Preview
CM-110
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address) FOR COURT USE ONLY
Evan S. Nadel (SBN 213230)
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
44 Montgomery St, 36th Floor, San Francisco, CA 94104
TELEPHONE NO.: (415) 432-6000 FAX NO. (Optional) (415) 432-6001
E-MAIL ADDRESS (Optional) enadel@mintz.com
ATTORNEY FOR (Name) Plaintiffs
SUPERIOR COURT OF CALIFORNIA, COUNTY OF Santa Clara
STREET ADDRESS: 191 N. 1st Street
MAILING ADDRESS: 191 N. 1st Street
CITY AND ZIP CODE: San Jose 95113
BRANCH NAME: Downtown Superior Court
PLAINTIFF/PETITIONER: Christopher D. Alafi, et al.
DEFENDANT/RESPONDENT: Stanley N. Cohen, et al.
CASE MANAGEMENT STATEMENT CASE NUMBER:
(Check one): UNLIMITED CASE LIMITED CASE 18CV333075
(Amount demanded (Amount demanded is $25,000
exceeds $25,000) or less)
CASE MANAGEMENT CONFERENCE is scheduled as follows:
Date: August 13, 2019 Time: 10:00 am Dept.: Div.: Room:
Address of court (if different from the address above):
Notice of Intent to Appear by Telephone, by (name): Michael S. Gardener
INSTRUCTIONS: All applicable boxes must be checked, and the specified information must be provided.
1. Party or parties (answer one):
a. This statement is submitted by party (name): Plaintiffs
b. This statement is submitted jointly by parties (names):
2. Complaint and cross-complaint (to be answered by plaintiffs and cross-complainants only)
a. The complaint was filed on (date): 8/10/18; 5/20/19
b. The cross-complaint, if any, was filed on (date):
3. Service (to be answered by plaintiffs and cross-complainants only)
a. All parties named in the complaint and cross-complaint have been served, have appeared, or have been dismissed.
b. The following parties named in the complaint or cross-complaint
(1) have not been served (specify names and explain why not):
(2) have been served but have not appeared and have not been dismissed (specify names):
(3) have had a default entered against them (specify names):
c. The following additional parties may be added (specify names, nature of involvement in case, and date by which
they may be served):
4. Description of case
a. Type of case in complaint cross-complaint (Describe, including causes of action):
Fraudulent inducement, fraudulent concealment, violation of California Corp. Code §25401, unfair competition,
negligent misrepresentation, breach of fiduciary duty, and reformation of contract due to mutual mistake.
Page 1 of 5
Form Adopted for Mandatory Use
Judicial Council of California
CASE MANAGEMENT STATEMENT Cal. Rules of Court,
rules 3.720–3.730
CM-110 [Rev. July 1, 2011] www.courts.ca.gov
CM-110
CASE NUMBER:
PLAINTIFF/PETITIONER: Christopher D. Alafi, et al.
18CV333075
DEFENDANT/RESPONDENT: Stanley N. Cohen, et al.
4. b. Provide a brief statement of the case, including any damages. (If personal injury damages are sought, specify the injury and
damages claimed, including medical expenses to date [indicate source and amount], estimated future medical expenses, lost
earnings to date, and estimated future lost earnings. If equitable relief is sought, describe the nature of the relief.)
This case is a civil action brought by Plaintiffs Christopher D. Alafi, Alafi Capital Company, LLC, and The
Christopher D. Alafi Family Trust against Defendants Stanley N. Cohen and Tzu-Hao Cheng for causes of action
for fraudulent inducement, fraudulent concealment, violation of California Corp. Code §25401, unfair competition,
negligent misrepresentation, breach of fiduciary duty, and reformation of contract due to mutual mistake.
(If more space is needed, check this box and attach a page designated as Attachment 4b.)
