusive conduct commencedby the SEC in June 2003 and continues to datethrough this very action. The pattern, however,
did not become apparent to Universal untilFebruary 2004. At that point, the SEC’s Denveroffice had (i) issued no less than twelve subpoenasto the company with return dates as few as twoworking days, all deliverable to Denver, Colorado,
(ii) contacted funders and other business peopleand advised them of the SEC’s request to communicatewith them and “to have their lawyers present duringthe teleconference,” (iii) issued three subpoenasfor testimony of USXP’S chief executive officerand general counsel in Miami, Florida.3 Each subpoenaissued and contact with funders and other persons by theSEC was a reaction to the Universal’s criticism of the
SEC’s handling of the naked short selling crisis.4
3 General counsel resides in New York.

The SEC has incorrectly stated to another federal districtcourt that its investigation preceded Universal’s concerns andcriticisms towards naked short-selling of stock and the SEC’sposition regarding naked short-selling of stock. Universal
first made contact with the SEC regarding naked short-selling ofstock and its effect on the company in January 1998. In
addition, the exhibits to this Declaration confirm the SEC’sawareness of the mind-boggling amount of money the big moneybrokerages, among others, will have to cover when the small-
capitalized companies in the United States continue to demand“delivery of shares at settlement,” and its own responsibilityfor allowing the scandal to go unremedied.

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8. The SEC commenced this action on March 24,2004, twenty-two days following the filing of theaction by Universal against it.5 At the time
Universal filed that action, it did not knowthat the SEC had authorization to file this suit.
9. On information and belief, the SECwent to extraordinary measures to expediteobtaining authorization to file this actionin the Southern District of New York only afterit was put on notice of Universal’s lawsuit.
10. In addition to the forum-shopped civillawsuit it filed against Universal in thisCourt, the SEC requested the United StatesAttorney’s Office to open a criminal investigationin the hopes that the persons involved in the NewYork action will assert their Fifth Amendment
privilege during civil discovery and thereby attemptto take advantage by urging the court to drawnegative inferences therefrom in this civil action.
See Baxter v. Palmigiano, 96 S.Ct 1551 (1976).6
11. Universal, Mr. Altomare and I, however,
have answered all the non-privileged inquiriesposed by the SEC in this action.
12. Publicly available facts prove, amongother things, (i) the Commission ignored theUniversal and others’ repeated voices of concernand increasing public criticism regarding nakedshort selling of stock years before the SEC’sformal order of investigation of Universal,
Mr. Altomare and me was entered because the
Commission has an enormous financial interest
5 The case, now closed, was styled, Universal Express, Inc. v.
Securities and Exchange Commission, United States District Courtfor the Southern District of Florida Case No. 04-20481-CIVJORDAN/
BROWN

Baxter does not go nearly as far as many civil litigatorsbelieve, and, often argue, as a result of its unique and verylimited facts.

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in allowing the continuation of naked shortselling: its revenue of fees from each
transaction (see ¶1 and n. 1 supra); (ii) thenaked short selling of stock has turned intoa nationwide scandal known as “StockGate”
(see http://host.wallstreetcity.com/wsc2/Autoflag.html,
for example Exhibit 3; (iii) by July 2001, theStockgate scandal was well known within the SECto have reached staggering dollar amounts, intothe range of hundreds of billions of dollars; (iv)
the SEC literally “sat on” a proposal initiated outside theCommission to ban naked shorting of stock for almost2 • years, and even currently condones, if not fosters,
delays in implementing material preventative measures;

