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					 1   Christopher R. Kaup
     State Bar No. 014820
 2
     Third Floor Camelback Esplanade II
 3   2525 East Camelback Road
     PHOENIX, ARIZONA 85016B4237
 4   TELEPHONE: (602) 255-6000
     FACSIMILE: (602) 255-0103

 5   Counsel for Biltmore Associates, Trustee
     of the Visitalk Creditors’ Trust
 6

 7                                    UNITED STATES DISTRICT COURT

 8                                           DISTRICT OF ARIZONA

 9

10    BILTMORE ASSOCIATES, as Trustee for
      the Visitalk Creditors’ Trust,                          Case No. 02-2405-PHX-HRH
11
                                           Plaintiff,
                                               PLAINTIFF’S SEPARATE
12                                         CONTROVERTING STATEMENT
           vs.                                OF FACTS IN SUPPORT OF
13
                                             RESPONSE TO DEFENDANT
      PETER THIMMESCH and CYNTHIA           SNELL & WILMER’S MOTION
14
      THIMMESCH, husband and wife; MICHAEL
                                             FOR SUMMARY JUDGMENT
15    O’DONNELL and MARSHA O’DONNELL,
      husband and wife; et al.,
                                                                      [ORAL ARGUMENT
16
      Defendants.                                                       REQUESTED]
17

18                                                                            (Assigned to
                                                                  the Honorable H. Russel Holland)
19

20
              Biltmore Associates, LLC (“Biltmore” or the “Plaintiff”), the Plaintiff in the above
21
     action, pursuant to the provisions of the Rule 56, Federal Rules of Civil Procedure,
22

23   hereby submits its Separate Controverting Statement of Facts (“CSOF”) in Support of its

24   Response to the Motion for Summary Judgment filed by Defendant Snell & Wilmer,
25   L.L.P. (“S&W”).
26
     ///

 Case 2:02-cv-02405-HRH
   343545.1/11400-001                     Document 384
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 1                   RESPONSES TO S&W’S STATEMENT OF FACTS
 2          1.     The statement that Visitalk.com, Inc. (“Visitalk”) “was formed in 1998 by
 3
     Peter Thimmesch and Michael O’Donnell” is unsupported by S&W’s citation to the
 4
     record in ¶1 of its Statement of Facts (the “SOF”). Plaintiff does not dispute that Visitalk
 5
     was formed on September 3, 1998. (Attached hereto as Exhibit “1” is a true and correct
 6

 7   copy of Visitalk’s Articles of Incorporation, dated September 3, 1998.) Plaintiff disputes

 8   any implication that only Mr. Thimmesch and Mr. O’Donnell “formed” Visitalk because

 9   Mr. Thimmesch has testified that Mark Cardwell was one of the three “founders” of
10
     Visitalk. (Transcript of Deposition of Peter Thimmesch (“Thimmesch Depo.”), attached
11
     hereto as Exhibit “2”, at 72:21- 73:18; 76:22 – 77:13). Also, Visitalk’s Unanimous
12
     Consent of Board of Directors In Lieu of Organizational Meeting, original stock transfer
13

14   ledger, stock certificate stubs and an audit report by Ernst & Young, L.L.P., demonstrate

15   that Mr. Cardwell, Mr. Thimmesch and Mr. O’Donnell were issued shares of stock in

16   Visitalk on the same day, September 4, 1998. (Unanimous Consent of Board of Directors
17
     In Lieu of Organizational Meeting, dated September 4, 1998, attached hereto as Exhibit
18
     “3”; Stock Transfer Ledger and three stock certificate stubs, attached hereto as Exhibit
19
     “4” and Ernst & Young audit report, dated November 23, 1999, at p. F-5 (Statement of
20
     Changes in Shareholders Equity), attached hereto as Exhibit “5”).
21

22          2.     Plaintiff disputes that Visitalk provides the “same products and services

23   today. Although the services and products currently provided by Visitalk are quite
24   similar from an end-user perspective as they were in 2000, the technology infrastructure
25
     currently underlying Visitalk’s products and services is completely different then in early
26
     2001 and was specifically redesigned, written and implemented to be massively
 Case 2:02-cv-02405-HRH
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 1   economically scaleable. (Declaration of Michael Williams (the “Williams Declaration”),
 2   at ¶24, attached hereto as Exhibit “6”).
 3
            3.     Plaintiff disputes that Visitalk was “[l]ike hundreds of aspiring “.com”
 4
     entities that were dependant on investor funding in their early stages” because that
 5
     statement is unsupported by S&W’s citation to the record, the referenced testimony of
 6

 7   Allan Kaplan.    Plaintiff also disputes the implied assertion in ¶3 of the SOF that

 8   Visitalk’s financial problems were caused by any bursting of a “.com bubble.” Rather,

 9   Visitalk was insolvent prior to April of 2000 and the company’s financial problems were
10
     caused by other factors such as almost no income from business operations, grossly
11
     excessive and wasteful spending, incompetent management by Messrs. Thimmesch and
12
     O’Donnell, breach of fiduciary duties by certain officers and lawyers at S&W, lack of
13

14   financial and operational controls and the failure to address and obtain the release of

15   claims against the company.       (Affidavit of Robert Corry (the “Corry Affidavit”),

16   Visitalk’s former Chief Financial Officer, at ¶¶3, 9 – 13, 15 – 17, and 19 – 26, attached
17
     hereto as Exhibit “7”; Transcript of the Deposition of Robert Corry (the “Corry Depo” ),
18
     attached hereto as Exhibit “8”, at 23:14 – 28:16; 29:10 – 30:12; 32:3 – 24; 36:3 – 37:4;
19
     40:5 – 15; 43:18 – 45 – 6; 54:17 – 56:23; 57:24 – 58:3; 63:9 – 64:1; 65:11 – 66:6; 69:20 –
20
     71:4; 72:20 – 73:8; 74:19 – 77:5; 84:22 – 85:3; 104:21 – 106 – 22; Transcript of the
21

22   Deposition of Allan Kaplan (the “Kaplan Depo”), attached hereto as Exhibit “9”, at 67:19

23   – 68:21; 130, 12 – 16; 132:21 – 133:11; 137:4 – 17; Transcript of the Deposition of
24   Debra Kuhns (the “Kuhns Depo”), Visitalk’s former Vice President of Marketing,
25
     attached hereto as Exhibit “10”, at 12:23 – 13:5; 15:2 – 7; 45:23 – 46:16; 65:24 – 66:13;
26
     67:8 – 17; 68:23 – 69:12; 72:6 – 73: 82:20 – 83:6; 121:16 – 122:9; Transcript of the
 Case 2:02-cv-02405-HRH
   343545.1/11400-001           Document 384
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 1   Deposition of Ray Gaston (the “Gaston Depo”), Visitalk’s former Controller, attached
 2   hereto as Exhibit “11” at 51:14 – 24; 66:18 – 67:4; 71:7 – 11; 72:9 – 73:4; 82:20 - 84:15
 3
     – 25; 85:18 – 25; 86:23 – 87:24; 225:22 – 226:5; 226:14 – 21; 266:22 – 267:1; 269:11 –
 4
     22; 270:22 - 272:20; 460:23 – 461:8; 464:14 – 465:11; 469:23 – 470:8; 477:21 – 478:10;
 5
     484:23 – 485:7; 505:17 – 507:10. Plaintiff does not dispute that Visitalk filed for
 6

 7   bankruptcy in November, 2000 giving rise to Case No. 00-13035-PHX-RTB (the

 8   “Bankruptcy Case”).

 9          4.     The statement in ¶4 of S&W’s SOF is not supported by a citation to the
10
     record. Plaintiff disputes that a trustee was “never appointed in the Visitalk bankruptcy”
11
     because Biltmore was appointed by the Bankruptcy Court to serve as the Trustee of the
12
     Visitalk Creditors’ Trust (the “Trust”) by an Order entered on October 19, 2004 (the
13

14   “Appointment Order”). (Appointment Order, attached hereto as Exhibit “12”). Plaintiff

15   does not dispute that a trustee was not appointed in the Bankruptcy Case prior to

16   confirmation of Visitalk’s Second Amended Chapter 11 Plan (the “Plan”) ;
17
            5.     Although the statement in ¶5 of S&W’s SOF is not supported by a citation
18
     to the record, Plaintiff does not dispute that statement;
19
            6.     Plaintiff disputes the assertion in ¶6 of S&W’s SOF that it is a “purported”
20
     assignee of Visitalk’s claims. Such an assertion is not supported by S&W’s citation to
21

22   the record as all such claims were actually assigned to the Visitalk Creditors’ Trust (the

23   “Trust”), pursuant to a final nonappealable Order (attached to S&W’s SOF as Exhibit E”)
24   confirming Visitalk’s Second Amended Chapter 11 Plan (the “Confirmation Order”)
25
     entered by the Bankruptcy Court on August 27, 2004 which provided for the creation of
26
     the Trust at Article XII of the Plan, the final nonappealable Appointment Order, entered
 Case 2:02-cv-02405-HRH
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 1   on October 19, 2004, and a final nonappealable Order Clarifying Article XII of the
 2   Confirmed Plan (the “Clarification Order”), entered by the Bankruptcy Court on
 3
     December 15, 2004. (Appointment Order, Exhibit “12” & Clarification Order, attached
 4
     hereto as Exhibit “13”). The Plan explicitly provides as follows:
 5
           Effective on the Effective Date, the Creditor’s Trustee will be the
 6
           representative of the Estate as that term is used in Bankruptcy Code
 7         §1123(b)(3)(B) and will have the rights and powers provided for in a
           Bankruptcy Code in addition to any rights and powers granted herein to
 8         pursue the Causes of Action. In his or her capacity as the representative of
           the Estate, the Creditor’s Trustee will be the successor in interest to the
 9         Debtor with respect to the Causes of Action.
10
           ***
11
           (k) Transfer of Trust Property to the Creditor’s Trust. Except as otherwise provided in the
12         Plan, title to the Trust Property, including the Causes of Action and the $50,000 from the
           Causes of Action Proceeds, will pass to the Creditor Trust on the Effective Date free and
13         clear of all claims and equity interest in accordance with Bankruptcy Code §1141.

