Preview
FILED
2/26/2021 12:00 AM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Darling Tellez DEPUTY
CAUSE NO. DC-19-09828
D&T PARTNERS, LLC (successor in interest IN THE DISTRICT COURT
to ACET VENTURE PARTNERS, LLC),
Plaintiff,
v.
ACET GLOBAL, LLC; DALLAS COUNTY, TEXAS
BAYMARK AC HOLDCO, LLC;
BAYMARK ACERT DIRECT INVEST, LLC;
BAYMARK MANAGEMENT, LLC;
BAYMARK PARTNERS;
DAVID HOOK; TONY LUDLOW; and
WINDSPEED TRADING, LLC,
Defendants. 116" JUDICIAL DISTRICT
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’S
AMENDED TRADITIONAL AND NO EVIDENCE
MOTION FOR SUMMARY JUDGMENT
COMES NOW D&T Partners, LLC (successor in interest to Acet Venture Partners, LLC)
(“D&T Partners”), Plaintiff, in the above-entitled and numbered case, and files this response to
Defendant Windspeed Trading, LLC’s (“Windspeed”) Amended Traditional and No Evidence
Motion for Summary Judgment (the “Motion”) and Windspeed’s Supplement to Motion for Summary
Judgment (the “Supplement”) pursuant to Rule 166a of the Texas Rules of Civil Procedure. D&T
Partners requests that the Court deny Windspeed’s Motion for the reasons set forth herein.
I INTRODUCTION
Windspeed paints a picture of an alternative reality: One where it is not involved with or related
to ACET Global, LLC (“ACET Global”) in any way, and Baymark Partners Management, LLC, Super
G Capital, LLC (“Super G Capital”), and Windspeed are just arm’s-length business relationships. The
evidence says otherwise. Indeed, the timeline established by Windspeed’s own “evidence” is
informative:
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 1 of 30
e On October 18, 2018, William Szeto; Tony Ludlow, on behalf of Baymark Partners
Management, LLC; and Marc Cole, on behalf of Super G Capital, executed the
Amended and Restated Company Agreement of Windspeed Trading, LLC. See
Motion, Exhibit A-2 (App., pp. 23-59). They became business partners in Windspeed.
. William Szeto claims that he is the 100% owner of Windspeed and has
complete control over it, but Windspeed’s formation documents demonstrate
that Szeto is merely the puppet of Super G Capital and the Defendants. For
example, the Company Agreement imbues Super G Capital and Baymark
Partners Management, LLC with perpetual authority (so long as they are
warrant holders or members of Windspeed) to appoint and control a board
membet of Windspeed’s three-person board (and retain the right to replace
such board member). Motion, Exhibit A-2 § 3.4 (App., p. 35). Under the
Agreement, the board members manage all of the business and affairs of
Windspeed by majority—Super G and Baymark Partners maintain complete
control. Motion, Exhibit A-2 § 3.1 (App., p. 34). The Agreement even provides
a heading that reads as follows: “No Control by Members.” Id. at § 3.2 (App.,
p- 34)... It provides that “No Member [Szeto claims to be the sole member] .
. . will participate in or have any control over the Company business or will
have any authority or right to act for or bind the Company.” Id. (App., p. 34).
Even further, both Super G Capital and Baymark Partners Management, LLC
own warrants with respect to 80% of the membership interests of Windspeed.
Id. (App. pp. 2: 59). The Agreement prohibits Szeto from transferring his
“ownership” in Windspeed to any petson without the consent of Super G
Capital and Baymark Partners Management (begging the question as to why
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 2 of 30
two purported non-owners can prohibit Szeto from transferring his claimed
“owner[ship]”). Id. at § 9.1 (App., p. 47). In fact, Super G Capital and Baymark
Partners Management are granted authority under the Agreement to even
force Szeto to sell all of his interest in “his” company without his consent. Id.
at §§ 3.1, 9.1, 9.6 (App., pp. 34, 41, 49). The Agreement also requires that Szeto
provide the “Baymark Manager” and “Super G Manager” a power of attorney
to engage in virtually any act with unfettered discretion on his behalf with
respect to Windspeed—even amend the company agreement of Windspeed
without his consent. Id. at § 11.3 (App., p. 54). Szeto and Windspeed may call
it “ownertship”—indeed, they do, repeatedly—but that does not make it so:
Actions speak much louder than words. Baymark owns Windspeed. Super G
helped Baymark acquire it.
On December 5, 2018, Windspeed Trading, LLC took ownership and control over
an ACET Global payment account, using a Windspeed email address.
As of at least December 12, 2018, Windspeed’s website was a virtual carbon copy of
the former ACET Global website. See Exhibit B, J 14-16, 20 (App., pp. 36-38);
Exhibit B-6 (App., pp. 67-68); Exhibit B-7 (App., pp. 69-70). The Windspeed website
included postings holding out for sale hundreds of products—distinct and unique
products (such as the Tear of a Fairy Bracelet) that were in fact one and the same as
those reflected on ACET Global’s inventory of items in the Foreclosure Sale
Agreement Id; Motion, Exhibit A-4 (App., p. 94) (a foreclosure sale that would not,
supposedly, take place until the following year when it, according to Windspeed and
Baymark, then gave Windspeed ownership over the inventories, including the Tear of
a Faity Bracelet).
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 3 of 30
On January 10, 2019, William Szeto, the CEO of both ACET Global and Windspeed,
issued a memo on behalf of Windspeed and on Windspeed letterhead, directing the
closure of “three accounts under ACET Global LLC”, effective immediately.
On March 1, 2019, William Szeto, on behalf of Windspeed, and Marc Cole, on behalf
of Super G Capital, executed a Foreclosure Sale Agreement by which Windspeed
purported to purchase all of ACET Global, LLC’s inventory (the inventory that
Windspeed had already been advertising and selling for many months). ACET Global,
LLC purportedly owed Super G Capital $403,345.79. Windspeed did not pay out of
pocket; instead, Super G Capital “sold” Windspeed the inventory for a loan in the
amount of $514,144.86. Super G, of course, had warrants to 40% of the membership
of Windspeed. Baymark Partners Management had warrants to another 40% of the
membership. Again, though, Szeto and Windspeed repeatedly lambast Plaintiff for its
“baseless allegations” and “ill-founded contentions,” characterizing the transaction as
n “arm’s-length” transaction. It was just a “good faith” purchaser, it claims, when it
accepted the hundreds of thousands of dollats' worth of inventory from its
owner/controlling-board member—without paying a penny in exchange, no less.
Throughout 2018, including in January 2018 and each month thereafter, ACET Global
received bank deposits that were wrongly diverted from ACET Ventures Partners into
an account that William Szeto, on Windspeed letterhead, later directed Chase Bank to
close down, as he would conduct all operations through Windspeed from that point
forward.
In 2019, an IRS Form 1099-K was issued reporting that Windspeed Trading, LLC had
received revenue in every month of 2018. (This, despite Windspeed’s efforts to paint
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 4 of 30
a picture here that it did not own or sell any of the inventory until after the March 1,
2019 “foreclosure sale.”).
In September of 2020, Matt Denegre, Director of Baymark Partners, emailed Tomer
Damti and informed him that Super G Capital was a “related party.” Rather than an
unaffiliated, third-party lender engaging in arm’s-length lending, Super G Capital was
related to Baymark Partners Management, LLC and Windspeed. Only recently,
however, did Windspeed inform Plaintiffs that Super G Capital was actually a partner
of Baymark and Szeto. This, of course, is entirely contrary to the discovery responses
that Baymark has provided to date.
Thus, at the end of the day, a company (Windspeed) controlled by Super G Captial
(40%); Baymark Partners Management, LLC (40%); and Szeto (20%), “foreclosed” (a
collusive foreclosure) on the inventory of ACET Global, LLC. ACET Global was
owned by the Baymark parties. The Baymark parties had purchased (on a $3.2 million
note) all of the assets of D&T Partners in 2017, and induced D&T Partners to
subordinate its interest therein in order to allow Super G Capital to finance ACET
Global, which took a lien in all assets. The Defendants induced D&T Partners to so
subordinate by representing that they (i) were not related to Super G Capital and (ii)
that they would maintain Mr. Damti as ACET Global’s CEO throughout the time that
any of the $3.2 million note was outstanding. Both representations failed: Baymark
Partner’s Director Matt Denegre admitted to Tomer Damti that Super G Capital is, in
fact, a “related” party. And Defendants, through Ludlow, fired Mr. Damti in February
of 2018 and replaced him with none other than William Szeto. William Szeto then
served as the CEO for ACET Global and, at the same time, (for many months) the
CEO of Windspeed. He is also a member of Windspeed’s three-person board, along
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 5 of 30
with perpetual members appointed by Baymark Partners Management, LLC and Super
G Capital. Super G Capital later “sold” Windspeed all of ACET Global’s former assets
for, amazingly, more than ACET Global had even owed it at the time it collusively
“foreclosed” on ACET Global.
