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1 UNITED STATES BANKRUPTCY COURT
2 DISTRICT OF NEVADA
3 LAS VEGAS, NEVADA
4 In re: XYIENCE, INCORPORATED, ) E-Filed: 03/14/11
)
5 Debtor. ) Case No.
) BK-S-08-10474-MKN
6 _________________________________) Chapter 11
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10
11 TRANSCRIPT OF PROCEEDINGS
OF
12 VIDEOCONFERENCE
OF
13 ORDER SHORTENING TIME
RE: EMERGENCY APPLICATION
14 FOR PLAN IMPLEMENTATION INJUNCTION, NO. 600
VOLUME 1
15 BEFORE THE HONORABLE LLOYD KING
VISITING UNITED STATES BANKRUPTCY JUDGE
16
Tuesday, March 1, 2011
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11:00 a.m.
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23 Court Recorder: Helen C. Smith
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Proceedings recorded by electronic sound recording;
25 transcript produced by transcription service.
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1 APPEARANCES:
2 For the Movants, GREGORY E. GARMAN, ESQ.
Zyen, LLC, and Gordon Silver
3 Manzen, LLC, d/b/a 3960 Howard Hughes Parkway
Xyience, Incorporated: Ninth Floor
4 Las Vegas, Nevada 89169
5 For the Defendant/ RICHARD E. BERGERON, III
Counterclaimant, in Propria Persona
6 Richard E. Bergeron, P.O. Box 5212
III: Weirs Beach, New Hampshire 03247
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1 I N D E X
Voir
2 Witness Direct Cross Red. Rec. Dire
3 GREGORY E. GARMAN, ESQ.
(By Mr. Bergeron) 42
4
WILLIAM J. BULLARD
5 (By Mr. Bergeron) 51
6 JOHN LENNON
(By Mr. Bergeron) 64
7
MICHAEL LEVY
8 (By Mr. Bergeron) 73
9 JOHN VILLARI
(By Mr. Bergeron) 78
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RICHARD E. BERGERON, III
11 (By Mr. Garman) 91
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1 (Court convened at 11:16:26 a.m.)
2 CLERK VEGAS: The United States Bankruptcy Court for
3 the District of Nevada is now in session. The Honorable
4 Lloyd King presiding.
5 You may be seated.
6 (Colloquy not on the record.)
7 CLERK VEGAS: Madam Clerk, you may call your case.
8 CLERK RAWLING: This is in the matter of
9 Xyience, Incorporated, Case No. 08-10474-MKN.
10 THE COURT: Good morning. I am Lloyd King,
11 United States Bankruptcy Judge for the District of Hawaii. I
12 am presiding this morning because this appeared to be a matter
13 that needed emergency attention, and I was the judge available
14 who had at least a limited exposure to this matter.
15 So that is why we are proceeding by a videoconference
16 today with the Court in Honolulu and everyone else at the
17 bankruptcy court in Las Vegas, Nevada.
18 Would the parties note their appearances, please.
19 MR. GARMAN: Your Honor, this is Greg Garman for the
20 movants, Zyen, LLC, and Manzen, d/b/a Xyience.
21 THE COURT: Thank you, Mr. Garman.
22 MR. BERGERON: Your Honor, Rich Bergeron for the
23 Defense --
24 THE COURT: Thank you --
25 MR. BERGERON: -- in pro se.
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1 THE COURT: -- Mr. Bergeron. All right.
2 Mr. Garman, how did you wish to proceed this morning?
3 MR. GARMAN: Your Honor, with the Court's indulgence,
4 I have a brief presentation outlining some of the highlights of
5 our motion that I'd like to present and then take any questions
6 you might have.
7 THE COURT: So you're planning just to proceed as a
8 motion.
9 MR. GARMAN: Yes. I'm planning to proceed as a
10 motion and simply make argument based upon the evidentiary
11 record that has been submitted to you and legal argument based
12 upon the briefs before you.
13 THE COURT: All right. Mr. Bergeron, are you ready
14 to proceed?
15 MR. BERGERON: Yes, your Honor.
16 THE COURT: Thank you. All right.
17 Go ahead, please, Mr. Garman.
18 And, Ms. Clerk, can you turn up the volume on this end,
19 please.
20 MR. GARMAN: Your Honor, I'll try and speak a little
21 louder as I know there have been some volume issues.
22 Your Honor, I'm in the courtroom in Las Vegas today with
23 parties in attendance being the parties who submitted
24 declarations, Bill Bullard who is the manager of Zyen along
25 with John Lennon and Michael Levy who are respectively the CEO
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1 and CFO of Manzen, d/b/a Xyience, the operating drink company.
2 And, also, in attendance in the courtroom today is
3 John Villari, an employee of Xyience who has been harassed in
4 this case.
5 Your Honor, we make this motion based upon the following
6 authority, Section 105 and 1142, Sub B of the bankruptcy
7 code.
8 In addition to that, we bring it based upon
9 Bankruptcy Rule 3020, Sub D. And in addition to that, we bring
10 it upon Sections 8.4, 8.5, and, notably, 9.1 of the plan of
11 reorganization that was confirmed in this proceeding some
12 number of years ago.
13 Your Honor, the highlights of the argument we advance --
14 THE COURT: Let me interrupt you --
15 MR. GARMAN: -- are --
16 THE COURT: -- Mr. Garman.
17 MR. GARMAN: -- that Mr. --
18 THE COURT: But I noticed you haven't mentioned
19 Bankruptcy Rule 7001, Sub 7.
20 MR. GARMAN: I haven't, and I don't believe that it's
21 necessary in light of the other authority; however, I'm happy
22 to address that issue to the extent the Court deems it
23 appropriate.
24 THE COURT: Well --
25 MR. GARMAN: And if you'd like me --
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1 THE COURT: -- no, no, no.
2 MR. GARMAN: -- to begin there, I can, your Honor --
3 THE COURT: No.
4 MR. GARMAN: -- or --
5 THE COURT: No. I just wanted to make sure that you
6 had at least given it some thought. I am of the impression
7 that the exceptions that were added to that rule I believe in
8 1999 are intended to protect former surviving entities
9 postconfirmation and reorganization cases and entities which
10 are presumably trying to get their businesses off to a good
11 start and to enable them to proceed by motion practice, rather
12 than to get involved in adversary proceedings.
13 We have trouble finding case law or anything that was
14 particularly helpful, but I believe that combining the terms of
15 the plan and the exceptions to the rule that in this case you
16 are proceeding properly by a motion.
17 MR. GARMAN: Your Honor, I will address that, and I
18 have given it thought, so I'll turn my attention there during
19 my presentation.
20 Your Honor, you've been involved in a number of
21 proceedings related to Xyience, and I think you've got a flavor
22 for the overall scope of what's happened in this case. It has
23 been a particularly distasteful process primarily driven by the
24 conduct that is subject of this motion.
25 Your Honor, Mr. Bergeron is engaged in the unauthorized
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1 practice of law. He is the unauthorized self-appointed party
2 for standing in pursuing claims on behalf of the shareholders,
3 and that is undeniable.
4 And it is just that point that he is bringing actions on
5 behalf of shareholders that leads us to the relief being sought
6 by way of this motion as being appropriate.
7 Before we get sidetracked on Mr. Bergeron's arguments that
8 he's somehow engaged in the appropriate conduct of journalism,
9 all we need to do is look at the record.
10 And you will find admission after admission after
11 admission including in his opposition that was filed by the
12 deadline yesterday acknowledging that his conduct is driven for
13 the benefit of shareholder claims that constituted undeniably
14 prepetition claims.
15 I would draw you to a number of admissions Mr. Bergeron
16 has made that I'd like to read into the record, and
17 Mr. Bergeron in the adversary proceeding in Docket 212, page 9
18 and again on page 19 stated, quote, "Mr. Bergeron has standing
19 enough to be dragged into this court against his will, so he
20 shall have standing to sue on behalf of those injured by the
21 abuse in addition to himself."
22 Mr. Bergeron goes on in a subsequent pleading to say,
23 quote, "Still, I have to fight for the legitimate shareholders
24 who got screwed," dot, dot, dot.
25 "Frankly and unfortunately, this work has become my life.
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1 I have had to become a lawyer virtually overnight," dot, dot,
2 dot.
3 "I wouldn't have done all this work I did to be proficient
4 as a lawyer through all of this if I did not have the facts on
5 my side."
6 Our points and authorities cite to numerous other
7 instances in which Mr. Bergeron has admitted that his conduct
8 is driven towards the prepetition claims of the shareholders.
9 Most importantly, though, I'd like to draw the Court's
10 attention to Mr. Bergeron's affidavit, Document 606 on page 9,
11 which contains -- I'm sorry -- on page 7 which contains
12 paragraph 35 in which he states, quote, "My mention of the 385
13 shareholders and my suggestion that it was time to write a
14 check was an obvious indication that my call was designed to
15 promote a settlement of the case and to provide relief to those
16 most damaged by this bankruptcy scheme that was orchestrated
17 and facilitated by Bullard on the behest of Frank Fertitta,
18 the Third, and Lorenzo Fertitta.
19 So we have judicial admissions by way of statements made
20 as late as yesterday that Mr. Bergeron's conduct is driven
21 towards driving a monetary settlement on account of people he
22 does not represent on account of undeniably and undisputedly
23 prepetition claims.
24 And, your Honor, other arguments evidencing that this is
25 an undeniable point of fact are contained in numerous points in
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1 our moving papers.
2 We have to go back to October 23rd, 2008, in which the
3 Court confirmed the plan of reorganization. That plan of
4 reorganization meaningfully dealt with the rights and remedies
5 of this estate and its many creditors, including the
6 shareholders.
7 In addition to that, that confirmed plan of reorganization
8 reiterated the rights that were granted to the restructured
9 company that was sold by way of 363 sale.
10 It was a sale Mr. Bergeron has attempted to upset. It was
11 a sale Mr. Bergeron has attempted to stay. It was a plan that
12 Mr. Bergeron has attempted to upset and stay, but it is the law
13 of the case.
14 And under that plan as is the public policy of bankruptcy,
15 a reorganized company emerged for the protection of its
16 creditors and its many employees.
17 This company is deserving of the protection afforded under
18 the bankruptcy code, and this is why Rule 7001 is not
19 applicable.
20 The permanent injunction established by way of a plan of
21 reorganization is the single cornerstone that was contemplated
22 by the bankruptcy code in Chapter 11.
23 The permanent injunction is the mechanism by which a
24 company can shed its baggage, leave its claims and assets in
25 bankruptcy court, and continue on in the operation for the
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1 public good of its business affairs.
2 Notably, your Honor, I would cite the Court's attention to
3 Section 9.1 of the confirmation order in which it says, quote,
4 "This Court" -- I'm sorry.
5 "This Court retains the jurisdiction, quote, 'to issue
6 injunctions, comma, enter and implement other orders, and take
7 such other actions as may be necessary or appropriate to
8 restrain interference by any person with consummation,
9 implementation, or enforcement of any final order, comma, this
10 plan, or the liquidating trust except as provided herein.'"
11 So I think it's undeniable that this Court retains the
12 jurisdiction to implement the injunction that was imposed by
13 way of the plan.
14 Now, turning to Mr. Bergeron's harassment, obstruction,
15 threats, and extortion, we again come to what end?
16 Mr. Bergeron seeks settlement on behalf of the shareholders.
17 And by his own admission, he takes a $500,000 piece of
18 that settlement for his own efforts. He is driven by a
19 pecuniary interest.
20 It is black-letter law that a prepetition claim is dealt
21 with by way of the estate, and Mr. Bergeron has no ability to
22 pursue that claim against the successor which was purchased by
23 way of 363 sale and a successor that was confirmed by way of a
24 plan.
25 Now, turning to Mr. Bergeron's conduct, I'm going to
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1 highlight some of the conduct in this case, but, certainly, it
2 is not an exclusive list of the things that has happened.
3 Your Honor, Mr. Bergeron sued me personally for defamation
4 for using the word "nonsense". He has sought from you and
5 other judges $150,000,000 in sanctions on at least three times.
6 He referred to me in the court record as a Nazi. He
7 posted a Web site, the ScarletLawyer.com, whose point was to
8 apparently identify for the world my misdeeds, a Web site by
9 the way that pursuant to the order that was attached to my
10 supplement was ordered taken down by a federal judge in
11 Indiana.
12 I have been forced to file police reports. And after
13 Mr. Bergeron threatened to evade security and the authorities
14 to confront me at my residence, I obtained a protective order
15 keeping him away from me.
16 Mr. Bergeron has even gone so far as to E-mail me the
17 address of my parents. He sent me an E-mail indicating that he
18 was looking at my house on Google Maps.
19 And as you will see from his own E-mails, he gloatingly
20 refers on his Web site to me being scared because of his
21 conduct, and he appears gloating and pleased with himself for
22 the terror that he seems to be instilling in people.
23 Turning my attention to John Villari who's in the
24 courtroom, this is simply an employee, someone not engaged in
25 management, doesn't own the company. He is an employee in the
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1 marketing department.
2 Mr. Bergeron has sent an E-mail to all the employees of
3 Xyience professing to expose him for conduct that ranges from
4 illegal activity of selling methamphetamines to steroids to
5 having an adulterous relationship with his coworker.
6 Mr. Bergeron has used technology by the way of a phone app
7 to pretend that he is calling from Mr. Villari's coworkers and
8 bosses to incite him to answer his phone when it's Mr. Bergeron
9 on the other end attempting to confront him.
10 He has showed up at Mr. Villari's house when Mr. Villari
11 was known not to be at home and confronted his parents with his
12 infant child. Mr. Villari has filed not less than five police
13 reports after Mr. Bergeron's repeated conduct.
14 Two CraigsList postings with Mr. Villari's address and
15 phone numbers have been posted inviting people to come by his
16 house to pick up free furniture.
17 And Mr. Villari has had to go out and hire a private
18 security guard because he feels threatened and endangered by
19 Mr. Bergeron's conduct.
20 This taken with the hundreds of text messages, the fact
21 that his car was vandalized, in the totality of the
22 circumstances, Mr. Villari is obviously concerned for himself
23 and his family.
24 Mr. Bergeron's attention has gone to Bill Bullard, the
25 manager of Zyen. Mr. Bergeron has called his wife indicating
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1 that people would come by, and that his (sic) husband was in
2 trouble. He has implicitly threatened Mr. Bullard's children,
3 and he has most importantly sought extortion.
4 And that as set forth in our pleadings the conclusion of
5 the transcription of Mr. Bergeron's voice mail says, "It's time
6 to open your checkbook, Bill," meaning all this can go away if
7 a cash settlement is paid which constitutes extortion.
8 Mr. Bergeron's attention is not left there, and that it
9 extends to Xyience's management, including Michael Levy and
10 John Lennon, the CFO and CEO, respectively.
11 Mr. Bergeron has tried to find Mr. Lennon at his hotel
12 room in order to confront him. He has had never-ending calls
13 to his cell phones.
14 And, now and most significantly, by the way, your Honor,
15 it's even been ratcheted up, Mr. Bergeron's conduct, over the
16 weekend when he is now threatening to sue Mr. Lennon and others
17 with new defamation suits similar to the ones that have been
18 brought against me in the past.
19 Finally, on the list of woes -- and I don't mean to make
20 light of it. But, finally, your Honor, turning to the company,
21 Mr. Bergeron has sought to extort the company for money.
22 He has posted a Web site called XyienceSucks.com in order
23 to try and advance his litigious behavior in order to obtain
24 money.
25 He has posted what I think your Honor would find to be
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1 immensely-disturbing and profanity-laden YouTube videos in
2 which -- I don't know if the Court had the chance to watch the
3 link that we cited to in our moving papers, but just
4 profanity-laden videos that discuss Xyience and its management
5 and can be interpreted no other way than being threatening in
6 nature.
7 He has contacted the company's customers, and there could
8 be no better example of the type of conduct that's specifically
9 prohibited by way of the permanent injunction than installing
10 yourself between the relationship between the company that came
11 out of the reorganization process and its very customers.
12 He's a vexatious litigant who has now threatened to sue
13 the company, and he does it under the guise of being some form
14 of blogger.
15 Your Honor, he has attacked Judge Nakagawa, and, most
16 recently, he has attacked you and your decisions and the
17 ignorance that you and I share for the law.
18 Your Honor, I've cited the authority in support of our
19 moving papers, already, but, again, they are 105, 1142(b), and
20 I think when you look at 1142(b) it is modified specifically by
21 the language of Bankruptcy Rule 3020, and 3020, Sub D is what
22 I'd like to draw the attention to. Let me open that.
23 Your Honor, the Bankruptcy Code 3020, Sub D specifically
24 contemplates the discussion of the retained powers of this
25 Court postconfirmation.
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1 And 3020(d) says, quote, "Notwithstanding the entry of
2 order of confirmation, comma, the Court may issue any order
3 necessary to administer the estate."
4 I think there could be no clearer example of 3020 taken in
5 conjunction with 1142(b) as authorized by plan Sections 8.4,
6 8.5, and the retention of jurisdiction in 9.1.
7 Those buttress the arguments made under 363, and
8 Mr. Bergeron must be enjoined from seeking to profit on his
9 extortious behavior.
10 Now, turning to what happened over the weekend,
11 Mr. Bergeron since the filing of this motion has not stopped
12 his antics. He's now claiming to seek new sanctions against
13 me, against the company, and against anyone involved.
14 He now seeks to commence new lawsuits for defamation and
15 other tortious conduct, and he continues his extortious
16 behavior.
17 Your Honor, if we go to Mr. Bergeron's most recent
18 pleading which is Docket No. 605, I'd like to highlight four
19 simple things.
20 On page 5, lines 7 through 9, Mr. Bergeron acknowledges
21 that he has willfully and deliberately violated federal court
22 orders for what he believes to be his own personal gain.
23 THE COURT: I'm sorry. I have the document, but
24 would you give me the page and line references --
25 MR. GARMAN: Yes, your Honor.
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1 THE COURT: -- please.
2 MR. GARMAN: It's on page 5 beginning on line 6,
3 roughly, and ending on line 8, and I'll read it. Quote, "Since
4 the entry of that injunction, comma, Bergeron has willfully and
5 deliberately violated the language of that district court
6 injunction order and subsequently begged that Court and the
7 Bankruptcy Court to sanction him for it." These are his own
8 words by way of Docket No. 605 Mr. Bergeron submitted
9 yesterday.
10 The extreme conduct of Mr. Bergeron is continued on
11 page 9 --
12 THE COURT: Excuse me --
13 MR. GARMAN: -- in which --
14 THE COURT: -- Mr. Garman.
15 MR. GARMAN: -- Mr. Bergeron states --
16 THE COURT: Excuse me, Mr. Garman.
17 MR. GARMAN: -- that he will file a new lawsuit --
18 THE COURT: Mr. Garman?
19 MR. GARMAN: Yes.
20 THE COURT: Mr. Garman, back up to the portion that
21 you just read, please.
22 MR. GARMAN: Yes.
23 THE COURT: And what is the language of the
24 district court injunction order that's referred to?