5. Jury or nonjury trial
The party or parties request a jury triaI a nonjury trial. (If more than one party, provide the name of each party
requesting a jury trial):
6. Trial date
a. The trial has been set for (date):
b. No trial date has been set. This case will be ready for trial within 12 months of the date of the filing of the complaint (if
not, explain):
c. Dates on which parties or attorneys will not be available for trial (specify dates and explain reasons for unavailability):
7. Estimated length of trial
The party or parties estimate that the trial will take (check one):
a. days (specify number):
b. hours (short causes) (specify):
8. Trial representation (to be answered for each party)
The party or parties will be represented at trial by the attorney or party listed in the caption by the following:
a. Attorney: Michael S. Gardener
b. Firm: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
c. Address: One Financial Center, Boston, MA 02111
d. Telephone number: (617) 542-6000 f. Fax number: (617) 542-2241
e. E-mail address: msgardener@mintz.com g. Party represented: Plaintiffs
Additional representation is described in Attachment 8.
9. Preference
This case is entitled to preference (specify code section):
10. Alternative dispute resolution (ADR)
a. ADR information package. Please note that different ADR processes are available in different courts and communities; read
the ADR information package provided by the court under rule 3.221 for information about the processes available through the
court and community programs in this case.
(1) For parties represented by counsel: Counsel has has not provided the ADR information package identified
in rule 3.221 to the client and reviewed ADR options with the client.
(2) For self-represented parties: Party has has not reviewed the ADR information package identified in rule 3.221.
b. Referral to judicial arbitration or civil action mediation (if available).
(1) This matter is subject to mandatory judicial arbitration under Code of Civil Procedure section 1141.11 or to civil action
mediation under Code of Civil Procedure section 1775.3 because the amount in controversy does not exceed the
statutory limit.
(2) Plaintiff elects to refer this case to judicial arbitration and agrees to limit recovery to the amount specified in Code of
Civil Procedure section 1141.11.
(3) This case is exempt from judicial arbitration under rule 3.811 of the California Rules of Court or from civil action
mediation under Code of Civil Procedure section 1775 et seq. (specify exemption):
CM-110 [Rev. July 1, 2011] Page 2 of 5
CASE MANAGEMENT STATEMENT
CM-110
CASE NUMBER:
PLAINTIFF/PETITIONER: Christopher D. Alafi, et al.
18CV333075
DEFENDANT/RESPONDENT: Stanley N. Cohen, et al.
10. c. Indicate the ADR process or processes that the party or parties are willing to participate in, have agreed to participate in, or
have already participated in (check all that apply and provide the specified information):
The party or parties completing If the party or parties completing this form in the case have agreed to
this form are willing to participate in or have already completed an ADR process or processes,
participate in the following ADR indicate the status of the processes (attach a copy of the parties' ADR
processes (check all that apply): stipulation):
Mediation session not yet scheduled
Mediation session scheduled for (date
(1) Mediation
Agreed to complete mediation by (date
Mediation completed on (date): 11/06/2018
Settlement conference not yet scheduled
(2) Settlement Settlement conference scheduled for (date
conference
Agreed to complete settlement conference by (date
Settlement conference completed on (date):
Neutral evaluation not yet scheduled
Neutral evaluation scheduled for (date
(3) Neutral evaluation
Agreed to complete neutral evaluation by (date
Neutral evaluation completed on (date):
Judicial arbitration not yet scheduled
(4) Nonbinding judicial Judicial arbitration scheduled for (date
arbitration
Agreed to complete judicial arbitration by (date
Judicial arbitration completed on (date):
Private arbitration not yet scheduled
(5) Binding private Private arbitration scheduled for (date
arbitration
Agreed to complete private arbitration by (date
Private arbitration completed on (date):
ADR session not yet scheduled
ADR session scheduled for (date
(6) Other (specify):
Agreed to complete ADR session by (date
ADR completed on (date):
CM-110 [Rev. July 1, 2011] Page 3 of 5
CASE MANAGEMENT STATEMENT
CM-110
CASE NUMBER:
PLAINTIFF/PETITIONER: Christopher D. Alafi, et al.
18CV333075
DEFENDANT/RESPONDENT: Stanley N. Cohen, et al.
11. Insurance
a. Insurance carrier, if any, for party filing this statement (name):
b. Reservation of rights: Yes No
c. Coverage issues will significantly affect resolution of this case (explain):
12. Jurisdiction
Indicate any matters that may affect the court's jurisdiction or processing of this case and describe the status.
