These are the latest documents in the bankruptcy of Xyience, Inc. filed to silence Rich Bergeron and stop his pursuit of the truth. Go to www.xyiencesucks.com to read all about the important work going on in this case to provide relief for shareholders who were burned by this fraudulent scheme to purposely tank this company on behalf of multiple insiders who benefit most from the collapse of what used to be the UFC's most prominent sponsor.
Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 1 of 31 1 GORDON SILVER E-Filed On 2 1 214 hi GREGORY E. GARMAN, ESQ. 2 Nevada Bar No. 6654 E-mail: firstname.lastname@example.org 3 3960 Howard Hughes Pkw 9th Floor y., Las Vegas, Nevada 89169 4 Telephone (702) 796-5555 Facsimile (702) 369-2666 5 Attorney for Zyen, LLC and Manzen, LLC d/b/a Xyience 6 UNITED STATES BANKRUPTCY COURT 7 FOR THE DISTRICT OF NEVADA 8 In re: Case No.: BK-S-08-10474-MKN 9 Chapter 11 XYIENCE INCORPORATED, 10 Debtor. 11 Date: OST Pending 12 Time: OST Pending 13 EMERGENCY MOTION FOR PLAN IMPLEMENTATION INJUNCTION 14 Pursuant to Sections l 105 and 1142(b) and Bankruptcy Rule 3020(d), Zyen, LLC 15 ("Zyen") and Manzen, LLC, a Nevada limited liability company d/b/a/ Xyience ("Xyience")2 16 hereby respectfully submit their Emergency Motion for Plan Implementation Injunction (the 17 "Motion") in the above-captioned case. Through this Motion, Zyen and Xyience request that this 18 Court enjoin Richard Bergeron ("Bergeron") from pursuing claims against Xyience, Inc. 19 ("Debtor"), Xyience, and their related parties, as such actions by Bergeron are in direct 20 21 1 Unless otherwise expressly stated herein, all references to chapters or sections shall refer to 11 U.S.C. § 101-1532 22 (the "Bankruptcy Code"), and all Rule references shall refer to the Federal Rules of Bankruptcy Procedure, 1001- 9036 (the "Bankruptcy Rules"). 23 2 Prepetition, Zyen was Debtor's largest secured creditor. During the course of the Bankruptcy Case, Debtor entered into an Asset Purchase Agreement with Manchester Consolidated Group, an Ontario corp. ("Manchester"), which 24 was approved by entry of an order of this Court on April 7, 2008, pursuant to which, in exchange for a cash payment to Debtor's estate and the assumption of Zyen's secured claims exceeding $14.8 Million, Debtor's assets were 25 transferred to Manchester subject to Zyen's liens, save and except the excluded assets, which included all causes of action of Debtor, Debtor's books and records, all rights under the Asset Purchase Agreement, any unassumed leases, 26 all life insurance policies, and a "carve out" for the payment of administrative claims. See Dkt. Nos. 149 and 178. The confirmed Plan is premised on this transaction. See, generally, Plan, Dkt No. 191. As Manchester acquired 27 Debtor's assets and operations and currently operates under the name of Xyience, for purposes of this Motion, Manchester shall be referred to herein as Xyience. 28 Gordon Silver Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 2 of 31 1 (as hereinafter defined) and threaten to upset the successful reorganization obtained through 2 these bankruptcy proceedings. 3 This Motion is made and based on the Declaration of William Bullard in Support of the 4 Motion for Plan Implementation Injunction (the "Bullard Declaration"), the Declaration of John 5 Lennon in Support of the Motion for Plan Implementation Injunction (the "Lennon 6 Declaration"), the Declaration of Michael Levy in Support of the Motion for Plan 7 Implementation Injunction (the "Levy Declaration"), the Declaration of John Villari in Support 8 of the Motion for Plan Implementation Injunction (the "Villari Declaration"), and the 9 Declaration of Gregory E. Garman, Esq. in Support of the Motion for Plan Implementation 10 Injunction (the "Garman Declaration"), each of which has been filed concurrently herewith, the 11 memorandum of points and authorities provided herein, the pleadings, papers, and other records 12 on file with the clerk of the above-captioned Court, judicial notice of which is hereby 13 respectfully requested, and the argument of counsel entertained by the Court at the time of the 14 hearing of the Motion. 15 MEMORANDUM OF POINTS AND AUTHORITIES 16 I. INTRODUCTION 17 In retaliation for the preliminary injunction Debtor obtained pre-petition against Bergeron 18 nearly four years ago, Bergeron has implemented a "crusade" 3 against Debtor and Xyience, 19 which obstructive and harassing conduct contravenes the permanent injunction provided by the 20 Bankruptcy Code and expressly stated in the Plan. Despite not being a shareholder of Debtor, 21 since the commencement of the Bankruptcy Case, Bergeron has assumed the unauthorized and 22 self-designated role of legal advocate of Debtor's former "shareholders." 4 With ever increasing 23 24 3 See Exhibit "3" to the Levy Declaration (wherein Bergeron defines his own actions with regard to Xyience as a "crusade"). 25 4 Despite not being a shareholder of Debtor, Bergeron has anointed himself the legal advocate for the allegedly 26 aggrieved former shareholders of Debtor, which were represented by counsel during the Bankruptcy Case. In so doing, Bergeron is arguably engaging in the unauthorized practice of law. See Dkt. No. 212, in Adv. No. 08-1082 ¶ 27 28 ("The entire class of shareholders I am fighting for...."); Dkt. No. 168, in Adv. No. 08-1082, at p. 6, 11. 21-25, p. 9, 11. 1-2; p. 19, 11. 13-15. ("Bergeron has standing enough to be dragged into this court against his will, so he should 28 have standing to sue on behalf of those injured by the abuse in addition to himself. Fertitta Enterprises points to the Gordon Silver 2 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 3 of 31 1 fervor, Bergeron contends that he is investigating, formulating, and on the eve of commencing 2 litigation for the benefit of the "shareholders" against Debtor and Xyience and their current and 3 former principals and affiliates, including Zyen and its principals, which litigation is premised on 4 Bergeron's outlandish theories of fraudulent and conspiratorial conduct that Bergeron alleges 5 occurred pre-petition. Bergeron's abusive conduct undertaken under the guise of protecting the 6 rights of Debtor's "shareholders" is in clear violation of the permanent injunction provided by 7 the Bankruptcy Code and expressly stated in the Plan and must immediately be halted. By way 8 of this Motion, Zyen and Xyience, pursuant to authority provided under Sections 105 and 1142 9 of the Bankruptcy Code and as expressly provided in the Plan, move this Court to enjoin 10 Bergeron's continued efforts to improperly prosecute claims or sanctions proceedings expressly 11 discharged, enjoined, or exculpated pursuant to the Plan against Zyen and Xyience, as well as 12 their affiliates, principals, management, employees, principals, and retained professionals. 13 II. JURISDICTION AND VENUE 14 1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 15 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). 16 2. Venue is appropriate under 28 U.S.C. §§ 1408 and 1409. 17 3. The statutory predicate for the relief requested herein is Section 105 and 1142(b) 18 of the Bankruptcy Code. Bankruptcy Rule 3020(d) also governs this Motion. 19 /// 20 /// 21 /// 22 23 (continued) other adversarial proceeding and previous developments that have nothing to do with the matter at hand and the circumstances under which Bergeron is asking for relief on his behalf as well as for damages shareholders." "These 24 burned shareholders simply need relief, and Bergeron is the only person at this point who can adequately help them get it." "This is about promoting restitution to an entire class of former Xyience owners who have so far been 25 completely overlooked by this process."); see also Exhibit "8" to the Levy Declaration ("Still, I have to fight for the legitimate shareholders who got screwed. .... Frankly, and unfortunately, this work has become my life. I have had 26 to become a lawyer virtually overnight.... I wouldn't have done all the work I did to be proficient as a lawyer through all this if I didn't have the facts on my side.") Notably, during the February 10, 2100 Leave to Amend 27 Hearing, this Court advised that the Court is not persuaded that Bergeron has standing to attempt to act on behalf of the shareholders. See Garman Declaration ¶ 4. 28 Gordon Silver 3 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 4 of 31 1 III. PERTINENT FACTS 2 A. The Bankruptcy Case and Applicable Plan Provisions. 3 4. On January 18, 2008, Debtor filed its voluntary Chapter 11 petition, thereby 4 commencing the above-captioned bankruptcy case (the "Bankruptcy Case"). 5 See Petition, Dkt. 5 No. 1.6 6 5. On May 19, 2008, Debtor filed its Plan of Reorganization (the "Plan") [Dkt. No. 7 191], which Plan was later confirmed by this Court on October 23, 2008, through the entry of the 8 Order: (1) Approving Debtor's Disclosure Statement; and (2) Confirming Debtor's Plan of 9 Reorganization (the "Confirmation Order"). See Dkt. No. 321. 10 6. The Plan includes an injunction provision that states the following: 11 From and after the Effective Date, 17 ' except for the shareholder derivative action 12 presently pending as Adv. No. 08-1107, the Bergeron matter presently pending as Adv. No. 08-1082, the Committee Action presently pending as Adv. No. 08- 13 1094, and except as provided in this Plan and the Confirmation Order, all entities 14 that have held, currently hold or may hold a Claim or an Equity Interest or other right of a Equity Interest holder that is terminated pursuant to the terms of the 15 Plan are permanently enjoined from taking any of the following actions on account of any such Claims or Equity Interests or rights: (a) commencing or 16 continuing in any manner any action or other proceeding against the Liquidating Trust or its respective property; (b) enforcing, attaching, collecting or recovering 17 in any manner any judgment, award, decree or order against the Liquidating Trust 18 or its respective property; (c) creating, perfecting or enforcing any Lien or encumbrance against the Liquidating Trust or its respective property; (d) 19 asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Liquidating Trust or its respective property; 20 and (d) [sic] commencing or continuing any action, in any manner or any place, that does not comply with or is inconsistent with the provisions of this Plan or the 21 Bankruptcy Code. Nothing in the plan shall affect, release, enjoin or impact in 22 any way the prosecution of the Claims of Creditors treated by this Plan or the Litigation Claims transferred to the Liquidating Trust pursuant to this Plan. The 23 Debtor reserves its right to file all appropriate pleadings or actions that may be 5 24 Pursuant to an order entered January 31, 2008, this Court dismissed, with prejudice, an involuntary Chapter 11 petition for relief that was filed against Debtor on January 3, 2008, as case number BK-S-08-10049-MKN. See Dkt. 25 No. 55. 