NINTH COUNTERCLAIM AND SEVENTH THIRD-PARTY COMPLAINT
(Against ITEX, The Exchange, The Directors, and The Governors)
Injunction
126.Plaintiff realleges, and incorporates by reference, paragraphs 1 through 124.
127.ITEX, The Exchange, The Directors, and The Governors have engaged in unlawful trade practices, fraud, securities fraud, and securities violations relating to the operation, management, financial liabilities, and disclosure requirements of The Exchange, and the offering of unregistered securities, causing irreparable injury and economic damage to French.
128.ITEX and The Directors have engaged in securities fraud and other securities violations relating to the offering of unregistered securities of ITEX, causing irreparable injury and economic damage to French.
129.Unless ITEX and The Exchange, The Directors, and The Governors are enjoined from further violations of ORS 646, ORS 78, and ORS 59 as described herein, French will incur further irreparable damage.
130.Unless ITEX and The Directors are enjoined from further violations of ORS 59 as described herein, French will incur further irreparable damage.
131.French has no adequate remedy at law.
EIGHTH THIRD-PARTY COMPLAINT
(Against The Exchange)
Receivership
132.Plaintiff realleges, and incorporates by reference, paragraphs 1 through 130.
133.The Exchange, ITEX, The Directors, and The Governors, have in the past, and now continue and will continue, to engage in unlawful trade practices and unlawful securities practices as alleged herein through its operation of The Exchange; as a result, injuries will occur to The Exchange to the extent of, but not limited to, the following circumstances:
a.The Deficit, which now exceeds $50,000,000.00, will continue to inflate to the injury of all persons, including French, which belong to, and conduct commerce through, The Exchange.
b.The Exchange, ITEX, and The Governors, are now, and will continue, to remove assets from The Exchange, increasing The Deficit beyond the existing $50,000,000.00, to the detriment and injury of French and the other members of The Exchange.
c.The Exchange, ITEX, and The Governors, are now, and will continue in, failing to monitor the condition of The Exchange and The Deficit, and will therefore fail to take such remedial action as necessary, such as restoring assets, to correct this situation.
d.The Exchange, ITEX, and The Governors, are now, and will continue in, failing to disclose to French and existing and prospective new members the existence of The Deficit, and the detrimental impact and injury The Deficit causes to French, and the commerce of French, and to other members of The Exchange, and to new members which ITEX recruits into the exchange, and the fact that French and the other members of The Exchange collectively suffer a $50,000,000.00 liability caused by ITEX, The Governors, and The Exchange.
e.ITEX will continue to recruit new members into The Exchange, causing the new members to invest into the exchange to fulfill on the credits held by existing members of the exchange, operating what is commonly known as a "Ponzi scheme".
134.Unless a receiver is appointed, to take charge of property and business of The Exchange during the pendency of the within civil action and upon judgment herein, to manage and/or dispose of the business and assets of The Exchange as the court may direct, then such assets and business will become further harmed and dissipated, thereby causing further irreparable damage to Plaintiff and the members of the Exchange.
135.Plaintiff has no adequate remedy at law.
WHEREFORE, having fully answered Plaintiffs' Fourth Amended Complaint, and having alleged his Counterclaims and Third-Party Complaint, French prays judgment that:
1.Plaintiffs ITEX and Norris take nothing thereby their Fourth Amended Complaint, and all Claims for Relief incorporated therein, and that French be awarded his costs of suit, and attorney fees if any, herein; and
2.On the First Counterclaim, that Defendant French be awarded judgment in his favor and against Plaintiffs for special and general damages in an amount to be determined at trial, but not less than $224,500.00, and for his costs of suit, and attorney fees if any, herein; and
3.On the Second Counterclaim and First Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $224,500.00, and for his costs of suit, and attorney fees if any, herein; and
4.On the Third Counterclaim and Second Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $190,000.00, and for his costs of suit, and attorney fees if any, herein; and
5.On the Fourth Counterclaim and Third Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $130,000.00, and for his costs of suit, and attorney fees if any, herein; and
6.On the Fifth Counterclaim and Fourth Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $500,000.00, and for his costs of suit, and attorney fees if any, herein;
7.On the Sixth Counterclaim, that Defendant French be awarded judgment in his favor and against Plaintiffs for his costs of suit, and attorney fees if any, herein;
8.On the Seventh Counterclaim and Fifth Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $130,000.00, and for his costs of suit, and attorney fees if any, herein;
9.On the Eighth Counterclaim and Sixth Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants for special and general damages in an amount to be determined at trial, but not less than $130,000.00, and for his costs of suit, and attorney fees if any, herein;
10.On the Ninth Counterclaim and Seventh Third Party Complaint, that Defendant French be awarded judgment in his favor and against Plaintiffs and Third-party Defendants enjoining and restraining
a.ITEX, The Directors, The Exchange, and The Governors from any future violations of ORS 646, ORS 59 and ORS 78; and
b.The Exchange and The Governors from any future violations of ORS 59 and ORS 78;
and for his costs of suit, and attorney fees if any, herein;
11.On the Eighth Third-Party Complaint, that Defendant French be awarded judgment in his favor and against Third-party Defendants that the court appoint a receiver to look after and control, and/or dissolve the assets of The Exchange, and to award French for his costs of suit, and attorney fees if any, herein;
12.For such other and further relief as the court deems just and equitable under the circumstances and evidence provided.
DATED: September 7, 1999.
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Les L. French, Defendant, Counterclaimant andThird-Party Plaintiff, Pro se |