25 MR. GARMAN: The language of the district court is
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1 attached to my supplement, and it's a fairly lengthy process,
2 but Mr. Bergeron has been enjoined or held in contempt on
3 numerous occasions for his Web site postings, his pursuit on
4 behalf of unauthorized -- it's a tragic case in which a woman I
5 believe died --
6 THE COURT: And I --
7 MR. GARMAN: -- ultimately --
8 THE COURT: And I assume you --
9 MR. GARMAN: -- as --
10 THE COURT: You are referring to the
11 Southern District of Indiana District Court order?
12 MR. GARMAN: Yes. I'm sorry, your Honor. I
13 misunderstood your question. What I am referring to is
14 Mr. Bergeron's violation of the Southern District of Indiana
15 orders and injunctions.
16 Or, more specifically, I believe Mr. Bergeron himself is
17 referring to the Indiana court injunctions that he has
18 violated.
19 THE COURT: Thank you.
20 MR. GARMAN: So, your Honor, I guess in closing the
21 only other one point of evidence I'd like to identify for the
22 Court is Mr. Bergeron takes pride in the fact that he has
23 studied psychological warfare.
24 And he believes it appropriate to institute such conduct
25 in the pursuit of what he deems to be righteous on behalf of
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1 those he has no right to advocate on behalf of in a proceeding
2 that has forever enjoined such claims from being brought.
3 To the extent that a claim such as this ever existed, it
4 is exclusively in the control of Mr. Backman and the
5 liquidating trust, and the Statute of Limitations to assert
6 such a claim under Section 108 has now come and gone.
7 And so in closing, I want to be specific about the
8 remedies that we are asking for by way of this order. The
9 movants respectfully request that you enter an order enjoining
10 Mr. Bergeron from the pursuit of the claims that have been
11 discharged, enjoined, or exculpated pursuant to the plan.
12 And that he be prevented from communicating or contacting
13 by any means, phone, E-mail, text message, social media,
14 posting on the Web sites, and other media affiliated with
15 Xyience or any person connected to the debtor, Zyen or Xyience,
16 Xyience's principals, management, employees expressly including
17 current and past employees, expressly including Mr. Villari,
18 Mr. Lennon, Mr. Levy, Xyience, Zyen, its holding company's
19 principals, including Frank Fertitta, the Third,
20 Lorenzo Fertitta, the entire Fertitta Family, Mr. Bullard.
21 We expressly seek that he be denied the ability to contact
22 our customers or to confront the fighters of the UFC. We
23 expressly request that this order include myself, my firm, the
24 employees, and those connected with my firm.
25 And that Mr. Bergeron's ongoing future correspondence be
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1 limited to written correspondence with the movants. This is
2 all laid out in the conclusion on pages 30 and 31 of our moving
3 papers.
4 However, in light of the conduct that has gone on over the
5 weekend and Mr. Bergeron's threats, I would ask you to
6 supplement that in one meaningful and material way.
7 And that is he is now threatening to bring defamation and
8 other tortious claims in a variety of courts to which I will be
9 filing a vexatious-litigant motion.
10 And I would ask that you additionally enter a temporary
11 order declaring Mr. Bergeron to be a vexatious litigant for a
12 period of 30 days, so that we can have a hearing on a
13 vexatious-litigant motion that I will file before this Court.
14 So, in essence, the relief I ask is that this Court enter
15 an order expansive enough to prohibit him from commencing other
16 proceedings until such time as we may take it up in 30 days.
17 And with that, I have nothing further, your Honor.
18 THE COURT: Mr. Garman, on the last point --
19 MR. GARMAN: Um-h'm.
20 THE COURT: -- I would not be prepared to entertain
21 any sort of vexatious-litigant motion against Mr. Bergeron
22 until such motion is filed.
23 MR. GARMAN: Okay.
24 THE COURT: He should have an opportunity to respond
25 to that. In fact, I don't even know that I would be the one to
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1 deal with it under the circumstances.
2 MR. GARMAN: Well, your Honor --
3 THE COURT: But --
4 MR. GARMAN: -- then I would ask that -- I fear that
5 that is an invitation for Mr. Bergeron to commence litigation
6 before other judges he may deem to be a new venue to pull some
7 of these same stunts. I can have a vexatious-litigant motion
8 on file by, most likely, close of business before I go home.
9 And I guess I would ask in open court for a request for an
10 order shortening time, so that that may be heard and it be
11 judged on its own merits.
12 But I am fearful that this will spread into other
13 jurisdictional venues, and I do think that you have the ability
14 to temporarily issue such orders as is necessary to prevent
15 injustice until such time as that hearing, but I'll defer to
16 the Court.
17 THE COURT: Well, Chief Judge Nakagawa is still the
18 judge principally responsible for this matter, and any requests
19 for orders shortening time, so forth, should be presented to
20 him at least initially --
21 MR. GARMAN: I understand --
22 THE COURT: -- please.
23 MR. GARMAN: -- your Honor.
24 Before I conclude my presentation, do you have any
25 additional questions for me?
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1 THE COURT: Not at this time.
2 MR. GARMAN: Thank you, your Honor.
3 THE COURT: Mr. Bergeron.
4 MR. BERGERON: Your Honor, first of all, I would just
5 like to say there were some extreme exaggerations involved in
6 the presentation by Mr. Garman.
7 The -- the amended motion Mr. Garman has admitted was
8 submitted on -- in March 2009, and the time for such an
9 injunction has passed.
10 There's actually been a settlement reached on that motion
11 with the liquidation trustee, and I've signed that agreement,
12 and there's a hearing set.
13 The injunction plan also permits me to move forward with
14 the sanctions motion. It's not a claim. It's a motion, and
15 the motion actually is outlined in the amended motion and --
16 and the existing motion that I do have the authority to ask for
17 relief for the people who have been directly injured by what
18 happened to me in this case.
19 I have not threatened anyone, your Honor.
20 THE COURT: Well --
21 MR. BERGERON: There is absolutely --
22 THE COURT: -- excuse me. Mr. --
23 MR. BERGERON: -- no evidence of that.
24 THE COURT: Mr. Bergeron --
25 MR. BERGERON: Yes, your Honor.
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1 THE COURT: -- would you explain in more detail how
2 it is that you are authorized to proceed on behalf of the
3 shareholders.
4 My concern is that they are other people. You are not
5 admitted to the practice of law, and that you would not have
6 standing to represent them.
7 So if you're saying that there's something that goes
8 against that rationale, would you please explain it to me in a
9 little more detail.
10 MR. BERGERON: Well, your Honor, first of all,
11 it's -- it was said at the last hearing that you hadn't read a
12 lot of these pleadings that deal with this.
13 And -- and the -- the statutes are within those pleadings.
14 The precedents are within those pleadings, and I think it's
15 important that you go over those and see what I'm talking
16 about.
17 But the reality is the sanctions motion is a motion that I
18 brought as my own attorney. I did not file a new claim. I did
19 not add anybody as official parties.
20 All I'm asking is that the sanctions that I request for my
21 case partially benefit the shareholders who were injured by the
22 vexatious tactics that brought me to this court because I was
23 silenced.
24 I wasn't able to warn these shareholders at the time
25 the injunction came out because I was abiding by it at that
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1 time.
2 And that injunction was solely based on the fact that I
3 was getting to the truth of the matter, and -- and I was
4 publishing the truth and warning these shareholders about what
5 was going on.
6 I predicted the bankruptcy before it happened. I knew it
7 was going to happen because they told me they were planning to
8 bankrupt the company when I visited with Mr. Sanford and
9 Mr. Frank when they were co-CEOs when they invited me to UFC 78
10 in New York City to attempt to work with me on -- on the
11 continuation of the company at that point.
12 And, your Honor, I have never threatened anyone. There is
13 no evidence of any physical threat or any otherwise implied
14 threat in my writing to anyone.
15 I never sent --
16 THE COURT: Well --
17 MR. BERGERON: -- these --
18 THE COURT: Well --
19 MR. BERGERON: -- text messages that --
20 THE COURT: -- excuse me. What about the message, in
21 essence, that you know where someone and his children live?
22 MR. BERGERON: Well, your Honor, I just said that I
23 knew where he lived. That -- just like you said. Is that a
24 threat that I know where someone lives?
25 I specifically said the only reason I would visit anyone
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1 is to ask questions. That's not -- that's not threatening
2 harm.
3 THE COURT: Do you know where someone and his
4 children live?
5 MR. BERGERON: Well, your Honor, Mr. Bullard in an
6 E-mail to me brought my parents up. Does that mean he's
7 threatening my parents?
8 THE COURT: That's a threat against the family and
9 the children of the person receiving the message. That's
10 intolerable behavior to say you know where someone's children
11 live. Why would anyone make such a suggestion or a comment?
12 MR. BERGERON: Well, first of all, I didn't say I
13 knew where his children lived. I called him at his home
14 address.
15 And I said I knew his children lived at home because he
16 suggested to me that I go to my parents for guidance. That's
17 all I did. I did not make any threats. I do not intend to
18 threaten anyone.
19 THE COURT: Well --
20 MR. BERGERON: All I said --
21 THE COURT: -- I view that --
22 MR. BERGERON: -- was that if I showed up I would be
23 showing up to ask questions. And, your Honor, as far as that
24 $500,000 I'm asking for the sanctions motion, I'll ask for
25 nothing if that helps. I don't want anything.
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1 I would rather have the shareholders benefit because
2 they're the ones that were injured by my being silenced. Even
3 though I was injured as well, if that's such a bone of
4 contention for Mr. Garman, I'll waive that.
5 And as far as the district court injunction, that is
6 unconstitutional, your Honor, and, furthermore, the language of
7 that injunction actually prevents me from publishing matters
8 that have been deemed to be true since then.
9 For instance, the -- the SEC investigation that I
10 mentioned that they say that I cannot write about, there was an
11 SEC investigation into Xyience.
12 There was an AA Capital case in the SEC where the bulk of
13 a company called Dreshman Rose Investments (phonetic) were made
14 in Xyience, so Xyience was investigated as part of that SEC
15 case.
16 And there are other -- there are other languages --
17 there's other language in that injunction that also prevents me
18 from speaking the truth and writing about it.
19 Mr. Garman simply doesn't have his facts straight,
20 your Honor. I have not made any attacks on any judges. I
21 asked for the recusal of Judge Nakagawa.
22 And I pointed out correctly that you had not read the
23 pleadings, and you've mentioned that in open court at the last
24 hearing.
25 And as far as Mr. Garman being sued, he wasn't even sued.
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1 He was -- I asked that there were -- that action be brought
2 against Fertitta Enterprises because of his activities.
3 And the -- and the reasoning he gave for -- for why I sued
4 him is false, too. He was -- he was actually quoted in a
5 published article where he said my idea of investigative
6 reporting is to sue people, and that is not true, your Honor.
7 My investigative reporting and my legal work are two separate
8 things.
9 And I have not tried to extort anyone. Trying to
10 negotiate a settlement or inspire a settlement I feel is my
11 duty representing myself in this case. I want to go home,
12 your Honor.
13 You said that I cannot appear telephonically at any other
14 hearing. I can't go home until this case is over under those
15 circumstances. I cannot afford to fly back here every time
16 there's a hearing.
17 Your Honor, I'm an investigative reporter plain and
18 simple. It's what I do best. I might seem like a hack lawyer
19 to you, but I only have to be a lawyer at all because the truth
20 scares the people trying to silence me.
21 I shouldn't be held responsible for the opposition's fears
22 of having their lies and corruption exposed for all to see. I
23 shouldn't be dragged through this process today, so they can
24 use the legal system for an improper purpose.
25 As far as all these voluminous documents Mr. Garman
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1 improperly served by E-mail yesterday, the scheduling order
2 didn't even stipulate a briefing period that would allow such
3 late documents to be part of these proceedings giving me no
4 chance to respond to them on paper.
5 Furthermore, all the statements made are declarations, not
6 affidavits. They are not sworn and notarized as I took the
7 time to do with my own affidavit, but, your Honor, I'm not here
8 to harp on technicalities. That's Attorney Garman's forte.
9 Your Honor, I don't have a problem with ceasing contact
10 with current Xyience employees as far as me reaching out to
11 them. I can get enough information without doing that.
12 I already have enough to go on to keep me busy for months
13 writing and publishing the truth about what I know and what I
14 have obtained.
15 I am perfectly fine just collecting information from my
16 actual sources and by way of other effective methods I've
17 employed, but all the other stipulations requested are
18 overbroad and unconstitutional, and I object to those.
19 An injunction must be specific. He is asking that I
20 refrain from contacting a plethora of people he does not even
21 name.
22 That's just unacceptable according to the rules of
23 injunctions. That's a prior restraint as well because it's
24 preventing me from reporting the truth.
25 The other thing -- the one thing that really bothers me
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1 about all this useless paperwork thrown at me to initiate these
2 proceedings today is that the justice system here in Las Vegas
3 seems to work much differently for my opponent here than it
4 does for me.
5 I mean, how can Mr. Garman get this hearing before you in
6 a matter of days when I have been waiting for the setting of a
7 hearing on my amended 9011 motion for almost two years since
8 that matter was deemed submitted? Even if I can amend that
9 motion again, you should at least hear the one that exists.
10 The fact is, your Honor, I would much rather be writing.
11 I have two major book projects I could work on if I were able
12 to write, but I can't. I have to be a lawyer because the truth
13 really hurts that bad.
14 This is supposed to be a free country, a country
15 where people routinely die in battle under the banner of
16 freedom.
17 In reality, when courts like this can haul a person like
18 me before a judge and admonish me for exposing the truth the
19 only way I know how, we aren't free, anymore. We're slaves to
20 the rich and powerful with armies of attorneys on retainer.
21 Your Honor, since Mr. Garman brought it up, I would like
22 to address the other case he brought into these proceedings by
23 citing my being found in contempt.
24 That case was being presided over by a biased judge. The
25 judge had a connection to the plaintiff's health-insurance
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1 company, and the plaintiff paid rent to the same company for
2 his facilities.
3 The plaintiff in that case sued eight years after damaging
4 the -- the defendant, Lucille Iacovelli, in a plastic-surgery
5 operation, and he sued because she was outspoken about her
6 criticism on-line.
7 She was a victim, and she was an advocate for other
8 victims. He victimized her once again with the courts, and I
9 defended her every step of the way.
10 I took on her case and had to balance it with this one day
11 in and day out. She never sent me as much as a penny for the
12 help.
13 Lucille was railroaded to no end, your Honor, and it got
14 so bad she took her own life last August. I'm still fighting
15 for her in that court, and I shouldn't have to defend those
16 actions here or at all for that matter.
17 A little more than a week ago, I went to the FOX News
18 affiliate here in Las Vegas and did an interview for FOX 11 in
19 L.A. about Lucille.
20 Even that news station had to jump through all kinds of
21 hoops with their lawyers just to get permission to do the piece
22 that finally aired last Wednesday.
23 I was featured prominently in the beginning and end of
24 that segment and told by the producers I should start
25 contacting literary -- literary agents about my book project.
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1 I am proud of Lucille's story, and that's why I fought so hard
2 in court for the privilege to tell it.
3 The reality is, though, that case has nothing to do with
4 this one. Not only is Mr. Garman wasting trees by dumping the
5 irrelevant material from that case on you, he's also wasting
6 your time.
7 If he really wants to litigate that case, your Honor, he
8 should go call Attorney Todd Richardson, the lead counsel for
9 the plaintiff, and volunteer to work with him on it.
10 Otherwise, unless he asks the Court to review the full and
11 accurate record, including the multiple appeals to the
12 Seventh Circuit, his citations from that case are useless when
13 it comes to deciding what happens to here -- here today.
14 Your Honor, you don't see me going out of my way to find
15 all the other corrupt bankruptcy cases Mr. Garman's been
16 engaged in because I stick to the facts of the case at hand. I
17 don't use bait-and-switch tactics and drop phone-book length
18 pleadings full of garbage on judges.
19 During what little time I've had to learn how to practice
20 law, I have at least figured out that the facts and the direct
21 evidence speak louder than attempts to obscure the fact and
22 misrepresent evidence.
23 Your Honor, the bottom line is this whole motion and
24 request for an injunction is a farce. It's an attempt to stop
25 my pursuit of the truth and distract me from doing more
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1 fact-finding.
2 It's not even legally sound for Mr. Garman to ask for
3 such relief if you closely examine the authorities he relies
4 on.
5 I'm a person with very limited means, your Honor, and just
6 one hour of payment for my services at Mr. Garman's rate would
7 feel like 1,000,000 bucks right now.
8 All these stacks of paperwork he put before you today
9 likely garnered him thousands of dollars in fees when most of
10 it is completely irrelevant and uncalled for in these
11 proceedings.
12 If it belongs anywhere, it belongs in a new civil action,
13 not here. As such, I request that the Court's inherent power
14 to impose sanctions be exercised here and applied to
15 Mr. Garman's vexatious pleadings under Section 105 which he
16 cited which he actually cites improperly as applicable to this
17 request when, in fact, the spirit of this Court's inherent
18 power would be much more in tune with providing punishment for
19 his obvious abuse of the bankruptcy courts to serve an improper
20 and malicious purpose.
21 Your Honor, I'm here before you today because I believe in
22 what I do, and I do not run from the truth. I run after it.
23 My opponents are using these proceedings purely to silence me,
24 and there's no call for that. That's all I have, your Honor.
25 THE COURT: Mr. Garman?
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1 MR. GARMAN: Yes, your Honor.
2 THE COURT: Mr. Garman? Mr. Garman?
3 MR. GARMAN: Yes. I'm here --
4 THE COURT: Mr. Garman, obviously --
5 MR. GARMAN: -- your Honor.
6 THE COURT: Mr. Bergeron. I am misspeaking.
7 Mr. Bergeron --
8 MR. BERGERON: Yes, your Honor.
9 THE COURT: -- I think both you and Mr. Garman feel
10 that you have better things to do than to be involved in legal
11 proceedings such as the one we're having this morning. Is
12 there any way out?
13 In other words, is there some way that the surviving
14 entity from the Chapter 11 case could go on with its business,
15 and you could go on with your writing in a way that would not
16 inspire further litigation? I'm asking for your help on this.
17 I --
18 MR. BERGERON: Well --
19 THE COURT: I --
20 MR. BERGERON: -- your Honor --
21 THE COURT: I'm really thinking.
22 MR. BERGERON: -- first of all --
23 THE COURT: And --
24 MR. BERGERON: -- there is no further litigation.
25 We've -- we've established that. There's an injunction.
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1 Mr. Backman has control of any other further litigation.
2 All I'm asking for is a hearing on the amended motion that
3 exists. And, in fact, I was hoping there would be an order
4 entered on -- on the last hearing, so that I could appeal it
5 because I would like to amend that. That's why I asked for a
6 90-day extension.
7 And, also, I should have the right to confront my -- my
8 accusers, and I should be able to cross-examine the witnesses
9 that have provided evidence against me today.
10 And -- and the -- the foremost reason why I started
11 this -- these investigation tactics is because I was refused
12 formal interviews with these people. They would not submit to
13 them even though I was very cordial in -- in asking for them.
14 So as far as any solution goes beyond that, maybe a
15 settlement conference on the 9011 motion. There's already been
16 a settlement issued by the trustee, so why not the other
17 parties? I --
18 THE COURT: Well --
19 MR. BERGERON: There should be a hearing held, first
20 and foremost, if that does not happen on the actual motion as
21 it exists.
22 THE COURT: Well, what I'm trying to grasp for is
23 there some way to bring all litigation to a conclusion. That
24 you and your opponents could walk away from each other, and
25 there would be no pending litigation in any court.