Bankruptcy Other (specify):
Status:
13. Related cases, consolidation, and coordination
a. There are companion, underlying, or related cases.
(1) Name of case: Christopher D. Alafi Family Trust, et al. v. Cohen, et al.
(2) Name of court: Delaware Court of Chancery
(3) Case number: 2018-0855-KSJM
(4) Status: Defendants’ Motion for Reargument Granted with Modifications.
Additional cases are described in Attachment 13a.
b. A motion to consolidate coordinate wiII be filed by (name party):
14. Bifurcation
The party or parties intend to file a motion for an order bifurcating, severing, or coordinating the following issues or causes of
action (specify moving party, type of motion, and reasons):
15. Other motions
The party or parties expect to file the following motions before trial (specify moving party, type of motion, and issues):
Evidentiary motions in limine
16. Discovery
a. The party or parties have completed all discovery.
b. The following discovery will be completed by the date specified (describe all anticipated discovery):
Party Description Date
Plaintiffs Party and third party written and deposition November 2019
discovery
Plaintiffs Expert discovery TBD
c. The following discovery issues, including issues regarding the discovery of electronically stored information, are
anticipated (specify):
CM-110 [Rev. July 1, 2011] Page 4 of 5
CASE MANAGEMENT STATEMENT
CM-110
CASE NUMBER:
PLAINTIFF/PETITIONER: Christopher D. Alafi, et al.
18CV333075
DEFENDANT/RESPONDENT: Stanley N. Cohen, et al.
17. Economic litigation
a. This is a limited civil case (i.e., the amount demanded is $25,000 or less) and the economic litigation procedures in Code
of Civil Procedure sections 90-98 will apply to this case.
b. This is a limited civil case and a motion to withdraw the case from the economic litigation procedures or for additional
discovery will be filed (if checked, explain specifically why economic litigation procedures relating to discovery or trial
should not apply to this case):
18. Other issues
The party or parties request that the following additional matters be considered or determined at the case management
conference (specify):
19. Meet and confer
a. The party or parties have met and conferred with all parties on all subjects required by rule 3.724 of the California Rules
of Court (if not, explain):
b. After meeting and conferring as required by rule 3.724 of the California Rules of Court, the parties agree on the following
(specify):
20. Total number of pages attached (if any):
I am completely familiar with this case and will be fully prepared to discuss the status of discovery and alternative dispute resolution,
as well as other issues raised by this statement, and will possess the authority to enter into stipulations on these issues at the time of
the case management conference, including the written authority of the party where required.
Date: 07/29/2019
Evan S. Nadel
(TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY)
(TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY)
Additional signatures are attached.
CM-110 [Rev. July 1, 2011] Page 5 of 5
CASE MANAGEMENT STATEMENT
Attachment 4b
Defendants defrauded Plaintiffs of $20 million. They fraudulently induced
Plaintiffs to invest $20 million in a company they would eventually form by
misrepresenting they had developed a cure for Huntington’s Disease (“HD”), a
fatal neurological disorder, by means of a drug that blocked the cellular process
causing the disease. In fact, the drug did not do so. Further, they misrepresented
that they had developed an assay that could quickly and easily demonstrate the
drug’s efficacy in a quantitative and non-invasive manner. In fact, no such assay
had been developed. Defendants also failed to inform Plaintiffs that the drug
posed substantial cardiac risks that could be fatal and that they had not even
consulted experts on the disease nor had they prepared any risk mitigation plan for
these cardiac events. Defendants misrepresented that, based on the purported
capability of the drug to cure HD and the existence of the assay that could
demonstrate efficacy, and omitting disclosure of the serious cardiac risks
surrounding the drug, pre-clinical testing would be substantially reduced and the
drug “conservatively” would be ready for clinical trials on live humans in 2017, an
enormous advantage over competitors. Defendants further misrepresented that,
based on the capability of the drug to cure HD and the ability of the assay to
quickly demonstrate efficacy and the advantages these developments provided to
leapfrog over the competition and get to clinical trials, the company would have a
$100 million valuation, including the $20 million to be invested by Plaintiffs.