14   (Williams Declaration, Exhibit “6,” at ¶¶6 & 13, Exhibit “6” & Plan, Exhibit “A” to the
15   Williams Declaration, at p. 36, lns. 15 – 20; p. 39, lns 3 - 10; Declaration of Vernon
16
     Schweigert, Managing Member of the Plaintiff (the “Schweigert Declaration”), at ¶4,
17
     attached hereto as Exhibit “14” ). The Plaintiff also disputes any implication in ¶6 of the
18
     SOF that persons who purchased preferred stock from Visitalk (the “Investor Creditors”)
19

20   through its Series A Offering of Preferred Stock (the “Series A Offering”), its Series B

21   Offering of Preferred Stock (the “Series B Offering”), and its Series C Offering of
22   Preferred Stock (the “Series C Offering”) did not hold claims against Visitalk and the
23
     Bankruptcy Estate.     Mr. Kaplan, one of Visitalk’s directors and a Series A and B
24
     investor, testified he believes that he and other Investor Creditors held claims against
25
     Visitalk. (Kaplan Depo, Exhibit 9, at 29:7 – 13 – 30 – 7; 67:19 – 68:21; 132:25 –
26
     133:11). Steve DelBianco, a Series C investor, also testified that Visitalk’s failure to
 Case 2:02-cv-02405-HRH
   343545.1/11400-001            Document 384
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 1   make disclosures regarding the claims held by Series A and B investors, the claimed
 2   issuance of certain founders warrants to Mr. Thimmesch and Mr. O’Donnell after the
 3
     closing of Series A Offering and other securities law problems was material to him.
 4
     (Transcript of Deposition of Steve DelBianco, attached hereto as Exhibit “15”, at 23:15 –
 5
     25:6; 51:5- 52:10).    Visitalk’s former controller, Mr. Gaston, also testified that he
 6

 7   understood that the Investor Creditors held claims against Visitalk.       (Gaston Depo,

 8   Exhibit 11, 225:22 – 226:5; 465:6 - 10) In fact, the Plan, the Disclosure Statement filed

 9   in support of the Plan, the Clarification Order and agreements executed by the Investor
10
     Creditors and the Reorganized Debtor after confirmation of the Plan recognize the fact
11
     that each of the Investor Creditors held actual claims against Visitalk and its Bankruptcy
12
     Estate. (Williams Declaration, Exhibit “6,” at ¶¶8 – 12, 15 – 21; Declaration of Renee
13

14   Jenkins, attached hereto as Exhibit “16,” at ¶¶5, 8, 9, 11 – 17; Schweigert Declaration,

15   Exhibit “14,” at ¶¶7, 11, 16).

16          7.     Plaintiff disputes that the Plan “purported to select a ‘creditors trust’ ”
17
     because that assertion is not supported by the record. The Trust was created by operation
18
     of the Confirmation Order to which all causes of action owned by the Bankruptcy Estate
19
     were actually transferred on the “Effective Date” of the confirmation of the Plan,
20
     pursuant to the terms of the Plan. (Plan, Exhibit “A” to the Williams Declaration, at
21

22   Article XII, pp. 34 – 42).

23          8.     Plaintiff does not dispute the statement in ¶8 of S&W’s SOF;
24          9.     Plaintiff does not dispute the statement in ¶9 of S&W’s SOF;
25
            10.    Plaintiff agrees that Biltmore is the Trustee of the Trust. Biltmore disputes
26
     that it and the Trust are “wholly unrelated to Visitalk” because the Trust was created by
 Case 2:02-cv-02405-HRH
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 1   operation of the Plan and the Order confirming the Plan and Biltmore was appointed as
 2   the Trustee of the Trust, pursuant to order of the Bankruptcy Court.                               (Schweigert
 3
     Declaration, Exhibit 14, at ¶¶3 – 7).
 4
             11.      Plaintiff does not dispute that it, in its separate individual capacity, had no
 5
     attorney-client relationship with S&W during its representation of Visitalk and that it is
 6

 7   the Trustee of the Trust which was assigned all of the causes of action owned by the

 8   Visitalk bankrutptcy estate. (Schweigert Declartion, Exhibit 14, at ¶¶3 – 7).

 9           12.      Plaintiff does not dispute the statement in ¶12 of S&W’s SOF.
10
             13.      Plaintiff does not dispute the statement in ¶13 of S&W’s SOF.
11
             14.      Plaintiff does not dispute that Bryan Cave prepared a document titled
12
     “Action by Unanimous Consent of the Board of Directors in Lieu of Special Meeting
13

14   which is dated “as of” September 12, 1998. Plaintiff disputes the implied assertion in

15   that ¶14 of S&W’s SOF that Visitalk actually authorized the issuance of 7,650,000

16   warrants to purchase Visitalk common stock on September 12, 1998.                                   Documents
17
     prepared by S&W in July and October 1999 and in March of 2000 contradict that implied
18
     assertion. Letter from Michael Donahey to Steven Best1, dated July 28, 1999, at pp. 1 –
19
     2, attached hereto as Exhibit “17”; S&W Office Memorandum, at p. 1, n. 1, attached
20
     hereto as Exhibit “18”; S&W Office Memorandum, “current as of 2:00 p.m. on October
21

22   22, 1999,” at p. 3 [Bates No. VT007167] ¶(C)(1)2, attached hereto as Exhibit “19”;

23

24
     1
       Mr. Donahey wrote in the third full paragraph of this letter that he understood Messrs Thimmesch and O’Donnell
25   authorized the Founders’ Warrants “in early November, 1998” and the “issuance of the Foounder’s (sic) Warrants . .
     . actually occurred in early November [1998].”
26   2
       S&W observed in this paragraph of this memo that “[t]here is no known documentary evidence to support
     Michael’s and Peter’s assertions that, on September 12, 1998, acting in their respective capacities as the sole
     directors of Visitalk, they resolved to issue the Founder’s warrants to themselves. . . . The Action by Unanimous
 Case 2:02-cv-02405-HRH
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 1   Memorandum3 from Mr. Donahey to Mr. Best, dated March 6, 2000, attached hereto as
 2   Exhibit “20”, at p. 2. Even Mr. O’Donnell agreed the statement in Mr. Donahey’s letter
 3
     that the Founders’ Warrants were not issued until early November, 1998, was accurate.
 4
     He also conceded that he did not disagree with “the fact from a paperwork standpoint”
 5
     that the Founders’ Warrants “were issued in early November.” Mr. Hirschberg, one of
 6

 7   Visitalk’s directors, testified that the statement that the Founders Warrants were

 8   authorized in early November, 1998, was consistent with his understanding of the facts.

 9   Mr. Gaston testified that he understood the Founders Warrants did not exist and had not
10
     been issued to Messrs. Thimmesch and O’Donnell at the time the Series A Offering
11
     documents were circulated to investors. (Transcript of Deposition of Michael O’Donnell
12
     (the “O’Donnell Depo”), attached hereto as Exhibit 21, at 151:12 – 152:21; Transcript of
13

14   Deposition of Jeffrey Hirschberg, (the “Hirschberg Depo” ) attached hereto as Exhibit 22,

15   at 52:3 – 17; Gaston Depo, Exhibit “11”, at 234:6 – 18). S&W also concluded that each

16   of the Series A investors held potential claims against Visitalk because Thimmesch and
17
     O’Donnell authorized and issued the Founders Warrants after the sale of the Series A
18
     stock. (Letter from Michael Donahey to Steven Best, dated July 28, 1999, at pp. 1 – 3,
19
     Exhibit “17”).
20
             15.      Plaintiff does not dispute the statement in ¶15 of S&W’s SOF.
21

22

23

24
     Consent [relating to the Founders’ Warrants identified in ¶14 of the SOF] is ineffective even today.” [Emphasis
     supplied.]
25
     3
       In this Memorandum, Mr. Donahey tells Mr. Best the key fact he had failed to disclose to the Series A investors in
26   the letter and Release of Claims, Mr. Kaplan and the other directors: the Founders Warrants had been issued in early
     November, 1999.

 Case 2:02-cv-02405-HRH
   343545.1/11400-001                  Document 384
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 1           16.      Plaintiff does not dispute the first sentence in ¶16 of S&W’s SOF. Plaintiff
 2   disputes the implied assertion in ¶16 that Visitalk’s Board of Directors made an effective
 3
     and informed decision at the November 24, 1999 Board Meeting regarding the potential
 4
     alternative solutions to problems with the Founders Warrants. S&W failed to inform the
 5
     entire Board regarding the actual chronology and truth regarding the claimed issuance of
 6

 7   the Founders’ Warrants and provided the Board with false information about actions

 8   Messrs. Thimmesch and O’Donnell would take if the Board refused to recognize the

 9   validity of the Founders’ Warrants. (Compare Letter from Donahey to Best, dated July
10
     28, 1999, at pp. 1 – 2, Exhibit “17”; S&W Office Memorandum, at p. 1, n. 1, Exhibit
11
     “18”; and S&W Office Memorandum, at p. 3 [Bates No. VT007167] ¶(C)(1), Exhibit
12
     “19” with S&W Memorandum to the Visitalk Board of Directors, dated November 2,
13

14   1999, attached hereto as Exhibit “23”; Kaplan Depo at 68:14 – 21; 82:15 – 84:2; 85:3 –

15   20; 90:10 – 22; 103:21 – 105:22; 111:3 – 112:14; 112:14 – 114:85; 132:2 – 133:11;

16

17

18

19

20
     4
      Mr. Kaplan testified that he believes no one from S&W disclosed to him or the Board of Directors during a board
21   meeting or in any writing that the Unanimous Consent relating to the claimed authorization of the Founders
     Warrants was ineffective.
22
     5
      For example, Mr. Kaplan acknowledged that the matters in the July 28, 1999 letter were not in the November 2
23   Memorandum to the Board. He also believes S&W should have included that information in the Memorandum in
     order to fully and adequately inform the Board about the problems with the Founders Warrants. He also believes
     S&W should have disclosed to the Board the “information under the words ‘Characterizing the Issuance of the
24   Warrants’ on the third page” of S&W’s internal October 22, 1999 Office Memorandum (Exhibit 19 hereto).