Indeed, contrary to Szeto’s sworn representations, not only are the other named Defendants
involved in the operation of Windspeed, but they actually control it. Szeto, the current CEO of
Windspeed, was the previous CEO of ACET Global—and worked in both capacities at the same
time. Baymark and Super G Capital control Windspeed’s board of managers. Baymark and Super G
Capital can prevent Szeto from transferring any membership interest. That is an unusual arrangement
for businesses that are “not related.”
Furthermore, the evidence demonstrates that the Defendants effectively “copied” ACET
Global over to Windspeed—vendors, product descriptions, and numerous other items are literal
carbon copies of ACET Global. Furthermore, tax documents issued by Defendants indicate that the
lender, Super G Capital, is not an “uninterested third-party,” but is related to named Defendants.
Despite the evidence against them, Defendants—and even the Baymark Parties’ counsel (who,
as a critical fact witness who just so happens to have represented Windspeed in the transactions)—
have continued to deny that any relationship exists between Super G Capital and any of the
Defendants. The denials have been obstructionist and have made a mockery of the judicial system and
discovery process. For example, when asked about the relationship between Super G Capital and any
Defendant (including Windspeed), David Hook defied the question to the extent it would reveal the
full relationship between the Defendants and Super G Capital.’ Exhibit B-9 (App., p. 74).
| The Defendants have a duty to respond to “any matter that is not privileged and is relevant to the subject matter of the
pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any
other party.” Tex. R. iv. P. 192.3 (emphasis added). Despite the question being relevant to the claims of the Defendants
that they are unrelated to Windspeed, improper objections were made to the question in an effort to hide the truth.
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 6 of 30
INTERROGATORY 1: Explain, in detail, the legal relationship between Super G Capital
and any defendant, including any interest that any defendant has or has had during the past five
years in SuperG Capital, LLC or that Super G Capital, LLC has with respect to any defendant,
OBJECTIONS AND RESPONSE: Hook objects to Interrogatory No. | as being vague and
ambiguous through its use of the terms “legal relationship” and “any interest.” Hook further
objects to Interrogatory No. | as it requires Hook to respond with respect to the “legal
relationship[s]” and “interest[s]” of Defendants other than Hook
Consistent with and without waiving the above-stated Objections, Hook will provide
information regarding any ownership interest Hook has in Super G Capital, LLC
Hook has no ownership interest in Super G Capital, LLC
The Baymark Parties’ counsel has echoed his clients’ mistepresentations:
I am also attaching for your reference publicly available documents related to the
management of Super G. Further information about Super G can be found on Super
G’s website: https: www.supergcapital.com/about/ I trust you will agree that this
documentation/information confirms what we discussed last week, namely that Super
G is wholly independent from any of the Defendants named in Plaintiffs lawsuit.
Exhibit D (App., p. 86) (Email from Edward Perrin on September 26, 2019 to Jason B, Freeman).
These mistepresentations by the Baymark Parties and their counsel/agent have been formally repeated
well more than ten times to Plaintiff and its counsel. Such obstructionist behavior has only been
emboldened by the Baymark Parties’ counsel’s glaring conflicts.”
Windspeed and the other Defendants all knew that Windspeed was related to not just the other Defendants, but also Super
G Capital.
? Edward Pertin, through Hallet & Perrin (collectively, “Pertin’”), represented ACET Holdco, LLC,
drafting its LLC Company Agreement dated July 14, 2017. That Agreement was an integral part of
the transaction at issue in this litigation. ACET Holdco, LLC’s members were: ACET Venture
Partners LLC (Owned by Tomer Damti) and Baymark ACET Direct Invest, LLC (with David
- Hook signing). Pertin represented ACET Global, LLC in drafting its Asset Purchase Agreement
with ACET Venture Partners LLC (predecessor of D&T Partners) and in drafting and obtaining a
Collateral Assignment of Rights and Subordination Agreement from Tomer Damti (owner of ACET
Venture Partners LLC), all in favor of Super G Capital. Perrin also represented Windspeed Trading,
LLC in its Foreclosure Sale Agreement entered into with Super G. Perrin is literally a walking
casebook study in conflicts of interest. Because D&T Partners (successor to ACET Venture Partners
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 7 of 30
LLC and owned by Tomer Damti) was a member in ACET Holdco, LLC, and because Perrin
represented the patties in drafting the ACET Holdco Operating Agreement, Perrin had or arguably
had fiduciary duties that ran to D&T Partners (the plaintiff in this action).
Mr. Perrin has gone to exceptional lengths to unequivocally represent to undersigned counsel that
Super G is unrelated to, and has no relationship with, any defendant in this case. (E.g., Email dated
September 26, 2019 from Edward Perrin to Jason B. Freeman, stating “I trust you will agree that this
documentation/information confirms what we discussed last week, namely that Super G is wholly
independent from any of the Defendants named in Plaintiff's lawsuit.” Exhibit D.) It has now
come to light that not only was Super G “related” to the Baymark parties, it was also a partner with
them i” Windspeed, the very company that is accused of wrongfully receiving the assets at issue in a
collusive foreclosure process. See Motion, Exhibit A-2 (App., pp. 23-59).
Despite Perrin’s continued and repeated representations that he knew “all of the facts” and that
Windspeed had no relationship whatsoever to any of the defendants to this suit, undersigned counsel
‘ontinued to insist that Super G appeared to have a relationship to certain defendants in this case.
Perrin continued to engage in obstructive behavior in response to counsel’s attempts to learn about
the relationship between Super G Capital and Petrin’s then-clients: Windspeed, ACET Holdco, LLC
and the Baymark parties—he thumbed his nose at a validly-issued subpoena; he engaged in
obstructionist discovery responses; he repeatedly chastised counsel; and he even instituted federal
bankruptcy proceedings (premised on the representation that Super G Capital, Windspeed, ACET
Global, and Baymark were not related) in an attempt to have the liabilities at issue here discharged,
although the bankruptcy court refused to discharge the debt. But it is now undeniable that Perrin
was aware of (and participated in) the very agreement making them all business partners in
Windspeed, which was dated October 18, 2018. Se Motion, Exhibit A-2 (App., pp. 23-59).
Eventually, Matthew Denegre, a Director of Baymark Partners, contacted Tomer Damti and informed
him and admitted that Super G was actually a “related party” to the Baymark defendants. Shortly after
that, the Baymark defendants caused amended K-1s to be issued to Tomer Damti (for the 2017 and
2018 years and precise activity at issue here) to reflect a new tax-reporting position that was required
because of the fact that Super G was a “related party.” In other words, Denegte had little choice but
to inform Damti of the close relationship because he would find out from the required tax forms in a
matter of days. On September 15, 2020, after learning of the amended K-1s that Perrin’s client caused
to be issued, undesigned counsel (growing in frustration from Perrin’s continued obstructionist
behavior), emailed Perrin to ask for an explanation of his client’s issuance of the K-1s to Mr. Damti
during the middle of this litigation for the exact years and transactions at issue in this litigation.
(Notably, those K-1’s reporting Perrin’s client’s (a defendant in this case) new tax-reporting position,
attributed $365,824 of income to Damti from Baymark ACET Holdco LLC (and away from the
Baymark Parties) — nearly two yeats after Damti had had any business engagement with the Baymark
parties. (His last business engagement with them was in October of 2018 when they caused ACET
Global, LLC to default on the $3.23 million it owed to Damti.).
