Affinity Fraud- Bankruptcy Fraud- Squeeze-Out- Fraudulent Transfer

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January 21, 2013 by jllafitte

The Bernard Madoff Ponzi scheme started mainstream awareness of the crime referred to as Affinity Fraud. The Sec has warned about these crimes, in which a member of an ethic or religious group preys on his own.

My story is a scheme by two fraternity brothers, in which I lost $200,000 and was left to pay the bills after they did a Squeeze-out to remove me followed by a Fraudulent Transfer to avoid creditors. Transferring the company back to themselves after they defaulted on a loan to the FF&E lender, General Electric Finance Corp, for $1.1 million.

I will call my brothers, T-Boy and Boudreaux, and our company “Scam Your Brother” planed to open six Thibodaux’s restaurants.

The year was 1998, T-boy I knew for twenty-five years before he recruited me to invest in Scam Your Brother. Boudreaux I had known for fifteen years. Boudreaux called it the Boudreaux and T-Boy increase their net worth by $13,000,000 each Business Plan.

Under the plan neither Boudreaux nor T-Boy would put any money into the company or if they did, they would get it out right away. I was soliciated to invest $200,000 with expectatiobs of an 100% annual return starting in year five. “Investor Expectations must be met” the operating agreement read.

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22 thoughts on “Affinity Fraud- Bankruptcy Fraud- Squeeze-Out- Fraudulent Transfer

  1. jllafitte says:

    I have created this site for a several reasons:
    1. To create awareness of Affinity Fraud.
    2. To give those who become prey an case history into the the thought process and actions of how the predators work and what options they have.
    3. For feedback; I continue to find terms used to describe the actions of T-Boy and Boudreaux and different legal options that still might exist or mistakes that were made along the way such as: Squeeze-Out Merger and Bustout Bankrputcy Fraud,
    5. For those who write laws to consider what laws need to written or changed to protect citizens. It was after the stock market crash of 1933 that Congress passed the Uniform Securities Act and other laws to protect citizens.
    6. For those studying law enforcement to understand how to apply the numerous codes that have been written to protect citizens.

  2. jllafitte says:

    From Wikipedia, the free encyclopedia AFFINITY FRAUD includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster’s ruse.

    These scams exploit the trust and friendship that exist in groups of people who have something in common. Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. Victims often fail to notify authorities or pursue their legal remedies, and instead try to work things out within the group. This is particularly true where the fraudsters have used respected community or religious leaders to convince others to join the investment.

    Many affinity scams involve “Ponzi schemes” or pyramid schemes, where new investor money is used to make payments to earlier investors to give the illusion that the investment is successful. This ploy is used to trick new investors to invest in the scheme and to lull existing investors into believing their investments are safe and secure. In reality, the fraudster almost always steals investor money for personal use. Both types of schemes depend on an unending supply of new investors; when the inevitable occurs, and the supply of investors dries up, the whole scheme collapses and investors discover that most or all of their money is gone.

    [edit] Examples

    Affinity frauds can target any group of people who take pride in their shared characteristics, whether they are religious, ethnic, or professional. Agencies such as U.S. Securities and Exchange Commission have investigated and taken action against affinity frauds targeting a wide spectrum of groups.[1] Some of the cases include the following:
    The slavery reparations scam.
    On November 16, 2007, Michael Owen Traynor a Bradenton, Florida, investment broker, who had found many of his clients though his church and private school social circles, was arrested on a first degree felony grand theft charge that he had stolen $6.5 million from his investors. It is believed Traynor stole funds from at least 34 clients in Sarasota, Manatee and Hillsborough counties between 2001 and February 2007. Traynor was subsequently sentenced to 12 years in Florida state penitentiary.
    “Armenian-American community loses $19 Million”: The SEC’s complaint alleges that this affinity fraud targeted Armenian-Americans with little investment experience, for some of whom English was a second language.
    “Criminal charges against South Florida man for $51.9 million fraud”: African American victims of this investment scheme were guaranteed that their investments would generate a 30% risk-free and tax-free annual return.
    “‘Church Funding Project’ costs faithful investors over $3 Million”: This nationwide scheme primarily targeted African-American churches and raised at least $3 million from over 1000 investing churches located throughout the United States. Believing they would receive large sums of money from the investments, many of the church victims committed to building projects, acquired new debt, spent building funds, and contracted with builders.
    “Baptist investors lose over $3.5 Million”: The victims of this fraud were mainly African-American Baptists, many of whom were elderly and disabled, as well as a number of Baptist churches and religious organizations located in a number of states. The promoter (Randolph, who was a minister himself and who is currently in jail) promised returns ranging between 7 and 30%, but in reality was operating a Ponzi scheme. In addition to a jail sentence, Randolph was ordered to pay $1 million in the SEC’s civil action.

  3. jllafitte says:

    11 USC § 523 – Exceptions to Bankruptcy discharge

    (a)A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—
    (A)false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
    (B)use of a statement in writing—
    (i)that is materially false;
    (ii)respecting the debtor’s or an insider’s financial condition;
    (iii)on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
    (iv)that the debtor caused to be made or published with intent to deceive; or
    (4)for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
    (6)for willful and malicious injury by the debtor to another entity or to the property of another entity;
    10)that was or could have been listed or scheduled by the debtor in a prior case concerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge, or was denied a discharge under section 727(a)(2), (3), (4), (5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of such Act;
    (11)provided in any final judgment, unreviewable order, or consent order or decree entered in any court of the United States or of any State, issued by a Federal depository institutions regulatory agency, or contained in any settlement agreement entered into by the debtor, arising from any act of fraud or defalcation while acting in a fiduciary capacity committed with respect to any depository institution or insured credit union;
    (19)that—
    (A)is for—
    (i)the violation of any of the Federal securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), any of the State securities laws, or any regulation or order issued under such Federal or State securities laws; or
    (ii)common law fraud, deceit, or manipulation in connection with the purchase or sale of any security; and
    (B)results, before, on, or after the date on which the petition was filed, from—
    (i)any judgment, order, consent order, or decree entered in any Federal or State judicial or administrative proceeding;
    (ii)any settlement agreement entered into by the debtor; or
    (iii)any court or administrative order for any damages, fine, penalty, citation, restitutionary payment, disgorgement payment, attorney fee, cost, or other payment owed by the debtor.

  4. jllafitte says:

    Journal of Forensic & Investigative Accounting
    Vol. 2, Issue 3, Special Issue, 2010
    75
    The Bankruptcy Reform Act and Bankruptcy Fraud: Implications and Opportunities for CPAs
    Katherine Barker
    Nicole Forbes Stowell
    Charlie Polansky
    Daniel Kieffer*

    The most common types of bankruptcy frauds involve concealment of assets and false or
    incomplete statements provided by debtor. According to the FBI, 70% of all bankruptcy crimes
    involve both of these schemes and are hard to separate since concealment of assets automatically
    assumes false or incomplete statements. Individuals filing bankruptcy inherently do not want to
    surrender all of their assets. It is common for individuals to omit jewelry, pieces of art, real
    estate, and stock (United States Trustee Manual, Volume 5: “Bankruptcy Fraud & Abuse
    Enforcement Program”). Another common concealment of assets is the debtor’s omission on
    bankruptcy filings of foreign bank accounts or interest received from foreign bank accounts

    A “bustout” is a fairly common bankruptcy fraud scheme. It is a planned bankruptcy
    scheme and often occurs when a company is actually set up to fail. The business first establishes
    a good credit history by paying bills promptly. Having established a good credit rating, the
    business then obtains excessive amounts of merchandise on credit with no intention of paying
    creditors. The business quickly sells the merchandise and the owner pockets the cash. The
    business then files for bankruptcy relief and the creditors are unable to locate any assets.
    Although many bustout schemes involve a start-up company, these schemes can also
    involve an existing, reputable firm with good credit. Fraudsters use the existing firm’s good
    reputation and credit history to obtain excessive amounts of inventory. The fraudsters then
    renege on the payments to the suppliers and sell merchandise to other illegitimate businesses.
    The end result is a bankruptcy with no assets.

    Credit Card Bustouts: Individuals contemplating bankruptcy run up large consumer
    credit card debt and then file bankruptcy. The purchases and cash advances occur
    within a short period of time. Frequently, the same individual files bankruptcy several
    times, using false social security numbers and aliases. Or the fraudulent perpetrator
    assumes another person’s name or social security number. False statements are
    usually made on credit applications, and the assets acquired from the fraud are
    concealed when the bankruptcy is filed. T-Boy had $430,000.00 in Credit Card debt on his 2003 Bankruptcy.

  5. jllafitte says:

    Freeze-out merger
    From Wikipedia, the free encyclopedia

    It has been suggested that this article or section be merged into squeeze out. (Discuss) Proposed since September 2010.

    A freeze-out merger is a technique by which one or more shareholders who collectively hold a majority of shares in a corporation gain ownership of remaining shares in that corporation.

    The majority shareholders incorporate a second corporation, which initiates a merger with the original corporation. The shareholders using this technique are then in a position to dictate the plan of merger. They force the minority stockholders in the original corporation to accept a cash payment for their shares, effectively “freezing them out” of the resulting company.

    The legal community has criticised the present rules with regard to freeze-out mergers as being biased against the interests of the minority shareholders. For example, if a gain in stock value is anticipated by the majority, they can deprive the frozen-out minority of its share of those gains.[1]

    David Fox
    Kirkland & Ellis LLP
    601 Lexington Avenue
    New York, NY 10022

    Under prior Delaware decisions, including an arguably controlling and
    inconsistent Delaware Supreme Court decision (Kahn v Lynch), a freeze-out merger was always subject to the entire fairness standard and use of procedural safeguards, such as a majority of the minority vote or a special committee, only served to shift the burden of proof regarding fairness from the subsidiary target to the plaintiffs alleging the unfairness of the transaction.

  6. jllafitte says:

    Minority Freeze-Out Transactions Revisited
    Law360, New York (September 07, 2010) — It is not uncommon for controlling stockholders of U.S. publicly listed corporations to engage in minority freeze-out transactions — that is, the acquisition by the controlling stockholder of the interest in the corporation held by the minority stockholders.
    The acquisition is typically accomplished by either a one-step merger or a two-step transaction comprising a tender offer followed by a short-form merger once the controlling stockholder has acquired 90 percent of the target corporation.
    Minority freeze-out transactions have been closely scrutinized by Delaware courts in light of the inherent conflict of interest between the controlling and minority stockholders in these transactions.

  7. jllafitte says:

    11 USC § 548 – Fraudulent transfers and obligations
    (a)
    (1)The trustee may avoid any transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of the debtor in property, or any obligation (including any obligation to or for the benefit of an insider under an employment contract) incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—

  8. jllafitte says:

    RE: Revere’s Warrant Application on Thomas, Boudreaux, and Pierre
    1 page petition of Codes violated.

    Revere lost $240,000 in this Affinity Fraud/ Ponzi Scheme and asks you to reconsider your dismissal for hearing his Citizens Warrant on grounds of Jurisdiction and Statute of Limitations. He have thousands of pages of exhibits, eight depositions (four taken in Fulton County), two declarations (prepared in Fulton County), and emails from Pierre in December 2012 to support my allegations. This appeal is limited to one page-a more detailed appeal is posted at http://www.AffinityFraud.wordpress.com. In 2008 the New Orleans FBI and 2011 the San Jose FBI declared the case too small for then to investigate. In 2012 the New Orleans DA citied Federal Court.

    Jurisdiction: Code 17-2-1. (1) The crime is committed either wholly or partly within the state; The 2003 and 2004 tax returns of SYB, LLC were filed by Chief Operating Officer and 34.25% owner, Pierre, who used his home in Fulton county as the company office. Pierre sold the home on 2009. He has been living in Florida. Meetings between Boudreaux and Revere took place in Atlanta. Meetings between Thomas, Boudreaux, and Pierre to discuss the default to GE Capital took place in Atlanta.

    Tolling the Statute of limitations: 2003-2006 Pierre & Boudreaux with Thomas consulting, violated Georgia Code 17-14-17 Fraudulent Sale to avoid creditors and 18-2-74 Fraudulent Transfer. SYB, LLC owed money to Revere and GE Finance Corp- assets were transferred to a lienor (Second Line) in 2004 and back to Pierre* in 2006. In March 2003, Boudreaux drafted a plan and consulted with his accountant to sell SYM, LLC to a third party, be hired with a partner to manage SYM, LLC and be able to buy in back. RICO has 5 years. In 2003 T-Boy filed a Bustout Bankruptcy Fraud for $12,000,000, in 2006 Thomas and Boudreaux company Bayou Electronics lost a $1M lawsuit to Aurora Phones, and in Dec 2007 T-Boy swore he was still bankrupt. 11 USC § 523 – Exceptions to discharge
    Any of three separate causes justify tolling the statute of limitations:
    GA Code 9-3-94 Removal of Defendant from State- time defendant is removed from GA shall not count in his favor. Pierre acquired Jaguarville Restaurant from Second Line in March 2006 and resides in Florida. He is removed from the state of Georgia, since approximately 2006.

    GA Code 9-3-96 Tolling of limitations for Fraud of defendant. If defendant deters plaintiff, the period of limitation shall run only from the time of discovery of fraud. Thomas, Boudreaux, and Pierre deterred Lafitte in numerous ways. Pierre stated: “I don’t recall” 160+ times in his deposition…. Boudreaux refused to provide annual financial returns from 1999-2004. The 1998 was misleading enough for the Accountant to put a disclaimer on it….. Boudreaux swore he had loaned Lafitte’s money to B&C to get a better interest rate, when he actually transferred Lafitte’s funds to his other business, Falcon violating 16-4-2,3,4 for Theft and 10-5-51 Omitting a material fact in selling a security. Gaston refused to provide B&C and Falcon books to verify Boudreaux’s declaration or answer questions. … Boudreaux swore he had paid in full a $250,000 loan Lafitte made to SYB, LLC at 10% yet SYB, LLC records show $12,000.00 in due to funds. SYBLLC only paid Lafitte interest of less than $5,000.00 despite having funds for more than a year… Other examples to deter exist, but a 1 page limitation does not permit. Boudreaux (swore in declaration) and Pierre refused to answer questions regarding that transfer of Jaguarville to Secondline resulted from a “loan default”. Boudreaux emailed his Accountant the Second Line loans were forgiven. Boudreaux and Pierre concealed from REvere that Boudreaux sold/pledged to sell (34.25%) stock to Pierre in August 2003. Cases tolling: State v. Brannon 154 GA App 285, 267, S.E. 2d 888 Tolled until time known by victim…….Adams v. State 231, GA App 279, 499, S.E. 2d 105 Tolled until victim and state first learned of offense….Revere did not learn of crimes 16-8-2,3,4,8 ; 18-2-74; 14-9-105, 502; 14-8-34, 16-9-51, 53; 23-2-52,53; until 2012.

    A conspiracy continues until the objectives of the conspiracy succeed or are abandoned per US Supreme Court decisions Kissel 218 U.S. 601 and Grunewald 353 U.S. 391. In 2000 Boudreaux drafted a plan to remove $13,000,000 in assets from Thomas, before Thomas filed bankruptcy in 2003. Pierre assisted with the removal. Lafitte still has claims against Thomas deterred by Pierre’s 2012 emails sent to Revere in Atlanta on the Bankruptcy Fraud, Contribution, and Breach of Fiduciary. Pierre still operates Jaguarville restaurant denying Lafitte $40-50,000 a year in dividends. The conspiracy of Pierre, Boudreaux, and Thomas to use Revere’s funds for their Atlanta restaurants and conceal the transfer still exists. GA Code 16-14-4,5,8; 14-9-105, 502; 14-8-34, 16-9-51, 53; 23-2-52,53; 14-2-1202; 9-11-37

    Boudreaux-T-boy Affinity Fraud Conspiracy. In Jan 1998 T-boy was showing Revere annual returns of $300,000 for the MCI Knoxville restaurant. In Feb Lafitte wanted to invest in Falcon, LLC for Atlanta -both were capitalized at over $600,000. Boudreaux drafted a Plan stating “investor expectations of 100% annual returns MUST be met”. Boudreaux’s scheme was for T-Boy to recruit his friends and receive huge commissions: For recruiting Lafitte, T-Boy received $86.500.00 in stock value. Boudreaux also received $86,500.00 in stock value. These outrageous commissions were achieved by omitting to tell Revere that the Capitalization Sentence of the Operating Agreement was deleted. Boudreaux’s cover letter stated the Agreement was the same as Falcon, which required all partners to pay for their equity. Boudreaux also deleted a sentence in Section 9 prohibiting him from selling all the assets of the company without unanimous approval. Seven years later he sold assets of the company to Second Line. 14-2-621

  9. jllafitte says:

    17-2-1. Jurisdiction over crimes and persons charged with commission of crimes generally

    (a) It is the policy of this state to exercise its jurisdiction over crime and persons charged with the commission of crime to the fullest extent allowable under, and consistent with, the Constitution of this state and the Constitution of the United States.