6 All references to docket numbers in Section A of this Motion shall refer to the docket in the Bankruptcy Case. 26 7 On November 23, 2009, Debtor filed its Notice of (1) Effective Date; and (2) Deadline For Filing Requests For 27 Payment of Administrative Claims and Professional Fee Claims, Including Claims Under 11 U.S.C. Section 503(B) ("Notice of Effective Date"), which stated therein that the Effective Date of the Plan was November 20, 2009. See 28 Dkt. No. 360. Gordon Silver 4 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 5 of 31 1 necessary to preserve its rights and protect the Estate's interest in Claims or Litigation Claims. 2 See Plan § 8.4, Dkt. No. 191. 3 7. In addition, the Plan includes an exculpation provision that insulates officers of 4 the organization from any liability arising from the Bankruptcy Case and states, in pertinent part, 5 as follows: 6 From and after the Effective Date, the Debtor, . . . the Professionals nor any of 7 their respective present or former members, directors, officers, managers, 8 employees, advisors, attorneys or agents, shall have or incur any liability to any holder of a Claim or Equity Interest or any other party-in-interest, or any of their 9 respective agents, employees, representatives, financial advisors, attorneys or Affiliates, or any of their successors or assigns, for any act or omission in 10 connection with, relating to, or arising out of (from the Petition Date forward), the Bankruptcy Case, Liquidating Trust, the pursuit of confirmation of this Plan 11 or the consummation of this Plan, except for gross negligence and willful 12 misconduct, and in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under this Plan 13 or in the context of the Case. 14 Id. § 8.5. 15 8. Finally, Section 9 of the Plan establishes that this Court retains jurisdiction 16 notwithstanding the occurrence of the Effective Date to provide the relief requested herein. 17 Specifically, Subsection 9.1(i) of the Plan states that this Court may "[i]ssue injunctions, enter 18 and implement other orders or take such other actions as may be necessary or appropriate to 19 restrain interference by any person with consummation, implementation or enforcement of any 20 Final Order, this Plan or the Confirmation Order or the Liquidating Trust, except as otherwise 21 provided herein." Id. § 9.1(i). 22 B. Bergeron's Harassing, Obstructive, and Extortionist Conduct in Violation of the Plan. 23 As discussed more fully herein, Bergeron's sole interest in the Bankruptcy Case arose out 24 of a defamation claim brought pre-petition against Bergeron by Debtor, which state court action 25 was removed to the Bankruptcy Court after the commencement of the Bankruptcy Case. 26 Importantly, all but one of Bergeron's claims in this adversary have been dismissed with 27 28 Gordon Silver 5 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 6 of 31 1 prejudice.8 Despite the fact that Bergeron has exhausted his ability to bring any further claims 2 (other than frivolous, vexatious claims and filings) in the adversary proceeding, under the 3 auspices of representing the interests of Debtor's "shareholders," Bergeron continues to seek to 4 derail the implementation of the Plan through any possible means, including the commencement 5 of impermissible lawsuits and other legal proceedings against Debtor, Xyience, Zyen, and their 6 affiliates, as well as their principals, management, employees, and retained professionals, while 7 simultaneously seeking a windfall for himself As this Court has most recently seen, through 8 unfounded sanctions proceedings, 9 Bergeron has sought an award of sanctions and damages in 9 the amount of $150 Million, $500,000 of which Bergeron would personally receive, against 10 Debtor, its attorneys, and eight persons and entities having never made an appearance, or signed 11 or filed any pleadings or papers in the adversary proceeding. 12 Despite having been unsuccessful in his legal pursuits to date, which pursuits are, at best, 13 unmeritorious, and more accurately, an abuse of the bankruptcy system, Bergeron remains 14 undeterred. 19 With every day that has passed since January 1, 2011, Bergeron's unrelenting 15 pattern of harassing, obstructive, and extortionist conduct undertaken under the auspices of 16 litigating for the benefit of Debtor's "shareholders" has escalated to new, unconscionable 17 heights. In furtherance of seeking to pursue pre-petition litigation claims against Debtor and 18 Xyience or to extract a payout by Xyience, Zyen, or their affiliates, Bergeron has embarked on a 19 8 As discussed more fully herein, Bergeron's only remaining claim is a claim for defamation against Debtor. Counsel for the Liquidating Trustee advised this Court on February 10, 2011, that pending a determination of 20 whether there would be funds available to make a meaningful distribution to holders of allowed claims, it would be a waste of the Liquidating Trust's assets to spend time litigating the merits of Bergeron's sole remaining claim. 21 Appreciating this argument, the Court continued the pending motion relating to Bergeron's sole remaining claim until such time as the Liquidating Trustee has determined whether there will be a meaningful distribution to holders 22 of unsecured claims, thereby justifying the expenditure of funds to defend against Bergeron's sole remaining claim. See Dkt. No. 223, in Adv. No. 08-1082. 23 9 In open Court on February 10, 2011, the Court denied Bergeron's Leave to Amend Motion (as defined herein). 24 See id. 10 See February 14, 2011 Garman Email, attached as Exhibit "2" to the Garman Declaration, wherein Bergeron 25 states "[t]he judge is saying I have to personally appear from now on. So, what's the incentive for me to keep fighting this from afar? Why not move out to Vegas and take you scumbags on in your own backyard? I have a 26 place to stay, and this place is a haven for my day job, so it makes sense." Further in the electronic mail, Bergeron advises of his intent to continue litigating in perpetuity, regardless of the frivolity of his actions. "You are going to 27 lose this one, whether it's in a courtroom or in the court of public opinion. It's only going to happen sooner if you keep acting like there's no downside to all this raging on into eternity." Id. 28 Gordon Silver 6 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 7 of 31 1 course of harassment outside the legal forum by: (i) contacting Xyience's employees through 2 mass electronic mails containing inflammatory, libelous, and threatening language; (ii) harassing 3 and threatening Xyience and Zyen's principals and employees, as well as counsel for Xyience 4 and Zyen via electronic mail correspondence, as well as phone calls and personally appearing or 5 threatening to personally appear at their offices and their homes; (iii) seeking to divert the sale of 6 Xyience products to a third-party not affiliated with Xyience; (iv) contacting one or more 7 customers of Xyience products and implying such customers' involvement in steroid sales; (v) 8 personally appearing at mixed martial arts studios with whom Xyience, Zyen, and their affiliates 9 have relationships and accusing Xyience's employees of selling steroids; (v) continuing to post 10 harassing, libelous, and inflammatory comments and videos on www.xyiencesucks.com and 11 www.youtube.com; (vi) posting false comments regarding alleged steroid use on Xyience's 12 Facebook page, which is viewed by consumers of Xyience products; and (vii) utilizing a mobile 13 phone application to contact Xyience employees from phone numbers for mobile phone accounts 14 held by Xyience's principals, thereby causing the recipient of the phone call to believe that one 15 of Xyience's principals is contacting them, when in fact, the phone call is from Bergeron. 16 1. Bergeron Has Recently Exponentially Elevated His Harassment of Xyience's Principals and Employees in Furtherance of the Pursuit of "Claims" Against 17 Debtor, Xyience, its Affiliates, and Their Principals, Management, and Employees for the Alleged Benefit of the "Shareholders." 18 a. Bergeron's Harassment of Lennon, Levy, and Xyience's Employees. 19 9. In the last few weeks and in contravention of the permanent injunction provided 20 by the Bankruptcy Code and expressly stated in the Plan, Bergeron has made his intent to 21 continue to pursue litigation against Xyience and its affiliates, as well as their principals, 22 management, and retained professionals abundantly clear -- unless and until he receives a 23 substantial payoff In furtherance of formulating his new "claims" purportedly on behalf of the 24 Debtor's "shareholders" (despite not being a shareholder), Bergeron is harassing Zyen and 25 Xyience's principals and employees and seeking to disrupt Xyience's operations. 26 10. Specifically, on January 24, 2011, Bergeron sent John Lennon, the President of 27 Xyience ("Lennon"), an electronic mail (the "January 24, 2011 Lennon Email"), wherein 28 Gordon Silver 7 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 8 of 31 1 Bergeron sets forth part of his misguided conspiracy theory and states, "I have been fighting to 2 expose the corruption that's been going [on] at the company, and I have multiple allies among 3 the 'shareholders' and even multiple current and past employees. One of those past employees, 4 someone who has been a longtime employee, is currently suing, and I am sure you are inclined to 5 settle." See January 24, 2011 Lennon Email, attached to the Lennon Declaration as Exhibit "1." 