With respect to undersigned counsel’s email to Perrin, Perrin responded asking if I was asking “for an
explanation of what an IRS K-1 Form is.” Exhibit E. I responded by informing him that “you can
safely assume I know what a K-1 is. What I don’t understand is why one is being sent to my client
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 8 of 30
II. GENERAL TIMELINE OF EVENTS
July 14, 2017 — Tomer Damti, on behalf of Plaintiff, and David Hook, on behalf of
ACET Global, executed the Asset Purchase Agreement.
July 2017 — Tomer Damti, on behalf
of Plaintiff, and David Hook, on behalf of ACET
Global, executed the Secured Promissory Note.
July 2017 — Tomer Damti, on behalf of Plaintiff, and David Hook, on behalf of
Baymark ACET Holdco, LLC, executed the Security Agreement.
from yours on a basis that appears to be directly contrary to representations you have made to me
and, if recollection holds, the court.” Id. I subsequently put the inquiry as simply as possible:
Please inform me of the reason for the issuance of the amended K-1’s, which together
reported hundreds of thousands of dollats of income to my client.
Please inform me of the relationship between the lender and any members of ACET
Global, LLC. That is, explain how they are related.
Id. (September 18, 2020 Email from Jason B, Freeman to Edward Perrin) (bolding added).
Perrin, true to form, responded with several rants:
Again, your communication is pretty opaque and fairly impossible to respond to, patticularly
without any indication what “representation” you are saying I made to you, and possibly the
coutt, that is somehow directly contradicted by some unidentified something in an unspecified
K-1. Since you won’t identify what you are referencing, I understandably can’t say if I’m
aware of it or not. But your unwillingness to straightforwardly identify what is purportedly at
issue, ot ask a ditect question in order to endeavor to obtain what may possibly be a simple
explanation, only serves to raise questions as to any valid or viable basis (and anything
approximating reasonable diligence or investigation necessary) for any such threatened action.
Id. (Email from Edward Pertin to Jason Freeman).
Again, your email tellingly avoids answering the question. Nothing below answers my simple
question in response to your direct accusation - what, if any, representation do you claim was
made to you and the Court, that is “revealed,” i. shown to be false, by those K-1’s?_ You
have crossed a bright ethical line by making such a serious accusation, so be specific, back it
up it up with facts, or stop your unbecoming and hollow posturing. Your failure to do so will
only confirm your inability to do so,
Id. (Email from Edward Perrin to Jason Freeman).
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 9 of 30
July 20, 2017 — David Hook, on behalf of ACET Global, Marc Cole, on behalf of
Super G Capital, and Tomer Damti, on behalf of Plaintiff, executed the Collateral
Assignment of Rights.
February 12, 2018 — Tony Ludlow issued Tomer Damti a letter, terminating Mr.
Damti’s employment with ACET Global.
February 14, 2018 — Around this date, William Szeto became acting CEO of ACET
Global.
June 2018 — William Szeto told Monica Plaskett that ACET Global had a high amount
of debt and that he was going to “start another business.” William Szeto also suggested
he “had friends,” and that if ACET Global went bankrupt, Mr. Szeto would continue
the operations with a new company.
September 27, 2018 — William Szeto filed the Certificate of Formation Limited
Liability Company for Windspeed.
September 30, 2018 — ACET Global’s balance sheet reflected a long term liability
owed to Super G Capital in the amount of $403,345.79.
October 18, 2018 — William Szeto, on behalf of Windspeed; Tony Ludlow, on behalf
of Baymark Partners Management, LLC; and Marc Cole, on behalf of Super G Capital,
LLC, executed the Amended and Restated Company Agreement of Windspeed
Trading, LLC. They became business partners in Windspeed. The Agreement was
drafted by Hallet & Pertin.
October 31, 2018 — The first monthly installment owed by ACET Global to Plaintiff
under the Secured Promissory Note became due. ACET Global failed to pay Plaintiff.
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 10 of 30
December 5, 2018 — Jane Lin, a former employee of ACET Global, executed the
Authorize.Net Request for a New Account Owner to be the new account owner of an
ACET Global account (using her Windspeed email address).
December 10, 2018 — Windspeed’s website reflected numerous products for sale—
unique products that were in fact one and the same as those reflected on ACET
Global’s inventory of items in the Foreclosure Sale Agreement (that would, supposedly
not take place until the following year).
January 10, 2019 — William Szeto, on behalf of Windspeed, issued a memo instructing
that “three accounts undet ACET Global LLC” be closed, effective immediately.
January 31, 2019 — Marc Cole, on behalf of Super G Capital, issued the Notice of
Disposition and Sale of Collateral to ACET Global (ATTN: David Hook).
March 1, 2019 — William Szeto, on behalf of Windspeed, and Marc Cole, on behalf of
Super G Capital, executed the Foreclosure Sale Agreement by which Windspeed
purported to purchase all of the inventory from Windspeed (the inventory it had
already been advertising and selling for many months).
March 1, 2019 - William Szeto, on behalf of Windspeed, and Marc Cole, on behalf of
Super G Capital, executed the Amended and Restated Business Loan & Security
Agreement for a loan in the amount of $514,144.86.
July 12, 2019 — Plaintiff filed its Original Petition.
August 14, 2020 — Matt Denegre, Director of Baymatk Partners, emailed Andy
Waltman, Director of Baymark Partners, and stated: “The last balance sheet for ACET
is from September 2018 when the company was foreclosed on by Super G.”
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 11 of 30
September 14-15, 2020 — Matt Denegre, Director of Baymark Partners, emailed
Tomer Damti and admitted that Super G Capital was a related party to the partners of
Baymark ACET Holdco LLC.
Til. FACTUAL BACKGROUND
On July 14, 2017, Plaintiff entered into an Asset Purchase Agreement with Defendant ACET
Global (hereafter, the “APA”). See PlaintifPs Second Amended Petition (hereafter, “Petition’”), §] 13.
Under the APA, ACET Global purchased the assets of Plaintiff. Id. In exchange, ACET Global agreed
to pay Plaintiff the following purchase price: (1) $850,000.00 in cash via wire transfer at closing; (2) a
subordinated secured promissory note in the original principal amount of $3,230,000.00; (3) a 25%
common membership interest in Defendant Baymatk ACET Holdco, LLC; and (4) ACET Global’s
assumption of the Assumed Liabilities. Id, 15.
Pursuant to the APA, ACET Global entered into a Promissory Note with Plaintiff in July
2017, memorializing the $3,230,000.00 payable to Plaintiff (hereafter, the “Note’’). See Petition, § 17.
According to the terms of the Note, the first installment payment was to come due in October 2018,
the fifteenth month after the Note was issued. Jd. According to the APA, Plaintiff provided its assets
to ACET Global. Moreover, ACET Global paid Plaintiff $850,000.00 in cash, granted Plaintiff a 25%
common membership interest in ACET Global, and assumed the “Assumed Liabilities” under the
APA. Id, §J 15-17.
Separately, Baymark ACET Holdco, LLC entered into a Security Agreement (the “Security
Agreement”) with ACET Venture Partners. See Petition, §/ 18. Under the Security Agreement, Baymark
ACET Holdco, LLC granted a security interest to ACET Venture Partners in 59% of the membership
interest of ACET Global, LLC. Id.
Following the APA, David Hook then caused ACET Global to enter into a Collateral Assignment
of Rights Under Acquisition Transaction Documents and Subordination Agreement (the “Collateral
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 12 of 30
Assignment”) with Super G Capital, LLC, which provided that Super G Capital, LLC would provide a
term loan facility of up to $1,000,000. See Petition, {] 20. The Collateral Assignment contemplated that
ACET Venture Partners’ security interest under the Security Agreement would be subordinated to the
lien held by Super G Capital. Id ACET Venture Partners agreed to subordinate its security interest to
Super G Capital, LLC and accept a 25% common membership interest in Baymark ACET Holdco, LLC
with the understanding that Damti would maintain managerial authority and discretion and that ACET
Global did not intend (and that Hook and Ludlow did not intend to cause it) to default on the loan to
ACET Venture Partners or default on the loan from Super G Capital. Id.
Within approximately a year—and before the Note came due—a new and separate entity,
Windspeed Trading, LLC, was formed. See Petition, § 24. Ludlow and Hook caused the transfer of
substantially all of the assets of ACET Global to Windspeed Trading, LLC, thereby removing all of the
value of ACET Global, which served as security for the Note and further decreased the value of Baymark
ACET Holdco, LLC. Id. This act, or series of acts, was in violation of the Secured Promissory Note and
related Security Agreement. Id.
