Preview
3/25/2024 9:17 AM
Marilyn Burgess - District Clerk Harris County
Envelope No. 85900972
2024-18782 / Court: 55 By: Cynthia Clausell-McGowan
Filed: 3/25/2024 9:17 AM
CAUSE NO.
SAMUEL SCHRADE and IN THE DISTRICT COURT OF
DNA STUDIOS, LLC,
Plaintiffs,
V. HARRIS COUNTY, TEXAS
CHRISTOPHER MARTIN;
BLUE POINTER GESTURE, LLC,
LOCUST8 GROUP, LLC;
PERSIMMONS, LLC;
RUSH EQUIPMENT I, LLC; and
EXIT STAGE LEFT PRODUCTIONS, LLC,
dba DNA STUDIOS PLUS
Defendants. § _____ JUDICIAL DISTRICT
PLAINTIFFS’ VERIFIED ORIGINAL PETITION AND APPLICATION FOR
ISSUANCE OF A TEMPORARY RESTRAINING ORDER,
TEMPORARY INJUNCTION, AND PERMANENT INJUNCTION
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiffs Samuel Schrade and DNA Studios, LLC file this Verified Original Petition and
Application for Issuance of a Temporary Restraining Order, Temporary Injunction, and Permanent
Injunction against Defendants Christopher Martin, Blue Pointer Gesture, LLC, Locust8 Group,
LLC, Persimmon9, LLC, Rush Equipment I, LLC, and Exit Stage Left Productions, LLC, dba
DNA Studios Plus. The facts in this petition and application for injunctive relief are verified by
the Declaration of Samuel Schrade (“Schrade Declaration”), attached as Exhibit A.
I DISCOVERY CONTROL PLAN
1 Plaintiffs request that the Court enter a docket control order setting the deadlines
for discovery and other pre-trial matters, in accordance with Rule 190.4 of the Texas Rules of Civil
Procedure.
Il. CLAIM FOR RELIEF
2. Plaintiffs seek monetary relief over $250,000 but not more than $1,000,000 and
non-monetary relief.
Ii. PARTIES
3 Plaintiff Samuel Schrade is a resident of the State of Texas.
4 Plaintiff DNA Studios, LLC is a Texas limited liability company whose principal
place of business is in Harris County, Texas.
5 Defendant Christopher Martin is a resident of the State of Texas that may be served
with process at 5900 Balcones Drive, Suite 100, Austin, Texas 78731
6 Defendant Blue Pointer Gesture, LLC is a foreign limited liability company whose
principle place of business is in Collin County, Texas and that may be served with process by
serving its Managing Member, Christopher Martin, at 5900 Balcones Drive, Suite 100, Austin,
Texas 78731
7 Defendant Locust8 Group, LLC is a Texas limited liability company that may be
served with process by serving its registered agent, Registered Agents Inc., at 5900 Balcones
Drive, Suite 100, Austin, Texas 78731
8 Defendant Persimmon9, LLC is a Texas limited liability company that may be
served with process by serving its registered agent, Registered Agents Inc., at 5900 Balcones
Drive, Suite 100, Austin, Texas 78731.
9 Defendant Rush Equipment II, LLC, is a foreign limited liability company whose
principle place of business is in Collin County, Texas and that may be served with process by
serving its Managing Member, Christopher Martin, at 5900 Balcones Drive, Suite 100, Austin,
Texas 78731
10. Defendant Exit Stage Left Productions, LLC, dba DNA Studios Plus is a Texas
limited liability company that may be served with process by serving its registered agent,
Registered Agents Inc., at 5900 Balcones Drive, Suite 100, Austin, Texas 78731
Iv. JURISDICTION AND VENUE
11. This Court has personal jurisdiction over this matter and each of the parties because
each party is a Texas resident or does business in Texas and a substantial part of the events or
omissions giving rise to the claims occurred within Texas.
12. This Court has jurisdiction over the subject matter of this dispute because the
amount in controversy exceeds this Court’s minimum jurisdictional requirements and because
Plaintiff seeks injunctive relief.
13. Venue is proper in Harris County, Texas pursuant to Texas Civil Practices and
Remedies Code § 15.002 because (1) a substantial part of the events or omissions giving rise to
the claims occurred in Harris County; (2) Plaintiff DNA Studio, LLC’ principal office is in Harris
County; and (3) the interest of justice and the convenience of the parties and witnesses calls for
venue to lie in Harris County
Vv. FACTUAL BACKGROUND
14. Samuel Schrade is the owner and sole member of DNA Studios, LLC
15. Since its inception in 2005, DNA Studios has operated as a media company that
provides complete communication services for broadcast networks, live events, and corporate
projects. DNA Studios has several television production trucks and vans that allow filming events
and video production at the site of the event. In addition, DNA Studios leases a 20,000 square foot
studio in Humble, Texas containing state-of-the-art media equipment that is used by DNA Studios
in producing live sports and entertainment programming
16. As part of its business model, DNA Studios contracts with freelance videographers,
vendors, and other personnel to produce sporting events across the United States. DNA Studios
uses the proceeds from a project to immediately pay off contractors and cover expenses,
purposefully not letting this time period exceed 30 days. DNA Studios has built up a great
reputation in the broadcasting business over the years as a result of timely paying its contractors
and delivering quality work. Additionally, DNA Studios made a national list of the 5000 fastest
growing companies in 2023 and Schrade was invited to speak at a well-regarded industry
conference in recognition of his accomplishments with successfully growing DNA Studios.