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1 MR. BERGERON: Well, your Honor --
2 THE COURT: What --
3 MR. BERGERON: -- in a perfect world --
4 THE COURT: What would it take to get you to agree to
5 something like that?
6 MR. BERGERON: In a perfect world, your Honor, there
7 might be a way to do that. But as the system stands, I don't
8 see any way out that you describe that's possible at this point
9 other than a settlement.
10 THE COURT: Well, a settlement means you get
11 something, and the other side gets something. What is it that
12 you would want?
13 MR. BERGERON: Well, I would ask for, your Honor, at
14 least $1 per share --
15 THE COURT: Now --
16 MR. BERGERON: -- for the shareholders in this
17 company according to the Rule 9011 motion that I asked for
18 relief for.
19 That would be 65 -- over $65,000,000 since there are
20 65,000,000 shares outstanding. That would be the least that
21 I -- I would request, and that I be permitted --
22 THE COURT: Okay. Well --
23 MR. BERGERON: -- to write and tell my story without
24 interference with the courts.
25 THE COURT: Thank you, Mr. Bergeron.
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1 MR. GARMAN: Your Honor, I don't have much to add.
2 We can pretty easily summarize where we are by the statement
3 Mr. Bergeron made that he can't go home until this case comes
4 to an end.
5 Your Honor, this case came to an end years ago. The plan
6 was confirmed. The litigation was dismissed. He doesn't like
7 the fact that creditors get paid before shareholders do.
8 MR. BERGERON: Your Honor --
9 MR. GARMAN: And --
10 MR. BERGERON: -- I object. He doesn't know what I
11 like or not.
12 MR. GARMAN: He --
13 MR. BERGERON: He can't speak for me.
14 MR. GARMAN: He's accused bias in the system in his
15 pursuit of the truth. We're almost at a delusional and
16 narcicisstic phase that Mr. Bergeron is the only savior for
17 which these shareholders have.
18 If Mr. Bergeron were to stipulate to the injunction that I
19 have asked for, I would happily give him a plane ticket to head
20 home.
21 The notion that notwithstanding the fact that the case is
22 over and he gets to pursue this on behalf of these shareholders
23 and he won't take less than $65,000,000 should be evidence to
24 the Court of exactly what we have been facing.
25 It is abusive behavior, and he takes pride in the fact in
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1 written E-mails that my clients are forced to spend tens of
2 thousands of dollars because of the nonsense that he creates.
3 Other Courts have found Mr. Bergeron to be abusive. You
4 yourself have found him to be abusive. Mr. Bergeron needs to
5 acknowledge that this case is over, and he can go home. That's
6 the outcome that we ought to get to in this case.
7 I don't believe that it's ever going to happen. And after
8 years of trying to come up with a narrowly-crafted remedy that
9 has failed, we have ultimately been forced to spend a great
10 deal of time and resources putting together the pending
11 injunction motion because this will never come to an end.
12 There is no end to the litigation, the defamation, the
13 accusations, the threats.
14 The fact that I had to go out and get a protective order,
15 the only one I've ever obtained in my life, the fact that
16 employees out of their own pockets are hiring security guards
17 just proves that Mr. Bergeron's understanding of what's
18 happening here isn't based in reality.
19 I have set forth a very specific request for an injunction
20 that can be found in Section 5 of my pleadings that's set forth
21 in the prayer beginning on page 30, lines 21 through page 31,
22 line 5.
23 And I would ask the Court to enter it, so, hopefully, we
24 can find our way out of this continued process, and we can go
25 our separate ways.
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1 MR. BERGERON: Your Honor, may I ask that I be able
2 to cross-examine the witnesses to prove that there is no need
3 for an injunction against my communicating with them?
4 MR. GARMAN: Your Honor, for what it's worth -- this
5 is Greg Garman again. Your Honor, for what it's worth, the
6 declarations you have before you are very specifically narrowly
7 tailored, and most of what we based our argument on is
8 Mr. Bergeron's own documents.
9 The documents simply authenticate things that have
10 happened, and there are no conclusory statements other than a
11 few offhanded statements that parties feel threatened.
12 Mr. Bergeron seeks to use this as sort of a deposition
13 process, and I'm sure that what he's asking for has nothing to
14 do with the authentication that took place in these
15 declarations.
16 And as such, his request is improper in that his
17 cross-examination could never -- and the Court need not permit
18 it.
19 But it could never be necessary to extend beyond the scope
20 of the limited declarations that were submitted as an
21 evidentiary record.
22 THE COURT: Mr. Bergeron, could you tell me, please,
23 how many witnesses you wish to cross-examine and the
24 approximate amount of time that you would anticipate.
25 MR. BERGERON: Your Honor, I would require probably
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1 about ten minutes per witness, and I'd like to question each
2 and every witness who provided a declaration for this
3 particular hearing, including Mr. Garman, and that's my
4 Sixth Amendment right to confront my accuser as well.
5 MR. GARMAN: It --
6 (Colloquy not on the record.)
7 THE COURT: All right. In the interest of fairness,
8 we will -- oh, I'm going to give Mr. Bergeron an opportunity to
9 examine the witnesses.
10 Otherwise, Mr. Garman, I think that the best we could do
11 today would be to have a temporary restraining order because
12 this matter has been heard on an accelerated basis with a
13 subsequent hearing after Mr. Bergeron has had an opportunity to
14 take --
15 MR. GARMAN: If --
16 THE COURT: -- formal depositions.
17 MR. GARMAN: If Mr. Bergeron is consenting to, and
18 the Court is ordering that this be a final hearing on the
19 matter, then I understand. I would simply request that if I am
20 going to be a witness begin with me, so we can see where we're
21 headed.
22 THE COURT: I'm sorry. To --
23 MR. GARMAN: Your Honor --
24 THE COURT: To --
25 MR. GARMAN: -- if --
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1 THE COURT: To do what?
2 MR. GARMAN: If the parties are consenting that this
3 is a final hearing, I understand. My only request would be if
4 we're going to cross-examine everyone who has submitted a
5 declaration I would request that we begin with me, so we can
6 test the scope of where we're headed.
7 THE COURT: All right. Mr. Bergeron --
8 MR. BERGERON: Yes, your Honor.
9 THE COURT: -- I'm going to ask you how you would
10 prefer to proceed.
11 MR. BERGERON: Of --
12 THE COURT: Would you like just to go ahead right
13 now --
14 MR. BERGERON: Yes, your Honor.
15 THE COURT: -- or --
16 MR. BERGERON: I have questions --
17 THE COURT: -- would you like --
18 MR. BERGERON: -- prepared.
19 THE COURT: -- to have a hearing for a temporary
20 restraining order that would be in effect only for a limited
21 period of time to give you an opportunity to conduct
22 depositions, and so forth?
23 MR. BERGERON: Your Honor, I'd like to question these
24 witnesses in open court because it's part of this hearing --
25 THE COURT: All right.
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1 MR. BERGERON: -- that their testimony was part of.
2 It would not be a deposition type of request because I
3 don't have any active case going against these principals that
4 they would have to be witnesses in. This is related to
5 Mr. Garman's motion.
6 MR. GARMAN: Your Honor, and if that's where we're
7 going, my preference would be to conduct the necessary
8 evidentiary hearing today and have you enter a final order.
9 THE COURT: I think you're both in agreement, then,
10 so all right.
11 Mr. Bergeron, would it be agreeable to you to take
12 Mr. Garman as your first witness?
13 MR. BERGERON: Actually, your Honor, I'd prefer to
14 start with Mr. Bullard.
15 THE COURT: Why would you not take Mr. Garman first?
16 I mean --
17 MR. BERGERON: Well --
18 THE COURT: -- is there something that --
19 MR. BERGERON: -- no specific reason, your Honor.
20 I just would like to request asking questions of
21 Mr. Bullard.
22 And Mr. Garman -- I don't know what he -- what he stands
23 to prove by going first. It just doesn't -- it doesn't make
24 sense to me what -- what his reasoning --
25 THE COURT: All right.
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1 MR. BERGERON: -- is.
2 THE COURT: Well, at the beginning of the hearing,
3 you indicated you were ready to go. We are now going to
4 accommodate your request to examine witnesses. And since we're
5 accommodating that request, we'll accommodate Mr. Garman's
6 request that he go first.
7 Mr. Garman --
8 MR. GARMAN: Yes, your Honor. Yes, your Honor.
9 THE COURT: -- you will be the first witness, so will
10 you take the witness stand, please.
11 MR. GARMAN: I will.
12 (Colloquy not on the record.)
13 CLERK RAWLING: We ask that you remain standing and
14 raise your right hand.
15 Thereupon --
16 GREGORY E. GARMAN, ESQ.,
17 was called as a witness, and having been first duly sworn,
18 testified as follows:
19 THE WITNESS: I do.
20 CLERK RAWLING: Thank you. Please have a seat and
21 state your name.
22 THE WITNESS: My name is Greg Garman.
23 CROSS-EXAMINATION
24 BY MR. BERGERON:
25 Q. Mr. Garman, how long have you been employed by
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1 Fertitta Enterprises as an attorney?
2 A. I have been their counsel for approximately four or
3 five years.
4 Q. And as far as these proceedings today, how much do you
5 anticipate billing your clients for the work?
6 MR. GARMAN: Your Honor, I object to relevance.
7 THE COURT: Sustained.
8 BY MR. BERGERON:
9 Q. Would you say that your clients have been involved in a
10 great deal of litigation over the last few years involving
11 bankruptcy?
12 A. No.
13 Q. As far as Lorenzo Fertitta and Frank Fertitta, the Third,
14 did you handle anything related to the Station Casinos
15 bankruptcy?
16 A. No.
17 Q. No. And in your investigation of the claims that you bring
18 against me today, did you speak at length with every employee?
19 A. No.
20 Q. You did not. Did you help prepare any of the documents?
21 A. Yes.
22 Q. But you didn't speak to the employees at length who have --
23 who provided them.
24 A. That wasn't your question. Your question was every
25 employee.
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1 Q. Okay. Well, did you speak to the employees that provided
2 statements?
3 A. Yes.
4 Q. And did you seek to investigate their claims independently
5 to see if they were correct?
6 A. Yes.
7 Q. And what did you find?
8 A. They're correct.
9 Q. How did you proceed with your investigation? What did you
10 do to determine that correctness?
11 A. I've been involved in these proceedings for a number of
12 years, and I'm intimately familiar with the allegations that
13 you have made.
14 I took steps to corroborate that -- that E-mails and other
15 evidence that had been submitted to me were, in fact,
16 authentic, and the conclusion I came to was that it was all
17 correct and authentic.
18 Q. As far as the text messages and the CraigsList posting --
19 A. Um-h'm.
20 Q. -- how did you determine that those came from me?
21 A. There is no direct allegation that they came from you. We
22 believe under the --
23 Q. You just said it in your remarks --
24 A. I believe under the --
25 Q. -- that the text messages came from me.
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1 A. I believe --
2 THE COURT: Excuse me, Mr. Bergeron. Mr. Bergeron,
3 this is Judge King. Please don't interrupt the witness when
4 your question is being answered.
5 MR. BERGERON: I apologize, your Honor.
6 THE WITNESS: I believe under the totality of the
7 circumstances there is no reasonable conclusion that they came
8 from a party other than you.
9 And we certainly have -- have investigated the fact that
10 you were using cell phones that were masked to look like
11 employees of Xyience.
12 I personally spoke with the individuals who on their phone
13 saw that it was their boss or coworker calling who personally
14 know your voice and identified you as being the caller.
15 BY MR. BERGERON:
16 Q. And what gave you the conclusion that that was a cell-phone
17 application?
18 A. Perhaps, that's a misstatement. It might be some other
19 piece of technology for which you are using another type of
20 phone.
21 But the conclusion is the same. It was your voice, and it
22 was you fraudulently trying to appear as if you were a coworker
23 or a boss.
24 Q. And to your knowledge, is that against the law?
25 A. I believe in December congress passed a law that does make
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1 it a crime.
2 Q. For Caller-ID spoofing?
3 A. Yes.
4 Q. You believe, but you don't know.
5 A. I believe.
6 Q. As far as the steroid allegations against Mr. Villari, how
7 did you investigate those?
8 A. Those are completely irrelevant to these proceedings, and I
9 did not seek to discuss them other than you made an
10 unsubstantiated allegation to that extent.
11 Q. They have nothing to do with these proceedings.
12 A. No.
13 Q. That's what you said, but --
14 A. Correct.
15 Q. But you have cited the -- those allegations in your
16 paperwork.
17 A. As harassment of Xyience in the pursuit of its ongoing
18 business.
19 Q. So wouldn't that be better handled in a separate civil
20 action, rather than this bankruptcy court --
21 A. No.
22 Q. -- if it was any way -- in any way wrong?
23 A. No.
24 Q. Well, why does it belong here, then?
25 A. Because this Court entered an order enjoining all parties
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1 from interfering in the conduct of Xyience's future operations.
2 You are doing so now, and this is the proceeding in which we're
3 seeking to enjoin you from doing so.
4 Q. Well, wouldn't you agree if someone was selling steroids
5 they probably shouldn't be employed by Xyience?
6 A. That would be an issue for the police.
7 Q. Well, I'm not sure if you know, but some steroid sales are
8 not illegal.
9 A. Okay.
10 Q. It would not be a police matter in some cases. So did you
11 do any investigation as to those allegations whatsoever? Did
12 you -- did you try to find out whether any of those allegations
13 regarding steroids were true?
14 A. No.
15 Q. No. Thank you. As far as the clients that you have, how
16 many specific clients in the amended sanctions motion do you
17 represent?
18 A. I -- I honestly don't know what you're referring to.
19 Q. Well, I've asked for sanctions against a large group of
20 people, and you've come here saying you represent Zyen, that
21 you represent former officers and current officers that have
22 been mentioned.
23 You've -- you've been the only one to appear other than
24 Laurel Davis, so I'm assuming you're trying to represent all of
25 these people?
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1 A. I've made an appearance. In your request for sanctions, my
2 appearance is accurately noted on the record who my clients
3 were. But as I sit here today, I couldn't identify them all.
4 Q. Okay. And as far as you're concerned, do you see my
5 approach as an investigative reporter as somehow improper?
6 A. You're not an investigative reporter.
7 Q. I'm not an investigative reporter?
8 A. No.
9 Q. And -- and what do you base that conclusion on?
10 A. You're a professional plaintiff seeking to obtain money
11 from this company.
12 Q. A professional plaintiff. I'm not even a lawyer.
13 A. Oh --
14 Q. You know this, right?
15 A. I do know you're not a lawyer.
16 Q. Well, how can I be a professional plaintiff, then? I have
17 never filed a single suit --
18 MR. GARMAN: Your Honor, this is argumentative.
19 BY MR. BERGERON:
20 Q. -- on my own.
21 MR. GARMAN: And I object.
22 THE COURT: The objection --
23 BY MR. BERGERON:
24 Q. Isn't it correct?
25 THE COURT: -- is sustained.
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1 BY MR. BERGERON:
2 Q. Isn't -- isn't that correct that I have not filed a suit
3 against anyone that has not been a result of someone filing a
4 suit against me?
5 A. That's absolutely incorrect.
6 Q. Absolutely incorrect.
7 A. Yes.
8 Q. Where can you cite a case where I filed the first action?
9 A. You have commenced actions against my clients and me in
10 these proceedings.
11 Q. In these proceedings which were brought about by a suit by
12 Xyience against me for $25,000,000.
13 A. No.
14 Q. Well, they didn't sue me?
15 A. That's not what these proceedings are, Mr. Bergeron.
16 Q. Yes, they are. This was brought into the bankruptcy court.
17 You're trying to tell the Court a lie, aren't you?
18 THE COURT: Excuse me. Mr. Bergeron, this is
19 Judge King. You are allowed to ask the witness questions. You
20 don't argue with the witness.
21 BY MR. BERGERON:
22 Q. So you stated that I started this litigation. I was sued.
23 How does that mean that I started this litigation?
24 A. The litigation that we are here on was commenced by you.
25 Q. But it was brought into the bankruptcy court as an action
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1 against me, correct?
2 A. Mr. Bergeron, you're referring to an injunction to which I
3 and my clients am not a party to. It was brought by a company
4 that we're not.
5 It was brought by lawyers I've never spoken to. That
6 action that you're referring to is completely unrelated to me,
7 my clients, and this proceeding.
8 Q. Well, thank you. Then why would you seek enforcement of
9 that injunction if you had nothing to do with it?
10 A. I'm not.
11 Q. You're not.
12 A. No.
13 Q. But you cited it in your pleadings.
14 A. No. I'm seeking -- I am seeking to have --
15 Q. Saying I violated it.
16 A. I'm seeking to have the Court enforce the permanent
17 injunction issued by the bankruptcy code and the bankruptcy
18 plan.
19 Q. But you cited the initial district court injunction in your
20 paperwork, did you not?
21 A. As a fact that it existed.
22 Q. And you've said that I was violating it.
23 A. You did violate it.
24 Q. Exactly.
25 A. You --
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1 Q. But I'm saying you said that, right?
2 A. Yes.
3 MR. BERGERON: No further questions, your Honor.
4 MR. GARMAN: I will choose --
5 THE COURT: All right.
6 MR. GARMAN: -- not to redirect myself, your Honor.
7 THE COURT: All right. You may step down,
8 Mr. Garman.
9 Mr. Bergeron, who is your next witness, please?
10 MR. BERGERON: Your Honor, I'd like to call
11 Bill Bullard.
12 THE COURT: All right. Mr. Bullard. All right.
13 (Colloquy not on the record.)
14 MR. BULLARD: All right.
15 Thereupon --
16 WILLIAM J. BULLARD
17 was called as a witness, and having been first duly sworn,
18 testified as follows:
19 THE WITNESS: I do.
20 CLERK RAWLING: If you could please state your name
21 and just spell your last name for the record.
22 THE WITNESS: William Bullard. Last name is spelled
23 B-u-l-l-a-r-d.
24 CROSS-EXAMINATION
25 BY MR. BERGERON:
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1 Q. Mr. Bullard, do you have any evidence that I have actually
2 ever been to your private residence?
3 A. No.
4 Q. Yet, you -- did you have a meeting with Xyience employees
5 last Friday in which you did tell them I had been at your home?
6 A. No.
7 Q. So you didn't have a meeting or you didn't tell them that I
8 was at your home?
9 A. I didn't say you were at my home.
10 Q. Would you be surprised if I had a witness who said that you
11 did say that?
12 A. Yes.
13 Q. Did you tell these same employees that I was not violent
14 when someone raised a hand to ask if they were going to be
15 attacked by me?
16 A. Can you define violent?
17 Q. Well, did you say it? You -- the -- the -- the -- the
18 testimony that I received from an inside source who was at that
19 meeting told me someone raised their hand and asked if they
20 were going to be attacked, and you said that I am not a violent
21 person. Do you recall that?
22 A. I don't recall that language.
23 Q. Did you say that I was a threat to the company?
24 A. Yes.
25 Q. Why do you deem me a threat to the company?
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1 A. Because the ongoing harassment, and it takes away from the
2 focus of the company.
3 Q. And what do you define as harassment, asking questions,
4 seeking to ask questions?
5 A. The evidence that was submitted earlier in this hearing.
6 Q. Do you find my request to ask questions harassment?
7 A. Yes.
8 Q. Because you do not want to answer questions?
9 A. I've never been asked a question from you.
10 Q. Well, you've received communications from me requesting --
11 MR. GARMAN: Your Honor, I object to --
12 BY MR. BERGERON:
13 Q. -- an interview, haven't you?
14 MR. GARMAN: I object under relevance grounds.
15 (Colloquy not on the record.)