Iv. STATEMENT REGARDING SUMMARY JUDGMENT EVIDENCE
Pursuant to Tex. R. Civ. P. 166a(d), D&T Partners intends to use discovery products that are
not currently on file as evidentiary proof. Specifically, D&T Partners relies on the following competent
summary judgment evidence and incorporates such products herein as if set forth in full:
Exhibit A: Affidavit of Monica Plaskett.
Exhibit B: Declaration of Tomer Damti.
Exhibit B-1: Memo from William C. Szeto, dated January 10, 2019.
Exhibit B-2: Authorize.Net Request for a New Account Owner, dated December 5, 2018.
Exhibit B-3: Super G Capital, LLC’s Notice of Disposition and Sale of Collateral, dated
January 31, 2019.
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 13 of 30
Exhibit B-4: Emails between Matt Denegre and'Tomer Damti, dated September 14-15, 2020.
Exhibit B-5: Windspeed Trading, LLC’s website, as of December 12, 2018.
Exhibit B-6: ACET Global’s Jewelry webpage, as of August 25, 2018.
Exhibit B-7: Windspeed Trading, LLC’s Jewelry webpage, as of December 12, 2018.
Exhibit B-8: 2018 Form 1099-K issued by Group, Inc. to Windspeed Trading LLC.
Exhibit B-9: David Hook’s Objections and Responses to Plaintiffs First Set of
Interrogatories, dated November 6, 2020.
Exhibit B-10: Koolulu’s Official Logo.
Exhibit C: Declaration of Paul Knutson.
Exhibit C-1: Emails between Matt Denegre, Andy Waltman, and Howard CPAs, dated
August 13-14, 2020.
Exhibit D: Email from Edward P. Perrin,Jr. to Jason Freeman, dated September 26, 2019.
Exhibit E: Emails between Edward P. Perrin,Jr. and Jason Freeman, dated September 15-
22, 2020.
Vv. ARGUMENT AND AUTHORITIES
A. Summary Judgment Standard.
The moving party is entitled to summary judgment when the party conclusively demonstrates
that the moving patty is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a. A patty is entitled
to judgment as a matter of law if there are (1) no genuine issues of material fact and the movant’s
summary judgment evidence establishes an entitlement to judgment as a matter of law; or (2) there is
no evidence of one or more essential elements of a claim or defense on which the adverse party has
the burden of proof. See id. But the Texas Supreme Court has held that the summary judgment
procedure is not intended, and should not be used, to deprive litigants of their right to a full hearing
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
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on the merits of any real issue of fact. In re Estate of Price, 375 SW.2d 900, 904 (Tex. 1964); Mariner
Financial Group v. H.G. Bossley, 79 S.W.3d 30, 32-33 (Tex. 2002).
A genuine issue of material fact exists when “if reasonable and fair-minded jurors could differ
in their conclusions in light of all of the summary-judgment evidence.” Transcon. Ins. Co. v. Briggs Equip.
Tr, 321 S.W.3d 685 (Lex. App.—Houston [14th Dist.] 2010, no pet.). But in examining the existence
of a genuine issue of material fact, evidence favorable to the non-movant must be taken as true, and
any doubts must be resolved in the non-movant’s favor. Nixon v. Mr. Prop. Mgut. Co., Inc., 690 S.W.2d
546, 549 (Tex. 1985) (emphasis added).
B. No-Evidence Summary Judgment Standard.
A no-evidence summary judgment is essentially a pretrial directed verdict. See, e.g, Valero Mktg.
> Supply Co. v. Kalama Int'l, 51 SW.3d 345, 350 (Tex. App—Houston [1st Dist.] 2001, no pet.). A no-
evidence point must be reviewed in the light most favorable to the non-movant, disregarding all
contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
“A no evidence point will be sustained when (a) there is a complete absence of evidence of a vital fact,
(b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered
to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or
(d) the evidence conclusively establishes the opposite of the vital fact.” Id. (citation omitted).
A no-evidence summary judgment is improperly granted if the respondent brings forth more
than a scintilla of probative evidence to raise a genuine issue of material fact; less than a scintilla of
evidence exists when the evidence is “so weak as to do no more than create a mere surmise or
suspicion” of a fact. Kindred v. Con/ Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983) (citation omitted). More
than a scintilla of evidence exists when the evidence “tises to a level that would enable reasonable and
fair-minded people to differ in their conclusions.” Merrell Dow Pharms., 953 S.W.2d at 711.
C. Declaratory Judgment
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 15 of 30
Plaintiff seeks a declaratory judgment that Windspeed has assumed all obligations under the
Note and Security Agreement noted above. Section (4) of the Security Agreement specifically provides
that: “[uJpon any Fundamental Transaction, the successor entity to such Fundamental Transaction
shall succeed to, and be substituted for .. . and shall assume all of the obligations of the Maker under
this Note with the same effect as if such successor Person had been named as the Maker herein... .”
See Petition, § 33.
Windspeed incorrectly suggests that the requested declaratory judgment may not be granted
because Windspeed was not a party to the Note ot the Security Agreement in question nor an assignee
or transferee of the original maker. See Motion, § 14. Further, Windspeed argues that a “Fundamental
Transaction” did not occur, as ACET Global was “not a party to the sale of the assets to Windspeed.”
Id.
at § 15.
As an initial matter, both ACET Global and Windspeed (and their owners) were involved in—
and were parties to—the “Fundamental Transaction” at issue. According to the Secured Promissory
Note executed between Plaintiff and ACET Global, “Fundamental Transaction” is defined as follows:
“Fundamental Transaction” means that the Maker [ACET Global] shall, directly
or indirectly, in one or more related transactions, (i) consolidate or merge with or
into (whether or not the Maker is the surviving entity) another Person, or (ii) sell,
ssign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Maker to another Person, or (iii) enter into _a stock
purchase agreement or other business combination (including without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with another
Person the intent of which is to accomplish any of the foregoing, or (iv) any
transaction or business combination resulting in, directly or indirectly, Holdco
[Baymark ACET Holdco, LLC] not having control over Maker.
Note, {| (25)(d) (emphasis added). Here, ACET Global engaged “in one or more related transactions”
with Windspeed as part of a “scheme of atrangement” in order to “dispose of all or substantially all
of the properties or assets of [ACET Global] to [Windspeed].” Windspeed took the property subject
to the foregoing restriction. However, Windspeed attempts to carve up the series of related
transactions, casting them as separate and distinct when they were (and, mote technically there is
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 16 of 30
evidence to provide a basis for an inference that) part of a series of related transactions that sold,
assigned, transferred, conveyed or disposed of the properties or assets of ACET Global or that it
entered into a stock purchase agreement (involving warrants or other business combination) with
Baymark Partners Management, LLC and/or Super G Capital to accomplish such a result.
However, there ate setious questions of material fact with respect to ACET Global’s
relationship with Super G Capital and Windspeed, as well as the transfer of assets from ACET Global
to Windspeed. And, evidence favorable to the non-movant—here, the Plaintiff—must be taken as
true, and any doubts must be resolved in the non-movant’s favor. Nixon v. Mr. Prop. Mgmt. Co., Inc.,
690 S.W.2d 546, 549 (Tex. 1985).
First, according to William Szeto’s own admission:
Baymark Partners Management, LLC owns a warrant to purchase a 40% interest in
Windspeed, which it has not exercised. Baymark Partners Management, LLC has a
tight to appoint a manager to Windspeed’s board of managers. Anthony Ludlow is
Baymark Partners Management, LLC’s appointee to the board. However, I am the
100% owner in Windspeed and there are a total of three managers on Windspeed’s
board.
Motion, Exhibit A, 4 (Motion App., p. 16). Additionally, Tony Ludlow was one of the ultimate
owners of ACET Global. Specifically, after the execution of the APA, Defendants Tony Ludlow and
David Hook controlled Defendant Baymark ACET Direct Invest, LLC. In turn, Baymark ACET
Direct Invest, LLC controlled Baymark ACET Holdco, LLC and ACET Global. See Petition, §] 14.
Thus, Tony Ludlow, who ultimately controlled ACET Global alongside David Hook, is a current
manager on Windspeed’s three-person board.
Second, William Szeto was involved on both sides of the transfer of ACET Global’s assets.