25

26


 Case 2:02-cv-02405-HRH
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 1   Thimmesch Depo., at 185:4 – 236; 206:2 – 207:177; O’Donnell Depo, Exhibit “21”, at
 2   156:1 – 157:88; 167:2 – 168:6).
 3
                17.     Plaintiff disputes the statements in ¶17 of the SOF. First, the statement in
 4
     ¶17 that there was a “thorough” discussion of the Founders’ Warrant “resolution” is
 5
     unsupported by the citations to the deposition of Mr. Best and the deposition of Mr.
 6

 7   Thimmesch. Contrary to S&W’s assertion, Mr. Best did not testify the discussion of that

 8   issue was “thorough.” He did not even recall who attended the meeting. (Best Depo

 9   January 21, 2005, Exhibit “24”, at 33:3 – 34:23). Mr. Thimmesch also did not testify
10
     about a “thorough” discussion of the matter. Second, Plaintiff disputes that no S&W
11
     attorney participated in the explanation to the Board of the “background on the Founder’s
12
     Warrants” or attended the Executive Session during the Board of Directors meeting on
13

14   November 24, 1999.               The Minutes from that meeting state that S&W lawyers Mr.

15   Mallery and Mr. Donahey attended the meeting and the “background on the Founder’s

16   Warrants was explained to the Board” prior to the start of the Executive Session. Third,
17
     the Minutes do not reflect that Messrs Donahey and Mallery left the meeting during the
18
     Executive Session. (Minutes of Board Meeting, dated November 24, 1999, attached
19
     hereto as Exhibit “25”, at pp. 1 & 4 – 5). Fourth, Mr. Donahey revised a draft of those
20

21

22

23   6
         Mr. Thimmesch testified he never saw the letter from Mr. Donahey dated July 28, 1999.
24   7
      According to Mr. Thimmesch, the statement in the Memorandum from S&W to the Board of Directors that he
     would leave the company or sue Visitalk if the Board refused to issue stock to him under the terms of the claimed
25   Founders Warrants “ridiculous” and “never in my mind”.

26   8
      Mr. O’Donnell testified he agreed with and understood that the “paperwork” to cause the issuance of the
     Fouonders’ Warrants did not happen until early November, 1998, but did not think or understand that S&W had
     concluded the warrants did not exist in early September.
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                             -10- Filed 07/24/2007
                                        Document 384                                     Page 10 of 38
 1   Minutes and sent it to Amanda Turley, Mr. O’Donnell’s executive assistant. The original
 2   version of these minutes read as follows:
 3
            “The background on the Finder’s Warrants was explained to the Board. The point
 4          was made that it was a technical error that caused the founder’s not to follow
            proper notification. The Board went into executive session where the options
 5          were reviewed.”
 6
     (E-mail from Mr. Donahey to Ms. Turley and attached redlined draft of the November
 7
     24, 1999 Minutes [Bates No.s SWDS0400 – 0408], at Bates No. SWDS0406.)
 8
     Significantly, Mr. Donahey deleted the words describing the explanation given to the
 9
     Board (“a technical error”) prior to the Executive Session from the final version of the
10

11   Minutes. (E-mail from Mr. Donahey to Ms. Turley and attached redlined draft of the

12   November 24, 1999 Minutes [Bates No.s SWDS0400 – 0408], at Bates No. SWDS0406,
13   attached hereto as Exhibit “43”). Finally, the original version of these Minutes is wholly
14
     consistent with the testimony of Mr. Kaplan, identified above in ¶16, that the truth
15
     regarding the Founders’ Warrants was not disclosed by S&W to the directors during any
16
     Board Meeting.
17

18         18.      Plaintiff does not dispute that Visitalk sent out the document which was

19   marked as Exhibit “8” to Mr. Best’s deposition to Visitalk’s Series A investors. Biltmore

20   disputes the balance of this paragraph for the reasons set forth below. The assertion in
21
     ¶18 that S&W did not propose that solution is not supported by any reference to the
22
     record in this case. In addition, the characterization of the content of that letter in ¶18 of
23
     the SOF is unsupported by S&W’s citation to the record. Plaintiff disputes the implied
24

25   assertion that S&W was not involved with “this solution” and this “notice” resolved the

26   problems with the Founders’ Warrants. In fact, the letter and release sent to the Series A


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -11- Filed 07/24/2007
                                Document 384                             Page 11 of 38
 1   investors was prepared by S&W and contained false and misleading information
 2   regarding the claimed authorization and issuance of the Founders’ Warrants. Mr. Kaplan
 3
     relied on the lawyers at S&W to prepare this letter and release. (Draft Release of Claims
 4
     and letter to Series A investors, produced by S&W from its files, at Bates Nos.
 5
     SWDS0568 – 0572, attached hereto as Exhibit “26”; Copy of Letter and Release of
 6

 7   Claims to Susan Cole (a Series A investor) (the “Cole Letter & Release Document”),

 8   dated November 29, 1999, attached hereto as Exhibit “27”; Kaplan Depo, Exhibit “9,” at

 9   93:1 – 16; 94:7 – 95:17; 95:25 – 97:15; 97:19 – 98:21; O’Donnell Depo, 181:9 - 129;
10
     Gaston Depo, Exhibit “11,” at 290:15 – 291:12; 477:21 – 478:10. S&W and Visitalk
11
     failed to disclose to the Series A investors that the Founders’ Warrants had actually been
12
     authorized and issued to Messrs. Thimmesch and O’Donnell after the closing of the
13

14   Series A Offering and the other material facts known to them regarding the problems

15   with the Founders’ Warrants. (Compare the Cole Letter & Release Document, Exhibit

16   “27”, to the Letter from Donahey to Best, dated July 28, 1999, at pp. 1 – 2, Exhibit “17”;
17
     S&W Office Memorandum, at p. 1, n. 1, Exhibit “18”; and S&W Office Memorandum, at
18
     p. 3 [Bates No. VT007167] ¶(C)(1), Exhibit “19”). Finally, the portion of the November
19
     24 Minutes quoted in the third sentence of ¶18 does not state Mr. Griffiths made this
20
     proposal nor does it suggest that S&W did not propose such a solution.
21

22              19.     The first sentence in ¶19 of the SOF is not supported by the citation to the

23   record.       Mr. Best did not testify that S&W did not “in any way” assist Messrs.
24   Thimmesch and O’Donnell in creating, developing or presenting a misleading picture
25

26
     9
         Mr. O’Donnell testified that he believes S&W prepared the Release of Claims document.

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                             -12- Filed 07/24/2007
                                        Document 384                                    Page 12 of 38
 1   about the Founders Warrants.               Instead, he merely testified that “to the best of his
 2   knowledge” S&W did not provide such assistance to them. S&W aided and abetted Mr.
 3
     Thimmesch and Mr. O’Donnell with, in the words of S&W partner Richard Mallery, the
 4
     “restatement of corporate history.”              (S&W Billing Statement for “Securities,” dated
 5
     January 21, 2000, Bates Nos. 1478 – 1490, attached hereto as Exhibit “44”, at p. 6,
 6

 7   billing entry of Mr. Mallery for December 10, 1999). Plaintiff disputes the entirety of

 8   ¶19 on the following grounds:

 9           (A)      First, S&W failed to inform the entire Board regarding the actual
10
     chronology and truth regarding the claimed authorization and issuance of the Founders’
11
     Warrants and provided the Board with false information about actions Messrs.
12
     Thimmesch and O’Donnell would take if the Board refused to recognize the validity of
13

14   the Founders’ Warrants. (Compare Letter from Donahey to Best, dated July 28, 1999, at

15   pp. 1 – 2, Exhibit “17”; S&W Office Memorandum, at p. 1, n. 1, Exhibit “18”; and S&W

16   Office Memorandum, at p. 3 [Bates No. VT007167] ¶(C)(1), Exhibit “19” with S&W
17
     Memorandum to the Visitalk Board of Directors, dated November 2, 1999, attached
18
     hereto as Exhibit “23”; Kaplan Depo at 68:14 – 21; 82:15 – 84:2; 85:3 – 20; 90:10 – 22;
19
     103:21 – 105:22; 111:3 – 112:110; 112:14 – 114:811; 132:2 – 133:11; Thimmesch Depo.,
20

21

22
     10
23    Mr. Kaplan testified that he believes no one from S&W disclosed to him or the Board of Directors during a board
     meeting or in any writing that the Unanimous Consent relating to the claimed authorization of the Founders
24   Warrants was ineffective.
     11
       For example, Mr. Kaplan acknowledged that the matters in the Juy 28, 1999 letter were not in the November 2
25   Memorandum to the Board. He also believes S&W should have included that information in the Memorandum in
     order to fully and adequately inform the Board about the problems with the Founders Warrants. He also believes
26   S&W should have disclosed to the Board the “information under the words ‘Characterizing the Issuance of the
     Warrants’ on the third page” of S&W’s internal October 22, 1999 Office Memorandum (Exhibit 19 hereto).

