DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 1
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., MANILA
INDUSTRIES, INC., AND MUNISH
KRISHAN,
Plaintiffs,
§
§
§
§
§
§
vs. §
§
JEFFREY BARON and
ONDOVA LIMITED COMPANY,
Defendants,
§
§
§
§
CIVIL ACTION NO. 3-09-CV-0988-F
§
vs. §
§
CHARLA G. ALDOUS, ALDOUS
LAW FIRM, JEFFREY RASANSKY,
and RASANSKY LAW FIRM,
Intervenors.
§
§
§
§
§
§
DERIVATIVE PLAINTIFFS QUANTEC, LLC, IGUANA CONSULTING, LLC,
AND NOVO POINT, LLC NOTICE OF MOTION FOR LEAVE TO FILE
INTERVENTION AND TO AUTHORIZE DISCOVERY, AND
BRIEF IN SUPPORT ON PAGE TWO
USCA5 836
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 2
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
QUANTEC, LLC,
IGUANA CONSULTING, LLC,
and NOVO POINT, LLC,
Derivative Plaintiffs/Intervenors,
§
§
§
§
§
§
v. §
§
JEFF BARON, Individually, and as
Director of ONDOVA LIMITED
COMPANY, MUNISH KRISHAN,
Individually, and as Director
of MANILA INDUSTRIES, INC.,
ONDOVA LIMITED COMPANY,
MANILA INDUSTRIES, INC, et al.,
Defendants in Intervention,
§
§
§
§
§
§
§
§
§
CIVIL ACTION NO. 3-09-CV-0988-F
§
QUANTEC, INC., IGUANA
CONSULTING, INC., and
NOVO POINT, INC.
Derivative Corporations in
Intervention.
§
§
§
§
§
§
§
§
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC,
AND NOVO POINT, LLC NOTICE OF MOTION FOR LEAVE TO FILE
INTERVENTION AND TO AUTHORIZE DISCOVERY, AND
BRIEF IN SUPPORT
USCA5 837
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 3
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES Quantec, LLC, Iguana Consulting, LLC, and Novo Point, LLC
(“Derivative Plaintiffs”) and files this Notice of Motion for Leave to File Intervention
and to Authorize Discovery, and Brief in Support (“Motion”) pursuant to Rule 24(a)(2) of
the Federal Rules of Civil Procedure and in support of this Motion would respectfully
show the Court the following:
I.
FACTUAL BACKGROUND
1.01 On or about July 9, 2009, Derivative Plaintiffs filed their Original Petition
in Intervention in the lawsuit styled Ondova Limited Company, et al. v. Manila
Industries, Inc., et al., bearing Cause No. 06-11717-C which is pending in the 68
th
District Court of Dallas County, Texas. Derivative Plaintiffs filed their Original Petition
in Intervention to prevent the enforcement of a Memorandum of Understanding which is
dated April 25, 2009.
1.02 The Honorable Martin Hoffman provided Derivative Plaintiffs with
knowledge that a similar lawsuit was pending in this Court. Derivative Plaintiffs did not
have this information prior to filing the Original Petition in Intervention in the state court
proceeding.
USCA5 838
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 4
II.
LEGAL JUSTIFICATION FOR ORIGINAL PETITION IN INTERVENTION
2.01 Derivative Plaintiffs claim that this Original Petition in Intervention,
which is attached hereto as Exhibit “A” and incorporated by reference as if fully set forth
at length, is mandatory pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure
because they have an ownership and economic interest in the domain names that are the
subject of this litigation. This Court’s disposing of all the ownership interest of the
domain names pursuant to the Preliminary Injunction, which has not been provided to
Derivative Plaintiffs since it is under seal, will impair and impede Derivative Plaintiffs
ability to protect their ownership interest in this matter.