According to the Affidavit of Monica Plaskett, a former employee of ACET Global, William Szeto
(or “Bill”) became involved in ACET Global’s business after ACET Venture Partners executed the
APA and related agreements. See Exhibit A, 6 (App., p. 32). After Tomer Damti was fired, William
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 17 of 30
Szeto became acting CEO of ACET Global. Id, 8 (App., p. 32). Notably, in June 2018, Ms. Plaskett
recalls the following interaction with William Szeto:
In June 2018, Bill called me into his office and mentioned that ACET Global had a
high amount of debt and that he was going to “start another business.” He
suggested he “had friends,” and that if ACET Global went bankrupt, Bill could
continue the operations with a new company.
Id.,§ 10 (App., p. 33) (emphasis added).
Based on Windspeed’s own evidence, William Szeto filed (or William Szeto’s representative
filed) a Certificate of Formation Limited Liability Company to form Windspeed on September 27,
2018. See Motion, Exhibit A-1 (Motion App., p. 20). Additionally, William Szeto admits he is the
“President & Chief Executive Officer” of Windspeed, and he “was involved in the formation of
Windspeed and [is] the 100% owner in Windspeed.” See Motion, Exhibit A, {J 2, 3 (Motion App., p.
16). Effectively, William Szeto was the CEO of both ACET Global and Windspeed when the transfer
of ACET Global’s assets occurred.
Third, evidence suggests that Windspeed was effectively transferring ACET Global’s business
to itself prior to the execution of the Bill of Sale, Foreclosure Sale Agreement, and Amended and
Restated Business Loan & Security Agreement on March 1, 2019. On January 10 2019, William Szeto
executed a memo on Windspeed letterhead (and in his capacity as President & CEO of Windspeed),
requesting that “three accounts under ACET Global LLC” be closed effective immediately. See Exhibit
B-1 (App., p. 39). Additionally, Jane Lin, a former employee of ACET Global, executed an
Authorize.Net Request for a New Account Owner on December 5, 2018. Using her Windspeed email
address, Jane Lin listed herself as the “New Account Owner” for an account held in ACET Global’s
name—the very same bank account listed in the Business Loan and Security Agreement
between Super G Capital and ACET Global. Se Exhibit B-2 (App., p. 40); Supplement, p. 29.
Fourth, evidence also suggests that Windspeed’s assumption of ACET Global’s assets was a
foregone conclusion. While the agreements executed between Windspeed and Super G Capital did
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 18 of 30
not occur until March 1, 2019, a snapshot of Windspeed’s website on December 12, 2018 shows that
Windspeed was already marketing inventory items included in Super G Capital, LLC’s Notice of
Disposition and Sale of Collateral and the Bill of Sale executed between Super G Capital and
Windspeed. See Exhibit B-5 (App., p. 63); Exhibit B-3 (App., pp. 47-52); Motion, Exhibit A-3 (Motion
App., pp. 64-69). Such items include, but are not limited to, the “Iphone 6/6 Plus Sport Armband,”
“Mini Portable USB Rechargeable Battery Clip Fan,” and “Bye Bye Clog.” Id.
Even further, Windspeed knowingly and intentionally copied ACET Global’s website content.
A scteenshot of Windspeed’s “Jewelry” webpage, dated December 12, 2018, is an exact copy of ACET
Global’s “Jewelry” webpage, dated August 25, 2018. See Exhibit B-6 (App., p. 67); Exhibit B-7 (App.
p- 69). Note the similarities—both webpages (1) market the exact same 10 jewelry products, (2) with
the exact same 10 pictures, (3) in the exact same order, (4) with the exact same product
descriptions, and (5) with the exact same typographical error (both webpages describe the fourth
jewelry product as follows: “Moments of Happiness Crystal Necklace with Anstrain Crystals”—
clear error intended to say “Austrian Crystals”). Id Notably, the second item on the Foreclosure Sale
Agreement’s Inventory listing—‘“Tear of A Fairy Bracelet” (a uniquely described item)—directly
corresponds to the ninth jewelry product marketed on Windspeed’s website in December 2018—
“Tear Of Fairy Bracelet With Swarovski Elements.” See Motion, Exhibit A-4 (App., p. 94); Exhibit B-
6 (App., p. 68); Exhibit B-7 (App., p. 70). Further, Windspeed straight copied the favicon (the tab
icon) used by ACET Global’s own website (koolulu.com), theteby stealing the signature wl eyes”
of Koolulu’s official logo. See Exhibit B, {20 (App., p. 37); Exhibit B-5 (App., p. 66); Exhibit B-10
(App., p. 80).
Fifth, Super G Capital is a related party to either Tony Ludlow or David Hook based on the
representations of Matt Denegre. On September 14, 2020, Matt Denegre emailed Tomer Damti a
copy of his 2019 Schedule K-1 issued by Baymark ACET Holdco LLC. See Exhibit B-4 (App., p. 56).
PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL
AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 19 of 30
Perplexed by a significant amount of cancellation of debt income, Tomer Damti requested an
explanation from Matt Denegre multiple times. Jd. Matt Denegre provided the following tesponses:
The company had loans from Super G and ACET Venture Partners (Seller Note). . . .
Because we have a recourse lender, i.e. the lender is a related party to one of the
partners . . There is recourse because the lender is a related party to one of the
partners....
Id. Thus, based on Matt Denegte’s responses, Supet G Capital was a related patty to either Tony
Ludlow or David Hook. If Tony Ludlow is the “partner” th
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FILED 2/26/2021 12:00 AM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Darling Tellez DEPUTY CAUSE NO. DC-19-09828 D&T PARTNERS, LLC (successor in interest IN THE DISTRICT COURT to ACET VENTURE PARTNERS, LLC), Plaintiff, v. ACET GLOBAL, LLC; DALLAS COUNTY, TEXAS BAYMARK AC HOLDCO, LLC; BAYMARK ACERT DIRECT INVEST, LLC; BAYMARK MANAGEMENT, LLC; BAYMARK PARTNERS; DAVID HOOK; TONY LUDLOW; and WINDSPEED TRADING, LLC, Defendants. 116" JUDICIAL DISTRICT PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’S AMENDED TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY JUDGMENT COMES NOW D&T Partners, LLC (successor in interest to Acet Venture Partners, LLC) (“D&T Partners”), Plaintiff, in the above-entitled and numbered case, and files this response to Defendant Windspeed Trading, LLC’s (“Windspeed”) Amended Traditional and No Evidence Motion for Summary Judgment (the “Motion”) and Windspeed’s Supplement to Motion for Summary Judgment (the “Supplement”) pursuant to Rule 166a of the Texas Rules of Civil Procedure. D&T Partners requests that the Court deny Windspeed’s Motion for the reasons set forth herein. I INTRODUCTION Windspeed paints a picture of an alternative reality: One where it is not involved with or related to ACET Global, LLC (“ACET Global”) in any way, and Baymark Partners Management, LLC, Super G Capital, LLC (“Super G Capital”), and Windspeed are just arm’s-length business relationships. The evidence says otherwise. Indeed, the timeline established by Windspeed’s own “evidence” is informative: PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 1 of 30 e On October 18, 2018, William Szeto; Tony Ludlow, on behalf of Baymark Partners Management, LLC; and Marc Cole, on behalf of Super G Capital, executed the Amended and Restated Company Agreement of Windspeed Trading, LLC. See Motion, Exhibit A-2 (App., pp. 23-59). They became business partners in Windspeed. . William Szeto claims that he is the 100% owner of Windspeed and has complete control over it, but Windspeed’s formation documents demonstrate that Szeto is merely the puppet of Super G Capital and the Defendants. For example, the Company Agreement imbues Super G Capital and Baymark Partners Management, LLC with perpetual authority (so long as they are warrant holders or members of Windspeed) to appoint and control a board membet of Windspeed’s three-person board (and retain the right to replace such board member). Motion, Exhibit A-2 § 3.4 (App., p. 35). Under the Agreement, the board members manage all of the business and affairs of Windspeed by majority—Super G and Baymark Partners maintain complete control. Motion, Exhibit A-2 § 3.1 (App., p. 34). The Agreement even provides a heading that reads as follows: “No Control by Members.” Id. at § 3.2 (App., p- 34)... It provides that “No Member [Szeto claims to be the sole member] . . . will participate in or have any control over the Company business or will have any authority or right to act for or bind the Company.” Id. (App., p. 34). Even further, both Super G Capital and Baymark Partners Management, LLC own warrants with respect to 80% of the membership interests of Windspeed. Id. (App. pp. 2: 59). The Agreement prohibits Szeto from transferring his “ownership” in Windspeed to any petson without the consent of Super G Capital and Baymark Partners Management (begging the question as to why PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 2 of 30 two purported non-owners can prohibit Szeto from transferring