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The Pelican Briefs - You're the fraudster! No, *you* are!
Thursday, August 20 2009 @ 01:12 AM EDT

The first answer has been filed in the litigation Pelican Equity recently initiated against Robert Brazell, Stephen Norris, Talos Partners, Rama Ramachandran, Darl McBride, and Bryan Cave. The other answers were due on the 19th or in one case on the 17th, but this is the first one to show up on PACER. Pelican Equity is essentially Mark Robbins, from the perspective of us SCO watchers. At the July 27th hearing, his name came up. Remember the guy Darl McBride testified he'd loaned $200,000 to and never got paid back in full? Same guy.

This answer is from Mr. Brazell, Mr. Norris, Talos Partners, and Mr. Ramachandran. Mr. Norris is, of course, the gentleman who signed the unXis-SCO agreement that died aborning. The judge ruled that it seemed to lack the hallmarks of a real deal.

I confess I don't know what to write about this icky case. I guess the best way to handle it is to let it speak for itself. The complaint, alleges the following:

NATURE OF THIS ACTION 1. This action arises out of the defendants' theft of extremely valuable trade secrets, breaches of the fiduciary duties owed by business partners and company employees pursuant to written agreements, misappropriation and unfair competition, violation of the Computer Fraud and Abuse Act, malpractice by a major international law firm, and fraud and deceit.
But this answer [PDF] in effect says, "No, you're the fraudster; you're the con artist". In fact, it goes farther and claims the litigation itself is part of the con.

I must caution that we have no way to know who, if anyone, is telling the truth. Sometimes people do file lawsuits with ulterior motives, after all, and sometimes the motives are to smear victims, because you can say things in court documents without, usually, being sued for libel, so there are those who take advantage of that. So as far as Groklaw is concerned, we have no position. This is included here just to complete the picture. It's happening. It's part of the SCO story. The complaint was handed to the judge at the last SCO bankruptcy hearing, and there was some testimony regarding the plaintiff on the part of both Darl McBride and Stephen Norris, so it's part of the SCO story, and since 2003 Groklaw has covered every SCO event so as to have a complete historical record. In that context then, I'll just let you read them for yourselves.

It's not every day that someone sues a law firm. You need to be brave indeed to try that. But that is what is happening. It's a complex tale of business dealings gone bad. Pelican says it came up with a business idea, one that involves arranging for people who own marketable securities "to pledge those assets as security for loans in amounts constituting substantial percentages of their market value under circumstances in which they could not obtain financing in comparable amounts from traditional lenders" and that under the program borrowers would thus have the benefit of "certain unique and innovative insurance coverage".

The allegation is that the idea was taken by erstwhile partners, web site content grabbed too, and that Robbins got isolated and that the others are now profiting from his concepts and implementations. The law firm, so it is claimed, started by representing Pelican folks, and ended up representing the defendants instead. That's if I understand what it says, which isn't too certain.

But what's clear as a bell is that Robbins says that these folks were drooling over the prospect of billions. In one email, so the complaint alleges, Brazell told Robbins that "[w]e will be on the billionaire list by 2110(sic)." Well. None too soon. I believe that was also the SCO dream.

I have no idea if this complaint in any way represents normal business dealings, but I certainly hope not. And I'll mention in passing that in my experience law firms are very paranoid about never crossing the line regarding who the client is, so I'm from Missouri on that claim. On the other hand, the same firm showed up representing unXis, and that makes me at least stay in focus, given the way that deal was set up. The judge in bankruptcy court wrote this about the deal:

Here, the Debtors offered no evidence of the fairness of the price and, indeed, the price is highly suspect as the sale was clearly a rushed, last ditch effort to avoid the Conversion Motions. There is no evidence that the sale price is fair because it is just enough for Debtors to dismiss their cases.

The terms are equally, if not more, troublesome. Debtors are retaining the Mobility business that is virtually worthless, the letter of credit to pay a Novell judgment terminates on December 31, 2009, with no guarantee that the Novell Litigation will be concluded. Further, the Court is unable to find based on this record, the Debtors' history of unsuccessful sale efforts and this sale's peculiar and questionable timing that Unixis has acted in good faith.

The Court is also very disturbed that the Sale Agreement contains a provision (which Movants refer to as a "poison pill") requiring the transfer of assets to Unixis upon conversion or appointment of a trustee. Here, again, the Sale Motion calls into question whether the sale has a sound business purpose and raises doubts of the parties' good faith. There is simply no record upon which the Court can find that the Sale is in the best interests of the creditors and the estate. The Sale Motion is denied as falling short of the required standards.

And this is the same law firm. As I say, I have no position. I'm just watching and wondering and telling you what they are saying to and about each other.