17. In or around April 2023, Schrade met Christopher Martin, who runs a small private
equity firm. Martin told Schrade that he also has a small production facility in the Dallas, Texas
area that is similar to DNA Studios. Because Martin does not have the level of experience or
expertise as Schrade in the media production business, Martin proposed that the companies join
together to expand into different regional markets and create synergies that neither company would
have operating on its own.
18 As part of this proposal, Martin represented to Schrade that Martin, through a
company owned by him, would contribute $750,000 in cash and Martin would serve as a personal
guarantor of a $2.5 million loan to provide the working capital needed for the new venture in
exchange for Schrade contributing the assets of DNA Studios. In addition, Schrade would assign
DNA Studio’s lease in the 20,000 square foot building in Humble to the new company and Martin
would do the same for a lease that one of his company’s has to a space in Dallas. Because DNA
Studios has outstanding bank loans secured by the assets of DNA Studios, the new company would
pay off the liens and issue Schrade a promissory note in the amount of the debt to be payable from
Schrade’s profit distribution from the new company. Based on this plan, Schrade would continue,
as he did with DNA Studios, in overseeing the operations of the new company—producing live
sports and entertainment programming—and Martin would assume a management and back-office
type of role, which included being in charge of the new company’s books and records.
19. In August 2023, Martin arranged for 2112 Group, LLC to be formed as a Delaware
limited liability company and serve as the holding company under which other various companies
operate to continue on DNA Studios’ business. According to 2112 Group’s Company Agreement,
Blue Pointer Gesture, LLC (“Blue Pointer”), a company solely owned by Martin, owns 60% of the
membership interest of 2112 Group that gives it 100% of the voting Class A units and Schrade
owns 40% of the membership interest of 2112 Group that gives him 100% of the non-voting Class
B units. For their respective membership interests in 2112 Group, Blue Pointer was required to
make an initial capital contribution of $750,000 in cash and Schrade was required to contribute the
assets of DNA Studios valued at $500,000. To effect the latter, Schrade and DNA Studios entered
into an Asset Purchase Agreement with Rush Equipment II, LLC, a wholly-owned subsidiary of
2112 Group, that was formed to hold the transferred assets of DNA Studios and any additional
assets acquired in the future for the media production operations. Another wholly-owned
subsidiary of 2112 Group—Exit Stage Left Productions, LLC, doing business as DNA Studios
Plus (“DNA Plus”)—was formed as the operational arm of the group of companies which is the
entity that performs the live sports production projects and contracts with the freelance
videographers, vendors, and other personnel.
20. Schrade entered into an Employment Agreement with DNA Plus in which he was
supposedly employed as the Chief Executive Officer. The Employment Agreement includes
restrictive covenants that purportedly prevent Schrade from competing with or soliciting
employees and customers of DNA Plus for a 12-month period after Schrade’s employment ends
with the company. Schrade entered into these agreements individually and on behalf of DNA
Studios based on the representations made to him by Martin.
21. Unfortunately, Martin’s initial promises to Schrade never materialized. As an initial
matter, Blue Pointer never made its initial capital contribution of $750,000 in cash to 2112 Group.
Instead of securing a working capital loan to have cash on hand for the operations of DNA Plus,
Martin purposefully slow paid contractors and failed to pay DNA Plus’s expenses as a way of
purportedly increasing profits. This tactic not only caused contractors, who had worked with DNA
Studios for years, to no longer do business with DNA Plus, but resulted in these contractors
spreading the word to others not to work with DNA Plus. Moreover, a major network that DNA
Studios regularly worked with and whose contracts DNA Studios assigned to the new company,
refuses to continue using DNA Plus for its digital broadcasting needs because it learned that DNA
Plus does not pay its contractors. Because Schrade is the face of DNA Plus, networks, vendors,
and contractors associate Martin’s unprincipled business practices with DNA Studios. This has
caused a massive erosion of DNA Studios’ goodwill that Schrade spent decades building.
22. To add insult to injury, Martin has funneled huge sums of the revenue generated by
DNA Plus to companies solely owned by him. Locust8, LLC, of which Martin is the sole member,
bills DNA Plus over $40,000 per month for “Managed Services.” Persimmon9, LLC, another
company of which Martin is the sole member, bills DNA Plus $25,000 per month to lease space
in a building in Dallas, which, upon information and belief, it outright owned by Martin or a
company controlled by him. The “services” that DNA Plus supposedly receives from these entities
does not justify the monthly costs. Additionally, Martin never arranged for DNA Plus to pay off
the debts of DNA Studios, causing the bank to send a notice of foreclosure on the assets that DNA
Studios purportedly sold to Rush Equipment II. After Schrade informed Martin of the foreclosure
notice, Martin sent people to strip the Humble studio of its assets and transfer them to the Dallas
property that Martin controls through Persimmon9. This was done in violation of the terms of the
bank loan and over the objections of Schrade, who attempted to lock up the assets. Additional
assets remain and Martin has indicated that he intends to take these as well
23. Martin and his companies have intentionally bled DNA Plus dry by billing
excessive rates for services and transferring to companies that are solely owned and controlled by
Martin assets that were used to facilitate the media production operations of DNA Plus. Martin’s
so-called business model of not paying contractors and vendors has caused DNA Studios a loss of
goodwill and harm to its reputation in the industry. Moreover, Martin and Blue Pointer’s lack of
funding of 2112 Group has caused many issues, including lack of maintenance of the television
production trucks and lack of funding for travel expenses, requiring Schrade and other personnel
to put these costs on personal credit cards that have yet to be reimbursed by Martin who controls
the purse strings of DNA Plus.
