Re: 10/17/01 - [IFTA] J Group Holdings et al vs. Bondy & Schloss... Infotopia, Inc. (Part 2 of 2)
THE BONDY STOCK SWINDLE
108. On April 3, 2001, the Bondy defendants caused to be filed with the SEC, on behalf of Infotopia, a form SB2 registration covering 272,990,955 shares of Infotopia common stock, then traded on the NASDAQ Bulletin Board under the symbol IFTP (now traded as IFTA). The registration stated that 8.5 million shares were to be registered in the name of and paid to J Group.
109. The SB2 registration also contained shares being registered for Bondy & Schloss LLP, Altea, Hoyng and Zavoral, and was the first revelation to J Group that the Bondy defendants had personal interests in Infotopia. A copy of the relevant pages of this registration statement is attached as Exhibit F.
110. On information and belief, on April 5, 2001, the SEC declared that the SB2 registration was approved, or "effective" in the parlance of the agency. This declaration triggered the 30-day period during which J Group was required to sell its shares in order to qualify for the $500,000 minimum payment guarantee contained in the License Agreement.
111. Although the Bondy defendants were the party to whom the SEC made the declaration that the SB2 registration was effective and although the Bondy defendants had drafted the License Agreement and therefore knew of the limited time during which the sales by J Group could take place in order to protect its rights under the minimum guarantee, they did not inform J Group of the SEC action, nor did they take other actions required of a fiduciary to protect J Group, even though they had insisted on being the sole agent to handle the securities and any moneys resulting from their sale.
112. Indeed, upon information and belief, the Bondy defendants either negligently or through intentional breach of their fiduciary duties due Plaintiffs as their attorneys, did not sell any of Plaintiffs' shares until after the 30 day window had closed. Failure to sell within the 30 day window would invalidate the minimum payment guarantee.
113. The Bondy defendants' failure to sell Plaintiffs' Infotopia shares in a timely manner was based, in part, upon the Bondy defendants' efforts to protect their own financial interests and the interests of other of their clients, including senior executives of Infotopia, who were also selling shares of Infotopia common stock.
114. Infotopia turned over to the Bondy defendants the 8.5 million shares of common stock for the account of J Group, declaring in multiple subsequent SEC registration statements, each drafted and filed by the Bondy defendants, but not shown to J Group, that the stock had a value in excess of $797,000.
115. Rinde sent Schub a stock power and sales agreement under which the 8.5 million shares were to be sold to a named individual for $612,850. Unaware of the higher valuation Infotopia and the Bondy defendants had placed on the stock, Schub promptly signed the documents and returned them to Rinde.
116. The Bondy Defendants had no authority to sell any of Plaintiffs' Infotopia stock for any amount other than $612,850.
117. On or about April 17, 2001, contrary to the SEC SB2 filing, Adler told J Group it would not be getting the stock or the $612,850, but would be given the $500,000 minimum payment guarantee instead. Adler's explanation for his statement was that his client Infotopia "had just read" the provision of the License Agreement that allowed Plaintiff to keep all proceeds of any sale in excess of the minimum payment guarantee and "did not want" Plaintiff to receive the full value of the stock it had registered in Plaintiff's name.
118. The diversion of the proceeds of the sale of SB2 stock is a serious criminal violation of federal securities law.
119. On April 17, 2001, when no proceeds of the sale had been delivered to J Group, it began to inquire of Rinde and Hoyng as to where the promised and badly needed money was. A copy of Plaintiffs' e-mail to Hoyng questioning why J Group was to only receive the $500,000 minimum payment guarantee is attached to this Complaint as Exhibit G.
120. On May 7, 2001, after the 30 day window had expired, Rinde informed J Group the stock had been "sent to the transfer agent" and that he had begun on May 4, 2001 selling the stock at the rate of $25,000 per day, "so as not to hurt the price of the stock."1
121. This declaration was particularly ironic and telling of the Bondy defendants' conflict of interest: on behalf of their client Infotopia they had prepared and filed an SEC Form 4, disclosing that Hoyng, the company chairman, had personally sold 14 million shares of IFTA on April 16, 2001, during the period in which the Bondy defendants should have been selling J Group's stock. In order to sell Infotopia stock on the open market, Honyg had to compete against J Group for buyers.
122. The Bondy defendants never told J Group of the April 16, 2001 sale of Infotopia stock by Honyg, and failed to disclose it to anyone until July 23, 2001, when the Bondy defendants filed the SEC Form 4.