Thus, even though Plaintiffs were the only party ever to invest any money and
Defendants put up no capital, Defendants obtained 80% of the company.
Thereafter, Defendants abused their power as majority shareholders and
violated the fiduciary duty they owed to the Plaintiffs. Defendants inserted
themselves as a “consultant” and “employee” to the company they formed and
controlled as majority shareholders. In fees, salary, housing, trips to Taiwan and
Malta and other emoluments – none of which were ever available to Plaintiffs –
Defendants put approximately $1 million of the money invested by the Alafis into
their own pockets within two years. In order to keep those moneys available to
them, Defendants breached their fiduciary duties to Plaintiffs and by virtue of their
majority shareholder control failed to permit the retention of professional,
experienced scientists and managers who actually had experience commercially
developing drugs, as the retention of such personnel would have made unnecessary
the continued employment of Defendants.
Because Defendants had not and could not develop the drug they represented
and had not and could not develop the assay they represented, because Defendants
-6-
had not and could not mitigate the cardiac risk they failed to disclose, and because
Defendants could not bring the drug to clinical trial as represented, Defendants are
now in the process of shutting down and liquidating the company – after operating
for just over two years. The company had no income, and no other investor ever
invested in the company. Upon information and belief, approximately $8 million
of Plaintiffs’ investment remains. Despite the fact that the purpose for which the
Plaintiffs had been induced to invest their $20 million has now been negated,
Defendants – instead of returning that remaining amount to Plaintiffs – are about to
disburse the bulk of the remaining money to themselves. Defendants also planned
to set aside a portion of Plaintiffs’ investment to pay their legal fees and expenses
in defending against this lawsuit caused by their fraudulent conduct until the
Delaware Chancery Court ruled against their continuing to fully advance
themselves legal fees to defend this action. In sum, Defendants implemented a
scheme to fraudulently induce Plaintiffs to put up $20 million by means of
misrepresentations and omissions, directly put $1 million of that amount in their
own pockets by abusing their majority shareholder status, and now will take for
themselves the vast bulk of the balance of Plaintiffs’ investment notwithstanding
that the purpose for which that money was provided has been completely negated.
-7-
PROOF OF SERVICE
I am a citizen of the United States, over the age of 18 years, and not a party to or
interested in this action. I am employed in the County of San Francisco, State of California and
my business address is Mintz Levin Cohn Ferris Glovsky and Popeo P.C., 44 Montgomery Street,
36th Floor, San Francisco, CA 94104. On July 29, 2019, I served the foregoing document
described as:
PLAINTIFFS’ CASE MANAGEMENT STATEMENT
By placing a copy into a sealed envelope addressed and served on the parties listed below:
BERGESON, LLP AND/OR TO: BERGESON, LLP
Daniel J. Bergeson, Esq. Daniel J. Bergeson, Esq.
John D. Pernick, Esq. John D. Pernick, Esq.
Adam C. Trigg, Esq. Adam C. Trigg, Esq.
10 Jaideep Venkatesan, Esq. Jaideep Venkatesan, Esq.
111 North Market Street, Suite 600 101 California Street, Suite 1075
11 San Jose, CA 95113 San Francisco, CA 94111
Tel: (408) 291-6200 Tel: (415) 365-9586
12
Emails: dbergeson@be-law.com; jpernick@be-law.com; atrigg@be-law.com;
13 jvenkatesan@be-law.com
14 Attorneys for Defendants
15
Service was accomplished as follows:
16
17 BY E-MAIL OR ELECTRONIC TRANSMISSION: On this day, I personally
electronically served from my electronic address rdabdulrahim@mintz.com in “PDF”
18 format, the document(s) described above to be transmitted to the person(s) at the e-mail
addresses as indicated. I did not receive, within a reasonable time after the transmission,
19 any electronic message or other indication that the transmission was incomplete or
unsuccessful. This is based on a court order or an agreement of the parties to accept
20 service by e-mail or electronic transmission.