    (b) Pursuant to this policy, a person shall be subject to prosecution in this state for a crime which he commits, while either within or outside the state, by his own conduct or that of another for which he is legally accountable, if:

    (1) The crime is committed either wholly or partly within the state;

    (2) The conduct outside the state constitutes an attempt to commit a crime within the state; or

    (3) The conduct within the state constitutes an attempt to commit in another jurisdiction a crime under the laws of both this state and the other jurisdiction.

    (c) A crime is committed partly within this state if either the conduct which is an element of the crime or the result which is such an element occurs within the state. In homicide, the “result” is either the act which causes death or the death itself; and, if the body of a homicide victim is found within this state, the death is presumed to have occurred within the state.

    (d) A crime which is based on an omission to perform a duty imposed by the law of this state is committed within the state, regardless of the location of the accused at the time of the omission.

  10. jllafitte says:
    • 20 + GA Codes Violated: • 10-5-51 Fraud in the sale of a security Partnerships are not exempt from State notification & law • 10-5-51. Fraud or deceit unlawful; adoption of rule (a) It is unlawful for a person that advises others for compensation, either directly or indirectly, or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities: (1) To employ a device, scheme, or artifice to defraud another person; or (2) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person. (b) A rule adopted under this chapter may define an act, practice, or course of business of an investment adviser or an investment adviser representative, other than a supervised person of a federal covered investment adviser, as fraudulent, deceptive, or manipulative and prescribe means reasonably designed to prevent investment advisers and investment adviser representatives, other than supervised persons of a federal covered investment adviser, from engaging in acts, practices, and courses of business defined as fraudulent, deceptive, or manipulative. (c) A rule adopted under this chapter may specify the contents of an investment advisory contract entered into, extended, or renewed by an investment adviser. • 16-4-8. Conspiracy to commit a crime A person commits the offense of conspiracy to commit a crime when he together with one or more persons conspires to commit any crime and any one or more of such persons does any overt act to effect the object of the conspiracy. A person convicted of the offense of criminal conspiracy to commit a felony shall be punished by imprisonment for not less than one year nor more than one-half the maximum period of time for which he could have been sentenced if he had been convicted of the crime conspired to have been committed, by one-half the maximum fine to which he could have been subjected if he had been convicted of such crime, or both. A person convicted of the offense of criminal conspiracy to commit a misdemeanor shall be punished as for a misdemeanor. A person convicted of the offense of criminal conspiracy to commit a crime punishable by death or by life imprisonment shall be punished by imprisonment for not less than one year nor more than ten years. • Dynalectric, • Our analysis of the relevant cases begins with United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168 (1910), the seminal Supreme Court case interpreting the criminal statute of limitations in the context of an antitrust conspiracy. Justice Holmes, writing for the Court, concluded that a conspiracy can have “continuance in time.” 218 U.S. at 610, 31 S.Ct. at 127. Holmes explained that a criminal conspiracy continues in time beyond the initial conspiratorial agreement until the objectives of the conspiracy either are abandoned or succeed. • To determine the extent to which a conspiracy continues over time, we must determine the objectives of the conspiracy. In any given case, the limits of a conspiracy to restrain trade depend on what the conspirators agreed to do. As the Supreme Court explained in Grunewald v. United States, 353 U.S. 391, 397, 77 S.Ct. 963, 970, 1 L.Ed.2d 931 (1957), “the crucial question in determining whether the statute of limitations has run is the scope of conspiratorial agreement for it is that which determines both the duration of the conspiracy and whether the act relied on as an overt act may properly be regarded as in furtherance 1564*1564 of the conspiracy.” In short, Kissel and Grunewald teach that a conspiracy continues until the objectives of the conspiracy succeed or are abandoned and that to determine the objectives of any given conspiracy, the court must look to the conspiratorial agreement For example, in United States v. Helmich, 704 F.2d 547 (11th Cir.), cert. denied, 464 U.S. 939, 104 S.Ct. 353, 78 L.Ed.2d 317 (1983), the defendant was convicted of conspiracy to commit espionage. He transmitted classified information in 1964 to the Soviet Union and attempted to collect his compensation from the Soviets in 1980. He was indicted in 1981. Helmich argued that the indictment was barred by the five-year statute of limitations for criminal conspiracies because the transmittal of defense information was the only substantive crime under the espionage statute. He argued that getting paid for his efforts was not illegal, thus the 1980 collection attempt could not be the subject of a prosecution for conspiracy to commit espionage. Id. at 549. The court rejected this argument, explaining that “the legal as well as the illegal aspects of an agreement are all part of a conspiracy to commit an illegal act for statute of limitations purposes.” Id.; see also United States v. Mennuti, 679 F.2d 1032, 1035-36 (2d Cir.1982) (Conspiracy to commit mail fraud continued until the conspirators received their payoffs, even though the payoffs themselves were not illegal under the mail fraud statute. Thus, the five-year statute of limitations was not violated when the substantive mail fraud offense was committed in December 1975, the payoff was received in July 1976, and the indictment was returned in February 1981.); United States v. Walker, 653 F.2d 1343, 1348-50 (9th Cir.1981), Koury v. United States, 217 F.2d 387, 388 (6th Cir.1954) (“A conspiracy is not ended by the illegal transportation of a stolen car when the fruits of the transportation are yet to be obtained and divided by the conspirators.”); United States v. Xheka, 704 F.2d 974, 987 (7th Cir.), cert. denied, 464 U.S. 993, 104 S.Ct. 486, 78 L.Ed.2d 682 (1983) (18 U.S.C. § 371 conspiracy to destroy building with explosives continued after the building was destroyed until conspirators either received the economic benefits (insurance proceeds) that motivated the crime or abandoned their claim). The Helmich court distinguished Grunewald on the same basis as we do in this opinion: the concealment efforts in Grunewald were not an objective of the conspiratorial agreement, whereas the compensation Helmich received from the Soviets clearly was part of a conspiratorial agreement to commit espionage, even though the payments were not received until sixteen years after he actually spied for the Soviets. Analogously in this case, even if we assume that the contract payments and the payments made pursuant to the joint venture agreement were not in restraint of trade, they clearly were objectives of the conspiracy to restrain trade. Thus, the statute of limitations did not begin to run until these objectives were achieved or abandoned. • 16-14-8 Conspiracy/ RICO- Bankruptcy Fraud, Money Laundering, Wire and Mail Fraud, • We note that there are several post-McNally cases whose language might be interpreted to require proof of actual loss (i.e., proof that the scheme to defraud actually succeeded) to support a mail fraud conviction. See, e.g., United States v. Evans, 844 F.2d 36, 39 (2d Cir.1988) (“If a scheme to defraud must involve the deceptive obtaining of property, the conclusion seems logical that the deceived party must lose some money or property.”); • See United States v. Young Bros., Inc., 728 F.2d at 689 (court sustained mail fraud conviction in bid rigging context where defendant claimed that the mailings were not sufficiently closely related to the scheme to defraud; the court reasoned that mailing a payoff to a coconspirator after the rigged bids were submitted was sufficient because “it reasonably can be inferred that [the defendant] would not have agreed to the scheme on behalf of his company without being paid.”); United States v. Rodgers, 624 F.2d at 1310 (mail fraud conviction upheld where victim mailed to defendants the final payment of a contract obtained by rigged bids; the court concluded that “[t]he scheme would have been meaningless, incomplete, and futile without final award and payment which were accomplished through the mail. Clearly, the 1578*1578 mails were used `in furtherance’ of the scheme.”). • 16-14-4. Prohibited activities (a) It is unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money. (b) It is unlawful for any person employed by or associated with any enterprise to conduct or participate in, directly or indirectly, such enterprise through a pattern of racketeering activity. (c) It is unlawful for any person to conspire or endeavor to violate any of the provisions of subsection (a) or (b) of this Code section. 16-14-5. Criminal penalties for violation of Code Section 16-14-4 (a) Any person convicted of the offense of engaging in activity in violation of Code Section 16-14-4 is guilty of a felony and shall be punished by not less than five nor more than 20 years’ imprisonment or the fine specified in subsection (b) of this Code section, or both. (b) In lieu of any fine otherwise authorized by law, any person convicted of the offense of engaging in conduct in violation of Code Section 16-14-4 may be sentenced to pay a fine that does not exceed the greater of $25,000.00 or three times the amount of any pecuniary value gained by him from such violation. (c) The court shall hold a hearing to determine the amount of the fine authorized by subsection (b) of this Code section. (d) For the purposes of subsection (b) of this Code section, “pecuniary value” means: (1) Anything of value in the form of money, a negotiable instrument, a commercial interest, or anything else, the primary significance of which is economic advantage; or (2) Any other property or service that has a value in excess of $100.00. • 16-8-3 Theft by deception- omission of facts to induce investment -Partnership Agreement w/o Cap • 16-8-3. Theft by deception (a) A person commits the offense of theft by deception when he obtains property by any deceitful means or artful practice with the intention of depriving the owner of the property. (b) A person deceives if he intentionally: (1) Creates or confirms another’s impression of an existing fact or past event which is false and which the accused knows or believes to be false; (2) Fails to correct a false impression of an existing fact or past event which he has previously created or confirmed; (3) Prevents another from acquiring information pertinent to the disposition of the property involved; (4) Sells or otherwise transfers or encumbers property intentionally failing to disclose a substantial and valid known lien, adverse claim, or other legal impediment to the enjoyment of the property, whether such impediment is or is not a matter of official record; or (5) Promises performance of services which he does not intend to perform or knows will not be performed. Evidence of failure to perform standing alone shall not be sufficient to authorize a conviction under this subsection. (c) “Deceitful means” and “artful practice” do not, however, include falsity as to matters having no pecuniary significance, or exaggeration by statements unlikely to deceive ordinary persons in the group addressed. • 16-8-4Theft by conversion Larceny using someone’s funds for your own purpose. 16-8-4. Theft by conversion (a) A person commits the offense of theft by conversion when, having lawfully obtained funds or other property of another including, but not limited to, leased or rented personal property, under an agreement or other known legal obligation to make a specified application of such funds or a specified disposition of such property, he knowingly converts the funds or property to his own use in violation of the agreement or legal obligation. This Code section applies whether the application or disposition is to be made from the funds or property of another or from the accused’s own funds or property in equivalent amount when the agreement contemplates that the accused may deal with the funds or property of another as his own. • 16-8-2 Theft by taking- being in lawful possession thereof, unlawfully 16-8-2. Theft by taking A person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated appropriates 3rd person singular present of ap•pro•pri•ate (Verb) 1. Take (something) for one’s own use, typically without the owner’s permission. • • 16-8-16 Theft by Extortion • 14-9A-130. Penalty for fraud Every partner who shall work any fraud in the affairs or business of a limited partnership shall be guilty of a misdemeanor • 14-8-34. Liability of partners to copartners for actions following dissolution of partnership Subject to contrary agreement of the partners, each partner is liable to his or her copartners for his or her share of any liability created by any partner acting for the partnership after dissolution as if the partnership had not been dissolved; provided, however, that a partner shall not be liable to the partner acting for the partnership after dissolution where: (1) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; (2) The dissolution being by the death of a partner, the partner acting for the partnership had knowledge or notice of the death; (3) The dissolution is not by the act or death of a partner; or (4) The liability is for a debt or obligation for which the partner is not liable as provided in subsection (b) of Code Section 14-8-15. • 14-9A-129, 130 Fraudulent Transfer sale of assets of a Partnership • 14-9A-129. Fraudulent sale, assignment, or transfer of property void (a) Every sale, assignment, or transfer of any of the property or effects of a limited partnership made by such partnership when insolvent or in contemplation of insolvency or made after or in contemplation of the insolvency of any partner, with the intent of giving a preference to any creditor of such partnership or insolvent partner over other creditors of such partnership or insolvent partner; and every judgment confessed, lien created, or security given by such partnership under the like circumstances and with the like intent shall be void as against the creditors of such partnership. (b) Every such sale, assignment, or transfer of any of the property or effects of a general or special partner who may have become liable as a general partner made by such general or special partner when insolvent or in contemplation of insolvency or made after or in contemplation of the insolvency of the partnership, with the intention of giving to any creditor of his own, or of the partnership, a preference over creditors of the partnership; and every judgment confessed, lien created, or security given by any such partner under like circumstances and with like intent shall be void as against the creditors of the partnership. (c) Any special partner who shall violate any provision of subsections (a) and (b) of this Code section or who shall concur in, or assent to, any such violation by the partnership or by any individual partner shall be liable as a general partner. • 14-2-1620. Financial statements for shareholders – annual reports not produced after 1998 • (a) Not later than four months after the close of each fiscal year and in any case prior to the annual meeting of shareholders, each corporation shall prepare (1) a balance sheet showing in reasonable detail the financial condition of the corporation as of the close of its fiscal year and (2) a profit and loss statement showing the results of its operation during its fiscal year. Upon request in writing or by electronic transmission, the corporation promptly shall mail to any shareholder of record a copy of the most recent balance sheet and profit and loss statement. If prepared for other purposes, the corporation shall also furnish upon request in writing or by electronic transmission a statement of sources and applications of funds and a statement of changes in shareholders’ equity for the fiscal year. If financial statements are prepared by the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared and disclose that they are prepared on that basis. If financial statements are prepared otherwise than on the basis of generally accepted accounting principles, they must so disclose and must be prepared on the same basis as other reports or statements prepared by the corporation for the use of others. (b) If the annual financial statements are reported upon by a public accountant, his report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation’s accounting records: (1) Stating his reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and (2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year. • 14-2-1621. Other reports to shareholders– expense reports of directors • § 14-2-1621. Other reports to shareholders If a corporation indemnifies or advances expenses to a director under Code Section 14-2-851, 14-2-852, 14-2-853, or 14-2-854 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders’ meeting. • 14-2-621. Issuance of shares– the consideration received or to be received for shares to be issued is adequate • c) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable, and the authorization by the board of directors of the issuance of shares constitutes such determination. • 14-8-34. Liability of partners to copartners for actions following dissolution of partnership Subject to contrary agreement of the partners, each partner is liable to his or her copartners for his or her share of any liability created by any partner acting for the partnership after dissolution as if the partnership had not been dissolved; provided, however, that a partner shall not be liable to the partner acting for the partnership after dissolution where: (1) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; (2) The dissolution being by the death of a partner, the partner acting for the partnership had knowledge or notice of the death; (3) The dissolution is not by the act or death of a partner; or (4) The liability is for a debt or obligation for which the partner is not liable as provided in subsection (b) of Code Section 14-8-15. • 14-9-502. Promise to contribute; liability for contribution • 14-2-1401. Dissolution by incorporators or initial directors • 14-9-105. Records to be kept The cash and property to be contributed by each partner to the capital of the partnership • 14-9-303. Liability A limited partner is not liable for the obligations of a limited partnership by reason of being a limited partner • 14-8-34. Liability of partners to copartners for actions following dissolution of partnership Subject to contrary agreement of the partners, each partner is liable to his or her copartners for his or her share of any liability created by any partner acting for the partnership after dissolution as if the partnership had not been dissolved; provided, however, that a partner shall not be liable to the partner acting for the partnership after dissolution where: (1) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; (2) The dissolution being by the death of a partner, the partner acting for the partnership had knowledge or notice of the death; (3) The dissolution is not by the act or death of a partner; or (4) The liability is for a debt or obligation for which the partner is not liable as provided in subsection (b) of Code Section 14-8-15. • 16-10-20 Perjury (a) A person to whom a lawful oath or affirmation has been administered commits the offense of perjury when, in a judicial proceeding, he knowingly and willfully makes a false statement material to the issue or point in question. (b) A person convicted of the offense of perjury shall be punished by a fine of not more than $1,000.00 or by imprisonment for not less than one nor more than ten years, or both. A person convicted of the offense of perjury that was a cause of another’s being imprisoned shall be sentenced to a term not to exceed the sentence provided for the crime for which the other person was convicted. A person convicted of the offense of perjury that was a cause of another’s being punished by death shall be punished by life imprisonment. • 16-8-16. Theft by extortion (a) A person commits the offense of theft by extortion when he unlawfully obtains property of or from another person by threatening to: (3) Disseminate any information tending to subject any person to hatred, contempt, or ridicule or to impair his credit or business repute; • 16-10-72 Subordination of Perjury – Witnesses or false swearing A person commits the offense of subornation of perjury or false swearing when he procures or induces another to commit the offense of perjury or the offense of false swearing and, upon conviction thereof, shall be punished by a fine of not more than $1,000.00 or by imprisonment for not less than one nor more than ten years, or both. • 16-10-93. Influencing witnesses (a) A person who, with intent to deter a witness from testifying freely, fully, and truthfully to any matter pending in any court, in any administrative proceeding, or before a grand jury, communicates, directly or indirectly, to such witness any threat of injury or damage to the person, property, or employment of the witness or to the person, property, or employment of any relative or associate of the witness or who offers or delivers any benefit, reward, or consideration to such witness or to a relative or associate of the witness shall, upon conviction thereof, be punished by imprisonment for not less than one nor more than five years. • 17-14-17 Fraudulent sale to avoid creditors (a) The state or the victim of a crime may institute an action against an offender pursuant to Article 4 of Chapter 2 of Title 18, the “Uniform Fraudulent Transfers Act,” to set aside a transfer of real, personal, or other property made voluntarily by the offender on or after the date of the crime committed by the offender against the victim with the intent to: (1) Conceal the crime or the fruits of the crime; (2) Hinder, delay, or defraud any victim; or (3) Avoid the payment of restitution. • 23-2-51. Fraud as actual or constructive (a) Fraud may be actual or constructive. (b) Actual fraud consists of any kind of artifice by which another is deceived. Constructive fraud consists of any act of omission or commission, contrary to legal or equitable duty, trust, or confidence justly reposed, which is contrary to good conscience and operates to the injury of another. (c) Actual fraud implies moral guilt; constructive fraud may be consistent with innocence. • • 23-2-20. Which accidents relievable in equity Capital Contribution & Buy/ Sell • An accident relievable in equity is an occurrence, not the result of negligence or misconduct of the party seeking relief in relation to a contract, as was not anticipated by the parties when the contract was entered into, which gives an undue advantage to one of them over another in a court of law. • 23-2-52. Misrepresentation as legal fraud Misrepresentation of a material fact, made willfully to deceive or recklessly without knowledge and acted on by the opposite party or made innocently and mistakenly and acted on by the opposite party, constitutes legal fraud. • 23-2-25. Form of conveyance contrary to intent If the form of conveyance is, by accident or mistake, contrary to the intention of the parties in their contract, equity shall interfere to make it conform thereto. • 23-2-135. Damages when specific performance impossible • 23-2-31. Rescission for unilateral mistake of fact Equity will not reform a written contract unless the mistake is shown to be the mistake of both parties; but it may rescind and cancel upon the ground of mistake of fact material to the contract of one party only. • 5-5-20. Verdict/ Ruling contrary to evidence and justice • 9 -11-60. Relief from judgments Equity will not reform a written contract unless the mistake is shown to be the mistake of both parties; but it may rescind and cancel upon the ground of mistake of fact material to the contract of one party only. • 9-3-96 Tolling for Fraud If the defendant or those under whom he claims are guilty of a fraud by which the plaintiff has been debarred or deterred from bringing an action, the period of limitation shall run only from the time of the plaintiff’s discovery of the fraud. • • • 17-1-4. Vacation of judgments, verdicts, rules, or orders obtained by perjury Any judgment, verdict, rule, or order of court which may have been obtained or entered shall be set aside and be of no effect if it appears that the same was entered in consequence of corrupt and willful perjury. It shall be the duty of the court in which the verdict, judgment, rule, or order was obtained or entered to cause the same to be vacated upon motion and notice to the adverse party; but it shall not be lawful for the court to do so unless the person charged with perjury shall have been duly convicted thereof and unless it appears to the court that the verdict, judgment, rule, or order could not have been obtained and entered without the evidence of the perjured person, saving always to third persons innocent of such perjury the rights which they may lawfully have acquired under the verdict, judgment, rule, or order before the same shall have been actually vacated. • 51-6-1. Right of action for fraud accompanied by damage Fraud, accompanied by damage to the party defrauded, always gives a right of action to the injured party • 23-2-58. Confidential relations defined Any relationship shall be deemed confidential, whether arising from nature, created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith, such as the relationship between partners, • 16-2-22. Criminal responsibility of corporations) A corporation may be prosecuted for the act or omission constituting a crime only if: (1) The crime is defined by a statute which clearly indicates a legislative purpose to impose liability on a corporation, and an agent of the corporation performs the conduct which is an element of the crime while acting within the scope of his office or employment and in behalf of the corporation; or (2) The commission of the crime is authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment in behalf of the corporation. 16-14-4. Prohibited activities: (a) It is unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, including money. 