2.02 In the alternative, Derivative Plaintiffs claim that this Original Petition in
Intervention is permissive pursuant to Rule 24(b)(1)(B) of the Federal Rules of Civil
Procedure because they have a claim that shares with the main action a common question
of law and fact. This Original Petition in Intervention will not unduly delay or prejudice
the adjudication of the original parties’ rights. If the Derivative Plaintiffs cannot
intervene in this pending action, they will be forced to litigate identical issues in other
forums which will create undue expense and delay and duplicity of parties.
2.03 This Motion is supported by this notice, Derivative Plaintiffs’ Original
Petition in Intervention which is attached as Exhibit “A,” the Verification of Mr. Adrian
Taylor which is attached as Exhibit “B,” and all the pleadings, papers, and records on file
in this action.
USCA5 839
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 5
III.
DISCOVERY
3.01 Derivative Plaintiffs request ninety (90) days to serve written discovery
(i.e. Request for Disclosure, Interrogatories, Request for Admissions, and Request for
Production of Documents) to the parties in this litigation.
3.02 Derivative Plaintiffs would also conduct oral depositions of various parties
during this ninety (90) day discovery time period.
3.03 Derivative Plaintiffs request the opportunity to serve discovery requests
and take oral depositions for the following reasons:
(a) The Village Trust and the MMSK Trust (“Trusts”) have not ever
received monthly financial statements or balance sheets from Quantec, Inc., Iguana
Consulting, Inc., or Novo Point, Inc.. The Trusts, as the majority stockholders in these
companies, were entitled to these financial documents. It is the Derivative Plaintiffs
position that these financial documents are being withheld to conceal important financial
information with an intention to defraud the Trusts;
(b) The Trusts have not ever received monthly financial statements or
balance sheets from Simple Solutions, LLC (USVI) f/k/a HCB, LLC, Blue Horizons
Limited Company (USVI) f/k/a Macadamia Management, LLC, or Search Guide, LLC
(USVI) f/k/a Realty Investment Management, LLC. The Trusts, as limited partner
owners through Four Points Management, LLLP, were entitled to these financial
documents. It is the Derivative Plaintiffs’ position that these financial documents are
being withheld to conceal important financial information with an intention to defraud the
Trusts; and
USCA5 840
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 6
(c) It is the Derivative Plaintiffs’ position that Four Points
Management, LLLP intentionally omitted income from the 2007 tax returns and Schedule
K-1’s with an intention to defraud the Trusts.
3.04 Derivative Plaintiffs need the discovery requested herein to support their
causes of action which are outlined in the Original Petition in Intervention.
3.05 In order to fully pursue this Motion in the most efficient manner possible
and in order to ensure that all of the necessary evidence and facts are available,
Derivative Plaintiffs move this Court for leave to authorize discovery. Because discovery
would assist in the orderly and timely resolution of Derivative Plaintiffs’ claims, they ask
that this Court grant their Motion.
IV.
PRAYER
Derivative Plaintiffs respectfully request that the parties take notice of their
Motion, move the Court for leave to intervene and to authorize discovery, and grant the
Original Petition in Intervention as a matter of right pursuant to Rule 24(a)(2) of the
Federal Rules of Civil Procedure
, or in the alternative by permission pursuant to Rule
24(b)(1)(B) of the Federal Rules of Civil Procedure.
Derivative Plaintiffs further move
that on final trial they have judgment against Defendants as outlined in Exhibit “A,”
recovery of reasonable attorneys’ fees, costs of suit, and for such other and further relief,
both general and special, at law or in equity, to which they may show themselves justly
entitled.
USCA5 841
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 7
Dated: July 22, 2009 Respectfully submitted,
CRAIG A. CAPUA
State Bar Card No. 03783950
ROYCE WEST
State Bar Card No. 21206800
_/s/Craig A. Capua
WEST & ASSOCIATES, LLP
P. O. Box 3960
Dallas, Texas 75208-1260
Ofc.: (214) 941-1881
Fax: (214) 941-1399
ATTORNEYS FOR QUANTEC, LLC,
IGUANA CONSULTING, LLC, AND
NOVO POINT, LLC
USCA5 842
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 8
CERTIFICATE OF CONFERENCE
A copy of the Motion at issue has been provided to Ms. Charla G. Aldous and
inquiry was made on the merits of this Motion and whether agreement could be reached.