The plaintiff claims that after grabbing his business from him, the defendants began a smear campaign against him, including setting up a website to "obliterate" his business and "deflect their misdeeds" -- he says particularly Brazell, who is the founder of Overstock.com, and McBride were involved -- and that they have "littered the Internet with scurrilous postings" on that website, www.skylinecowboy.com and on Yahoo, Twitter and other message boards.

Heaven only knows someone has littered the Internet. But how does he know who is doing that site? More questions than answers at this point. I do not recommend going to that website, by the way. I wouldn't touch it with a ten-foot pole. Nor does an allegation in a complaint make something true. I don't see a claim for libel, either, which seems odd to me. But then again, what if it does prove true? This is the kind of aim-for-the-other-side'-eyeballs litigation that you often see settling fast, since it's humiliating and embarrassing for everyone. Remember the Canopy litigation, how fast that settled? Pelican is asking for compensatory damages of $100,000,000. Gasp.

So that's one side. What about the defendants? These defendants in their answer deny everything Pelican has alleged throughout, paragraph by paragraph, and the defenses at the end are of interest, because they frame what the litigation will be about from these defendants' perspective:

(Improper Plaintiff)
AS AND FOR A FIRST DEFENSE

105. Plaintiff’s claims are barred, in whole or in part, because Plaintiff, which is the alter ego of Robbins and AIP, is not the real party in interest and is not a proper plaintiff for this action.

106. Upon information and belief, AIP filed for bankruptcy on May 27, 2009. As such, all rights, title and interest in any property of AIP, including any rights to sue, belong to AIP and are subject to the bankruptcy proceedings.

(Fraud)
AS AND FOR A SECOND DEFENSE

107. Plaintiff has conspired, and continues to conspire and act in concert with its alter egos Robbins and AIP, as well as others to misrepresent and falsely portray Robbins’s and AIP’s business and assets in an effort to defraud the Talos Defendants, prospective investors and customers, and this Court.

108. In furtherance of this fraudulent scheme, Robbins and AIP falsely represented, among other things:

(a) that they had expertise in the stock loan business;
(b) that they had concluded numerous stock loan transactions;
(c) that they had substantial assets and financial backing, including ownership of a mountain ski resort and an island in the Bahamas; and
(d) that they had developed proprietary business plans, models and other intellectual property for a stock loan business.
109. Robbins and AIP deliberately and fraudulently concealed from the Talos Defendants that the one stock loan that AIP had in fact placed resulted in a lawsuit in the Third Judicial District Court in and for Salt Lake County, State of Utah, brought by the borrower based on, among other things, fraud and misrepresentation by AIP and Robbins, which resulted in the entry of a final judgment against Robbins and AIP in the amount of $2,296,651.38, which judgment remains unsatisfied, and that Robbins is subject to a bench warrant for his arrest issued by the Third Judicial District Court in Utah for contempt of court.

110. Plaintiff, Robbins, and AIP knew these representations to be false and made these misrepresentations and concealed these facts for the purpose of inducing Talos Defendants, as well as other prospective investors and customers, to rely upon the representations, to create a false belief that the AIP stock loan business was real, lawful and legitimate, and to induce them to invest time and money in Robbins’s and AIP’s fraudulent scheme when, in fact, AIP, Robbins and their alleged stock loan business was nothing more than an elaborate con job.

111. The Talos Defendants relied upon and were misled by these misrepresentations and concealments and have been damaged thereby.

112. By bringing this lawsuit Plaintiff has joined with and is acting in furtherance of the fraudulent schemes of Robbins, AIP and others.

113. Plaintiff’s claims are barred, in whole or in part, by Plaintiff’s and Plaintiff’s co-conspirators’ own fraudulent acts.

(Misrepresentation)
AS AND FOR A THIRD DEFENSE

114. Talos Defendants repeat and reallege each of the allegations and responses contained in paragraphs 1 through 113 as if fully set forth herein.

115. Plaintiff’s claims are barred, in whole or in part, by Plaintiff’s and Plaintiff’s co-conspirators’ misrepresentation to Defendants.

(Willful Misconduct and Unclean Hands)
AS AND FOR A FOURTH DEFENSE

116. Talos Defendants repeat and reallege each of the allegations and responses contained in paragraphs 1 through 113 as if fully set forth herein.

117. Plaintiff’s claims are barred, in whole or in part, because of Plaintiff’s and Plaintiff’s co-conspirators’ own willful misconduct and/or unclean acts.

We have yet to hear from McBride. Of course, I'll let you know when his answer shows up.

  


The Pelican Briefs - You're the fraudster! No, *you* are! | 190 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections please
Authored by: Tufty on Thursday, August 20 2009 @ 01:36 AM EDT
Neat and tidy


---
Linux powered squirrel.