123. During the same period the Bondy defendants as well as their client Altea were presumably selling from their own accounts the 14,647,428 shares they had collectively registered, also in competition with Plaintiff for buyers for this thinly traded penny stock.
124. Sometime during the last week of May 2001, the Bondy defendants finally disbursed $280,383, which they claimed was the total received for the sale of the 8.5 million shares of Infotopia stock.
125. Despite repeated demands for an accounting and for the balance due, alternatively between the $797,230 Infotopia repeatedly in SEC filings has reported the stock was worth, or the $612,850 price for which the Bondy defendants were authorized to sell the shares, and the $280,383 it delivered, the Bondy defendants have only provided one piece of paper, not on firm letterhead, purporting to account for the sale.
126. The single sheet the Bondy defendants provided purports to show that they disbursed the $280,383 to Bondy & Schloss itself, to Rinde and Adler's R&A Group, to Bondy client Altea, and to Eulberg and Schub personally, but nothing at all to J Group. The single sheet is attached to this complaint as Exhibit H.
127. The Bondy defendants have consistently refused all requests for backup documents showing by whom, how and when the stock was sold. Although they have repeatedly promised an accounting and claimed that no money is missing, no such accounting has been provided.
128. When the overdue sums were not delivered to corporate accounts by the Bondy defendants, when the Bondy defendants failed to deliver copies of executed transaction records and corporate documents, and when defendant Infotopia failed to make payments called for under consulting agreements urged, negotiated, and drafted by the Bondy defendants, Plaintiffs again demanded an accounting, and when that demand was refused, Plaintiffs demanded that Bondy & Schloss return all J Group corporate records and files.
129. When the Bondy defendants again refused to provide anything more than the single unsigned sheet of paper, and that page showed more than half a million dollars was missing and unaccounted for, Plaintiffs sought new counsel and terminated the Bondy defendants' representation, yet again demanding an accounting, and that all files be turned over to their new attorney.
130. The Bondy defendants continued to stonewall. They refused to provide any of the demanded documents, asserting they had a lien on the files for unpaid legal fees in spite of the fact that there was no unpaid legal bill, in spite of the fact that each and every one of their bills that had been rendered had been paid in full, and even though the Bondy Defendants had helped themselves to the proceeds of the sale of Plaintiff's Infotopia stock far in excess of any bills rendered for legal services, whether or not any services were actually performed.
INFOTOPIA BREACHES EACH OF THE CONTRACTS
131. Notwithstanding the questions regarding payment and the stock sale, throughout May 2001 Eulberg and Schub diligently proceeded to prepare production plans and promotional materials for the J Group Products and attempted to work with the marketing team at Infotopia, providing samples of existing products and developing new formulations for line extensions.
132. The Infotopia marketing team said its efforts were focused on preparation of an "infomercial" which would be the principal selling tool it would use to market the J Group Products.
133. Infotopia hired an outside consultant, Tonda Mullis ("Mullis") to do market research in furtherance of its sales of the J Group Products.
134. On June 4, 2001, Mullis prepared a report which demonstrated her lack of understanding of the License Agreement. Rather than focusing on the products itself, the Mullis report advised Infotopia that the License Agreement, signed two months earlier, was a bad deal for Infotopia, and that Infotopia would not be able to achieve its minimum sales guarantees. Mullis, in her report, stated that the "agreement needs to have clauses added."
135. Ominously, the consultant report asked, "If Infotopia terminates, how do they recover the $500k?" A copy of the Mullis report is attached to this Complaint as Exhibit I.
136. Within a day of receiving the Mullis report, Infotopia advised the Bondy defendants that the company had misjudged the skin care market, realized that it could not meet the minimum sales requirements of the License Agreement and was determined, with the assistance of the Bondy defendants to get out of the agreement.
137. The next week, in an e-mail dated June 13, 2001, Infotopia advised J Group that it wanted "minor changes" in the License Agreement.
138. Two days later, on June 15, 2001, Infotopia failed to make the third payments due both Schub and Eulberg under their Consulting Agreements. After repeated prodding, the payments were made in the second week of July. They were the last payments of any kind that Infotopia made to Plaintiffs.
139. Plaintiffs e-mailed Rinde on June 19, 2001 advising him as Plaintiffs' attorney that these payments had not been made, and seeking assurances that he had secured and registered additional shares of Infotopia common stock on behalf of J Group, in order to make up the minimum guaranteed payment of $500,000.
140. Rinde, who at the time was secretly acting as General Counsel to Infotopia, responded by e-mail that "the balance of the money for the initial $500,000 is expected shortly. A copy of Rinde's e-mail is attached to this Complaint as Exhibit J.