24. Because Martin never made good on the promises he told Schrade to lure Schrade
into giving up the assets of his company, the agreements that Plaintiffs entered into on reliance of
Martin’s false representations are void or should be rescinded.
VI. CAUSES OF ACTION
A. Breach of Contract
25 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
26. Blue Pointer breached the Limited Liability Company Agreement of 2112 Group
by failing to make a $750,000 initial capital contribution.
27. As a result, Plaintiffs have sustained damages. Plaintiffs seek recission of the
contract as well as attorney’s fees and costs and pre- and post-judgment interest.
B. Fraudulent Inducement
28 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
29. Neither Schrade or DNA Studios would have entered into the various transactions
with Defendants had it not been for Martin’s false representations described herein. Martin,
individually and as agent for Rush Equipment II, Blue Pointer, and DNA Plus, willfully and
knowingly omitted material facts and made representations that he knew were not true to induce
Schrade and DNA Studios to enter into the Asset Purchase Agreement, the Limited Liability
Company Agreement of 2112 Group, and the Executive Employment Agreement, respectively.
Schrade and DNA Studios relied on these representations to their detriment causing them to sustain
damages.
30. Schrade and DNA Studios seek recission of the contracts, exemplary damages, and
costs.
Cc. Breach of Fiduciary Duty
31 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
32. There was a fiduciary duty between Plaintiffs and Martin and between Schrade and
Blue Pointer.
33 Martin and Blue Pointer breached their fiduciary duties to Plaintiffs.
34. Such breach proximately caused injury to Plaintiffs and benefited Martin, Blue
Pointer, and their affiliated companies. Accordingly, Plaintiffs seek all actual, consequential, and
incidental damages that have resulted from Martin’s and Blue Pointer’s breaches of their fiduciary
duties, plus exemplary damages and costs, expenses, pre- and post-judgment interest as allowed
by law, and attorney’s fees. Additionally, Plaintiffs seek forfeiture and disgorgement of all benefits
that Martin and Blue Pointer received as a result of their breaches of fiduciary duty.
D. Conversion
35 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
36. DNA Studios had the right to immediate possession of the equipment that Martins
took from DNA Studios’ Humble location and that secures bank loans by DNA Studios. Martins
wrongfully took this equipment and exercised dominion or control over the equipment resulting in
injury to DNA Studios.
37. DNA Studios requests recovery of its actual damages, exemplary damages, pre-and
post-judgment interest, and court costs.
E. Declaratory Judgment
38 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
39. Pursuant to the Uniform Declaratory Judgments Act, Texas Civil Practice and
Remedies Code § 37.001, et seq., Plaintiffs request that the Court enter declaratory judgment in
their favor, as follows:
a. The non-competition provisions within the Asset Purchase Agreement are void
and unenforceable as drafted.
The non-competition and non-solicitation provisions within the Executive
Employment Agreement are void and unenforceable as drafted.
F, Unjust Enrichment
40. Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
41 DNA Plus is a closely held Texas limited liability company as defined by section
101.463 of the Texas Business Organizations Code. Accordingly, Schrade asserts the following
cause of action against Locust8 and Persimmon9 in both his individual capacity and derivatively
on behalf of DNA Plus. Schrade respectfully requests that any judgment granted upon the claim
asserted herein be paid either directly to Schrade or to DNA Plus, as justice and the protection of
creditors’ interests may require. TEX. BUS. ORG. CODE, § 101.463(c).
42. Locust8 and Persimmon9 have wrongfully obtained a benefit by taking undue
advantage of DNA Plus. Locust8 and Persimmon9 have charged DNA Plus fees that they did not
earn. Accordingly, DNA Plus is entitled to restitution and costs and pre- and post-judgment
interest.
G. Accounting
43 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
44 Plaintiffs request an order for an accounting from Martin, Blue Pointer, Locust8,
and Persimmon9 for money received by, deposited with, and withdrawn from DNA Plus since
September 1, 2023
VIL. CONDITIONS PRECEDENT
45 Plaintiffs further request an accounting from Martin and Blue Pointer as a result of
their self-dealing to determine the distributions and assets they have taken from 2112 Group from
its inception.
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46. All conditions precedent, if any, have occurred or have been performed or waived.
VII. ATTORNEY’S FEES
47. Plaintiffs are entitled to recover their reasonable and necessary attorney’s fees and
costs of court on their cause of action for breach of contract under Chapters 37 and 38 of the Texas
Civil Practice and Remedies Code.
48 Plaintiffs also seeks their reasonable and necessary attorney’s fees and costs of
court for any subsequent appeal filed by Defendants in the Court of Appeals and/or the Supreme
Court of Texas resulting from this lawsuit.
Ix. APPLICATION FOR TEMPORARY RESTRAINING ORDER AND
TEMPORARY AND PERMANENT INJUNCTIONS
49. Plaintiffs re-allege and incorporate by reference the allegations in the foregoing
paragraphs.
50. The Schrade Declaration has verified the facts in this application for a temporary
restraining order and temporary and permanent injunctions
51. Plaintiffs are entitled to the entry of a temporary restraining order and a temporary
injunction against Defendants because Schrade’s verified pleading demonstrates that: (1)
Defendants have engaged in wrongful acts that provide Plaintiffs with a cause of action; (2)
Plaintiffs have a probable right to relief; and (3) Plaintiffs will suffer probable injury for which
there is no adequate remedy at law. See Butnaru vy. Ford Motor Co., 84 $.W.3d 198, 204 (Tex.
