Complaint — Blue Force Technologies, Inc. v. Raymond C. Jones, James v. Punelli, Midtown Resources MCA LLC, Azadian Group, LLC
- Date
- 2019-11-02
Source document: Complaint; document type: civil complaint, attachment to a motion.
Full text
EXfflBIT I
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UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
BLUE FORCE TECHNOLOGIES, INC.,
Plaintiff,
V.
RAYMOND C. JONES, JAMES V.
)
1:18CV1028
PUNELLI, MIDTOWN RESOURCES
MCA LLC, AZADIAN GROUP, LLC,
AND CHANGE CAPITAL PARTNERS
FUND 1,LLC,
Défendants.
COMPLAINT
Plaintiff Elue Force Technologies, Inc. sues Raymond C. Jones, James V. Punelli,
Midtown Resources MCA LLC, Azadian Group, LLC, and Change Capital Partners Fund 1, LLC,
and states:
JURISDICTION. VENUE, AND THE PARTIES
1.
This is an action for damages in excess of $75,000 by Elue Force Technologies,
Inc., for fraud, breach of fiduciary duty, injunctive relief, and declaratory action.
2.
This Court has jurisdiction pursuant to 28 U.S.C. § 1332.
3.
Venue is proper in this District because the acts complained of occurred in
substantial part in this District and because Plaintiff maintains its principal place of business in
this District.
4.
Plaintiff Elue Force Technologies, Inc. is a Delaware corporation located in
Morrisville, North Carolina that designs and manufactures composite structures for the
commercial and defense aerospace markets.
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5.
Défendant Raymond C. Jones is a citizen of the United States and a résident of
Leesburg, Virginia.
6.
Défendant James V. Punelli is a citizen of the United States and a résident of
Reston, Virginia.
7.
Défendant Midtown Resources MCA, LLC is a Pennsylvania limited liability
Company located in Philadelphia, Pennsylvania. Midtown opérâtes a merchant cash advance
Company for smail-businesses in need of liquidity.
8.
Défendant Azadian Group, LLC is a Deiaware limited liability company located in
New York, New York. Azadian opérâtes a merchant cash advance company for small-businesses
in need of liquidity.
9.
Change Capital Partners Fund 1, LLC is a Deiaware limited liability company
located in New York, New York. Change Capital opérâtes a merchant cash advance company for
small-businesses in need of liquidity.
10.
AU conditions précédent to the filing of this action have occurred, have been
fulfilled, waived, excused, or otherwise satisfied.
11.
The Plaintiff has engaged the undersigned counsel to represent it in the prosecution
of this lawsuit.
GENERAL ALLEGATIONS
12.
On January 19, 2011, Scott Bledsoe incorporated Blue Force Technologies, Inc.
13.
Raymond C. Jones was one of the original investors in Blue Force.
14.
Since founding Blue Force, Bledsoe has served as Président, with Jones as a silent
partner.
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15.
In early January 2012, after winning contracts that required significant capital
infusion into Blue Force, Jones introduced another investor, James V. Punelli, to Elue Force.
16.
Between Jones' original investment, and Punelli's new investment, Jones and
Punelli each owned a 30% equity stake in Blue Force. The remaining 40% equity stayed with
Bledsoe.
17.
Jones and Punelli additionally provided Blue Force with a stockholder loan.
18.
Bledsoe remained as Président of Blue Force.
TenX Groupy LLC is Formée!
19.
A short time after acquiring their respective interests in Blue Force, Punelli and
Jones became partners in a new independent business venture known as TenX Group, LLC.
20.
TenX served as a holding company for several defense-related entities.
21.
The first of these entities was Panthera Training Center, LLC ("PTC"), which, in
or around 2013, took over ownership and opérations of a 750-acre military and law enforcement
training facility located in Moorefield, West Virginia.
22.
This acquisition required significant debt financing on behalf of TenX because of
the size of the facility and its associated real estate.
23.
Within a year of launching PTC, TenX fonned other entities with the goal of
expanding its presence within the defense industry. These entities included Night Eagle Aviation,
LLC (subsequently renamed Panthera Mission Systems, LLC), and Panthera Worldwide, LLC
(subsequently renamed Panthera Solutions, LLC).
24.
Punelli also operated a personal holding company (Pons Milvius, LLC), as did
Jones (Global Matrix Corporation).
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25.
For the purposes of this document, the aforementioned companies, except Blue
Force, are hereinafter referred to as TenX.
The First Incident Invoiving Punelli
26.
Between November 2015 and January 2016, two incidents raised Bledsoe's
concem with respect to Punelli.
27.
First, in response to winning a multi-million dollar contract with an aircraft engine
manufacturer, Bledsoe asked Punelli for help arranging bank fmancing for necessary equipment.
28.
On or about December 4, 2015, Bledsoe received a call from the finance manager
at an equipment vendor, who infonned Bledsoe that Blue Force's crédit application was rejected
by a major commercial bank because of the use of an incorrect social security number by Punelli.
The social security number was for one of Punelli's sons, who had the same name. Bledsoe
requested that he be allowed to correct the mistake but was told that the bank would not reconsider
the application because it suspected fraud.
29.
Bledsoe removed Punelli from any tasks related to obtaining fmancing for this
Project and ultimately obtained fmancing using Blue Force's crédit with Bledsoe as the sole
Personal guarantor on the loan.
30.
This loan was properly approved and documented by a full meeting of the Blue
Force Board of Directors on January 14, 2016. Bledsoe signed the required Blue Force corporate
resolution as Président, Punelli signed as Secretary/Treasurer, and Jones signed as a director.
Punelli certified the resolution as authentic.
The Second Incident Invoiving Punelli
31.
The second incident in the December 2015 to January 2016 time period involved a
sériés of cash transfers from Blue Force's checking account into accounts held by TenX.
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32.
Without prior authorization from Bledsoe, Punelli transferred $50,000 from Blue
Force's account on December 17, 2015, leaving Blue Force without sufficient funds to make
payroll and pay key vendors, both of which were required to keep critical production programs
operating. This was in addition to $41,000 that had been borrowed from Blue Force with Bledsoe's
prior consent earlier in December 2015.
33.
Despite continuai protests by Bledsoe, the funds required for payroll were not paid
back in time to meet payroll, thereby triggering a liquidity crisis for Blue Force.
34.
In response to fréquent calls from Bledsoe to retum the funds, Jones deflected the
issues and stated repeatedly that money was "on the way."
35.
On January 4, 2016, Punelli transferred another $20,000 from Blue Force to TenX,
bringing the total net outflow to $
111,000.
36.
On January 7, 2016, an unexpected inbound wire transfer to Blue Force was
received in the amount of $104,309.50. That same day, Punelli transferred $74,309.50 to TenX,
leaving Blue Force with a net outflow during this sériés of transfers (December to January) of
$81,000.
37.
Following the unexpected wire, Bledsoe noticed daily withdrawals of
approximately $600 by an organization with the name Quarterspot. Bledsoe determined that Blue
Force had received an unauthorized loan obtained by Punelli and Jones, and the majority of the
loan proceeds had been taken to satisfy TenX's cash needs. Blue Force was required to pay the
Quarterspot loan, which had a high rate of interest and caused significant négative cash flow issues
impacting Blue Force's growth.
38.
As a resuit of the aforementioned conduct, on January 6, 2016, Bledsoe called for
a Spécial Meeting of the Blue Force Board. In a letter to the Board, Bledsoe summarized the
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problems caused by the transfers, and informed Punelli and Jones that "[t]he Directors and Officers
of [Blue Force] need to take action to protect shareholders from further hann."
39.
At the Spécial Meeting held on January 29, 2016, the Board approved a variety of
measures relating to corporate govemance and fïduciary duty. Specifically, the Board, including
Bledsoe as Président, Punelli as Secretary/Treasurer, and Jones as a director:
a) acknowledged that Blue Force was a separate légal entity from TenX, with
only two of four stockholders in common between the two companies;
b) directed Bledsoe to review and establish separate services for accounting,
tax préparation, business development consultants, information technology,
marketing, human resources, and légal services;
c) approved a detailed operating budget, including a target cash reserve and
repayment schedule for stockholder loans;
d) established a regular schedule for Board of Directors meetings;
e) directed that the shared use of business development personnel to attend
conférences and customer meetings would be undertaken on a case-by-case
basis with mutual consent of the two companies; and
f) reiterated that Board members could not act unilaterally when making any
fmancial décisions on behalf of Blue Force without approval of the Board.
Share Pledges and Secret Transactions in 2016
40.
In early 2016, Blue Force began repaying stockholder loans to Punelli and Jones.
41.
After only two payments, in June 2016 Punelli and Jones approached Bledsoe with
a proposai to each pledge 2.5% of their ownership stake in Blue Force in order to guarantee a loan
by a third party, SMI, LLC, to TenX.