16 THE COURT: The objection's sustained.
17 BY MR. BERGERON:
18 Q. Is it true that you and other Xyience executives offered
19 legal help at no -- no charge to any employee who wants it in
20 regards to addressing concerns about me?
21 MR. GARMAN: Objection, your Honor. Relevance.
22 THE COURT: Overruled.
23 BY MR. BERGERON:
24 Q. Is that true?
25 A. Could you ask the question again?
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1 Q. Is it true you and other Xyience executives offered legal
2 help at no charge to any employee who wants it in regard to
3 addressing concerns about me?
4 A. I don't believe I've ever said that.
5 Q. Do you know of anybody else in the company that did say
6 that?
7 A. No.
8 Q. Do you have any working theories as to who my sources
9 inside the company are?
10 MR. GARMAN: Objection, your Honor. Relevance. And
11 his sources?
12 THE COURT: Overruled.
13 BY MR. BERGERON:
14 Q. Do you?
15 A. Could you ask the question again?
16 Q. Do you have any working theories as to who my sources
17 inside the company are?
18 A. No.
19 Q. Do you have any specific knowledge of how I've been able to
20 generate the information I've gathered and shared with you
21 about day-to-day operations at Xyience?
22 A. No.
23 Q. Have you hired any professionals to determine how I'm
24 getting this information?
25 MR. GARMAN: Your Honor, Mr. Bergeron's now asking
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1 how we operate our company and protect ourselves from outside
2 intrusion. That seems well beyond the scope of what we're here
3 to talk about.
4 MR. BERGERON: Your Honor, it's goes --
5 THE COURT: The objection --
6 MR. BERGERON: -- to the relevance --
7 THE COURT: -- is sustained.
8 MR. BERGERON: -- of my trying to figure out how much
9 of a threat I am to this company according to their statements.
10 THE COURT: The relevance objection is sustained.
11 BY MR. BERGERON:
12 Q. Now, Mr. Bullard, you're aware I run multiple Web sites,
13 including XyienceSucks.com, aren't you?
14 A. I'm not aware of all the Web -- Web sites you run.
15 Q. Have you had a chance to read the bulk of material posted
16 at XyienceSucks.com?
17 A. I -- I don't know because I don't follow it. I've read
18 bits and pieces.
19 Q. How about the matters pertaining to your personal
20 involvement with the Fertittas that I've written about? Have
21 you reviewed those stories?
22 A. I think I've read some of them.
23 Q. Is it your contention that my blog contains false
24 information about you and your associates?
25 A. I believe your blog contains misleading information.
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1 Q. But not false.
2 A. I -- I don't know the difference.
3 Q. Have you spoken to any trial lawyers about bringing
4 defamation or other charges against me due to what you consider
5 to be untrue postings about you and your character?
6 MR. GARMAN: Objection, your Honor. Both relevance,
7 and it would be covered by attorney/client privilege.
8 THE COURT: Sustained.
9 BY MR. BERGERON:
10 Q. Have you suggested to any executives or owners of the
11 reorganized Xyience in regard to bringing any new civil claims
12 regarding my writing?
13 A. I'm sorry. Repeat the question.
14 Q. Have you suggested to any executive or owners of the
15 reorganized Xyience in regard to bringing any new civil claims
16 regarding my writing?
17 A. No.
18 Q. You wrote an E-mail to me during the time I was in town,
19 didn't you?
20 A. I don't know when you've been in town.
21 Q. In the last few weeks, did you write an E-mail to me?
22 A. Yes.
23 Q. You suggested I go to my parents for guidance in that
24 E-mail, correct?
25 A. I believe that was stated in the E-mail.
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1 Q. You also mentioned something about waiting for a chance to
2 go before the judge as well, correct?
3 A. I don't remember. I don't have the E-mail in front of me.
4 Q. Well, you did say that. You said that, "We are all waiting
5 for our chance before the judge."
6 A. If it's contained in the E-mail, then so be it.
7 Q. It's an exhibit to this. What did you mean by that,
8 waiting for your chance to go before the judge?
9 A. I believe what I said in my E-mail is what I meant.
10 Q. Now, you have children, correct?
11 A. Yes, I do.
12 Q. You have a son named JXXX (redacted)?
13 MR. GARMAN: Your Honor, your Honor, I object. What
14 Mr. Bullard's family has to do with these proceedings --
15 MR. BERGERON: Mr. Garman --
16 MR. GARMAN: -- is beyond me.
17 MR. BERGERON: -- opened the door for this,
18 your Honor. He said I threatened his children.
19 MR. GARMAN: Their existence is stipulated.
20 BY MR. BERGERON:
21 Q. Have I ever threatened your children?
22 A. I don't know if you've ever spoke with my children.
23 Q. Did your son, Jake, apply for a job at Xyience at one
24 point --
25 MR. GARMAN: I --
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1 BY MR. BERGERON:
2 Q. -- and get rejected?
3 MR. GARMAN: I object, your Honor. Relevance.
4 THE COURT: Sustained.
5 BY MR. BERGERON:
6 Q. Were you surprised when I was able to tell you the details
7 about why your son wasn't able to get that job?
8 MR. GARMAN: I object, your Honor. Relevance.
9 THE COURT: Sustained.
10 BY MR. BERGERON:
11 Q. Are you familiar with a Xyience employee named
12 John Villari?
13 A. Yes.
14 Q. Do you know him personally?
15 A. No.
16 Q. Have you ever heard anything about him being involved in
17 steroid sales?
18 A. No.
19 Q. You got -- how about the E-mails that I sent you
20 stipulating that? You didn't hear -- you didn't read those?
21 A. I don't remember.
22 Q. You don't remember the E-mails.
23 A. You've sent so many E-mails. I don't know which ones. I
24 usually ignore them.
25 Q. Is there any reason why you didn't present the bulk of
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1 those E-mails to the Court?
2 A. It's not my job.
3 Q. Have you ever heard anything about Mr. Villari being
4 involved in steroid sales at all --
5 A. No.
6 MR. GARMAN: Object, your Honor.
7 BY MR. BERGERON:
8 Q. -- from any --
9 MR. GARMAN: Object, your Honor.
10 THE WITNESS: Asked and --
11 MR. GARMAN: Relevance.
12 THE WITNESS: I believe I've answered that.
13 THE COURT: Sustained.
14 BY MR. BERGERON:
15 Q. To your knowledge, has Mr. Villari ever been written up for
16 his conduct at work?
17 MR. GARMAN: Your Honor, I object again. We're
18 trying to drag Mr. Villari through the mud in order to somehow
19 demonstrate that Mr. Bergeron is righteous. I object.
20 MR. BERGERON: Your Honor --
21 THE COURT: Well --
22 MR. BERGERON: -- I seek --
23 THE COURT: -- I --
24 MR. BERGERON: -- to establish --
25 THE COURT: Excuse me.
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1 MR. BERGERON: -- only that Mr. Bullard --
2 THE COURT: The --
3 MR. BERGERON: -- knows about this conduct and hasn't
4 done anything about it.
5 MR. GARMAN: That's irrelevant.
6 THE COURT: The essence of today's hearing is that
7 Mr. Bergeron is guilty of misconduct and giving at least
8 misleading information about Mr. Villari, so what Mr. Bullard
9 knows concerning the subject is relevant. The objection's
10 overruled.
11 MR. GARMAN: I understand.
12 BY MR. BERGERON:
13 Q. Now, did you take any steps to investigate the allegations
14 of steroid sales against Mr. Villari?
15 A. I was not aware of any allegations of steroids.
16 Q. I presented those allegations to you in an E-mail.
17 A. I -- like I say, I -- I usually delete most of your
18 E-mails.
19 Q. But you responded to one.
20 A. Which one was that?
21 Q. I'm not sure, but the E-mail itself that you wrote is on
22 the record. Was there any kind of formal inquiry that you're
23 aware of by Xyience officials to determine the truth of the
24 allegations?
25 A. What specific allegations?
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1 Q. The allegations of steroid sales.
2 A. I am not aware of any allegations of steroid sales.
3 Q. So you don't know if there's been any formal inquiry into
4 that.
5 A. I am not aware of any allegations of steroid sales.
6 Q. If you were aware, and you did find evidence of steroid
7 sales, would you be concerned enough to terminate his
8 employment?
9 MR. GARMAN: Your Honor, I will just for the record
10 object one more time --
11 THE COURT: The question calls --
12 MR. GARMAN: -- to the --
13 THE COURT: -- for speculation on the part of the
14 witness. The objection is sustained.
15 BY MR. BERGERON:
16 Q. Since Xyience's reorganization plan took effect, are you if
17 -- are you aware if the company has turned a profit?
18 MR. GARMAN: Objection, your Honor. Relevance.
19 THE COURT: Sustained.
20 BY MR. BERGERON:
21 Q. Have you on behalf of Fertitta Enterprises had to
22 personally address issues at Xyience, so the company could --
23 could continue to operate?
24 MR. GARMAN: Objection, your Honor. Vague and
25 ambiguous.
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1 THE COURT: Yes. Mr. Bergeron, please focus your
2 questions on the subject matter of this hearing which focuses
3 upon your conduct.
4 It appears that you're trying just to fish for general
5 information concerning the surviving entity and some
6 parties.
7 MR. BERGERON: Well, your Honor, the importance of
8 that is that I've been accused of slanderous and defamatory
9 remarks by Mr. Garman.
10 And he's seeking to stop my investigative reporting which
11 has been uncovering this information. I'm seeking to prove
12 that it's true.
13 MR. GARMAN: And a court of law is not where you
14 conduct your investigation would be my response, your Honor.
15 THE COURT: This is not a general hearing. This is a
16 hearing with a specific focus, and confine your questions,
17 please, to the focus of this hearing.
18 BY MR. BERGERON:
19 Q. Mr. Bullard, do you speak to Frank Fertitta, the Third, and
20 Lorenzo Fertitta on a daily basis or a regular basis?
21 A. No.
22 Q. In your communications with them, otherwise, have they
23 mentioned anything about the E-mails they received from me in
24 recent weeks?
25 A. No.
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1 Q. To your knowledge, are the Fertittas at all concerned about
2 my writing and reporting regarding their personal activities to
3 facilitate this bankruptcy process to benefit the UFC which
4 they also --
5 MR. GARMAN: Your Honor --
6 THE WITNESS: I have no --
7 MR. GARMAN: -- I object on relevance grounds.
8 THE COURT: Sustained.
9 MR. BERGERON: That's all I have.
10 THE COURT: All right.
11 MR. GARMAN: Your --
12 THE COURT: Wait just a moment, Mr. Bullard.
13 Mr. Garman, did you have any questions for Mr. Bullard?
14 MR. GARMAN: No. I have no redirect, your Honor.
15 THE COURT: All right. Thank you, Mr. Bullard.
16 You're excused.
17 Who would you like to call next, Mr. Bergeron?
18 MR. BERGERON: Your Honor, I'd like to call
19 Mr. John Lennon.
20 THE COURT: All right. Mr. Lennon.
21 (Colloquy not on the record.)
22 CLERK RAWLING: Raise your right hand and remain
23 standing.
24 Thereupon --
25 JOHN LENNON
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1 was called as a witness, and having been first duly sworn,
2 testified as follows:
3 THE WITNESS: Yes, I do.
4 CLERK RAWLING: Okay. Please have a seat.
5 (Indiscernible) state and spell your last name (indiscernible).
6 THE WITNESS: Oh, I'm sorry. My name is John Lennon,
7 and it's L-e-n-n-o-n.
8 CLERK RAWLING: Thank you.
9 CROSS-EXAMINATION
10 BY MR. BERGERON:
11 Q. Mr. Lennon, when I first reached out to you this past
12 January, I offered you multiple chances to submit to a formal
13 interview on Xyience, correct?
14 A. That is correct.
15 Q. Was it your personal choice not to speak with me or did you
16 obtain advice from counsel suggesting you avoid not speaking to
17 me at all?
18 A. I obtained advice from counsel, and it was also on my
19 personal choice.
20 Q. Now, you later held a conference call in which you spoke at
21 length about me after I began calling you and then contacting
22 employees upon being refused an interview, correct?
23 A. That is correct. The conference call was not about you.
24 It was about the performance of the company. Since you had
25 written an E-mail to the entire company, I dealt with that in a
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1 small portion of that conference call.
2 Q. You began the conference call with the remarks about me --
3 A. The conference call --
4 Q. -- did you not?
5 A. -- went about 20 minutes. We spent about four minutes
6 discussing an E-mail that came from an outside source to all
7 the employees.
8 Q. And you also discussed the entire litigation as well,
9 correct?
10 A. I did not discuss the entire litigation.
11 Q. So you did not say that the bankruptcies typically fall on
12 the shareholders?
13 A. I did not say that bankruptcies fall -- typically fall on
14 the shareholders. I said that companies often become bankrupt
15 when shareholders fail to invest in companies prior to going
16 bankrupt.
17 Q. Would you be surprised if I had a recording of this, and
18 you did indeed say those words?
19 A. I would not be surprised you have a recording seeing the
20 kind of tactics you've used to try and infiltrate our company.
21 Q. You told the employees who -- who -- of Xyience who
22 attended and participated by phone that I was on the losing end
23 of this litigation, did you not?
24 A. I believe I said that it was my belief that you were on the
25 losing end of this litigation.
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1 Q. And what did you conclude what -- what evidence did you
2 have to make that statement?
3 A. That was only my own supposition.
4 Q. Are you aware of me having to pay any amount of money to
5 anything related -- for anything related to these -- this
6 litigation?
7 A. No, I am not.
8 Q. Would you say now that you were wrong about that statement?
9 A. No, I would not.
10 Q. So what -- what about my proceeding here would you -- would
11 you deem that it's a losing effort?
12 A. As I've stated, it was my supposition and my opinion that
13 it would be a losing effort for you.
14 Q. But you said it was a losing effort, not that it would be.
15 A. I don't recall exactly what I said.
16 Q. Do you know the exact details of how this company became
17 bankrupt in the first place?
18 A. No, I do not.
19 Q. Yet, you presume to know all about why I do what I do.
20 You've told your employees that what I've written to them is
21 fiction. How can you reconcile that with not knowing the
22 history of this company?
23 A. Excuse me. You're putting a lot of different claims
24 together. Which one do you --
25 Q. Do --
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1 A. Which question do you want me to address, Mr. Bergeron?
2 Q. I want to know why you would say to these shareholders that
3 what I've written to them -- or to these employees that what
4 I've written to them is false when you just admitted you -- you
5 don't know the history of this company in the bankruptcy
6 process.
7 A. I said -- would you please specify what I said to my
8 employees was false --
9 Q. You sent --
10 A. -- that I said to my --
11 Q. -- a company-wide --
12 A. I --
13 Q. -- E-mail --
14 A. I need to know what you're --
15 Q. -- which is in evidence --
16 A. Okay.
17 Q. -- on the record --
18 A. Which?
19 Q. -- for this proceeding.
20 A. Which E-mail, please? I don't have it before me.
21 Q. I do not have the actual motion --
22 A. Okay. But --
23 Q. -- where it's contained.
24 A. Well, I'd like the --
25 Q. But Mr. Garman --
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1 A. Please --
2 Q. -- has it.
3 A. Please show me the E-mail.
4 MR. BERGERON: Do you have that part of your motion?
5 MR. GARMAN: It was in what we filed.
6 BY MR. BERGERON:
7 Q. Well, basically, the E-mail said --
8 A. Are you --
9 Q. -- disregard --
10 A. Are you referring to fiction? Is that -- is that what --
11 MR. GARMAN: It --
12 THE WITNESS: -- you're referring to --
13 MR. GARMAN: Your Honor --
14 THE WITNESS: -- Mr. Bergeron?
15 MR. GARMAN: -- it --
16 BY MR. BERGERON:
17 Q. Your remark that you said what I wrote to the employees was
18 fiction.
19 A. Okay. I will address that.
20 MR. GARMAN: Your Honor --
21 THE WITNESS: You --
22 MR. GARMAN: -- I'd like to object before
23 Mr. Lennon answers. We can proceed with the answer if you deem
24 it fit.
25 But the entire line of questioning seems argumentative
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1 designed to prove the point that because Mr. Lennon has not
2 investigated what has been directed by Mr. Bergeron he's not
3 able to competently do his job, and I believe that that is
4 irrelevant and argumentative to the reason we're here before
5 the Court today.
6 THE COURT: Respond to the objection, please,
7 Mr. Bergeron.
8 MR. BERGERON: Your Honor, this -- first of all, it
9 goes to character, and -- and the -- he's actually signed a
10 declaration in this case based on some of the interactions that
11 I've had with employees, and I'm asking questions about those
12 interactions with employees that he's addressed with them.
13 MR. GARMAN: And --
14 MR. BERGERON: So it is relevant.
15 MR. GARMAN: Well --
16 THE COURT: The objection is sustained.
17 BY MR. BERGERON:
18 Q. During the conference call, did you suggest that I was a
19 journalist on a crusade?
20 A. I don't recall exactly what I suggested, Mr. Bergeron.
21 Q. Have you ever met me before --
22 A. I --
23 Q. -- Mr. Lennon?
24 A. I recall saying something to the effect that I think you
25 fancied yourself as a crusading journalist.
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1 Q. Right. Well, have you ever met me before, Mr. Lennon?
2 A. No. I have not met you before today.
3 Q. And you've never personally spoken to me over the phone.
4 A. I have never personally spoken to you over the phone. I've
5 listened to several voice messages from you, though.
6 Q. And that led you to believe that I'm -- I fancy myself as a
7 crusading journalist, just those phone messages? Is that what
8 you're saying?
9 A. It -- I -- I'm -- I really haven't formed an opinion one
10 way or the other, Mr. Bergeron.
11 Q. Now, I have contained (sic) an E-mail from an insider at
12 Xyience back in 2007 to one of the E-mails I sent to the
13 employees. What is your impression of the account from that
14 E-mail, and do you think it's not accurate?
15 MR. GARMAN: Your Honor, I --
16 BY MR. BERGERON:
17 Q. Is that what you're referring to is fiction?
18 MR. GARMAN: Your Honor, I object.
19 THE WITNESS: No, it is not. I --
20 MR. GARMAN: You --
21 THE WITNESS: I'll answer --
22 MR. GARMAN: I'll --
23 THE WITNESS: -- the question.
24 MR. GARMAN: -- object.
25 THE COURT: Excuse me. Wait.
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1 MR. GARMAN: You --
2 THE COURT: There's a --
3 THE WITNESS: Okay.
4 THE COURT: There's an objection pending.
5 MR. GARMAN: You --
6 THE COURT: Go ahead, Mr. Garman.
7 MR. GARMAN: Your Honor, Mr. Bergeron is asking
8 Mr. Lennon about an E-mail and conduct that occurred in 2007.
9 And as is on the record, he has no knowledge and wasn't even at
10 the company during that time.
11 THE COURT: So what is the objection?
12 MR. GARMAN: The objection is asked and answered.
13 And to the extent that he's simply asking him whether he knows
14 of it, so be it, but he asked him to explain facts to which
15 he's already stated he has no personal knowledge.
16 THE COURT: All right. The objection's sustained as
17 calling for speculation on the part of the witness.