[ Reply to This | # ]

Off Topic thread
Authored by: ais523 on Thursday, August 20 2009 @ 01:36 AM EDT
This is where to put comments that don't match up with the article.

[ Reply to This | # ]

News picks
Authored by: Tufty on Thursday, August 20 2009 @ 01:38 AM EDT
Latest pedition



---
Linux powered squirrel.

[ Reply to This | # ]

Rats!
Authored by: Tufty on Thursday, August 20 2009 @ 01:40 AM EDT
Needed to raise some investment cash, should have thought of Darl earlier.
Wonder if he is still throwing it around.

Tufty


---
Linux powered squirrel.

[ Reply to This | # ]

Sounds like it would be really easy to fleece Darl
Authored by: kawabago on Thursday, August 20 2009 @ 02:21 AM EDT
Just mention beeellions and beeeellions and watch his eyes glaze over. :o)

[ Reply to This | # ]

Just curious... "as and for" a defense?
Authored by: achurch on Thursday, August 20 2009 @ 03:45 AM EDT

I can't recall having seen this wording in any briefs that have been covered here (though I might have just overlooked it), so I'm curious: Is there a particular reason for saying "as and for a first [second, etc.] defense", rather than just "as a first defense" or even "first defense"? Was there perhaps some case where someone wrote "for a defense" and the judge ruled that it wasn't raised "as a defense"? Or is it just this particular law firm's accent, so to speak?

[ Reply to This | # ]

We can draw one conclusion
Authored by: Anonymous on Thursday, August 20 2009 @ 03:50 AM EDT

I must caution that we have no way to know who, if anyone, is telling the truth.

One thing, however, we do know: they can't all be telling the truth. At least one party is lying. We just don't know whether it's the plaintiff, the defendant, or both.

Nothing about this case would surprise me.

[ Reply to This | # ]

Primary Colors
Authored by: Anonymous on Thursday, August 20 2009 @ 03:51 AM EDT
Is this article (fully) authored by PJ?

I get some perception noise reading it. The noise says,
this is not the same person who started and lead Groklaw
for years.

Can anyone run stylistic analysis software on it?


[ Reply to This | # ]

Berger Singerman bill for june: $163,000
Authored by: Baud on Thursday, August 20 2009 @ 05:11 AM EDT
Waouhh!! I didn't go through the details yet, but it's certainly worth a read!

[ Reply to This | # ]

Bench Warrant
Authored by: Anonymous on Thursday, August 20 2009 @ 09:41 AM EDT
Doesn't it seem a little strange if (as alleged in the quoted response) there is
an outstanding bench warrant against someone for an unpaid judgement, that they
would file a suit in that same court?

Isn't that like walking into jail?

--Jpvlsmv (not logged in)

[ Reply to This | # ]

Just more making Utah look bad
Authored by: Anonymous on Thursday, August 20 2009 @ 10:46 AM EDT
The bottom line from all of this, SCO, Canopy, and now this piece of work (and
the winter olympics bribery scandal, etc. etc.) is that Utah comes out looking
bad.

Somehow I wouldn't be too surprised if some knot of idiots in Manhattan were to
develop their only little world of inbred lawsuits. But that particular facet
of urbanity is not the part that Utah needs.

[ Reply to This | # ]

The Pelican Briefs - You're the fraudster! No, *you* are!
Authored by: Anonymous on Thursday, August 20 2009 @ 11:09 AM EDT
One thing that seems to have been a result of the music
stopping in the US "musical chairs" economy is that the
players who didn't sit down right away are coming to
realize that they have been left standing, or holding the
bag, so to speak. ( Even M$ has had to deal with a lack of
chairs, but that may have been aggravated by other actions
;-) ) Now that the money flow has all but dried up, all
those funny-money financial aggreements are becoming visible
as the hungry dogs start to eat each other.

[ Reply to This | # ]

Where's Darl?
Authored by: rsteinmetz70112 on Thursday, August 20 2009 @ 11:10 AM EDT
There seems to be some split between the defendant's.

I know that when I was once threatened with a suit involving business partners
the first thing my lawyer wanted to do was get a joint defense agreement with
the other defendants where we all agreed to defend the suit together and settle
any differences between ourselves afterwards.

I wonder if Darl and Bryan Cave not being part of this is significant.

On the other hand Darl and Bryan Cave are still working with Norris or were
recently, so this doesn't seem to have killed the relationship.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

Skyline Cowboy
Authored by: Anonymous on Thursday, August 20 2009 @ 12:05 PM EDT
Oh my.

Someone is doing something they shouldn't be with this site.

Someone has seriously sunk to the depths of ASKING for
trouble. There can be no argument against premeditation or
intent for the smearing and content behind this site.

---
Clocks
"Ita erat quando hic adveni."