21
22
I declare under penalty of perjury under the laws of the State of California that the
23 foregoing is true and correct. Executed on July 29, 2019, at San Francisco, California.
24
25 Regina Abdul-Rahim
26
27
28
-8-
PROOF OF SERVICE – CASE NO. 18cv333075
Preview
CM-110 ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address) FOR COURT USE ONLY Evan S. Nadel (SBN 213230) Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 44 Montgomery St, 36th Floor, San Francisco, CA 94104 TELEPHONE NO.: (415) 432-6000 FAX NO. (Optional) (415) 432-6001 E-MAIL ADDRESS (Optional) enadel@mintz.com ATTORNEY FOR (Name) Plaintiffs SUPERIOR COURT OF CALIFORNIA, COUNTY OF Santa Clara STREET ADDRESS: 191 N. 1st Street MAILING ADDRESS: 191 N. 1st Street CITY AND ZIP CODE: San Jose 95113 BRANCH NAME: Downtown Superior Court PLAINTIFF/PETITIONER: Christopher D. Alafi, et al. DEFENDANT/RESPONDENT: Stanley N. Cohen, et al. CASE MANAGEMENT STATEMENT CASE NUMBER: (Check one): UNLIMITED CASE LIMITED CASE 18CV333075 (Amount demanded (Amount demanded is $25,000 exceeds $25,000) or less) CASE MANAGEMENT CONFERENCE is scheduled as follows: Date: August 13, 2019 Time: 10:00 am Dept.: Div.: Room: Address of court (if different from the address above): Notice of Intent to Appear by Telephone, by (name): Michael S. Gardener INSTRUCTIONS: All applicable boxes must be checked, and the specified information must be provided. 1. Party or parties (answer one): a. This statement is submitted by party (name): Plaintiffs b. This statement is submitted jointly by parties (names): 2. Complaint and cross-complaint (to be answered by plaintiffs and cross-complainants only) a. The complaint was filed on (date): 8/10/18; 5/20/19 b. The cross-complaint, if any, was filed on (date): 3. Service (to be answered by plaintiffs and cross-complainants only) a. All parties named in the complaint and cross-complaint have been served, have appeared, or have been dismissed. b. The following parties named in the complaint or cross-complaint (1) have not been served (specify names and explain why not): (2) have been served but have not appeared and have not been dismissed (specify names): (3) have had a default entered against them (specify names): c. The following additional parties may be added (specify names, nature of involvement in case, and date by which they may be served): 4. Description of case a. Type of case in complaint cross-complaint (Describe, including causes of action): Fraudulent inducement, fraudulent concealment, violation of California Corp. Code §25401, unfair competition, negligent misrepresentation, breach of fiduciary duty, and reformation of contract due to mutual mistake. Page 1 of 5 Form Adopted for Mandatory Use Judicial Council of California CASE MANAGEMENT STATEMENT Cal. Rules of Court, rules 3.720–3.730 CM-110 [Rev. July 1, 2011] www.courts.ca.gov CM-110 CASE NUMBER: PLAINTIFF/PETITIONER: Christopher D. Alafi, et al. 18CV333075 DEFENDANT/RESPONDENT: Stanley N. Cohen, et al. 4. b. Provide a brief statement of the case, including any damages. (If personal injury damages are sought, specify the injury and damages claimed, including medical expenses to date [indicate source and amount], estimated future medical expenses, lost earnings to date, and estimated future lost earnings. If equitable relief is sought, describe the nature of the relief.) This case is a civil action brought by Plaintiffs Christopher D. Alafi, Alafi Capital Company, LLC, and The Christopher D. Alafi Family Trust against Defendants Stanley N. Cohen and Tzu-Hao Cheng for causes of action for fraudulent inducement, fraudulent concealment, violation of California Corp. Code §25401, unfair competition, negligent misrepresentation, breach of fiduciary duty, and reformation of contract due to mutual mistake. (If more space is needed, check this box and attach a page designated as Attachment 4b.) 5. Jury or nonjury trial The party or parties request a jury triaI a nonjury trial. (If more than one party, provide the name of each party requesting a jury trial): 6. Trial date a. The trial has been set for (date): b. No trial date has been set. This case will be ready for trial within 12 months of the date of the filing of the complaint (if not, explain): c. Dates on which parties or attorneys will not be available for trial (specify dates and explain reasons for unavailability): 7. Estimated length of trial The party or parties estimate that the trial will take (check one): a. days (specify number): b. hours (short causes) (specify): 8. Trial representation (to be answered for each party) The party or parties will be represented at trial by the attorney or party listed in the caption by the following: a. Attorney: Michael S. Gardener b. Firm: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. c. Address: One Financial Center, Boston, MA 02111 d. Telephone number: (617) 542-6000 f. Fax number: (617) 542-2241 e. E-mail address: msgardener@mintz.com g. Party represented: Plaintiffs Additional representation is described in Attachment 8. 