141. On or about June 21, Adler stated that enough stock had been registered, and was being sold to cover the shortfall.
142. On or about July 1, when neither money nor an accounting had been provided, again Plaintiffs contacted Adler. Adler told them that "the broker had sold the stock" and was "waiting for good certificates."
143. A few days later Adler reported that Rinde and Zavoral had met over the previous weekend and that "Infotopia did not want to go on with the agreements."
144. When J Group asked Adler what was to become of the money in the possession of the broker, representing the proceeds of the sale of the additional shares of Infotopia stock, Adler said J Group would not get the money.
145. On or about July 24, 2001, Rinde stated that Adler had been "mistaken" about the receipt of additional shares for J Group and that Infotopia had not registered additional shares, but that they had made what he characterized as "an arrangement" with an unnamed third party who had registered shares at the same time J Group's shares had been registered, and that this arrangement would have resulted in payment to J Group, except that the contract for the sale of the third party's shares had fallen through.
146. In early August, Plaintiffs, realizing that the Bondy defendants had abandoned them in favor of their other clients, sought new counsel.
147. On August 13, 2001, Plaintiffs demanded that the Bondy defendants immediately deliver the balance due under the agreement for the sale of the 8.5 million shares of the Infotopia stock, cease their conflicting representations, provide full a accounting of the sale of the stock, which was by then more than three months overdue, and deliver all client files to Plaintiffs' new attorney.
148. The Bondy defendants refused each of those demands, although they promised an accounting at some unspecified date.
149. Although continuously unable or unwilling to account for money belonging to Plaintiffs, the Bondy defendants had no such trouble when they believed they were due funds. Within 48 hours of Plaintiffs' demand of August 13, 2001, Adler responded with a demand to J Group for $130,000 on behalf of the Rinde/Adler venture R&A Group, claiming the amount was due on a loan. To this day, Plaintiffs have no documents relating to the purported loan. A copy of the Adler letter on behalf of R&A Group is attached to this Complaint as Exhibit K.
150. In the course of their representation of Plaintiffs, the Bondy defendants violated each of the following sections of the NYCRR and Disciplinary Rules governing the Bar of the State of New York, some of them multiple times:
A. NYCRR §1200.46 (c) (1). Failure to promptly notify a client of the receipt of funds, securities, or other properties in which the client has an interest in violation of DR 9-102 (c).
B. NYCRR §1200.46 (c) (3). Failure to maintain complete records of all funds, securities, and other properties of a client...and render appropriate accounts to the client regarding them.
C. NYCRR §1200.46 (c) (4) Failure to promptly pay or deliver to the client or third person as requested by the client the funds, securities or other properties in the possession of the lawyer which the client or third person is entitled to receive.
D. NYCRR §1200.32 (a) (1) Failure to seek the lawful objectives of the client through reasonably available means permitted by law.
E. NYCRR §1200.32 (a) (3) Commission of actions causing prejudice or damage to the client during the professional relationship.
F. NYCRR §1200.27 (a) (1) Conflict of interest in representing a client in the same or substantially related matter in which that client's interests are materially adverse to the former client's interests in violation of DR 5-108 (a) and (b).
G. NYCRR §1200.24 (a) Conflict of interest, in failing to decline simultaneous employment when the exercise of independent professional judgment is or is likely to be adversely affected, or if it would likely involve representing differing interests, except to the extent permitted.
H. NYCRR §1200.24 (b) Conflict of interest in continuing multiple employment when the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer's representation of another client in violation of DR 5-105 and DR 1-102 (A) (5).
I. NYCRR §1200.23 (a) Conflict of interest in entering into a business transaction with a client with differing interests than those of the client, when the client expects the lawyer to exercise professional judgment for the protection of the client, without full disclosure to the client or proper client consent, in violation of DR 5-101 (a) and DR 5-104 (a).
J. NYCRR §1200.20 (a) Conflict of interest in accepting employment without full disclosure or client consent when exercise of professional judgment on behalf of the client will be or reasonably may be affected by the lawyer's own financial, business, property or personal interests in violation of DR 5-101 (a).
K. NYCRR §1200.3 (a) (1) Violating a disciplinary rule.
L. NYCRR §1200.3 (a) (2) Circumventing a disciplinary rule through the actions of another.
M. NYCRR §1200.3 (a) (3): Neglect of a legal matter within responsibilities of an attorney in violation of DR 6-101 (a) (2), (3).