18 BY MR. BERGERON:
19 Q. Now, Mr. Lennon, in -- in all your interaction with me or
20 lack thereof personally, is there anything that I've raised
21 that has concerned you regarding the corruption of the company
22 that I've tried to raise --
23 A. None --
24 Q. -- with the employees?
25 A. -- whatsoever.
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1 Q. Nothing whatsoever. So you don't believe there's any
2 corruption whatsoever --
3 A. No.
4 Q. -- going on at the company.
5 A. Absolutely not.
6 MR. BERGERON: No further questions.
7 MR. GARMAN: Your Honor, this is Greg Garman. I have
8 no redirect.
9 THE COURT: All right. Mr. Lennon is excused.
10 Who would you like to call next, please, Mr. Bergeron?
11 MR. BERGERON: Your Honor, I'd like to call
12 Mr. Michael Levy.
13 THE COURT: All right. Mr. Levy.
14 Before we go on, I note that it's approximately
15 12:30 p.m., a little past that, in Las Vegas. Do the parties
16 wish to continue the hearing until its conclusion or do you
17 want to take a lunch break at some point? What is the
18 pleasure --
19 (Colloquy not on the record.)
20 THE COURT: -- of Mr. Garman and Mr. Bergeron?
21 MR. BERGERON: I'd like to continue, your Honor.
22 MR. GARMAN: Your Honor, this is Greg Garman. I'd
23 like to continue until we're finished.
24 THE COURT: All right. Well, go ahead, then.
25 CLERK RAWLING: Thank you.
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1 Thereupon --
2 MICHAEL LEVY
3 was called as a witness, and having been first duly sworn,
4 testified as follows:
5 THE WITNESS: Yes.
6 CLERK RAWLING: Thank you. You may be seated. If
7 you could just spell your last name for the record.
8 THE WITNESS: Michael Levy, L-e-v-y.
9 CROSS-EXAMINATION
10 BY MR. BERGERON:
11 Q. Mr. Levy, you are the current chief financial officer at
12 Xyience, correct?
13 A. Correct.
14 Q. How long have you been in that position?
15 A. Since the company emerged from bankruptcy.
16 Q. So you had no involvement with the company prior to
17 bankruptcy?
18 A. Yes, I did, but it was a different company.
19 Q. Okay. What was your involvement with the prior company?
20 A. I was a controller and a CFO for some time.
21 Q. So, currently, you're in a position where you see the
22 physical bills that come through that office regularly,
23 correct?
24 A. Correct.
25 Q. Can you estimate how much my specific investigation efforts
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1 have cost Xyience over the years and, specifically, the last
2 few weeks since you've been there.
3 A. I'd have to go back and look at it in more detail. I
4 haven't -- I haven't broken it out.
5 Q. Can you estimate?
6 A. 20,000.
7 Q. And can you describe at all what these costs were
8 specifically for.
9 A. They were pulling the declarations and -- and all of the
10 backup together to file in this court.
11 Q. How about any technologically -- technological steps --
12 MR. GARMAN: And, again --
13 BY MR. BERGERON:
14 Q. -- now --
15 MR. GARMAN: -- your Honor, I object. Mr. Bergeron
16 is now asking questions as to what specialists we've employed
17 to try and keep him and others out of our systems. It's an
18 improper line of questioning, and I object that it's not
19 relevant.
20 MR. BERGERON: Your Honor --
21 THE COURT: The relevance --
22 MR. BERGERON: -- it goes --
23 THE COURT: Sustained.
24 BY MR. BERGERON:
25 Q. Are you aware of my blogs, specifically, XyienceSucks.com
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1 and my work there?
2 A. Yes.
3 Q. And is it your position that those blogs are defamatory or
4 slanderous?
5 A. I don't read them.
6 MR. GARMAN: I object. It calls for a legal
7 conclusion, your Honor.
8 THE COURT: The objection is sustained.
9 BY MR. BERGERON:
10 Q. Have I personally contacted you at all ever?
11 A. You've left some phone messages.
12 Q. And I --
13 A. And I received E-mails for you through work.
14 Q. And I requested to interview you, correct, ask you
15 questions?
16 A. Correct.
17 Q. And why did you refuse that?
18 A. On advice, I elect -- my own election, I decided not to.
19 Q. As far as the behavior that's been mentioned today, do you
20 see that as damaging the company at all?
21 A. I do when asked that -- that the time we're -- for example,
22 we're spending here is taking away our ability to manage the
23 company and grow the business.
24 Q. Now, you mentioned growing the business. Are you aware
25 that this company hasn't turned a profit since it's gone to
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1 bankruptcy?
2 MR. GARMAN: Objection. It assumes facts not in
3 evidence, and it's irrelevant.
4 MR. BERGERON: He mentioned --
5 THE COURT: The --
6 MR. BERGERON: He brought --
7 THE COURT: The objection --
8 MR. BERGERON: He opened the door, your Honor.
9 THE COURT: -- is sustained.
10 MR. BERGERON: He mentioned the business at hand of
11 the company, so he opened --
12 MR. GARMAN: You --
13 MR. BERGERON: -- the door.
14 MR. GARMAN: Your Honor, whether the company on paper
15 turns a profit or a loss is irrelevant to Mr. Bergeron's
16 conduct and our request for an injunction.
17 THE COURT: I said the objection is sustained. It's
18 still sustained.
19 MR. GARMAN: Oh, I'm sorry. We couldn't hear you in
20 Las Vegas, your Honor.
21 THE COURT: All right.
22 BY MR. BERGERON:
23 Q. Mr. Levy, do you deem me a physical threat at all?
24 A. No.
25 Q. And you haven't obtained any protection order against me,
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1 correct?
2 A. No.
3 MR. BERGERON: No further questions.
4 THE COURT: Wait.
5 Mr. Garman, do you have any questions --
6 MR. GARMAN: No, I don't.
7 THE COURT: -- for Mr. Levy?
8 MR. GARMAN: I'm sorry. I have no redirect --
9 THE COURT: That --
10 MR. GARMAN: -- your Honor.
11 THE COURT: That's all right.
12 Mr. Levy's excused.
13 MR. BERGERON: Your Honor, I'd like to call
14 Mr. John Villari.
15 THE COURT: All right.
16 (Colloquy not on the record.)
17 CLERK RAWLING: Please remain standing and raise your
18 right hand.
19 Thereupon --
20 JOHN VILLARI
21 was called as a witness, and having been first duly sworn,
22 testified as follows:
23 THE WITNESS: I do.
24 CLERK RAWLING: Please have a seat and state and
25 spell your last name (indiscernible).
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1 THE WITNESS: John Villari, V-, as in Victor,
2 i-l-l-a-r-i.
3 CROSS-EXAMINATION
4 BY MR. BERGERON:
5 Q. Mr. Villari, how did you come to be employed by Xyience?
6 A. I filled out an application and got interviewed.
7 Q. Did -- do you ever maintain an active friendship with
8 Mr. Lennon at all?
9 A. No. I have never met him before he became the -- the CEO
10 of this company.
11 Q. Are you friendly with the Fertittas or Mike Levy at all?
12 A. Other than working for Mike Levy, that is all that we have
13 a relationship for. I have never met the Fertittas.
14 Q. Have you ever had any involvement with Wanderlei Silva's
15 MMA gym?
16 A. I used to train there.
17 Q. And are you currently not allowed on the premises of that
18 gym for any reason?
19 A. No. That is false.
20 Q. Would you be surprised if somebody there told me you were?
21 A. I would be very surprised.
22 Q. Would you have any idea why people at Xyience would say you
23 were banned from that gym?
24 A. I have no idea.
25 Q. And do you recall the phone calls I made to you in recent
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1 weeks?
2 A. I do.
3 Q. I asked you questions about the circumstances surrounding
4 allegations of steroid sales against you, correct?
5 A. Yes.
6 Q. And I gave you multiple chances to tell your side of the
7 story, didn't I?
8 A. You called me several times.
9 Q. And I asked you questions that you did not answer, correct?
10 A. That is correct.
11 Q. Can you tell me why you didn't answer those questions?
12 A. There's no reason for me to speak to you.
13 Q. Do you deny the allegations?
14 MR. GARMAN: Your Honor, I clearly think it's
15 improper to use this as a proceeding to try and prove up his
16 allegations of steroid sales or methamphetamine sales. I
17 object on relevance grounds.
18 MR. BERGERON: Your Honor, these --
19 THE COURT: The relevance objection --
20 MR. BERGERON: These accusations are being used --
21 THE COURT: -- is sustained.
22 MR. BERGERON: -- are being used against me.
23 THE COURT: The relevance objection is sustained.
24 BY MR. BERGERON:
25 Q. Now, you handle computer work for Xyience, correct?
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1 A. I handle the Web site, and I design graphics.
2 Q. Do you handle Xyience's search-engine marketing at all?
3 A. No. That is handled by an outsourced company.
4 Q. Were you ever asked to address the position of my blog,
5 XyienceSucks.com, in the search-engine strings for the keyword
6 "Xyience"?
7 A. Never once.
8 Q. Have you ever met me before personally?
9 A. Never once.
10 Q. Do you have any idea why I would focus so intently on you
11 in my investigation if we've never met, and I have no reason to
12 have any personal grudge against you?
13 A. I have no clue.
14 Q. During the course of my investigation efforts this past few
15 weeks, have you ever been in jeopardy of losing your job?
16 A. I can't speak to that because I don't know what was handled
17 at the top level. That's above my pay grade.
18 Q. Did anybody tell you that you're in danger of losing your
19 job?
20 A. I have -- I could not -- I was never told that
21 specifically, no.
22 Q. At one point, Xyience executives were going to set you up
23 with a home office, correct?
24 A. Not ever once. That is false.
25 Q. Now, you have stated that because I went to your house that
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1 that was threatening towards your family, correct?
2 A. First of all, I don't know you from anybody. Secondly, you
3 came to my home. After which you came to my home, you went to
4 my work. And after that, you went to a gym where I had
5 acquaintances.
6 MR. GARMAN: Yeah. It --
7 BY MR. BERGERON:
8 Q. Right.
9 A. There was absolutely no need for any of that.
10 MR. GARMAN: Your Honor, this is Greg Garman. I'd
11 just like to interject and instruct the witness to just simply
12 answer the questions as Mr. Bergeron poses them.
13 BY MR. BERGERON:
14 Q. Well, you may disagree with my reasons, but I have them.
15 The question I have next is -- did your family tell you they
16 felt threatened by my presence at your home?
17 A. Yes.
18 Q. And what exactly was threatening about my actions?
19 A. You were obviously there for adversarial purposes.
20 Q. To -- I specifically remember asking your family if I could
21 speak to you for five minutes. Did they tell you that?
22 A. Yes.
23 Q. Did they tell you that I -- I made any reference to any
24 threats whatsoever against them or you?
25 A. No.
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1 Q. But you felt the need to get a protection order, anyway.
2 A. That is correct.
3 Q. Well, what is the reason for that?
4 A. I felt for the safety of my family, an individual who sent
5 me text messages and many other things at -- and spreading
6 slanderous truths about me, so I felt for my family because
7 it's uncorrect (sic), and I was worried about my young
8 children.
9 Q. Your young children which one of them your father brought
10 to the door when I arrived at your residence.
11 MR. GARMAN: Your Honor, I object. There's no
12 relevance to that question.
13 THE COURT: Overruled.
14 BY MR. BERGERON:
15 Q. Is that correct? Your father brought the child to the door
16 when he came to the door?
17 A. He may have. I was not there.
18 Q. You weren't there; yet, I was told that you called in sick
19 to work, so were you somewhere else? Were you not at work?
20 A. I did not call into work that day. I was at work.
21 Q. You were at work, but I went to Xyience offices, and they
22 told me that you were not there.
23 A. I have a lunch break.
24 Q. They didn't say you were at lunch. They said you weren't
25 there.
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1 MR. GARMAN: Your Honor, I object.
2 THE WITNESS: Is that --
3 MR. GARMAN: It's argumentative.
4 THE WITNESS: -- a question?
5 BY MR. BERGERON:
6 Q. Are you saying the people at Xyience --
7 THE COURT: The objection's sustained.
8 BY MR. BERGERON:
9 Q. -- lied to you -- lied to me --
10 MR. GARMAN: Your --
11 BY MR. BERGERON:
12 Q. -- about that?
13 MR. GARMAN: Your Honor, I object. It's
14 argumentative.
15 THE COURT: The objection is sustained.
16 BY MR. BERGERON:
17 Q. So I never made any physical threat against you or any
18 member of your family; is that correct?
19 A. You have sent me constant text messages indicating that you
20 were going to step up, turn the heat up on me, and that you
21 were going to get more aggressive with your behavior to try to
22 get me to speak poorly on Xyience and to -- to basically answer
23 these slanderous allegations that you have posed against me.
24 Q. What evidence --
25 A. So, yes --
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1 Q. What evidence do you have --
2 A. -- I did feel threatened.
3 Q. -- that I sent you any text messages?
4 A. It's all included in the documentation, and I also have a
5 phone that indicates that because you put your telephone number
6 and indicated that your name was Rich Bergeron.
7 Q. Well, I never sent any text messages. It's obviously
8 somebody --
9 MR. GARMAN: Your Honor, I object. This is an
10 argumentative statement.
11 BY MR. BERGERON:
12 Q. Would you be surprised --
13 THE COURT: The objection's sustained.
14 BY MR. BERGERON:
15 Q. -- if it was not me who sent those text messages?
16 A. I would definitely --
17 THE COURT: Mr. Bergeron --
18 THE WITNESS: -- be surprised --
19 THE COURT: -- the --
20 THE WITNESS: -- that it wasn't you.
21 BY MR. BERGERON:
22 Q. Now, since you filed your protection order, have I
23 contacted you in any way?
24 A. As far as this -- in this court, no, not that I'm aware of
25 at this moment.
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1 Q. And since I visited your home the first time, have I come
2 back there?
3 A. No, you haven't.
4 Q. Exact. Okay. So there's been testimony that you acquired
5 a personal security guard out of your own pocket?
6 A. It's not out of my pocket.
7 Q. Who's paying for it, then?
8 A. I don't know who's paying for it.
9 Q. Okay. What do you feel that is necessary for?
10 A. Because as far as my -- I have never met you before. But
11 since I am sudden -- suddenly a target of you and because you
12 are trying to soil my name for some unknown reason beknownst
13 (sic) to myself and because you -- you showed up to my
14 property.
15 I have had several individuals call me who you have gone
16 to to try to also soil my name with, and they told me that you
17 were very, very proud of the fact that you went to my property.
18 And because I have received text messages that would only
19 be of your knowledge and my father's knowledge indicating that
20 my dad and my baby could go and have a talk with you, I felt
21 the need to protect my family.
22 Q. Well, first of all, as I said -- obviously, I cannot say it
23 outright, but you first --
24 MR. GARMAN: Your Honor, I would ask Mr. Bergeron to
25 pose a question or cease making argumentative statements.
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1 BY MR. BERGERON:
2 Q. Now, these individuals that you speak of --
3 THE COURT: Well --
4 BY MR. BERGERON:
5 Q. -- can you tell me who they are.
6 A. John Wood, Throwdown Training Centers. Wanderlei Silva's
7 manager and lawyer specifically let me know of the allegations
8 that you put against me.
9 They called me immediately once these allegations were
10 told to them and let me know that they did not believe them to
11 be true, and that I have no -- they have no issues with me and
12 no -- or am I banned from any one of those gyms.
13 Q. So why do you think that people in the Xyience offices that
14 I've spoken to have indicated you in these steroid sales?
15 MR. GARMAN: Objection, your Honor. The
16 steroid-sales allegation is preposterous, and he's trying to
17 use this to investigate. It is irrelevant --
18 THE COURT: The question --
19 MR. GARMAN: -- to these proceedings.
20 THE COURT: The question assumes facts not in
21 evidence. The objection is sustained.
22 BY MR. BERGERON:
23 Q. As far as these individuals and the Xyience employees, are
24 you aware of anybody at the Xyience offices who would have a
25 reason to make that up?
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1 A. I have no idea why somebody would make something up. I
2 can't speak to that.
3 Q. And do you have any enemies that you know of within the
4 company who would seek to target you on allegations like that?
5 A. Not that I'm aware of.
6 Q. And did -- when you spoke to Mr. Wood and the people at
7 Wanderlei's gym, did they specifically tell you that when I
8 came over there I did not specifically accuse you? I said that
9 I had talked to people at Xyience who said you were banned from
10 that gym. Did they tell you that?
11 A. That is incorrect. Both John Wood and Wanderlei Silva's
12 lawyer, Rob Cardenas, both indicated that you went up to --
13 specifically, on John Wood, you told him over the phone several
14 instances that I was selling steroids, and you accused one of
15 his trainers.
16 Then you went -- with Robert Cardenas, you went up to a
17 specific trainer at Wanderlei's gym and told him I know
18 John Villari is selling you steroids, so I'm sorry, sir.
19 You're incorrect.
20 Q. I said there were allegations as far as I remember, and --
21 and you're saying that that's not true. That's these people
22 told you otherwise.
23 MR. GARMAN: Asked and answered, your Honor.
24 THE WITNESS: Your allegations?
25 MR. GARMAN: Objection. Asked and answered.
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1 THE COURT: Overruled.
2 THE WITNESS: Repeat the question.
3 BY MR. BERGERON:
4 Q. So these -- these specific people that you just mentioned,
5 they all said that I specifically told them these are
6 allegations -- these were not allegations. That I told them it
7 was for a fact.
8 A. They told me. Specifically, John Wood told me directly
9 this guy could not stop talking about you and yours -- you
10 sell -- the selling of steroids, so yes.
11 Q. Okay. But that does not specifically say that I
12 definitively accused you myself, does it?
13 A. He -- John Wood specifically told me this guy referring to
14 you who asked for John to give him a call -- give you a call
15 said you told him specifically I sell steroids.
16 Q. Now, in my -- in your communications with these
17 individuals, how many of them said -- told you that I had spoke
18 to them personally in person?
19 A. John Wood told me. Robert Cardenas told me that
20 Jorge Lopez indicated that you came up to him. You told
21 Jorge Lopez that I sold him steroids, and that you knew that,
22 and you started taking pictures of people in Wanderlei's gym.
23 That's what was told to me.
24 Q. Do you have any evidence of that?
25 A. I -- if you would like to bring them in, we can bring them
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1 in.
2 Q. But you don't have any evidence of that.
3 A. At this moment, no, I do not.
4 Q. And what was I taking pictures of did they say?
5 A. Other fighters.
6 MR. BERGERON: Really? It's news to me.
7 No further questions.
8 THE COURT: All right. May Mr. Villari be excused?
9 MR. GARMAN: Yes, your Honor. I have no questions.
10 THE COURT: You're excused, Mr. Villari.
11 Any further witnesses, Mr. Bergeron?
12 MR. BERGERON: No, your Honor.
13 MR. GARMAN: Your Honor, this is --
14 THE COURT: All right.
15 MR. GARMAN: Your Honor, this is Greg Garman. If
16 permissible, I'd like to take a ten-minute break, and then I
17 have a few minutes of questions for Mr. Bergeron.
18 THE COURT: All right. We'll take a ten-minute
19 recess --
20 MR. GARMAN: Thank you, your Honor.
21 THE COURT: -- starting right now.
22 CLERK VEGAS: All rise.
23 CLERK RAWLING: All rise.
24 CLERK VEGAS: Court stands in recess for
25 ten minutes.