6 11. Lennon has never provided Bergeron with information regarding his travel plans 7 or his cell phone number. Nonetheless, the January 24, 2011 Lennon Email concludes with the 8 following menacing statement "I know you're in New York on hiatus for a while. Maybe I'll 9 call you. I have your cell number. We should talk." See id., ¶ 5. 10 12. After Bergeron's further attempts to contact Lennon, on January 28, 2011, 11 Gregory Garman, Esq. ("Garman"), counsel to Zyen and Xyience, sent an electronic mail to 12 Bergeron (the "January 28, 2011 Garman Email"), wherein Garman advised Bergeron that 13 Lennon and the other officers and employees of Xyience have been instructed not to 14 communicate with Bergeron and that any future pleadings filed will result in a request for 15 damages, including but not limited to reimbursement for attorneys' fees and costs. See January 16 28, 2011 Garman Email, attached to the Garman Declaration as Exhibit "3." 17 13. An hour after the January 28, 2011 Garman Email was sent, Bergeron, in blatant 18 disregard for Garman's electronic mail, contacted Lennon on his cell phone and left a voice 19 message. See Lennon Declaration ¶ 6. 20 14. Three hours after the January 28, 2011 Garman Email was sent, Bergeron sent 21 Lennon an electronic mail (the "January 28, 2011 Lennon Emails") with a courtesy copy to 22 Garman and Michael Levy, Xyience's Chief Financial Officer and Chief Operating Officer 23 ("Levy"), wherein Bergeron threatens, "I'm on to your game. Technology is a wonderful thing. 24 I can almost hear what you are thinking. If none of you talk, someone else will, on or off the 25 record. People are already talking. I know what's going on." See January 28, 2011 Email, 26 attached to the Lennon Declaration as Exhibit "2." 27 15. Eight hours later, on January 28, 2011, Bergeron expanded the scope of his 28 harassment and obstruction from the targets of Lennon, Levy, and Garman to effectively all of Gordon Silver 8 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 9 of 31 1 Xyience's employees" by sending an electronic mail to Xyience's employees (collectively, the 2 "Xyience Employees") with a subject line of "All Points Bulletin: The truth and the law protect 3 you" (the "January 28, 2011 Xyience Employees Email"). See January 28, 2011 Xyience 4 Employees Email, attached to the Lennon Declaration as Exhibit "3." The January 28, 2011 5 Xyience Employees Email is laden with blatantly false and disparaging statements regarding 6 Xyience and its affiliates, as well as their management and principals, intended to vilify 7 management, to ignite distrust and discord between the employees and management, to disrupt 8 Xyience's operations, and to coerce the Xyience Employees into believing that Bergeron is 9 somehow acting on their behalf so that they provide him with information he may utilize in his 10 continued efforts to litigate against Xyience. See Lennon Declaration, ¶ 9. Bergeron concludes 11 the electronic mail with a plea to the Xyience Employees to "[p]lease contact me if you can tell 12 me something that will help expose the ongoing issues at Xyience and point to any serious 13 evidence that will help my case to promote the truth." Id. 14 16. On February 1, 2011, Bergeron sent a second electronic mail to the Xyience 15 Employees with a subject line of "A little light reading (Warning: Xplosive Material)," (the 16 "February 1, 2011 Xyience Employees Email"), through which he, using the metaphor of an 17 abused child, again peddled his conspiracy theory to the Xyience Employees and invited the 18 Xyience Employees to contact him to provide information in support of his case. See February 19 1, 2011 Xyience Employees Email, attached to the Lennon Declaration as Exhibit "4." 20 However, this electronic mail takes it a step further and attempts to gain credibility by suggesting 21 that Bergeron has recorded or has deployed someone else to record or otherwise report the 22 details of a private company meeting with the Xyience Employees conducted the day before - 23 January 31, 2011. See id. ("How was the big meeting yesterday?" "Believe it or not, I am a 24 friend of Xyience, despite what John Lennon tells you." "Maybe Maria Sosa was right to tell 25 you to bring it to the company first if you have concerns." "Maybe John Lennon is right about 26 the Fertittas being good for the company...."). 27 11 It is unclear by what legal means Bergeron could have obtained the contact information for Xyience's Employees. 28 Gordon Silver 9 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 10 of 31 1 17. Within hours of sending the February 1, 2011 Xyience Employees Email, 2 Bergeron sent Lennon an electronic mail with a subject line of "You can talk to me...or you can 3 talk to a judge," (the "February 1, 2011 Lennon Email"), wherein Bergeron seeks to extort 4 information from Lennon by threatening to file a lawsuit against Lennon if he does not cooperate 5 with him: 6 If you're not a bad guy, you have nothing to worry about. If I have no reason to be on good terms with you, why shouldn't I file a new civil action against you for 7 defamation?... 8 All it would take me to file a civil action against you would be time, and I have all the evidence I need already.... So, the bottom line is it's your choice if you 9 want to pick up the phone and chat like grown men. It's also your choice if you want to run to the lawyers and get them on my case, inspiring me to get you on a 10 case of my own. 11 The worst thing you can do is avoid this altogether, ignore me, or hope I go away. I'm not letting up until I get answers, and I won't be made a scapegoat by you or 12 anyone else.... 13 In this case you are either with me or against me, and you are starting to make your preference known without bothering to investigate what I'm all about. I 14 know exactly what you said about me yesterday and who you said it to. One affidavit and a complaint is all it will take. Thousands of dollars spent by you 15 down the line on your own personal lawyers will then maybe force you to see things in my frame of light. Or, you can pick up the phone and start a 16 conversation in good faith. It can be on or off the record, your choice. 17 So the choice is yours. Talk to me...or talk to a judge. I can have a suit filed within the next month with you as the main defendant. This is not a fishing 18 expedition. 19 See February 1, 2011 Lennon Email, attached to the Lennon Declaration as Exhibit "5." 20 18. About twelve hours later, on February 1, 2011, Bergeron sent an electronic mail 21 to Levy, Chief Financial Officer and Chief Operating Officer of Xyience, and Garman, with a 22 subject line of "Suing Me Will Not Be A Good Idea" (the "First February 1, 2011 Levy Email"), 23 wherein Bergeron again threatens to sue Lennon, advises that he "has been informed that you are 24 contemplating a new lawsuit against me," and reveals his intention to continue unmeritorious 25 litigation and sanctions proceedings if any action is taken to hinder his obstruction and 26 harassment of Xyience undertaken in the name of investigating and formulating claims on behalf 27 of Debtor's "shareholders." See February 1, 2011 Levy Email No. 1, attached to the Levy 28 Declaration as Exhibit "1." Importantly, through the First February 1, 2011 Levy Email, Gordon Silver 10 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 11 of 31 1 Bergeron acknowledges that he is able to continue his ill-founded crusade against Xyience (and 2 his effort to extract a payout for his benefit through sanctions awards) because, as a self- 3 proclaimed attorney and advocate for the "shareholders," he is not restrained by normal legal 4 costs that deter the filing of frivolous pleadings and claims. 5 My law firm is my computer, my printer, the Internet, and my time. As you should know from experience, I've gone almost 4 years without having to hire a 6 single attorney of my own. I've grown leaps and bounds from the kid you sued back in 2007 for no reason but to shut me up. .... 7 Finally, you have know [sic] idea how much I am really starting to enjoy 8 practicing the law. I have three different lawsuits going in three states that I'm part of now. I've handled four appeals to the 7th Circuit in addition to working at 9 the superior court, state court, and federal court levels.... The fact is, I'm a defensive lawyer. I prefer being sued to having to file a suit of my own. You do 10 all the work that way, and then since it will be obvious you are attacking me needlessly you are the one who will be seen as the bully while I'm going to be 11 seen as the victim. So, please, sue me. I'd like that. 12 I'd like very much to have another opportunity to extract damages against the lawyers who file this title of paperwork. 13 Id.; see also February 1, 2011 Lennon Email, attached to the Lennon Declaration as Exhibit "5" 14 (wherein Bergeron states "you should consider how much it cost me over the past nearly 4 years 15 this case has been going on. I can tell you I have not spent much at all.... I likely only have 16 about $4,000 to $5,000 of my own money into this case if you total up all my expenses on it 17 from ink and paper to postage. My primary investment was been time, and I have plenty of 18 that."). 19 19. At 11:07 p.m. on February 1, 2011, Bergeron sent another electronic mail to Levy 20 (the "Second February 1, 2011 Levy Email"), wherein Bergeron states, "You can try to find a 21 mole or see if you can figure out how I am getting all this information, but the real sources of my 22 info will elude you. There is no way for you to find out how I obtained what I did. I can still get 23 more, and there's nothing you can do to get in my way." Bergeron further states, "I am going to 24 be gathering file cabinets full of documents in the near future. I have multiple new sources to 25 garner valid information from. The s[---]storm is gathering, and it's going to wind up on your 26 doorstep soon." See Second February 1, 2011 Levy Email, attached to the Levy Declaration as 27 Exhibit "2." 