16-14-3. Definitions As used in this chapter, the term: (1) “Alien corporation” means a corporation organized under laws other than the laws of the United States or the laws of any state of the United States. (2)(A) “Beneficial interest” means either of the following: (i) The interest of a person as a beneficiary under any other trust arrangement pursuant to which a trustee holds legal or record title to real property for the benefit of such person; or (ii) The interest of a person under any other form of express fiduciary arrangement pursuant to which any other person holds legal or record title to real property for the benefit of such person. (B) “Beneficial interest” does not include the interest of a stockholder in a corporation or the interest of a partner in either a general partnership or limited partnership. A beneficial interest shall be deemed to be located where the real property owned by the trustee is located. (3) “Civil proceeding” means any civil proceeding commenced by an investigative agency under any provision of this chapter. (4) “Criminal proceeding” means any criminal proceeding commenced by an investigative agency under any provision of this chapter. (5) “Documentary material” means any book, paper, document, writing, drawing, graph, chart, photograph, phonorecord, magnetic tape, computer printout, other data compilation from which information can be obtained or from which information can be translated into usable form, or other tangible item. (6) “Enterprise” means any person, sole proprietorship, partnership, corporation, business trust, union chartered under the laws of this state, or other legal entity; or any unchartered union, association, or group of individuals associated in fact although not a legal entity; and it includes illicit as well as licit enterprises and governmental as well as other entities. (7) “Investigative agency” means the Department of Law or the office of any district attorney. (8) “Pattern of racketeering activity” means: (A) Engaging in at least two acts of racketeering activity in furtherance of one or more incidents, schemes, or transactions that have the same or similar intents, results, accomplices, victims, or methods of commission or otherwise are interrelated by distinguishing characteristics and are not isolated incidents, provided at least one of such acts occurred after July 1, 1980, and that the last of such acts occurred within four years, excluding any periods of imprisonment, after the commission of a prior act of racketeering activity; or (B) Engaging in any one or more acts of domestic terrorism as described in subsection (a) of Code Section 16-4-10 or any criminal attempt, criminal solicitation, or criminal conspiracy related thereto. (9)(A) “Racketeering activity” means to commit, to attempt to commit, or to solicit, coerce, or intimidate another person to commit any crime which is chargeable by indictment under the following laws of this state: (i) Article 2 of Chapter 13 of this title, relating to controlled substances; (ii) Article 3 of Chapter 13 of this title, known as the “Dangerous Drugs Act”; (iii) Subsection (j) of Code Section 16-13-30, relating to marijuana; (iv) Article 1 of Chapter 5 of this title, relating to homicide; (v) Article 2 of Chapter 5 of this title, relating to bodily injury and related offenses; (vi) Articles 3 and 4 of Chapter 7 of this title, relating to arson and destructive devices, respectively; (vii) Code Section 16-7-1, relating to burglary, or Code Section 16-7-2, relating to smash and grab burglary; (viii) Code Section 16-9-1, relating to forgery in any degree; (ix) Article 1 of Chapter 8 of this title, relating to theft; (x) Article 2 of Chapter 8 of this title, relating to robbery; (xi) Code Sections 16-6-9 through 16-6-12 and 16-6-14, relating to prostitution and pandering; (xii) Code Section 16-12-80, relating to distributing obscene materials; (xiii) Code Section 16-10-2, relating to bribery; (xiv) Code Section 16-10-93, relating to influencing witnesses; (xv) Article 4 of Chapter 10 of this title and Code Sections 16-10-20, 16-10-20.1, 16-10-23, and 16-10-91, relating to perjury and other falsifications; (xvi) Code Section 16-10-94, relating to tampering with evidence; (xvii) Code Section 16-12-22, relating to commercial gambling; (xviii) Code Section 3-3-27, relating to distilling or making liquors; (xix) Part 2 of Article 4 of Chapter 11 of this title, known as the “Georgia Firearms and Weapons Act”; (xx) Code Section 16-8-60, relating to unauthorized transfers and reproductions of recorded material; (xxi) Chapter 5 of Title 10, relating to violations of the “Georgia Uniform Securities Act of 2008”; (xxii) Code Section 3-3-27, relating to the unlawful distillation, manufacture, and transportation of alcoholic beverages; (xxiii) Code Sections 16-9-31, 16-9-32, 16-9-33, and 16-9-34, relating to the unlawful use of financial transaction cards; (xxiv) Code Section 40-3-90, relating to certain felonies involving certificates of title, security interest, or liens concerning motor vehicles; (xxv) Code Section 40-4-21, relating to removal or falsification of identification numbers; (xxvi) Code Section 40-4-22, relating to possession of motor vehicle parts from which the identification has been removed; (xxvii) Code Section 16-9-70, relating to use of an article with an altered identification mark; (xxviii) Article 6 of Chapter 9 of this title, known as the “Georgia Computer Systems Protection Act”; (xxix) Any conduct defined as “racketeering activity” under 18 U.S.C. Section 1961 (1)(A), (B), (C), and (D); (xxx) Article 3 of Chapter 5 of this title, relating to kidnapping, false imprisonment, and related offenses, except for Code Section 16-5-44, relating to aircraft hijacking; (xxxi) Code Section 16-11-37, relating to terroristic threats and acts; (xxxii) Code Section 16-5-44.1, relating to motor vehicle hijacking; (xxxiii) Code Section 16-10-32, relating to tampering with witnesses, victims, or informants; (xxxiv) Code Section 16-10-97, relating to intimidation of grand or trial juror or court officer; (xxxv) Article 11 of Chapter 1 of Title 7 and Sections 5311 through 5330 of Title 31 of the United States Code relating to records and reports of currency transactions; (xxxvi) Article 8 of Chapter 9 of this title, relating to identity fraud, and Section 1028 of Title 18 of the United States Code, relating to fraudulent identification documents and information; (xxxvii) Code Section 33-1-9, relating to insurance fraud; (xxxviii) Code Section 16-17-2, relating to payday loans; (xxxix) Code Section 16-9-101, relating to deceptive commercial e-mail; (xl) Code Section 16-8-102, relating to residential mortgage fraud; or (xli) Code Section 16-5-5, relating to assisted suicide. (B) “Racketeering activity” shall also mean any act or threat involving murder, kidnapping, gambling, arson, robbery, theft, receipt of stolen property, bribery, extortion, obstruction of justice, dealing in narcotic or dangerous drugs, or dealing in securities which is chargeable under the laws of the United States or any of the several states and which is punishable by imprisonment for more than one year. 18-2-74. Fraudulent transfer; determination of actual intent (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) With actual intent to hinder, delay, or defraud any creditor of the debtor; or (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due. (b) In determining actual intent under paragraph (1) of subsection (a) of this Code section, consideration may be given, among other factors, to whether: (1) The transfer or obligation was to an insider; (2) The debtor retained possession or control of the property transferred after the transfer; (3) The transfer or obligation was disclosed or concealed; (4) Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit; (5) The transfer was of substantially all the debtor’s assets; (6) The debtor absconded; (7) The debtor removed or concealed assets; (8) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; (9) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; (10) The transfer occurred shortly before or shortly after a substantial debt was incurred; and (11) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor. CHAPTER 1. GENERAL PROVISIONS § 23-1-1. Equity jurisdiction — Vested in superior courts § 23-1-2. Equity jurisdiction — Scope; modes of remedy § 23-1-3. Equity jurisdiction — Grounds § 23-1-4. Effect of legal remedy on exercise of jurisdiction § 23-1-5. Concurrent jurisdiction of law and equity § 23-1-6. Nature of equity — Follows the law § 23-1-7. Nature of equity — Seeks to do justice § 23-1-8. Nature of equity — Considers done what ought to be done § 23-1-9. Nature of equity — Is equality § 23-1-10. Who would have equity must do equity § 23-1-11. Effect of equal equities; effect of unequal equities § 23-1-12. Equity of misled party superior The equity of a party who has been misled is superior to that of the person who willfully misleads such party. § 23-1-13. Volunteer’s equity inferior § 23-1-14. Who bears loss from act of third party § 23-1-15. Where both parties equally at fault; where fault is unequal § 23-1-16. Taking with notice of equity § 23-1-17. Scope of notice; ignorance due to negligence § 23-1-18. Pending action as notice; effect on purchaser § 23-1-19. Sale to one without notice; sale by one without notice § 23-1-20. Interference with bona fide purchaser § 23-1-21. Compulsion to litigate § 23-1-22. Interference with creditor § 23-1-23. Construction of conditions; relief against forfeitures § 23-1-24. When election between benefits compelled § 23-1-25. Laches 14-2-621. Issuance of shares (a) The powers granted in this Code section to the board of directors may be reserved to the shareholders by the articles of incorporation. (b) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation. (c) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable, and the authorization by the board of directors of the issuance of shares constitutes such determination. (d) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable. (e) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be canceled in whole or in part. 14-4-143. Right of stockholder to dissent from merger or share exchange consolidation — Demand for payment of value of stock If any corporation incorporated by the Secretary of State under provisions other than Chapter 2 of this title, except banks and trust companies, merges or enters into a share exchange with another corporation pursuant to Code Section 14-4-140, 14-4-141, or 14-4-142, the rights of shareholders of such corporation to dissent from and obtain payment of the fair value of their shares in connection with such merger or share exchange shall be governed by provisions of Article 13 of Chapter 2 of this title. Majority Shareholders Who Take Part in “Squeeze-Outs” Can No Longer Count Pennsylvania as the Sanctuary It Once Was Thought to Be 8/13/2012 Standard learning has long held that a minority shareholder of a Pennsylvania corporation who was deprived of his stock by a “cash-out” or “squeeze-out” merger had no remedy after the merger was completed other than to take what the merger gave or demand statutory appraisal and be paid the “fair value” for his shares. No other post-merger remedy, whether based in statute or common law, was thought to be available to a minority shareholder to address the actions of the majority in a “squeeze-out.” Now, after the Pennsylvania Supreme Court’s holding in Mitchell Partners, L.P. v. Irex Corporation, minority shareholders may pursue common law claims on the basis of fraud or fundamental unfairness against the majority shareholders that squeezed them out. 14-4-147. Enforcement against corporation of judgment determining value of stock In the event the surviving or resulting corporation shall fail to pay the amount of a judgment determining the value of a dissenting stockholder’s stock within ten days after the judgment becomes final, execution shall issue thereon and said judgment shall be enforced as other judgments of the superior court are enforced. 14-2-1302. Right to dissent (a) A record shareholder of the corporation is entitled to dissent from, and obtain payment of the fair value of his or her shares in the event of, any of the following corporate actions: (1) Consummation of a plan of merger to which the corporation is a party: 14-2-1202. Sale of assets requiring shareholder approval (a) A corporation may sell, lease, exchange, or otherwise dispose of all or substantially all of its property (with or without the good will), otherwise than pursuant to Code Section 14-2-1201, on the terms and conditions and for the consideration determined by the corporation’s board of directors, if the board of directors proposes and its shareholders approve the proposed transaction. (b) For a transaction to be authorized: (1) The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless the board of directors makes a determination that, because of conflicts of interest or other special circumstances, it should either refrain from making such a recommendation or recommend that the shareholders reject or vote against the plan, in which case the board of directors shall transmit to the shareholders the basis for such determination; and 14-2-1109.3. Conversion to foreign limited liability company, foreign limited partnership, or foreign corporation, requirements 16-8-11. Venue for purposes of Code Sections 16-8-2 through 16-8-9 and 16-8-13 through 16-8-15 In a prosecution under Code Sections 16-8-2 through 16-8-9 and 16-8-13 through 16-8-15, the crime shall be considered as having been committed in any county in which the accused exercised control over the property which was the subject of the theft 9-11-37. Failure to make discovery; motion to compel; sanctions; expenses (a) Motion for order compelling discovery. A party, upon reasonable notice to other parties and all persons affected thereby, may apply for an order compelling discovery as follows: (1) Appropriate court. An application for an order to a party may be made to the court in which the action is pending or, on matters relating to a deposition, to the court in the county where the deposition is being taken. An application for an order to a deponent who is not a party shall be made to the court in the county where the deposition is being taken; (2) Motion; protective order. If a deponent fails to answer a question propounded or submitted under Code Section 9-11-30 or 9-11-31, or a corporation or other entity fails to make a designation under paragraph (6) of subsection (b) of Code Section 9-11-30 or subsection (a) of Code Section 9-11-31, or a party fails to answer an interrogatory submitted under Code Section 9-11-33, or if a party, in response to a request for inspection submitted under Code Section 9-11-34, fails to respond that inspection will be permitted as requested or fails to permit inspection as requested, the discovering party may move for an order compelling an answer, or a designation, or an order compelling inspection in accordance with the request. When taking a deposition on oral examination, the proponent of the question may complete or adjourn the examination before he applies for an order. If the court denies the motion in whole or in part, it may make such protective order as it would have been empowered to make on a motion made pursuant to subsection (c) of Code Section 9-11-26; (3) Evasive or incomplete answer. For purposes of the provisions of this chapter which relate to depositions and discovery, an evasive or incomplete answer is to be treated as a failure to answer; and (4) Award of expenses of motion. (A) If the motion is granted, the court shall, after opportunity for hearing, require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct or both of them to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney’s fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust. (B) If the motion is denied, the court shall, after opportunity for hearing, require the moving party or the attorney advising the motion or both of them to pay to the party or deponent who opposed the motion the reasonable expenses incurred in opposing the motion, including attorney’s fees, unless the court finds that the making of the motion was substantially justified or that other circumstances make an award of expenses unjust. (C) If the motion is granted in part and denied in part, the court may apportion the reasonable expenses incurred in relation to the motion among the parties and persons in a just manner. (b) Failure to comply with order. (1) Sanctions by court in county where deposition is taken. If a deponent fails to be sworn or to answer a question after being directed to do so by the court in the county in which the deposition is being taken, the failure may be considered a contempt of that court. (2) Sanctions by court in which action is pending. If a party or an officer, director, or managing agent of a party or a person designated under paragraph (6) of subsection (b) of Code Section 9-11-30 or subsection (a) of Code Section 9-11-31 to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subsection (a) of this Code section or Code Section 9-11-35, the court in which the action is pending may make such orders in regard to the failure as are just and, among others, the following: (A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order; (B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence; (C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party; (D) In lieu of any of the foregoing orders, or in addition thereto, an order treating as a contempt of court the failure to obey any orders except an order to submit to a physical or mental examination; or (E) Where a party has failed to comply with an order under subsection (a) of Code Section 9-11-35 requiring him to produce another for examination, such orders as are listed in subparagraphs (A), (B), and (C) of this paragraph, unless the party failing to comply shows that he is unable to produce such person for examination. In lieu of any of the foregoing orders, or in addition thereto, the court shall require the party failing to obey the order or the attorney advising him, or both, to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust. (c) Expenses on failure to admit. If a party fails to admit the genuineness of any document or the truth of any matter as requested under Code Section 9-11-36 and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, he may apply to the court for an order requiring the other party to pay him the reasonable expenses incurred in making that proof, including reasonable attorney’s fees. The court shall make the order unless it finds that the request was held objectionable pursuant to subsection (a) of Code Section 9-11-36, or the admission sought was of no substantial importance, or the party failing to admit had reasonable ground to believe that he might prevail on the matter, or there was other good reason for the failure to admit. (d) Failure of party to attend at own deposition or serve answers to interrogatories or respond to request for inspection. (1) If a party or an officer, director, or managing agent of a party or a person designated under paragraph (6) of subsection (b) of Code Section 9-11-30 or subsection (a) of Code Section 9-11-31 to testify on behalf of a party fails to appear before the officer who is to take his deposition, after being served with a proper notice, or fails to serve answers or objections to interrogatories submitted under Code Section 9-11-33, after proper service of the interrogatories, or fails to serve a written response to a request for inspection submitted under Code Section 9-11-34, after proper service of the request, the court in which the action is pending on motion may make such orders in regard to the failure as are just; and, among others, it may take any action authorized under subparagraphs (b)(2)(A) through (b)(2)(C) of this Code section. In lieu of any order, or in addition thereto, the court shall require the party failing to act or the attorney advising him, or both, to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust. (2) The failure to act described in the provisions of this chapter which relate to depositions and discovery may not be excused on the ground that the discovery sought is objectionable unless the party failing to act has applied for a protective order as provided by subsection (c) of Code Section 9-11-26. Dynalectric, pursuant to the alleged joint venture agreement, were elements of a continuing conspiracy to restrain trade rather than merely the results of a completed conspiracy. Our analysis of the relevant cases begins with United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168 (1910), the seminal Supreme Court case interpreting the criminal statute of limitations in the context of an antitrust conspiracy. Justice Holmes, writing for the Court, concluded that a conspiracy can have “continuance in time.” 218 U.S. at 610, 31 S.Ct. at 127. Holmes explained that a criminal conspiracy continues in time beyond the initial conspiratorial agreement until the objectives of the conspiracy either are abandoned or succeed. 16-8-16. Theft by extortion (a) A person commits the offense of theft by extortion when he unlawfully obtains property of or from another person by threatening to: (1) Inflict bodily injury on anyone or commit any other criminal offense; (2) Accuse anyone of a criminal offense; (3) Disseminate any information tending to subject any person to hatred, contempt, or ridicule or to impair his credit or business repute; (4) Take or withhold action as a public official or cause an official to take or withhold action; (5) Bring about or continue a strike, boycott, or other collective unofficial action if the property is not demanded or received for the benefit of the group in whose interest the actor purports to act; or (6) Testify or provide information or withhold testimony or information with respect to another’s legal claim or defense. (b) In a prosecution under this Code section, the crime shall be considered as having been committed in the county in which the threat was made or received or in the county in which the property was unlawfully obtained. (c) It is an affirmative defense to prosecution based on paragraph (2), (3), (4), or (6) of subsection (a) of this Code section that the property obtained by threat of accusation, exposure, legal action, or other invocation of official action was honestly claimed as restitution or indemnification for harm done in the circumstance to which such accusation, exposure, legal action, or other official action relates or as compensation for property or lawful services. (d) A person convicted of the offense of theft by extortion shall be punished by imprisonment for not less than one nor more than ten years. Dilutive Financing is a sale of equity at a price lower than the previous valuation of the company. Sometimes this happens because the company lost value and must raise money at a decreased valuation. Other times, this can be motivated to dilute a shareholder’s interest. In dilutive financings, courts have looked at: • Whether there was a need for the financing • Whether this was an “inside down round” meaning that the directors or majority shareholders stood to gain from the round by the dilutive effect or their own participation in the equity Purchase A financing or stock issue can be unfairly dilutive even without a valuation of the company. These transactions and others may also be reviewed for the decision of the Board of Directors. Typically, courts afford a good deal of discretion to corporate directors and officers, which is referred to doctrinally as the Business Judgment Rule. However, if the minority shareholder plaintiff can show satisfactorily to the court that something is amiss and/or that there were conflicts of interest by the directors, the court will scrutinize the transaction and the directors will have to prove “entire fairness,” which requires a showing that the minority shareholders received a fair price and were treated fairly procedurally. Freeze Out Mergers (also referred to as Squeeze-Outs) (as defined by me in this context) are corporate transactions whereby two entities are merged into a single entity, which may be one of the preexisting entities or a newly formed entity, whereby the minority shareholder is forced to sell their stock for a cash buyout as part of the transaction. a. Short-form Merger Delaware statutorily provides a mechanism for mergers where a parent corporation owning 90% or more of each class of stock in a subsidiary may merge with the entity and force the minority shareholders out for a fair value cash buyout. See DEL. CODE ANN. tit. 8, § 253(a). Delaware courts have determined that under this a §253 merger, commonly referred to as a short-form merger, a minority shareholder’s only recourse, absent fraud or illegality, is appraisal (determination of the fair value for the cash buyout). Glassman v. Unocal Exploration Corp., 777 A.2d 242, 243 (Del. 2001). Caliofrnia also has statutory provisions for short-form mergers, Cal. Corp Code §1110, though the scope of fiduciary duties owed to minority shareholders in California short-form mergers has not been defined. b. Long-form Merger For companies incorporated in states that do not have a statute like §253, or in Delaware mergers using other statutory provisions (“long-form mergers”) where majority shareholders have the voting power to approve freeze-out mergers which are statutorily recognized, minority shareholders find their protection from the fiduciary duty that majority shareholders (as shareholders, not directors) owe the minority shareholders. See e.g., Jones v. H.F. Ahmanson & Company (1969) 1 Cal.3d 93 (for California corporations); Singer v. Magnavox Co., 380 A.2d 969 (Del. 1977) (for Delaware). In long-form freeze-out mergers, various state courts have looked at the following factors to determine that majority shareholders breached their fiduciary duty: • Common majority shareholders pre and post transaction • Common directors pre and post transaction • The majority is permitted continued participation in the equity of the surviving corporation while the minority has no choice but to surrender their shares for cash • Freeze-out of minority stockholders on a cash-out basis is the sole purpose of the merger or, conversely stated, there was no independent purpose of the merger. • Price paid for the minority shareholder’s shares • Procedural fairness of the transaction, such as its timing, initiation, structure, financing, development, disclosure to the independent directors and shareholders, and how the necessary approvals were obtained As a rule of thumb, long-form mergers which have an independent, legitimate business reason that have a consequential, but fair impact on minority shareholders will likely survive scrutiny, whereas transactions engaged in for the purposes of forcing a minority shareholder out or otherwise adversely impacting their ownership rights will likely subject the majority shareholder to liability and/or invalidate the transaction. 23-2-53. Suppression of fact as fraud Suppression of a material fact which a party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case. 23-2-60. Annulment of conveyances for fraud Fraud will authorize equity to annul conveyances, however solemnly executed. 23-2-58. Confidential relations defined Any relationship shall be deemed confidential, whether arising from nature, created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct 23-2-50. Concurrent jurisdiction over fraud In all cases of fraud, except fraud in the execution of a will, equity has concurrent jurisdiction with the law. 23-2-57. Proving existence of fraud Fraud may not be presumed but, being in itself subtle, slight circumstances may be sufficient to carry conviction of its existence. 23-3-4. Extraordinary remedies for defendant Any defendant may, by proper pleadings and sufficient evidence, obtain the benefit of extraordinary remedies allowed in equitable proceedings by the superior court 16-9-51. Destruction, removal, concealment, encumbrance, or transfer of property subject to security interest (a) Except as provided in subsection (b) of this Code section, a person who destroys, removes, conceals, encumbers, transfers, or otherwise deals with property subject to a security interest with intent to hinder enforcement of that interest shall be guilty of a misdemeanor. (b) A person who destroys, removes, conceals, encumbers, transfers, or otherwise deals with property subject to a security interest with intent to hinder enforcement of that security interest and in so doing does damage to such property in an amount greater than $500.00 shall be guilty of a misdemeanor of a high and aggravated nature. (c) In a prosecution under this Code section the crime shall be considered as having been committed in any county where any act in furtherance of the criminal scheme was done or caused to be done. 16-9-53. Damaging, destroying, or secreting property to defraud another (a) A person commits the offense of damaging, destroying, or secreting property to defraud another person when he knowingly and with intent to defraud another person damages, destroys, or secretes any property of whatever class or character, whether the property of himself or of another person. (b) A person convicted of the offense of damaging, destroying, or secreting property to defraud another person shall be punished by imprisonment for not less than one nor more than five years. 16-9-51. Destruction, removal, concealment, encumbrance, or transfer of property subject to security interest (a) Except as provided in subsection (b) of this Code section, a person who destroys, removes, conceals, encumbers, transfers, or otherwise deals with property subject to a security interest with intent to hinder enforcement of that interest shall be guilty of a misdemeanor. (b) A person who destroys, removes, conceals, encumbers, transfers, or otherwise deals with property subject to a security interest with intent to hinder enforcement of that security interest and in so doing does damage to such property in an amount greater than $500.00 shall be guilty of a misdemeanor of a high and aggravated nature. (c) In a prosecution under this Code section the crime shall be considered as having been committed in any county where any act in furtherance of the criminal scheme was done or caused to be done.
  11. jllafitte says:

    Perjury, Deter, Fraud Before the Court

    Boudreaux Deposition: P196-197
    Claude : “Why is it you did not disclose that to Charles Revere?”
    Boudreaux: “Certainly if I could change history, I know it hurt his feelings and I would change history. I was looking for what I thought was the best interest of the company. “
    However throughout his deposition Boudreaux commits perjury to cover-up other Frauds and omissions that were violations of Georgia Law. His answers to many questions are equivocating words and phrases aimed at creating an impression that something specific and meaningful has been said, when in fact only a vague or ambiguous claim, or even a reputation has been communicated.”
    Boudreaux was able to get numerous False conclusions in a Motion for Summary Judgment Ruling by Judge XXX based on these Frauds to the Court.
    Attorney Codes of Ethics 3.3, 3.4, 3.5 require Boudreaux Attorneys to inform the court they presented Fraudulent Evidence to the Court.
    Example Boudreaux Depo P245-248. His attorney Bailey stated: “I object to the witness testifying further about the document, because it’s not complete.” In the document Boudreaux refers to himself as “The dictator” of SYB.
    Line 16 (p245) “Now, did you prepare this document?” Boudreaux answer: “I’m sorry what was your question?” The question was: “Whether or not you prepared this document.” Boudreaux answer: “I can’t answer without the whole document. I don’t know.” Claude Question: “Can you offer an explanation as to how is that document made its way to your file?”
    Boudreaux attorney (Bailey): “I object to the witness testifying further about the document, because it’s not complete.”
    To support these allegations Revere has a preponderant amount of evidence including depositions Thomas, Boudreaux, Gaston, Laura Baker, Glenn Redwood, and Claire Redwood and 1000 exhibits.
    Revere was deterred by taking further action after Boudreaux was successful in getting Judge XXX to deny several of Revere’s Fraud claims based on False Evidence, Perjury, and Fraud before the court.
    Boudreaux story as told on pages 195-205 of his deposition is that:
    1. He admits he omitted to tell Revere about the loan to B&C, it happened after SYB had Revere’s funds sitting in a 2-3% checking account for several months and presented an opportunity to earn 10% from B&C Recovery owned by Glenn and Claire Redwood, and thus benefited the company and Revere. He claims it was a short term loan. This story was supported by Jerry Thomas and Glenn Redwood. Redwood’s attorney who threaten sanctions against Revere and his attorney, who refused to supply Revere with documents requested by subpoena and a deposition to explain such documents.
    Actually what happened was that TORTOLLA, owned by Gaston, Boudreaux, Thomas, and Boudreaux needed money and Revere wanted to invest in TORTOLLA after he was told of the capitalization amounts required by the partners and the expertise they brought to the company.
    TORTOLLA needed Revere’s money but did not want to pay him returns on his investment, as did Boudreaux, Thomas, and Gaston for SYB.
    The manner they used to obtain Revere’s funds is illegal by numerous Georgia Codes. The Cover-up is also illegal by numerous Georgia codes. Finally the failure to repay him when the company dissolved and his annual distributions of the Jacksonville Profits also violated numerous Georgia codes.
    Judge XXX ruled that since Revere was not damaged by the loan to B&C, he had no claim. Revere was damaged (he lost the majority of his $200,000 investment, was left to pay creditors, and denied his share of profits) and 10-5-51 Fraud in the sale of a security prohibits such actions.
    What did Boudreaux and Thomas really do?
    Within days of receiving Revere’s funds Boudreaux wrote checks to TORTOLLA to secure the Atlanta Market from Copelands. It was not a loan to B&C.
    When B&C repays the loan over a year period, which is a form of Money Laundering, the interest is distributed to Boudreaux and Thomas. There is no benefit to SYB. Actually there is harm to the financials.
    Not having the cash to operate SYB, Boudreaux loans his money to SYB at a cost to SYB of 11%.
    To prevent Revere from discovering what is going on, Boudreaux provides Revere with a Fraudulent Financial Report in 1998 and fails to provide Revere with reports in 1999-2005.
    Boudreaux commits wire fraud when Revere emails him in 2005 to explain the checks to B&C; Mail fraud when the Operating Agreement is mailed to Revere, stating it is the same (capitalization) as TORTOLLA.
    Once Revere sues Boudreaux, witness are tampered with to keep the cover-up continuing, Boudreaux commits perjury numerous times, and Boudreaux lawyers present false evidence to the Tribunal in Summary Judgment.