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1 (Recess at 12:55:16 p.m.)
2 (Court reconvened at 01:09:56 p.m.)
3 CLERK VEGAS: Bankruptcy court is once again in
4 session.
5 THE COURT: Be seated, please.
6 (Colloquy not on the record.)
7 THE COURT: Go ahead, Mr. Garman.
8 MR. GARMAN: Your Honor, I have a few questions to
9 ask of Mr. Bergeron under oath.
10 THE COURT: All right. Mr. Bergeron.
11 (Colloquy not on the record.)
12 CLERK RAWLING: Remain standing --
13 MR. BERGERON: Yep. Whoops.
14 CLERK RAWLING: -- and raise your right hand. There
15 you go.
16 Thereupon --
17 RICHARD E. BERGERON, III,
18 was called as a witness, and having been first duly sworn,
19 testified as follows:
20 THE WITNESS: I do.
21 CLERK RAWLING: Thank you. (Indiscernible) please
22 state your name for the record.
23 THE WITNESS: Richard Bergeron. The last name is
24 B-e-r-g-e-r-o-n.
25 CLERK RAWLING: Thank you.
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1 DIRECT EXAMINATION
2 BY MR. GARMAN:
3 Q. Mr. Bergeron, you understand you're under oath?
4 A. Yes.
5 Q. What does that mean to you?
6 A. It means I have to tell the truth or risk perjury.
7 Q. And you understand there are consequences if you don't?
8 A. Yes.
9 Q. Your goal is to obtain money from the Fertittas and the
10 Xyiences for yourself and the shareholders, correct?
11 A. No.
12 Q. All right. I'll refer to your declaration that was
13 submitted over the weekend, and I will read to you paragraph 37
14 which reads, quote, "My mention of the 385 shareholders and my
15 suggestion that it was time to write a check was an obvious
16 indication that my call was designed to promote a settlement of
17 the case and to provide relief to those most damaged by the
18 bankruptcy scheme that was orchestrated and facilitated by
19 Bullard at the behest of Frank Fertitta, the Third, and
20 Lorenzo Fertitta." Was that a truthful statement when you made
21 it?
22 A. Yes.
23 Q. Is --
24 A. The reason I said no to the last question was --
25 Q. Mr. Bergeron --
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1 MR. GARMAN: I object as to anything further as being
2 nonresponsive to my question.
3 BY MR. GARMAN:
4 Q. Mr. Bergeron, does that paragraph that I just read to you
5 remain a truthful statement now?
6 A. Yes.
7 Q. Okay. Are you working at the direction of shareholders?
8 A. They do not direct my case, but I do consult with them and
9 speak with them on a regular basis.
10 Q. And on a regular basis, does that mean daily?
11 A. Oftentimes, yes.
12 Q. And are they funding your actions either through travel,
13 court filings, or other incidental expenses?
14 A. Some shareholders have provided for travel and for
15 expenses.
16 Q. And is the reason that they are providing you those funds
17 so that you can pursue collection on their behalf?
18 A. I -- you'd have to ask them. That's not a question I can
19 answer.
20 Q. Have they ever told you that the reason they're funding
21 your operations is that because they stand to benefit from your
22 actions?
23 A. No.
24 Q. Do you believe that they're giving you a gift unrelated to
25 the fact that they may collect someday?
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1 A. I'm not sure.
2 Q. Oh.
3 A. I mean, I -- I would have to say that I don't personally
4 see it as a gift.
5 Q. You see it as an investment in your activity, so that you
6 and they may recover, correct?
7 A. Well, if it means that I have to say that I don't want to
8 recover, then --
9 MR. GARMAN: Your Honor --
10 THE WITNESS: -- and it goes to them --
11 MR. GARMAN: -- I object --
12 THE WITNESS: -- then I'll be happy --
13 MR. GARMAN: -- as being nonresponsive.
14 THE WITNESS: -- with it going to them. I would be
15 perfectly happy with it going to them. I have no --
16 BY MR. GARMAN:
17 Q. Mr. Bergeron --
18 A. -- objection --
19 Q. -- please answer --
20 A. -- to that.
21 Q. -- my question. My question wasn't your intent going
22 forward, but, right now, you're attempting to collect for
23 yourself and for shareholders, correct?
24 A. On the sanctions motion, yes.
25 Q. Okay. Mr. Bergeron, you're attempting to pursue claims on
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1 account of shareholders that constitute prepetition claims,
2 correct?
3 A. No. I'm -- I'm going after sanctions which are not claims.
4 Sanctions are a completely different thing than claims. This
5 is a motion, not a case.
6 Q. Identify with specificity what gives you the right to
7 pursue claims on behalf of shareholders.
8 A. When this litigation started, I was sued for $25,000,000
9 for what I had reported about the ongoing activities of this
10 company.
11 Now, after a period of time where I had been writing about
12 this and after I had been sued, I was invited to
13 New York City to attend UFC 78 by the co-CEOs of this company
14 wherein they told me this company was going bankrupt. That was
15 their only option.
16 I had an individual there who told them every other option
17 they had, and then somebody from an investment firm.
18 MR. GARMAN: Your Honor, I object as being
19 nonresponsive. My question --
20 THE WITNESS: I'm trying to get --
21 MR. GARMAN: -- specifically related --
22 THE WITNESS: -- to the question, your Honor.
23 MR. GARMAN: -- to standing.
24 THE COURT: The objection's sustained.
25 Mr. Bergeron, please limit your answers to the question
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1 that's asked.
2 THE WITNESS: Could you repeat the question?
3 BY MR. GARMAN:
4 Q. Identify with specificity what right and how you have the
5 right to pursue any claim on behalf of shareholders.
6 A. Well, sanctions punish litigation conduct, specifically,
7 vexatious-litigation conduct. And if that conduct should
8 damage a class of people, Rule 9011 specifies through the
9 statutes and precedence that I have cited in my pleading that
10 those people can be given some of the damage awards from a
11 sanctions motion.
12 Q. I understand and agree with all of that. Why is it that
13 you have the right to bring this sanctions motion on their
14 behalf?
15 A. Because I am named as the only one in the injunction in the
16 permanent plan who can proceed with anything other than the
17 liquidation trustee --
18 Q. Okay.
19 A. -- at this point.
20 Q. So you believe that the plan specifically provides that
21 you're authorized to do this.
22 A. Yes.
23 Q. Is there any other basis for your legal argument that you
24 have standing other than what's contained in this plan?
25 A. Oh, as far as the stipulations of Rule 9011, I believe
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1 under that I do have standing.
2 Q. You believe that Rule 9011 permits you to bring a claim for
3 sanctions on behalf of anyone?
4 A. It's not a claim. I have said that multiple times. This
5 is a motion.
6 Q. That you believe that Rule 9011 authorizes you to ask for
7 sanctions on behalf of anyone.
8 A. Yes.
9 Q. So --
10 A. Anyone who has been injured by the activity.
11 Q. All right. So other than Rule 9011 and the specific
12 content of the bankruptcy plan, is there any other authority
13 for you bringing any claim, argument, motion on behalf of
14 shareholders?
15 A. Yes.
16 Q. What?
17 A. The section that you mentioned, 105, where it gives the
18 Court inherent power to issue any order in the furtherance of
19 justice.
20 Q. Anything else?
21 A. As far as I know offhand, that's -- anything that's not in
22 my pleadings, I don't know.
23 Q. How much have the shareholders paid you to effectuate your
24 conduct?
25 A. Effectuate my conduct? What do you mean by that?
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1 Q. How much have the shareholders paid you?
2 A. Period?
3 Q. Yep.
4 A. I would have to look back at the records, but I would say
5 less than $3,000 over the past four years.
6 Q. And how much of that has come within the last 90 days?
7 A. Oh, I was paid $1,000 to travel out here.
8 Q. Who paid you that?
9 A. A representative of one of the companies involved in the
10 bankruptcy.
11 Q. Please answer my question. Who paid you that?
12 A. A gentleman named Robert Sparks (phonetic).
13 Q. Mr. Sparks is a shareholder.
14 A. No. He represents a shareholder.
15 Q. Who is Mr. Sparks?
16 A. Robert Sparks. He's an attorney for a company called
17 Marvee, LLC --
18 Q. And an attorney --
19 A. -- who holds --
20 Q. An attorney paid you to --
21 A. -- significant shares.
22 Q. And an attorney paid you to come to Las Vegas?
23 A. Yes.
24 Q. Huh. Have any individual shareholders given you money
25 directly?
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1 A. Yes.
2 Q. Who?
3 A. Multiple people. I couldn't name them all. When I
4 actually came out here in October of 2009, I was put up in a
5 hotel and given $100.
6 Q. Can you name any of the shareholders who funded that money?
7 A. Not shareholders, specifically. I'd -- I'd say the
8 Bertachini Family (phonetic). There were two shareholders
9 there, John -- John Bertachini (phonetic) and Paul Bertachini
10 (phonetic).
11 Q. Are they shareholders?
12 A. Yes.
13 Q. Are there any shareholders in court today?
14 A. That -- who have given me money?
15 Q. Are there any shareholders in court today?
16 A. Yes.
17 Q. Did you come with them?
18 A. No.
19 Q. How did they know to be here?
20 A. I spoke to them. I have an E-mail list for a lot of the
21 shareholders, especially, the local ones.
22 Q. So you told them.
23 A. Yes.
24 Q. Okay. Have any of the shareholders in court today ever
25 provided you any money or other resources to promote anything
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1 on their behalf?
2 A. No.
3 Q. Other than specifically what's contained in your sanctions
4 request, are you bringing -- strike that. You fancy yourself
5 as a lawyer, correct?
6 A. I don't fancy myself. I am a pro se representative of
7 myself.
8 Q. But you believe that you're acting in a capacity as a
9 lawyer on behalf of the shareholders, correct?
10 A. No.
11 Q. No? Let me refer you to your declaration. I'm going to
12 move on. I don't have it at my fingertips. Have you attempted
13 to contact the liquidating trustee to cause him to pursue
14 claims against my clients or others involved in the conspiracy
15 you write about in your pleadings?
16 A. No. Actually, the trustee actually reached out to me.
17 Q. Okay. So you have talked to the trustee about bringing
18 claims against parties you believe have engaged in misconduct.
19 A. No. Not necessarily bringing claims. The only thing I've
20 talked to the trustee in relation to my case regarding is the
21 Rule 9011 motion asking him if he would be willing to take it
22 over as a real party in interest.
23 Q. But you believe that's the only basis for a claim, correct?
24 A. It's not a claim.
25 Q. You believe that's the only basis for recovery is a
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1 Rule 9011 motion, right?
2 A. Rule 9011 and 105.
3 Q. Okay. And --
4 A. Yes.
5 Q. And both of those have been submitted to the Court and are
6 under advisement, correct?
7 A. Yes.
8 Q. There is no ongoing discovery that permits you to do any
9 Court-sanctioned investigation in support of those motions,
10 correct?
11 A. I haven't done any Court-sanctioned --
12 Q. I'm asking you --
13 A. -- investigation.
14 Q. -- whether that's a true statement.
15 A. Well, I -- I don't know. I -- I don't know the rules of
16 discovery.
17 Q. Are you permitted to engage in Court-sanctioned discovery?
18 A. I don't know. I -- I have no idea of that. I would not
19 characterize my activity as discovery, anyway.
20 Q. All of this is designed so that you can benefit
21 financially, correct?
22 A. No.
23 Q. You want $500,000, though, correct?
24 A. That's not to benefit financially. That's --
25 Q. You want $500,000, though, correct?
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1 A. No. I've said in open court I will -- I'm willing to waive
2 that requirement.
3 Q. Have you agreed to waive that?
4 A. I am agreeing to it right now. I have agreed to it before.
5 If --
6 Q. You're --
7 A. If that's what it takes --
8 Q. You're --
9 A. -- that's what I'll do.
10 Q. You're seeking $150,000,000 in sanctions against me. Are
11 you seeking to personally recover any of that money?
12 A. I'm seeking sanctions against a whole group of people
13 collectively.
14 Q. Mr. Bergeron, my --
15 A. I'm not seeking 150,000,000 against you personally.
16 Q. Mr. Bergeron, you're seeking $150,000,000 in sanctions.
17 Please clarify whether or not you're seeking to recover any of
18 that money personally.
19 A. If --
20 Q. It's a yes-or-no question, Mr. Bergeron.
21 A. As it currently is written, yes.
22 Q. Okay. Mr. Bergeron, why did you send me the address of my
23 parents' house?
24 A. I wanted you to know that I knew where you lived because I
25 wanted to come and ask you questions.
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1 Q. Why would it be relevant that you know where I live?
2 A. I don't know.
3 Q. When you made the statement that you knew how to evade the
4 authorities and security at my residence, why was that relevant
5 to you asking me questions?
6 A. It probably wasn't.
7 Q. So it was a threat, right?
8 A. No. It was not a threat.
9 Q. Okay. When you told Mr. Bullard that you knew his children
10 lived in his residence, that was a threat, wasn't it?
11 A. No, it was not.
12 Q. Okay. How many times -- let's see. Do you have a phone
13 list of Xyience employees?
14 A. Yes.
15 Q. Where did you obtain that?
16 A. I obtained it from an inside source at Xyience.
17 Q. Who?
18 A. I refuse to acknowledge who that is under the shield law.
19 Q. Mr. Bergeron, we're involved in litigation. I'm asking you
20 under oath who did you obtain the phone list of the Xyience
21 employees from.
22 A. I refuse to answer that question.
23 Q. Mr. --
24 MR. GARMAN: Or, your Honor, I would ask that you
25 direct the witness to answer my question.
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1 THE COURT: Why don't you want to answer the
2 question, Mr. Bergeron?
3 THE WITNESS: Your Honor, then that individual is
4 still employed by Xyience, and I fear that if I ever reveal his
5 name he will not only be fired but subject to litigation by the
6 attorney here.
7 THE COURT: Why do you need the information,
8 Mr. Garman?
9 MR. GARMAN: Your Honor, Mr. Bergeron, his arguments
10 go to the extent that he knows of particular facts that he is
11 using in his defense as being truthful.
12 I'm entitled to challenge him as to the source of that
13 knowledge and to the credibility of that knowledge, so the
14 Court can make an informed decision whether or not there is any
15 basis in fact for the defenses that Mr. Bergeron has raised.
16 THE COURT: All right. Mr. Bergeron, I will sustain
17 your objection, but you must understand that if you decline to
18 answer that undermines your position.
19 THE WITNESS: That's fine, your Honor. I do not want
20 to put the individual in jeopardy.
21 THE COURT: Very well.
22 BY MR. GARMAN:
23 Q. Mr. Bergeron, you make a number of statements in your
24 declaration that say I'm informed by sources inside of Xyience.
25 A. Yes.
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1 Q. To cut to the chase, it's my intent to ask you who every
2 one of those sources are. Are you willing to provide me the
3 names of any of those sources?
4 A. No, I am not.
5 MR. GARMAN: Then, your Honor, I can do this with a
6 bit more clarity in a minute. But as Mr. Bergeron is refusing
7 to testify to the facts that he submitted under oath, I move to
8 strike -- let's see -- paragraphs 10, 11, 12, 15, 16, 19, 21,
9 22, 45, 46, 47 from his declaration.
10 THE COURT: The motion's denied.
11 BY MR. GARMAN:
12 Q. What's phone spoofing?
13 A. Phone spoofing? I don't -- I don't know what you're
14 talking about. I've heard of Caller-ID spoofing. Is that --
15 is that what you're referring to?
16 Q. Yes.
17 A. It's where you get a card, and it's -- it's a legal card
18 you can get on-line, and you type in the card number. You type
19 in the phone number that you want to appear, and you type in
20 the number you wish to call.
21 Q. And have you engaged in Caller-ID spoofing when you've made
22 calls to Xyience employees?
23 A. Yes.
24 Q. How many times have you done that?
25 A. I would say three or four.
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1 Q. Why was it necessary to spoof the phone when you call
2 employees of Xyience?
3 A. When my number came up after awhile when I was trying to
4 ask questions, they just simply wouldn't answer.
5 Q. Okay.
6 A. I wanted to confront them with the truth to see if they
7 would answer the questions that I had. I knew they would
8 answer those particular numbers.
9 Q. Have you ever directly or indirectly been involved in the
10 posting of a CraigsList ad related to Mr. Villari?
11 A. No.
12 Q. Have you ever sent a text message to any employee of
13 Xyience?
14 A. I did send probably two or three very recently, though,
15 nothing over the course of the last few weeks like they've been
16 talking about day after day.
17 Q. Okay. So it's your testimony under oath that other than
18 the two or three you have never been engaged directly or
19 indirectly in causing someone to send text messages to Xyience
20 employees.
21 A. Correct.
22 Q. Presumably, you'd be surprised if there were phone records
23 indicating otherwise.
24 A. I would not be.
25 Q. And why not?
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1 A. Because I know I did not make those texts.
2 Q. So you wouldn't be surprised there are phone records
3 indicating that you made text messages that your testimony is
4 you didn't make them.
5 A. Well, you just -- we just went over the Caller-ID spoofing.
6 If somebody wanted to be me, they could do it in a text, too.
7 Q. Okay. Okay. Why are you interested in what steps the
8 company has taken to secure its E-mail and other servers?
9 A. Well, my point of asking that was to discover how much was
10 expended on that and would they have expended that if I wasn't
11 getting accurate information.
12 Q. Have you ever attempted to hack into Xyience's servers,
13 E-mail, or otherwise?
14 A. I haven't attempted. I have.
15 Q. You've gained access to Xyience E-mail servers?
16 A. Yes.
17 Q. How did you do that?
18 A. Methods I don't particularly want to talk about at this
19 point.
20 MR. GARMAN: Well, your Honor, or --
21 BY MR. BERGERON:
22 Q. Mr. Bergeron, with all due respect, I'm not particularly
23 interested in what you want to talk about. How did you gain
24 access to the servers at Xyience?
25 A. If I reveal that information, I won't be able to do my job
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1 as an investigative reporter, so I refuse to answer that
2 question.
3 MR. GARMAN: Your Honor, I again make the argument
4 that Mr. Bergeron is basing his defenses on the fact that his
5 statements are somehow truthful, and he somehow has inside
6 information.
7 He's also asking the Court to make speculation as to
8 certain assumptions based upon what he's put before the
9 Court.
10 He's refused to testify as to unnamed sources. Now
11 he's testified that he has gained access to the company's
12 servers.
13 Obviously, this company is protected by the permanent
14 injunction, and he's refusing to testify about it. My request
15 is that either he be compelled to testify about it or that his
16 entire opposition be stricken.
17 THE COURT: Mr. Bergeron, as you can imagine, this is
18 very important to the strength of your position, so I will
19 order you to answer the question. If you decline to answer,
20 then we'll decide the consequences.
21 THE WITNESS: The way that I was able to gain access
22 was I was sent anonymous information on how to get into this
23 server.
24 BY MR. GARMAN:
25 Q. You know that you're not authorized to access that server,
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1 correct?
2 A. I don't know.
3 Q. You believe that Xyience has authorized you -- do you
4 believe that Xyience has authorized you to access the E-mail
5 server?
6 A. No.
7 Q. So you know that you're not authorized to access the E-mail
8 server, correct?
9 A. Yes.
10 Q. Were you accessing the server under false pretenses using
11 someone else's log-in and password?