28 Gordon Silver 11 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 12 of 31 1 20. On the same day, February 1, 2011, on the website he created to disseminate false 2 and inflammatory information regarding Xyience, Zyen, and their principals and management in 3 furtherance of his conspiracy theory - www.xyiencesucks.com -- Bergeron posted a blog 4 discussing at length Bergeron's harassment of Lennon and Lennon's continued refusal to 5 succumb to the harassment and to speak to Bergeron, as well as acknowledging his "electronic 6 mail blasts to Xyience employees," and threatening that he has "a tremendous library of 7 evidence" that he may or may not have to publish. See Exhibit "3" to the Levy Declaration. 8 21. Thereafter, on February 24, 2011, Bergeron sent yet another electronic email to 9 the Xyience Employees with a subject line of "Not Out To Destroy Your Company" (the 10 "February 24, 2011 Xyience Employees Email"), wherein Bergeron, in addition to implying that 11 he is counsel for the "shareholders" and that he is currently in contact with other employees of 12 Xyience, discusses his efforts at extracting a payoff from Xyience, Zyen, and their affiliates. 13 It seems they'd rather pay their high priced lawyers hundreds of dollars an hour to avoid paying me or those victims any restitution. 14 *** 15 The Fertittas are worth billions, and they can afford to pay. 16 Exhibit "8" to the Levy Declaration. The February 24, 2011 Xyience Employees Email again 17 concludes with a plea to the Xyience Employees to provide Bergeron with information. See id. 18 22. Also on February 24, 2011, Bergeron sent a subsequent email to the Xyience 19 Employees with a subject line of "John Villari Xposed" (the "Villari February 24, 2011 Xyience 20 Employees Email"), wherein Bergeron included an aggregate of over fifty text messages sent to 21 a Xyience employee, John Villari ("Villari"), which text messages contain false allegations 22 pertaining to Villari's personal life as well as threatening and extortionist statements in an effort 23 again to coerce Villari to comply with his demands for information. A true and correct copy of 24 the Villari February 24, 2011 Xyience Employees Email is attached to the Levy Declaration as 25 Exhibit "9." 26 /// 27 /// 28 Gordon Silver 12 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 13 of 31 1 b. Bergeron's Targeted Harassment of John Villari, an Employee of Xyience. 2 23. Beginning on February 10, 2011, Bergeron focused his harassment on Villari. 3 Although it remains unclear how Bergeron obtained Villari's cellular phone number, starting on 4 the evening of February 10, 2011, Bergeron, through the use of various phone numbers and 5 blocked numbers, has repeatedly called Villari and accused him of engaging in the sale of steroid 6 and methamphetamines, threatened to take the information to the "feds," and stated that he will 7 not leave Villari alone. See Villari Declaration ¶ 2; see also Incident Report, attached as Exhibit 8 "1" to the Villari Declaration, which Exhibit has been filed under seal. 9 24. The next day, on February 11, 2011, Bergeron and a second unknown person 10 appeared at Villari's residence and when Villari's father answered the door, Bergeron inquired as 11 to whether he was Villari, whether Villari was home, and advised that he, Bergeron, had been 12 informed that Villari had "called in sick" to work that day. See Incident Report, at Voluntary 13 Statement, attached as Exhibit "1" to the Villari Declaration, which Exhibit has been filed under 14 seal. After Bergeron was asked to leave Villari's property, Bergeron appeared at Xyience's 15 offices, requesting the same information. See Levy Declaration, ¶ 8. Shortly thereafter, on the 16 same date, Bergeron appeared at a mixed martial arts studio where Villari has many 17 acquaintances. At the studio, Bergeron engaged in discussions with other members of the studio, 18 wherein he proceeded to falsely accuse Villari of selling steroids. See id. ¶ 4. 19 25. The following date, through a mobile phone application that allows the user to 20 call from any phone number, Bergeron contacted Villari by telephone by impersonating the 21 telephone numbers of a co-worker and principals of Xyience. 12 During these phone calls, 22 Bergeron continued to harass Villari with allegations of steroid sales and threatened that if Villari 23 did not speak to Bergeron regarding Bergeron's Xyience conspiracy theory, Bergeron would be 24 25 12 To the best of Zyen's understanding, the mobile phone application allows the user to call the application provider 26 and input the phone number that he desires to appear on the phone of the person he is calling. The call is then placed to the recipient from the phone number directed by the application user. Thus, through this application, when 27 Bergeron would contact Villari, the phone number that would appear on Villari's phone would be the phone number of other employees or principals of Xyience. 28 Gordon Silver 13 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 14 of 31 1 "going to print" with the alleged steroid story. See id ¶ 5; see also Incident Report, attached as 2 Exhibit "1" to the Villari Declaration, which Exhibit has been filed under seal. 3 26. On February 14, 2011, Bergeron contacted Villari through his profile on 4 Behance.net asking why Villari was "scared to come to work" when Villari had not gone to work 5 that day. Bergeron also continued to threaten the disclosure of false evidence related to 6 purported steroid and methamphetamine sales - "Do I have to go to the police to get you to open 7 up, John? .... I really don't want to make it front page news so you and your family have to deal 8 with the bad press. I'd much rather just talk to you about what you know about Xyience." See 9 Exhibit "2" to the Villari Declaration; see also Villari February 24, 2011 Xyience Employees 10 Email, Exhibit "10" to the Levy Declaration ("I can continue to pursue this story, and you 11 wherever you go or we can talk and you can clear your name. the choice is yours JV but dont 12 think too long" "the more you dont talk the more aggressive I will get" "you going to call? you 13 really want me to release these messages to everyone at the company?"). 14 27. Two days later, on February 16, 2011, Bergeron appeared at another mixed 15 martial arts studio that Villari frequents falsely alleging to the owner of the facility and others 16 present that Villari sells steroids and methamphetamines. See id ¶ 7. 17 28. That same day, an unidentified and unauthorized individual, whom one can only 18 presume to be Bergeron, posted on www.craigslist.org "Moving. Patio set and chairs. Little 19 dirty, needs to be cleaned. I also have a shade umbrella. Need this gone by weekend. Bring 20 trucks, no cars. Come pick it up: [at Villari's home address]." See Villari Declaration ¶ 8; see 21 also Exhibit "3" to the Villari Declaration, which exhibit has been filed under seal. After several 22 persons responded in person to the craigslist post, Villari contacted craigslist and had the posting 23 removed as he had not authorized it. Shortly after the removal of the initial posting, a second 24 posting stating "Moving this weekend. I have a patio set that I bought at Sears last year. a little 25 dirty, but can be cleaned. comes with a shade umbrella. having a yard sale today at noon. 26 [Villari's home address] call and ask for John [followed by Villari's phone numbers]." See 27 Villari Declaration ¶ 9; see also Exhibit "4" to the Villari Declaration, which exhibit has been 28 Gordon Silver 14 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 15 of 31 1 filed under seal. Again, persons began responding with phone calls and in person in response to 2 this second posting before Villari could obtain its removal from www.craigslist.com. See id. 3 29. In response to such terrorizing of himself and his family, Villari has now obtained 4 a temporary protective order against Bergeron. See id. 10. However, such order does not 5 preclude Bergeron from targeting other employees or persons affiliated with Xyience or provide 6 any protection or prohibition against such continued harassment of Xyience's other employees 7 which harassment Bergeron contends he is undertaking in furtherance of his pursuit of the 8 "shareholders" prepetition claims. 9 2. Bergeron Has Recently Intensified His Harassment of Xyience and His Obstruction of Xyience's Operations. 10 30. In addition to sending the incendiary electronic mails to Xyience's employees and 11 disrupting Xyience's operations, on February 11, 2011, Bergeron personally appeared at 12 Xyience's offices. As Bergeron had not been invited to the offices, security immediately 13 approached Bergeron prior to any confrontation with management or employees and asked that 14 he leave the premises. See Levy Declaration 7. 15 31. In addition to his website (www.xyiencesucks.com) dedicated to the 16 dissemination of false information in furtherance of his conspiracy theory, Bergeron has also 17 posted several YouTube videos attacking Xyience. Perhaps the most disturbing of these videos 18 is one in which Bergeron violently punches a bag and curses profusely, while he tells the viewers 19 to purchase Xyience products not from Xyience's websites, but from a friend of Bergeron's who 20 sells the products on e-Bay for lower prices than Xyience sells its products. As Bergeron states, 21 "I got a guy.... This f---ing guy has a f---ing Xyience e-bay shop where they got Xyience s--- so 22 f---ing cheap it's practically f---ing free." Movants would encourage the Court to watch the 23 video available at http://www.youtube.com/watch?v=IJcWNr0Repo, at 1:34/4:41. 