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                          -13- Filed 07/24/2007
                                     Document 384                                      Page 13 of 38
 1   at 185:4 – 2312; 206:2 – 207:1713; O’Donnell Depo, Exhibit “21”, at 156:1 – 157:814;
 2   167:2 – 168:6).
 3
                (B)      Second, Mr. Donahey deleted language from a draft of the Minutes from
 4
     the November 24, 1999 Board Meeting which would have disclosed to a reader that the
 5
     explanation of the problems given to the Board (“a technical error”) was false because it
 6

 7   contradicted the information contained in his letter dated July 28, 1999 and S&W’s

 8   earlier internal Office Memoranda.                  (E-mail from Mr. Donahey to Ms. Turley and

 9   attached redlined draft of the November 24, 1999 Minutes [Bates No.s SWDS0400 –
10
     0408], at Bates No. SWDS0406.)
11
                (C)      Third, the letter and release sent to the Series A investors was prepared by
12
     S&W and contained false and misleading information regarding the claimed
13

14   authorization and issuance of the Founders’ Warrants. Mr. Kaplan relied on the lawyers

15   at S&W to prepare this letter and release. (Draft Release of Claims and letter to Series A

16   investors, produced by S&W from its files, at Bates Nos. SWDS0568 – 0572, attached
17
     hereto as Exhibit “26”; Copy of Letter and Release of Claims to Susan Cole (a Series A
18
     investor) (the “Cole Letter & Release Document”), dated November 29, 1999, attached
19
     hereto as Exhibit “27”; Kaplan Depo, Exhibit “9,” at 93:1 – 16; 94:7 – 95:17; 95:25 –
20
     97:15; 97:19 – 98:21; O’Donnell Depo, 181:9 - 1215; Gaston Depo, Exhibit “11,” at
21

22
     12
          Mr. Thimmesch testified he never saw the letter from Mr. Donahey dated July 28, 1999.
23
     13
       According to Mr. Thimmesch, the statement in the Memorandum from S&W to the Board of Directors that he
24   would leave the company or sue Visitalk if the Board refused to issue stock to him under the terms of the claimed
     Founders Warrants “ridiculous” and “never in my mind”.
25
     14
        Mr. O’Donnell testified he agreed with and understood that the “paperwork” to cause the issuance of the
26   Fouonders’ Warrants did not happen until early November, 1998, but did not think or understand that S&W had
     concluded the warrants did not exist in early September.
     15
        Mr. O’Donnell testified that he believes S&W prepared the Release of Claims document.
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                             -14- Filed 07/24/2007
                                        Document 384                                     Page 14 of 38
 1   290:15 – 291:12; 477:21 – 478:10. S&W and Visitalk failed to disclose to the Series A
 2   investors that the Founders’ Warrants had actually been authorized and issued to Messrs.
 3
     Thimmesch and O’Donnell after the closing of the Series A Offering and the other
 4
     material facts known to them regarding the problems with the Founders’ Warrants.
 5
     (Compare the Cole Letter & Release Document, Exhibit “27”, to the Letter from
 6

 7   Donahey to Best, dated July 28, 1999, at pp. 1 – 2, Exhibit “17”; S&W Office

 8   Memorandum, at p. 1, n. 1, Exhibit “18”; and S&W Office Memorandum, at p. 3 [Bates

 9   No. VT007167] ¶(C)(1), Exhibit “19”);
10
           (D)    Fourth, S&W failed to provide necessary information and advice regarding
11
     the claims of past investors and securities law problems about which they had knowledge
12
     for inclusion in documents offering the sale of securities. Mr. Gaston prepared securities
13

14   offering documents after the date S&W began representing Visitalk. He relied on S&W

15   to provide him with advice and information regarding the existence of claims held by

16   earlier investors and past securities law problems in order to permit him to make proper
17
     disclosure of such matters to potential investors. S&W failed to disclose such matters to
18
     Mr. Gaston and include the disclosure of such matters in those securities offering
19
     documents, including an “Updated Series C Confidential Information Statement”. Those
20
     issues were, in Mr. Gaston’s view, serious and material to the investors. (178:1 – 21;
21

22   180:3 – 9; 186:20 – 188:3; 487:23 – 489:25; 495:1 – 496:4; 498:23 – 500:20; 504:19 –

23   505:8);
24         (E)    Fifth, as a director, Mr. Kaplan understood S&W assisted with the
25
     preparation of the Updated Series C Confidential Information Statement and relied upon
26
     S&W to disclose all material information in that securities offering document in order to
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -15- Filed 07/24/2007
                               Document 384                           Page 15 of 38
 1   permit investors to make an informed decision about the matters set forth therein. He
 2   believes that S&W failed to adequately represent Visitalk by failing to include disclosure
 3
     regarding the securities law problems identified by Mr. Donahey in a letter dated July 15,
 4
     1999, and the problems regarding the Founders’ Warrants set forth in Mr. Donahey’s July
 5
     28, 1999 letter in Updated Series C Confidential Information Statement. (Kaplan Depo,
 6

 7   Exhibit “9”, at 127:4 - 128:19.

 8          (F)    Sixth, as a director of Visitalk, Mr. Kaplan would have wanted to know

 9   Messrs. Thimmesch and O’Donnell authorized the Founders’ Warrants after the date the
10
     Company sold the Series A preferred stock.        Mr. Kaplan has no knowledge of S&W
11
     having disclosed to him and the other directors that Messrs. Thimmesch and O’Donnell
12
     had breached their fiduciary duties by causing Visitalk to breach the Series A Stock
13

14   Purchase Agreement through the claimed issuance of the Founders’ Warrants. He also

15   believes that, as a director, he should have known about that matter. In order to make an

16   informed decision, as a director, about the Founders’ Warrants, Mr. Kaplan would have
17
     wanted to know that there was no known documentary evidence to support the claims of
18
     Mr. Thimmesch and Mr. O’Donnell to the Founders’ Warrants. However, S&W failed to
19
     disclose that fact to the Visitalk Board. Mr. Kaplan, as a director, also would have wanted to
20
     know that that the Action by Unanimous Consent relating to the claimed authorization of the
21
     Founders’ Warrants was ineffective as of October 22, 1999, the date of S&W’s second internal
22

23   Office Memorandum on the issue. S&W failed to disclose those facts to him and the other

24   directors at a Board Meeting or in writing. Mr. Kaplan believes that S&W failed to adequately

25   represent Visitalk because it failed to disclose those items. (Kaplan Depo, Exhibit “9”, 83:20

26   – 84:2; 103:21 – 105:22; 110:2 – 23; 111:3 – 112: 13.

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -16- Filed 07/24/2007
                                Document 384                             Page 16 of 38
 1         (G)      Seventh, Mr. Kaplan, as a former Visitalk director, believes that S&W
 2   failed to adequately perform their duties if they did not call Joe Richardson or other
 3
     lawyers at Bryan cave to verify the story of Messrs’ Thimmesch and O’Donnell
 4
     regarding the claimed issuance of the Founders’ Warrants. (Kaplan Depo, at 72:17 –
 5
     73:14).     Mr. Richardson never spoke to a lawyer at S&W regarding that matter.
 6

 7   (Deposition of Joe Richardson, Visitalk’s original corporate attorney at Bryan Cave,

 8   attached hereto as Exhibit “28”, at 141:19 – 143:7).

 9         (H)      Eighth, according to Mr. Gaston, he does not recall S&W ever advising
10
     him, as Visitalk’s Controller, regarding his fiduciary duties to creditors when Visitalk
11
     becam insolvent. To the best of Mr. Gaston’s knowledge, S&W did not advise any of
12
     Visitalk’s other officers about their fiduciary duties to creditors upon Visitalk’s
13

14   insolvency. (Gaston Depo, Exhibit “11”, at 90:14 – 91:25.)

15         (I)      Ninth, Messrs. Thimmesch and O’Donnell only made de minimus capital

16   contributions into Visitalk and were spending other people’s (the investors’) money by
17
     causing Visitalk to spend money. Mr. Thimmesch breached his fiduciary duties through
18
     excessive and improper expenditure of corporate funds. No one at S&W recommended
19
     to him the need for policies and procedures to prevent breaches of fiduciary duties by
20
     excessive expenditures. Mr. Gaston has a law degree and practiced corporate law and, as
21

22   a result, understands what a fiduciary duty is. Based on his time and experience working

23   as an officer of Visitalk, Mr. Gaston believes: (i) Peter Thimmesch and Mike O’Donnell
24   breached their fiduciary duties at Visitalk; (ii) Mr. Donahey and Mr. Mallery breached
25
     their fiduciary duties to Visitalk; (iii) Mr. Donahey assisted Messrs Thimmesch and
26
     O’Donnell in breaching their fiduciary duties to Visitalk; and (iv) Mr. Mallery assisted
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -17- Filed 07/24/2007
                               Document 384                         Page 17 of 38
 1   Messrs Thimmesch and O’Donnell in breaching their fiduciary duties to Visitalk.
 2   (Gaston Depo, Exhibit “11”, at 50:15 – 51:13; 72:25 – 73:4; 73:25 – 74:12; 128:17 – 23;
 3
     505:17 – 507:10.
 4
          20.     Plaintiff disputes the statements contained in Paragraph 20. The original
 5
     corporate records of Visitalk, prepared by Bryan Cave, and an audit report of Ernst &
 6

 7   Young contradict those statements. In addition, Mr. Thimmesch has testified that Mark

 8   Cardwell was one of the three “founders” of Visitalk.         (Visitalk By-Laws, dated

 9   September 4, 1998, Exhibit “3”; Stock Transfer Ledger and three stock certificate stubs,
10
     Exhibit “4” Ernst & Young audit report, dated November 23, 1999, at p. F-5 (Statement
11
     of Changes in Shareholders Equity), Exhibit “5”; Thimmesch Depo, Exhibit “2”, at
12
     72:21- 73:18; 76:22 – 77:13). The Unanimous Consent of the Board of Directors relating
13

14   to the claimed issuance of the Founders’ Warrants which are signed by Mr. Thimmesch

15   and Mr. O’Donnell with an “as of” date of September 12, 1998, states that the resolution

16   was adopted “without as meeting.” (Unanimous Consent of the Board of Directors,
17
     attached hereto as Exhibit “29”, at p. 1). Mr. O’Donnell does not disagree with “the fact
18
     from a paperwork standpoint” the Founders’ Warrants were issued in early November.
19
     (O’Donnell Depo, Exhibit “21”, at p. 151:12 – 152:21). Mr. Richardson never saw any
20
     documents or even notes prepared by the Thimmesches or the O’Donnells regarding a
21