Ms. Aldous neither agrees nor opposes the Motion. Therefore, the Motion is presented to
the Court for determination.
_/s/Craig A. Capua
Craig A. Capua
CERTIFICATE OF CONFERENCE
A copy of the Motion at issue has been provided to Mr. Jeffrey H. Rasansky and
inquiry was made on the merits of this Motion and whether agreement could be reached.
Mr. Rasansky neither agrees nor opposes the Motion. Therefore, the Motion is presented
to the Court for determination.
_/s/Craig A. Capua_________
Craig A. Capua
CERTIFICATE OF CONFERENCE
A copy of the Motion at issue has been provided to Mr. John W. MacPete and
inquiry was made on the merits of this Motion and whether agreement could be reached.
Mr. MacPete opposes this Motion.
/s/Craig A. Capua
Craig A. Capua
USCA5 843
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 9
CERTIFICATE OF CONFERENCE
A copy of the Motion at issue has been provided to Mr. James Krause and inquiry
was made on the merits of this Motion and whether agreement could be reached.
Mr. Krause neither agrees nor opposes the Motion. Therefore, the Motion is presented to
the Court for determination.
/s/Craig A. Capua
Craig A. Capua
USCA5 844
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC NOTICE OF
MOTION FOR LEAVE TO FILE INTERVENTION AND TO AUTHORIZE DISCOVERY, AND BRIEF IN SUPPORT
PAGE 10
EXHIBIT “A”
USCA5 845
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION
– PAGE 11
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., MANILA
INDUSTRIES, INC., AND MUNISH
KRISHAN,
Plaintiffs,
§
§
§
§
§
§
vs. §
§
JEFFREY BARON and
ONDOVA LIMITED COMPANY,
Defendants,
§
§
§
§
CIVIL ACTION NO. 3-09-CV-0988-F
§
vs. §
§
CHARLA G. ALDOUS, ALDOUS
LAW FIRM, JEFFREY RASANSKY,
and RASANSKY LAW FIRM,
Intervenors.
§
§
§
§
§
§
DERIVATIVE PLAINTIFFS QUANTEC, LLC, IGUANA CONSULTING, LLC,
AND NOVO POINT, LLC ORIGINAL PETITION IN INTERVENTION
ON PAGE TWELVE
USCA5 846
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION
– PAGE 12
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
QUANTEC, LLC,
IGUANA CONSULTING, LLC, and
NOVO POINT, LLC,
Derivative Plaintiffs/Intervenors,
§
§
§
§
§
§
v. §
§
JEFF BARON, Individually, and as
Director of ONDOVA LIMITED
COMPANY, MUNISH KRISHAN,
Individually, and as Director
of MANILA INDUSTRIES, INC.,
ONDOVA LIMITED COMPANY,
MANILA INDUSTRIES, INC, et al.,
Defendants in Intervention,
§
§
§
§
§
§
§
§
§
CIVIL ACTION NO. 3-09-CV-0988-F
§
QUANTEC, INC., IGUANA
CONSULTING, INC., and
NOVO POINT, INC.
Derivative Corporations in
Intervention.