9. Preference This case is entitled to preference (specify code section): 10. Alternative dispute resolution (ADR) a. ADR information package. Please note that different ADR processes are available in different courts and communities; read the ADR information package provided by the court under rule 3.221 for information about the processes available through the court and community programs in this case. (1) For parties represented by counsel: Counsel has has not provided the ADR information package identified in rule 3.221 to the client and reviewed ADR options with the client. (2) For self-represented parties: Party has has not reviewed the ADR information package identified in rule 3.221. b. Referral to judicial arbitration or civil action mediation (if available). (1) This matter is subject to mandatory judicial arbitration under Code of Civil Procedure section 1141.11 or to civil action mediation under Code of Civil Procedure section 1775.3 because the amount in controversy does not exceed the statutory limit. (2) Plaintiff elects to refer this case to judicial arbitration and agrees to limit recovery to the amount specified in Code of Civil Procedure section 1141.11. (3) This case is exempt from judicial arbitration under rule 3.811 of the California Rules of Court or from civil action mediation under Code of Civil Procedure section 1775 et seq. (specify exemption): CM-110 [Rev. July 1, 2011] Page 2 of 5 CASE MANAGEMENT STATEMENT CM-110 CASE NUMBER: PLAINTIFF/PETITIONER: Christopher D. Alafi, et al. 18CV333075 DEFENDANT/RESPONDENT: Stanley N. Cohen, et al. 10. c. Indicate the ADR process or processes that the party or parties are willing to participate in, have agreed to participate in, or have already participated in (check all that apply and provide the specified information): The party or parties completing If the party or parties completing this form in the case have agreed to this form are willing to participate in or have already completed an ADR process or processes, participate in the following ADR indicate the status of the processes (attach a copy of the parties' ADR processes (check all that apply): stipulation): Mediation session not yet scheduled Mediation session scheduled for (date (1) Mediation Agreed to complete mediation by (date Mediation completed on (date): 11/06/2018 Settlement conference not yet scheduled (2) Settlement Settlement conference scheduled for (date conference Agreed to complete settlement conference by (date Settlement conference completed on (date): Neutral evaluation not yet scheduled Neutral evaluation scheduled for (date (3) Neutral evaluation Agreed to complete neutral evaluation by (date Neutral evaluation completed on (date): Judicial arbitration not yet scheduled (4) Nonbinding judicial Judicial arbitration scheduled for (date arbitration Agreed to complete judicial arbitration by (date Judicial arbitration completed on (date): Private arbitration not yet scheduled (5) Binding private Private arbitration scheduled for (date arbitration Agreed to complete private arbitration by (date Private arbitration completed on (date): ADR session not yet scheduled ADR session scheduled for (date (6) Other (specify): Agreed to complete ADR session by (date ADR completed on (date): CM-110 [Rev. July 1, 2011] Page 3 of 5 CASE MANAGEMENT STATEMENT CM-110 CASE NUMBER: PLAINTIFF/PETITIONER: Christopher D. Alafi, et al. 18CV333075 DEFENDANT/RESPONDENT: Stanley N. Cohen, et al. 11. Insurance a. Insurance carrier, if any, for party filing this statement (name): b. Reservation of rights: Yes No c. Coverage issues will significantly affect resolution of this case (explain): 12. Jurisdiction Indicate any matters that may affect the court's jurisdiction or processing of this case and describe the status. Bankruptcy Other (specify): Status: 13. Related cases, consolidation, and coordination a. There are companion, underlying, or related cases. (1) Name of case: Christopher D. Alafi Family Trust, et al. v. Cohen, et