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42.
In repayment of this loan, Jones and Punelli requested that their stockholder loan
payments from Blue Force of $12,500 per month be used to pay the loan.
43.
During this process, Bledsoe stated that while stockholders can pledge shares with
Board approval, they cannot create an implied or expressed guarantee by Blue Force of a loan.
44.
To emphasize his point, Bledsoe edited the pledge letter to make it clear that
stockholder loan payments were goals, net of other loan payments, that would only be paid if such
payments did not threaten Blue Force's cash reserves as mandated by its Board.
45.
in signing off on the pledge letter, Punelli and Jones acknowledged that, "if loans
cannot be paid by [Blue Force shareholder loan payments to Jones and Punelli,] [SMI] will be paid
by Raymond Jones and James Punelli."
Punelli is Asked to Resign
46.
Throughout 2016, TenX made numerous short tenu loan requests to Blue Force.
47.
Many of these requests were rejected because Blue Force needed cash to operate.
When loans were made by Blue Force to TenX, they were either repaid late, or not at ail.
48.
The expériences of 2016 demonstrated to Bledsoe that Punelli and Jones were
teetering on insolvency and would breach their fiduciary duty to Blue Force in order to keep TenX
alive.
49.
At Bledsoe's request, Punelli resigned from Blue Force as a director and as an
officer on December 28, 2016. His résignation was formally acknowledged at a Board meeting
and memorialized in Board meeting minutes.
50.
On March 21, 2017, Punelli sold his Blue Force shares back to Blue Force. His
remaining stockholder loan balance was paid to him in full on May 4, 2017.
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Azadian Group, LLC Threalens Blue Force with Légal Action
51.
On or about April 17, 2018, Blue Force received a demand letter from Azadian
Group, LLC. Prior to this, Blue Force had never heard of Azadian Croup, LLC.
52.
The letter notified Blue Force of Azadian's demand for $304,754.57 as a resuit of
TenX having defaulted on three separate Merchant Receivables Purchase and Security Agreements
dated August 18, 2017 for $417,937.52, October 24, 2017 for $198,050, and December 4, 2017
for $57,200, respectively.
53.
Upon investigation by Blue Force, it was detennined that Punelli had, without the
knowledge of and authority from Blue Force, committed Blue Force as a guarantor to each of these
three agreements.
54.
These loan agreements were between Azadian and TenX, named Punelli and Jones
as Personal guarantors, and were for the benefit of TenX.
55.
Punelli, without Blue Force's knowledge or authority, committed Blue Force as a
corporate guarantor to these loan agreements by signing on behalf of Blue Force under the title of
"Corporate Officer."
56.
At the time that Punelli conducted these transactions, Jones continued to serve as a
director of Blue Force and knew that Punelli's représentations were false.
57.
After receipt of the Azadian demand letter, Blue Force immediately contacted
Punelli.
58.
On April 19, 2018, Punelli provided a swom Affidavit stating that he had no
authority to enter into any agreement on behalf of Blue Force, and that the Merchant Receivables
Purchase and Security Agreements were executed without Blue Force's knowledge and authority,
which is attached as Exhibit "A."
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59.
Punelli also swore in this Affidavit that Blue Force did net receive any use or
benefit from these three Merchant Receivables Purchase and Security Agreements. See Exhibit A.
60.
On April 24,2018, Blue Force sent Punelli a letter reminding him of his résignation
from Blue Force and his complété lack of authority to bind Blue Force in any matter whatsoever.
In this letter, Punelli was asked if he had committed Blue Force to any other loans, obligations, or
any other matter(s).
61.
In his response dated May 2, 2018, Punelli informed Blue Force that he had not
committed Blue Force as a guarantor to any other loans or financial instruments.
62.
Based on the emergent three year pattem of potential fraud and fiduciary breaches
by Punelli and Jones, Blue Force immediately began an internai investigation.
Jones is Asked to Resign From Blue Force
63.
On May 2, 2018, Jones executed an Affidavit whereby he acknowledged the
Azadian loan, stating that Punelli had supervised and directed the exécution of the loan documents.
In this affidavit, Jones stated he was unaware of any purported guarantee on behalf of Blue Force
and that he was aware he would need a Board resolution from Blue Force for any such guarantee.
See Raymond C. Jones Affidavit dated May 2, 2018, attached as Exhibit "B."
64.
Concemed by the fraudulent Azadian loans and Jones' lack of plausible explanation
for not stopping the guarantees by Blue Force, on May 15,2018, Blue Force requested and received
Jones' résignation from the Board and as an officer. The résignation was accepted in writing by
Blue Force's Board on May 17, 2018.
65.
During due diligence associated with the rédemption of Jones' stock in Blue Force
(June 12-18, 2018), Bledsoe was provided loan documents for purportedly ail TenX transactions
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and discovered that Blue Force was, in multiple instances, unknowingly included as a guarantor
of unauthorized loans and other guarantees signed by Punelli and Jones under varions titles.
Unauthorized Loan Guarantees By Punelli and Jones
66.
Between June 2015 and March 2018, Punelli and Jones had entered into at least
sixteen separate loans, receivables purchase agreements, guarantees, and other fmancial
agreements committing Blue Force as a corporate guarantor without the knowledge or
authorization of Blue Force.
67.
These fmancial arrangements were never brought to the attention of the Blue Force
Board, were not considered by the Board, were not authorized or ratified by the Board, and
provided no fmancial benefit to Blue Force.
68.
The fraudulent fmancial instruments that have been discovered thus far include:
l.ender / Countcrpart>'
Fraudulent Blue Force Endorsement
Ref
Date
Name
Domicile
Document
Value
Name
Title
1
23-Sep-15
SVII, LLC
Virginia
Loan
S
100.000.00
Punelli &
Jones
Près. &
CEO. respectively
2
23-Sep-15
SMI. LLC
Virginia
Security Agreetnent
N/A
Punelli &
Jones
Près. &
CEO. respectively
.4
I6-Jun-I6
SMI. LLC
Virginia
Loan with S200.000
originatiun fee
S 400.000.00
Punelli &
Jones
Près. &
CEO. respectively
4
I6-Jun-I6
Proposetl Sharehoidcr
Virginia
Stock Purchase & Loan
•Agreement
N A
Jones
Secretary / Treasurer
5
i.3-Dec-16
Change Capital Partners Fund 1
Delaware
Loan
S 399.000.36
Punelli
Corporate Secretary
6
27-Feb-17
Change Capital Partners Fund 1
Delawarc
Loan
S
26.599.80
Punelli
Corporate Officer
7
I8-Mav-17
Change Capital Partners Fund 1
Delaware
Loan
S 330.000.00
Punelli
Corporate Officer
8
I6-Jun-I7
Midtown Resources MCA
Pennsylvania
Loan
S
199.499.52
Punelli
Corporate Officer
9
I8-AUK-17
Azadian Croup
Delaware
Loan
S 417.937.52
Punelli
Corporate Officer
10
5-Sep-l7
SMI. LLC
Virginia
Loan
S
75.000.00
Joncs
CEO
II
24-Oct-l7
Azadian Croup
Delaware
Loan
S
198.050.00
Punelli
Corporate Officer
12
4-Dec-17
Azadian Croup
Delaware
Loan
S
57.200.00
Punelli
Corporate Officer
13
6-Dec-17
On behalfof SMI, LLC
Virginia
Power of Attorney
N/A
Punelli &
Jones
Près. & CEO,
respectively
14
13-Da--I7
•Midtown Resources MCA
Pennsylvania
Loan
S 204,800.00
Punelli
Corporate Officer
15
15-Jan-i8
•Midtown Resources MCA
Pennsylvaniii
Loan
S
102,400.50
Punelli
Corptrrate Officer
16
26-Feb-18
•Midtown Resources MCA
Pennsylvaniii
Loan
S
96,000.00
Punelli
Corporate Officer
Combinai value of transactions: $2,606,487.70
Midtown Resources MCA LLC
69.
Four Merchant Receivables Purchases and Security Agreements between Midtown
and TenX were entered into on June 16, 2017 for $199,499.52, December 13, 2017 for $204,800,
January 15, 2018 for $102,400.50, and February 26, 2018 for $96,000. In each of these
transactions, Punelli and Jones appear as personal guarantors.
10
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70.
Despite the fact that Blue Force had already severed ail ties with Punelli at the time
of these transactions, he nevertheless purported to commit Blue Force as a corporate guarantor by
falsely signing as a corporate officer.
71.
At the time that Punelli conducted these transactions, Jones continued to serve as a
director of Blue Force and knew that Punelli's représentations were false.
Change Capital Partners Fund I
72.
TenX entered into three Merchant Receivables Purchase and Security Agreements
with Change Capital on December 13, 2016 for $399,000.36, February 27, 2017 for $26,599.80,
and May 18,2017 for $330,000. In each of these transactions, Punelli and Jones appear as personal
guarantors.