12 A. I don't know. I don't know if it was anyone's or if it was
13 just an administration password.
14 Q. What user name did you use to access the server?
15 A. I don't recall.
16 Q. Was it a name of an individual?
17 A. No.
18 Q. Do you recall anything about the user name?
19 A. Not offhand as far as the actual information that was -- it
20 was a long time ago that it was done. About a couple months
21 ago, I think.
22 Q. How many times have you accessed the E-mail server at
23 Xyience?
24 A. I couldn't tell you.
25 Q. Estimate.
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1 A. It was multiple times.
2 Q. More than ten?
3 A. Yes.
4 Q. More than 100?
5 A. No.
6 Q. More than 50?
7 A. Probably not.
8 Q. Somewhere between 10 and 50, then.
9 A. Yes.
10 Q. When was the most recent time you accessed the server?
11 A. Probably, a few weeks ago.
12 Q. Why have you not accessed the server in the last few weeks?
13 A. Once I reported some of the information that I gained, the
14 loophole that I was able to get in was shut down.
15 Q. Do you have an opinion as to whether or not that's illegal?
16 A. I'm not positive. I -- I would say that it's -- it's an
17 iffy issue.
18 Q. So you know it might be illegal to engage in that conduct.
19 A. I don't know. I just told you I'm not sure.
20 Q. Might it be illegal to engage in that conduct?
21 A. I don't think so. I've never seen any law to that effect.
22 Q. Okay. Who did you obtain that information from?
23 A. I cannot -- I -- I -- I don't know. It was anonymously
24 sent. It was a Hotmail account.
25 Q. So you can't tell or you won't tell me?
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1 A. I don't know.
2 Q. Yeah.
3 A. I mean, I can't.
4 Q. So just say it's your testimony under oath that it was
5 anonymously sent to you, and you have no idea who sent it.
6 A. Yes.
7 Q. Do you have an idea who sent it?
8 A. No.
9 Q. When you accessed the company's E-mail servers, were you
10 able to read everyone's E-mails?
11 A. I was able to, but I did not read everyone's E-mails.
12 Q. Have you ever read an E-mail between me and my client?
13 A. No.
14 Q. Have you ever read any E-mail I've sent?
15 A. No.
16 Q. Have you ever read any E-mail that was sent to me?
17 A. No.
18 Q. Whose E-mail did you read?
19 A. I read Mr. Lennon's E-mail --
20 Q. To who?
21 A. -- to Mr. Pallante, Anthony Pallante, who was a member of
22 Manchester Consolidated.
23 Q. How many E-mails have you read?
24 A. Oh, probably, about 20 or 30.
25 Q. Why only 20 or 30?
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1 A. Because I didn't spend that much time on the system.
2 Q. So you access the system up to 50 times; yet, you only read
3 20 E-mails.
4 A. As far as I remember, yes.
5 Q. So would you access the system multiple times to read a
6 single E-mail?
7 A. Sometimes, yes.
8 Q. Why?
9 A. Because there was information there that I thought I could
10 use.
11 Q. If you're looking for all this information, why wouldn't
12 you read the tens of thousands of E-mails that would be on that
13 server?
14 A. Because it was not just the E-mails. There was other
15 information that I was looking at while I was --
16 Q. Okay.
17 A. -- in the system.
18 Q. We're going to get to that, but why wouldn't you read the
19 other tens of thousands of E-mails on that server?
20 A. I just didn't get to it.
21 Q. Over what period of time did you access this server?
22 A. I'm not sure as far as the definitive dates, but I'd say
23 between early January and just before I came out here on
24 February 9th.
25 Q. And, again, I just want to clarify for the record. It's
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1 your testimony that in the up to 50 times you accessed this
2 server I'm to believe you only read 20 E-mails.
3 A. I mean, I can't say that exactly. I mean, I don't know. I
4 mean --
5 Q. Okay. Did you ever download any E-mails off the server?
6 A. Download? No. I copied some, but I --
7 Q. How many?
8 A. -- did not download.
9 Q. How many did you copy? Excuse me.
10 A. Probably, two or three.
11 Q. Okay. Have you ever saved -- other than those two or
12 three E-mails, what have you taken off of Xyience servers and
13 stored remotely, printed, and done anything else with?
14 A. That includes thousands of documents.
15 Q. That's exactly what I'm asking is what are these thousands
16 of documents.
17 A. Some of them were related to a presentation made to the
18 Fertittas about what to do with the company, three different
19 plans.
20 I have an operating-expense report right on my desk over
21 there, profit and loss over the last few quarters, and just
22 various other paperwork related to the day-to-day operations of
23 the company.
24 Q. Would you deem any of this to be propriety company
25 information?
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1 A. I wouldn't know that. I haven't studied the law on that.
2 Q. Would you deem it to be propriety information?
3 A. I can't say.
4 Q. Do you know --
5 A. I --
6 Q. What does propriety information mean to you?
7 A. That it's the property of the company alone.
8 Q. Okay. So with that definition, is any of the information
9 you downloaded propriety?
10 A. I -- I don't know if it qualifies under that definition.
11 Q. I'm asking you in your opinion based upon the definition
12 you gave me whether or not this is propriety information.
13 A. I don't think so.
14 Q. Is it nonpublic?
15 A. The company is nonpublic, yes.
16 Q. Is the information nonpublic?
17 A. Not necessarily. I could publish that information based on
18 a Supreme Court case --
19 Q. And --
20 A. -- CBS versus Davis.
21 Q. Okay.
22 A. So it could be public information if I revealed it.
23 Q. Are there sales forecasts in what you give in what you --
24 A. Excuse me?
25 Q. Are there sales forecasts in what you stole from the
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1 company?
2 A. Sales forecasts?
3 Q. Yeah.
4 A. I don't recall. Possibly.
5 Q. Identify with more specificity what type of documents these
6 are.
7 A. Just statements, presentations, graphics presentations,
8 three-year plans.
9 Q. You have the company's three-year business plan?
10 A. Yes.
11 Q. And you don't think that's propriety?
12 A. No. It's -- there's specific activities that I'm
13 investigating --
14 Q. What would be --
15 A. -- to report on.
16 Q. What would be propriety in your mind, then?
17 A. Well, their brand, their flavors, their -- their inventory,
18 their stock.
19 Q. Do you have salary information?
20 A. No.
21 Q. Have you given this information that you wrongfully took
22 from the company to anyone else?
23 A. I have not given the information to anyone else, but I
24 don't think I wrongfully took it.
25 Q. Have you showed this information to any other individual or
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1 entity?
2 A. Not yet, no.
3 Q. It's your intent to, though, right?
4 A. Not necessarily. It depends on --
5 Q. And you're not going to do it if we pay you, right?
6 A. No. No. That's not -- you didn't even let me finish. I
7 was saying that it might be necessary to -- to publish it in a
8 book if I ever get beyond this case, and -- and I have the
9 ability to write a book without being sued.
10 Q. Why might it be necessary to publish our
11 three-year business plan?
12 A. I didn't say I was going to publish that. You asked --
13 Q. Okay.
14 A. -- you know, if I was going to publish anything.
15 Q. So what might you publish?
16 A. Some of the information that I gathered regarding like the
17 profit/loss, operating loss, certain documentation that showed
18 some of the corruption that was going on in the company.
19 Q. What corruption?
20 A. Well, where do I start?
21 Q. Give me --
22 A. I mean --
23 Q. What's your definition of corruption?
24 A. Well, corruption is basically when people use something for
25 the intent that it wasn't supposed to be used, and they act as
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1 if they're above the law, and --
2 Q. Okay. All right. So let's use that definition.
3 Specifically, what act was this company used for that it wasn't
4 intended to be used for?
5 A. Well, it's been bankrupted for the specific purpose of
6 benefiting the UFC, benefiting the Cott Corporation, benefiting
7 UFC marketing companies and -- and other insiders.
8 I believe this is a bleed-out scam is what it's referred
9 to in bankruptcy where -- even Gordon Biersch, the company
10 that's owned by the Fertittas, I have been told it's company
11 policy to bring a sales representative there -- there on the
12 company dime, and that's -- that's a company that's owned by
13 one of the insiders who has an ownership interest in the
14 company.
15 Q. Okay. So you think that the company spending money on
16 marketing, advertising, or travel that you don't agree with is
17 corruption.
18 A. No. I didn't say that.
19 Q. Okay.
20 A. I said that the way that it was directed.
21 Q. Okay.
22 A. As soon as this company was given this million -- millions
23 of dollars in -- of loans from Zyen, LLC, that money was used
24 to primarily pay off insiders --
25 Q. Yeah.
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1 A. -- and --
2 Q. There you go.
3 A. -- and not to pay off product that they could possibly
4 sell.
5 Q. That's the point. That's the point. You don't like the
6 way that the company spent its money, right?
7 A. I wouldn't say it like that.
8 Q. Is it illegal to pay favored creditors?
9 A. I don't know.
10 Q. I'm asking you. Do you believe it to be illegal to pay
11 favored creditors?
12 A. Favored? I don't even know what you mean by favored
13 creditors.
14 Q. Okay. All this comes back to the fact that you didn't like
15 the way that the company expended the loans that it obtained,
16 right?
17 A. No.
18 Q. That's really what --
19 A. This comes back --
20 Q. -- it all comes back to.
21 A. -- to the fact that this was a fraudulent bankruptcy
22 designed to benefit certain insiders.
23 Q. Who?
24 A. Who? The Fertittas.
25 Q. Okay. In their capacity as secured creditors, right?
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1 A. I don't -- I wouldn't say that.
2 Q. You disagree with the proposition that creditors should get
3 paid before shareholders in a bankruptcy case, right? That's
4 really what this comes down to.
5 A. No. I don't disagree with that, but I don't -- I don't
6 have control over that.
7 Q. Okay. I'm going to move on. Your conduct is designed to
8 upset what was put in motion by way of this bankruptcy plan,
9 correct?
10 A. No. It's not correct at all.
11 Q. So you don't want to upset that. You don't want to upset
12 the plan in any way.
13 A. Well, my reason for going for sanctions was to --
14 Q. That's not my question, Mr. Bergeron. My question is do
15 you want to upset what was put in place --
16 A. I don't know what you mean --
17 Q. -- by way --
18 A. -- by upsetting --
19 Q. -- of this plan.
20 A. -- the plan.
21 Q. Do you want to undo the plan in any fashion?
22 A. It can't be undone.
23 Q. All right. I'm glad we agree upon that.
24 A. That doesn't mean damages can be applied for -- for the
25 actions that were taken.
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1 Q. I got it. Why are you threatening to sue members of
2 Xyience for defamation and retaliation for the pleadings that
3 we filed?
4 A. It's not in retaliation at all. It's, perhaps, a little
5 bit inspired by them, but it's not direct retaliation. It's
6 because there's merits to my claims.
7 Mr. Lennon said it himself on the stand that he has never
8 met me. He doesn't know me. He doesn't know the history of
9 the bankruptcy.
10 Yet, he's telling the -- the -- the employees, every
11 employee, through a blanket E-mail that what I'm writing to
12 them is fiction.
13 Q. Okay. So I'm looking at an E-mail you sent me on
14 February 25th from you to me. "Greg, comma" -- the first two
15 lines -- "Just got through reading half your paperwork, period.
16 I guess it's on now, period. The defamation suit against
17 Zyen, LLC, and Manzen will commence now."
18 That statement is that you are going to sue for
19 defamation because of the paperwork I filed,
20 correct?
21 A. Not purely just because of that, though. It's just one of
22 the underlying reasons.
23 Q. All right. What's the defamatory statement you're going to
24 sue for again?
25 A. There's multiple defamatory statements. When -- when he
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1 said --
2 Q. Pick one.
3 A. When he said that I was on the losing end of this lawsuit.
4 Q. What's defamatory about that?
5 A. Because I'm not. I haven't had to pay out a dime to
6 anybody for -- for my actions here. I've been -- I have
7 asked -- been asked to sign a settlement agreement, so I
8 wouldn't call that a win, but it's not a loss.
9 Q. So it's defamatory to say that you have been on the losing
10 end is your testimony.
11 A. Yes. And it was defamatory as I said to call my writing to
12 the employees fiction.
13 Q. Okay.
14 A. Mr. Bullard also said that I showed up at his home
15 according to one of my sources, and I did not.
16 Q. What's defamatory about that?
17 A. It's a lie. He's going around telling people that I showed
18 up at his house when I did not.
19 Q. Are all lies defamatory? I strike it. I'll withdraw the
20 question. Mr. Bergeron, you said in your closing argument that
21 you can't go home. What's compelling you to stay and pursue
22 this company because you didn't like its bankruptcy?
23 A. I would not characterize it because I didn't like the
24 bankruptcy.
25 Q. What's --
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1 A. I didn't like the way it was bankrupted and the reasons it
2 was bankrupted for, and what's compelling me to stay is
3 Judge King entered a ruling saying I can never appear
4 telephonically again in these proceedings.
5 Q. Okay.
6 A. And these proceedings are not going to end tomorrow. It's
7 going to take awhile, so I'm going to stay here awhile, and I'm
8 going to do whatever I can to write the story of the truth that
9 happened with the bankruptcy, and I'm also going to do whatever
10 I can to pursue the 9011 motion.
11 Q. Okay. Understanding now your definition of defamation,
12 your only connection to this case on a prepetition basis was
13 that you alleged that they defamed you in obtaining an
14 injunction, correct?
15 A. No.
16 Q. Were you a creditor, otherwise?
17 A. No.
18 Q. Were you a shareholder?
19 A. No.
20 Q. And --
21 A. It was not just that they -- they defamed me. They sued me
22 for an improper purpose. They sued me for defamation when all
23 I was doing was writing the truth.
24 Q. And a Court agreed with them because they got an
25 injunction, right?
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1 A. A court which had a judge presiding who the Fertittas
2 helped get elected.
3 Q. So that judge was biased.
4 A. I don't know if he was biased, but it seems possible that
5 he was.
6 Q. Okay. Other than that defamation claim, what connection
7 did you have with Xyience on a prepetition basis?
8 A. Well, none that was a business relationship, but I had been
9 writing about them. I had been talking to employees and -- and
10 sources who were giving me information about what was going on
11 there.
12 Q. On page 5 of your opposition, you make the statement,
13 quote, "Since entry of that injunction, comma, Bergeron has
14 willfully and deliberately violated the language of that
15 district court injunction order and subsequently begged that
16 Court and the Bankruptcy Court to sanction him for it." Is
17 that a true statement?
18 A. Yes.
19 Q. So you acknowledge that you have deliberately and willfully
20 violated injunction orders issued by other federal courts.
21 A. Yes.
22 Q. And you acknowledge that you violated the terms of the
23 injunction granted by the state court that you were referring
24 to earlier, correct?
25 A. Yes. Those are all unconstitutional injunctions.
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1 Q. If this Court enters an order barring you from engaging in
2 activity, is it your intent to violate it?
3 A. Well, I will appeal it first.
4 Q. And --
5 A. But I would not outright violate it right away. I would
6 respect this Court's ruling, and then I would appeal it.
7 Q. And if an appellate court didn't agree with you, would you
8 then violate it?
9 A. It depends on the -- what's written --
10 Q. Okay.
11 A. -- within the -- the injunction --
12 Q. Okay.
13 A. -- if it's constitutional or not.
14 Q. Do you currently have any ability to access the company's
15 computer servers?
16 A. No.
17 Q. Can you in the future obtain access? Given your sources
18 and given your resources, do you have the ability to turn that
19 spigot back on if you choose?
20 A. It depends on what you mean by that.
21 Q. Can --
22 A. I can talk to sources. Sure. I can get information from
23 sources. Can I get into the mainframe again? I don't know. I
24 know that they've taken steps to prevent that.
25 They've had Cox officials down there within the last
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1 couple weeks working on the mainframe and trying to make sure
2 that no interference is coming in and no devices are being used
3 to take information.
4 Q. Have you bugged the building?
5 A. No.
6 Q. Other than obtaining records in the way that we discussed
7 through the improper access of the company's servers and other
8 than the conversations we've discussed with unidentified
9 individuals, are you accessing company records?
10 A. At this point, no.
11 Q. Have you ever?
12 A. Yes.
13 Q. Okay. Other than the two we just talked about, identify
14 with specificity the other ways in which you had been accessing
15 the company's records.
16 A. Well, no. I -- I must have misunderstood the question.
17 I --
18 Q. Okay.
19 A. As far as the other methods, I've already described --
20 Q. Okay. So we talked about --
21 A. -- how I've gotten in.
22 Q. We talked about the fact that you accessed the company's
23 servers through a user name and password that you can't recall,
24 right?
25 A. Right.
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1 Q. Was that an isolated user name and password or did they
2 evolve, and you continuously get new information?
3 A. No. It was just one -- that one.
4 Q. Okay. Have you ever attempted to access the company's
5 servers other than through the use of that user name and
6 password?
7 A. No.
8 Q. Have you ever asked an individual within the company to
9 access the servers on your behalf?
10 A. No.
11 Q. Did you dial in to the internal company meetings that
12 Mr. Lennon conducted?
13 A. I did not personally dial in, no.
14 Q. Did you listen to them?
15 A. Yes.
16 Q. Were you listening to them with an employee?
17 A. No.
18 Q. Who outside of employees are you conspiring with to obtain
19 company information?
20 A. I refuse to give up my confidential sources under the
21 shield law.
22 Q. What exactly does the shield law mean to you?
23 A. It's the reporter's shield law which reporters cannot be
24 forced to give up their confidential sources.
25 Q. So you're acting as both a lawyer and as a reporter?
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1 A. No. I'm not acting as a lawyer. I'm a pro se
2 representative of -- of myself in these proceedings.
3 Q. And the shareholders.
4 A. No. I am not a representative of them. I'm asking for
5 relief from them -- for them.
6 Q. On their --
7 A. It does not mean --
8 Q. Okay.
9 A. -- I am representing them.
10 Q. But you're asking for it on their behalf, right? I just
11 want to clarify that.
12 A. I'm asking for relief on their behalf, yes.
13 Q. Okay. Was this person who was listening to the phone call
14 with you a shareholder?
15 A. No.
16 Q. Was it a former employee?
17 A. No.
18 Q. Without identifying who they are, generally, who are they?
19 A. I don't -- I -- I -- I don't understand --
20 Q. Well, I'm trying --
21 A. -- how --
22 Q. -- to understand --
23 A. -- you expect me to answer that without giving up the
24 source.
25 Q. Don't give me the name, but, I mean, I don't understand.
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1 They dialed in for you, right?
2 A. Yes.
3 Q. Why are they interested in Xyience?
4 A. I don't know.
5 Q. Have you been orchestrating any efforts that resulted in
6 phone calls, E-mails, access to company information with this
7 other unidentified individual?
8 A. No.
9 Q. Have you contacted company customers in the last 90 days?
10 A. Not that I'm aware of, no.
11 Q. Have you read Mr. Lennon's declaration --
12 A. Yes.
13 Q. -- that --
14 A. And I know what you're referring to. That's that Chat
15 conversation. That individual I was told was a person who sold
16 Xyience product and was not a customer, but a distributor of
17 sorts. He has a store where he sells items.
18 Q. All right. So it was a distributor of Xyience product, and
19 I mean that in the small definition of distributor, someone who
20 retail sells it. Was --
21 A. Right.
22 Q. Was that designed for the purpose of interfering with the
23 ability of Xyience to sell its product to the market?