2002).
A. Wrongful Acts
52. Defendants committed the wrongful acts detailed in the paragraphs above.
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B. Probable Right to Relief
53 Plaintiffs are entitled to injunctive relief because they can demonstrate a probable
right to relief upon a final hearing. See Sun Oil Co. v. Whitaker, 424 S.W.2d 216, 218 (Tex. 1968).
Plaintiffs need not prove that they will ultimately prevail at trial to demonstrate a probable right to
relief. See Keystone Life Ins. Co. v. Mktg. Mgmt., Inc., 687 S.W.2d 89, 92 (Tex. App —Dallas
1985, no writ)
Cc. Probable Injury for which There Is No Adequate Remedy at Law
54. Plaintiffs are entitled to injunctive relief because they will suffer probable injury
which is imminent, irreparable, and for which there is no adequate remedy at law. See Fasken v.
Darby, 901 8.W.2d 591, 592 (Tex. App.—EI Paso 1995, no writ); Henderson v. KRTS, Inc., 822
S.W.2d 769, 773 (Tex. App—Houston [1st Dist.] 1992, no writ).
1. Imminent Harm
55. Plaintiffs face imminent harm. Martin has indicated that he will return for additional
equipment of DNA Studios that was supposedly transferred to Rush Equipment II as part of the
asset sale. However, this equipment, along with what Martin has already taken, is security for loans
that DNA Studios had prior to agreeing to sale its assets to Rush Equipment II and loans that
Martin never arranged to have paid off as part of the deal. The bank has indicated that it intends to
foreclose on the loans using the equipment as collateral, but Martin has taken and is planning to
take the equipment in violation of the terms of the loans.
2. Irreparable Injury without Adequate Remedy at Law
56. Trreparable injury is an injury that cannot be fully compensated in damages or an
injury that results in damages that cannot be measured by any pecuniary standard. Assoc. Gen.
Contractors v. City of El Paso, 932 8.W.2d 124, 126 (Tex. App.—El Paso 1996, no writ); see also
Wright v. Sport Supply Grp., 137 S.W.3d 289, 294 (Tex. App.—Beaumont 2004, no pet.) (finding
12
irreparable injury when damages were not easily calculated or presently ascertainable). A remedy
at law is not adequate unless it gives the injured party complete, final, and equal relief. See
Henderson, 822 S.W.2d at 773. If damages cannot be calculated for the complained-of harm, or if
the defendant is unable to pay damages, there is no adequate remedy at law. Tex. Indus. Gas. v.
Phoenix Metallurgical Corp., 828 $.W.2d 529, 533 (Tex. App.—Houston [1st Dist.] 1992, no
writ).
57. If left unrestrained, the harm to Plaintiffs caused by Defendants’ unlawful conduct
will be irreparable. Any pecuniary damages would be difficult or impossible to show. The only
effective remedy is to restrain Defendants. See Vaughn v. Intrepid Directional Drilling Specialists,
LTD., 288 S.W.3d 931, 935, 938 (Tex. App.—Eastland 2009, no pet.)
58. Likewise, Plaintiffs will suffer harm that is irreparable if Defendants are allowed to
continue their unlawful activities. The injury would not be remediable at law because the damage
cannot be undone and the substitute measure of damages would be too difficult to calculate and
cannot compensate Plaintiffs for the continued removal of equipment that secures a loan that is in
the process of being foreclosed.
D. Request for Injunctive Relief
59. Under Section 65.011 of the Texas Civil Practice and Remedies Code and general
principles of equity, Plaintiffs ask the Court to grant a temporary restraining order and, ultimately,
a temporary injunction and a permanent injunction enjoining Defendants from removing any
equipment from 412 Isaacks Road, Humble, Texas 77338 or any other location in which the
equipment secures loans of DNA Studios
60. Plaintiffs further ask the Court to grant a temporary and permanent injunction
mandating that Defendants return all equipment removed from 412 Isaacks Road, Humble, Texas
77338 that secures loans of DNA Studios.
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E. Willingness to Post a Bond
61 Plaintiffs are willing to post a bond.
xX. PRAYER
WHEREFORE, Plaintiffs respectfully request that the Court issue an immediate temporary
restraining order and, upon hearing, a temporary injunction and, upon final trial, a permanent
injunction as delineated above. Plaintiffs further request that the Court enter judgment against
Defendants and award Plaintiffs their court costs, reasonable and necessary attorney’s fees and
expenses, actual damages, exemplary damages, and pre- and post-judgment interest. Plaintiffs
further request that the Court grant them such other and further relief at law or in equity to which
they may be justly entitled.