N. NYCRR §1200.3 (a) (4): Engaging in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of DR 7-102 (a) (8).
O. NYCRR §1200.3 (a) (5): Engaging in conduct prejudicial to the administration of justice.
P. DR 5-103 (b). Offering a client financial advances, loans or guarantees other than the advancement or guarantee of litigation expenses.
Q. DR 4-101(b) (3). Improper use of client information to the disadvantage of the client or for the advantage of the lawyer or a third person, absent informed consent.
R. DR 2-110 (b) (2). Failure to withdraw from representation when lawyer knows or it is obvious that continued employment violates a disciplinary rule.
151. As a firm, Bondy & Schloss LLP is responsible for each of the following violations
of the Disciplinary Rules governing the conduct of lawyers in the State of New York.
A. DR 1-104 (a), (c): failure to supervise lawyers and require conformance to the Disciplinary Rules.
B. DR 1-104 (b): failure to make reasonable efforts to ensure that a lawyer conforms to the Disciplinary Rules.
C. DR 1-104 (d): Responsibility for knowing or failing to know of Disciplinary violations by partners.
152. Each of the multiple violations of each Disciplinary Rule enumerated above contributed to the losses suffered by Plaintiffs or has contributed to additional costs incurred by Plaintiffs in bringing this action.
INFOTOPIA CLAIMS SIGNED CONTRACTS "WERE NEVER CONSUMMATED"
153. On August 22, 2001, Plaintiffs advised Infotopia by a faxed and e-mailed letter that they had received a substantial order from a new retailer, one not listed on Schedule A of the License Agreement, and under the agreement, sought Infotopia's instructions on how to fill that order.
154. The letter also advised Infotopia, pursuant to the License Agreement, that the Bondy defendants had advised that the stock sale had failed to yield the minimum payment guarantee, and requested that Infotopia deliver additional shares pursuant to the guarantee. The letter also demanded payment of the past due consulting fees.
155. Infotopia refused to either provide additional shares or pay the past due consulting fees. By letter, dated August 27, 2001, Infotopia stated that J Group had in unspecified ways breached the License Agreement, which the same letter stated "was never consummated."
156. The letter also said Infotopia was serving notice of its "intent to cancel" the two consulting agreements. A copy of the letter from Infotopia is attached to this Complaint as Exhibit L.
157. Infotopia has not communicated with J Group subsequent to the August 27, 2001 letter.
FIRST CLAIM FOR RELIEF
(Malpractice)
158. Plaintiffs repeat the allegations set forth in paragraphs 1 through 157 above as though they were set fully set forth herein.
159. Gerald Alan Adler and Jeffrey A. Rinde are both attorneys licensed to practice law in the State of New York.
160. The Bondy defendants, two attorneys and the law firm itself, held themselves out as competent, licensed attorneys, and agreed to provide and did provide legal services to Plaintiffs.
161. As Plaintiffs' attorneys, the Bondy defendants were under an obligation to provide Plaintiffs legal services in a competent manner, without conflict of interest, and at all times to protect Plaintiffs' interests.
162. By their actions enumerated above the Bondy defendants have flagrantly breached each of those duties.
163. As a result of the Bondy defendants' actions violating their duties to practice law competently on behalf of Plaintiffs, their clients, Plaintiffs have been damaged in an amount to be determined at trial, but not less than $2,559,000.
SECOND CLAIM FOR RELIEF
(Breach of Fiduciary Duties)
164. Plaintiffs repeat the allegations set forth in paragraphs 1 through 163 above as though they were set fully set forth herein.
165. As attorneys for Plaintiffs, the Bondy defendants owed Plaintiffs a fiduciary duty, including the highest obligations of good faith and fair dealing.
166. By engaging in the foregoing conduct, each of the Bondy defendants has breached its fiduciary duties to Plaintiffs.
167. By reason of the foregoing breaches, Plaintiffs have been damaged in an amount to be determined at trial, but not less than $2,559,000.
THIRD CLAIM FOR RELIEF
(Fraud)
168. Plaintiffs repeat the allegations set forth in paragraphs 1 through 167 above as though they were set fully set forth herein.
169. In order to convince Plaintiffs to accept the deal with Infotopia, the Bondy defendants stated that Infotopia "never took on products that they couldn't sell at a rate of $20 million per year" and that most of the Infotopia products grossed $50 million per year.
170. Since the Bondy defendants prepared Infotopia's SEC filings including quarterly and annual financial statements they knew or should have known at the time they made the statements that those statements were untrue.
