H. EIGHTH CAUSE OF ACTION: Breach of Fiduciary Duty
494. I, plaintiff John A. Deep (hereinafter, “plaintiff”), repeat and reallege the allegations contained above as if fully stated herein.
495. Defendants were fiduciaries of plaintiff. As such, plaintiff reposed confidence and trust in defendants, authorized defendants to exercise discretionary functions for their benefit, and directly or indirectly relied on defendants’ superior expertise in controlling and financing plaintiff’s business.
496. Defendants accepted and solicited that confidence and trust through virtually uniform misrepresentations in their publicly available materials and communications.
497. As fiduciaries, defendants were obliged to discharge their duties solely in the interests of plaintiff, and specifically to provide independent, unbiased control and finance of plaintiff’s business, find independent, unbiased attorneys and accountants, and accurately disclose the components of compensation and fees paid to Trans World and plaintiff’s Lawyers by Label and Studio Defendants and Boies. The defendants had an obligation to exercise good faith and fair dealing, with full and fair disclosure, care, and loyalty to the interests of plaintiff.
498. Defendants have breached those duties by acting in their own pecuniary interests in disregard of the interests of plaintiff.
499. Defendants have also breached those duties by concealing and failing to disclose that they were being paid on both sides of the transaction and had engaged in illegal promotional allowances, bid rigging, bribes, payments of earn outs and other illicit Agreements.
500. Label and Studio Defendants have breached their fiduciary duties to plaintiff by concealing and embedding payments to Trans World of promotional funds to which plaintiff is entitled.
501. Further, all defendants have breached their fiduciary duties by concealing and failing to disclose the amount of compensation paid by Label and Studio Defendants to Trans World as required by their roles as partners, joint venturors and controlling shareholders in plaintiff’s business.
502. Finally, defendants have breached their fiduciary duties by engaging in sham promotional allowances, stock credits, LSAG earn outs and payments to related third parties as described herein.
503. Defendants are accordingly liable for breach of fiduciary duty to plaintiff for the damages suffered by plaintiff in an amount to be proved at trial.
504. Plaintiff is further entitled to an accounting by defendants with respect to all compensation paid or received by defendants.
I. NINTH CAUSE OF ACTION: Breach of Contract
505. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
506. Trans World entered into contracts with companies and employees, under which Trans World agreed to represent the interests of plaintiff in connection with the procurement of funding and other investment related matters.
507. Trans World breached the terms of its contracts with plaintiff by, inter alia, steering plaintiff to become a dealer for Label and Studio Defendants who agreed to pay kickbacks and undisclosed compensation, and by engaging in sham promotional allowances, bribes to related third parties and bid-rigging, and by steering plaintiff to be a client of Boies, who misappropriated plaintiff’s assets and simultaneously represented Trans World.
508. Plaintiff has performed all conditions precedent under his contract with Trans World.
509. In addition, Label and Studio Defendants have entered into contracts with plaintiff to provide accurate tracking of promotional funds to plaintiff’s dealer business. These contracts provide the promotional rates and the components comprising those rates.
510. Label and Studio Defendants have breached the terms of their contracts by misrepresenting and concealing the amount and nature of compensation paid to Trans World, as factored in to the prices charged to Plaintiff as a dealer.
511. As a result of defendants’ breach of contract or negligence, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
512. Accordingly, defendants are liable to plaintiff for breach of contract or negligence damages in an amount to be proved at trial.
J. TENTH CAUSE OF ACTION: Negligence
513. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
514. Defendants are under a duty to the plaintiff to exercise reasonable care in representing the information about controlling and financing plaintiff’s business as alleged herein, and plaintiff's reliance upon the information is foreseeable.
515. Defendants have knowledge that the information about the control and finance of plaintiff’s business is desired by plaintiff for a serious purpose; that plaintiff intends to rely and act upon it; and that if false or erroneous plaintiff will because of it be deprived of his business and reputation.
516. Finally, the relationship of the parties, arising out of contract or fiduciary duty to control or finance plaintiff’s business, is such that in morals and good conscience plaintiff has the right to rely upon defendants for such information, and defendants owe a duty to give it with care.
517. As a result of defendants’ negligence, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
518. Defendants are accordingly liable to plaintiff for negligence damages in an amount to be proved at trial.
K. ELEVENTH CAUSE OF ACTION: Aiding and Abetting Breach of Fiduciary Duty
519. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
520. Defendants have knowingly induced or participated in the breach of fiduciary duties to plaintiff as alleged herein.
521. As a result of defendants’ aiding and abetting breach of fiduciary duty, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
522. Defendants are accordingly liable to plaintiff for aiding and abetting breach of fiduciary duty damages in an amount to be proved at trial.