Dated: March 25, 2024 Respectfully submitted,
JOHNSEN LAW PLLC
By: /s/ Tamara D. Stiner Toomer
Tamara D. Stiner Toomer
Texas Bar No, 24043940
tamara@johnsenlaw.com
Christopher Johnsen
Texas Bar No, 24072169
chris@johnsenlaw.com
1849 Kingwood Driver, Suite 105
Kingwood, Texas 77339
Telephone: (832) 786-8646
Counsel for Plaintiffs Samuel Schrade and
DNA Studios, LLC
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Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Katy Cabrera on behalf of Tamara Stiner Toomer
Bar No. 24043940
katy@johnsenlaw.com
Envelope ID: 85900972
Filing Code Description: Petition
Filing Description: Plaintiff's Verified Original Petition and Application for
Issuance of a Temporary Restraining Order, Temporary Injunction and
Permanent Injunction
Status as of 3/25/2024 9:44 AM CST
Associated Case Party: Samuel Schrade
Name BarNumber | Email TimestampSubmitted | Status
Tamara D.Stiner Toomer tamara@johnsenlaw.com | 3/25/2024 9:17:34 AM | SENT
Johnsen Law firm@johnsenlaw.com 3/25/2024 9:17:34 AM | SENT
Preview
3/25/2024 9:17 AM Marilyn Burgess - District Clerk Harris County Envelope No. 85900972 2024-18782 / Court: 55 By: Cynthia Clausell-McGowan Filed: 3/25/2024 9:17 AM CAUSE NO. SAMUEL SCHRADE and IN THE DISTRICT COURT OF DNA STUDIOS, LLC, Plaintiffs, V. HARRIS COUNTY, TEXAS CHRISTOPHER MARTIN; BLUE POINTER GESTURE, LLC, LOCUST8 GROUP, LLC; PERSIMMONS, LLC; RUSH EQUIPMENT I, LLC; and EXIT STAGE LEFT PRODUCTIONS, LLC, dba DNA STUDIOS PLUS Defendants. § _____ JUDICIAL DISTRICT PLAINTIFFS’ VERIFIED ORIGINAL PETITION AND APPLICATION FOR ISSUANCE OF A TEMPORARY RESTRAINING ORDER, TEMPORARY INJUNCTION, AND PERMANENT INJUNCTION TO THE HONORABLE JUDGE OF SAID COURT: Plaintiffs Samuel Schrade and DNA Studios, LLC file this Verified Original Petition and Application for Issuance of a Temporary Restraining Order, Temporary Injunction, and Permanent Injunction against Defendants Christopher Martin, Blue Pointer Gesture, LLC, Locust8 Group, LLC, Persimmon9, LLC, Rush Equipment I, LLC, and Exit Stage Left Productions, LLC, dba DNA Studios Plus. The facts in this petition and application for injunctive relief are verified by the Declaration of Samuel Schrade (“Schrade Declaration”), attached as Exhibit A. I DISCOVERY CONTROL PLAN 1 Plaintiffs request that the Court enter a docket control order setting the deadlines for discovery and other pre-trial matters, in accordance with Rule 190.4 of the Texas Rules of Civil Procedure. Il. CLAIM FOR RELIEF 2. Plaintiffs seek monetary relief over $250,000 but not more than $1,000,000 and non-monetary relief. Ii. PARTIES 3 Plaintiff Samuel Schrade is a resident of the State of Texas. 4 Plaintiff DNA Studios, LLC is a Texas limited liability company whose principal place of business is in Harris County, Texas. 5 Defendant Christopher Martin is a resident of the State of Texas that may be served with process at 5900 Balcones Drive, Suite 100, Austin, Texas 78731 6 Defendant Blue Pointer Gesture, LLC is a foreign limited liability company whose principle place of business is in Collin County, Texas and that may be served with process by serving its Managing Member, Christopher Martin, at 5900 Balcones Drive, Suite 100, Austin, Texas 78731 7 Defendant Locust8 Group, LLC is a Texas limited liability company that may be served with process by serving its registered agent, Registered Agents Inc., at 5900 Balcones Drive, Suite 100, Austin, Texas 78731 8 Defendant Persimmon9, LLC is a Texas limited liability company that may be served with process by serving its registered agent, Registered Agents Inc., at 5900 Balcones Drive, Suite 100, Austin, Texas 78731. 9 Defendant Rush Equipment II, LLC, is a foreign limited liability company whose principle place of business is in Collin County, Texas and that may be served with process by serving its Managing Member, Christopher Martin, at 5900 Balcones Drive, Suite 100, Austin, Texas 78731 10. Defendant Exit Stage Left Productions, LLC, dba DNA Studios Plus is a Texas limited liability company that may be served with process by serving its registered agent, Registered Agents Inc., at 5900 Balcones Drive, Suite 100, Austin, Texas 78731 Iv. JURISDICTION AND VENUE 11. This Court has personal jurisdiction over this matter and each of the parties because each party is a Texas resident or does business in Texas and a substantial part of the events or omissions giving rise to the claims occurred within Texas. 12. This Court has jurisdiction over the subject matter of this dispute because the amount in controversy exceeds this Court’s minimum jurisdictional requirements and because Plaintiff seeks injunctive relief. 13. Venue is proper in Harris County, Texas pursuant to Texas Civil Practices and Remedies Code § 15.002 because (1) a substantial part of the events or omissions giving rise to the claims occurred in Harris County; (2) Plaintiff DNA Studio, LLC’ principal office is in Harris County; and (3) the interest of justice and the convenience of the parties and witnesses calls for venue to lie in Harris County Vv. FACTUAL BACKGROUND 14. Samuel Schrade is the owner and sole member of DNA Studios, LLC 15. Since its inception in 2005, DNA Studios has operated as a media company that provides complete communication services for broadcast networks, live events, and corporate projects. DNA Studios has several television production trucks and vans that allow filming events and video production at the site of the event. In addition, DNA Studios leases a 20,000 square foot studio in Humble, Texas containing state-of-the-art media equipment that is used by DNA Studios in producing live sports and entertainment programming 16. As part of its business model, DNA Studios contracts with freelance videographers, vendors, and other personnel to produce sporting events across the United States. DNA Studios uses the proceeds from a project to immediately pay off contractors and cover expenses, purposefully not letting this time period exceed 30 days. DNA Studios has built up a great reputation in the broadcasting business over the years as a result of timely paying its contractors and delivering quality work. Additionally, DNA Studios made a national list of the 5000 fastest growing companies in 2023 and Schrade was invited to speak at a well-regarded industry conference in recognition of his accomplishments with successfully growing DNA Studios. 