73.
Punelli purported to commit Blue Force as a corporate guarantor by signing the first
loan in his alleged capacity as "Corporate Secretary" and the last two as "Corporate Officer." None
of the loan agreements was presented to or authorized or ratified by Blue Force, and the last two
loan documents were executed by Punelli with the full knowledge that he had resigned from Blue
Force.
74.
At the time that Punelli conducted these transactions, Jones continued to serve as a
director of Blue Force and knew that Punelli's représentations were false.
SMI, LLC
75.
Blue Force discovered multiple unauthorized and undisclosed Promissory Notes,
Security Agreements, Power of Attorney assignments, and related documents between SMI and
TenX.
76.
On September 23, 2015, Punelli and Jones entered into a Promissory Note and
Security Agreement with SMI on behalf of TenX and its related companies for $100,000. Punelli
11
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and Jones fraudulently purported to commit Blue Force as a guarantor to the loan and falsely signed
as Blue Force's Président and CEO, respectively. This loan was never disclosed to or approved by
the Board of Blue Force.
77.
On June 16, 2016, Punelli and Jones entered into a loan with SMI on behalf of
TenX and its related companies for $400,000. Yet again, Punelli and Jones fraudulently purported
to commit Blue Force as a guarantor to the loan and falsely signed as Blue Force's Président and
CEO, respectively. This loan was never disclosed to or approved or ratified by the Board of Blue
Force.
78.
As part of this transaction, Punelli and Jones shared with Blue Force a "Stock Grant
Letter" and a "Shareholder Loan Payment Letter" they wanted endorsed by Bledsoe in his capacity
as Président of Blue Force, while simultaneously hiding a "Promissory Note" for $400,000 and a
"3% Option Agreement," which were fraudulently guaranteed by Punelli and Jones, purportedly
on behalf of Blue Force.
79.
These four contemporaneous documents (ail dated June 16,2016) show Punelli and
Jones signing with varions titles depending upon whether the agreement was disclosed or secret.
At no point were the two secret agreements introduced for Board considération by either Punelli
or Jones.
Disclosed to Bledsoe
Signator>' 1
Signatory 2
Signatory 3
Stock Grant Letter
Punelli, Secretary &
Shareholder
Jones, Direetor &
Shareholder Bledsoe, Président &
Shareholder
Shareholder Loan Rcpayment Letter
Punelli. Secretary &
Shareholder
Jones, Direetor &
Shareholder Bledsoe, Président &
Shareholder
Undisclosed Secret Agreements
Slgnator>' 1
Signatory 2
Signatory3
Promissory Note (S400.000)
Punelli. Président
Jones, CKO
None
3% Option Agreement
Punelli (as individual)
Jones (as individual)
Jones, Secretary &
Treasurer
80.
Only five months prior to the June 16, 2016 stock pledges and loans, Jones had
brought forward a request for an accounts receivable line of crédit purportedly benefitting both
TenX and Blue Force. After a long discussion, Bledsoe relented and agreed to the request, adding
12
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that he would never again consent to a joint loan package that included Blue Force as a guarantor
for Punelli and Jones' other businesses. The décision was brought forward and documented as a
Board résolution, signed January 20, 2016. The parties signed with their Board-approved titles:
Bledsoe (Président), Punelli (Secretary/Treasurer), and Jones (Director). Obtaining this resolution
demonstrated that Punelli and Jones understood the correct process for the Blue Force Board to
approve fmancial transactions, and that both Punelli and Jones were aware that future transactions
not exclusively in the interest of Blue Force would not be approved by Bledsoe. Ultimately, this
loan never made it to closure with the lender.
81.
On September 5, 2017, Punelli and Jones amended the June 16, 2016 Promissory
Note (adding $75,000 to the loan amount) in yet another undisclosed transaction with SMI. Jones
fraudulently signed the amended instrument as Blue Force's CEO. In this one instance, Punelli
did not sign for Blue Force, and the party that prepared the documents did not include a signature
blank for him as was done on ail other SMI documents.
Unauthorized Access to Blue Force Accounting System
82.
During the course of the internai investigation, Blue Force also found that Punelli
and the former Chief Financial Officer of TenX (Ray Barbie) had, without authorization, accessed
Blue Force's accounting system between April 2017 and March 2018.
83.
TenX and Blue Force use the same accounting system vendor but have separate
cloud-based accounts. The system administrator at Blue Force inadvertently left Punelli and
Barbic's accounts enabled after Punelli's résignation in 2016.
84.
Punelli and Barbie had no reason or authority to access the Blue Force system as
they had no rôle or responsibilities with Blue Force after Punelli's résignation at the end of 2016.
13
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Logging onto the Blue Force System requires a user to enter the company's name in addition to
the user name and password.
85.
These access events are contemporaneous with each of the 10 loans obtained with
a fraudaient guarantee naming Blue Force as a guarantor from Azadian, Midtown, and Change
Capital.
Audit ID
User Name
i^gin Date and Time
IP Address
Contemporaneous Loans
28346
ray.barbic
3/27/18 6:18PM
96.241.108.50
28289
Jpunelli
3/9/18 17:28
108.44.250.65
28164
Jpunelli
2/9/18 8:19
108.44.250.65
Midtown Rcsourccs MCA
281 14
Jpunelli
1/27/18 12:03
108.44.250.65
Midtown Rcsourccs MCA
281 13
Jpunelli
1/26/18 13:20
73.251.219.164
28096
Jpunelli
1/20/18 8:00
108.44.250.65
28036
ray.barbic
1/8/18 13:56
96.241.108.50
Midtown Rcsourccs MCA
27746
brian.riso
10/18/17 15:30
107.12.196.189
Azadian Croup
27727
Jpunelli
10/15/17 16:31
108.44.250.65
Azadian Croup
27697
brian.riso
10/5 M 7 14:46
107.12.196.189
Azadian Croup
27692
Jpunelli
10/5/17 7:04
108.44.250.65
Azadian Croup
27659
Jpunelli
9/27/17 7:58
108.44.250.65
27576
Jpunelli
8/30/17 10:24
108.44.250.65
2746!
ray.barbic
8/7/17 18:50
96.241.108.50
Azadian Croup
27460
Jpunelli
8/7/17 1 1:01
108.44.250.65
Azadian Croup
27453
ray.barbic
8/4/17 17:24
96.241.108.50
Azadian Croup
27452
ray.barbic
8/4/17 17:06
96.241.108.50
Azadian Croup
27443
Jpunelli
8/2/17 7:22
108.44.250.65
Azadian Croup
27423
Jpunelli
7/26/17 17:07
70.109.50.84
27420
Jpunelli
7/25/17 18:16
108.44.250.65
27292
Jpunelli
6/27/17 12:58
166.164.37.209
Midtown Rcsourccs MCA
27262
Jpunelli
6/20/17 9:10
142.234.1 15.146 Midtown Rcsourccs MCA
27070
Jpunelli
4/28/17 7:00
185.25.95.132
Change Capital Partners Fund I
27006
Jpunelli
4/10/17 12:49
68.235.53.156
Change Capital Partners Fund 1
26997
Jpunelli
4/6/17 20:26
108.44.250.65
Change Capital Partners Fund 1
26988
Jpunelli
4/4/17 21:26
68.235.53.156
Change Capital Partners Fund 1
COUNT I -
BREACH OF FIDUCIARY DUTY
(By Défendant Raymond C. Jones)
86.
Blue Force re-alleges the allégations contained in paragraphs 1 through 85 of this
Complaint.
87.
Directors and corporate officers have a fiduciary duty to a corporation and must
strive to advance its best interests.
14
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88.
A director and corporate officer must always discharge the responsibilities of the
office with undivided loyalty to the corporation by discharging his or her responsibilities openly,
honestly, conscientiously, and with the utmost dévotion to the corporation.
89.
On January 29,2016, at a Blue Force Board meeting, Jones was named as a director
of Blue Force. At this Board meeting, Jones was reminded that he could not make any fmancial
décisions on behalf of Blue Force without flill approval of its Board.
90.
As a director of Blue Force, Jones failed to advance the best interests of Blue Force
when he participated in transactions that beneflted himself instead of Blue Force, which was owed
a fiduciary duty.
91.
Between 2015 and 2017, Jones, along with Défendant Punelli, entered into loan
agreements with Azadian, Midtown, Change Capital, and SMI, using Blue Force as an unknowing
and unauthorized guarantor of loans in excess of $2,606,000.
92.
In his time as a director, Jones signed four loan agreements with SMI on behalf of
TenX, with Jones fraudulently signing as Blue Force's CEO.
93.