§
§
§
§
§
§
§
§
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC,
AND NOVO POINT, LLC ORIGINAL PETITION IN INTERVENTION
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES Quantec, LLC, Iguana Consulting, LLC, and Novo Point, LLC
(“Derivative Plaintiffs”), and files this Derivative Plaintiffs’ Original Petition in
Intervention (“Derivative Intervention”) pursuant to Rule 24(a) & (b) of the Federal Rules of
USCA5 847
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 13
Civil Procedure, and brings this proceeding in the rights of Quantec, Inc., Iguana
Consulting, Inc., and Novo Point, Inc. (“Derivative Corporations”), as shareholders in the
Derivative Corporations and in behalf of all other shareholders similarly situated, and
files this Derivative Intervention complaining against the Derivative Corporations,
Ondova Limited Company, Jeffrey Baron, Manila Industries, Inc., Munish Krishan,
Simple Solutions, LLC (USVI) f/k/a HCB, LLC, Search Guide, LLC (USVI) f/k/a Realty
Investment Management, LLC, Blue Horizons Limited Company (USVI) f/k/a
Macadamia Management, LLC, Netsphere, Inc., Dennis Kleinfeld, Four Points
Management, LLLP, and Marshden, LLC (sometimes collectively referred to as
“Defendants”), and for cause of action would show the Court the following:
SECTION 1
CONTENTS
Contents 13
Jurisdiction and Venue 14
Parties 15
Shareholder Status and Adequate Representation 19
Irreparable Injury 20
Background Facts 21
Causes of Action 28
Request for Declarative Judgment 28
Rescission 28
Request for Permanent Injunctive Relief 28
Breach of Contract 29
USCA5 848
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 14
Breach of Fiduciary Duty 30
Civil Conspiracy to Commit Fraud 30
Accounting 31
Application for Receivership 31
Exemplary/Punitive Damages 32
Attorney’s Fees 32
Conditions Precedent 33
Jury Demand 33
Prayer 33
SECTION 2
JURISDICTION AND VENUE
2.01 This Court has subject matter jurisdiction pursuant to 28 U. S. C. §1332 as
complete diversity exists among Plaintiffs, Derivative Plaintiffs, Intervenors, and
Defendants, and the amount in controversy exceeds US$75,000.00.
2.02 This Court has personal jurisdiction over Defendants due to the fact that
some are citizens of Texas and continuously do business in this judicial district. Futher,
the Memorandum of Understanding at issue was entered into in this judicial district and a
substantial portion of the performance of the transaction at issue was to take place in this
jurisdiction.
2.03 Exercise of the jurisdiction in this suit comports with the due process
requirements of the U. S. Constitution.
USCA5 849
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 15
2.04 Venue is proper in this Court under 28 U. S. C. § 1391(a) because a
substantial portion of the events, or omissions, giving rise to Derivative Plaintiffs’ claims
occurred in the State of Texas and in this judicial district.
SECTION 3
PARTIES
3.01 Derivative Plaintiff, Quantec, LLC is a limited liability company
organized and existing under the laws of the Cook Islands, with its principal office in
Rarotonga, the Cook Islands.
3.02 Derivative Plaintiff, Iguana Consulting, LLC is a limited liability company
organized and existing under the laws of the Cook Islands, with its principal office in
Rarotonga, the Cook Islands.
3.03 Derivative Plaintiff, Novo Point, LLC is a limited liability company
organized and existing under the laws of the Cook Islands, with its principal office in
Rarotonga, the Cook Islands.
3.04 Defendant, Ondova Limited Company ("Ondova") is a corporation
organized and existing under the laws of the State of Texas, with its principal office
located in Dallas County, Texas. Ondova has appeared in this action.
3.05 Defendant, Jeffrey Baron ("Baron") is an individual citizen of Carrollton,
Texas, who has appeared in this action.
3.06 Defendant, Munish Krishan ("Krishan") is an individual citizen of
California who has appeared in this action.
3.07 Defendant, Manila Industries, Inc. ("Manila") is a corporation organized
under the laws of the State of California, with its principal office in California, which has
USCA5 850
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 16
appeared in this action.
3.08 Defendant, Netsphere, Inc. ("Netsphere") is a corporation organized and
existing under the laws of the State of Michigan, with its principal office in California,
which has appeared in this action.