171. In order to convince Plaintiffs to accept the deal with Infotopia, the Bondy defendants stated that Infotopia's Chairman, Honyg, was "stock smart" and that Plaintiffs would "make a killing" on the stock.
172. Since the Bondy defendants knew that Infotopia was at the time planning a reverse split, taking 200 shares for ever one the company issued, they knew or should have known that Infotopia was in serious financial difficulty and that the stock was highly likely to decline in value, and that, therefore, their statements were untrue.
173. The Bondy defendants and Infotopia intentionally withheld from Plaintiffs the information that the Bondy defendants served as General Counsel to Infotopia.
174. The Bondy defendants also intentionally withheld from Plaintiffs the information that the Bondy defendants were engaged in trading in Infotopia stock at the same time as they urged Plaintiffs to accept payment under the Licensing Agreement in Infotopia stock.
175. Plaintiffs, without knowledge of Defendants' material misrepresentations and omissions described above, and believing Defendants' statements to be true and complete, entered into the transactions in reasonable reliance upon Defendants' aforesaid representations and statements.
176. Plaintiffs would not have entered into the transactions absent Defendants' false and misleading statements.
177. By engaging in the foregoing knowingly fraudulent conduct Defendants have damaged Plaintiffs J Group, Eulberg and Schub in an amount to be determined at trial, but not less than $2,559,000.
178. Such conduct by licensed attorneys as well as by companies offering stock to the public constitutes conduct evincing evil and reprehensible motives which should be punished in order to deter defendants and others like them from engaging in such egregious and morally reprehensible conduct.
179. Such willful, gross conduct demonstrates such wanton dishonesty as to imply a criminal indifference to its civil obligations, and therefore Defendants should be punished by an award of punitive damages to Plaintiff in an amount to be determined at trial, but not less than $5.5 million.
FOURTH CLAIM FOR RELIEF
(Conversion)
180. Plaintiffs repeat the allegations set forth in paragraphs 1 through 179 above as though they were set fully set forth herein.
181. The Bondy defendants engaged in transactions in which they disposed of 8.5 million shares of stock paid to J Group in an unauthorized fashion.
182. The Bondy defendants further engaged in willful unauthorized exercise of dominion or control over property of J Group including its corporate documents and stock certificates, in defiance of the superior possessory right of J Group and its duly constituted officers.
183. By virtue of the foregoing improper and unethical conduct, Plaintiffs have been damaged in an amount to be determined at trial but not less than $332,467.
FIFTH CLAIM FOR RELIEF
(Breach of the Licensing Agreement)
184. Plaintiffs repeat the allegations set forth in paragraphs 1 through 183 above as though they were set fully set forth herein.
185. Effective March 30, 2001, defendant Infotopia and Plaintiffs entered into the Licensing Agreement.
186. Plaintiffs fully performed their duties under the Licensing Agreement, except as excused by Infotopia's non-performance.
187. Infotopia failed to make required payments under the Licensing Agreement. By reason of the foregoing breaches Plaintiffs have been damaged in an amount to be determined at trial, but not less than $1,719,617.
SIXTH CLAIM FOR RELIEF
(Breach of the Eulberg Consulting Agreement)
188. Plaintiffs repeat the allegations set forth in paragraphs 1 through 187 above as though they were set fully set forth herein.
189. Effective March 30, 2001, defendant Infotopia and Plaintiff Eulberg entered into one of the Consulting Agreements.
190. Eulberg fully performed his duties under the Consulting Agreement, except as excused by Infotopia's non-performance.
191. Infotopia without any excuse or justification has failed to make required payments under the Consulting Agreement.
192. By reason of the foregoing breaches Eulberg has been damaged in an amount to be determined at trial, but not less than $420,000.
SEVENTH CLAIM FOR RELIEF
(Breach of the Schub Consulting Agreement)
193. Plaintiffs repeat the allegations set forth in paragraphs 1 through 192 above as though they were set fully set forth herein.
194. Effective March 30, 2001, defendant Infotopia and Plaintiff Schub entered into one of the Consulting Agreements.
195. Schub fully performed her duties under the Consulting Agreement, except as excused by Infotopia's non-performance.
196. Infotopia has, without any excuse or justification, failed to make required payments under the Consulting Agreement.
197. By reason of the foregoing breaches Schub has been damaged in an amount to be determined at trial, but not less than $420,000.
EIGHTH CLAIM FOR RELIEF
(Bad Faith in Contract Dealings)
198. Plaintiffs repeat the allegations set forth in paragraphs 1 through 197 above as though they were set fully set forth herein.