In conjunction with the June 16,2016 agreement with SMI, Jones also executed an
undisclosed Stock Purchase and Loan Agreement which inappropriately involved Blue Force as a
party to stock transfers. This Agreement was fraudulently endorsed by Jones (alone) as
"Secretary/Treasurer" and was never disclosed to Blue Force.
94.
Then on December 6, 2017, a Power of Attorney granted SMI unilatéral power to
execute on any and ail documents required to retitle Blue Force assets serving as collatéral under
the various SMI Notes and Security Agreement. This Power of Attorney was fraudulently signed
on behalf of Blue Force by Punelli signing as Président and Jones signing as CEO. This Power of
Attorney was never disclosed to the Board of Blue Force.
15
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95.
Additionally, Punelli and Jones purported to commit Blue Force as a corporate
guarantor when TenX entered into three Merchant Receivables Purchase and Security Agreements
with Change Capital on December 13, 2016 for $399,000.36, February 27, 2017 for $26,599.80,
and May 18, 2017 for $330,000, with Punelli and Jones serving as personal guarantors and Punelli
purporting to commit Blue Force as a corporate guarantor to these loan agreements by signing on
behalf of Blue Force first as "Corporate Secretary" and then as "Corporate Officer."
96.
Furthennore, Punelli and Jones entered into four Merchant Receivables Purchases
and Security Agreements between Midtown and TenX on June 16, 2017 for $199,499.52,
December 13, 2017 for $204,800, January 15, 2018 for $102,400.50, and February 26, 2018 for
$96,000, wherein Punelli purported to commit Blue Force as a corporate guarantor to these loan
agreements by signing on behalf of Blue Force as a corporate officer.
97.
Lastly, Punelli and Jones entered into three Merchant Receivables Purchase and
Security Agreements between Azadian and TenX on August 18, 2017 for $417,937.52, October
24, 2017 for $198,050, and December 4, 2017 for $57,200, respectively. Punelli had, without the
knowledge of and authority from Blue Force, purported to commit Blue Force as a guarantor to
each of these three agreements. Punelli, without Blue Force's knowledge or authority, purported
to commit Blue Force as corporate guarantor to these loan agreements by signing on behalf of Blue
Force under the non-descript title of "Corporate Officer."
98.
These loan agreements were solely for the benefit of TenX and its subsidiaries.
Equally disturbing, Jones was still a director of Blue Force when Punelli resigned from Blue Force
and knew Punelli's status as a corporate officer. Lastly, Jones was aware, as he stated in his
Affidavit, that he would need a Board resolution from Blue Force for committing Blue Force as a
guarantor to any loans.
16
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99.
As yet another example of Jones' breach of flduciary duty, Blue Force in 2012 had
agreed to guarantee a loan for the benefit of TenX and Blue Force with EagleBank. With only one
day verbal waming from Jones, and no other prior knowledge of any default for this loan, which
Blue Force believed was paid off, Blue Force leamed of a judgment against it, in favor of
EagleBank, in the amount of $209,157.02. Blue Force had no choice but to pay this judgment
because it included a legitimate guarantee by Blue Force.
100. By reason of the foregoing, Jones has breached his flduciary duties as a director of
Blue Force, and the above-referenced breaches were not discovered and could not reasonably have
been discovered by Blue Force but for Jones providing ail the TenX transactions documentation
wherein Blue Force was falsely included as a guarantor during the due diligence associated with
the rédemption of Jones' stock in Blue Force.
WHEREFORE, Plaintiff, Blue Force Technologies, Inc., demands judgment on this
Count in its favor and against Défendant Raymond C. Jones for compensatory damages together
with pre-judgment interest and post-judgment interest, punitive damages pursuant to North
Carolina Statutes § ID - 15, costs including an award of attorneys' fees, and such other relief
deemed just and proper.
COUNT II -
BREACH OF FIDUCIARY DUTY
(By Défendant James V, Punelli)
101.
Blue Force re-alleges the allégations contained in paragraphs 1 through 85 of this
Complaint.
102.
Directors and corporate officers have a flduciary duty to a corporation and must
strive to advance the best interests of the corporation.
17
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103. A director and corporate officer must always discharge the responsibilities of the
office with undivided loyalty to the corporation by discharging his or her responsibilities openly,
honestly, conscientiously, and with the utmost dévotion to the corporation.
104. On January 29, 2016, at a Blue Force Board meeting, Punelli was named as a
director and Secretary/Treasurer of Blue Force. At this Board meeting, Punelli was reminded that
he could not make any fmancial décisions on behalf of Blue Force without full approval of the
Blue Force Board. Punelli resigned from Blue Force on December 28, 2016 and redeemed his
stock in a sale to Blue Force on March 21, 2017.
105. As a corporate officer and director of Blue Force, Punelli failed to advance the best
interest of Blue Force when he participated in transactions that benefited himself instead of Blue
Force, which was owed a fiduciary duty.
106. Between 2015 and 2017, Jones and Punelli entered into loan agreements with
Azadian, Midtown, Change Capital Loans, and SMl, using Blue Force as an unknowing and
unauthorized guarantor of loans in excess of S2,606,000.
107. In his time as a corporate officer and director, Punelli executed three loan
agreements with SMI on behalf of TenX, with Punelli purporting to commit Blue Force as a
guarantor by improperly signing on behalf of Blue Force as Président.
108.
Additionally, Punelli and Jones committed Blue Force as a corporate guarantor
when TenX entered into three Merchant Receivables Purchase and Security Agreements with
Change Capital on December 13, 2016 for $399,000.36, February 27, 2017 for $26,599.80, and
May 18,2017 for $330,000, with Punelli purporting to commit Blue Force as a corporate guarantor
to these loan agreements by improperly signing on behalf of Blue Force first as "Corporate
Secretary" and then as "Corporate Officer."
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109. By reason of the foregoing, Punelli has breached his fiduciary duties as a corporate
officer and director of Elue Force, and the above-referenced breaches were not discovered and
could not reasonably have been discovered by Elue Force but for Jones providing ail the TenX
transactions documentation wherein Elue Force was falsely included as a guarantor during the due
diligence associated with the rédemption of Jones' stock in Elue Force.
WHEREFORE, Plaintiff, Elue Force Technologies, Inc., demands judgment on this
Count in its favor and against Défendant, James V. Punelli, for compensatory damages together
with pre-judgment interest and post-judgment interest, punitive damages pursuant to North
Carolina Statutes § ID - 15, costs including an award of attorneys' fees, and such other relief
deemed just and proper.
COUNT III -
FRAUD
(By Défendant Raymond C. Jones)
110.
Elue Force re-alleges the allégations contained in paragraphs 1 through 85 of this
Complaint.
111. On January 29,2016, at a Elue Force Eoard meeting, Jones was named as a director
of Elue Force. At this meeting, Jones was also reminded that he could not make any fmancial
décisions on behalf of Elue Force without the approval of the Elue Force Eoard.
112. As a director of Elue Force, Jones failed to advance the best interest of Elue Force
when he participated in transactions that benefited himself instead of Elue Force, which was owed
a fiduciary duty.
113. Eetween 2015 and 2017, Jones and Punelli entered into loan agreements with
Azadian, Midtown, Change Capital Loans, and SMl LLC, using Elue Force as an unknowing and
unauthorized guarantor of loans in excess of $2,606,000.
19
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114. Jones and Punelli, without the knowledge of and authority from Blue Force,
purported to commit Blue Force as a corporate guarantor to three separate Azadian Merchant
Receivables Purchase and Security Agreements dated August 18, 2017 for $417,937.52, October
24, 2017 for $198,050, and December4,2017 for $57,200, respectively, by improperly signing on
behalf of Blue Force under the non-descript title of "Corporate Officer." These three loan
agreements were between Azadian and TenX, and funding was solely for the benefit of TenX and
its subsidiaries.
115.
Additionally, Jones and Punelli purported to commit Blue Force as a corporate
guarantor to four Merchant Receivables Purchases and Security Agreements between Midtown
and TenX dated June 16, 2017 for $199,499.52, December 13, 2017 for $204,800, January 15,
2018 for $102,400.50, and February 26, 2018 for $96,000, wherein Punelli and Jones served as
Personal guarantors. These four loan agreements were between Midtown and TenX, and funding
was solely for the benefit of TenX and its subsidiaries.
116.
Furthennore, Jones and Punelli purported to commit Blue Force as a corporate
guarantor to three Merchant Receivables Purchase and Security Agreements with Change Capital
on December 13, 2016 for $399,000.36, February 27, 2017 for $26,599.80, and May 18, 2017 for
$330,000. Punelli purported to commit Blue Force as a corporate guarantor by signing the first
loan in his alleged capacity as "Corporate Secretary" and the last two as "Corporate Officer." None
of the loan agreements was presented to Blue Force and the last two loan documents were executed
by Punelli with the full knowledge that he had resigned from Blue Force. These three loan
agreements were between the Change Capital and TenX, and funding was solely for the benefit of
TenX and its subsidiaries.