17. In or around April 2023, Schrade met Christopher Martin, who runs a small private equity firm. Martin told Schrade that he also has a small production facility in the Dallas, Texas area that is similar to DNA Studios. Because Martin does not have the level of experience or expertise as Schrade in the media production business, Martin proposed that the companies join together to expand into different regional markets and create synergies that neither company would have operating on its own. 18 As part of this proposal, Martin represented to Schrade that Martin, through a company owned by him, would contribute $750,000 in cash and Martin would serve as a personal guarantor of a $2.5 million loan to provide the working capital needed for the new venture in exchange for Schrade contributing the assets of DNA Studios. In addition, Schrade would assign DNA Studio’s lease in the 20,000 square foot building in Humble to the new company and Martin would do the same for a lease that one of his company’s has to a space in Dallas. Because DNA Studios has outstanding bank loans secured by the assets of DNA Studios, the new company would pay off the liens and issue Schrade a promissory note in the amount of the debt to be payable from Schrade’s profit distribution from the new company. Based on this plan, Schrade would continue, as he did with DNA Studios, in overseeing the operations of the new company—producing live sports and entertainment programming—and Martin would assume a management and back-office type of role, which included being in charge of the new company’s books and records. 19. In August 2023, Martin arranged for 2112 Group, LLC to be formed as a Delaware limited liability company and serve as the holding company under which other various companies operate to continue on DNA Studios’ business. According to 2112 Group’s Company Agreement, Blue Pointer Gesture, LLC (“Blue Pointer”), a company solely owned by Martin, owns 60% of the membership interest of 2112 Group that gives it 100% of the voting Class A units and Schrade owns 40% of the membership interest of 2112 Group that gives him 100% of the non-voting Class B units. For their respective membership interests in 2112 Group, Blue Pointer was required to make an initial capital contribution of $750,000 in cash and Schrade was required to contribute the assets of DNA Studios valued at $500,000. To effect the latter, Schrade and DNA Studios entered into an Asset Purchase Agreement with Rush Equipment II, LLC, a wholly-owned subsidiary of 2112 Group, that was formed to hold the transferred assets of DNA Studios and any additional assets acquired in the future for the media production operations. Another wholly-owned subsidiary of 2112 Group—Exit Stage Left Productions, LLC, doing business as DNA Studios Plus (“DNA Plus”)—was formed as the operational arm of the group of companies which is the entity that performs the live sports production projects and contracts with the freelance videographers, vendors, and other personnel. 20. Schrade entered into an Employment Agreement with DNA Plus in which he was supposedly employed as the Chief Executive Officer. The Employment Agreement includes restrictive covenants that purportedly prevent Schrade from competing with or soliciting employees and customers of DNA Plus for a 12-month period after Schrade’s employment ends with the company. Schrade entered into these agreements individually and on behalf of DNA Studios based on the representations made to him by Martin. 21. Unfortunately, Martin’s initial promises to Schrade never materialized. As an initial matter, Blue Pointer never made its initial capital contribution of $750,000 in cash to 2112 Group. Instead of securing a working capital loan to have cash on hand for the operations of DNA Plus, Martin purposefully slow paid contractors and failed to pay DNA Plus’s expenses as a way of purportedly increasing profits. This tactic not only caused contractors, who had worked with DNA Studios for years, to no longer do business with DNA Plus, but resulted in these contractors spreading the word to others not to work with DNA Plus. Moreover, a major network that DNA Studios regularly worked with and whose contracts DNA Studios assigned to the new company, refuses to continue using DNA Plus for its digital broadcasting needs because it learned that DNA Plus does not pay its contractors. Because Schrade is the face of DNA Plus, networks, vendors, and contractors associate Martin’s unprincipled business practices with DNA Studios. This has caused a massive erosion of DNA Studios’ goodwill that Schrade spent decades building. 22. To add insult to injury, Martin has funneled huge sums of the revenue generated by DNA Plus to companies solely owned by him. Locust8, LLC, of which Martin is the sole member, bills DNA Plus over $40,000 per month for “Managed Services.” Persimmon9, LLC, another company of which Martin is the sole member, bills DNA Plus $25,000 per month to lease space in a building in Dallas, which, upon information and belief, it outright owned by Martin or a company controlled by him. The “services” that DNA Plus supposedly receives from these entities does not justify the monthly costs. Additionally, Martin never arranged for DNA Plus to pay off the debts of DNA Studios, causing the bank to send a notice of foreclosure on the assets that DNA Studios purportedly sold to Rush Equipment II. After Schrade informed Martin of the foreclosure notice, Martin sent people to strip the Humble studio of its assets and transfer them to the Dallas property that Martin controls through Persimmon9. This was done in violation of the terms of the bank loan and over the objections of Schrade, who attempted to lock up the assets. Additional assets remain and Martin has indicated that he intends to take these as well 23. Martin and his companies have intentionally bled DNA Plus dry by