    Applying Georgia Law to these violations: (there may be other laws violated that are not yet evident)
    1. 10-5-51 Fraud in the sale of a security- Revere would not have invested in SYB had he known the omissions made by Boudreaux and Thomas.
    2. 16-14-8 RICO Mail Fraud, Wire Fraud, Extortion, Witness Tampering, Victim Tampering, and more
    3. 16-8-3 Theft by deception- Services promised that were not preformed
    4. 16-8-4 Theft by Conversion- Boudreaux and Thomas converted Revere’s funds to their own use.
    5. 16-10-20 Perjury
    6. 16-10-72 Subordination of Perjury
    7. 16-8-16 Theft by Extortion
    8. 23-2-52 Misrepresentation as legal fraud
    9. 14-9A-129 Fraudulent statements to shareholders
    10. 14-2-1620 Fraudulent Financial Statements to Shareholder
    11. 23-2-51 Constructive Fraud
    12. 16-8-2. Theft by taking
    13. 16-4-8. Conspiracy to commit a crime
    14. 14-2-621. Issuance of shares
    15. 17-14-17 Fraudulent sale to avoid creditors
    16. 23-2-20. Which accidents relievable in equity Capital Contribution Buy/ Sell
    17. 23-2-52. Misrepresentation as legal fraud
    18. 23-2-25. Form of conveyance contrary to intent
    19. 23-2-135. Damages when specific performance impossible
    20. 23-2-31. Rescission for unilateral mistake of fact
    21. 9-11-37. Failure to make discovery; motion to compel; sanctions; expenses

  12. jllafitte says:

    Fraud event #1—Larceny –using Revere’s funds for Thomas and Boudreaux other needs.
    Boudreaux evasive actions in his deposition to deter Revere from realizing the extent of the fraud and discovery of other frauds are deceptive and worked for many years.
    1. He was asked “Did you disclose this loan or these loans to Charles Revere?”
    2. His Answer: “I did.” He does not say that he did seven years later, when Revere was advised by an attorney of several payments to B&C.
    3. So then he is asked: “At the time they were made, you disclosed them to Charles Revere.?
    4. His answer: “I did not”
    5. Why?
    6. He does not answer this question and answers: “…. I know it hurt his feelings….” “I do not regret the fact that the company made a premium based on the interest they paid….”
    7. Why did they need the money?
    8. His answer: “I don’t recall.”
    9. Boudreaux never advises that the interest earned went to him and Thomas as dividends through SYB.
    10. Instead Boudreaux advises the court and Revere the interest funds stayed with SYB.
    11. Boudreaux stated SYB did not need the funds at the time May 1998.
    12. However in October 1998, Boudreaux loaned money to SYB at 11%, as SYB needed cash.
    13. Thus the Transfer of funds to TORTOLLA was a loss to SYB.
    14. The next questions and false answers to cover up a false Financial statement to hide the loan and the $200,000.00 Revere expected Boudreaux and Thomas to contribute to SYB.

  13. jllafitte says:

    Fraud Event #2 (p198) False Financial Statements and no Financial Statements

    15. Q: What money was it that SYB had in its bank account at that time?
    16. His Answer: “During the span of the loans, based on the financial statements which are somewhere in the pile, as memory serves after the loans were made there was somewhere in the neighborhood of 350 to 400,000 of cash in the bank.”
    17. Boudreaux tried to answer without answering, so he is asked again: “At the time the loans were made, not during the span of the loan, all right, how much money was in the bank?
    18. His answer: “I would have to have the bank statement to answer it definitively.”
    19. He gets the exhibits and responds: “Based on what you’ve put in my hands, I don’t know.”
    20. The bantering without answer continued on this topic.
    21. He is then asked: “All right. You said that there was a period of time following or during the course of these loans where there was money in the bank, is that correct, and I think you said close to $400,000.?
    22. His answer: “I said the financial statement prepared by the accountant showed money in the bank, the 1998 financial statement.”
    23. He is then asked: “ Why is it you said that the financial statements of the LLC during the spans of the loans showed that there was close to $400,000.00 in it?
    24. He asks to have the question repeated.
    25. His answer: “I believe I said between 350 to 400, or in that range.”
    26. He is then shown the Compilation report and asked who prepared it.
    27. His answer: “…Ashworth and Associates…”
    28. Question: “ Isn’t it true according to Exhibit Number 7 that on December 31st, 1998 there was a withdrawal from the cash in the bank in the amount of $394,000 in payment of a loan to Boudreaux Development?
    29. His long answer ends with: “I’m not comfortable with certainty verifying any balances based on what appears to be an Excell Spreadsheet.”
    30. More questions are asked to pin Boudreaux down on how the 1998 financial report could contain $394,000.00 as cash on hand that was in the account for less than 3 days.
    31. His answer: “ I know that my dealing with this account involved turning in bank statements. I would assume an accountant would rely on those bank statements.”
    32. Question: “If one were to receive that compilation report as a member of SYB, they would be led to believe that the company was in good stead financially?”
    33. His answer: “…they could draw their own conclusions.”
    34. He is asked (p207) “Why is this coded TORTOLLA/ B&C?”
    35. His answer: “I don’t know.”
    36. What the facts support: The Larceny transfer to TORTOLLA was repaid by B&C. He should know that. Glenn Redwood hinted at that in his deposition. Gaston confirmed that TORTOLLA needed cash.
    37. He is asked (p210) “were the loans made by SYB to B&C recovery used to benefit the operation that TORTOLLA had in Atlanta with Glenn Redwood.”
    38. His answer: “I don’t know.”
    39. How can he not know, he was a partner in TORTOLLA.
    40. He is asked if the loan proceeds were used to benefit TORTOLLA should Revere have been told.
    41. His answer is long and does not answer the question: “I did act in the best interest of the company, because we made a lot more money than we would have. All that said, as I testified before if I could change history, I know it hurt Charles, and I ‘m sorry that it did.”
    42. Later the checks written to TORTOLLA are found and a Larceny is confirmed.
    43. Boudreaux never advises that after interest from the B&C loan was transferred to SYB, he distributed the interest to himself and Thomas each made $3,005 from this loan in 1998 alone and SYB did not benefit.
    44. Because SYB did not have funds on hand in the Fall of 1998, Boudreaux loans money to SYB at 11%.
    45. Thus the Transfer of funds to TORTOLLA hurt SYB and was Larceny.
    Applying Georgia Law to these violations: (there may be other laws violated that are not yet evident)
    1. 16-14-8 RICO Mail Fraud, Wire Fraud, Extortion, Witness Tampering, Victim Tampering, and more
    2. 16-8-3 Theft by deception- Services promised that were not preformed
    3. 16-8-4 Theft by Conversion- Boudreaux and Thomas converted Revere’s funds to their own use.
    4. 16-10-20 Perjury
    5. 16-10-72 Subordination of Perjury
    6. 23-2-52 Misrepresentation as legal fraud
    7. 14-9A-129 Fraudulent statements to shareholders
    8. 14-2-1620 Fraudulent Financial Statements to Shareholder
    9. 23-2-51 Constructive Fraud

  14. jllafitte says:

    Fraud Event # 3 Securities’’ Fraud, Theft by Deception, & Equity Principles violations
    46. Fraud in the consideration of shares.
    47. Boudreaux is asked more questions regarding Thomas’s 43.75% ownership for only recruiting Revere and his sale of those shares to Lanner for a $70,000.00 interest in real estate.
    48. Frauds: 14-9-502 , Promise to contribute
    49. 14-2-621 The consideration to be received for shares is adequate
    50. Neither the Operating Agreement nor the Amendments spoke of Sweat Equity
    51. Boudreaux’ cover letter stated the Operating Agreement was the same as TORTOLLA which had a capitalization of $6,500.00 per percent of stock ownership.
    52. Boudreaux omitted that sentence in the SYB Agreement.
    53. This violates standard Partnership Operating Agreements which specify Capital Contributions of Partners.
    54. Omitting a material fact is considered Securities Fraud Rule 10b-5
    55. Omitting a material fact violates GA Code 10-5-51
    56. Revere funds were then used for Boudreaux and Thomas other interests (TORTOLLA) which is Theft by Conversion or Larceny.
    57. Boudreaux, Thomas, and Redwood then commit perjury to cover-up the Larceny, Theft, and Money Laundering.
    58. Revere’s funds go to TORTOLLA, the funds are repaid overtime with B&C profits.
    59. The interest earned is transferred to Thomas and Boudreaux
    60. Boudreaux has to loan funds to SYB in the meantime at 11% payable to Boudreaux.
    61. It is a net loss to SYB.
    62. Yet Boudreaux testifies that he loaned the money to B&C and made a profit for SYB.
    63. Mary, Boudreaux attorney, misrepresents numerous facts in her motion for Summary Judgment.
    64. Judge XXX accepts Boudreaux Declaration and Mary’s Statements without evidence, denies Revere the chance to present evidence in court to prove their perjuries.
    65. Evidence does not support the verdict.
    66. Boudreaux informs Revere that because Mary clerked for Judge XXX, he has received favorable rulings.
    67. Boudreaux and Thomas with no evidence to support their position of receiving $700,000.00 each in Sweat Equity in SYB and despite GA Equity Laws prohibiting such an action were able to convince Judge XXX to accept such a position.
    68. In fact emails exist between Revere, Thomas, and Boudreaux in 2005 where Boudreaux denies he and Thomas were to receive $700,000.00 in sweat equity for making loans.
    69. Boudreaux Depo P141:
    70. Q: “Are there any written documents that you are aware of that would reflect that you and Mr. Thomas would be entitled to your 43.75% interest each in the LLC for the sweat equity that you were giving to the LLC?”
    71. A: “I don’t know.”
    72. Q: “Are you aware of any?”
    73. A: “I don’t know.”
    74. Chapter 23 of the Georgia code on Equity and Chapter 14 of the code on selling stock for fair value.

  15. jllafitte says:

    Fraud Event #4 “Squeeze-out of minority partner.” And Breach of Fiduciary Responsibility
    Delaware Supreme Court: Weinbergh v. UOP: Fair Dealing and Fair practice in Squeeze out Mergers of Minority Partners. From Leo Herzel “The powers of a majority stockholder and rights of a stockholder are statutory, although subject to additional restraints imposed by the courts applying fiduciary responsibility and other equitable principles.”
    Elliot J. Weiss: “Situations arise with regularity in which the majority shareholders of a corporation wish to continue their participation while terminating the minority shareholders position in the enterprise.”

    “Vulnerability of Professional-Client Privilege in Shareholder litigation”, by F.Hodge O’Neil
    When a plan to eliminate a minority shareholder from a corporation (a Squeeze-Out) is being evolved, those in control of the company are likely to ask the corporations attorney and accountant for guidance and the attorney or accountant may prepare letters in which he describes methods to accomplish the desired objective.
    The conferences of majority shareholders, directors, and business advisors as they search for the most advantageous and least risky way to eliminate the minority shareholder may take on all the coloration of a full fledged plot or conspiracy.
    When corporate officials and attorneys involved realize their correspondence may be discoverable and not protected by attorney client privilege, which reveal their plotting against a minority shareholder….may set the stage for a settlement.”
    By William Pricket: “These recurring disputes center on fairness obligation owed by the majority to the minority stockholders. The obligation stems from the Majority stockholder’s control of the corporation and forbids unfair use of that control to the detriment of the minority stockholders.”

    Boudreaux had begun working with accountants and lawyers in 2003 to remove Revere and continue to operate the Jacksonville without having to pay Revere his capital distribution and annual dividends.
    He wrote: “As SYB has not cash flowed, one could argue its stock was of little value” Of course most business enterprises have an initial start up period that does not produce cash flow before hitting the cross over point and Profitability.
    Pages 269-272 of Boudreaux deposition regarding the selling of stock .to Jerry Gaston

    Jacksonville was a huge success. Boudreaux wanted to move forward without having to pay Revere his capital contribution and annual dividends. Thus a Squeeze-out was put in place.

  16. jllafitte says:

    Fraud event #5- Bankruptcy Fraud & Financial Intuition Fraud–
    developing a plan (which happened) to transfer Jerry Thomas’s assets in 2000 prior to Thomas’s filing for Bankruptcy in 2003. Boudreaux removed his $6M+ prior to going to GE in 2004 in hardship and asking for forgiveness of his debts.
    76. Removal of Thomas from SYB, Universal Solutions, and TORTOLLA in 2000
    77. Two years to avoid Preference Charges
    78. Incur $400,000 in Credit Card charges
    79. File Bankruptcy in 2003
    80. A document presented in discovery by Boudreaux to Revere outlined a plan to removed Jerry Thomas’s assets to avert Bankruptcy.
    81. P255
    82. Q: “How much did Mr. Thomas owe you at time that he transferred his interest in Prodining to you, if anything?
    83. A: “I don’t know if he did.”
    84. A:”It says, If Thomas does not pay off by random date 12/1/00, Thomas’s stock reverts back to Boudreaux. As Prodinig has not cash flowed, one could argue it is of little value. Do you see that?”
    85. P274
    86. Q: “Does it suggest to you that this was prepared sometime in the year 2000?
    87. A: “Yeah, I ‘d answer the same, 2000 or before: yeah.”
    88. Q: Okay: Now, I understand that according to this, it’s represented that Mr. Thomas as of this date, the date that this was prepared, had a net worth of $14,508,823.00?
    89. A: “I’m not with you there. I don’t see that.”
    90. Q: “Third to last paragraph.”
    91. A: “Thank you”
    92. Q:”Shortly after this, within a three year period Mr. Thomas declared bankruptcy. Do you know if he listed $14,508,823.00 as a net worth on his bankruptcy?
    93. A: “As I testified earlier, I haven’t seen his bankruptcy schedule.”
    94. Q:”You list yourself as having as of that time a net worth of $6,812,706.00. Is that roughly your net worth today?”
    95. A: “No”
    96. Q: :How has that decreased?
    97. A: “It’s been quite some time since I’ve… or since I’ve prepared one. I would like to think there would be a plus sign on my current personal financial statement.”
    98. Q: “Do you know when Mr. Thomas claimed Bankruptcy?”
    99. A: “I do not.”
    100. Boudreaux letters in 2001 state that Thomas is Bankrupt.
    101. Q: “Were you a creditor in Mr. Thomas’s bankruptcy?”
    102. A: “I don’t know”
    103. Q: “Did you ever assist Mr. Thomas in attempting to remove assets from his name in anticipation of his bankruptcy?”
    104. A: ”NO”

  17. jllafitte says:

    Fraud event #6 – Fraudulent Transfer to avoid Creditors (Revere)
    Omitting to advise Revere that Boudreaux has sold 32% of SYB from his stock to Jerry Gaston starting on August 10, 2003 with 7.8%. Not offering it to Revere. Avoiding telling of the event in his deposition.
    105. In Dec 2012 emails Gaston still denies that he acquired stock in SYB when Revere was a member
    106. Boudreaux FEMOF denies in his deposition

  18. jllafitte says:

    Fraud event #7 Fraudulent Transfer to avoid Creditors (FF&E Lenders with Revere to pay for personal guarantee)
    107. The first known Fraudulent Transfer is between Thomas to Boudreaux via Mal Tiempo and Boudreaux Dining In (owned 49% by Thomas) 2000. Through this transfer the creditors for the FF&E in Pineville and Charlotte are avoided.
    108. In 2000 there is also the Transfer of Universal Solutions Stock to Glenn Redwood.
    109. In 2004 there is the transfer of SYB by Boudreaux and Gaston to Second Line and back to Gaston to avoid GE.
    110. Boudreaux net worth has gone down to nearly zero to avoid GE and is confirmed by Glenn Robl, an attorney.
    111. At the same time Boudreaux claims to Revere that he is helping Marala with GE, Boudreaux attorney is advising GE to go after Revere.
    112. Thomas(through GDI) was a creditor to Boudreaux Dining in an DTD, yet Boudreaux never went after him for Personal Guarantees.
    113. Redwood claimed in his deposition that Thomas transferred the Universal Solutions stock to Redwood for the B&C debt and because Thomas felt “bad”.
    114. Numerous emails exist between Boudreaux and PD accountants, attorneys, Revere, Second Line, and GE to support that Boudreaux planned the transfer to SECOND LINE to A. Obtain the FF&E without fully paying GE and B. Squeezing-out Revere before the profits started.
    115. Second Line “loaned” SYB $700,000 in August 2003 within 10 months it was gone ($70,000.00 per month). While Jacksonville is reporting $474,000.00 ($40,000.00 per month) in income in 2003 and Boudreaux and Gaston are reporting in March 2004 how great things are to GE.
    18-2-74. Fraudulent transfer; determination of actual intent (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
    (1) With actual intent to hinder, delay, or defraud any creditor of the debtor; or
    (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
    (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
    (B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.

    (b) In determining actual intent under paragraph (1) of subsection (a) of this Code section, consideration may be given, among other factors, to whether:

    (2) The debtor retained possession or control of the property transferred after the transfer;
    (3) The transfer or obligation was disclosed or concealed;
    (4) Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
    (5) The transfer was of substantially all the debtor’s assets;
    (6) The debtor absconded;
    (7) The debtor removed or concealed assets;
    (8) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
    (9) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
    (10) The transfer occurred shortly before or shortly after a substantial debt was incurred; and
    (11) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
    Jacksonville Dining Concepts currently owns Jacksonville Copelands with Jerry Gaston as Managing partner.
    Boudreaux in his deposition states:
    116. Q: “All right. Are any of the restaurants that were opened by Pro Dining previously still open today?”
    117. L: “I can speculate.”
    118. Q: “Do you know.”
    119. A: “Jacksonville”
    120. Q:”All right. Do you retain an interest in that?”
    121. A: “I do.”