20
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117.
Lastly, Jones and Punelli purported to commit Blue Force as a corporate guarantor
to three Promissory Note and Security Agreements with SMI. The three are dated September 23,
2015 for $100,000, June 16, 2016 for $400,000, and September 5, 2017 for $75,000.
118. These loan agreements were solely for the benefit of TenX and its subsidiaries.
Equally disturbing, Jones was still a director of Blue Force and knew Punelli's status as a corporate
officer of any variety was false. Lastly, Jones was aware, as he stated in his Affidavit, that he
would need a Board resolution from Blue Force for committing Blue Force as a guarantor to any
loans.
119. Then on December 6, 2017, a Power of Attorney granted SMI unilatéral power to
execute on any and ail documents required to retitle Blue Force assets serving as collatéral under
the various SMI Notes and Security Agreement. This Power of Attorney was fraudulently signed
on behalf of Blue Force by Punelli signing as Président and Jones signing as CEO. This Power of
Attorney was never disclosed to or authorized by the Board of Blue Force.
120. Jones concealed these loans from Blue Force and intentionally deceived Blue Force
by not disclosing these loans, resulting in fmancial losses to Blue Force.
121. As a director of Blue Force, Jones had an affimiative, fîduciary duty to disclose ail
material facts related to the above loans to Blue Force.
122. Jones not only breached his fîduciary duties through misrepresentations and
concealment, he committed fraud because his fîduciary relationship créâtes a duty to fully disclose
these loans, and Jones' concealment of his herein-described actions prevented Blue Force from
discovering or having the reasonable ability to discover the loans prior to the internai investigation
described herein.
21
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WHEREFORE, Plaintiff, Blue Force Technologies, Inc., demands judgment on this
Count in its favor and against Défendant, Raymond C. Jones, for compensatory damages together
with pre-judgment interest and post-judgment interest, punitive damages pursuant to North
Carolina Statutes § ID - 15, costs including an award of attorneys' fees, and such other relief
deemed just and proper.
COUNTIV-FRAUD
(By Défendant James V. Punelli)
123.
Blue Force re-alleges the allégations contained in paragraphs 1 through 85 of this
Complaint.
124. On January 29, 2016, at a Blue Force Board meeting, Punelli was named as a
director and Secretary/Treasurer of Blue Force. At this Board meeting, Punelli was reminded that
he had no authority to make any financial décisions on behalf of Blue Force without full approval
of the Blue Force Board. Punelli resigned from Blue Force on December 28, 2016 and redeemed
his stock in a sale to Blue Force on March 21, 2017.
125.
Between 2015 and 2017, Jones and Punelli entered into loan agreements with
Azadian, Midtown, Change Capital Loans, and SMI LLC, using Blue Force as an unknowing and
unauthorized guarantor of loans in excess of $2,606,000.
126. Jones and Punelli, without the knowledge of and authority from Blue Force,
purported to commit Blue Force as a corporate guarantor to three separate Azadian Merchant
Receivables Purchase and Security Agreements dated August 18, 2017 for $417,937.52, October
24, 2017 for $198,050, and December 4, 2017 for $57,200, respectively, by signing on behalf of
Blue Force under the non-descript title of "Corporate Officer." These three loan agreements were
between Azadian and TenX, and flinding was solely for the benefit of TenX and its subsidiaries.
22
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127.
Additionally, Jones and Puneiii purported to commit Biue Force as a corporate
guarantor to four Merchant Receivables Purchases and Security Agreements between Midtown
and TenX dated June 16, 2017 for $199,499.52, December 13, 2017 for $204,800, January 15,
2018 for $102,400.50, and February 26, 2018 for $96,000, wherein Punelli and Jones served as
Personal guarantors. These four loan agreements were between Midtown and TenX, and funding
was solely for the benefit of TenX and its subsidiaries.
128.
Furthermore, Jones and Punelli purported to commit Blue Force as a corporate
guarantor to three Merchant Receivables Purchase and Security Agreements with Change Capital
on December 13, 2016 for $399,000.36, February 27,2017 for $26,599.80, and May 18, 2017 for
$330,000. Punelli purported to commit Blue Force as a corporate guarantor by improperly signing
the first loan in his alleged capacity as "Corporate Secretary" and the last two as "Corporate
Officer." None of the loan agreements was presented to Blue Force, and the last two loan
documents were executed by Punelli with the full knowledge that he had resigned from Blue Force.
These three loan agreements were between Change Capital and TenX, and funding was solely for
the benefit of TenX and its subsidiaries.
129.
Lastly, Jones and Punelli purported to commit Blue Force as a corporate guarantor
to three Promissory Note and Security Agreements with SMl. The three are dated September 23,
2015 for $100,000, June 16, 2016 for $400,000, and September 5, 2017 for $75,000.
130. Then on December 6, 2017, one year after Punelli resigned from Blue Force, a
Power of Attorney granted SMI unilatéral power to execute on any and ail documents required to
retitle Blue Force assets serving as collatéral under the various SMI Notes and Security Agreement.
This Power of Attorney was fraudulently signed on behalf of Blue Force by Punelli signing as
23
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Président and Jones signing as CEO. This Power of Attorney was never disclosed to or authorized
by the Board of Blue Force.
131.
These loan agreements were solely for the benefit of TenX and its subsidiaries.
Equally disturbing, Jones was still a director of Blue Force when Punelli resigned from Blue Force
and knew Punelli's status as a corporate officer after bis departure was false.
132.
Punelli concealed these loans from Blue Force, that served the sole benefit of TenX,
and intentionally deceived Blue Force by not disclosing these loans, resulting in financial losses
to Blue Force.
133. As an corporate officer of Blue Force, Punelli had an affirmative, fiduciary duty to
disclose ail material facts related to the above loans to Blue Force.
134.
Punelli not only breached his fiduciary duties through misrepresentations and
concealment, he committed fraud because his fiduciary relationship créâtes a duty to fully disclose
these loans and because he continued to knowingly misrepresent himself as an authorized
représentative of Blue Force even after departing Blue Force. Punelli's concealment of his herein-
described actions prevented Blue Force from discovering or having the reasonable ability to
discover the loans prior to Jones providing ail the TenX transaction documentation wherein Blue
Force was falsely included as a guarantor during the due diligence associated with the rédemption
of Jones' stock in Blue Force.
135. The fraud was confinned on April 19, 2018, when in response to a demand letter
for collection from Azadian, Punelli provided a swom Affidavit confinning he had no authority to
enter into any agreement on behalf of Blue Force, and that the Merchant Receivables Purchase and
Security Agreements were executed without Blue Force's knowledge and authority.
24
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136.
In this same Affidavit, Punelli also swore that Blue Force did net receive any use
or benefit, including funds of any kind or whatsoever, from these three Merchant Receivables
Purchase and Security Agreements.
137. On April 24,2018, Blue Force sent Punelli a letter reminding him of his résignation
from Blue Force and his complété lack of authority to bind Blue Force in any matter whatsoever.
In this letter, Punelli was asked if he had committed Blue Force to any other loans, obligations, or
any other matter(s). In Punelli's response dated May 2, 2018, Punelli falsely informed Blue Force
that he had not committed Blue Force as a guarantor to any other loans or financial instruments.
WHEREFORE, Plaintiff, Blue Force Technologies, Inc., demands judgment on this
Count in its favor and against Défendant, James V. Punelli, for compensatory damages together
with pre-judgment interest and post-judgment interest, punitive damages pursuant to North
Carolina Statutes § ID - 15, costs including an award of attorneys' fees, and such other relief
deemed just and proper.
COUNT V -
DECLARATORY ACTION ON THE VALIDITY OF THE
GUARANTEES FRAUDULENTLY ENTERED INTO BY
JAMES V. PUNELLI AND RAYMOND C. JONES
(Against Défendants Midtown Resources MCA LLC,
Azadian Croup, LLC, and Change Capital Partners Fund 1, LLC)
138.
Blue Force re-alleges the allégations contained in paragraphs 1 through 85 of this
Complaint.
139.
Pursuant to 28 U.S.C. § 2201 (a), this Court may déclaré the rights and other légal
relations of any interested party seeking such déclaration, whether or not further relief is or could
be sought.
25
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140. Between 2015 and 2017, Jones and Punelli entered into guarantees for loans with
Azadian, Midtown, and Change Capital Loans, and SMI LLC, using Blue Force as an unknowing
and unauthorized guarantor of loans in excess of $2,606,000.
141.