24 32. Clearly adept at using all available medium to harass Xyience, Bergeron has also 25 posted threatening and libelous comments on Xyience's Facebook page. For instance, on 26 February 17, 2011, Bergeron posted the following three posts: (1) "There's some big a-- waves 27 coming Xyience's way. There better be more where this came from"; (2) "When are the new 28 Gordon Silver 15 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 16 of 31 1 anabolic steroids coming out???"; and (3) "How do you go from JV to varsity? Roids Baby! 2 Roids." See Exhibit "4" to the Levy Declaration. 3 33. In the last few weeks, Xyience has also learned that Bergeron has contacted by 4 way of internet chat conversation ("Chat Conversation") at least one of its customers alleging 5 that Villari is involved in steroid sales and suggesting that the customer is also involved with 6 steroids. The chat conversation concluded with Bergeron seeking "comment" from the customer 7 in response to his allegations. The customer ended the chat conversation and alerted Xyience to 8 Bergeron's accusations. A true and correct copy of the chat conversation is attached to the Levy 9 Declaration as Exhibit "5." It is unclear how many other customers Bergeron may be contacting 10 and making similar false accusations designed to harm Xyience. 11 34. On the morning of February 22, 2011, Bergeron electronic mailed Villari, 12 Lennon, Levy, and a number of other Xyience Employees attaching a link to his blog titled 13 "Dispatch From The Desert: Xyience Scandal Widens, Prospect of Questions Scrambles 14 Security" (the "February 22, 2011 Blog Email"), which blog was posted on February 21, 2011 15 (the "February 21, 2011 Blog"). See February 22, 2011 Blog Email, attached as Exhibit "6" to 16 the Levy Declaration. The February 22, 2011 Blog electronic mail was concluded with yet 17 another threat, followed by a request for information - "This is just the tip of the iceberg. More to 18 come in the days ahead. Contact Rich Bergeron at email@example.com or 617-209-4325 if 19 you have any information you'd like to share." Id. 20 35. Inconceivably, the February 21, 2011 Blog brags about Bergeon's harassment of 21 Xyience, its principals, and its employees. 22 I started to pick apart Xyience and find their flaws from day one, right off the airplane. First there was a cruise around their offices and warehouse facility. Then 23 I arrived in person. Dispatches from within told me what I was doing was working wonders. The staff was meeting about me daily, sometimes having the 24 lawyer down there to discuss it all. The "distraction" I posed was now real, as I was in their backyard suddenly. The judge's stern order in my case that I would 25 have to appear in person for future hearings troubled me. I decided to stay in town and start doing some digging. I wanted to find out what was buried in that 26 Xyience hole in the desert. *** 27 28 It's funny how one guy can generate so much buzz. While in Las Vegas I thought Gordon Silver 16 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 17 of 31 1 it to be pretty important to go after the attorney on the case and the general manager for the Fertitta entity that ran Xyience into the ground to promote the 2 bankruptcy. Gregory Eugene Garman seemed on the very verge of shitting his pants when I emailed the lawyer his home address in a gated community out here. 3 He alerted his local law enforcement and his security in the community thinking I was going to show up at his doorstep. I did the same thing to General Manager of 4 Fertitta Enterprises and Zyen, LLC 'Dollar' Bill Bullard. 5 Exhibit "7" to the Levy Declaration. 6 3. Harassment of Zyen's Manager and Counsel. 7 36. In addition to threatening and harassing Xyience and its principals, management, 8 and employees, beginning in February, 2011, Bergeron began contacting Zyen's manger, Bill 9 Bullard ("Bullard"), at his home. In these calls, among other threats, Bergeron advised that he 10 knew where Bullard lived and that people would be coming to Bullard's home. See Bullard 11 Declaration 112. 12 37. In a voicemail left on Bullard's cellular phone on February 14, 2011, Bergeron 13 not only impliedly threatened Bullard and his children, but further explicitly sought to extort 14 payment from Bullard: 15 Hey Bill. This is Rich Bergeron calling. I have a few questions I want to ask ya'. Can we set up an interview while I am in town maybe? Maybe then you guys can 16 serve that restraining order on me. How about we have a pow wow down at Gordon Biersch? Just set up a reservation for a party of three hundred and 17 eighty-five so all the shareholders can go too. Listen Bill, I am not going away anytime soon. I have all kinds of dirt on this company that I'm going to have to 18 go to print with soon. It's getting better and better every day. I think its kinda funny you giving me advice on -- urn -- going to my parents for guidance. Do 19 you say that 'cause both of your kids still live at home? How are Brittany and Jake doing with your guidance? Not too swell it seems. At any rate, Bill, time for 20 us to put all of this to bed. You can't afford to be paying Garman to come down to Xyience's headquarters every day. You can't justify spending all this money 21 for what one guy is doing. Time to write a check Bill. That's the bottom line. 22 See Bullard Declaration 3. 23 38. In response, on February 15, 2011, Bullard sent Bergeron an electronic mail (the 24 "February 15, 2011 Bullard Email") advising that "as a result of your continued threatening and 25 harassing phone calls to my family[,] I have given your picture and name to security at my 26 residence as well as local authorities. Any attempt to approach my residence or make contact 27 with my family will be met with your arrest." See February 15, 2011 Bullard Email attached as 28 Exhibit "1" to the Bullard Declaration; see also February 21, 2011 Blog, attached to the Levy Gordon Silver 17 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 18 of 31 1 Declaration (wherein Bergeron brags about his threats and the response they elicited from 2 Bullard). 3 39. In addition, Bergeron's pattern of harassment has also extended to Zyen's 4 counsel. At 3:19 p.m. on February 15, 2011, Bergeron sent an electronic mail (the "First 5 February 15, 2011 Garman Email") to Garman solely stating "You want me to just come down 6 to your offices and start asking questions." See First February 15, 2011 Garman Email, attached 7 as Exhibit "3" to the Garman Declaration. 8 40. Garman responded to the First February 15, 2011 Garman Email by sending an 9 electronic mail (the "Response to First February 15, 2011 Garman Email") to Bergeron stating 10 "Mr. Bergeron, you are not welcome at my offices. Please be advised that by way of this 11 message[,] i am directing my executive director to alert security that you are not to be admitted 12 to the building and law enforcement is to be summoned if you attempt to gain access. I have no 13 patience for your misguided antics. All future electronic correspondence will go unanswered." 14 See Response to First February 15, 2011 Garman Email, attached as Exhibit "4" to the Garman 15 Declaration. 16 41. At 3:54 p.m. on February 15, 2011, Bergeron sent another electronic mail to 17 Garman (the "Second Series of February 15, 2011 Garman Emails") stating in relevant part "OK, 18 so you're saying now I have to find out where you live to talk to you? Can't be that hard. I 19 found out where Bill Bullard lives." This electronic mail was then followed by two additional 20 electronic mails referencing addresses, implying that Bergeron had located where Garman 21 resides, the second of which was followed by the statement "I'll try both." See Second Series of 22 February 15, 2011 Garman Email, attached as Exhibits "5," "6," and "7" to the Garman 23 Declaration. 24 42. In response to the Second Series of February 15, 2011 Garman Emails, Garman 25 sent an electronic mail to Bergeron stating that "Mr. Bergeron, security at my residence and the 26 police department have already been alerted to the threat you pose. Be advised you will be 27 arrested should you attempt to obtain access to my neighborhood," a true and correct copy of 28 which is attached to the Garman Declaration as Exhibit "8." See also February 21, 2011 Blog, Gordon Silver 18 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 19 of 31 1 attached to the Levy Declaration (wherein Bergeron brags about his threats and the response they 2 elicited from Garman). 3 43. Garman's response to the Second Series of February 15, 2011 Garman Emails 4 was met with an electronic mail from Bergeron (the "Third February 15, 2011 Garman Email") 5 stating in relevant part: 6 I have my ways of getting into your neighborhood undetected. All they can do is escort me out if I'm only there to ask questions. 7 Why are you so scared of me? 8 Looking at your house on Google Maps right now. 9 See Third February 15, 2011 Garman Email, attached as Exhibit "9" to the Garman Declaration. 10 44. In response to these threats, Garman has now obtained a temporary protective 11 order against Bergeron. 13 See Garman Declaration 1112. However, such order does not preclude 12 Bergeron from targeting and harassing other employees, professionals, principals, or persons 13 affiliated with Xyience or Zyen in furtherance of his continued pursuit of claims purportedly on 14 behalf of Debtor's "shareholders." 15 45. Despite the Plan's clear prohibition against Bergeron's pursuit of prepetition 16 "claims" for the purported benefit of Debtor's "shareholders," without the injunctive relief 17 requested herein, Bergeron's self-proclaimed crusade to litigate claims against Xyience, Zyen, 18 and their principals, management, and employees will continue to escalate until it severely 19 impedes Xyience's operations. 20 C. Bergeron's Recent Threats and Harassment are Consistent with his Pattern of 21 Harassment, Abuse of the Bankruptcy System, and Vexatious Litigation in the Adversary Proceeding. 