al. (2) Name of court: Delaware Court of Chancery (3) Case number: 2018-0855-KSJM (4) Status: Defendants’ Motion for Reargument Granted with Modifications. Additional cases are described in Attachment 13a. b. A motion to consolidate coordinate wiII be filed by (name party): 14. Bifurcation The party or parties intend to file a motion for an order bifurcating, severing, or coordinating the following issues or causes of action (specify moving party, type of motion, and reasons): 15. Other motions The party or parties expect to file the following motions before trial (specify moving party, type of motion, and issues): Evidentiary motions in limine 16. Discovery a. The party or parties have completed all discovery. b. The following discovery will be completed by the date specified (describe all anticipated discovery): Party Description Date Plaintiffs Party and third party written and deposition November 2019 discovery Plaintiffs Expert discovery TBD c. The following discovery issues, including issues regarding the discovery of electronically stored information, are anticipated (specify): CM-110 [Rev. July 1, 2011] Page 4 of 5 CASE MANAGEMENT STATEMENT CM-110 CASE NUMBER: PLAINTIFF/PETITIONER: Christopher D. Alafi, et al. 18CV333075 DEFENDANT/RESPONDENT: Stanley N. Cohen, et al. 17. Economic litigation a. This is a limited civil case (i.e., the amount demanded is $25,000 or less) and the economic litigation procedures in Code of Civil Procedure sections 90-98 will apply to this case. b. This is a limited civil case and a motion to withdraw the case from the economic litigation procedures or for additional discovery will be filed (if checked, explain specifically why economic litigation procedures relating to discovery or trial should not apply to this case): 18. Other issues The party or parties request that the following additional matters be considered or determined at the case management conference (specify): 19. Meet and confer a. The party or parties have met and conferred with all parties on all subjects required by rule 3.724 of the California Rules of Court (if not, explain): b. After meeting and conferring as required by rule 3.724 of the California Rules of Court, the parties agree on the following (specify): 20. Total number of pages attached (if any): I am completely familiar with this case and will be fully prepared to discuss the status of discovery and alternative dispute resolution, as well as other issues raised by this statement, and will possess the authority to enter into stipulations on these issues at the time of the case management conference, including the written authority of the party where required. Date: 07/29/2019 Evan S. Nadel (TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY) (TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY) Additional signatures are attached. CM-110 [Rev. July 1, 2011] Page 5 of 5 CASE MANAGEMENT STATEMENT Attachment 4b Defendants defrauded Plaintiffs of $20 million. They fraudulently induced Plaintiffs to invest $20 million in a company they would eventually form by misrepresenting they had developed a cure for Huntington’s Disease (“HD”), a fatal neurological disorder, by means of a drug that blocked the cellular process causing the disease. In fact, the drug did not do so. Further, they misrepresented that they had developed an assay that could quickly and easily demonstrate the drug’s efficacy in a quantitative and non-invasive manner. In fact, no such assay had been developed. Defendants also failed to inform Plaintiffs that the drug posed substantial cardiac risks that could be fatal and that they had not even consulted experts on the disease nor had they prepared any risk mitigation plan for these cardiac events. Defendants misrepresented that, based on the purported capability of the drug to cure HD and the existence of the assay that could demonstrate efficacy, and omitting disclosure of the serious cardiac risks surrounding the drug, pre-clinical testing would be substantially reduced and the drug “conservatively” would be ready for clinical trials on live humans in 2017, an enormous advantage over competitors. Defendants further misrepresented that, based on the capability of the drug to cure HD and the ability of the assay to quickly demonstrate efficacy and the advantages these developments provided to leapfrog over the competition and get to clinical trials, the company would have a $100 million valuation, including the $20 million to be invested by Plaintiffs. Thus, even though