199. Infotopia was obligated under New York law to follow a course of good faith and fair dealing in its dealings with Plaintiffs.
200. By engaging in the foregoing conduct, Infotopia has breached its obligations of good faith and fair dealing, causing damage to Plaintiffs J Group, Eulberg and Schub in an amount to be determined at trial, but not less than $2,559,000.
201. By willfully refusing to honor agreements reached by their own top executives and memorialized in contracts drafted by their own attorneys, Infotopia has evinced evil and reprehensible motives which should be punished in order to deter defendants and others like them from engaging in such egregious and morally reprehensible conduct.
202. As a result of Infotopia's willful, gross conduct demonstrating such wanton dishonesty as to imply a criminal indifference to its civil obligations, Infotopia should be punished by an award of punitive damages to Plaintiff in an amount to be determined at trial, but not less than $5.5 million.
NINTH CLAIM FOR RELIEF
(Promissory Estoppel)
203. Plaintiffs repeat the allegations set forth in paragraphs 1 through 202 above as though they were set fully set forth herein.
204. Commencing on or about March 23, 2001, Infotopia and the Bondy defendants made promises to J Group that were designed to induce, and induced, J Group to cease independent efforts to market its products.
205. These promises included promises to provide funds to pay creditors and suppliers, and to pay for production needed to fill orders and service existing accounts.
206. The Bondy defendants repeatedly promised J Group that funds were on the way or would be provided soon.
207. J Group reasonably relied on Infotopia's and the Bondy defendants' assurances that they would live up to their obligations regarding the payments and the License Agreement, and that they would make reasonable efforts to meet minimum sales requirements.
208. Eulberg and Schub devoted substantial efforts and time to developing products and marketing plans for the products. In further reliance on Infotopia's promises, they turned over to Infotopia orders from retail outlets, which went unfilled.
209. J Group, Eulberg and Schub have each been damaged directly and foreseeably by their reasonable reliance on Infotopia's and the Bondy defendants' promises, in that orders have gone unfilled and sales lost and that Infotopia has refused to make payments required under each of its three contracts with Plaintiffs.
210. By reason of the foregoing, Plaintiffs have been damaged in an amount to be determined at trial, but not less than $6,000,000.
RELIEF REQUESTED
WHEREFORE, Plaintiffs J Group Holdings, Inc., Julius Eulberg and Jane Schub demand judgment against defendants Bondy & Schloss LLP, Gerald Alan Adler, Jeffery A. Rinde, R&A Group Holdings, Inc. and Infotopia, Inc, as follows:
A. On the First Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $2,559,000;
B. On the Second Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $2,559,000;
D. On the Third Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $2,559,000, and punitive damages in an amount not less than $5,500,000;
D. On the Fourth Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $332,467;
E. On the Fifth Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $1,719,617;
F. On the Sixth Claim for Relief, awarding damages to Julius Eulberg in an amount not less than $420,000;
G. On the Seventh Claim for Relief, awarding damages to Jane Schub in an amount not less than $420,000;
H. On the Eighth Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $2,559,000 and punitive damages of not less than $5,500,000;
I. On the Ninth Claim for Relief, awarding damages to J Group Holdings, Inc. in an amount not less than $6,000,000; and
J. Ordering that any contract or other agreement granting R&A Group Holdings, and/or the Bondy Defendants either individually or as a group any interest of any kind in J Group Holdings, Inc. be reformed to cancel or invalidate such a grant of interest;
K. Ordering the Bondy defendants to immediately hand over to J Group Holdings any and all J Group corporate records, stock certificates and/or files in their possession; and
L. Granting such other and further relief as this Court deems just and proper, including interest from the date any sums are deemed to have been due, reasonable attorney fees and the costs and disbursements of this action.
Plaintiffs hereby demand a jury trial.
The undersigned, an attorney licensed to practice in the Courts the State of New York, represents Plaintiffs, and herebys swear that all statements made in this Complaint are true to the best of his knowledge.
Dated: New York, New York
October 17, 2001
By: ___________________
David A. Browde
Attorney for Plaintiffs
176 Broadway
New York, NY 10038
(212) 791-0319
1 The Bondy defendants, who, as of the date of this filing, more than six months after this claimed sale have not produced any credible documentation of it, subsequently claimed that they had begun selling stock a day earlier, on May 3, 2001. Absent an accounting, Plaintiff has no way to resolve the conflict in the Bondy defendants' verbal assertions.
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