22 46. Debtor's association with Bergeron dates back to July 18, 2007 when Debtor 23 commenced litigation against Bergeron in the Eighth Judicial District Court, Clark County, 24 Nevada (the "State Court"), being case number A544781 (the "State Court Litigation") based on 25 26 13 It should be noted that this is not the first time Bergeron has attempted to harass Garman. Through a website named the scarlet lawyer that has now been taken down, Bergeron posted a picture of Garman, wrote disparaging 27 comments about Garman, and invited viewers to click on a link that sent disparaging electronic mails to Garman. See Garman Declaration, ¶13. 28 Gordon Silver 19 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 20 of 31 1 allegations, among others, of defamation against Debtor, and which action also sought to restrain 2 and enjoin Bergeron from posting allegedly defamatory remarks on the internet concerning 3 Debtor and to remove certain allegedly false and defamatory articles from Bergeron's website. 4 See, generally, Dkt. No. 3.14 5 47. On September 6, 2007, the State Court issued its Preliminary Injunction Order, 6 which granted Debtor a preliminary injunction against Bergeron. See Dkt. No. 3. 7 48. On September 26, 2007, Debtor filed its Motion to Modify Preliminary Injunction 8 Order in the State Court Litigation, which was granted by entry of the Modified Preliminary 9 Injunction Order (the "Preliminary Injunction") on November 6, 2007. See Dkt. No. 3-33, at 10 Exhibit 28. 11 49. The Preliminary Injunction provided in pertinent part as follows: 12 IT IS FURTHER ORDERED, that the Defendant, Richard Bergeron, shall remove any and all articles or postings regarding false claims about Xyience from 13 the internet and [Bergeron] shall be enjoined from communicating any statements or making any representations which in any manner state, advise, represent, 14 assert, allege, suggest, or imply, in any manner which is intended to, or does evoke an inference or create impression that Xyience is being investigated by the 15 SEC. 16 IT IS FURTHER ORDERED, that the Defendant, Richard Bergeron, shall remove any and all articles claiming that Xyience is defrauding investors and/or 17 is conspiring with Dana White or the Ultimate Fighting Challenge to defraud investors. Richard Bergeron shall be enjoined from communicating any 18 statements or making any representations which in any manner state, advise, represent, asset, allege, suggest or imply in any manner which is intended to, or 19 does evoke an inference or create impression that Xyience is defrauding investors and/or conspiring with Dana White or the Ultimate Fighting Challenge to defraud 20 investors. 21 22 50. Following the commencement of the Bankruptcy Case, on March 20, 2008, 23 Debtor removed the State Court Litigation to Bankruptcy Court, which thereby commenced 24 adversary proceeding number 08-1082-MKN (the "Adversary Proceeding"). See Dkt. Nos. 1 25 and 3. 26 14 Unless otherwise expressly stated, all docket references in Section C of this Motion shall refer to the docket in the 27 Adversary Proceeding, Adversary Number 08-1082. 15 For ease of reference, a copy of the Preliminary Injunction is attached to the Garman Declaration as Exhibit "10." 28 Gordon Silver 20 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 21 of 31 1 1. Initial Proceedings in the Adversary Proceeding. 2 51. Since its removal, Bergeron has unrelentingly and improperly used the Adversary 3 Proceeding to vexatiously litigate frivolous claims and sanctions proceedings against Debtor, 4 Zyen, Fertitta Enterprises, Inc. ("Fertitta Enterprises"), and their principals, management, 5 employees, and professionals under the guise of advocating for the "shareholders," 16 while 6 seeking a personal windfall. The following highlights 17 Bergeron's unceasing pattern of 7 harassment of Xyience, Zyen, Fertitta Enterprises, and their principals, management, employees, 8 and professionals through the Adversary Proceeding. 9 52. In response to the Adversary Proceeding, Bergeron filed the following four 10 counterclaims 18 against Debtor and Fertitta Enterprises: (1) "Defamation;" (2) "Violation of 11 First Amendment Rights;" (3) "Tortuous Interference With Prospective Economic Advantage;" 12 and (4) "Pain And Suffering" (collectively, the "Counterclaims"), to which Counterclaims were 13 premised on many of the alleged fraudulent and conspiratorial actions that purportedly underlie 14 Bergeron's subsequent frivolous filings in the Adversary Proceeding and recent harassment 15 previously discussed herein. The counterclaims were dismissed on October 14, 2008, and 16 Bergeron was given leave to amend only with respect to his first counterclaim asserting a 17 defamation claim for relief. See Dkt. No. 75. 18 53. On March 28, 2008, Bergeron filed Defendant/Counterclaimant's (I) Emergency 19 Motion to Suspend Bankruptcy Proceedings Pending Investigation of Fraudulent Bankruptcy 20 Filing, and (II) Motion for Summary Judgment on Defendant's Rule 11 Motion, Motion to 21 Dismiss and Counterclaims (the "Motion to Suspend and for Sanctions"), thereby seeking the 22 suspension of the bankruptcy proceedings based on Bergeron's claims of prepetition fraud, 23 collusion, and possible violations of the RICO Act and further seeking in the amount of $15 24 16 See supra footnote 4. 25 17 The following shall solely highlight Bergeron's abusive actions, including the filing of frivolous motions in the Adversary Proceeding to provide the Court with an understanding of Bergeron's abuse of the legal system and the 26 fact that his defeats in the Adversary Proceeding have simply fueled his continued pursuit of his conspiratorial claims against Xyience, Zyen, Fertitta Enterprises, and their principals, managers, employees, and professionals, 27 thereby necessitating the injunctive relief requested herein. 18 See, Din. No. 3-58, at Exhibit 50. 28 Gordon Silver 21 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Lbs Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 22 of 31 1 Million, $500,000 of which were to be directed to Bergeron personally. See Dkt. No. 11. After 2 briefing by Debtor, Fertitta Enterprises, 19 and Bergeron and hearings before this Court, 29 the 3 Court denied the Motion to Suspend and for Sanctions in its entirety. See id. Dkt. Nos. 72 and 4 73. 5 54. On September 18, 2008, Bergeron filed a Motion to Revoke the Bankruptcy 6 Xyience's Reorganization Plan Approval Order, and Motion to Transfer Adversary Proceeding 7 to Proper Venue (the "Motion to Revoke/Transfer Venue"), thereby seeking, among other relief, 8 the revocation of the Debtor's plan of reorganization, which plan had not yet been confirmed, . as VP' `" 9 pending Bergeron's investigation of his alleged fraudulent and conspiratorial theories, as well as 10 the transfer of the Adversary Proceeding to the U.S. District Court in Boston, Massachusetts. 11 After briefing by Debtor, Fertitta Enterprises, and Bergeron, and a hearing before the Court, the 12 improper and unmeritorious Motion to Revoke/Transfer Venue was denied. See Dkt. Nos. 66, 13 83, 84, 86, 87. 14 55. On November 3, 2008, Bergeron filed his amended counterclaim, wherein he 15 abandoned his prior defamation allegations as against Fertitta Enterprises, and instead asserted 16 that he was defamed by a comment made by Garman, Fertitta Enterprises' attorney. The hearing 17 on the motion to dismiss Bergeron's amended counterclaim against Garman was held on January 18 7, 2009, and on January 30, 2009 the Court entered its memorandum decision and order 19 dismissing with prejudice Bergeron's final counterclaim allegedly against Fertitta Enterprises - a 20 defamation claim against Garman - in the Adversary Proceeding. See Dkt. Nos. 106, 111, 141, 21 and 142. 22 19 23 As evidenced by the docket in the Adversary Proceeding, Fertitta Enterprises solely became a party to the Adversary Proceeding when it was named as a counterdefendant by Bergeron. 24 20 As an aside, it is important to note that during the proceedings on the Motion to Suspend and for Sanctions and consistent with Bergeron's pattern of abuse of the Court system, Bergeron, who had been authorized to appear 25 telephonically at a hearing on the Motion to Suspend, was involved in the recording of the entire court hearing and its posting on the internet at the following link: http://www.freewebs.com/mmalinks/mmainterviews.htm. See Dkt. 26 No. 79. In addition, on August 29, 2008, in conjunction with his response to an order to show cause resulting from his involvement in the improper recording and dissemination of court hearings, Bergeron sought the recusal of the 27 Honorable Mike K. Nakagawa from the Bankruptcy Case and the Adversary Proceeding. Bergeron's unmeritorious request for recusal was denied. See Dkt. Nos. 60, 81, and 82. 28 Gordon Silver 22 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 23 of 31 1 56. After filing his amended counterclaim, but prior to its dismissal with prejudice, 2 Bergeron filed Defendant and Counter-Claimant's Motion For an Immediate Show Cause 3 Hearing to Strike the Perjured Declarations of Adam Frank (Dkt. #3, Exh. 3) and Jamie Cogburn 4 (Dkt. #3, Exh. 8); and Motion to Vacate the Clark County District Court's Modified Preliminary 5 Injunction Order (Dkt. #3, Exh. 28) (the "Motion to Vacate Preliminary Injunction"), wherein 6 Bergeron requested, among other relief, that the Preliminary Injunction entered by the State 7 Court be vacated. See Dkt. No. 117. Surprisingly, Bergeron acknowledges therein that he "has 8 produced volumes of new reports regarding Xyience since the injunction, refusing to abide by 9 that injunction's grossly over-reaching language. Bergeron has challenged the bankruptcy court 10 to sanction him, extradite him, fine him, or hold him in contempt for violating the bogus 11 injunction order. This court has thus far refused to do so." Id. at p. 4, 11. 10-14. The Motion to 12 Vacate Preliminary Injunction was denied by entry of an order of this Court on January 30, 2010. 13 See Dkt. No. 138 and 139. In its memorandum decision to deny Bergeron's Motion to Vacate 14 Preliminary Injunction, the Court specifically held that there was no evidence to support a 15 vacature of the State Court's previous Preliminary Injunction Order against Bergeron. Id. at 138. 