billing excessive rates for services and transferring to companies that are solely owned and controlled by Martin assets that were used to facilitate the media production operations of DNA Plus. Martin’s so-called business model of not paying contractors and vendors has caused DNA Studios a loss of goodwill and harm to its reputation in the industry. Moreover, Martin and Blue Pointer’s lack of funding of 2112 Group has caused many issues, including lack of maintenance of the television production trucks and lack of funding for travel expenses, requiring Schrade and other personnel to put these costs on personal credit cards that have yet to be reimbursed by Martin who controls the purse strings of DNA Plus. 24. Because Martin never made good on the promises he told Schrade to lure Schrade into giving up the assets of his company, the agreements that Plaintiffs entered into on reliance of Martin’s false representations are void or should be rescinded. VI. CAUSES OF ACTION A. Breach of Contract 25 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 26. Blue Pointer breached the Limited Liability Company Agreement of 2112 Group by failing to make a $750,000 initial capital contribution. 27. As a result, Plaintiffs have sustained damages. Plaintiffs seek recission of the contract as well as attorney’s fees and costs and pre- and post-judgment interest. B. Fraudulent Inducement 28 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 29. Neither Schrade or DNA Studios would have entered into the various transactions with Defendants had it not been for Martin’s false representations described herein. Martin, individually and as agent for Rush Equipment II, Blue Pointer, and DNA Plus, willfully and knowingly omitted material facts and made representations that he knew were not true to induce Schrade and DNA Studios to enter into the Asset Purchase Agreement, the Limited Liability Company Agreement of 2112 Group, and the Executive Employment Agreement, respectively. Schrade and DNA Studios relied on these representations to their detriment causing them to sustain damages. 30. Schrade and DNA Studios seek recission of the contracts, exemplary damages, and costs. Cc. Breach of Fiduciary Duty 31 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 32. There was a fiduciary duty between Plaintiffs and Martin and between Schrade and Blue Pointer. 33 Martin and Blue Pointer breached their fiduciary duties to Plaintiffs. 34. Such breach proximately caused injury to Plaintiffs and benefited Martin, Blue Pointer, and their affiliated companies. Accordingly, Plaintiffs seek all actual, consequential, and incidental damages that have resulted from Martin’s and Blue Pointer’s breaches of their fiduciary duties, plus exemplary damages and costs, expenses, pre- and post-judgment interest as allowed by law, and attorney’s fees. Additionally, Plaintiffs seek forfeiture and disgorgement of all benefits that Martin and Blue Pointer received as a result of their breaches of fiduciary duty. D. Conversion 35 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 36. DNA Studios had the right to immediate possession of the equipment that Martins took from DNA Studios’ Humble location and that secures bank loans by DNA Studios. Martins wrongfully took this equipment and exercised dominion or control over the equipment resulting in injury to DNA Studios. 37. DNA Studios requests recovery of its actual damages, exemplary damages, pre-and post-judgment interest, and court costs. E. Declaratory Judgment 38 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 39. Pursuant to the Uniform Declaratory Judgments Act, Texas Civil Practice and Remedies Code § 37.001, et seq., Plaintiffs request that the Court enter declaratory judgment in their favor, as follows: a. The non-competition provisions within the Asset Purchase Agreement are void and unenforceable as drafted. The non-competition and non-solicitation provisions within the Executive Employment Agreement are void and unenforceable as drafted. F, Unjust Enrichment 40. Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 41 DNA Plus is a closely held Texas limited liability company as defined by section 101.463 of the Texas Business Organizations Code. Accordingly, Schrade asserts the following cause of action against Locust8 and Persimmon9 in both his individual capacity and derivatively on behalf of DNA Plus. Schrade respectfully requests that any judgment granted upon the claim asserted herein be paid either directly to Schrade or to DNA Plus, as justice and the protection of creditors’ interests may require. TEX. BUS. ORG. CODE, § 101.463(c). 42. Locust8 and Persimmon9 have wrongfully obtained a benefit by taking undue advantage of DNA Plus. Locust8 and Persimmon9 have charged DNA Plus fees that they did not earn. Accordingly, DNA Plus is entitled to restitution and costs and pre- and post-judgment interest. G. Accounting 43 Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 44 Plaintiffs request an order for an accounting from Martin, Blue Pointer, Locust8, and Persimmon9 for money received by, deposited with, and withdrawn from DNA Plus since September 1, 2023 VIL. CONDITIONS PRECEDENT 45 Plaintiffs further request an accounting from Martin and Blue Pointer as a result of their self-dealing to determine the distributions and assets they have taken from 2112 Group from its inception. 10 46. All conditions precedent, if any, have occurred or have been performed or waived. VII. ATTORNEY’S FEES 47. Plaintiffs are entitled to recover their reasonable and necessary attorney’s fees and costs of court on their cause of action for breach of contract under Chapters 37 and 38 of the Texas Civil Practice and Remedies Code. 48 Plaintiffs also seeks their reasonable and necessary attorney’s fees and costs of court for any subsequent appeal filed by Defendants in the Court of Appeals and/or the Supreme Court of Texas resulting from this lawsuit. Ix. APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY AND PERMANENT INJUNCTIONS 49. Plaintiffs re-allege and incorporate by reference the allegations in the foregoing paragraphs. 