22   meeting at which the authorization of the Founders’ Warrants is claimed to have

23   occurred. (Richardson Depo, Exhibit “28”, at 166:3 – 15). Mr. Richardson did not meet
24   either Mr. Thimmesch or Mr. O’Donnell until sometime in October and did not start
25
     representing Visitalk until after the Series A sales had been offered and sold.
26
     (Richardson Depo, Exhibit “28”, at 73:3 – 6; 76:7 – 11); Mr. Richardson or another
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                   -18- Filed 07/24/2007
                              Document 384                           Page 18 of 38
 1   Bryan Cave employee drafted the Unanimous Consent regarding the claimed
 2   authorization of the Founders’ Warrants.      (Richardson Depo, Exhibit “28”, at 59: 7 –
 3
     17). The retention letter between Visitalk and Bryan Cave is dated October 30, 1998.
 4
     (Bryan Cave retention letter from Margaret Mahoney to Peter Thimmesch, Bates Nos.
 5
     VT021888, attached hereto as Exhibit “28”). As a result, the Action By Unanimous
 6

 7   Consent was not effective even as of October 22, 1999, when S&W analyzed the issue in

 8   its Office Memorandum of that date. (S&W Office Memorandum, Bates Nos. 7165 –

 9   7168, at p. 3, ¶(C)(1)). Mr. Schweigert and his staff have reviewed all of Visitalk’s files
10
     and have not located any documents to support the story of the Thimmesches and
11
     O’Donnells that an actual meeting relating to the Founders’ Warrants occurred on
12
     September 12, 1998 or any other date that month.          (Schweigert Declaration, Exhibit
13

14   “14”, at ¶31).

15         21.        Plaintiff disputes that the Founders’ Warrants “mess” was ever “resolved”

16   with the assistance of S&W. Biltmore adopts and incorporates herein by this reference
17
     all of the citations to the record set forth above in ¶¶16 - 18 of this CSOF which also
18
     support Plaintiff’s dispute of the assertions in ¶21 of the SOF.
19
           22.        Plaintiff disputes that all of Visitalk’s Board members made an informed
20
     and effective decision regarding the solution to the Founders’ Warrants problems.
21

22   Biltmore adopts and incorporates herein by this reference all of the citations to the record

23   set forth above in ¶18 which also support Plaintiff’s dispute of the assertions in ¶22 of the
24   SOF. The statement that the Board received legal advice from Mr. Best on the Founders’
25
     Warrants issues directly contradicts Mr. Best’s own testimony in which he said he relied
26
     “heavily . . . probably exclusively” on S&W to address the issues regarding the Founders’
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                      -19- Filed 07/24/2007
                                 Document 384                           Page 19 of 38
 1   Warrants.         (Best Depo (9/9/05), Exhibit “30”, at 27:19 – 28:13).                      In addition, Mr.
 2   Schweigert has found no bills or other documents from Mr. Griffiths or the Gibson, Dunn
 3
     & Crutcher to support the assertion that the Visitalk Board relied most upon Mr.
 4
     Griffiths. (Schweigert Declaration, Exhibit “14”, at ¶32).
 5
               23.       Plaintiff disputes the entirety of the statement in ¶23 of the SOF, including
 6

 7   the implied assertion that S&W was not involved with or important in facilitating the

 8   referenced attempted “solution” to the Founders’ Warrants problems.                                First, Mr.

 9   Schweigert has found no bills or other documents from or prepared by Mr. Griffiths or
10
     the Gibson, Dunn & Crutcher to support the assertion that the Visitalk Board relied most
11
     upon Mr. Griffiths. (Schweigert Declaration, Exhibit “14”, at ¶32). Second, the letter
12
     and release sent to the Series A investors was prepared by S&W, not Mr. Griffiths, and
13

14   contained false and misleading information regarding the claimed authorization and

15   issuance of the Founders’ Warrants.                   Mr. Kaplan relied on the lawyers at S&W to

16   prepare this letter and release. (Draft Release of Claims and letter to Series A investors,
17
     produced by S&W from its files, at Bates Nos. SWDS0568 – 0572, attached hereto as
18
     Exhibit “26”; Copy of Letter and Release of Claims to Susan Cole (a Series A investor)
19
     (the “Cole Letter & Release Document”), dated November 29, 1999, attached hereto as
20
     Exhibit “27”; Kaplan Depo, Exhibit “9,” at 93:1 – 16; 94:7 – 95:17; 95:25 – 97:15; 97:19
21

22   – 98:21; O’Donnell Depo, 181:9 - 1216; Gaston Depo, Exhibit “11,” at 290:15 – 291:12;

23   477:21 – 478:10. Third, the Minutes from the November 24, 1999 Meeting state that Mr.
24   Griffiths explained “further the process of the waivers.” The Minutes do not reflect Mr.
25

26
     16
          Mr. O’Donnell testified that he believes S&W prepared the Release of Claims document.

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                             -20- Filed 07/24/2007
                                        Document 384                                    Page 20 of 38
 1   Griffiths made any statements to the Board regarding the background and chronology
 2   relating to the claimed existence of the Founders’ Warrants. (Minutes of November 24,
 3
     1999 Board Meeting, Exhibit “25”, at p. 4 - 5).     Finally, the assertion that Mr. Kaplan
 4
     “actually crafted” the solution adopted by the Board at that meeting is contradicted by his
 5
     testimony that he does not even remember the conversation and does not know what
 6

 7   alternatives were presented at that time and Mr. Hirschberg made the motion to approve

 8   that course of action. (Kaplan Depo, Exhibit “9”, at 122:1 – 18; Minutes of November

 9   24, 1999 Board Meeting, Exhibit “25”, at p. 5).
10
           24.     Plaintiff does not dispute that Bryan Cave drafted the Action by Unanimous
11
     Consent relating to the claimed authorization of the Founders’ Warrants.           Plaintiff
12
     disputes all other statements in ¶24 of the SOF, including the implied assertion that the
13

14   Founders’ Warrants were authorized in early September before Mr. Cardwell was a

15   principal in Visitalk. Biltmore adopts and incorporates herein by this reference all of the

16   citations to the record set forth above in ¶1 and 14 which also support Plaintiff’s dispute
17
     of the assertions in ¶24 of the SOF.
18
           25.     Plaintiff disputes the statements ¶25. S&W failed to adequately represent
19
     Visitalk in a manner consistent with the standard of care of lawyers, breached their
20
     fiduciary duties and assisted Messrs. Thimmesch and O’Donnell with breaching their
21

22   fiduciary duties. (Expert witness report of Boyd Lemon, attached hereto as Exhibit “31”;

23   supplemental & rebuttal report of Boyd Lemon, attached hereto as Exhibit “32”).
24   Biltmore adopts and incorporates herein by this reference all of the citations to the record
25
     set forth above in ¶16 and 19 which also support Plaintiff’s dispute of the assertions in
26
     ¶25 of the SOF.
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -21- Filed 07/24/2007
                               Document 384                            Page 21 of 38
 1          26.       Plaintiff disputes the statements in ¶26 of the SOF.                    Biltmore adopts and
 2   incorporates herein by this reference all of the citations to the record set forth above in ¶1
 3
     which also support Plaintiff’s dispute of the assertions in ¶26 of the SOF.
 4
             27.      Plaintiff disputes the statements in ¶26 of the SOF. The assertion that the
 5
     Board was given an “accurate and complete understanding” of the Founders Warrants is
 6

 7   flatly contradicted by the testimony of Alan Kaplan and Peter Thimmesch and a

 8   comparison of the Memorandum to the Board of Directors, dated November 2, 1999,

 9   with the letter from Mr. Donahey, dated July 28, 1999, and the two internal S&W office
10
     memoranda on the subject. (Compare Letter from Donahey to Best, dated July 28, 1999,
11
     at pp. 1 – 2, Exhibit “17”; S&W Office Memorandum, at p. 1, n. 1, Exhibit “18”; and
12
     S&W Office Memorandum, at p. 3 [Bates No. VT007167] ¶(C)(1), Exhibit “19” with
13

14   S&W Memorandum to the Visitalk Board of Directors, dated November 2, 1999,

15   attached hereto as Exhibit “23”; Kaplan Depo at 68:14 – 21; 82:15 – 84:2; 85:3 – 20;

16   90:10 – 22; 103:21 – 105:22; 111:3 – 112:117; 112:14 – 114:818; 132:2 – 133:11;
17
     Thimmesch Depo., at 185:4 – 2319; 206:2 – 207:1720; O’Donnell Depo, Exhibit “21”, at
18

19

20
     17
      Mr. Kaplan testified that he believes no one from S&W disclosed to him or the Board of Directors during a board
21   meeting or in any writing that the Unanimous Consent relating to the claimed authorization of the Founders
     Warrants was ineffective.
22
     18
        For example, Mr. Kaplan acknowledged that the matters in the Juy 28, 1999 letter were not in the November 2
23   Memorandum to the Board. He also believes S&W should have included that information in the Memorandum in
     order to fully and adequately inform the Board about the problems with the Founders Warrants. He also believes
     S&W should have disclosed to the Board the “information under the words ‘Characterizing the Issuance of the
24   Warrants’ on the third page” of S&W’s internal October 22, 1999 Office Memorandum (Exhibit 19 hereto).
     19
        Mr. Thimmesch testified he never saw the letter from Mr. Donahey dated July 28, 1999.
25
     20
       According to Mr. Thimmesch, the statement in the Memorandum from S&W to the Board of Directors that he
26   would leave the company or sue Visitalk if the Board refused to issue stock to him under the terms of the claimed
     Founders Warrants “ridiculous” and “never in my mind”.