(v) Universal publicly and openly challenged theCommission before the latter’s purported investigationwas initiated; (vi) Universal’s $389 million courtjudgment victory in July 2001 and later its $137million judgment in April 2003 substantially fuelledthe movement against the SEC and others to ban nakedshorting; and (vii) I believe the SEC’s civil actionin this court is nothing more than a transparentcontrivance to “silence” Universal, the lynchpinof which is a misrepresentation.
13. The SEC’s essential misstatement in this
civil action is its description of Universal’scommon stock issuance to certain persons as“illegal, unregistered…shares.” In support ofits complaint and its ex parte application fora preliminary injunction, the SEC represented thata search of its databases disclosed no registrationsfor the common stock shares in question.
(Decl. Of Hugh Beck at ¶¶12, 13.) What the SEC
did not inform this Court is that the subjectUniversal stock shares were duly and legallyissued and sufficiently registered pursuant to law.
The law involved was not and is not the normal
domain of the SEC, the Securities Act of 1933 andSecurities Exchange Act of 1934, both as amended,
15 U.S.C. et seq. §§77a et seq. and 78a et seq.,
but the United States Bankruptcy Code, 11 U.S.C.
§101 et seq, particularly §§1123, 1125 and 1145.
The SEC had knowledge that the shares in question
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were properly issued pursuant to the 1994 StockOption Plan of Packaging Plus Services, Inc.,
Universal’s former name, but ignored that fact(see Hugh Beck depo).

14. The 1994 Stock Option Plan was part of theReorganization Plan for the company [Exhibit 8],
approved and confirmed by the United StatesBankruptcy Court, Eastern District of New York,
pursuant to Section 1125 of the Bankruptcy Code.
[Exhibit 9]. The filing of the Stock Option Planwas and is a registration statement or itsfunctional equivalent. It was filed with the SEC
as part of the Reorganization Plan [Exhibit 8]
and as a separate exhibit on Form 8-K as a partof the Company’s transition Report 10-KSB for theperiod ending June 30, 1994. Subsequently, andon an annual basis, its has been filed with the SECas an exhibit to the company’s annual 10-KSB reports.
Pursuant to law it is an S-8 registration coveringadvisors and consultants whose future need byUniversal had been determined by the BankruptcyCourt for the long-term development of thecompany (10 years).
15. At all times I, as General Counsel forUniversal, acted in good faith reliance onthe [following] language in Sections 1123 ofthe Bankruptcy Code, 11 U.S.C. §1123, among others:
(a) Notwithstanding any otherwise applicablenon-bankruptcy law, a plan shall
* * *

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

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

16. Once the Bankruptcy Court determinedthat Universal’s Reorganization Plan (the FirstAmended Plan of Reorganization and DisclosureStatement), including the 1994 Stock Option Plancontained “adequate information.” I acted in
good faith reliance on Section 1125 of theBankruptcy Code, which states that once sucha finding is made by the bankruptcy court, noother law or rule governed Universal’s conduct.
11 U.S.C. §1125(d) which says,
‘Whether a disclosure statement requiredunder subsection (b) of this section
contains adequate information is not
governed by any otherwise applicablenonbankruptcy law, rule, or regulation, butan agency or official whose duty is to
administer or enforce such a law, rule, orregulation may be heard on the issue ofwhether a disclosure statement contains
adequate information. Such an agency orofficial may not appeal from, or otherwiseseek review of, an order approving a
disclosure statement.’

See also Section 1145, 11 U.S.C. §1145cited in the motion.

17. The Bankruptcy Court’s determination wasnot and is not appealable by the SEC.
11 U.S.C. §1109(a).
18. Moreover, the company and personsacting for or with it are immune from suitarising from the issuance of securitiesunder the Reorganization Plan and the 1994Stock Option Plan pursuant to the safe harborprovisions of Section 1125(e), which providesin pertinent part:
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A person . . that participates, in goodfaith and in compliance with the applicableprovisions 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 anyapplicable law, rule or regulation governing. . . the offer, issuance, sale, or purchaseof securities. (emphasis added).

