RE: FIC v SN, ZM - the various cases17 Feb 2022 08:32
Pt.2 (final part) which lays out the basis of each case, it doesn't discuss the merits of the case
The Federal Actions
1. The California Federal Action
In the California Federal Action, FRC and FIC alleged claims against Hope, Outrider and Outrider Onshore for breach of fiduciary duty/duty of loyalty, intentional interference with prospective economic relations, fraud, negligent misrepresentation and civil conspiracy. As stated above, the primary basis of the claims is that the defendants, through OMF, purchased $13.8 million in loan notes issued by a subsidiary of FRC at a discounted price of approximately $4 million. In 2016, the defendants negotiated a settlement pursuant to which OMF obtained loan notes in the total amount of $22,910,094 issued by FIC, and Hope received a seat on FRC’s board of directors. Then, as a director, Hope repeatedly and systematically thwarted FRC’s efforts to obtain necessary funding, seeking instead to cause FRC’s liquidation over unpaid debts, including, principally, the loan to OMF.
In the plaintiffs’ initial disclosure statement, they identified Hope, Nicandros and Mamulaishvili as witnesses. (Ex. C.) In the defendants’ initial disclosure statement, they identified as witnesses, among others: Mamulaishvili, Nicandros and Hope.
2. The Texas Federal Action
In the Texas Federal Action, OMF sued Nicandros and Mamulaishvili for allegedly breaching personal guarantees of payment for the 2016 OMF notes. The Texas Federal Action is based on OMF’s contentions that FRC sought to avoid its payment obligations under the notes by filing an adversary proceeding in a bankruptcy case, which ultimately was settled in mediation. The settlement resulted in a new note agreement, subsequent to which OMF, FRC, Nicandros, and Mamulaishvili executed a Third Amendment to the Note, providing for the deferral of certain interest payments, and including a pledge by Nicandros and Mamulaishvili of certain shares (“Pledged Shares”) guaranteeing FRC’s payments under the note.
B. The State Action
In the State Action, the plaintiffs are FIC—a party to the California Federal Action—and FRGC, a subsidiary of FRC. And, as in the Texas Federal Action, the defendants are Nicandros and Mamulaishvili.
Not surprisingly, the State Action Petition includes a lengthy recitation of the parties’ extensive dealings and history, including a detailed description of the events engendering the Third Amendment to the Note, as well as the California Federal Action. Indeed, Plaintiffs allege that “[i]t was the Defendants that drove and directed the Frontera Group’s reckless and wasteful litigiousness” and “[t]he increase in FIC’s liability to its creditors is the direct result of the Defendants’ actions in directing meritless litigation in an attempt to delay and/or avoid FIC’s legitimate obligations to its creditors.”. Plaintiffs also allege that Nicandros andMamulaishvili breached fiduciary duties, in part based on their alleged failure to pay cr
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