Jones and Punelli, without the knowledge of and authority from Blue Force,
purported to commit Blue Force as a corporate guarantor to three separate Azadian Merchant
Receivables Purchase and Security Agreements dated August 18, 2017 for $417,937.52, October
24,2017 for $ 198,050, and December 4, 2017 for $57,200, respectively, by improperly signing on
behalf of Blue Force under the non-descript title of "Corporate Officer." These three loan
agreements were between Azadian and TenX, and funding was solely for the benefît of TenX and
its subsidiaries.
142.
Additionally, Jones and Punelli purported to commit Blue Force as a corporate
guarantor to four Merchant Receivables Purchase and Security Agreements between Midtown and
TenX dated June 16, 2017 for $199,499.52, December 13, 2017 for $204,800, January 15, 2018
for $102,400.50, and February 26, 2018 for $96,000, wherein Punelli and Jones served as personal
guarantors. These four loan agreements were between Midtown and TenX, and flinding was solely
for the benefit of TenX and its subsidiaries.
143.
Furthermore, Jones and Punelli purported to commit Blue Force as a corporate
guarantor to three Merchant Receivables Purchase and Security Agreements with Change Capital
on December 13, 2016 for $399,000.36, February 27, 2017 for $26,599.80, and May 18,2017 for
$330,000. Punelli purported to commit Blue Force as a corporate guarantor by improperly signing
the first loan in his alleged capacity as "Corporate Secretary" and the last two as "Corporate
Officer." None of the loan agreements was presented to or authorized by Blue Force, and the last
two loan documents were executed by Punelli with the full knowledge that he had resigned from
26
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Blue Force. These three loan agreements were between Change Capital and TenX, and ftinding
was solely for the benefït of TenX and its subsidiaries.
144.
Equally disturbing and conceming with the loans of Azadian, Midtown, and
Change Capital is a clause in the loan agreements have that purports to give the bank a judgment
against Blue Force without providing Blue Force its due process rights to defend itself.
Specifically, the "Confession of Judgment" states:
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
HEREUNDER, MERCHANT, GUARANTOR(S), AND
CORPORATE GUARANTOR(S) HEREBY AUTHORIZE
AND EMPOWER COMPANY, THROUGH ITS ATTORNEY
OR THROUGH THE PROTHONOTARY OR CLERK OF
ANY COURT OF RECORD, TO APPEAR FOR MERCHANT,
GUARANTOR(S) AND CORPORATE GUARANTOR(S),
WITH OR WITHOUT COMPLAINT FILED, TO CONFESS
AND ENTER JUDGMENT, OR A SERIES OF JUDGMENTS,
AGAINST
MERCHANT,
GUARANTOR(S)
AND
CORPORATE GUARANTOR(S) IN FAVOR OF COMPANY
(AND/OR ITS SUCCESSORTS OR ASSIGNS), FOR THE
UNPAID BALANCE OF THE SPECIFIED AMOUNT (AS
DEFINED IN THIS AGREEMENT) AND ALL OTHER
SUMS PAID BY COMPANY TO OR ON BEHALF OF
MERCHANT PURSUANT TO THE TERMS OF ANY AND
ALL AGREEMENTS BETWEEN COMPANY AND
MERCHANT, TOGETHER WITH ALL COSTS OF SUIT
AND
REASONABLE
ATTORNEYS' FEES
FOR
COLLECTION OF THE INDEBTEDNESS, ON WHICH
JUDGMENT OR JUDGMENTS, ONE OR MORE
EXECUTIONS MAY ISSUE FORTHWITH. MERCHANT
AND GUARANTOR(S) HEREBY FOREVER WAIVE STAY
OF EXECUTION, THE RIGHT OF INQUISITION AND
EXTENSIONS OF TIME OF PAYMENT, AGREES TO
CONDEMNATION OF ANY PROPERTY LEVIED UPON
BY VIRTUE OF ANY SUCH EXECUTION, AND WAIVE
ALL EXEMPTIONS FROM LEVY AND SALE OF
PROPERTY THAT IS NOR OR HEREINAFTER MAY BE
EXEMPTED BY LAW. THIS PARAGRAPH SHALL BE
DEEMED A SUFFICIENT WARRANT OF ATTORNEY FOR
ALL ACTION AUTHORIZED HEREIN.
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145. By reason of the foregoing, Blue Force is entitled to a judgment declaring that the
guarantees purportedly entered on behalf of Blue Force by Jones and Punelli with Midtown
Resources MCA LLC, Azadian Group, LLC, and Change Capital Partners Fund 1, LLC, are not
enforceable against Blue Force.
WHEREFORE, Blue Force Technologies, Inc., demands this Court to déclaré the loan
guarantees entered against Blue Force by Raymond C. Jones and James V. Punelli unenforceable
against Blue Force; for the entry of a preliminary and permanent injonction against Défendants
Midtown Resources MCA LLC, Azadian Group, LLC, and Change Capital Partners Fund 1 ; and
any additional relief that this Court deems is just and proper.
Dated: December 18, 2018
Respectfully submitted,
/s/ K. Alan Parrv
K. Alan Parry, N.C. Bar #31343
Megan E.A. Bishop, N.C. Bar #53386
(MDNC admission pending)
PARRY
I TYNDALL |
WHITE
100 Europa Drive, Suite 401
Chapel Hill, NC 27517
aDarrv@ptwfinn.com
mbishop@ptwfinn.com
T: 919-246-4676
F: 919-246-9113
-and-
Ignacio M. Alvarez
Carlos F. Gonzalez
Alvarez |
Gonzalez |
Menezes, LLP
One Flagler Building
14 NE P' Ave
Miami, Florida 33132
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i 0. a
1 var ez@r
i mon
1 a w.
coin
carlos.gonzalez@rimonlaw.com
T: (305)723-1876
F: (786) 475-7832
28
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Exhibit
A
Case l:18-cv-01028-CCE-JLW Document 1-1 Filed 12/18/18 PaaelofS
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COMMONWEALTH OF VIRGINIA
LOUDOUN COUNTY
AFFIDAVIT
NOW COMES the Affiant, JAMES V. PUNELLI, having been duly swom and states the
foilowing:
1.
My name is JAMES V. PUNELLI.
2.
I am an adult over the âge of 18 years, bave never been adjudicated incompétent,
sufFer from no mental or emotional illnesses and make this Affidavit of my own free will, stating
facts of which I bave personal knowledge.
3.
I am a former minority sbarebolder, member of tbe Board of Directors and
Treasurer of Elue Force Technologies, Inc., a Delaware corporation "Elue Force."
4.
On December 28, 2016,1 resigned from my position as a member of tbe Eoard of
Directors and as tbe Treasurer of Elue Force.
5.
On Marcb 21, 2017, I entered into a Stock Purcbase Agreement witb Elue Force
to sell 18.3 sbares (representing 18.3% interest in Elue Foce), being my entire ownersbip interest
in Elue Force. Tbe closing on the sale of my stock to Elue Force occurred on Marcb 21, 2017.
6.
Since December 28, 2016,1 bad no autbority to contract on bebalf of or enter into
any agreement on bebalf of Elue Force.
7.
On August 18, 2017, I executed a Mercbant Receivables Purcbase and Security
Agreement by and between Azadian Group, LLC and Tenx Group, LLC ("Tenx") (tbe Mercbant
Receivables Purcbase Agreement") on bebalf of Elue Force as a Corporate Guarantor.
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8.
I executed the Merchant Receivables Purchase Agreement purportedly on behalf of
Blue Force; however, I did so without the knowledge and authority of Elue Force. I never notifled
Elue Force of the existence of the Merchant Receivables Purchase Agreement and its obligations
as Corporate Guarantor.
9.
Elue Force is not an affîliate of Tenx or Panthera Training Center, LLC.
10.
Elue Force never derived any financial or other benefit under the Merchant
Receivables Purchase Agreement.
11.
I was authorized to signed the Merchant Receivables Purchase Agreement on behalf
of Raymond C. Jones in every capacity that Raymond C. Jones purportedly executed the Merchant
Receivables Purchase Agreement. I never informed Raymond C. Jones that Elue Force was a
Corporate Guarantor under the Merchant Receivables Purchase Agreement and to my knowledge,
Raymond C. Jones had no knowledge that Blue Force was a Corporate Guarantor.
FURTHER AFFIANT SAYETH NAUGHT.
This the
day of
-T /
, 2018.
JAMES V. PUNELLI
Swom to and subscribed before me
This tl^e
day of 4^Tx )
Notary Pub
S\nQz..i;^ QôKfLOar
Printed name of Notary Pub
(OFFICIAL SEAL)
My commission expires:
3l [ 1^
Shazia Sarwar
Commonwcnlili uf Virginia
Noi.nry fiiltlic
Commission No.7053624
My Commission Expires 8/3iy2019
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Exhibit
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COMMONWEALTH OF VIRGINIA
LOUDOUN COUNTY
AFFIDAVIT
NOW COMES the Affiant, RAYMOND C. JONES, having been dufy swom and states
the foUowing:
1.