[ Reply to This | # ]

The Pelican Briefs - Skyline Cowboy Fun Facts
Authored by: Tim Ransom on Thursday, August 20 2009 @ 04:39 PM EDT
While the main SCO story line is in limbo, I've been assuaging my
procrastination jones by applying my sooper sophisticated heuristic research
methods to checking out Skyline Cowboy and the knaves allegedly behind the
"Digital Bounty Hunter" site, partially due to their repeated libeling
of me, replete with $1500 - $1749 bounties being posted there for my "true
identity", which they of course never paid out, having failed to deduce who
or where I am.

First thing to note is that the Cowboy has been silent for three weeks -- no
more tweets, no more site updates.

Second thing to note is that several comments and tweets have been removed,
apparently in some half assed effort to mitigate the amount of outrageous libel
on their site, as well as to remove comments pointing out how insane their
assertions about Groklaw are. There was a thread between "Jak" and the
Cowboy under the PJ bounty wherein various assertions about Groklaw and IBM were
refuted by "Jak", to which the Cowboy responded with feeble
non-answers and more libel, using the same tone and allegations as
"bigdaddypayday" and other related nyms used on Yahoo.

Third thing to note is that in the bounty posting for PJ, the Cowboy has
included some links that they think bolster their libelous assertions. At least
two of the links are to sites controlled by "Kenneth R Saborio" -
krsaborio.net and anonymous-insider.net (Saborio maintains the 100% transparent
conceit that he isn't "anonymous-insider", which is utterly ridiculous
in light of the fact that all of "anonymous-insider"s online profiles
on the tech sites he trolls link directly to krsaborio.net, and his IP address,
captured both from posts on a Linux related site and from Saltydogmn's logs,
points to Costa Rica, where Saborio is).

This is the same lunatic who stated "I'll always be a proud Nazi when
dealing with Moglen, Stallman, Salus and Mettler"on Yahoo.

Another tin hat fact about the site is that developer comments that appear in
the source are in Spanish. "Saborio" is Costa Rican.

Although the site and Twitter account have been silent for weeks, I noted that
the Cowboy showed up in the comments section of a blog post about the suit by
Sam Johnston entitled "A disturbing taste of the 'Digital Wild West':
http://samj.net/2009/07/disturbing-taste-of-digital-wild-west.html


Posting as "A Few of Our Favorite Things", the Cowboy carries on about
Robbins again, saying things like:

<<And what business did these guys steal from Mark?? The only deal that
Mark put togetherat AIP was with Fairstar. Maybe you should speak to a few of
Mark's former employees, they could fill you in. He took almost 3 million from
Fairstart, for a stock loan and never returned the money, let alone the upside
that he promised, therefore the Australian based Fairstar, has sued him and has
a warrant for his arrest in Utah. Wow! Sounds to me like he is the guy doing the
robbing!

I guess that's why the entire family had to pick up and move to California
overnight and reside in a residence that has 24 hour security so they could
start the scam someplace else. The courts appear to have NO mercy on this guy,
especially since he hasn't appeared for ONE of his court appearances. HE is the
only guy hiding AND the only guy with any reason to be hiding! Your article
makes NO sense, but Mark has a long history of paying people off to do things
that can't ethically be done on their own merits. So, I get it!>>

If I were behind the Pelican suit and wanted to find out Skyline Cowboy's IP
address, I'd start by approaching Mr. Johnston, who may be far more receptive to
sharing his logs than the various ISPs etc that one might have to wade through
to get an ID.

Lastly, I noted that the Talos Partners page on Wikipedia was nuked completely
on August 14th.
http://en.wikipedia.org/wiki/Talos_Partners
While I think Wikipedia is a blight on the Internet, it is worth watching
activity there due to the very aspects of it that I find so repugnant.

Apparently, "Allen3" deleted the entire entry on August 14th due to a
"G7" - "(G7: One author who has requested deletion or blanked the
page)".

That's the total output of my procrastinating thus far. Hope someone finds it
edifying.

---
Thanks again,

[ Reply to This | # ]

I think I can see why they call them 'Briefs'...
Authored by: cr on Friday, August 21 2009 @ 05:17 PM EDT
This looks to me to be airing rather dirty laundry in public.


---
GROKLAW: "And I would have gotten away with it, too, if not for you meddling
kids!"

[ Reply to This | # ]

The Pelican Briefs - You're the fraudster! No, *you* are!
Authored by: iraskygazer on Saturday, August 22 2009 @ 12:31 AM EDT
Looks like the old saying is playing out in this sad SCO play: There is no honor
among thieves.

Nobody, related to SCO's side of the case, can recognize that there are other
leaches in the crowd trying to draw the last ounce of blood, actually money,
from the SCO post of gold. So sad, and yet I'm laughing at the brilliance of the
Pelican effort.

[ Reply to This | # ]

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