his claimed “owner[ship]”). Id. at § 9.1 (App., p. 47). In fact, Super G Capital and Baymark Partners Management are granted authority under the Agreement to even force Szeto to sell all of his interest in “his” company without his consent. Id. at §§ 3.1, 9.1, 9.6 (App., pp. 34, 41, 49). The Agreement also requires that Szeto provide the “Baymark Manager” and “Super G Manager” a power of attorney to engage in virtually any act with unfettered discretion on his behalf with respect to Windspeed—even amend the company agreement of Windspeed without his consent. Id. at § 11.3 (App., p. 54). Szeto and Windspeed may call it “ownertship”—indeed, they do, repeatedly—but that does not make it so: Actions speak much louder than words. Baymark owns Windspeed. Super G helped Baymark acquire it. On December 5, 2018, Windspeed Trading, LLC took ownership and control over an ACET Global payment account, using a Windspeed email address. As of at least December 12, 2018, Windspeed’s website was a virtual carbon copy of the former ACET Global website. See Exhibit B, J 14-16, 20 (App., pp. 36-38); Exhibit B-6 (App., pp. 67-68); Exhibit B-7 (App., pp. 69-70). The Windspeed website included postings holding out for sale hundreds of products—distinct and unique products (such as the Tear of a Fairy Bracelet) that were in fact one and the same as those reflected on ACET Global’s inventory of items in the Foreclosure Sale Agreement Id; Motion, Exhibit A-4 (App., p. 94) (a foreclosure sale that would not, supposedly, take place until the following year when it, according to Windspeed and Baymark, then gave Windspeed ownership over the inventories, including the Tear of a Faity Bracelet). PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 3 of 30 On January 10, 2019, William Szeto, the CEO of both ACET Global and Windspeed, issued a memo on behalf of Windspeed and on Windspeed letterhead, directing the closure of “three accounts under ACET Global LLC”, effective immediately. On March 1, 2019, William Szeto, on behalf of Windspeed, and Marc Cole, on behalf of Super G Capital, executed a Foreclosure Sale Agreement by which Windspeed purported to purchase all of ACET Global, LLC’s inventory (the inventory that Windspeed had already been advertising and selling for many months). ACET Global, LLC purportedly owed Super G Capital $403,345.79. Windspeed did not pay out of pocket; instead, Super G Capital “sold” Windspeed the inventory for a loan in the amount of $514,144.86. Super G, of course, had warrants to 40% of the membership of Windspeed. Baymark Partners Management had warrants to another 40% of the membership. Again, though, Szeto and Windspeed repeatedly lambast Plaintiff for its “baseless allegations” and “ill-founded contentions,” characterizing the transaction as n “arm’s-length” transaction. It was just a “good faith” purchaser, it claims, when it accepted the hundreds of thousands of dollats' worth of inventory from its owner/controlling-board member—without paying a penny in exchange, no less. Throughout 2018, including in January 2018 and each month thereafter, ACET Global received bank deposits that were wrongly diverted from ACET Ventures Partners into an account that William Szeto, on Windspeed letterhead, later directed Chase Bank to close down, as he would conduct all operations through Windspeed from that point forward. In 2019, an IRS Form 1099-K was issued reporting that Windspeed Trading, LLC had received revenue in every month of 2018. (This, despite Windspeed’s efforts to paint PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 4 of 30 a picture here that it did not own or sell any of the inventory until after the March 1, 2019 “foreclosure sale.”). In September of 2020, Matt Denegre, Director of Baymark Partners, emailed Tomer Damti and informed him that Super G Capital was a “related party.” Rather than an unaffiliated, third-party lender engaging in arm’s-length lending, Super G Capital was related to Baymark Partners Management, LLC and Windspeed. Only recently, however, did Windspeed inform Plaintiffs that Super G Capital was actually a partner of Baymark and Szeto. This, of course, is entirely contrary to the discovery responses that Baymark has provided to date. Thus, at the end of the day, a company (Windspeed) controlled by Super G Captial (40%); Baymark Partners Management, LLC (40%); and Szeto (20%), “foreclosed” (a collusive foreclosure) on the inventory of ACET Global, LLC. ACET Global was owned by the Baymark parties. The Baymark parties had purchased (on a $3.2 million note) all of the assets of D&T Partners in 2017, and induced D&T Partners to subordinate its interest therein in order to allow Super G Capital to finance ACET Global, which took a lien in all assets. The Defendants induced D&T Partners to so subordinate by representing that they (i) were not related to Super G Capital and (ii) that they would maintain Mr. Damti as ACET Global’s CEO throughout the time that any of the $3.2 million note was outstanding. Both representations failed: Baymark Partner’s Director Matt Denegre admitted to Tomer Damti that Super G Capital is, in fact, a “related” party. And Defendants, through Ludlow, fired Mr. Damti in February of 2018 and replaced him with none other than William Szeto. William Szeto then served as the CEO for ACET Global and, at the same time, (for many months) the CEO of Windspeed. He is also a member of Windspeed’s three-person board, along PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 5 of 30 with perpetual members appointed by Baymark Partners Management, LLC and Super G Capital. Super G Capital later “sold” Windspeed all of ACET Global’s former assets for, amazingly, more than ACET Global had even owed it at the time it collusively “foreclosed” on ACET Global. Indeed, contrary to Szeto’s sworn representations, not only are the other named Defendants involved in the operation of Windspeed, but they actually control it. Szeto, the current CEO of Windspeed, was the previous CEO of ACET Global—and worked in both capacities at the same time. Baymark and Super G Capital control Windspeed’s board of managers. Baymark and Super G Capital can prevent Szeto from transferring any membership interest. That is an unusual arrangement for businesses that are “not related.” Furthermore, the evidence demonstrates that the Defendants effectively “copied” ACET Global over to Windspeed—vendors, product descriptions, and numerous other items are literal carbon copies of ACET Global. Furthermore, tax documents issued by Defendants indicate that the lender, Super G Capital, is not an “uninterested third-party,” but is related to named Defendants. Despite the evidence against them, Defendants—and even the Baymark Parties’ counsel (who, as a critical fact witness who just so happens to have represented Windspeed in the transactions)— have continued to deny that any relationship exists between Super G Capital and any of the Defendants. The denials have been obstructionist and have made a mockery of the judicial system and discovery process. For example, when asked about the relationship between Super G Capital and any Defendant (including Windspeed), David Hook defied the question to the extent it would reveal the full relationship between the Defendants and Super G Capital.’ Exhibit B-9 (App., p. 74). | The Defendants have a duty to respond to “any matter that is not privileged and is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party.” Tex. R. iv. P. 192.3 (emphasis added). Despite the question being relevant to the claims of the Defendants that they are unrelated to Windspeed, improper objections were made to the question in an effort to hide the truth. PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 6 of 30 INTERROGATORY 1: Explain, in detail, the legal relationship between Super G Capital and any defendant, including any interest that any defendant has or has had during the past five years in SuperG Capital, LLC or that Super G Capital, LLC has with respect to any defendant, OBJECTIONS AND RESPONSE: Hook objects to Interrogatory No. | as being vague and ambiguous through its use of the terms “legal relationship” and “any interest.” Hook further objects to Interrogatory No. | as it requires Hook to respond with respect to the “legal relationship[s]” and “interest[s]” of Defendants other than Hook Consistent with and without waiving the above-stated Objections, Hook will provide information regarding any ownership interest Hook has in Super G Capital, LLC Hook has no ownership interest in Super G Capital, LLC The Baymark Parties’ counsel has echoed his clients’ mistepresentations: I am also attaching for your reference publicly available documents related to the management of Super G. Further information about Super G can be found on Super G’s website: https: www.supergcapital.com/about/ I trust you will agree that this documentation/information confirms what we discussed last week, namely that Super G is wholly independent from any of the Defendants named in Plaintiffs