3.09 Defendant Simple Solutions, LLC ("Simple") is a U.S. Virgin Islands
limited liability company, with its principal place of business in the U.S. Virgin Islands.
The Texas Secretary of State is an agent for service of process upon Simple because
Simple engages in business in Texas but does not maintain a regular place of business in
this state or a designated agent for service of process, and this proceeding arises out of
the business done in Texas and to which Simple is a party. The Secretary of State may be
served on Simple’s behalf with instruction to mail a copy to Simple at its home office
address at Triangle Corporate Services, LLC, #8 Norre Gade, St. Thomas, U. S. Virgin
Islands 00802. Also, pursuant to Fed. R. Civ. P. 5, Simple may be served at the foregoing
address in any manner allowed by any disinterested person competent to make oath of the
fact.
3.10 Defendant HCB, LLC ("HCB") is a Delaware limited liability company,
with its principal place of business in the U.S. Virgin Islands, which can be served at its
Registered Agent, Triangle Corporate Services, LLC, P. O. Box 490, #8 Norre Gade,
Charlotte Amalie, St. Thomas, U. S. Virgin Islands 00804. Also, pursuant to Fed. R. Civ.
P. 5, Blue HCB may be served at the foregoing address in any manner allowed by any
disinterested person competent to make oath of the fact.
3.11 Defendant Realty Investment Management, LLC ("RIM") is a Delaware
limited liability company, with its principal place of business in the U.S. Virgin Islands,
USCA5 851
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 17
which can be served at its Registered Agent, Triangle Corporate Services, LLC, P. O.
Box 490, #8 Norre Gade, Charlotte Amalie, St. Thomas, U. S. Virgin Islands 00804.
Also, pursuant to Fed. R. Civ. P. 5, RIM may be served at the foregoing address in any
manner allowed by any disinterested person competent to make oath of the fact.
3.12 Defendant Denis Kleinfeld ("Kleinfeld") is an individual residing in
Florida who can be served at One SE Third Avenue, Suite 1940, Miami, Florida 33131.
Also, pursuant to Fed. R. Civ. P. 5, Kleinfeld may be served at the foregoing address in
any manner allowed by any disinterested person competent to make oath of the fact.
3.13 Defendant Four Points Management, LLLP ("Four Points") is a U.S.
Virgin Islands limited liability limited partnership. It is subject to personal jurisdiction in
Texas because it has engaged in business here and/or committed a tort here. Thus, it may
be served with citation by serving the Texas Secretary of State, with instruction to mail a
notice copy to Four Points at: 2GA Ridge Road, Estate Nazareth, St. Thomas, U.S. Virgin
Islands 00802. Also, pursuant to Fed. R. Civ. P. 5, Four Points may be served at the
foregoing address in any manner allowed by any disinterested person competent to make
oath of the fact.
3.14 Defendant Marshden, LLC ("Marshden") is a U.S. Virgin Islands limited
liability company. Itt is subject to personal jurisdiction in Texas because it has engaged in
business here and/or committed a tort here. Thus, it may be served with citation by
serving the Texas Secretary of State, with instruction to mail a notice copy to Marshden
at: 2GA Ridge Road, Estate Nazareth, St. Thomas, U.S. Virgin Islands 00802. Also,
pursuant to Fed. R. Civ. P. 5, Marshden may be served at the foregoing address in any
manner allowed by any disinterested person competent to make oath of the fact.
USCA5 852
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 18
3.15 Defendant Search Guide, LLC ("Search Guide") is a U.S. Virgin Islands
limited liability company. It is subject to personal jurisdiction in Texas because it has
engaged in business here and/or committed a tort here. Thus, it may be served with
citation by serving the Texas Secretary of State, with instruction to mail a notice copy to
Search Guide at: 2GA Ridge Road, Estate Nazareth, St. Thomas, U.S. Virgin Islands
00802. Also, pursuant to Fed. R. Civ. P. 5, Search Guide may be served at the foregoing
address in any manner allowed by any disinterested person competent to make oath of the
fact.