16 57. Undeterred, on February 17, 2009, Bergeron filed his motion seeking the 17 reconsideration (the "Reconsideration Motion") of the denial of his Motion to Vacate 18 Preliminary Injunction, which motion was also denied by entry of an order of this Court on 19 December 2, 2009. See Dkt. Nos. 156 and 204. 20 2. The Amended Sanctions Motions and Related Proceedings. 21 58. On January 21, 2009, Bergeron filed Defendant and Counterclaimant's Amended 22 Motion For Rule 11 and 9011 Sanctions (the "Amended Sanctions Motion"), seeking sanctions 23 against not only the parties and the attorneys in the Adversary Proceeding, but also against 24 persons and entities who had never filed or submitted any pleadings or papers in the Adversary 25 Proceeding—such as Zyen, Frank Fertitta, Jr., Frank Fertitta, III, Lorenzo Fertitta, Bullard, 26 Station Casinos, Zuffa Marketing, LLC, and Zuffa, LLC (collectively, the "Nonparties"). The 27 Amended Sanctions Motion alleged that all of the foregoing parties should be liable for sanctions 28 for "either directly, indirectly or completely vicariously culpable [sic] for continuing, funding, Gordon Silver 23 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 24 of 31 1 instigating, and/or fraudulently orchestrating the filing an maintenance of this frivolous lawsuit 2 against Bergeron." Dkt. No. 136, p. 2, 11. 19-22. Bergeron further argued that "[t]heir 3 conspiracy to silence [him] led to hundreds of shareholders being left in the dark about the 4 corrupt behavior that went on at the company level leading up to the Fertitta Enterprises buy-in 5 and the subsequent fraudulent bankruptcy filing." Id. at 11. 23-25. As a result, Bergeron sought 6 $150 Million in total sanctions and/or damages (i.e., a tenfold increase from his prior $15 Million 7 request), with his take being $500,000. Id. at p. 42. 8 59. On February 10, 2009, Fertitta Enterprises filed its opposition to the Amended 9 Sanctions Motion (the "Sanctions Opposition") [Dkt. No. 150], which was joined by Debtor on 10 February 11, 2009 [Dkt. No. 153]. The Sanctions Opposition, which is incorporated herein in its 11 entirety, seeks the denial of the Amended Sanctions Motion on, among other bases, the 12 following: (i) the Amended Sanctions Motion violates Local Rule 9014(b)(2)(C) and 9014(e); 13 (ii) a pro se litigant cannot recover attorney's fees and costs because a non-attorney does not 14 "incur" fees payable to oneself within the meaning of Bankruptcy Rule 9011(c)(1)(A); (iii) 15 consequential damages are not recoverable pursuant to a sanctions motion, nor does Bankruptcy 16 Rule 9011 provide a basis for a cause of action to recover for tort damages; (iv) Bergeron is 17 precluded from relitigating his previously denied sanctions motion filed in March 2008; (v) as 18 the Nonparties do not fall within the purview of Bankruptcy Rule 9011 and, as they are not 19 parties to the Adversary Proceeding, they cannot be liable for sanctions; (vii) Bergeron's 20 allegations of sanctionable conduct are themselves meritless. See Dkt. No. 150. 21 60. Through the Sanctions Opposition and pursuant to Bankruptcy Rule 22 9011(c)(1)(A), Fertitta Enterprises sought an award of its attorney's fees and costs incurred in 23 having to oppose the meritless Amended Sanctions Motion (the "Fertitta Sanctions 24 Counterclaim"). See id. 25 61. On February 24, 2009, the Court entered its scheduling order (the "Scheduling 26 Order") [Dkt. No. 160], which ordered in relevant part as follows: 27 3. The following briefing schedule applies to the Amended Sanctions Motion as well as the Reconsideration Motion: 28 Gordon Silver 24 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 25 of 31 1 (A) Bergeron's reply brief, if any, in support of the Amended Sanctions Motion must be served and filed no later than March 13, 2009; 2 *** 3 (C) Bergeron's reply brief, if any, in support of the 4 Reconsideration Motion must be served and filed no later than March 26, 5 2009. 6 4. Upon close of the briefing period, both matters are deemed submitted. 7 Dkt. No. 160, at p. 3. 8 62. On May 5, 2009, which was forty (40) days after the close of briefing and after 9 the matters had been submitted to the Court for decision per the Scheduling Order, without 10 having sought or obtained leave of Court, Bergeron filed five (5) new affidavits (the 11 "Affidavits")21 in support of his Amended Sanctions Motion, four of which were all dated prior 12 to the time Bergeron had filed his Amended Sanctions Motion. See Dkt. Nos. 169, 170, 172, and 13 173. 14 63. In response to such continued frivolous and harassing filings, Fertitta Enterprises 15 filed its Motion of Counterdefendant, Fertitta Enterprises, Inc., to Strike Affidavits Filed by 16 Defendant/Counterclaimant, Richard Bergeron, and for Civil Contempt and Filing Bar, seeking, 17 in relevant part: (i) to strike the egregiously late-filed Affidavits, and; (ii) seeking sanctions, 18 including a bar on his filing any further pleadings, as a result of Bergeron's continuing pattern of 19 bad faith and vexatious conduct. See Dkt. No. 175. As discussed in the Motion to Strike, 20 sanctions against Bergeron are unquestionably appropriate where Bergeron has engaged in, and 21 been sanctioned for, substantially similar abusive litigation practices in another matter, Eppley v. 22 Iacovelli, Case No. 1:09-cv-00386-SEB-JMS (S.D. Ind. 2009). See id. at TT 21-24. 23 64. Approximately three weeks later, again purportedly to support his Amended 24 Sanctions Motion, Bergeron then filed Defendant and Counterclaimant's Supplemental Brief in 25 Advance of Status Hearing on Amended Motion for Rule 11 and 9011 Sanction; and Formal 26 Request in Respect of Recently Submitted Affidavits (the "Supplemental Brief') [Dkt. No. 178], 27 21 See Dkt. Nos. 169-173. 28 Gordon Silver 25 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 26 of 31 1 which was supported by an affidavit of Rich Bergeron ("Supplemental Brief Affidavit") [Dkt. 2 No. 179], requesting that the Court consider the Affidavits, as well as the "new evidence 3 included in Bergeron's latest affidavit...." Dkt. No. 178, at p.6,11. 13-14. 4 65. On June 15, 2009, Fertitta Enterprises filed its opposition to the Supplemental 5 Brief seeking its denial and that the Supplemental Brief Affidavit be stricken. See Dkt. No. 182. 6 The opposition further explained that the Supplemental Brief "further illustrates why this Court 7 needs to impose a filing bar on Mr. Bergeron with respect to this case and Fertitta Enterprises, as 8 Mr. Bergeron apparently cannot help himself but to continue to pursue this frivolous litigation as 9 against Fertitta Enterprises under a 'sanctions' theory, even when his underlying claims as 10 against Fertitta Enterprises have been dismissed with prejudice." Id. at p. 3,11. 5-9. 11 66. Although the Fertitta Sanctions Countermotion, the Amended Sanctions Motion, 12 and the above-discussed motions relating to Bergeron's parade of attempts to improperly present 13 additional evidence before the Court to purportedly support his unfounded allegations remained 14 pending, on November 19, 2010, Bergeron filed Defendant and Counterclaimant's Motion for 15 Leave to Amend Rule 9011 Sanctions Motion (the "Leave to Amend Motion"). The Leave to 16 Amend Motion seized upon and sought to exploit the Court's delay in deciding Bergeron's 17 Amended Sanctions Motion with yet another request that the Court grant Bergeron permission to 18 amend his previously filed, fully briefed, and submitted Amended Sanctions Motion to add and 19 remove various parties and to present additional evidence to support his allegations. See Dkt. 20 No. 207. 21 67. The Leave to Amend Motion was adamantly opposed by Fennemore Craig, P.C. 22 on behalf of Fennemore Craig, P.C., its directors Laurel Davis, Esq. and John Mowbray, Esq., 23 and its former associate, Jon Pearson, Esq., 22 as well as Fertitta Enterprises, who emphasized that 24 Bergeron's efforts to amend his Amended Sanction Motion to include Levy was, at best, ill- 25 founded, and, more accurately, entirely frivolous, as even if Bergeron had any viable claim 26 27 22 See Dkt. No. 219. 28 Gordon Silver 26 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 27 of 31 1 against Levy based on his conduct during the Bankruptcy Case - a point vehemently denied - the 2 Plan exculpates Levy from any liability. See Dkt. No. 220, at pp. 6-7 (citing Plan § 8.5). 3 68. The Leave to Amend Motion was denied in open Court on February 10, 2011 (the 4 "Leave to Amend Hearing"). See Garman Declaration ¶ 5. Consistent with his pattern of abuse 5 of the legal system and vexatious litigation, during the Motion for Leave Hearing, Bergeron 6 advised all parties present that he will appeal the order denying his Leave to Amend Motion. 7 69. As evidenced by the foregoing, without the entry of an order enjoining Bergeron 8 from the continued pursuit of alleged prepetition claims on behalf of the "shareholder," which 9 claims have been dismissed in the Adversary Proceeding, or discharged, enjoined, or exculpated 10 through the Plan, Bergeron will continue to seek to derail the Bankruptcy case and the 11 implementation of the Plan. 12 IV. LEGAL ARGUMENT 13 Zyen and Xyience seek relief pursuant to Section 105 and 1142(b) of the Bankruptcy 14 Code, as well as the Court's retained jurisdiction provided for in Section 9 of the Plan. Section 15 105(a) of the Bankruptcy Code provides that "[t]he court may issue any order, process or 16 judgment that is necessary to carry out the provision of this title," and Bankruptcy Rule 3020(d) 17 provides that "[n]otwithstanding the entry of the order of confirmation, the court may issue any 18 other order necessary to administer the estate." Section 1142(b) provides that "The court may 19 direct the debtor and any other necessary party to . . . perform any other act . . . that is necessary 20 for the consummation of the plan."11 U.S.C. § 1142(b); see also Hillis Motors, Inc. v. Hawa 21 Auto Dealers' Ass'n, 997 F.2d 581, 587 n.11 (9th Cir. 1993) (noting that "[r]egardless of any 22 plan provision, a bankruptcy court has statutory jurisdiction under Section 1142(b) to ensure that 23 any act necessary for the consummation of the plan is carried out and it has continuing 24 responsibilities to satisfy itself that the plan if being properly implemented"). 