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                           -22- Filed 07/24/2007
                                      Document 384                                       Page 22 of 38
 1   156:1 – 157:821; 167:2 – 168:6). Biltmore also adopts and incorporates herein by this
 2   reference all of the citations to the record set forth above in ¶19(F) which also support
 3
     Plaintiff’s dispute of the assertions in ¶27 of the SOF.
 4
            28.       Plaintiff disputes the statements in ¶28 of the SOF. The first sentence in
 5
     ¶28 of the SOF is wholly unsupported by any citation to the record in the case. Mr.
 6

 7   Cardwell did not testify to a lack of support for Plaintiff’s “Founders’ Warrants

 8   chronology” or that the Founders Warrants were authorized and issued before the Series

 9   A Offering.       He also did not testify in the referenced portion of his deposition that he
10
     “was not a shareholder, director or employee before September 15, 1998.”                            Biltmore
11
     adopts and incorporates herein by this reference all of the citations to the record set forth
12
     above in ¶1 which also support Plaintiff’s dispute of the assertions in ¶26 of the SOF.
13

14          29.       Plaintiff disputes the statements in ¶29 of the SOF. Mr. Kaplan did not

15   testify, at the referenced portion of his deposition, that the “solution” to the Founders’

16   Warrants adopted by the Board was in the best interest of Visitalk. Moreover, it is clear
17
     from his other testimony that the Board’s decision was not fully informed or based on
18
     truthful and complete disclosures regarding the matter. Biltmore adopts and incorporates
19
     herein by this reference all of the citations to the record set forth above in ¶27 which also
20
     support Plaintiff’s dispute of the assertions in ¶29 of the SOF.
21

22          30.       Plaintiff does not dispute that Mr. Cardwell was terminated with cause and

23   threatened legal action. Biltmore also does not dispute that Mr. Cardwell and Visitalk
24   entered into a “Separation and Release Agreement” which provided Visitalk was to locate
25

26   21
       Mr. O’Donnell testified he agreed with and understood that the “paperwork” to cause the issuance of the
     Fouonders’ Warrants did not happen until early November, 1998, but did not think or understand that S&W had

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                          -23- Filed 07/24/2007
                                     Document 384                                     Page 23 of 38
 1   purchasers for Mr. Cardwell’s stock with the sale proceeds to Plaintiff disputes the
 2   entirety of the last two sentences of ¶30 because they are wholly unsupported by the
 3
     citation to the record in that paragraph (¶¶72 and 79 of the Second Amended Complaint).
 4
           31.     Plaintiff disputes the entirety of ¶31 because it is wholly unsupported by
 5
     any citation to the record. Moreover, evidence in the record demonstrates that Visitalk
 6

 7   suffered serious harm as a result of the Cardwell stock sale transaction and S&W aided

 8   and abetted this transaction. Mr. Cardwell was still a director after he was terminated as

 9   an employee. The agreement with Mr. Cardwell resulted in the transfer of a corporate
10
     opportunity to sell Visitalk stock, depriving Visitalk of over $1,000,000 and, as a result,
11
     deepened its insolvency.     According to Mr. Gaston, who was personally involved
12
     handling the funds received by Visitalk from the sale of Mr. Cardwell’s stock, S&W was
13

14   at the center of the sale of Mr. Cardwell’s stock through this transaction. An internal

15   Office Memorandum from S&W lawyer Shirley Nagy to Mr. Donahey demonstrates this

16   transaction exposed Visital to civil and criminal liability. (Kaplan Depo, at Exhibit “9”,
17
     at 160:6 – 161:3; 164:12; Gaston Depo, Exhibit “11”, at 257:19 – 261:22; Office
18
     Memorandum, dated February 28, 2000, attached hereto as Exhibit “33”, at pp. 1 – 2 ).
19
           32.     Plaintiff disputes that the claims of Mr. Cardwell were so serious as to
20
     justify the transfer of over $1 million of corporate opportunities to sell Visitalk stock to
21

22   him. Indeed, his lawyer, Janet Lord, offered to settle the dispute for $275,000, payable

23   over three years. Correspondence reflects that S&W was involved in the drafting and
24   negotiatin of the documentation for this agreement. (Letter from Janet Lord to Steve
25
     Best, attached hereto as Exhibit “34”, Bates Nos. VT006910 – 6912, at p. 2;
26


    concluded the warrants did not Document 384
 Case 2:02-cv-02405-HRH exist in early September. Filed 07/24/2007
    343545.1/11400-001                        -24-                     Page 24 of 38
 1   Memorandum from Michael Donahey to Janet Lord, dated February 23, 2000, Bates Nos.
 2   VT0057137 – 7140, attached hereto as Exhibit “35”).
 3
           33.     Plaintiff disputes that S&W played a small role in the Cardwell stock sale
 4
     transaction and that it was in the best interest of Visitalk. S&W prepared the stock
 5
     purchase agreements, stock certificates and related documentation necessary to effectuate
 6

 7   the Cardwell stock sales. (Letter from Mr. Donahey to Michael Bidwell, dated May 26,

 8   2000, with enclosures, attached hereto as Exhibit “36”; Kaplan Depo, at Exhibit “9”, at

 9   160:6 – 161:3; 164:12; Gaston Depo, Exhibit “11”, at 257:19 – 261:22).
10
           34.     Plaintiff disputes that the Cardwell stock sale transaction was a “terrific
11
     idea” for the company, the terms were in the best interest of and fair to Visitalk and no
12
     corporate opportunity was usurped. The agreement with Mr. Cardwell resulted in the
13

14   transfer of a corporate opportunity to sell Visitalk stock, depriving Visitalk of over

15   $1,000,000 and, as a result, deepened its insolvency. According to Mr. Gaston who was

16   personally involved handling the funds received by Visitalk from the sale of Mr.
17
     Cardwell’s stock, S&W was at the center of the sale of Mr. Cardwell’s stock through this
18
     transaction. An internal Office Memorandum from S&W lawyer Shirley Nagy to Mr.
19
     Donahey demonstrates this transaction exposed Visitalk to civil and criminal liability.
20
     (Kaplan Depo, at Exhibit “9”, at 160:6 – 161:3; 164:12; Gaston Depo, Exhibit “11”, at
21

22   257:19 – 261:22; Office Memorandum, dated February 28, 2000, attached hereto as

23   Exhibit “33”, at pp. 1 – 2 ).
24         35.     Plaintiff disputes the statements contained in ¶35 of the SOF. The first two
25
     sentences are not supported by the referenced citations to the record. Mr. Kaplan testified
26
     he played a “support” not a “major” role in negotiating the settlement. He also did not
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -25- Filed 07/24/2007
                                Document 384                           Page 25 of 38
 1   testify that he “relied mostly” on Steve Best. Plaintiff disputes that the Cardwell stock
 2   sale transaction was in the best interest of and fair to Visitalk and no corporate
 3
     opportunity was usurped. The agreement with Mr. Cardwell resulted in the transfer of a
 4
     corporate opportunity to sell Visitalk stock, depriving Visitalk of over $1,000,000 and, as
 5
     a result, deepened its insolvency. According to Mr. Gaston who was personally involved
 6

 7   handling the funds received by Visitalk from the sale of Mr. Cardwell’s stock, S&W was

 8   at the center of the sale of Mr. Cardwell’s stock through this transaction. An internal

 9   Office Memorandum from S&W lawyer Shirley Nagy to Mr. Donahey demonstrates this
10
     transaction exposed Visitalk to civil and criminal liability. (Kaplan Depo, at Exhibit “9”,
11
     at 160:6 – 161:3; 164:12; Gaston Depo, Exhibit “11”, at 257:19 – 261:22; Office
12
     Memorandum, dated February 28, 2000, attached hereto as Exhibit “33”, at pp. 1 – 2 ).
13

14         36.     Plaintiff disputes the statements contained in ¶36 of the SOF.             The

15   statement in the first sentence is not supported by the referenced citation to the record.

16   Mr. Cardwell actually testified his threatened age discrimination action against Visitalk
17
     was “not a frivolous claim”. He did not testify it was a “serious” claim.            Plaintiff
18
     disputes that the benefits from the Cardwell stock sale transaction referenced in ¶36 of
19
     the SOF were outweighed by the costs and risks. The agreement with Mr. Cardwell
20
     resulted in the transfer of a corporate opportunity to sell Visitalk stock, depriving Visitalk
21

22   of over $1,000,000 and, as a result, deepened its insolvency. According to Mr. Gaston

23   who was personally involved handling the funds received by Visitalk from the sale of Mr.
24   Cardwell’s stock, S&W was at the center of the sale of Mr. Cardwell’s stock through this
25
     transaction. An internal Office Memorandum from S&W lawyer Shirley Nagy to Mr.
26
     Donahey demonstrates this transaction exposed Visitalk to civil and criminal liability.
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -26- Filed 07/24/2007
                                Document 384                             Page 26 of 38
 1   (Kaplan Depo, at Exhibit “9”, at 160:6 – 161:3; 164:12; Gaston Depo, Exhibit “11”, at
 2   257:19 – 261:22; Office Memorandum, dated February 28, 2000, attached hereto as
 3
     Exhibit “33”, at pp. 1 – 2 ).
 4
           37.     Plaintiff does not dispute the statements in ¶37 of the SOF.
 5
           38.     Plaintiff disputes that S&W gave an “admonition” to Visitalk to require the
 6

 7   Thimmesches to sign a security agreement and collateralize the debt owed by them to

 8   Visitalk. (E-mail to from Todd Weiss, Exhibit “P” to the S&W SOF).

 9         39.     S&W disputes the implied assertion in ¶39 that S&W’s representation of
10
     the Thimmesches and O’Donnells on their personal estate planning matters began in
11
     2000, after the Founders’ Warrants issue allegedly was resolved. David Weiss provided
12
     the estate planning legal services only to the Thimmesches and O’Donnells. He did not
13

14   provide legal representation to Visitalk. However, Mr. Donahey had a conference wit

15   hMr. Weiss regarding the letter and release agreement relating to the Founders’ Warrants

16   on November 29, 1999. He also billed for a conference and research regarding the
17
     Founders’ Warrants on January 13, 2000. (S&W Billing Statements, Exhibit “37”, at pp.
18
     Bates Nos. 1498 – 1499 (next to initials MMD) and Bates No. 1409 (next to initials
19
     DEW); Deposition of Charles Pulaski, attached hereto as Exhibit “38”, at 11:15 – 12:6)
20
     There was no written waiver of conflict of interest relating to the joint representation of
21