lawsuit. Exhibit D (App., p. 86) (Email from Edward Perrin on September 26, 2019 to Jason B, Freeman). These mistepresentations by the Baymark Parties and their counsel/agent have been formally repeated well more than ten times to Plaintiff and its counsel. Such obstructionist behavior has only been emboldened by the Baymark Parties’ counsel’s glaring conflicts.” Windspeed and the other Defendants all knew that Windspeed was related to not just the other Defendants, but also Super G Capital. ? Edward Pertin, through Hallet & Perrin (collectively, “Pertin’”), represented ACET Holdco, LLC, drafting its LLC Company Agreement dated July 14, 2017. That Agreement was an integral part of the transaction at issue in this litigation. ACET Holdco, LLC’s members were: ACET Venture Partners LLC (Owned by Tomer Damti) and Baymark ACET Direct Invest, LLC (with David - Hook signing). Pertin represented ACET Global, LLC in drafting its Asset Purchase Agreement with ACET Venture Partners LLC (predecessor of D&T Partners) and in drafting and obtaining a Collateral Assignment of Rights and Subordination Agreement from Tomer Damti (owner of ACET Venture Partners LLC), all in favor of Super G Capital. Perrin also represented Windspeed Trading, LLC in its Foreclosure Sale Agreement entered into with Super G. Perrin is literally a walking casebook study in conflicts of interest. Because D&T Partners (successor to ACET Venture Partners PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 7 of 30 LLC and owned by Tomer Damti) was a member in ACET Holdco, LLC, and because Perrin represented the patties in drafting the ACET Holdco Operating Agreement, Perrin had or arguably had fiduciary duties that ran to D&T Partners (the plaintiff in this action). Mr. Perrin has gone to exceptional lengths to unequivocally represent to undersigned counsel that Super G is unrelated to, and has no relationship with, any defendant in this case. (E.g., Email dated September 26, 2019 from Edward Perrin to Jason B. Freeman, stating “I trust you will agree that this documentation/information confirms what we discussed last week, namely that Super G is wholly independent from any of the Defendants named in Plaintiff's lawsuit.” Exhibit D.) It has now come to light that not only was Super G “related” to the Baymark parties, it was also a partner with them i” Windspeed, the very company that is accused of wrongfully receiving the assets at issue in a collusive foreclosure process. See Motion, Exhibit A-2 (App., pp. 23-59). Despite Perrin’s continued and repeated representations that he knew “all of the facts” and that Windspeed had no relationship whatsoever to any of the defendants to this suit, undersigned counsel ‘ontinued to insist that Super G appeared to have a relationship to certain defendants in this case. Perrin continued to engage in obstructive behavior in response to counsel’s attempts to learn about the relationship between Super G Capital and Petrin’s then-clients: Windspeed, ACET Holdco, LLC and the Baymark parties—he thumbed his nose at a validly-issued subpoena; he engaged in obstructionist discovery responses; he repeatedly chastised counsel; and he even instituted federal bankruptcy proceedings (premised on the representation that Super G Capital, Windspeed, ACET Global, and Baymark were not related) in an attempt to have the liabilities at issue here discharged, although the bankruptcy court refused to discharge the debt. But it is now undeniable that Perrin was aware of (and participated in) the very agreement making them all business partners in Windspeed, which was dated October 18, 2018. Se Motion, Exhibit A-2 (App., pp. 23-59). Eventually, Matthew Denegre, a Director of Baymark Partners, contacted Tomer Damti and informed him and admitted that Super G was actually a “related party” to the Baymark defendants. Shortly after that, the Baymark defendants caused amended K-1s to be issued to Tomer Damti (for the 2017 and 2018 years and precise activity at issue here) to reflect a new tax-reporting position that was required because of the fact that Super G was a “related party.” In other words, Denegte had little choice but to inform Damti of the close relationship because he would find out from the required tax forms in a matter of days. On September 15, 2020, after learning of the amended K-1s that Perrin’s client caused to be issued, undesigned counsel (growing in frustration from Perrin’s continued obstructionist behavior), emailed Perrin to ask for an explanation of his client’s issuance of the K-1s to Mr. Damti during the middle of this litigation for the exact years and transactions at issue in this litigation. (Notably, those K-1’s reporting Perrin’s client’s (a defendant in this case) new tax-reporting position, attributed $365,824 of income to Damti from Baymark ACET Holdco LLC (and away from the Baymark Parties) — nearly two yeats after Damti had had any business engagement with the Baymark parties. (His last business engagement with them was in October of 2018 when they caused ACET Global, LLC to default on the $3.23 million it owed to Damti.). With respect to undersigned counsel’s email to Perrin, Perrin responded asking if I was asking “for an explanation of what an IRS K-1 Form is.” Exhibit E. I responded by informing him that “you can safely assume I know what a K-1 is. What I don’t understand is why one is being sent to my client PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 8 of 30 II. GENERAL TIMELINE OF EVENTS July 14, 2017 — Tomer Damti, on behalf of Plaintiff, and David Hook, on behalf of ACET Global, executed the Asset Purchase Agreement. July 2017 — Tomer Damti, on behalf of Plaintiff, and David Hook, on behalf of ACET Global, executed the Secured Promissory Note. July 2017 — Tomer Damti, on behalf of Plaintiff, and David Hook, on behalf of Baymark ACET Holdco, LLC, executed the Security Agreement. from yours on a basis that appears to be directly contrary to representations you have made to me and, if recollection holds, the court.” Id. I subsequently put the inquiry as simply as possible: Please inform me of the reason for the issuance of the amended K-1’s, which together reported hundreds of thousands of dollats of income to my client. Please inform me of the relationship between the lender and any members of ACET Global, LLC. That is, explain how they are related. Id. (September 18, 2020 Email from Jason B, Freeman to Edward Perrin) (bolding added). Perrin, true to form, responded with several rants: Again, your communication is pretty opaque and fairly impossible to respond to, patticularly without any indication what “representation” you are saying I made to you, and possibly the coutt, that is somehow directly contradicted by some unidentified something in an unspecified K-1. Since you won’t identify what you are referencing, I understandably can’t say if I’m aware of it or not. But your unwillingness to straightforwardly identify what is purportedly at issue, ot ask a ditect question in order to endeavor to obtain what may possibly be a simple explanation, only serves to raise questions as to any valid or viable basis (and anything approximating reasonable diligence or investigation necessary) for any such threatened action. Id. (Email from Edward Pertin to Jason Freeman). Again, your email tellingly avoids answering the question. Nothing below answers my simple question in response to your direct accusation - what, if any, representation do you claim was made to you and the Court, that is “revealed,” i. shown to be false, by those K-1’s?_ You have crossed a bright ethical line by making such a serious accusation, so be specific, back it up it up with facts, or stop your unbecoming and hollow posturing. Your failure to do so will only confirm your inability to do so, Id. (Email from Edward Perrin to Jason Freeman). PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 9 of 30 July 20, 2017 — David Hook, on behalf of ACET Global, Marc Cole, on behalf of Super G Capital, and Tomer Damti, on behalf of Plaintiff, executed the Collateral Assignment of Rights. February 12, 2018 — Tony Ludlow issued Tomer Damti a letter, terminating Mr. Damti’s employment with ACET Global. February 14, 2018 — Around this date, William Szeto became acting CEO of ACET Global. June 2018 — William Szeto told Monica Plaskett that ACET Global had a high amount of debt and that he was going to “start another business.” William Szeto also suggested he “had friends,” and that if ACET Global went bankrupt, Mr. Szeto would continue the operations with a new company. September 27, 2018 — William Szeto filed the Certificate of Formation Limited Liability Company for Windspeed. September 30, 2018 — ACET Global’s balance sheet reflected a long term liability owed to Super G Capital in the amount of $403,345.79. October 18, 2018 — William Szeto, on behalf of Windspeed; Tony Ludlow, on behalf of Baymark Partners Management, LLC; and Marc Cole, on behalf of Super G Capital, LLC, executed the Amended and Restated Company Agreement of