24 A. No, not at all. It was seek -- simply seeking information
25 that I had heard he was connected to.
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1 Q. Weren't you attempting to tell him that Xyience had engaged
2 in misconduct, and he shouldn't be selling that product?
3 A. No, not at all. I never mentioned anything like that.
4 Q. What information were you trying to obtain from him?
5 A. Information regarding the allegations against Mr. Villari.
6 Q. Why would you think that he knew anything about
7 Mr. Villari?
8 A. Someone told me that he might be connected to it.
9 Q. But you're unwilling to tell me who, right?
10 A. I can't. I've already mentioned that.
11 Q. Well, you can. You're unwilling to, right?
12 A. Yes.
13 Q. Okay. I think I'm done. Did you try and confront
14 Mr. Lennon at the hotel he was staying at?
15 A. Did I try to confront him? No.
16 Q. Did you travel to a hotel to find Mr. Lennon?
17 A. I went there to see if he was staying there.
18 Q. Why?
19 A. But I did not go there to confront him, specifically.
20 Q. Then why would you ask -- why would you go to inquire
21 whether or not Mr. Lennon is staying at a hotel?
22 A. Because I wanted to know.
23 Q. Why?
24 A. It was a Station Casinos Hotel. I thought it was relevant.
25 Q. Why? Why? Why? Really, I --
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1 A. Because it just goes to the same pattern of insiders
2 benefiting from, you know, the Xyience day-to-day operations.
3 Insider companies have -- are always benefiting while the
4 company is losing money.
5 Q. They own the company. You know that, right?
6 A. Yes, I know that.
7 Q. Okay. And you think it's improper for the owner of a
8 company to benefit from a company they own?
9 A. No. I'm saying that it's improper to -- to tank a company
10 to benefit these other companies. They're basically putting it
11 in deep debt, so these other companies will benefit.
12 Q. Okay. Who's being injured by the company going into debt?
13 A. Who's being injured?
14 Q. Yeah.
15 A. The potential employees are being injured if they're fired
16 because there -- there's a bankruptcy or they -- they're laid
17 off because there's another bankruptcy. As you yourself
18 mentioned, it's possible.
19 Q. No, I didn't.
20 A. You did, too. You wrote it in your pleadings that you
21 think I'm going to cause it.
22 Q. Okay. So you believe that you're also looking out for
23 potential future employees who may lose their job because you
24 think that we're mismanaging the company such that it's going
25 to fail.
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1 A. Yes. Current employees --
2 Q. Okay.
3 A. -- not future employees.
4 Q. And that's part of your motivation is on behalf of these
5 other helpless people who need you to assist them in this
6 process.
7 A. I wouldn't call them helpless, but I -- I do feel the
8 necessary call to -- to make sure that this corruption isn't
9 going to destroy this company yet again.
10 Q. Are you staying with a shareholder while you're in
11 Las Vegas?
12 A. No.
13 MR. GARMAN: I have no further questions, your Honor.
14 THE COURT: All right. Mr. Bergeron, you have two
15 options here. You can basically examine yourself if you want
16 to or you can save anything you have to say for closing
17 remarks.
18 Both you and Mr. Garman have made closing remarks, but
19 that was before there was live testimony of witnesses, so you
20 can wait and respond in that manner if you wish.
21 MR. BERGERON: Yes. I'll wait.
22 THE COURT: If you do choose to give testimony, then
23 you have to be available for further cross-examination by
24 Mr. Garman.
25 MR. BERGERON: I'll wait, your Honor.
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1 THE COURT: All right. Then you may step down,
2 Mr. Bergeron.
3 (Colloquy not on the record.)
4 THE COURT: Mr. Garman, do you have any other
5 witnesses?
6 MR. GARMAN: I do not, your Honor.
7 THE COURT: All right. Then I assume that both
8 parties have concluded the testimony they wish to present, and
9 that we will now go to closing arguments.
10 Is that correct, Mr. Bergeron?
11 MR. BERGERON: Yes, your Honor.
12 THE COURT: Mr. Garman.
13 MR. GARMAN: Yes, your Honor.
14 THE COURT: All right. I don't know -- you made
15 fairly extensive closing remarks before. But if you wish to
16 supplement those remarks, you may do so starting with you,
17 Mr. Garman, as the counsel for the moving parties.
18 MR. GARMAN: Your Honor, I'd simply like to
19 incorporate the arguments I made before particularly on the
20 legal basis.
21 But in summary, we have elicited some new testimony, and
22 the new testimony is that Mr. Bergeron is partially being
23 funded by shareholders.
24 Mr. Bergeron is pursuing what he doesn't call his claims,
25 but some sort of collection in the 9011 process on behalf of
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1 others.
2 He is engaged in the unauthorized practice of law. He has
3 meaningfully refused to answer questions that were contained in
4 his declarations.
5 Ample Ninth Circuit and other compelling authority leads
6 to a negative inference on your part that Mr. Bergeron has only
7 been willing to engage in part of the process.
8 And the fact that he refused to answer questions and
9 candidly in my opinion otherwise implicated himself in criminal
10 activity should be used as a negative inference against him.
11 Mr. Bergeron clearly is not a journalist. We don't need
12 to find ourselves in a messy First Amendment argument.
13 Journalists aren't seeking financial recovery. Journalists
14 don't seek sanctions. Journalists don't cross-examine
15 witnesses. Journalists engage in a public discourse.
16 There are certainly things that Mr. Bergeron could say in
17 a vacuum that would protect themselves by the First Amendment,
18 but, your Honor, this Court is obligated to look at the
19 totality of the circumstances.
20 And the totality of the circumstances is that Mr. Bergeron
21 is attempting to both misuse the journalist process and misuse
22 the court process for his own gain and the gain on behalf of
23 shareholders.
24 He answered during his cross-examination that the nexus of
25 his alleged conspiracy is that the company misapplied sources
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1 of a prepetition loan, and that the secured creditors otherwise
2 shouldn't have been able to benefit from the bankruptcy.
3 That argument has long since left the building, and his
4 affirmative motions to upset the plan process have been denied.
5 His affirmative motion to recuse Judge Nakagawa has been
6 denied.
7 He has been denied on every front, including the
8 defamation claims and the affirmative claims he brought on
9 behalf of the shareholders against my clients at every turn.
10 I too wish that I could give Mr. Bergeron a flight back to
11 Boston. He could go log on his site about how he thinks that
12 we're ruining the world, and we could both live in peace.
13 In fact, for a couple of years, that's candidly what
14 happened. He would take shots at us occasionally through
15 judicial court proceedings or the like, but he was a nuisance.
16 He's turned from a nuisance into a threat.
17 No one lightly goes to the police. Other than having my
18 car broken into, I have not ever gone to the police to report a
19 threatening act. I feel threatened by Mr. Bergeron's conduct.
20 I am uncertain as to what he will do on a going-forward basis.
21 Mr. Villari has been to the police more than five times
22 because of Mr. Bergeron's activity that's only beginning to
23 come to light.
24 The injunction by way of the plan is specifically designed
25 to prevent Mr. Bergeron and others like him from hacking into
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1 our servers, calling our customers, phoning our employees.
2 As the supplemental declaration of Mr. Lennon said, we
3 had an employee quit yesterday because of Mr. Bergeron's
4 conduct.
5 MR. BERGERON: Your Honor, I object to the admission
6 of those. I didn't have a chance to respond in paper, and they
7 were filed long past the deadline that I was required --
8 MR. GARMAN: Mr. --
9 MR. BERGERON: -- to --
10 MR. GARMAN: Mr. --
11 MR. BERGERON: -- to meet.
12 MR. GARMAN: Mr. Bergeron, you cross-examined Mr. --
13 Mr. Bergeron cross-examined Mr. Lennon and had his opportunity
14 to challenge those statements.
15 Nevertheless, this company is by the evidence that
16 Mr. Bergeron elicited during testimony spending tens of
17 thousands of dollars on this nonsense.
18 And this Court has ample authority under 105, 1142,
19 Rule 3020(d) to issue the injunction that's -- to enforce the
20 injunction, not issue, to enforce the injunction that's set
21 forth by way of the plan.
22 And what we would ask you to do in light of the fact of
23 Mr. Bergeron's admitted conduct and the fact that he willfully
24 violates court orders is to issue a very specific court order
25 as set forth in paragraph 30 and 31 of my motion enjoining him
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1 from any further contact, communication, blogging, or the like
2 with all those parties identified.
3 This isn't a First Amendment case. It is admitted -- and
4 you should take judicial notice of his statements -- that he is
5 pursuing claims against us.
6 And he's attempting to engage in this conduct in the
7 pursuit of his pecuniary interest or the interest as a crusader
8 for those who can't protect themselves on behalf of
9 shareholders.
10 And, your Honor, I encourage you to ignore the hyperbole
11 and red herring that is these issues of prior restraint and the
12 First Amendment and the like because you can make a factual
13 finding that Mr. Bergeron is engaged in this conduct in his
14 capacity as a party to these proceedings, and he should be
15 enjoined, and this should come to an end.
16 THE COURT: Mr. Bergeron.
17 MR. BERGERON: Your Honor, the idea that you can
18 just ignore the First Amendment I think is pretty
19 preposterous.
20 There's a section in the pleading that I filed yesterday
21 which clearly outlines the protections the Internet also has in
22 addition to the regular news media, and I'd ask you to review
23 that before you make any decision on an injunction.
24 Secondly, the injunction that's requested is by no means
25 specific at all. It blankets me from going to any MMA gym and
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1 talking to any MMA gym employees, and my business is normally a
2 fight news site that I run, so that would prevent me from doing
3 my job.
4 Secondly, the -- the idea that the shareholders are
5 providing me all this money for something other than expenses
6 is completely wrong.
7 I've only asked for money from shareholders for basic
8 expenses which I don't get paid. He can get his expenses paid
9 for his work, but I don't. I don't collect any hourly wage
10 whatsoever. The only way I ever get paid is if I get a
11 judgment.
12 And I feel like at certain times in these proceedings,
13 specifically, in the last hearing, I've been focussed on and
14 punished in ways for the advantages that I have for not having
15 any overhead, and that's just the reality of the system.
16 I'm a representative of myself, so I have that advantage.
17 He's a representative of a client who pays him hundreds of
18 dollars an hour, so he has that advantage. I don't think I
19 should be punished for having an advantage.
20 At the end of the day, I think it should equal out if the
21 two parties think they have the facts on their sides and argue
22 it well enough.
23 And as far as my private investigation and my writing, I
24 am a journalist. I graduated with a degree in English from
25 Norwich University.
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1 I have written for two newspapers and published articles
2 in three magazines. To say that I'm not a journalist is a lie
3 plain and simple.
4 Finally, your Honor, the case against me that started all
5 of this that was dragged into these bankruptcy proceedings has
6 never been prosecuted. Since it came into the bankruptcy, it's
7 just been sat on. They haven't done anything to advance it.
8 Specifically, Laurel Davis in one piece of paperwork said
9 that the case was costing the estate money that it probably
10 shouldn't be spending.
11 And as far as this employee who quit, there is no evidence
12 she quit because of me except for an accusation from a person
13 that is not her, and he has provided no statement that she
14 made, no letter of resignation to prove that that was because
15 of me.
16 And, finally, your Honor, Backman, the Attorney Backman,
17 who's the liquidation trust, he has made almost all of the
18 allegations that I have made in his paperwork, almost all.
19 Everything that I've written about before this case
20 commenced he is suing over as far as the -- the deepest
21 corruption, and he's pursuing multiple adversary claims.
22 He settled some of those adversary claims. He settled the
23 Rule 9011 motion, so, obviously, he thought there was some
24 merit to that or else he wouldn't have done that.
25 Now, your Honor, I think the whole reason why I'm here is
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1 because, obviously, what I'm doing is affecting my opposition.
2 They are concerned that I'm getting so much truth it's going to
3 make them look bad in the long run.
4 And I shouldn't be punished for that because I'm out to
5 promote the truth and print the truth, and I don't see why any
6 injunction is necessary.
7 I'm willing right here and now to stipulate that I will
8 not contact any current employees. But as far as any past
9 employees, any MMA gyms, any customers, and all of this
10 other -- these other names and classes of people that are
11 included in this injunction, I can't agree to that.
12 That's unconstitutional, and it's a prior restraint, and
13 you can't ignore the First Amendment because that will be
14 grounds for appeal.
15 So I do not see any reason why it would be necessary,
16 first of all, to provide an injunction in this scenario. And
17 if there is an injunction, if there is a need in your mind to
18 file one, then just make it so that I cannot contact the
19 current employees.
20 And I'll be fine with that as long as I can still take
21 contact from them, the sources that I have that I will not
22 reveal, but they have every right to talk to me under the
23 Whistle-Blower Protection Act.
24 So if they have information that they think is actionable
25 that I should know that I should either write about or include
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1 in this suit or another suit, then why not?
2 I don't see the reasoning for denying me the ability to do
3 my job. This is a story like I said like Mr. Garman cited that
4 has become my life. If I don't succeed here in the writing
5 area and in the court, I may never even be able to write about
6 all of this.
7 In my whole last four years plus of work investigating and
8 prosecuting the case and items that I've tried to -- to bring
9 will be a waste.
10 So I'm inspired to keep going, and I'm doing it under the
11 tenants of what I know best works and what I feel is
12 responsible activities under the law. I have no further
13 remarks.
14 THE COURT: Is the matter submitted?
15 MR. GARMAN: The movants submit, your Honor.
16 THE COURT: All right. The matter is submitted, and
17 the motion for injunctive relief will be granted. This Court
18 has continuing jurisdiction and jurisdiction specifically for
19 injunctive relief as is provided in the plan.
20 I'm satisfied that this is a proper proceeding by way of
21 motion, rather than an adversary proceeding because of the
22 exception that was added to Rule 7001-7.
23 I believe that that rule is intended to minimize the
24 interference with the business operations of debtors just
25 surviving a reorganization proceeding and to allow some
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1 streamlining of problems allowing practice by motion, rather
2 than by full-blown adversary proceedings.
3 I'm satisfied that Mr. Bergeron lacks standing to
4 represent shareholders. He stated in court this morning that
5 he'd like to have $65,000,000 for the shareholders.
6 Whether that's by way of sanctions or damages or anything
7 else, it doesn't matter. It still indicates a desire or an
8 intent to represent the parties that Mr. Bergeron has no
9 authority to represent.
10 To the extent that there is representation, there's also
11 the unauthorized practice of law, so there is a violation of
12 the plan injunction.
13 There's been harassment of employees and their families
14 and professionals for Zyen. There are unsupported allegations
15 against Mr. Villari that he's been involved in sales of
16 steroids and methamphetamines. There has been interference
17 with Zyen's business, hacking into its server, listening in on
18 phone conversations.
19 Well, there was reference to a prior proceeding in the
20 U.S. District Court in the Southern District of Indiana in
21 which Mr. Bergeron was sanctioned, held in contempt, under
22 somewhat similar circumstances involving Internet proceedings.
23 Interestingly enough, when I saw those papers, I had
24 discovered for the first time that another judge had said that
25 Mr. Bergeron was not to make any more telephonic appearances.
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1 The employees and professionals involved in this case have
2 felt necessary to get numerous protective orders against
3 Mr. Bergeron.
4 The way that he has dealt with them and their families
5 certainly is cause for them to feel threatened. There's no
6 cause under any circumstances to have any mention of the
7 children, for example, of the employees or of their related
8 persons.
9 The litigation concerning the filing of this bankruptcy
10 and if they were improper motives relative that filing to the
11 filing of the Xyience bankruptcy case are, in fact, being
12 pursued by Mr. Backman and the litigation trustee.
13 That's the proper party to pursue this matter. It's not
14 something for Mr. Bergeron or anyone else to proceed. The
15 litigation is going forward in this court, and that's the way
16 it should be done.
17 Mr. Bergeron has admitted violating of the Court's
18 injunction. The refusal to answer questions about sources is
19 proper for a journalist, but it also to some extent undermines
20 the strength of the position of being advocated by the
21 journalist.
22 I'm a little concerned about the crusading-journalist
23 claim. Journalists I think are supposed to report facts, not
24 to try to create facts which is what, certainly, as far as
25 Mr. Villari is concerned appear to be say unsubstantiated
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1 allegations against him are going on.
2 So I'll accept the journalist classification, but I think
3 it's being undermined by the way that Mr. Bergeron is
4 proceeding specifically with regard to Mr. Villari and also
5 with interfering with the business of the debtor by
6 communications with employees and unauthorized access to Zyen's
7 server and listening in on conference calls.
8 So for all of those reasons, the injunctive relief is
9 proper. Mr. Bergeron has suggested that there might be some
10 provisions that would be agreeable to him.
11 So, Mr. Garman, I would like you, please, to prepare
12 proposed findings of fact, conclusions of law, and the form of
13 injunction. You may prepare the injunction consistent with the
14 moving papers.
15 But please submit the proposed findings and conclusions
16 and the proposed order to Mr. Bergeron before you send them to
17 the Court, then I will go -- I don't have your proposed
18 injunction --
19 MR. GARMAN: Right.
20 THE COURT: -- before me now, so I will do any
21 editing that I feel is appropriate after I have received the
22 documents.
23 Is there anything else that needs attention --
24 MR. GARMAN: And --
25 THE COURT: -- today?
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1 MR. GARMAN: Yes, your Honor. I hate to complicate
2 this at all. Mr. Bergeron has refused to accept service of
3 documents via E-mail, and all he's given me is a
4 Post Office Box I believe in New Hampshire.
5 Would your Honor's order be modified to permit me to send
6 him my proposed findings and the proposed injunction via E-mail
7 to the address that he's acknowledged is his in court, so that
8 we may proceed to get this done timely?
9 THE COURT: Any objection to that, Mr. Bergeron?
10 MR. BERGERON: No, your Honor. I do have something
11 else, though. Is there ever going to be an order entered on
12 the last hearing?
13 THE COURT: Yes.
14 Mr. Garman, I believe you were asked to submit an order --
15 MR. GARMAN: Yeah.
16 THE COURT: -- from the February 10th hearing, and I
17 don't think one has come in, yet.
18 MR. GARMAN: No, your Honor. I intentionally did not
19 submit that order in anticipation of today as to prevent an
20 argument that this Court was divested of some sort of
21 jurisdiction. So now that we are concluded, it will be
22 forthcoming.
23 THE COURT: Well, you will please -- in fairness to
24 Mr. Bergeron, he indicated at the conclusion of that hearing
25 that he wished to proceed by way of appeal.
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1 MR. GARMAN: Yes.
2 THE COURT: So please submit the proposed order, so
3 that Mr. Bergeron's appellate rights are not --
4 MR. GARMAN: I will do so.
5 THE COURT: -- delayed.
6 MR. GARMAN: I will do so promptly, your Honor.
7 THE COURT: All right. Anything else that requires
8 attention?
9 Apparently not. All right.
10 Thank you very much to everyone.
11 That concludes our hearing, and all parties are excused.
12 MR. GARMAN: Thank you, your Honor.
13 CLERK VEGAS: Court stands in recess subject to call.
14 (Court concluded at 02:18:30 p.m.)
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1 I certify that the foregoing is a correct transcript
2 from the electronic sound recording of the proceedings in
3 the above-entitled matter.
4
5
6 /s/ Lisa L. Cline 03/10/11
_______________________________ ________
7 Lisa L. Cline, Transcriptionist Date
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