Plaintiffs were the only party ever to invest any money and Defendants put up no capital, Defendants obtained 80% of the company. Thereafter, Defendants abused their power as majority shareholders and violated the fiduciary duty they owed to the Plaintiffs. Defendants inserted themselves as a “consultant” and “employee” to the company they formed and controlled as majority shareholders. In fees, salary, housing, trips to Taiwan and Malta and other emoluments – none of which were ever available to Plaintiffs – Defendants put approximately $1 million of the money invested by the Alafis into their own pockets within two years. In order to keep those moneys available to them, Defendants breached their fiduciary duties to Plaintiffs and by virtue of their majority shareholder control failed to permit the retention of professional, experienced scientists and managers who actually had experience commercially developing drugs, as the retention of such personnel would have made unnecessary the continued employment of Defendants. Because Defendants had not and could not develop the drug they represented and had not and could not develop the assay they represented, because Defendants -6- had not and could not mitigate the cardiac risk they failed to disclose, and because Defendants could not bring the drug to clinical trial as represented, Defendants are now in the process of shutting down and liquidating the company – after operating for just over two years. The company had no income, and no other investor ever invested in the company. Upon information and belief, approximately $8 million of Plaintiffs’ investment remains. Despite the fact that the purpose for which the Plaintiffs had been induced to invest their $20 million has now been negated, Defendants – instead of returning that remaining amount to Plaintiffs – are about to disburse the bulk of the remaining money to themselves. Defendants also planned to set aside a portion of Plaintiffs’ investment to pay their legal fees and expenses in defending against this lawsuit caused by their fraudulent conduct until the Delaware Chancery Court ruled against their continuing to fully advance themselves legal fees to defend this action. In sum, Defendants implemented a scheme to fraudulently induce Plaintiffs to put up $20 million by means of misrepresentations and omissions, directly put $1 million of that amount in their own pockets by abusing their majority shareholder status, and now will take for themselves the vast bulk of the balance of Plaintiffs’ investment notwithstanding that the purpose for which that money was provided has been completely negated. -7- PROOF OF SERVICE I am a citizen of the United States, over the age of 18 years, and not a party to or interested in this action. I am employed in the County of San Francisco, State of California and my business address is Mintz Levin Cohn Ferris Glovsky and Popeo P.C., 44 Montgomery Street, 36th Floor, San Francisco, CA 94104. On July 29, 2019, I served the foregoing document described as: PLAINTIFFS’ CASE MANAGEMENT STATEMENT By placing a copy into a sealed envelope addressed and served on the parties listed below: BERGESON, LLP AND/OR TO: BERGESON, LLP Daniel J. Bergeson, Esq. Daniel J. Bergeson, Esq. John D. Pernick, Esq. John D. Pernick, Esq. Adam C. Trigg, Esq. Adam C. Trigg, Esq. 10 Jaideep Venkatesan, Esq. Jaideep Venkatesan, Esq. 111 North Market Street, Suite 600 101 California Street, Suite 1075 11 San Jose, CA 95113 San Francisco, CA 94111 Tel: (408) 291-6200 Tel: (415) 365-9586 12 Emails: dbergeson@be-law.com; jpernick@be-law.com; atrigg@be-law.com; 13 jvenkatesan@be-law.com 14 Attorneys for Defendants 15 Service was accomplished as follows: 16 17 BY E-MAIL OR ELECTRONIC TRANSMISSION: On this day, I personally electronically served from my electronic address rdabdulrahim@mintz.com in “PDF” 18 format, the document(s) described above to be transmitted to the person(s) at the e-mail addresses as indicated. I did not receive, within a reasonable time after the transmission, 19 any electronic message or other indication that the transmission was incomplete or unsuccessful. This is based on a court order or an agreement of the parties to accept 20 service by e-mail or electronic transmission. 21 22 I declare under penalty of perjury under the laws of the State of California that the 23 foregoing is true and correct. Executed on July 29, 2019, at San Francisco, California. 24 25 Regina Abdul-Rahim 26 27 28 -8- PROOF OF SERVICE – CASE NO. 18cv333075