  19. jllafitte says:

    Fraud Event #9 Frauds against Equity and standard Partnership operating Principles
    123. The General Partner’s unsecured loans do not get paid before the Secured Loans. ($1.8M repaid to Boudreaux before GE is Paid)
    124. A Limited Liability Corporation is just that LIMITED LIABILITY for the LIMITED PARTNERS (Revere pressured to sign personal Guarantees)
    125. The agreement will state the Capitalization of the company ($650,000.00 for TORTOLLA — no mention for SYB)
    126. The agreement will state the Limited Partners will be paid back their Capital contribution first.
    127. New Partners shall not be added without approval of the limited partners. Jerry Gaston added on August 10, 2003 without informing Revere.
    128. Loans to the Partnership do not qualify as Capital contributions at the same time.
    129. Annual financial reports will be provided.
    130. Stock will be sold at fair prices to the partnership.

  20. jllafitte says:

    Fraud event #10 Methods used to deter Revere from discovering the crimes and other reasons to toll Section 9-3-96 Tolling if Victim deterred
    1. Conspiracy continues until last disbursement of illegal profits US v. Dynalectric Co. 169 ALR FED 575–, – US v. Bornman 559K 3d 150, 153 3d Cir
    2. Extortion- Threatening to harm Revere politically if he does not settle
    3. Withholding information- 45 boxes of Documents not given until September 24, 2003 for review at the time Motion for Summary Judgment is filed
    4. Perjury- Declarations and Depositions and interrogatives
    5. Witness tampering- Jerry Gaston and Claire Redwood represented by Boudreaux attorney (Bailey); Bailey also drafts statement for SECOND LINE.
    6. Victim Tampering
    7. Fraud before the court- Boudreaux attorney motion and Thomas acceptance of her motion
    8. Threat of Sanctions by Redwood’s attorney with refusal to comply with subpoena and Gaston does not comply either
    9. Failure to provide Financial Statements
    10. Purpose not abandoned – US v. Northern IMP 814 F. 2d 540 (8th Cir 1987)
    11. Gaston and Thomas Out of Georgia State most of the last 10 years.
    12. Till Victim first learned of offenses/ crimes– ADAMS v. State 231 GA. APP. 279, 499 S.E. 2d 105 (1998) – State v. Brannon 154 GA. APP 285, 267 S.E. 2d 888 (1980)
    13. 18 USC 3284 Concealment of assets extends statute of limitations Baily v. Glover US Supreme Court; Comerford v. Hurley 154 GA app 387, 268 SE 2d 358, 1980
    14. 9-3-94. Removal of defendant from state
    Unless otherwise provided by law, if a defendant removes from this state, the time of his absence from the state until he returns to reside shall not be counted or estimated in his favor.
    15. Victim used reasonable diligence, defendant conduct was that of moral turpitude
    16. Thomas states he is still bankrupt Dec 2007 and Revere will have no financial benefit if successful in civil court
    17. 9-11-37. Failure to make discovery; motion to compel; sanctions; expenses
    (2) Motion; protective order. If a deponent fails to answer a question propounded or submitted under Code Section 9-11-30 or 9-11-31,
    (3) Evasive or incomplete answer. For purposes of the provisions of this chapter which relate to depositions and discovery, an evasive or incomplete answer is to be treated as a failure to answer; and
    .Withholding evidence as noted by Claude in the Gaston deposition. P98
    18. Judge XXX denies Revere’s civil claim for Fraud, based on mistake.

    Conspiracy
    131. Boudreaux, Thomas, and Redwood have all maintained that Revere’s money that was invested into SYB was loaned to B&C Recovery at 10% and was a benefit SYB. Redwood refused Revere’s subpoena to provide information to Revere to confirm this.
    132. However Revere found checks written to TORTOLLA not B&C and Revere found Thomas’s tax returns from 1998 showing dividends from SYB that match a 43.75% of the interest earned.
    133. Since Revere’s funds were gone from SYB, Boudreaux loaned money to SYB at 11% with the end result a loss to SYB.
    134. Judge XXX accepted Quirk’s motion and missed the numerous laws broken by Boudreaux, Thomas, and Redwood to con Revere out of his $200,000.00
    135. From 2000 to 2003 there was Thomas’s Bankruptcy Fraud.
    136. From 2004-2005 there was the Ericsson RICO action.
    137. From 2003-and 2013+ there was the “Squeeze-out of Revere by Boudreaux and Gaston followed by the Fraudulent Transfer to avoid creditors.

  21. jllafitte says:

    Errors in Judge XXX’s Order and Ruling supported by evidence
    1. “Charles Revere invested in restaurants franchises with a close friend of 25 years, Jerry Thomas, and an acquaintance Fraternity brother for 15 years , Jay Boudreaux.”
    2. “The Venture Failed was reformed after Revere was “squeezed-out” , money to one extent or another was lost by all partners” made by Thomas who invested nothing and received 43.75% of the venture, Boudreaux who stated he is still involved and received hundreds of thousands of dollars of tax credits and pull out over $1.5M, but was lost by Revere who invested $200,000.00 and was liable for Boudreaux and Gaston’s default to General Electric.
    3. “A few years after that, the venture had failed…been reformed without Revere by Gaston and maybe Boudreaux as Jacksonville Dining Concepts and still exists today. In 2003, Jacksonville was the highest sales Copelands in the chain.
    4. “Revere and Thomas had done business together.. Thomas was a silent Partner” the managing partner. Determining was salaries to pay agents and how to market.
    5. “Revere was there following a divorce, deciding whether he wanted to relocate from California reconciling with his wife with firm comittments to return to his managerial position in San Jose, .”
    6. “He said he would like to invest if the opportunity arose in the TORTOLLA partnership Thomas had formed with Redwood and Boudreaux in which shares were sold for $6,500.00 per percent. It did.”
    7. “Revere did little independent investigation had known Copelands for 15 years, that Thomas and Boudreaux had built two Copelands, and recruited Managers from Copelands…”
    8. “Thomas told Revere that Boudreaux had remarked that “there’s no way you can loose, which given that Thomas received his 43.75% for no investment, Thomas could not lose. However Revere took the you to be Plural and not geared just to Thomas.…”
    9. “Revere estimated was told by Thomas that woit would cost $600,000 to open a Copelands….”
    10. “Thomas had told him that Boudreaux would receive $100,000 in sweat equity in SYB in return for developing the restaurant site and overseeing construction. Similar as to what Thomas and Boudreaux’ other company, TORTOLLA, had compensated Jerry Gaston and what Thomas’s other company Garden District Investments (GDI) had compensated Bill French.
    11. “Presumably because of the relationship between the three, which has been called Affinity Fraud, and Boudreaux knew he could leave a paper trail of the frauds and omissions there was only one written communication between Boudreaux and Revere before Revere invested…A document drafted by Boudreaux titled the Jay and Jerry Businees Plan was never shown to Revere. The document explained the SYB plan for Thomas and Boudreaux not to invest any capital and retain 70-87% ownership of their business. The admission of this omission would likely chased away any investor.”
    12. “Jerry, this is the same operating agreement we used for TORTOLLA, expect that I deleted the Capitalization clause so neither you nor I have to contribute any money to SYB for our 43.75% equity, hopefully because of Revere’s trust in us he will not take this to an attorney and catch us in Security Fraud Rule 10b-5 or Theft by Deception or Partnership or Equity code violations”
    13. “By June, 1998, Boudreaux apparently had loaned transferred the $200,000, that Thomas Revere paid in, to B&C RecoveryBoudreaux and Thomas’s other company TORTOLLA which Revere had wantd to invest in to begin with committing Larceny and Theft by Conversation …”
    14. “Boudreaux temporarily managed to premium return on SYB’s cash but he did not tell the court he then transferred the return to Boudreaux and Thomas resulting in Boudreaux needing to lend $60,000.00 to SYB at11% causing a lost to SYB
    15. “In October 1998, Revere was provided with a SYB business plan…3.By the end of the first year of operation of the sixth restaurant, investment partners should receive at least 100% of their initial investment as a distribution…(emphasis added) showing returns of 100% starting in year six titled “Investor expectations” below the spreadsheet was the line “Investor Expectations must be met” This type of hype is typical of Affinity Fruad Ponzi Schemes and several states are now offering courses to protect investors.
    16. “This time, Thomas forfeited transferred his position for $70,000 to be applied to a real estate venture with Boudreaux of membership thus showing Revere had been either sold stock which only had a value ot $2,000.00 per percent for $16,000.00 and that Thomas had received a commission so high that it violates security law and committed Larceny by using Revere funds for his own purpose twice. A document with Boudreaux handwriting on it lists how to remove Thomas’s assets prior to Thomas’s filing bankrupty…”
    17. “On May 10, 2001…the handout from the meeting alerted Revere that the financial expectations were not being met, but Boudreaux does reference or point to a specific place, verbally Boudreaux declared that SYB was doing well enough for Boudreaux to repaid his loans. A check on April 8, 2001 for $16,418.12 and checks $328,000.00 in 2002 were found …”
    18. “To try to deal with the financial distress, Boudreaux negotiated $700,000 bail-out loan from SYBs Landlord, Second Line, however this was the first step in a Fraudulent Transfer to avoid creditors GE Capital and Revere, …”
    19. “By June 2003, SYB was, by admission in default under the loan agreement, Second Line took over the Jacksonville and Winston-Salem stores as Jacksonville Dining Concepts, to later transfer Jacksonville Dining Concepts to Jerry Gaston who had acquired 32% of SYB in August 2003 without Revere’s knowledge…. Violating several codes on Partnerships, and creditors…”
    20. “In September 2003, Boudreaux told Revere that he would buy him out… in July, Boudreaux had recommended Revere simply sign over his shares to a new entity Boudreaux was forming with Second Line and Gaston, such a process is called a “Squeeze-out” of a minority shareholder”
    21. “to date, Second Line has not released Boudreaux from the guarantee…or the $700,000 loan, this appears to be a smoke screen as three years have passed, Second Line has rented out the Tampa and Winston-Salem stores, and Boudreaux has written his accountant that the loan was forgiven….”
    22. VI “Claim under Promissory Note SYB Counters that it repaid Revere…”
    23. “SYB insists that its own records “show that the note has been paid, but not completely. SYB records and tax returns show a Due to Funds of $12,000.00 to Revere for unpaid interest”
    24. “Because the parties do not dispute what has been paid to the plaintiff on the note, and because the parties agree that Revere is owed $12,000 Summary Judgment is denied…”
    25. Revere has been very reluctant to accept the fact that his long time friends, fraternity brothers, and adventure buddies would take $200,000 from him to use in their own business, then squeeze him out before the investment became profitable and leave him to pay for the Furniture Fixture & Equipment by claiming their $20,000,000.00 had disappeared.
    26. Obviously numerous frauds were committed and Summary Judgment is not appropriate. In fact given that Revere has uncovered documents that show perjury by Boudreaux and Thomas in their depositions, Boudreaux and Thomas are required to cover the cost to have their depositions taken a second time.

  22. jllafitte says:

    Revere had no interest in investing in SYB with Thomas and Boudreaux to receive $700,000 in Sweat Equity. At the time Thomas’s plate was full and Thomas was adding more. Thomas had no time for Sweat Equity. Thomas had D&B franchises from Hawaii to Maine (17 states), was developing Universal Solutions, had two other Thibodeauxs Franchises, lived in New Jersey, and took a position as Senior VP at MCI/Worldcom.
    Revere was firm that he would only invest if the GP (s) had skin in the game, advise from the early investor to Steve Jobs at Apple.” Jobs had to sell his VW to prove his commitment.
    Bailey and Long again claim without evidence that Boudreaux was to receive $700,000.00 in “Sweat Equity” without putting that in writing to Revere and despite having in writing that Boudreaux and Thomas would sell shares of their stock to fund SYB.
    The theme of Bailey and Long is to clear for not being responsible to Revere, yet the operating agreement puts responsibility on the Managing Partners.
    Long and Bailey claim the Merger clause relieves Thomas and Boudreaux for any verbal commitments made to Revere. Georgia’s Equity Codes, Criminal codes for Theft, Partnership Codes, Financial reporting Codes, and Securities Code prohibit Omitting a Material fact to steal $200,000 from an investor.

    Long and Bailey move on to the Section 4. The Operation of SYB
    This is another section where Section 3.3 of Candor towards the Tribunal needs to be enforced:
    Long and Bailey present a false story to the TRIBUNAL to cover up numerous Frauds and crimes by Boudreaux and Thomas.
    This section deals with the Transfer of Revere’s funds to TORTOLLA and the coverup.
    Q&K write: “Revere now alleges that SYB’s loan to B&C Recovery was self dealing by Boudreaux because the loan proceeds were used by TORTOLLA, an entity in which Boudreaux has a 5% ownership interest. While Boudreaux did have a small interest in TORTOLLA, it still remains that the loan benefits SYB.”
    Q&K and Boudreaux and Judge XXX all accept that the loan benefited SYB. It did not, it benefitted Boudreaux and Thomas and to some degree Redwood and Gaston.
    Boudreaux original story was that the funds had been sitting in SYBs account for some time. Later after Revere secured Promissory Notes showing the money was “loaned” immediately Lanner changed that story.
    The 4 of them needed funds for TORTOLLA and they needed them by May8th for a Thibodeauxs Franchise conference. They wanted to secure the entire Atlanta Market. Rather than bring Revere in TORTOLLA they formed SYB.
    The Transfer of Revere’s funds to TORTOLLA is
    16-8-2. Theft by taking
    A person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated

    16-8-3. Theft by deception
    (a) A person commits the offense of theft by deception when he obtains property by any deceitful means or artful practice with the intention of depriving the owner of the property.
    (b) A person deceives if he intentionally:
    (1) Creates or confirms another’s impression of an existing fact or past event which is false and which the accused knows or believes to be false;
    (2) Fails to correct a false impression of an existing fact or past event which he has previously created or confirmed;

    • 16-8-4Theft by conversion Larceny using someone’s funds for your own purpose. 16-8-4. Theft by conversion
    (a) A person commits the offense of theft by conversion when, having lawfully obtained funds or other property of another including, but not limited to, leased or rented personal property, under an agreement or other known legal obligation to make a specified application of such funds or a specified disposition of such property, he knowingly converts the funds or property to his own use in violation of the agreement or legal obligation. This Code section applies whether the application or disposition is to be made from the funds or property of another or from the accused’s own funds or property in equivalent amount when the agreement contemplates that the accused may deal with the funds or property of another as his own.
    What the evidence supports that happened:
    1. Revere’s funds were transferred to TORTOLLA violating coded 16-8-2,3,4 for theft
    2. B&C a separate company, which Revere claims in a Thomas/Redwood partnership but the Redwood’s in deposition claim otherwise wrote checks to SYB totaling approximately that amount plus interest of 10%
    3. Boudreaux and Q&K and Feldman claimed the interest was a benefit to SYB
    4. However Boudreaux distributed those funds to Thomas and Boudreaux. Thomas’s 1998 tax return shows a dividend of $3,005.00 matching 43.75% of the interest earned per the Financial statement
    5. Boudreaux then loaned $60,000.00 to SYB at 11% interest.
    6. Boudreaux was paid per checks cashed and the financial report $197.00 in interest in 1998.
    7. Thus the whole process was a net loss to SYB
    8. Thus Long & Bailey have presented false evidence to the court and need to advise the court per 3.3 A.4

    Later in their Motion Section 4 Q&K state: “Revere now complains that Boudreaux wrongfully induced him to sign this guaranty by telling him that the investors would make a 100% return on investment, but the document that Boudreaux actually gave Revere referring to a 100% return plainly stated that this was only an “objective”.

    Again Q&K leave out the full details. A sentence right below the “objective” stated “Investor expectations must be met.”

    By April 2000 Revere decided to stop signing personal guarantees. Boudreaux did not notice this until 2003.

    Q&K then discuss the events of the Summer of 2001.

    This starts with a Franchise meeting in New Orleans in May.

    Boudreaux claims he gave Revere a report that stated that Financial Expectations were not being met. While a report was given that no chart comparing Financial Expectations and actual expectations was given.

    SYB was ahead in number of stores open with five.

    Boudreaux indicated that he was going to use some of the profits to repay his loans, which he did in the amount of $325,000.00 during 2000- May 2001.