L. TWELFTH CAUSE OF ACTION: Conspiracy
523. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
524. Defendants have conspired as alleged herein.
525. As a result of defendants’ conspiracy, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
526. Defendants are accordingly liable to plaintiff for conspiracy damages in an amount to be proved at trial.
M. THIRTEENTH CAUSE OF ACTION: Tortious Interference with Contract or Business Relations
527. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
528. Defendants have interfered with plaintiff’s contract or business relations as alleged herein.
529. Defendants have acted for a wrongful purpose or used dishonest, unfair, or improper means as alleged herein.
530. As a result of defendants’ tortious interference with contract or business relations alleged herein, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
531. Defendants are accordingly liable to plaintiff for tortious interference damages in an amount to be proved at trial.
N. FOURTEENTH CAUSE OF ACTION: Piercing the Corporate Veil
532. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
533. Defendants pierced the corporate veil by exercising complete domination of certain corporations including but not limited to iDeal Ventures LLC, BuddyUSA Inc., AbovePeer Inc., Pi2 Inc., Pi3 Inc. and Pi2 Products LLC, Datamine LLC, LSAG, and their officers and directors, and completely financing and operating the same corporations through the misuse of fraudulent profits paid to those corporations or to related persons and entities while concealing an accounting of their scheme from plaintiff, as alleged herein.
534. Such domination was used to commit a fraud or wrong against the plaintiff as alleged herein.
535. As a result of defendants’ piercing the corporate veil, plaintiff has been deprived of his business and reputation and suffered damages as alleged herein.
536. Defendants are accordingly liable to plaintiff for piercing the corporate veil damages in an amount to be proved at trial.
O. FIFTEENTH CAUSE OF ACTION: Declaratory and Injunctive Relief
537. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
538. Defendants’ scheme and common course of conduct is continuing and will continue unless enjoined by this Court. Boies and Trans World continue to control plaintiff’s business in return for kickbacks paid by Label and Studio Defendants as alleged herein.
539. Label and Studio Defendants continue to charge prices to plaintiff’s business that embed undisclosed or inadequately disclosed promotional allowances and stock credits to Trans World.
540. Plaintiff seeks a judgment declaring that defendants must desist from their illegal practices and scheme and only charge prices that do not include or do not hinge on the payment to Trans World of undisclosed or inadequately disclosed promotional allowances and stock credits and LSAG earn outs. Furthermore, plaintiff seeks a judgment declaring that defendants must desist from their steering practices, distribution of “clears” and bid-rigging arrangements.
541. Plaintiff seeks injunctive relief enjoining defendants from paying or receiving any promotional allowances or stock credits or LSAG earn outs that are not fully disclosed to plaintiff. Plaintiff further seeks injunctive relief enjoining defendants from steering practices on the basis of such allowances or credits. Finally, plaintiff seeks injunctive relief enjoining defendants from engaging in other fraudulent practices, such as distribution of “clears” or bid-rigging.
542. Plaintiff has no adequate remedy at law.
543. By reasons of the foregoing, plaintiff is entitled to declaratory and injunctive relief as set forth above.
P. SIXTEENTH CAUSE OF ACTION: Unjust Enrichment and
Imposition of a Constructive Trust
544. Plaintiff repeats and realleges the allegations contained above as if fully stated herein.
545. As a result of the relationships between the parties and the facts as stated above, a constructive trust should be established over plaintiff’s business, contracts and monies, in the form of payments of any legitimate promotional funds paid by Label and Studio Defendants to Trans World, and payment of LSAG earn outs and litigation support fees paid to Amici LLC, to the extent that the plaintiff’s business, contracts or monies due were obtained or secured by means of defendants’ scheme and common course of conduct.
546. Trans World obtained payments for promotional allowances to which plaintiff is entitled, including without limitation “remuneration based on [TWEC’s] conduct of business within the Scope as set forth in the Business Plan” as alleged herein, and have negligently and fraudulently failed to track and make payments to which the Plaintiff is entitled.
547. Moreover, Label and Studio Defendants received proprietary information about and control over plaintiff’s business which is the result of defendants’ fraudulent scheme, including but not limited to proprietary information about and control over plaintifff’s valuable contract with Trans World, which defendants transferred to the entity MusicNet on or about October 2004.
548. As a result, plaintiff has conferred a benefit on all defendants, and defendants had knowledge of this benefit and have voluntarily accepted and retained the benefit conferred on it, including but not limited to: $10,000,000 – value of LSAG cash flows fraudulently paid by Boies in November 2000 to induce Duker to misappropriate my Aimster assets; $10,000,000 – litigation support fees paid to Amici LLC by Boies clients Tyco and Adelphia for unauthorized use of my assets, beginning in October 2002; $40,000,000 – litigation support fees paid to Amici LLC by other Boies Schiller clients for unauthorized use of my assets beginning in 2003; on or about April 2005, Label and Studio Defendants sold MusicNet for an amount in excess of $25 million dollars, the benefit of which directly resulted from the transfer to MusicNet of plaintiff’s contract with Trans World.
549. Defendants will be unjustly enriched if they are allowed to retain such funds, and, therefore, a constructive trust should be imposed on all monies wrongfully obtained by defendants.
550. Plaintiff has no adequate remedy at law.
551. By reasons of the foregoing, plaintiff has been irreparably harmed and is entitled to imposition of a constructive trust as set forth above