3.16 Defendant Quantec, Inc. (“Quantec” and sometimes referred to as a
“Derivative Corporation”) is a U.S. Virgin Islands closely held corporation. It is subject
to personal jurisdiction in Texas because it has engaged in business here and/or
committed a tort here. Thus, it may be served with citation by serving the Texas
Secretary of State, with instruction to mail a notice copy to Quantec at: 2GA Ridge Road,
Estate Nazareth, St. Thomas, U.S. Virgin Islands 00802. Also, pursuant to Fed. R. Civ. P.
5, Quantec may be served at the foregoing address in any manner allowed by any
disinterested person competent to make oath of the fact.
3.17 Defendant Iguana Consulting, Inc. (“Iguana” and sometimes referred to as
a “Derivative Corporation”) is a U.S. Virgin Islands closely held corporation. It is subject
to personal jurisdiction in Texas because it has engaged in business here and/or
committed a tort here. Thus, it may be served with citation by serving the Texas
Secretary of State, with instruction to mail a notice copy to Iguana at: 2GA Ridge Road,
Estate Nazareth, St. Thomas, U.S. Virgin Islands 00802. Also, pursuant to Fed. R. Civ. P.
5, Iguana may be served at the foregoing address in any manner allowed by any
USCA5 853
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 19
disinterested person competent to make oath of the fact.
3.18 Defendant Novo Point, Inc. (“Novo Point” and sometimes referred to as a
“Derivative Corporation”) is a U.S. Virgin Islands closely held corporation. It is subject
to personal jurisdiction in Texas because it has engaged in business here and/or
committed a tort here. Thus, it may be served with citation by serving the Texas
Secretary of State, with instruction to mail a notice copy to Novo Point, Inc. at: 2GA
Ridge Road, Estate Nazareth, St. Thomas, U.S. Virgin Islands 00802. Also, pursuant to
Fed. R. Civ. P. 5, Novo Point may be served at the foregoing address in any manner
allowed by any disinterested person competent to make oath of the fact.
3.19 Defendant Blue Horizons Limited Company f/k/a Macadamia
Management, LLC (“Blue Horizons”) is a U.S. Virgin Islands limited liability company.
It is subject to personal jurisdiction in Texas because it has engaged in business here
and/or committed a tort here. Thus, it may be served with citation by serving the Texas
Secretary of State, with instruction to mail a notice copy to Blue Horizons at: 2GA Ridge
Road, Estate Nazareth, St. Thomas, U.S. Virgin Islands 00802. Also, pursuant to Fed. R.
Civ. P. 5, Blue Horizons may be served at the foregoing address in any manner allowed
by any disinterested person competent to make oath of the fact.
SECTION 4
SHAREHOLDER STATUS AND ADEQUATE REPRESENTATION
4.01 Derivative Plaintiff Iguana Consulting, LLC is the record owner, or
beneficial owner, of shares of Iguana. Derivative Plaintiff Iguana Consulting, LLC
became a shareholder of Iguana by operation of law from the Village Trust and the
MMSK Trust (“Trusts”) entities which were at the time of the acts or omissions made the
USCA5 854
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 20
basis of this proceeding, record owners of shares of Iguana. Derivative Plaintiff Iguana
Consulting, LLC fairly and adequately represents the interests of Iguana and the interests
of other shareholders similarly situated in enforcing the right of Iguana.
4.02 Derivative Plaintiff Quantec, LLC is the record owner, or beneficial
owner, of shares of Quantec. Derivative Plaintiff Quantec, LLC became a shareholder of
Quantec by operation of law from the Trusts which were at the time of the acts or
omissions made the basis of this proceeding, record owners of shares of Quantec.
Derivative Plaintiff Quantec, LLC fairly and adequately represents the interests of
Quantec and the interests of other shareholders similarly situated in enforcing the right of
Quantec.