    Boudreaux Q&K then make an off the wall statement: “Revere did not go back to his room and analyze it and come back with questions.” Revere was with Boudreaux for 2-3 days and discussed many Copeland issues with Boudreaux. Several related that report.
    At the May meeting the Jacksonville restaurant was recognized for its success.

    In August 2001 when Revere loaned SYB $250,000.00 at 10% it was in increments and due to some unknown reason Boudreaux at one time repaid Revere, but asked Revere to repay the repayment. Thus Revere wrote checks to SYB for $350,000.00.

    Revere does not accept that the loan was made because he was aware that SYB was in “Poor Financial Condition”. Rather the acquisition to five stores ahead of schedule had caused a need for extra capital.

    SYB’s records show a DTF due to funds of $12,000.00 to Revere. Q&K write that SYB’s records show that it had paid Revere $254,600 by March 2003. Ten percent of$250,000 would be $25,000.00 per year in interest. The repayment to Revere was set at $10,000.00 per month.

    Boudreaux, Q&K state that “As planned, Boudreaux through his company, Boudreaux Development and other companies he owns, loaned approximately $1.8M million to SYB…” Boudreaux states in his declaration he was repaid very little of this.

    However checks discovered show Boudreaux was repaid approximately $1,4M million.

    At this point Q&K skip to August 2003: “ Thus is August, 2003, Boudreaux as a last resort negotiated a $700,000 loan from SYB’s Landlord Second Line….None of it was used to repay money to Boudreaux.”

    “Second Line asked Boudreaux and Revere to personally guarantee the loan, which Boudreaux did but Revere did not.”

    Revere position is that Boudreaux and Q&K have left out major parts of these events and falsely told others, which they need to correct to the Tribunal.

    The following checks were discovered payable to Boudreaux Development after the loan:
    Date: Amount Reason
    12/14/2003 $2,884.61 BiWeekly loan pymt
    12/23/2003 3,000.00 Partial repymt of $11,532.68 on 11/19
    1/11/2004 2,884.61 BiWeekly loan pymt
    1/25/2004 2,884.61 BiWeekly loan pymt
    2/8/2004 2,884.61 BiWeekly loan pymt
    2/22/2004 2,884.61 BiWeekly loan pymt
    3/7/2004 2,884.61 BiWeekly loan pymt
    3/15/2004 4,252.02 Prodining LLC
    3/21/2004 2,884.61 BiWeekly loan pymt
    3/29/2004 24,999.88 loan repayment
    4/4/2004 2,884.61 BiWeekly loan pymt
    4/9/2004 1,128.95 postage
    4/18/2004 2,884.61 BiWeekly loan pymt
    5/2/2004 2,884.61 BiWeekly loan pymt
    5/16/ 2004 2,884.61 BiWeekly loan pymt
    5/30/2004 2,884.61 BiWeekly loan pymt
    6/13/2004 2,884.61 BiWeekly loan pymt
    6/27/2002 2,884.61 BiWeekly loan pymt
    7/11/2004 2,884.61 BiWeekly loan pymt
    7/25/2004 2,884.61 BiWeekly loan pymt
    7/7/2004 1,134.76
    8/8/2004 2,884.61 BiWeekly loan pymt

    What was found is that from Dec 2003- Aug 2004 $77,000.00 was paid to Xxx Boudreaux labeled as “Loan Repayment”

    Going back through files discovered and emails that were sent to Revere, the evidence validates that Boudreaux wanted to “Squeeze-Out” Revere and reform the company without Revere’s debt, the GE Debt, and repaying Revere’s his annual dividend, and return of Revere’s capital contribution, and if Boudreaux could get Revere to have personal responsibility for the leases and $700,000 loan even better.

    What other omissions to Boudreaux and Q&K fail to disclose:
    1. They fail to disclose that in December 2000, Boudreaux drafted a plan to remove Thomas’s assets to avert bankruptcy.
    2. In January 2001, Boudreaux had SYB take over Thibodeauxs’ Pineville which was losing money and a tenant to Boudreaux Dining-In costing SYB $160,00.00, and benefiting Boudreaux Dining-In by getting the FF&E for free.
    3. In March 2003 Boudreaux began drafting plans for a merger of SYB which would allow Lanner to stay on as a manager and buy back the company and for the new owner to default to GE Capital.
    4. In August 2003 Boudreaux agreed to sell 32% of SYB to Zzz Gaston.
    5. In July 2003 Boudreaux informed Revere that Second Line would squeeze –out Revere via conditions in the Buy/Sell that Revere could not meet.
    6. In September 2003 Boudreaux did “Squeeze-out” Revere with conditions in the Buy/Sell that Revere could not meet.
    7. Request of Second Line for a deposition were met with resistance and that depostion never happened. Why didn’t SECOND LINE ever attempt to collect against Xxx Boudreaux?
    8. Reason, When Revere would not agree to walk away, Boudreaux devised a plan to force him out, starting with the Second Line loan.

    Back to the Motion by Long and Bailey:
    Q&K wrote: “Boudreaux realized that his personal guaranty of the Second Line loan could eventually cause him to file bankruptcy. In an effort to save Revere from this same fate, Boudreaux put an additional $203,333.01 into the company in exchange for SECOND LINE forgiving Revere’s personal guarantee of the Tampa Lease (Boudreaux Dec). The Tampa lease obligations has exposed Revere to a potential obligation of several million dollars, but Boudreaux relieved Revere of that potential liability. (Boudreaux DECL 27)
    This paragraph is full of false statements. First the Tampa lease option had a cap of $1.5M, second that would first have been due from SYB, third Thomas and Boudreaux both signed that Personal Guarantee as well as Revere, and fourth Boudreaux did not have to the loan from Second Line, and fifth Revere had found a qualified Restaurant real estate broker in Tampa in July but Boudreaux had refused to corporate with information to lease the facility.
    Boudreaux actions were to “Squeeze-Out” Revere and do a fraudulent transfer to avoid creditors and acquire the business back less the debts.
    Q&K then state: “Second Line asked Boudreaux and Revere to personally guarantee the loan, which Boudreaux did but Revere did not.”
    How foolish it would have been for Revere to personally guarantee that loan for $700,000.00 given that Boudreaux is claiming he has no money and the SYB is failing. Why would Second Line even consider Personal Guarantees given that Boudreaux says he is broke?
    The only reason is that Second Line had no intention of using the Personal Guarantees. The transfer was a convient way to allow the transfer without Thibodeauxs getting hold of Jacksonville per their first right of refusal.
    Here Q&K paint a confusing picture: First they state Boudreaux wanted to save Revere by getting a release of Tampa, then they say Boudreaux exercised his Buy/Sell rights because Revere would not execute documents promptly, and eventually he explained to Boudreaux that he was too busy decorating his house.
    Revere actually flew to Atlanta to meet with Boudreaux to reach some type of agreement and Boudreaux did not show. Boudreaux sent the documents to Revere wanting an signature in 48 hours and Revere decided to show them to an attorney. The time it took to find one and the concerns raised consumed less than two weeks.
    Boudreaux could have advised Revere what he was working on weeks prior and asked for Revere’s input.
    Q&K write: “By contrast, Boudreaux lost almost all of the money he had invested, paid $70,000.00 in his personal guaranty to GE Capital, and has never been released from any personal guaranty of any store lease. (Boudreaux Decl 15, 27-28)
    Response: Boudreaux emailed his accountant and GE he was being forgiven of the loans, checks have been discovered totaling almost $1.8M to Boudreaux companies, Boudreaux has developed restaurant skills and possibly has some method to receive payments from Zzz Gaston.

    On Page 15 Q&K argue that under Georgia Law the state in which a corporation is incorporate in governs the nature and scope of fiduciary duties. They cite: Diedrich v. Miller and Phoenix Airlines v. Metro Airline however researching these cases does not give any support to that statement.
    Diedrich v. Miller is a case where a Wisconsin firm opened an office in Georgia. SYB is a case where the partners agreed to Georgia Law, headquarters were always in Georgia, and once legal action started the General Partners sought the reduced fiduciary accountability the Delaware Law offers. There is a big difference.
    Diedrich v. Miller
    1. In our view the Court of Appeals, in Division 2 of its opinion, failed to give proper consideration to OCGA § 14-2-310. This section of the Business Corporations Code requires a foreign corporation to obtain a certificate of authority before it has the right to transact business in Georgia. However, the section provides that “. . . nothing contained in this Chapter (Chapter 2 of Title 14 – Business Corporations) shall be construed to authorize this state to regulate the organization or the internal affairs of such corporation. (A foreign corporation with a certificate of authority.)” This is a recognition of the internal affairs doctrine which has been described as “. . . involved whenever the issue concerns the relations inter se of the corporation, its shareholders, directors, officers or agents. . ..” Restatement 2d Conflict of Laws, § 313 a.3 We hold that the wrongful appropriation of [ 254 Ga. 736 ]
    a business opportunity of a foreign corporation by its officer or director is an internal affair not to be regulated by Georgia law. Instead, the local law of the state of incorporation applies, which is Wisconsin in this case. Restatement 2d Conflict of

    PHOENIX AIRLINE v. METRO AIRLINES
    260 Ga. 584 (1990)

    Pages 17-21 Q&K seek to clear Boudreaux of Fiduciary responsibility with misrepresentations.
    Q&K state: “Prior to the execution of the Operating Agreement, Boudreaux owed no fiduciary duty at all.” While no fiduciary duty might be owed, numerous other laws protect investors from Boudreaux and Thomas’s conduct.
    • 10-5-51 Fraud in the sale of a security 10-5-51. Fraud or deceit unlawful; adoption of rule

    (a) It is unlawful for a person that advises others for compensation, either directly or indirectly, or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities
    (1) To employ a device, scheme, or artifice to defraud another person; or
    (2) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

    This parallels SEC Rule 10b-5
    Rule 10b-5: Employment of Manipulative and Deceptive Practices”:
    It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
    (a) To employ any device, scheme, or artifice to defraud,
    (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
    (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,in connection with the purchase or sale of any security.”

    This omissions of Thomas and Boudreaux in recruiting Revere not only violate the above laws. They also violate at least the following:
    • 16-4-8. Conspiracy to commit a crime
    16-14-4. Prohibited activities
    16-14-5. Criminal penalties for violation of Code Section 16-14-4
    16-8-3 Theft by deception- omission of facts to induce investment -Partnership Agreement w/o Cap
    • 16-8-4Theft by conversion Larceny using someone’s funds for your own purpose. 16-8-4. Theft by conversion

    16-8-2 Theft by taking- being in lawful possession thereof, unlawfully
    • 16-8-2. Theft by taking

    16-8-16 Theft by Extortion
    • 14-9A-130. Penalty for fraud

    14-2-621. Issuance of shares– the consideration received or to be received for shares to be issued is adequate
    Q&K (p18) write: “Revere lamely asserts that that Boudreaux owed him a fiduciary duty because they were fraternity brothers.” Revere Depo Pages 262-263.
    When Bailey began his question of Revere, Claude Objected saying “you’re taking it out of context.” Revere position is that there was an Affinity between him and Boudreaux through the Delt Brotherhood had travelled together and been in the same circle for 15 years. Had a Xxx Boudreaux from Atlanta barely known to Charles Revere called with a recommendation that 100% annual returns on an investment must be met, Revere would not have invested.
    Boudreaux and Thomas were required by state and federal not to omit material facts when procuring Revere’s $200,000.00
    Delaware and Georgia Law require a fiduciary to not knowingly mislead and to speak up if he learns that his earlier statement was false or misleading.

    Q&K write: “Failing to tell Revere the commonly known fact that landlords often require personal guarantees of leases can hardly be a breach of fiduciary duty.”
    Revere and the Facts disagree: Limited Partners in LLCs do not sign Personal Guarantees, that why they are called Limited Partners. Revere would not have invested in a Personal Guarantee situation. Boudreaux drafted in his business plan that Revere would be required to sign, but still did not tell Revere.
    P19
    Q&K write: “Revere complains that Boudreaux did not adequately capitalize the company, thus necessitating personal guarantees. However Boudreaux put in over $1.8M in the company, and when he asked Revere to guaranty the Tampa lease, Revere voluntarily agreed to do so.”
    Revere and the Facts disagree: Boudreaux took out approximately $1.8M from SYB by August 2003. Boudreaux also received substantial tax losses to offset other income.($208,000 in 1999). Boudreaux may be receiving income from the restaurant skills he learned or some type of by back from Gaston who now owns Jacksonville because of Boudreaux.
    Revere never volunteered agreed to sign the personal guarantees for Tampa. Revere was told his $200,000 was already spent on Franchise fees and there was no way to move forward without personal guarantees on the leases and FF&E.

    Q&K write p19- “Boudreaux’ apparent misstatement was that is was the “objective” to obtain a 100% return investment. That was true. Moreover, a generalized objective hardly rises to the level of a misstatement or omission of material facts.”
    Revere and the facts disagree: Boudreaux did not just say it was the “Objective” Boudreaux stated the 100% return on investment was the “investor expectation” and that “Investor expectations MUST be met”. Must is defined as “b: be required by law, custom, or moral conscience to ”
    P20
    Q&K write: “Neither is the loan Boudreaux orchestrated to B&C recovery a breach of fiduciary duty. That loan benefited SYB.”
    Revere and the Facts disagree: “the transfer was to TORTOLLA Boudreaux and Thomas’s other company. Over time it was repaid to Prodining and then those revenues were distributed to Boudreaux and Thomas. Because Revere funds were missing, SYB had to borrow money at 11%. A lost to SYB.
    P20
    Q&K write: “Nor is it problematic that Boudreaux loaned money, upon which he could collect interest to SYB…”
    Revere and the facts disagree: Thomas first advised Revere that $200,000 would be for a 25% stake in a LLC partnership fully capitalized, per the GDI and TORTOLLA agreements. This is what Revere agreed to. Then Boudreaux and Thomas began reducing Revere’s payout. First it was reduced to a 12.5% stating in was due to the successful track records having improved profitability. It was not until months later, Boudreaux and Thomas informed Revere that they would be making loans instead of placing capital and at the same time informing Revere that Boudreaux would be paid $25,000 per open store.
    Checks were discovering that Boudreaux repaid himself:
    1998 $50,000.00 W-2 Other expenses-rent
    1999 $ 702,000.00
    2000 $321,000.00 $44,230.00
    2001 $ 16,400.00 $79,607.00
    2002 $ 20,000.00
    2003 $ 6,000.00
    2004 $77,000.00
    Total found $1.3M
    However Boudreaux violated Georgia financial reporting laws for Partnerships, by not filing reports to Revere.
    The reality is that had Revere would have received 25% of the $1.3M+ that Boudreaux pulled out of SYB per the GDI and TORTOLLA operating agreements and ongoing dividends.
    Standard Partnership agreements have payouts in the following manner:
    1. Secured Creditors 2. Unsecured Creditors 3. Limited Partners 4. General Partners

    P20
    Q&K state: “Boudreaux breached no fiduciary duty by obtaining the Second Line loan or later “letting” it default. Boudreaux would not have “let” the loan default if SYB could have paid it.”
    Revere and the facts disagree: Boudreaux hid from Revere the fact that Boudreaux had admitted Zzz Gaston to the partnership for a total of 32%. The Loan default was part of the “Squeeze-out” of Revere and having Revere cover the GE FF&E loan default.
    Notes and emails show that Boudreaux had wanted to restructure SYB without Revere which would allow Boudreaux to clear the GE Debt at the same time. Georgia Law called this Transfer Fraud.
    Boudreaux had numerous other options that would have benefited Revere and took the one that financially hurt Revere the most.
    Boudreaux could have sold shares in SYB to properly capitalize it.
    Boudreaux could have leased the Tampa store or let Revere lease it.
    Boudreaux could have left his “loans” in SYB
    A Fiduciary looks out for the best interests of those he is responsible for.

    P21
    Q&K state: “Boudreaux buy out is not a Breach of Fiduciary duty the way the Operating Agreement’s buy out provision works and Revere signed the agreement.
    Since standard Operating Agreement contain a capitalization statement and require more than one limited Liability Partner to capitalize a company. Standard Operating agreements do not have such One-sided Buy/Sell Agreements.
    The operating agreement was Theft by deception to Revere. Boudreaux sold him “nothing” for $200,000.00 and later executed a Buy/Sell to complete the Theft by returning $36,750.00 and leaving Revere responsible for unpaid secured debt of $400,000.00.