25 Moreover, Section 9 of the confirmed Plan established the extent of this Court's retained 26 jurisdiction notwithstanding the occurrence of the Effective Date and entry of the Confirmation 27 Order. Specifically, Subsection 9.1(i) of the Plan states that this Court may "[i]ssue injunctions, 28 Gordon Silver 27 Attorneys At Law 101551-001/11416106.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 28 of 31 1 enter and implement other orders or take such other actions as may be necessary or appropriate 2 to restrain interference by any person with consummation, implementation or enforcement of 3 any Final Order, this Plan or the Confirmation Order or the Liquidating Trust, except as 4 otherwise provided herein." Plan, Dkt. No. 191 (emphasis added). 5 Pursuant to the terms of the confirmed Plan and the applicable provisions of the 6 Bankruptcy Code, this Court has retained sufficient jurisdiction to enjoin Bergeron from his 7 continued pursuit of claims discharged, enjoined, or exculpated pursuant to the Plan, including 8 all communication and contact, including but not limited to contact by telephone, electronic 9 correspondence, text messages, social media postings, postings on web pages or other media 10 affiliated with Xyience, or in person with: (i) Debtor, Zyen or Xyience; (ii) Xyience's principals, 11 management, and employees, expressly including past and present Xyience Employees, Lennon, 12 Levy, and Villari; (iii) Zyen's principals, management, and employees, expressly including 13 Frank Fertitta, Jr., Frank Fertitta III, Lorenzo Fertitta, and Bill Bullard; (iv) mixed martial arts 14 studios and fighters affiliated with Xyience or Ultimate Fighting Championship; (v) Xyience's 15 customers; and (v) Zyen's and Xyience's current or formerly retained attorneys, other than 16 written (not electronic) correspondence sent to Zyen's and Xyience's retained counsel. 17 Foremost, any and all Litigation Claims, 23 were transferred to the Liquidating Trust 18 pursuant to Sections 5.1.5 and 8.2 of the Plan. See Plan, Dkt. No. 191, at §§ 1.1.6, 1.1.46, 5.1.5, 19 and 8.2. Thus, only the Liquidating Trustee has standing to pursue any claim Bergeron may be 20 contemplating and threatening to bring purportedly on behalf of the "shareholders." 21 23 The Plan defines "Litigation Claims" as "all Claims, demands, right, actions, rights of action and suites of the 22 Estate of the Debtor or the Liquidating Tryst against any other Person, of any kind or character, whatsoever, known or unknown, suspected or unsuspected, whether arising prior to, in or after the Petition Date, in contract or in tort, at 23 law or in equity, or under any other theory of state or federal law, including (but not limited to): (a) rights of a setoff, counterclaim, recoupment, replevin or reclamation, and Claims on contract or for breaches of duties imposed by 24 law; (b) the right to object to or seek estimation of Claims or Equity Securities; (c) Claims pursuant to section 362 of the Bankruptcy Code; (d) Claims and defenses, such as misrepresentation, fraud, mistake duress, and usury; and (e) 25 all avoiding powers, rights to seek subordination, and all rights and remedied under sections 502(d), 506, 509, 510, 542, 543, 544, 545, 547, 548. 549, 550, 551, 552, 553 and/or 724 of the Bankruptcy Code, and any fraudulent 26 conveyance, fraudulent transfer, or preferential transfer action under applicable law or in equity. This term shall be construed broadly and inclusively, and shall include, without limitation, the shareholder derivative action presently 27 pending as Adv, No. 08-1107, the Bergeron matter presently pending as Adv. No. 08-1082, the Committee Action presently pending as Adv. No. 08-1094, and any Claims against any of Debtor's present or former Officers and 28 Directors and/or any governmental entity." Id. at § 1.1.46. Gordon Silver 28 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 29 of 31 1 Second, through Section 8.4 of the Plan, Bergeron is enjoined from commencing or 2 continuing any action, in any manner or any place that does not comply with or is inconsistent 3 with the provisions of the Plan or the Bankruptcy Code, which unquestionably includes his 4 unmeritorious fraudulent and conspiratorial "claims" designed to derail the reorganization 5 accomplished through the Plan. 6 Although the permanent injunction provided in Section 8.4 of the Plan excepts the 7 "Bergeron matter presently pending as Adv. No. 08-1082," 24 as set forth at length herein, all of 8 Bergeron's claims, with the sole exception of his defamation claim against Debtor, have been 9 dismissed with prejudice. Further, as set forth in detail herein, all of Bergeron's other 10 unmeritorious, frivolous, and vexatious motions and actions designed to wedge his fraudulent 11 and conspiracy theory claims into the scope of the Adversary Proceeding have either been denied 12 (sometime repeatedly) or, as in the instance of the Amended Sanctions Motion and the pleadings 13 related thereto, have been fully briefed and have been submitted to the Court consistent with the 14 Scheduling Order. As evidenced by the most recent denial of the Leave to Amend Motion, 15 Bergeron has thoroughly exhausted his ability to pursue his fraudulent and conspiratorial claims 16 in the Adversary Proceeding. Thus, Section 8.4's exception for the Adversary Proceeding does 17 not provide a permissible means by which Bergeron may continue his frivolous and improper 18 pursuit of his alleged "claims" on behalf of the Debtor's shareholders. 19 Finally, Section 8.5 of the Plan, exculpates, among others, all of Debtor's present and 20 former members, directors, officers, managers, employees, advisors, and attorneys or agents 21 from any liability, except gross negligence or willful misconduct, to any holder of a claim or 22 equity interest or any other party-in-interest, or any of their respective agents, employees, 23 representatives, financial advisors, attorneys, affiliates, or any of their successors or assigns, 24 from any act or omission in connection with, relating to, or arising out of the Bankruptcy Case, 25 the pursuit of confirmation of the Plan, or the consummation of the Plan. See Plan, Dkt. No. 26 191, § 8.5. Nearly all of the persons and entities that have been the subject of Bergeron's recent 27 24 See Plan, Dkt. No. 191, at § 8.4. 28 Gordon Silver 29 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 30 of 31 1 harassment undertaken in furtherance of his "investigation" for the pursuit of the "shareholders" 2 claims against Debtor, Xyience, Zyen, and their affiliates fall within the purview of Section 8.5 3 of the Plan. As such, beyond lacking standing, Bergeron is precluded by Section 8.5 of the Plan 4 from pursing his alleged claims against Debtor, Zyen, Xyience, Levy, Lennon, Xyience's 5 Employees, Villari, Bullard, Garman, and the other persons that have been the subject of 6 Bergeron's most recent threats and harassment. 7 Unless this Court grants the injunctive relief requested herein pursuant to Section 105 and 8 1142(b), Bankruptcy Rule 3020(d), and Section 9.1 of the Plan, Bergeron's "crusade" to pursue 9 his frivolous claims will continue in perpetuity in contravention of the permanent injunctions 10 provision of Plan, thereby threatening not only the successful implementation of the Plan, but 11 also the welfare of Xyience and Zyen and their affiliates, as well as their principals, 12 management, employees, and retained professionals. Bergeron has made it abundantly clear that 13 unless this Court intervenes pursuant to Section 9.1 of the Plan, his efforts will only escalate until 14 he extorts a significant payout from Xyience or Zyen or their affiliates, or so severely harms 15 Xyience's operations such that it is forced to seek bankruptcy protection or to close its doors. 16 Sections 105 and 1142, as well as Section 9.1 of the Plan are designed to provide the Court with 17 a means of enjoining actions that may cause such a result. As such, this Court not only has 18 ample jurisdiction to grant the Motion, it further has an overwhelming evidentiary record upon 19 which to rely in rendering the injunctive relief requested herein. 20 V. CONCLUSION 21 WHEREFORE, Zyen respectfully requests that the Court enter an order enjoining 22 Bergeron from his continued pursuit of claims discharged, enjoined, or exculpated pursuant to 23 the Plan, including all communication and contact, including but not limited to contact by 24 telephone, electronic correspondence, text messages, social media postings, postings on web 25 pages or other media affiliated with Xyience, or in person with: (i) Debtor, Zyen or Xyience; (ii) 26 Xyience's principals, management, and employees, expressly including past and present Xyience 27 Employees, Lennon, Levy, and Villari; (iii) Zyen's principals, management, and employees, 28 Gordon Silver 30 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Las Vegas, Nevada 89169 (702) 796-5555 Case 08-10474-mkn Doc 589 Entered 02/24/11 18:53:36 Page 31 of 31 1 expressly including Frank Fertitta, Jr., Frank Fertitta III, Lorenzo Fertitta, and Bill Bullard; (iv) 2 mixed martial arts studios and fighters affiliated with Xyience or Ultimate Fighting 3 Championship; (v) Xyience's customers; and (v) Zyen's and Xyience's current or formerly 4 retained attorneys, other than written (not electronic) correspondence sent to Zyen's and 5 Xyience's retained counsel. Zyen and Xyience seek such further and other relief as the Court 6 deems just and proper. 7 DATED this / 27 day of February, 2011. 8 GORDO 9 10 REGO AI,ESQ.W 96 y., Hughes Pkw 9th Floor 11 Las Vegas, Nevada 89169 Attorney for Zyen, LLC and 12 Manzen, LLC d/b/a Xyience 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gordon Silver 31 Attorneys At Law 101551-001/1141610_6.doc Ninth Floor 3960 Howard Hughes Pkwy Les Vegas, Nevada 89169 (702) 796-5555
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