Mr. Gunderson also testified unrefuted that the

number of shares of USXP stock that could be issued as

part of the Bankruptcy Code approved Plan could be and

in fact regularly was increased as a result of the

daily recapitalization of the company due to the

unabated, wild naked short selling of the USXP stock

which the SEC ignored for over six (6) years. The

pertinent portions of Gunderson’s testimony include:

A. Shares issued under the stock option planwere to consultants or advisors, were free
trading shares that could be sold by them if theywanted to do that because the 1994 stock optionplan is a functional S8 registration coveringconsultants and advisors as determined by thebankruptcy court.
Q. Where in the plan do you see that it statesthat shares issued to consultants or advisors are
free trading?
A. The plan does not restrict the shares to acertain type of shares as restricted shares.
It’s a question of interpretation of the plan.
And the fact that the plan was filed with theSecurities & Exchange Commission as a functional
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equivalent of an S8 as authorized by the
bankruptcy court in Section 1125, 1112 and 1109of the bankruptcy code.

Q. Do you see Page 2 of the 1994 stock optionplan in Paragraph 3 entitled Stock Subject tothis Plan?
There will be reserve for use, upon theexercise of options which may be granted pursuantto this plan, an aggregate of 1,250,000 shares ofcommon stock?

A. Yes.
Q. Was this plan ever amended to increase thatnumber of shares?
A. The plan is automatically amended under theexpander provision contained in – in the fourthparagraph of Section 3.
Q. And it’s the top of Page 3?
A. Yes.
Q. Were there any records of the number oshares that were automatically – what – increasedunder this plan –-
What is the word you used?

* * *

A. The issuance of shares sold in the name of
the company by those that have sold shares, thenaked shortings in transactions where
transactions are sold by sellers to buyers asshates of the company and in the name of thecompany, are and do constitute an increase in thenumber of outstanding shares of the company, andthat amount of shares issued in the
recapitalization of the company under the nakedshorting situation increases and has resulted in
18



an increase in the company’s outstanding shareson the books of the company issued by the companyfrom treasury.

Q. Were the number of shares authorized by thisplan ever increased because of a stock split?
A.
No.
Q.
Were there the number of shares authorized
by this plan ever increased because of astock dividend?
A.
There were documented dividends that the
company issued.
And those would have increased the
outstanding shares of the company.

Q.
But did it increase the number of shares
that could be issued pursuant to this 1994stock option plan?
A.
The stock dividend might be issued by the
company, would be issued to known
stockholders of the company who hold sharesof the company issued from the company’streasury. And the issuance of a stock
dividend would be for consideration, and
that is that the shareholder, as a valuedshareholder, receives a stock dividend andhis continued shareholding is part of theconsideration of the company.
The shares recapitalized, the outstandingshares of the company that have been
recapitalized as a result of the naked
shorter situation, are shares that have notbeen issued by the company but are issued inthe name of the company and constitute theoutstanding shares of the company in thename of the company, and their multiplier isabout 11 – in excess of 11 of the

19



outstanding shares of the company on thecompany books.

And therefore, the company is entitled toissue additional shares under this expanderprovision to advisors and consultants underthis stock option plan.

Q.
Did you calculate the daily recapitalizationunder the provisions of this 1994 stock
option plan?
A.
The company is unable to ascertain the
amount of shares that have been sold in the
naked shorting situation because the totalamount of outstanding shares that have beenissued by the nake shorting, the company isunable to quantify that at any one time.
* * *

Q.
Did anyone at Universal Express calculate ona daily basis the recapitalization of thestock and apply it to this 1994 stock optionplan?
A.
We were unable to calculate and I was in a
position to calculate the effect on the
company of the naked shorting position ofincreasing an increased outstanding sharesin the market in the name of the companythat were issued in the name of the companybut do not actually exist as shares
certification.
* * *

As a result of that capitalization andbecause the naked shorting situation has
continued unabated, the company is under theposition under the standard clause of thestock option agreement to issue additionalshares to consultants and advisors under the
1994 stock option plan.

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* * *
Gunderson depo sworn to 21 April 2006 at 145-158.