22   Visitalk and the Thimmesches and the O’Donnells, personally.         (Best Depo, 1/21/05,

23   Exhibit “24”, at 180:13 – 19; Best Depo, 9/9/05, Exhibit “30”, at 77:5 – 19; Expert
24   witness report of Boyd Lemon, attached hereto as Exhibit “31”; Supplemental & Rebuttal
25
     Report of Boyd Lemon, attached hereto as Exhibit “32”)
26


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -27- Filed 07/24/2007
                                Document 384                           Page 27 of 38
 1         40.    Plaintiff disputes the statement in ¶40 that S&W was hired “on its merits”
 2   and the “relationship was strictly a business relationship.” According to Mr. Best, Mr.
 3
     Mallery gave business advice on how to run a company, in addition to legal advice. Mr.
 4
     Mallery was also a “father to children who did not have fathers or whose fathers were
 5
     distant and unresponsive to these children's needs, whether it be Peter Thimmesch, Mike
 6

 7   O'Donnell, or even me.” (Best Depo, 9/9/05, Exhibit “30”, 20:1 – 21:21; Gaston Depo,

 8   Exhibit “11”, 483:3 – 484:21). Mr. Mallery attended a meeting of Visitalk’s shareholders

 9   in December of 1999, at which the issues regarding the Founders’ Warrants were
10
     discussed. At the shareholders meeting, Mr. Mallery “hyped” the business and stock
11
     opportunities of Visitalk and discounted a securities law problem about which he had
12
     knowledge. Mr. Mallery “captivated” several of the investors.             In fact, according to
13

14   the testimony of an investor witness, Mr. Mallery,

15         stood up and told the entire group that Visitalk was doing fabulously. That we
           were going to be public in the next few months. That we had a principal of
16         Goldman Sachs there present. And that we were all about to be millionaires.

17         And that this anti-dilution issue didn't generally affect us individually because in
           the practice of buying stock on Wall Street, as small investors go anyway, that
18         there isn't generally any research done regarding the number of shares outstanding
           and the dilution of various series of stocks to another. That when it's all said and
19         done, we'll all own common stock, and that stock is going to go out at some price.
20
           And at that point, while Dick was still standing, Mike O'Donnell interjected that
21         their initial discussions with Goldman Sachs had indicated that they were
           probably going to have an offering price of $13 or $15 per share.
22
           They related it verbally to eBay's initial public offering. In fact, then Peter
23         Thimmesch chimed in and mentioned that eBay increased six-fold during its first
           month, and they came out at about $15 a share. Then the attorney from Snell &
24         Wilmer joined in again, Dick, and indicated that -- indicated that that's how the
           stock market worked and this anti-dilution issue was insignificant.
25
           And that there was a large transaction about to occur with MP3.com, and this
26         company couldn't move forward until this Series A errors and corrections were

 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -28- Filed 07/24/2007
                                Document 384                               Page 28 of 38
 1          made so that Visitalk could go on and make its private offering to MP3.com for
            $15 million.
 2
     (Deposition of Richard Rothwell (the “Rothwell Depo”), attached hereto as Exhibit “39”,
 3

 4   94:10 – 95:15).   Mr. Rothwell and other investors had been concerned for weeks after

 5   having received the Release of Claims document regarding the Founders Warrants. Mr.
 6   Mallery’s statements reassured Mr. Rothwell and he was “thrilled and relieved and put at
 7
     ease for quite some time” because a partner from S&W had made such specific
 8
     statements about such matters. (Rothwell Depo, Exhibit “39”, at 96:15 – 97:10).
 9
           41.     S&W wielded an unusual amount of power and control over Visitalk due to
10

11   the relationship between Mr. Mallery and Messrs Thimmesch and O’Donnell and the fact

12   that S&W had knowledge about Visitalk’s precarious financial condition and Visitalk

13   could not continue to operate – it would have to shut down and liquidate – if S&W
14
     ceased providing legal services to Visitalk relating to the offerings of securities.    The
15
     bills of S&W were paid as a result of those securities offerings, but, Visitalk’s corporate
16
     life was artificially prolonged and its insolvency was deepened. Based on the initial
17
     expert report of Renee Jenkins, Visitalk had millions of dollars of debt as of the date it
18

19   filed for bankruptcy. (Expert reports of Renee Jenkins, attached as exhibits to her

20   Declaration, attached as Exhibit “16”; Expert report of Steven Scherf, attached hereto as
21   Exhibit “40”, at p. 2; the Rebuttal Expert Report of Steven Scherf, attached hereto as
22
     Exhibit “41”, at p. 4; the Expert Report of Boyd Lemon, Exhibit “31”, at p. 3; Gaston
23
     Depo, Exhibit “11”, at 139:11 – 141:25; 142:14 – 19; 143:7 – 19; 145:14 – 147:17;
24
     151:23 – 152:24; 163:5 – 164:1; 228:18 – 230:14; 239:11 – 240:20; 247:11 – 248:3;
25

26


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -29- Filed 07/24/2007
                               Document 384                            Page 29 of 38
 1   261:3 – 22; 273:1 – 24; 452:8 – 24; 481:10 – 482:5; 490:7 - 491:5; 491:18 – 492:3;
 2   492:15 – 493:4; 497:21 – 498:15).
 3
                        PLAINTIFF’S ADDITIONAL MATERIAL FACTS
 4
            Plaintiff respectfully submits the following Additional Material Facts (the “AMF”)
 5
     which establish the existence of disputed material facts:
 6

 7          1.       Visitalk was incorporated in the State of Arizona on September 3, 1998, but

 8   had become insolvent by November of 1998. Schweigert Declaration, Exhibit “14”, at

 9   ¶10;
10
            2.       The initial shareholders of Visitalk, based on its corporate records, were
11
     Peter Thimmesch (“Thimmesch”), Michael O’Donnell and Mark Cardwell. Thimmesch
12
     was the Chief Executive Officer and a Director of Visitalk and Mr. O’Donnell was its
13

14   President and another member of the board of directors. Schweigert Declaration, Exhibit

15   “14”, at ¶22;

16          3.       In September, 1998, Visitalk raised money through the sale and issuance of
17
     “Series A Preferred Stock” to individual investors (the “Series A Offering”). Visitalk
18
     sold Series B preferred stock to investors in October and November, 1998 (the “Series B
19
     Offering”) and sold Series C preferred stock to investors 1999 (the “Series C Offering”).
20
     Schweigert Declaration, Exhibit “14”, at ¶23;
21

22          4.       In connection with the Series A Offering, no disclosure was made by

23   Thimmesch, O’Donnell and Visitalk regarding the alleged existence of warrants to
24   purchase Visitalk’s common stock at an exercise price of $0.1375 per share (the
25
     “Founders’ Warrants”) claimed to have been issued to Mr. O’Donnell and Thimmesch in
26
     September, 1998. Schweigert Declaration, Exhibit “14”, at ¶24;
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                      -30- Filed 07/24/2007
                                 Document 384                          Page 30 of 38
 1          5.     No disclosure was made by Thimmesch, O’Donnell and Visitalk to the
 2   investors who purchased preferred stock through the Series B Offering regarding the
 3
     exercise price of the Founders Warrants, the claims held by investors who had purchased
 4
     stock in the Series A Offering, whether Visitalk’s securities offerings were in compliance
 5
     with “Regulation D” of the securities laws, whether those offerings were “integrated” and
 6

 7   exempt from registration under the securities laws, and the fact that a significant number

 8   of persons who purchased stock in the Series A Offering were “non-accredited”

 9   investors. Schweigert Declaration, Exhibit “14”, at ¶25;
10
            6.     No disclosure was made by Thimmesch, O’Donnell and Visitalk to persons
11
     who purchased stock through Visitalk’s Series C Offering and then by Thimmesch,
12
     O’Donnell and S&W in subsequent private offerings of securities by Visitalk regarding
13

14   the claims held by investors who had purchased stock in the Series A Offering, the claims

15   held by investors in the Series B Offering, lawyers at S&W had advised or concluded that

16   Visitalk’s securities offerings may not have been in compliance with “Regulation D” of
17
     the securities laws, those offerings may have been “integrated” and not exempt from
18
     registration under the securities laws, and a significant number of persons who purchased
19
     stock in the Series A Offering were “non-accredited” investors. Schweigert Declaration,
20
     Exhibit “14”, at ¶26;
21

22          7.     Visitalk was insolvent from November of 1998 through the date of its

23   bankruptcy on November 29, 2000. Schweigert Declaration, Exhibit “14”, at ¶27;
24          8.     S&W concluded that Messrs. Thimmesch and O’Donnell breached their
25
     fiduciary duties to Visitalk and agreements with the Series “A” investors. Schweigert
26
     Declaration, Exhibit “14”, at ¶28;
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -31- Filed 07/24/2007
                               Document 384                           Page 31 of 38
 1         9.     Vernon Schweigert, as the managing member of Biltmore, the Trustee of
 2   the Trust, has determined that the conclusion of S&W that Mr. Thimmesch and Mr.
 3
     O’Donnell breached their fiduciary duties to Visitalk was correct and further determined
 4
     that persons who purchased stock from Visitalk in its Series A, B and C offerings held
 5
     claims against the company as a consequence of those breaches of fiduciary duty.
 6

 7   (Schweigert Declaration, Exhibit “14”, at ¶29).