4.03 Derivative Plaintiff Novo Point, LLC is the record owner, or beneficial
owner, of shares of Novo Point. Derivative Plaintiff Novo Point, LLC became a
shareholder of Novo Point by operation of law from the Village Trust, an entity which
was at the time of the acts or omissions made the basis of this proceeding, the record
owner of shares of Novo Point. Derivative Plaintiff Novo Point, LLC fairly and
adequately represents the interests of Novo Point and the interests of other shareholders
similarly situated in enforcing the right of Novo Point.
SECTION 5
IRREPARABLE INJURY
5.01 Derivative Plaintiffs issued notice to the Derivative Corporations dated
July 9, 2009. Irreparable injury to Quantec, Iguana, and Novo Point is being suffered and
additional injury will result by waiting for the expiration of ninety (90) days from the
date the written demand described in this paragraph was made on these Derivative
USCA5 855
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 21
Corporations, in that officers of these corporations and other named Defendants are
seeking to enforce a Memorandum of Understanding (“MOU”), that has not been
properly executed because it does not have the signatures of the necessary parties. In
addition, the MOU divides many of Quantec, Iguana, and Novo Points’ business assets
and lucrative streams of revenue between various other wholly-owned subsidiaries in a
way that is detrimental to these Derivative Corporations. The Derivative Corporations
will be unable to protect themselves if the assets are divided as agreed by the parties to
the MOU, which includes Quantec, Iguana, Novo Point, and these Derivative
Corporations will suffer irreparable loss of business opportunities, revenue streams, and
market shares in the industry.
SECTION 6
BACKGROUND FACTS
6.01 Mr. Jeffrey Baron (“Baron”) is an individual with a background and
experience in the domain name business. Ondova d/b/a Compana is in the business of
registering domain names to customers throughout the United States. Ondova performs
the services as a bulk domain name accredited registrar, for example, with the Internet
Corporation for Assigned Names and Numbers (“ICANN”). The purpose of registering
the domain names on a centralized database like ICANN allows information to be placed
on the internet so these names can be found by users all over the world. Ondova is hired
by domain name owners to register their names and paid a fee for its service. In return,
Ondova registers the domain names with Verisign, a company which effects the
registration with ICANN. Ondova is owned by Baron.
USCA5 856
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 22
6.02 Krishan is an individual with a background and experience in the domain
name business. Manila is in the domain name registration and monetization business.
Manila is owned by a number of individuals including Krishan.
6.03 Netsphere performs monetization functions for various domain names by
operating webpages associated with the domain names that contain advertising links. A
small fee is paid by advertisers every time a user “clicks” on an advertiser link. This
practice is referred to as “domain name parking.” The click fee paid by advertisers is
very small per individual domain; however, the domain name parking business can
generate substantial revenue if the number of names in the database is large enough. The
information gathered by Netsphere about search behavior of internet users during the
monetization process is intended to provide the basis for the construction of a new search
engine at some point in the future.
6.04 In approximately 2003, Baron and Krishan (sometimes collectively
referred to as “Partners”), began the process of establishing a joint venture in which they
would utilize their respective assets and aptitudes to build first a profitable domain name
parking business, and then later a valuable search engine. In the course of planning for
this partnership, the Partners sought advice on the identification and creation of an asset
protective and tax efficient structure for their business and personal assets to minimize
tax risk and liability. After meetings and much discussion with various attorneys and
accountants, it was decided in approximately November, 2005, that the United States
Virgin Islands Economic Development Program structure (“USVI structure”), which was
recommended by Kleinfeld, was the best program for the Partners. Specifically, Kleinfeld
recommended that the Partners participate in a limited partnership called Four Points,
USCA5 857
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 23
which is a United States Virgin Islands limited liability limited partnership managed by
Marshden, LLC, a company in which Kleinfeld had an ownership interest. Four Points
was qualified as an Economic Development Company; therefore, the process of entering
the Economic Development Program would be easier if the Partners joined this structure
rather than forming their own.