My name is RAYMOND C. JONES.
2.
I am an aduh over the âge of 18 years, have never been adjudicated inconpetent,
sufer from no mental or emotbnal illnesses and make this AfÊdavit of my own free will, stating
fects of which I have personal knowledge.
3.
I am a minority shareholder, member of the Board of Directors, Corporate
Secretary and Treasurer of Bhie Force Technofogies, Inc., a Delaware corporation "Bhie Force."
4.
I am an owner and a Managing Member of TenX Group LLC ('TenX"), a
Delaware Limited Liability Company ako doing business as "PTC" and ^Tanthera Worldwide."
9.
Blue Force is not an aflSliate ofTenx LLC, or PTC, orPanthera Worldwide.
5.
On, or about, August 18, 2017, 1 received an email from DocuSign containing a
Merchant Receivables Purchase and Security Agreement by and between A2adian Groiç), LLC
("Azadian Group") and Tenx Group, LLC ('Tenx") (the Merchant Receivables Purchase
Agreement"). Without opening or in any way reviewing the document, I ferwarded the email to
James V. Punelli and asked fîjr him to execute the document on my behalf for the sake of
expediency. Further, 1 did not review the final copy of the document after signature.
6.
I was not involved in the ban application process for the Merchant Receivabfes
Purchase Agreement, and therefore did not have any knowfedge of the use of Blue Force as a
corporate guarantor in the agreement.
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6.
On the moming of Aprfl 16, 2018, I was notified by Mr. Punelli that Bhie Force
would be receiving a demand letter from Azadian Group in the next few days. This was a
surprise to me, as I had no knowledge that Bhie Force was in any manner involved as a party to
the Merchant Receivables Purchase Agreement, guarantor or otherwise.
7.
I can state unequivocally that prbr to April 16, 2018, I was unaware of Bhie
Force being a purported guarantor under the Merchant Receivables Purchase Agreement.
Involving Blue Force would have required me to obtain a Board Resohitbn from Bhie Force
approving the loan. As the other two board members at Bhie Force have no finançai interest in
TenX, I believe they would never have approved a ban guarantee.
FURTHER AFFIANT SAYETH NAUGHT.
This the
_ day of
, 2018.
Swom to and subscribed before me
This the
day of
, 2018.
Printed name of Notary Public
(OFFICIAL SEAL)
My commission e?q)ires:
5\ 3oàD
/
S-?'
-
7687864
î
S
r": COMMISSION :5r
expires
1/31/2020/^^
'oZf/iLJH
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Page 1 of 6
18BD,CASSET,CL0SED,MEDIATION
U.S. District Court
North Carolina Middie District (NCMD)
CIVIL DOCKET FOR CASE #: l:18-cv-01028-CCE-JLW
BLUE FORCE TECHNOLOGIES, INC. V. JONES, ET AL. Date Filed: 12/18/2018
Assigned to: JUDGE CATHERINE C. EAGLES
Date Terminated: 05/01/2019
Referred to: MAG/JUDGE JOE L. WEBSTER
Jury Demand: Plaintiff
Cause: 28:1332 Diversity
Nature of Suit: 370 Fraud or Truth-In-
Lending
Jurisdiction: Diversity
Plaintiff
BLUE FORCE TECHNOLOGIES,
represented by IGNACIO MIGUEL ALVAREZ
INC.
ALVAREZ GONZALEZ MENEZES,
LLP
14NE IST AVE.
STE 1105
MIAMI, FL 33132
305-723-1876
Fax: 786-475-7832
Email: imalvarez@aIgofirm.com
LEAD ATTORNEY
A TTORNEY TO BE NOTICED
KIRK ALAN PARRY,
JR.
PARRY LAW,
PLLC
THE EUROPA CENTER
100 EUROPA DR., SUITE 351
CHAPEL HILL, NC 27517
919-913-3320
Fax: 919-869-2600
Email: kap@parryfirm.com
A TTORNEY TO BE NOTICED
V.
Défendant
RAYMOND C. JONES
represented by GEOFFREY M. DURESKA
DUNLAP BENNETT &
LUDWIG,
PLLC
1870 THE EXCHANGE, SE
STE. 200
ATLANTA, GA 30339
404-596-5283
Fax: 404-596-5283
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Email: gdureska@dblla\vyers.com
LEAD ATTORNEY
A TTORNEY TO BE NOTICED
Défendant
JAMES V. PUNELLI
11654 PLAZA AMERICA DRIVE,
#320
RESTON, VA 20190
JASON A. MCGRATH
MCGRATH &
SPIELBERGER, PLLC
6201 FAIRVIEW ROAD, SUITE 330
CHARLOTTE, NC 28210
800-481-2180
Fax: 800-962-7158
Email: info@mcgrathspielberger.com
A TTORNEY TO BE NOTICED
represented by GEOFFREY M. DURESKA
(See above for address)
LEAD ATTORNEY
A TTORNEY TO BE NOTICED
Défendant
MIDTOWN RESOURCES MCA
LLC
TERMINATED: 12/28/2018
Défendant
AZADIAN GROUP, LLC
TERMINATED: 12/28/2018
Défendant
CHANGE CAPTIAL PARTNERS
FUND 1, LLC
TERMINATED: 12/28/2018
JASON A. MCGRATH
(See above for address)
A TTORNEY TO BE NOTICED
Date Filed
#
Docket Text
12/18/2018
i COMPLAINT against Ail Défendants (
Filing fee $ 400 receipt number 0418-
2479097.), filed by Blue Force Technologies, Inc.. (Attachments: # i
Exhibit
Exhibit A-Affidavit of James V. Punelli, # 2 Exhibit Exhibit B-Affidavit of
Raymond G. Jones)(PARRY, KIRK)
(Entered: 12/18/2018)
12/18/2018
2
Corporate Disclosure Statement by Blue Force Technologies, Inc.. (PARRY,
KIRK)
(Entered: 12/18/2018)
12/18/2018
3
NOTICE of Appearance by attorney KIRK ALAN PARRY, JR on behalf of
Plaintiff Blue Force Technologies, Inc. (PARRY, KIRK)
(Entered: 12/18/2018)
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12/18/2018
CASE REFERRED to Médiation pursuant to Local Rule 83.9b of the Rules of
Practice and Procédure of this Court. Please go to our website under Attorney
Information for a list of mediators which must be served on ail parties. (Coyne,
Michelle) (Entered: 12/18/2018)
12/19/2018
Case ASSIGNED to JUDGE CATHERINE C. EAGLES and MAGISTRALE
JUDGE JOE L. WEBSTER.
(Coyne, Michelle) (Entered: 12/19/2018)
12/20/2018
4 STANDARD ORDER for civil cases proceeding before JUDGE CATHERINE
C. EAGLES.
(Sanders, Marlene) (Entered: 12/20/2018)
12/21/2018
5
Summons Issued as to RAYMOND C. JONES, and JAMES V. PUNELLI.
(Attachments: # i Jones)(Coyne, Michelle) (Entered: 12/21/2018)
12/21/2018
6
Notice of Right to Consent. Counsel shall serve the attached form on ail parties.
(Attachments: # 1 Consent Form)(Coyne, Michelle) (Entered: 12/21/2018)
12/27/2018
7 NOTICE by BLUE FORCE TECHNOLOGIES, INC. of Spécial Appearance
(ALVAREZ, IGNACIO)
(Entered: 12/27/2018)
12/28/2018
8
NOTICE OF VOLUNTARY DISMISSAL WITH PREJUDICE Midtown
Resources MCA LLC, Azadian Group LLC and Change Capital Partners Fund I
LLC by BLUE FORCE TECHNOLOGIES, INC. (PARRY, KIRK) Modified on
12/28/2018 to correct title of document (Taylor, Abby). (Entered: 12/28/2018)
01/14/2019
9
AFFIDAVIT OF SERVICE as to JAMES V. PUNELLI served on 12/26/2018,
answer due 1/16/2019. (PARRY, KIRK)
(Entered: 01/14/2019)
01/14/2019
iO
WAIVER OF SERVICE of SUMMONS by BLUE FORCE TECHNOLOGIES,
INC.. RAYMOND C. JONES waiver sent on 1/9/2019, answer due 3/11/2019.
(PARRY, KIRK)
(Entered: 01/14/2019)
01/17/2019
ii
MOTION for Entry of Default by BLUE FORCE TECHNOLOGIES, INC..
(PARRY, KIRK)
(Entered: 01/17/2019)
01/22/2019
12
MOTION to Set Aside Entry of Default by JAMES V. PUNELLI.