 8         10.    Visitalk never had a commercially viable product or technology prior to its

 9   bankruptcy according to the testimony of Mr. Gaston, James Fallon, the former head
10
     engineer at Visitalk, and Debra Kuhns, Visitalk’s former Vice President of Marketing.
11
     (Gaston Depo, Exhibit “11”, at 272:21 – 25; Transcript of Deposition of James Fallon
12
     (the “Fallon Declaration”), attached hereto as Exhibit “42” at 10:2 – 11:8; 20:5 – 22:22;
13

14   27:5 – 9; 32:10 – 33:8; 35:5 – 41:4; 44:9 – 15; 46:11 – 13; 47:12 – 19; 57:7 – 58:2; 61:2

15   – 14; Kuhns Depo, Exhibit “10”, at 27:10 – 15; 34:18 – 35:8;

16         11.    Visitalk spent over $2,000,000.00 in corporate funds for tenant
17
     improvements, furniture, fixtures and equipment in a building that Visitalk first occupied
18
     in or about April 2000 just months before its bankruptcy. These expenditures were not
19
     needed and grossly excessive. (Schweigert Declaration, Exhibit “14”, at ¶36).
20
           12.    Visitalk did not have formal written policies and procedures to govern
21

22   business expense reimbursement and corporate conduct from January of 1999 through

23   June of 2000. In one quarter, Visitalk spent in excess of $1,153,000 on travel and
24   entertainment and received revenue of less than $60,000 as a result of those expenditures.
25
     It is my understanding that, due to the lack of internal controls, Peter Thimmesch was
26
     able to cause Visitalk to incur and reimburse him for at least $235,000 of expenses for
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -32- Filed 07/24/2007
                               Document 384                           Page 32 of 38
 1   which no or inadequate documentation or justification was provided, were excessive or
 2   which, in reality, were personal expenses. (Schweigert Declaration, Exhibit “14”, at
 3
     ¶37).
 4
             13.   Visitalk paid over $1,000,000 to acquire a billing system from a company
 5
     named Portal Software, Inc., even though Visitalk had no customers to bill. Visitalk also
 6

 7   paid approximately $750,000 to Oracle for an accounting system, even though it had no

 8   revenue and no need for a sophisticated accounting system. In addition, Visitalk paid

 9   approximately $2,000,000 for consulting services related to the Portal billing system and
10
     Oracle accounting system. (Schweigert Declaration, Exhibit “14”, at ¶38).
11
             14.   Visitalk had no need for the Portal billing software and system at the time it
12
     agreed to purchase that product and hire Ernst & Young to provide consulting services
13

14   regarding that product. Visitalk also had no need for the Oracle software and system at

15   the time it agreed to purchase that product and hire Ernst & Young to provide consulting

16   services regarding that product. Visitalk’ Board of Directors did not investigate, analyze
17
     and competitively bid billing and accounting software and systems and consulting
18
     services regarding such software and systems and was not adequately informed about the
19
     need or lack thereof for the Portal billing software and the Oracle accounting software.
20
     (Schweigert Declaration, Exhibit “14”, at ¶39).
21

22           15.   Visitalk actually was a “Ponzi scheme.” (Schweigert Declaration, Exhibit

23   “14”, at ¶40; Jenkins Declaration, Exhibit 16, at ¶6 & ¶10).
24           16.   Based on Mr. Schweigert’s review of documents and the testimony of
25
     witnesses, including the materials set forth in ¶14, 16, 17, 18 & 19, 25, 31, 40 & 41 of the
26
     CSOF, the expert reports of Boyd Lemon and the expert reports of Renee Jenkins, he has
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                    -33- Filed 07/24/2007
                               Document 384                            Page 33 of 38
 1   concluded that (A) S&W failed to tell the truth to and properly advise the Board of
 2   Directors of Visitalk, the Series A investors in a letter and Release of claims document
 3
     relating to the Founders Warrants, the Series C investors in an Updated Series C
 4
     Confidential Information Statement and other securities offerings on which they provided
 5
     legal services, and Visitalk shareholders during a meeting at the end of December, 1999;
 6

 7   (B) S&W breached their duties to Visitalk; and (C) assisted Messrs. Thimmesch and

 8   O’Donnell with breaches of their fiduciary duties to Visitalk.

 9          17.    As the managing member of Trustee of the Trust, Mr. Schweigert has also
10
     determined, based upon his investigation and review of all the materials set forth in this
11
     CSOF, and the expert witness reports of Boyd Lemon, Renee Jenkins and Steven Scherf,
12
     that the actions and inactions by S&W identified herein resulted in the failure to obtain
13

14   the effective releases of claims held by the Investor Creditors, caused claims to arise

15   against and debt to be incurred by Visitalk and artificially prolonged Visitalk’s life and

16   deepened its insolvency.
17
            18.    As the managing member of Trustee of the Trust, Mr. Schweigert has also
18
     determined that Visitalk suffered actual damages in an amount of not less than
19
     $25,146,000 as a direct, proximate and foreseeable result of actions and inaction of S&W
20
     set forth above.
21

22          RESPECTFULLY SUBMITTED this 24th day of July, 2007.

23                                             TIFFANY & BOSCO, P.A.

24
                                               By: ____/s/ CRK #014820__________
25                                                Christopher R. Kaup, Esq.
                                                  Jeffrey A. Sandell, Esq.
26                                                Attorneys for Plaintiff


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                     -34- Filed 07/24/2007
                                Document 384                           Page 34 of 38
 1                             INDEX OF EXHIBITS
 2

 3       1. Visitalk’s Articles of Incorporation, dated September 3, 1998
 4
         2. Transcript of Deposition of Peter Thimmesch dated December 7, 2005 and
 5          April 18, 2006
 6

 7
         3. Visitalk By-Laws, dated September 4, 1998

 8
         4. Stock Transfer Ledger and three stock certificate stubs
 9

10       5. Ernst & Young audit report, dated November 23, 1999 (Statement of Changes
            in Shareholders Equity)
11

12       6. Declaration of Michael Williams dated July 16, 2007
13
         7. Affidavit of Robert Corry dated December 20, 2004
14

15
         8. Transcript of the Deposition of Robert Corry dated May 1, 2006
16

17       9. Transcript of the Deposition of Allan Kaplan dated November 17, 2005 and
            November 23, 2005
18

19       10. Transcript of the Deposition of Debra Kuhns dated July 26, 2006

20
         11. Transcript of the Deposition of Ray Gaston dated July 14, 2005, July 27, 2005
21           and October 6, 2005
22
         12. Order entered on October 19, 2004 (“Appointment Order”)
23

24
         13. Order Clarifying Article XII of the Confirmed Plan entered by the Bankruptcy
25           Court on December 15, 2004 (“Clarification Order”)

26


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                 -35- Filed 07/24/2007
                            Document 384                              Page 35 of 38
 1       14. Declaration of Vernon Schweigert, Managing Member of the Plaintiff dated
             July 23, 2007
 2

 3       15. Transcript of Deposition of Steve DelBianco dated August 23, 2006
 4

 5
         16. Declaration of Renee Jenkins dated July 17, 2007

 6
         17. Letter from Michael Donahey to Steven Best dated July 28, 1999
 7

 8       18. S&W Office Memorandum

 9
         19. S&W Office Memorandum, “current as of 2:00 p.m. on October 22, 1999,”
10           [Bates No. VT007167]
11
         20. Memorandum from Mr. Donahey to Mr. Best, dated March 6, 2000
12

13
         21. Transcript of Deposition of Michael O’Donnell dated July 18, 2006 and July
14           19, 2006

15
         22. Transcript of Deposition of Jeffrey Hirschberg dated September 8, 2005
16

17       23. S&W Memorandum to the Visitalk Board of Directors, dated November 2,
             1999
18

19       24. Transcript of Deposition of Stephen Best dated January 21, 2005
20
         25. Minutes of Board Meeting, dated November 24, 1999
21

22
         26. Draft Release of Claims and letter to Series A investors, produced by S&W
23           from its files, at Bates Nos. SWDS0568 – 0572

24
         27. Copy of Letter and Release of Claims to Susan Cole (a Series A investor) (the
25           “Cole Letter & Release Document”) dated November 29, 1999
26


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                 -36- Filed 07/24/2007
                            Document 384                           Page 36 of 38
 1       28. Transcript of Deposition of Joe Richardson, Visitalk’s original corporate
             attorney at Bryan Cave dated June 21, 2006 and August 28, 2006
 2

 3       29. Unanimous Consent of the Board of Directors relating to the claimed issuance
 4
             of the Founders’ Warrants which are signed by Mr. Thimmesch and Mr.
             O’Donnell with an “as of” date of September 12, 1998
 5

 6       30. Transcript of Deposition of Stephen Best dated September 9, 2005

 7
         31. Expert witness report of Boyd Lemon dated December 5, 2006
 8

 9       32. Supplemental & Rebuttal Report of Boyd Lemon dated June 4, 2007
10
         33. Office Memorandum, dated February 28, 2000
11

12
         34. Letter from Janet Lord to Steve Best, Bates Nos. VT006910 – 6912
13

14       35. Memorandum from Michael Donahey to Janet Lord, dated February 23, 2000,
             Bates Nos. VT07137 – 7140
15

16       36. Letter from Mr. Donahey to Michael Bidwell, dated May 26, 2000, with
             enclosures
17

18       37. S&W Billing Statements
19
         38. Transcript of Deposition of Charles Pulaski dated August 25, 2005
20

21
         39. Transcript of Deposition of Richard Rothwell dated August 25, 2007, August
22          31, 2006 and September 20, 2006

23
         40. Expert report of Steven Scherf dated January 8, 2007
24

25       41. Rebuttal expert report of Steven Scherf dated May 21, 2007
26
         42. Transcript of Deposition of James Fallon dated July 27, 2006
 Case 2:02-cv-02405-HRH
    343545.1/11400-001                 -37- Filed 07/24/2007
                            Document 384                            Page 37 of 38
 1

 2       43. E-mail from Mr. Donahey to Ms. Turley and attached redlined draft of the
             November 24, 1999 Minutes [Bates No.s SWDS0400 – 0408], at Bates No.
 3           SWDS0406
 4
         44. S&W Billing Statement for “Securities,” dated January 21, 2000, Bates Nos.
 5           1478 – 1490

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26


 Case 2:02-cv-02405-HRH
    343545.1/11400-001                -38- Filed 07/24/2007
                           Document 384                          Page 38 of 38

				
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