6.05 Three (3) closely held corporations, which are called Quantec, Iguana f/k/a
Octavia Consulting, Inc., and Novo Point f/k/a Loop Corporate Services, Inc. were
formed in the United States Virgin Islands by Four Points for the purpose of facilitating
the Partners’ investment in Four Points.
6.06 It was also recommended by the legal and tax professionals, and concurred
by the Partners, that two (2) trusts be created to own a majority stock interest in Quantec,
Iguana, and Novo Point. Therefore, on December 30, 2005, the Trusts were established.
Both of the Trusts are Cook Islands Trusts. The named trustee of both Trusts is Asiatrust
Limited. The beneficiaries of the Trusts include Baron, Krishan, and family members of
Krishan.
6.07 The Village Trust owned one hundred percent (100%) of the common
stock of Novo Point, fifty percent (50%) of the common stock of Iguana, and fifty
percent (50%) of the common stock of Quantec. The MMSK Trust owned twenty-nine
and three hundred twenty-fifths percent (29.325%) of the common stock of Iguana and
twenty-nine and three hundred twenty-fifths percent (29.325%) of the common stock of
Quantec.
6.08 Quantec, Iguana., and Novo Point purchased limited partnership interests
in Four Points on December 30, 2005. Kleinfeld executed the Four Points Subscription
USCA5 858
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 24
Agreement on behalf of the entities referenced in this paragraph. As part of the purchase,
Quantec, Iguana, and Novo Point, respectively, agreed to make an initial capital
contribution of Ten Thousand Dollars ($10,000) to Four Points, and also agreed to pay a
subscription fee of Thirteen Thousand Three Hundred Fifty Dollars ($13,350) to Four
Points. They also agreed to pay Marshden, as the general partner of Four Points, an
ongoing management fee equal to a percentage of the net taxable income generated by
the Partners’ business on a sliding scale from one percent (1%) to three percent (3%).
6.09 On December 30, 2005, Manila sold to HCB, LLC (USVI) n/k/a Simple
Solutions, which is wholly-owned by Four Points, approximately 529,000 domain names
in exchange for a promissory note secured by the domain names.
6.10 On December 30, 2005, Ondova sold to Macadamia Management, LLC
(USVI) n/k/a Blue Horizons, which is wholly-owned by Four Points, all of its
approximately 2,500 domain names and all referral fee agreements in existence at the
time, in exchange for a promissory note secured by the domain names and the referral fee
agreements.
6.11 On December 30, 2005, Netsphere sold to RIM n/k/a Search Guide, which
is wholly-owned by Four Points, all of its interest in its search engine intellectual
property in exchange for a promissory note secured by the search engine intellectual
property.
6.12 Four Points owns one hundred percent (100%) of Simple Solutions, Blue
Horizons, and Search Guide. This fact is important for two reasons. First, Ondova,
Manila, and Netsphere sold their assets to these three companies. Second, the Trusts own
limited partnership interests in Four Points through their ownership of Quantec, Iguana,
USCA5 859
DERIVATIVE PLAINITFFS QUANTEC, LLC, IGUANA CONSULTING, LLC, AND NOVO POINT, LLC ORIGINAL
PETITION IN INTERVENTION -
PAGE 25
and Novo Point, which are companies managed and controlled by individuals related to
Four Points. Consequently, the Trusts have ownership interests in Simple Solutions,
Blue Horizons, and Search Guide.
6.13 On information and belief, Krishan, Manila, and Netsphere take the
position that a sale of assets to Simple Solutions and to Search Guide did not occur. This
argument is completely untenable because Simple Solutions and Search Guide assumed
ownership and management of the assets sold to them, monetized the domain names,
entered into contracts, and made payments on the promissory notes.
6.14 On information and belief, Four Points and its related individuals and
controlled parties, takes