(Attachments: # 1 Envelope)(Taylor, Abby) Modified to correct title of
document per Text Order entered on 02/01/2019. (Taylor, Abby). (Entered:
01/22/2019)
01/23/2019
Motions Referred: RE: 12 MOTION for Extension of Time to File Answer re 1
Complain to MAG/JUDGE JOE L. WEBSTER (Sanders, Marlene) (Entered:
01/23/2019)
01/23/2019
il
RESPONSE in Opposition re 12 MOTION for Extension of Time to File
Answer re 1 Complaint, filed by JAMES V. PUNELLI filed by BLUE FORCE
TECHNOLOGIES, INC.. Replies due by 2/6/2019 (ALVAREZ, IGNACIO)
(Entered: 01/23/2019)
01/24/2019
Motions Referred: RE: H
MOTION for Entr>' of Default to MAG/JUDGE JOE
L. WEBSTER.
(Sanders, Marlene) (Entered: 01/24/2019)
02/01/2019
TEXT ORDER granting H
Motion for Entry of Clerk's Default and directing
the Clerk to enter a default as to Défendant James V. Punelli, pursuant to
Fédéral Rule of Civil Procédure 55(a), in light of the fact that Défendant Punelli
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was served with the Complaint and Summons on December 26,2018 (Docket
Entry 9), and Défendant did net timely "plead or otherwise defend" the
Complaint on or before January 16, 2019. Défendant Punelli's Letter fîled with
the Court on January 22, 2019 shows that he received the Complaint and
Summons by mail. (Docket Entry 12.) Proof of service is further demonstrated
by Plaintiffs Affidavit showing Défendant Punelli was served on December 26,
2018. (Docket Entry 9.) Therefore, pursuant to Rule 55(a) of the Fédéral Rules
of Civil Procédure, the Clerk is directed to enter a default as to Défendant James
V. Punelli. Furthermore, the Court will construe Défendant Punelli's Letter
document (Docket Entry 12) as a Motion to Set Aside Entry of Default. Plaintiff
shall have up to and including February 8, 2019 to file any response to
Defendant's motion. Thereafter, Défendant Punelli shall file a reply within 5
days of the filing of Plaintiff s response. Should the Court thereafter set aside the
entry of default, the undersigned will then déterminé when an Answer or other
responsive pleadings are due. Issued by MAG/JUDGE JOE L. WEBSTER on
2/l/2019.(Lee, Pedra) (Entered: 02/01/2019)
02/01/2019
Set/Response Deadline 02/08/2019. re 12 MOTION to Set Aside Entry of
Default. See Text Order entered on 02/01/2019. (Taylor, Abby)
(Entered:
02/01/2019)
02/01/2019
14
**SET ASIDE pursuant to order dated 5/1/2019**ENTRY OF DEFAULT
signed by Clerk of Court, JOHN S. BURBAKER on 02/01/2019. In accordance
with the Order entered by the Honorable Joe L. Webster on February 1, 2019,
default is hereby entered against Défendant JAMES V. PUNELLI. (Taylor,
Abby) Modified on 5/1/2019 (Coyne, Michelle). (Entered: 02/01/2019)
02/06/2019
11 RESPONSE in Opposition re 12 MOTION to Set Aside Entry of Default, filed
by JAMES V. PUNELLI PLAINTIFFS RESPONSE IN OPPOSITION TO
DEFENDANT P
UN
ELUS MOTION TO SET ASIDE ENTRY OF
CLERK
DEFAULTr\\Q& by BLUE FORCE TECHNOLOGIES, INC. Replies due by
2/11/2019 (PARRY, KIRK)
(Entered: 02/06/2019)
02/06/2019
Set/Reply Deadline re \2 MOTION to Set Aside Entry of Default : Replies due
by 2/11/2019. (Taylor, Abby)
(Entered: 02/07/2019)
02/11/2019
16
MOTION to Set Aside Default by JAMES V. PUNELLI. Response to Motion
due by 3/7/2019 (MCGRATH, JASON)
(Entered: 02/11/2019)
02/11/2019
12 REPLY re 13 Response in Opposition to Motion filed by BLUE FORCE
TECHNOLOGIES, INC. to Motion for Ext. ofTime filed by JAMES V.
PUNELLI. (MCGRATH, JASON) Modified on 2/12/2019 to correct title of
document (Taylor, Abby). (Entered: 02/11/2019)
02/11/2019
18
BRIEF re 16 MOTION to Set Aside Default. (MCGRATH, JASON)
(Entered:
02/11/2019)
02/11/2019
19
MOTION to Dismiss by RAYMOND C. JONES, JAMES V. PUNELLI.
Response to Motion due by 3/4/2019 (Attachments: # 1 Exhibit Exhibit A -
Termination of Guaranty Agreements)(MCGRATH, JASON)
(Entered:
02/11/2019)
02/11/2019
20
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BRIEF re 19 MOTION to Dismiss .
(Attachments: # 1 Exhibit Exhibit A -
Termination of Guaranty Agreements)(MCGRATH, JASON)
(Entered:
02/11/2019)
03/04/2019
21
RESPONSE in Opposition re 19 MOTION to Dismiss filed by RAYMOND C.
JONES, JAMES V. PUNELLI filed by BLUE FORCE TECHNOLOGIES,
INC.. Replies due by 3/18/2019 (PARRY, KIRK)
(Entered: 03/04/2019)
03/07/2019
22
RESPONSE in Opposition re 16 MOTION to Set Aside Default filed by JAMES
V. PUNELLI filed by BLUE FORCE TECHNOLOGIES, INC.. Replies due by
3/21/2019 (ALVAREZ, IGNACIO)
(Entered: 03/07/2019)
03/18/2019
23
REPLY re 21 Response in Opposition to Motion to Dismiss filed by
RAYMOND C. JONES, JAMES V. PUNELLI. (MCGRATH, JASON)
Modified on 3/19/2019 to correct title of document (Taylor, Abby). (Entered:
03/18/2019)
03/21/2019
24
REPLY,
filed by Défendant JAMES V. PUNELLI, to Response to \2 MOTION
for Extension of Time to File Answer re 1 Complaint,, 16 MOTION to Set
Aside Default filed by JAMES V. PUNELLI. (DURESKA, GEOFFREY)
(Entered: 03/21/2019)
03/22/2019
Motions Submitted: \2 MOTION for Extension of Time to File Answer re 1
Complaint,, 19 MOTION to Dismiss , 16 MOTION to Set Aside Default to
JUDGE CATHERINE C. EAGLES.
(Sanders, Marlene) (Entered: 03/22/2019)
03/26/2019
25
NOTICE of Hearing: Motion Hearing set for 4/9/19 at 2:00 PM in Greensboro
Courtroom #3 before JUDGE CATHERINE C. EAGLES.
(Sanders, Marlene)
(Entered: 03/26/2019)
04/09/2019
Minute Entry for proceedings held before JUDGE CATHERINE C. EAGLES:
Attorneys Ignacio Alvarez and Megan Bishop présent as counsel for plaintiff.
Attorneys Jason McGrath and Geoggrey Dureska présent as counsel for
défendants. Motion Hearing held on 4/9/2019 re 12 MOTION for Extension of
Time to File Answer re 1 Complaint, filed by JAMES V. PUNELLI, 19
MOTION to Dismiss filed by RAYMOND C. JONES, JAMES V. PUNELLI,
16 MOTION to Set Aside Default filed by JAMES V. PUNELLI. For reasons
stated in open court. Court takes matter under advisement. (Court Reporter Jane
Calhoun.) (Sanders, Marlene) (Entered: 04/09/2019)
04/12/2019
26
NOTICE of Appearance by attorney GEOFFREY M. DURESKA on behalf of
Défendants RAYMOND C. JONES, JAMES V. PUNELLI (DURESKA,
GEOFFREY)
(Entered: 04/12/2019)
04/12/2019
Case Reported Settled by defense counsel, Geoffrey Dureksa. Stipulation of
Dismissal due by 5/13/2019. (Sanders, Marlene) (Entered: 04/15/2019)
05/01/2019
27
JOINT MOTION 7b Set Aside Default and Stipulation of Dismissal by
RAYMOND C. JONES, JAMES V. PUNELLI. (Attachments: # 1 Text of
Proposed Order)(DURESKA, GEOFFREY)
(Entered: 05/01/2019)
05/01/2019
Motions Submitted: 27 JOINT MOTION7b Set Aside Default and Stipulation of
Dismissal to JUDGE CATHERINE C. EAGLES.
(Sanders, Marlene) (Entered:
05/01/2019)
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05/01/2019
CONSENT ORDER signed by Judge Catherine C. Eagles on 05/01/2019. The
Consent Motion should be GRANTED. Défendant Punelli's Motions to Set
Aside Default \2 and 16 are GRANTED. FURTHER that the Clerk's Entry of
Default 14 is hereby set aside. This case is DISMISSED WITH PREJUDICE
with each party bearing their own costs and attorney's fee incurred in the
prosecution of this matter. (Coyne, Michelle) (Entered: 05/01/2019)
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