    P22
    Q&K write: “In sum, despite the fact that Boudreaux did the best he could, SYB failed.”
    Revere and the Facts disagree: SYB did not fail. The Jacksonville store never closed, at the time of transfer only GE and Revere were not being paid.
    Numerous Laws and terms have been developed prevent what happened to Revere.
    “Squeeze-out” or “Freeze-out” is the term used to describe when a majority shareholder seeks to remove a minority shareholder before he restructures the company.
    Transfer Fraud is used to describe Transfer the assets of the company to avoid creditors and back to an insider of the company.
    PXXXX
    Breaches of Fiduciary not mentioned by Q&K:
    Boudreaux not validating Thomas’s Bankruptcy Claim and leaving Revere to cover
    Freeze-Out or Squeeze Out Merger of Revere by Boudreaux and Gaston
    Boudreaux claiming to be bankrupt to GE and leaving Revere to cover
    Boudreaux never answering why he omitted to put in writing or explain to Revere his sudden claim of “Sweat Equity”

    Freeze-out merger
    From Wikipedia, the free encyclopedia
    It has been suggested that this article or section be merged into squeeze out. (Discuss) Proposed since September 2010.
    A freeze-out merger is a technique by which one or more shareholders who collectively hold a majority of shares in a corporation gain ownership of remaining shares in that corporation.
    The majority shareholders incorporate a second corporation, which initiates a merger with the original corporation. The shareholders using this technique are then in a position to dictate the plan of merger. They force the minority stockholders in the original corporation to accept a cash payment for their shares, effectively “freezing them out” of the resulting company.
    The legal community has criticised the present rules with regard to freeze-out mergers as being biased against the interests of the minority shareholders. For example, if a gain in stock value is anticipated by the majority, they can deprive the frozen-out minority of its share of those gains.[1][2]
    Although a LBO is an effective tool for a group of investors to use to purchase a company, it is less well suited to the case of one company acquiring another. An alternative is the freeze-out merger: The Laws on tender offers allow the acquiring company to freeze existing shareholders out of the gains from merging by forcing non-tendering shareholders to sell their shares for the tender offer price.
    To complete freeze-out merger, the acquiring company first creates a new corporation, which it owns and controls. The acquiring corporation then makes a tender offer at an amount slightly higher than the current target corporation’ stock price. If the tender offer succeeds, the acquirer gains control of the target and merges its assets into the new subsidiary corporation. In effect, the non-tendering shareholders lose their shares because the target corporation no longer exists. In compensation, non tendering shareholders get their right to receive the tender offer price for their shares. The bidder, in essence, gets complete ownership of the target for the tender offer price. Because the value the non-tendering shareholders receive for their shares is equal to the tender price (which is more than the premerger stock price), the law recognizes it as fair value and non-tendering shareholders have no legal recourse. Under these circumstances, existing shareholders will tender their stock, reasoning that there is no benefit to holding out: if the tender offer succeeds, they get the tender price anyway; if they hold out, they risk jeopardizing the deal and forgoing the small gain. Hence the acquirer is able to capture almost all the value added from the merger and, as in the leveraged buyout, is able to effectively eliminate the free rider problem. This freeze-out tender offer has a significant advantage over an LBO because an acquiring corporation need not make an all-cash tender offer. Instead, it can use shares of its own stock to pay for the acquisition. In this case, the bidder offers to exchange each shareholder’s stock in the target for stock in the acquiring company. As long as the exchange rate is set so that the value in the acquirer’s stock exceeds the pre-merger market value of the target-company stock, the non-tendering shareholders will receive fair value for their shares and will have no legal recourse.
    Majority Shareholders Who Take Part in “Squeeze-Outs” Can No Longer Count Pennsylvania as the Sanctuary It Once Was Thought to Be
    8/13/2012

    Standard learning has long held that a minority shareholder of a Pennsylvania corporation who was deprived of his stock by a “cash-out” or “squeeze-out” merger had no remedy after the merger was completed other than to take what the merger gave or demand statutory appraisal and be paid the “fair value” for his shares. No other post-merger remedy, whether based in statute or common law, was thought to be available to a minority shareholder to address the actions of the majority in a “squeeze-out.” Now, after the Pennsylvania Supreme Court’s holding in Mitchell Partners, L.P. v. Irex Corporation, minority shareholders may pursue common law claims on the basis of fraud or fundamental unfairness against the majority shareholders that squeezed them out.
    Prior to the Pennsylvania Supreme Court’s decision, the Third Circuit turned this long-standing view of Pennsylvania law on end with its Mitchell Partners, L.P. v. Irex Corporation opinion of late 2011. In that case, the Court held that Pennsylvania’s Business Corporation Law does not bar recovery based on common law claims following a cash-out merger. The Court reasoned that “barring [post-merger suits] would do little more than insulate alleged tortfeasors from responsibility for their conduct.” After a motion for rehearing from the defendants, and some added pressure from the Governor of Pennsylvania in the form of an amicus brief, the Third Circuit granted rehearing and certified the question at hand to the Pennsylvania Supreme Court. The specific inquiry was “Does 15 Pa. [C. S.] §1105, providing for appraisal of the value of the shares of minority shareholders who are “squeezed out” in a cashout merger[,] preclude all other post-merger remedies including claims of fraud, breach of fiduciary duty, and other common law claims?”

    The Supreme Court held that there are remedies available to a minority shareholder in Pennsylvania after the merger in the event of fraud or fundamental unfairness. The
    opinion, along with the concurrence, was careful to point out that this exception to the rule of
    exclusivity should not be invoked lightly. The exception does not allow a minority shareholder
    to pursue a common law claim based solely on the nature of the squeeze-out or on an allegation
    that the majority inadequately compensated the minority for its shares.

    This change moves the law of the Commonwealth of Pennsylvania closer to that of the Stateof Delaware which, like many other jurisdictions across the United States, allows for post-merger
    remedies other than appraisal rights. Those considering pursuing a cash-out merger must now
    address the potential of post-merger claims in every stage of planning.

    False Statements with Boudreaux, Thomas’s, and Gaston’s story on Loaning Revere’s money to B&C, which was communicated to the Tribunal as a Statement of Uncontested Fact and accepted by Judge XXX.
    What happened by evidence discovered in evidence turned over after Motion for Summary Judgment had been filed:

    1. March 1998, Revere advises Thomas he would like to invest in TORTOLLA and is told TORTOLLA is adequately funded and closed to new investors.
    2. April 1998, Boudreaux devised Xxx and Zzz business plan for Thibodeauxs in Central Florida
    3. April 1998, Boudreaux and Thomas solicit Revere to invest in SYB stating same Operating Agreement as TORTOLLA
    4. Boudreaux deletes Capitalization Statement from SYB Agreement in Section 4 and Section 9.
    5. May 6, 1998 $170,000.00 of Revere’s funds deposited into SYB Checking account.
    6. May 7, $70,000.00 of Revere’s money transferred into TORTOLLA business owned by Redwood, Thomas, Boudreaux, and Gaston, as TORTOLLA is short Capital.
    7. Revere is not told
    8. May 8th, Copeland’s Franchise meeting starts and it it announced that TORTOLLA has purchased the rights to four Thibodeauxs in Atlanta to prevent others from coming into the Atlanta market.
    9. May 9, 1998 A $100,000 Promissory note is drafted.
    10. May 14, 1998 Claire Redwood signs a $100,000 Promissory Note from B&C Recovery to SYB at 10% to repay in one payment $100,000 plus 10% interest by either the earlier of 10 days from call date or Payment due to SYB by Dec 1, 1998. No monthly plan is offered.
    11. B&C Recovery does not make any payments on note until 12/31/1998 of $5,000.00
    12. B&C makes 12 unequal payments back to SYB, the last one being $50,000.00 on August 18, 1999.
    13. B&C was never charged interest on this note, and B&C never fully repaid the note.
    14. $50,000 for 15 months at 10% would be $6,250.00.
    15. Other payments:
    16. 12/31/1998 $5,000.00 2/2/1999 $2,742.88
    17. 2/22/1998 $4,114.32 (needing to apply $3,655.00 to $60,000.00 loan leaves $459.00)
    18. 3/22/1999 $1,371.44 4/1/1999 $13,085.86
    19. 4/20/1999 $1,371.44 5/11/1999 $12,000.00
    20. 5/19/1999 $1,371.44 6/21/1999 $1,371.44
    21. 7/27/1999 $11,371.44
    22. Total collected per spreadsheet $100,145.00
    23. It appears only $145.00 in interest was charged to B&C for this loan.
    24. Subpoenas requests to Glenn Redwood and B&C for documents to TORTOLLA and B&C were denied. His attorney wrote: “…any involvement Mr. Redwood has had with any other Copeland’s restaurants are simply none of Mr. Revere’s business.”….”in the event you fail or refuse to stop harassing and annoying TORTOLLA, B&C, or the Redwood’s it will be necessary to bring you inappropriate conduct to the attention of the subpeona issueing court….”
    25. Other notes of interest from the spread sheet: a check from Zzz Thomas for $12,000.00 on 5/11/1999 and repaid to Thomas on 8/18/1999 for $12,099.82
    26. A check from Zzz Gaston on 5/1999 for $1,371.44
    27. The cashed checks from SYB to TORTOLLA were signed by Zzz Gaston, who when asked in Dec 2012 if he knew anything stated he could not remember how the money came only that Thomas was responsible for obtaining the money to open TORTOLLA’s restaurants.
    28. On June 8, 1998 a second note was issued to B&C and signed by …….(Signature not recognizable) for $60,000.00 from B&C Recovery to SYB at 10% to repay in one payment $100,000 plus 10% interest by either the earlier of 10 days from call date or Payment due to SYB by Dec 1, 1998. No monthly plan is offered.
    29. This note is repaid on February 17, 1999 with $4,114,32 paid on February 22, 1999. Interest due would be @$3,655.00 no penalty for late payment was assigned.
    30. The SYB Spreadsheet shows only two interest charges of $3,065.86 and $589.62 totaling $3,655.48.
    31. An extra $30,000.00 was shown to B&C from SYB on June 30, 1998 repaid Sept 30,1998. No interest was earned for this “loan” assignment. 10% would have generated $750.00
    32. Zzz Thomas’s 1998 tax return shows a dividend from SYB of $3,005.00
    33. The 1998 compilation report of SYB shows $6869.00 in interest earned for 1998.
    34. $6,869.00 x 43.75% (Thomas’s % ownership) = $3,005.19
    35. $100,000.00 at 10% interest for @ 7.7 months = $6,427.00
    36. $60,000 at 10% interest for 6 months =$3,000.00
    37. SYB should have made @ $10,180.00 in 1998 from B&C on Revere’s funds
    38. SYB should have made at least $5,000.00 in 1999 on Revere’s funds from B&C.
    39. Or SYB could have earned 4.56% per year per the checking statement or $5,320.00 in 1998.
    40. Instead Boudreaux charged SYB interest on his loans to SYB at 11% on $280,000 starting on Oct 30, 1998.
    41. Net result: Revere’s funds left in SYB earn $5,000 in 1998 instead Boudreaux transfer to TORTOLLA is cover to pay Thomas (and maybe Boudreaux) $3,005.00 each. And for Boudreaux to charge SYB 11% on $280,000.00 (@$6,000 for 2 months).
    42. Thus a loss to SYB of $5,000.00 + $6,010 + $6,000 of $17,000.00 for 1998. And probably $20,000.00 for 1999 for a total of $34,000.00
    43. Neither Boudreaux, Thomas, Redwood, or Gaston informed Revere that his funds had been transferred to TORTOLLA for their use violating Georgia Code 16-8-4 Theft by conversion, 16-4-8 Conspiracy to commit a crime, 16-10-20 Perjury, 16-10-72 Subordination of perjury, 16-8-3 Theft by deception, 10-5-51 Fraud in the sale of securities, 14-2-1620 False reporting on financial statement, 9-11-37 Failure to make discovery, 16-10-93, 23-2-51, 23-2-52, 16-2-22
    44. In September 2003 Revere became aware something was up, at that same time Boudreaux removed Revere from the partnership.
    45. In August 2004 Boudreaux and Gaston defaulted to GE and Revere was required to pay on the debt owed GE, while Gaston continued to manage Jacksonville and eventually buy Jacksonville.
    46. In 2005 Revere asked Boudreaux about checks to B&C. At that point efforts to deter Revere began Tolling Code 9-3-96.
    47. Boudreaux first said B&C Recovery was a collection agency that was trying to collect a past due debt on a phone bill.
    48. Revere point out B&C was Thomas and Redwood.
    49. Boudreaux then claimed: SYB did not need to use Revere’s funds right away and Thomas informed Boudreaux that B&C needed funds so he did a short term loan at 10% to earn a premium.
    50. Boudreaux stuck to this story in his deposition and declaration.
    51. Thomas claimed the funds were to B&C to repay a loan Thomas made to B&C to loan money to GDI at 31% interest.
    52. Redwood stated the funds were for TORTOLLA capital, but did not disclose the check was written to TORTOLLA.
    53. Gaston cashed the checks but claims not to know where the money came from.
    54. Boudreaux withheld 45 boxes of documents from Revere until late September as he was filing a motion for Summary Judgment.
    55. Judge XXX accepted Boudreaux’,Bailey’s, and Long’s evidence and dismissed the fraud claim. Stating Revere did not dispute that Boudreaux had benefited SYB.
    56. Judge XXX’s was misled and wrong in his ruling.
    57. Although aware of the deception Bailey and Long have not informed the court or Tribunal of the fact that false evidence was presented per Bar Code of Conduct Rules 3.3 and 3.4.
    58. Like the court Revere accepted Boudreaux sworn statement that Boudreaux benefited SYB with the loan.
    59. Only recently did Revere realize to validate the checking statement would show interest rate being paid of 4.5% instead of the 2% Boudreaux quoted and
    60. The B&C/ TORTOLLA Spread sheet might have an omission of the 10% interest charge to B&C.
    61. This research was based on trying to determine the $3,005.00 declared to on Zzz Thomas’s 1998 tax return.
    62. Thus B&C/ Glenn Redwood and Zzz Thomas still owe $13,250 in interest from 1998-1999 and interest on the interest.

    63. Sweat Equity
    64. Boudreaux and Thomas claimed they were to receive $700,000 each for Sweat Equity in their Depositions and Declarations.
    65. Yet neither could produce evidence to support this claims.
    66. Evidence of emails supports that Revere sought to clarify this issue and that Boudreaux denies receiving any payout or payback of funds from SYB although checks discovered show he received over $1.3M.
    67. Evidence shows that Thomas and Boudreaux were evasive and deterred Revere especially after Judge XXX’s ruling.
    68. However evidence also shows that Boudreaux and Thomas were not entitled to “Sweat Equity” and thus stole Revere’s $200,000 in an intricate Ponzi Scheme. $200,000 was the initial contribution, plus interest on a loan, plus payments to GE, plus lost opportunity or dividends from Jacksonville, less $36,750.00 returned.
    69. The actions by Boudreaux and Thomas to obtain Revere’s $200,00 violate numerous Georgia Codes. Their efforts to cover-up the “sweat equity” scam also violate numerous GA codes:
    70. Georgia Code 16-8-4 Theft by conversion, 16-4-8 Conspiracy to commit a crime, 16-10-20 Perjury, 16-10-72 Subordination of perjury, 16-8-3 Theft by deception, 10-5-51 Fraud in the sale of securities, 14-2-1620 False reporting on financial statement, 9-11-37 Failure to make discovery, etc ..
    71. 14-2-621 share price, 14-9-502 promise to contribute
    72. 14-9-105 records to be kept

    73. $12,000 due to Revere on Promissory Note
    74. Although Long and Bailey argued to Judge XXX that Revere had been paid on his Promissory Note.
    75. The 2004 tax show that Gaston converted the $12,000 DTF (Due to Funds) as Paid in Capital and
    76. The accountant reported Revere was still due $12,000.00
    77. SYB violated laws by not providing Financial reports after 1999 for Revere to monitor his loans and Boudreaux loans.
    78. Judge XXX ruled in Boudreaux favor and dismissed Revere’s claim based on Long and Bailey claiming that SYB had paid the loans.
    79. Theft by taking 16-8-2

    80. The next acts against Revere by Thomas, Boudreaux, and Gaston included:
    81. Refusing to properly disolve SYB to allow Revere to recoup his $200,000.00 investment
    82. Leaving Revere with $400,000 in GE Debt to pay 14-2-1202
    83. Squeezing-out Revere to avoid paying him is annual 12.5% dividend on $300,000 to $500,000 in profit. and Codes 16-9-53, Destruction, removal, concealment or transfer of property to security interest, Codes 16-9-51 secreting property, 16-14-4 RICO unlawful to retain property, 16-8-2 taking, 14-2-1202 Sale of Assets requires Shareholder approval
    84. Failure to make discovery 9-11-37
    85. Extortion 16-8-4
    86. To achieve this Fraudulent Transfer to avoid Creditors, Conspiracy 16-14-8, 16-8-2, 14-9A-130, 14-2-1621,

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