VI ARGUMENT

Because (i) 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, under §§ 1125(e) and 1145(a) of the Bankruptcy
Code, supra, (ii) these Defendants’ actions with respect to
shares issued pursuant to the Plan were in good faith reliance
of the Bankruptcy Court’s confirmation of the Plan; (iii) the
number of shares of the Plan were subject to the Plan’s expander
clause; (iv) the number of shares Universal sold to the
consultants as it did due to the scandalous “naked shorting”
tolerated and even fostered by the SEC and (v) these Defendants
good faith actions are immune from suit pursuant to the
Bankruptcy Code, §1125, they were exempt from the registration
requirements of §§ 5(a) and 5(c) of the Securities Act of 1933,
15 U.S.C. §§ 77e(a) and 77e(c), supra, Universal, Altomare and
Gunderson are entitled to a partial summary judgment dismissing
the Complaint’s First Claim For Relief, and the Plaintiff’s
summary judgment moton must be denied.

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Because these Defendants’ good faith actions inherently
involved questions of fact reserved to the jury, the Plaintiffs’
summary judgment motion as to the first claim also must be
denied.
VII CONCLUSION

The motion of Universal, Altomare and Gunderson for partial
summary judgment of dismissal should be granted and the First
Claim For Relief should be dismissed. The Plaintiff’s motion
for partial summary judgment should be denied.

Respectfully submitted,
TIFFORD & TIFFORD, P.A.
Lead counsel for Universal,
Altomare and Gunderson
1385 N.W. 15th Street
Miami, FL 33125

(305) 545-7822
FAX: (305) 325-1825
BY /S/
ARTHUR W. TIFFORD
(NY ID- 011481)
CERTIFICATE OF SERVICE
I hereby certify that on March 8, 2007, I electronically
filed the foregoing with the Clerk of the Court by using the
CM/ECF System, which will send notice of electronic filing to
the following:

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Julie K. Lutz, Esq.
Attorney for Plaintiff

U.S. Securities and Exchange Commission
Central Regional Office
1801 California Street, Suite 4800
Denver, CO 80202-2648
Robert B. Blackburn, Esq.
Attorney for Plaintiff

U.S. Securities and Exchange Commission
233 Broadway, 11th Floor
New York, NY 10279
Marvin Pickholz, Esq.
Jason Pickholz, Esq.
Akerman Senterfitt LLP
335 Madison Avenue
Suite 2600
New York, NY 10017


John B. Harris, Esq.
Stillman & Friedman
425 Park Avenue
New York, NY 10022


Harry H. Wise, III, Esq.
770 Lexington Avenue, 6th Floor
New York, NY 10021


John A. Hutchings, Esq.
Dill Dill Carr Stonebraker & Hutchings, P.C.
455 Sherman Street, Suite 300
Denver, CO 80203


/S/
ARTHUR W. TIFFORD


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Click Links Below For Easy Navigation:

1. Supreme Court Case
2. 150 Articles: SEC finally admits Naked Short Selling is a HUGE problem and a cause for financial crisis (July 15th, 2008 et. seq-September 15th, 2008 et. seq)
3. Richard Altomare's "Prison Inc." Book Excerpts
4. Universal Express Statement
5. Universal Express Recitation of Facts by General Counsel
6. Brief in Support of USXP Entitlement to Trial by Jury
7. Universal Express Complaint filed against SEC- March 3, 2004
8. USXP Full Page Ad in New York Times
9. Office of Inspector General Semi Annual Report to Congress- March 31, 2008
10. Richard Altomare's Speech on Naked Short Selling
11. USXP Quarterly and Annual Reports
12. Exhibit A and B: Universal Express Press Releases and Published Articles on Naked Short Selling 1998-2007
13. Universal Express Motion for Partial Summary Judgment
14. Supplemental Declaration of Chris G. Gunderson- Nov 13, 2006
15. Universal Express et al Motion for Reconsideration- March 8th, 2007
16. USXP Memo of Law in Support of Motion for Reconsideration
17. Universal's Declaration of General Counsel in Response to SEC's Request for a Receiver