50. The Schrade Declaration has verified the facts in this application for a temporary restraining order and temporary and permanent injunctions 51. Plaintiffs are entitled to the entry of a temporary restraining order and a temporary injunction against Defendants because Schrade’s verified pleading demonstrates that: (1) Defendants have engaged in wrongful acts that provide Plaintiffs with a cause of action; (2) Plaintiffs have a probable right to relief; and (3) Plaintiffs will suffer probable injury for which there is no adequate remedy at law. See Butnaru vy. Ford Motor Co., 84 $.W.3d 198, 204 (Tex. 2002). A. Wrongful Acts 52. Defendants committed the wrongful acts detailed in the paragraphs above. 11 B. Probable Right to Relief 53 Plaintiffs are entitled to injunctive relief because they can demonstrate a probable right to relief upon a final hearing. See Sun Oil Co. v. Whitaker, 424 S.W.2d 216, 218 (Tex. 1968). Plaintiffs need not prove that they will ultimately prevail at trial to demonstrate a probable right to relief. See Keystone Life Ins. Co. v. Mktg. Mgmt., Inc., 687 S.W.2d 89, 92 (Tex. App —Dallas 1985, no writ) Cc. Probable Injury for which There Is No Adequate Remedy at Law 54. Plaintiffs are entitled to injunctive relief because they will suffer probable injury which is imminent, irreparable, and for which there is no adequate remedy at law. See Fasken v. Darby, 901 8.W.2d 591, 592 (Tex. App.—EI Paso 1995, no writ); Henderson v. KRTS, Inc., 822 S.W.2d 769, 773 (Tex. App—Houston [1st Dist.] 1992, no writ). 1. Imminent Harm 55. Plaintiffs face imminent harm. Martin has indicated that he will return for additional equipment of DNA Studios that was supposedly transferred to Rush Equipment II as part of the asset sale. However, this equipment, along with what Martin has already taken, is security for loans that DNA Studios had prior to agreeing to sale its assets to Rush Equipment II and loans that Martin never arranged to have paid off as part of the deal. The bank has indicated that it intends to foreclose on the loans using the equipment as collateral, but Martin has taken and is planning to take the equipment in violation of the terms of the loans. 2. Irreparable Injury without Adequate Remedy at Law 56. Trreparable injury is an injury that cannot be fully compensated in damages or an injury that results in damages that cannot be measured by any pecuniary standard. Assoc. Gen. Contractors v. City of El Paso, 932 8.W.2d 124, 126 (Tex. App.—El Paso 1996, no writ); see also Wright v. Sport Supply Grp., 137 S.W.3d 289, 294 (Tex. App.—Beaumont 2004, no pet.) (finding 12 irreparable injury when damages were not easily calculated or presently ascertainable). A remedy at law is not adequate unless it gives the injured party complete, final, and equal relief. See Henderson, 822 S.W.2d at 773. If damages cannot be calculated for the complained-of harm, or if the defendant is unable to pay damages, there is no adequate remedy at law. Tex. Indus. Gas. v. Phoenix Metallurgical Corp., 828 $.W.2d 529, 533 (Tex. App.—Houston [1st Dist.] 1992, no writ). 57. If left unrestrained, the harm to Plaintiffs caused by Defendants’ unlawful conduct will be irreparable. Any pecuniary damages would be difficult or impossible to show. The only effective remedy is to restrain Defendants. See Vaughn v. Intrepid Directional Drilling Specialists, LTD., 288 S.W.3d 931, 935, 938 (Tex. App.—Eastland 2009, no pet.) 58. Likewise, Plaintiffs will suffer harm that is irreparable if Defendants are allowed to continue their unlawful activities. The injury would not be remediable at law because the damage cannot be undone and the substitute measure of damages would be too difficult to calculate and cannot compensate Plaintiffs for the continued removal of equipment that secures a loan that is in the process of being foreclosed. D. Request for Injunctive Relief 59. Under Section 65.011 of the Texas Civil Practice and Remedies Code and general principles of equity, Plaintiffs ask the Court to grant a temporary restraining order and, ultimately, a temporary injunction and a permanent injunction enjoining Defendants from removing any equipment from 412 Isaacks Road, Humble, Texas 77338 or any other location in which the equipment secures loans of DNA Studios 60. Plaintiffs further ask the Court to grant a temporary and permanent injunction mandating that Defendants return all equipment removed from 412 Isaacks Road, Humble, Texas 77338 that secures loans of DNA Studios. 13 E. Willingness to Post a Bond 61 Plaintiffs are willing to post a bond. xX. PRAYER WHEREFORE, Plaintiffs respectfully request that the Court issue an immediate temporary restraining order and, upon hearing, a temporary injunction and, upon final trial, a permanent injunction as delineated above. Plaintiffs further request that the Court enter judgment against Defendants and award Plaintiffs their court costs, reasonable and necessary attorney’s fees and expenses, actual damages, exemplary damages, and pre- and post-judgment interest. Plaintiffs further request that the Court grant them such other and further relief at law or in equity to which they may be justly entitled. Dated: March 25, 2024 Respectfully submitted, JOHNSEN LAW PLLC By: /s/ Tamara D. Stiner Toomer Tamara D. Stiner Toomer Texas Bar No, 24043940 tamara@johnsenlaw.com Christopher Johnsen Texas Bar No, 24072169 chris@johnsenlaw.com 1849 Kingwood Driver, Suite 105 Kingwood, Texas 77339 Telephone: (832) 786-8646 Counsel for Plaintiffs Samuel Schrade and DNA Studios, LLC 14 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules. Katy Cabrera on behalf of Tamara Stiner Toomer Bar No. 24043940 katy@johnsenlaw.com Envelope ID: 85900972 Filing Code Description: Petition Filing Description: Plaintiff's Verified Original Petition and Application for Issuance of a Temporary Restraining Order, Temporary Injunction and Permanent Injunction Status as of 3/25/2024 9:44 AM CST Associated Case Party: Samuel Schrade Name BarNumber | Email TimestampSubmitted | Status Tamara D.Stiner Toomer tamara@johnsenlaw.com | 3/25/2024 9:17:34 AM | SENT Johnsen Law firm@johnsenlaw.com 3/25/2024 9:17:34 AM | SENT