Windspeed Trading, LLC. They became business partners in Windspeed. The Agreement was drafted by Hallet & Pertin. October 31, 2018 — The first monthly installment owed by ACET Global to Plaintiff under the Secured Promissory Note became due. ACET Global failed to pay Plaintiff. PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 10 of 30 December 5, 2018 — Jane Lin, a former employee of ACET Global, executed the Authorize.Net Request for a New Account Owner to be the new account owner of an ACET Global account (using her Windspeed email address). December 10, 2018 — Windspeed’s website reflected numerous products for sale— unique products that were in fact one and the same as those reflected on ACET Global’s inventory of items in the Foreclosure Sale Agreement (that would, supposedly not take place until the following year). January 10, 2019 — William Szeto, on behalf of Windspeed, issued a memo instructing that “three accounts undet ACET Global LLC” be closed, effective immediately. January 31, 2019 — Marc Cole, on behalf of Super G Capital, issued the Notice of Disposition and Sale of Collateral to ACET Global (ATTN: David Hook). March 1, 2019 — William Szeto, on behalf of Windspeed, and Marc Cole, on behalf of Super G Capital, executed the Foreclosure Sale Agreement by which Windspeed purported to purchase all of the inventory from Windspeed (the inventory it had already been advertising and selling for many months). March 1, 2019 - William Szeto, on behalf of Windspeed, and Marc Cole, on behalf of Super G Capital, executed the Amended and Restated Business Loan & Security Agreement for a loan in the amount of $514,144.86. July 12, 2019 — Plaintiff filed its Original Petition. August 14, 2020 — Matt Denegre, Director of Baymatk Partners, emailed Andy Waltman, Director of Baymark Partners, and stated: “The last balance sheet for ACET is from September 2018 when the company was foreclosed on by Super G.” PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 11 of 30 September 14-15, 2020 — Matt Denegre, Director of Baymark Partners, emailed Tomer Damti and admitted that Super G Capital was a related party to the partners of Baymark ACET Holdco LLC. Til. FACTUAL BACKGROUND On July 14, 2017, Plaintiff entered into an Asset Purchase Agreement with Defendant ACET Global (hereafter, the “APA”). See PlaintifPs Second Amended Petition (hereafter, “Petition’”), §] 13. Under the APA, ACET Global purchased the assets of Plaintiff. Id. In exchange, ACET Global agreed to pay Plaintiff the following purchase price: (1) $850,000.00 in cash via wire transfer at closing; (2) a subordinated secured promissory note in the original principal amount of $3,230,000.00; (3) a 25% common membership interest in Defendant Baymatk ACET Holdco, LLC; and (4) ACET Global’s assumption of the Assumed Liabilities. Id, 15. Pursuant to the APA, ACET Global entered into a Promissory Note with Plaintiff in July 2017, memorializing the $3,230,000.00 payable to Plaintiff (hereafter, the “Note’’). See Petition, § 17. According to the terms of the Note, the first installment payment was to come due in October 2018, the fifteenth month after the Note was issued. Jd. According to the APA, Plaintiff provided its assets to ACET Global. Moreover, ACET Global paid Plaintiff $850,000.00 in cash, granted Plaintiff a 25% common membership interest in ACET Global, and assumed the “Assumed Liabilities” under the APA. Id, §J 15-17. Separately, Baymark ACET Holdco, LLC entered into a Security Agreement (the “Security Agreement”) with ACET Venture Partners. See Petition, §/ 18. Under the Security Agreement, Baymark ACET Holdco, LLC granted a security interest to ACET Venture Partners in 59% of the membership interest of ACET Global, LLC. Id. Following the APA, David Hook then caused ACET Global to enter into a Collateral Assignment of Rights Under Acquisition Transaction Documents and Subordination Agreement (the “Collateral PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 12 of 30 Assignment”) with Super G Capital, LLC, which provided that Super G Capital, LLC would provide a term loan facility of up to $1,000,000. See Petition, {] 20. The Collateral Assignment contemplated that ACET Venture Partners’ security interest under the Security Agreement would be subordinated to the lien held by Super G Capital. Id ACET Venture Partners agreed to subordinate its security interest to Super G Capital, LLC and accept a 25% common membership interest in Baymark ACET Holdco, LLC with the understanding that Damti would maintain managerial authority and discretion and that ACET Global did not intend (and that Hook and Ludlow did not intend to cause it) to default on the loan to ACET Venture Partners or default on the loan from Super G Capital. Id. Within approximately a year—and before the Note came due—a new and separate entity, Windspeed Trading, LLC, was formed. See Petition, § 24. Ludlow and Hook caused the transfer of substantially all of the assets of ACET Global to Windspeed Trading, LLC, thereby removing all of the value of ACET Global, which served as security for the Note and further decreased the value of Baymark ACET Holdco, LLC. Id. This act, or series of acts, was in violation of the Secured Promissory Note and related Security Agreement. Id. Iv. STATEMENT REGARDING SUMMARY JUDGMENT EVIDENCE Pursuant to Tex. R. Civ. P. 166a(d), D&T Partners intends to use discovery products that are not currently on file as evidentiary proof. Specifically, D&T Partners relies on the following competent summary judgment evidence and incorporates such products herein as if set forth in full: Exhibit A: Affidavit of Monica Plaskett. Exhibit B: Declaration of Tomer Damti. Exhibit B-1: Memo from William C. Szeto, dated January 10, 2019. Exhibit B-2: Authorize.Net Request for a New Account Owner, dated December 5, 2018. Exhibit B-3: Super G Capital, LLC’s Notice of Disposition and Sale of Collateral, dated January 31, 2019. PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 13 of 30 Exhibit B-4: Emails between Matt Denegre and'Tomer Damti, dated September 14-15, 2020. Exhibit B-5: Windspeed Trading, LLC’s website, as of December 12, 2018. Exhibit B-6: ACET Global’s Jewelry webpage, as of August 25, 2018. Exhibit B-7: Windspeed Trading, LLC’s Jewelry webpage, as of December 12, 2018. Exhibit B-8: 2018 Form 1099-K issued by Group, Inc. to Windspeed Trading LLC. Exhibit B-9: David Hook’s Objections and Responses to Plaintiffs First Set of Interrogatories, dated November 6, 2020. Exhibit B-10: Koolulu’s Official Logo. Exhibit C: Declaration of Paul Knutson. Exhibit C-1: Emails between Matt Denegre, Andy Waltman, and Howard CPAs, dated August 13-14, 2020. Exhibit D: Email from Edward P. Perrin,Jr. to Jason Freeman, dated September 26, 2019. Exhibit E: Emails between Edward P. Perrin,Jr. and Jason Freeman, dated September 15- 22, 2020. Vv. ARGUMENT AND AUTHORITIES A. Summary Judgment Standard. The moving party is entitled to summary judgment when the party conclusively demonstrates that the moving patty is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a. A patty is entitled to judgment as a matter of law if there are (1) no genuine issues of material fact and the movant’s summary judgment evidence establishes an entitlement to judgment as a matter of law; or (2) there is no evidence of one or more essential elements of a claim or defense on which the adverse party has the burden of proof. See id. But the Texas Supreme Court has held that the summary judgment procedure is not intended, and should not be used, to deprive litigants of their right to a full hearing PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 14 of 30 on the merits of any real issue of fact. In re Estate of Price, 375 SW.2d 900, 904 (Tex. 1964); Mariner Financial Group v. H.G. Bossley, 79 S.W.3d 30, 32-33 (Tex. 2002). A genuine issue of material fact exists when “if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence.” Transcon. Ins. Co. v. Briggs Equip. Tr, 321 S.W.3d 685 (Lex. App.—Houston [14th Dist.] 2010, no pet.). But in examining the existence of a genuine issue of material fact, evidence favorable to the non-movant must be taken as true, and any doubts must be resolved in the non-movant’s favor. Nixon v. Mr. Prop. Mgut. Co., Inc., 690 S.W.2d 546, 549 (Tex. 1985) (emphasis added). B. No-Evidence Summary Judgment Standard. A no-evidence summary judgment is essentially a pretrial directed verdict. See, e.g, Valero Mktg. > Supply Co. v. Kalama Int'l, 51 SW.3d 345, 350 (Tex. App—Houston [1st Dist.] 2001, no pet.). A no- evidence point must be reviewed in the light most favorable to the non-movant, disregarding all contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). “A no evidence point will be sustained when (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.” Id. (citation omitted). A no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact; less than a scintilla of evidence exists when the evidence is “so weak as to do no more than create a mere surmise or suspicion” of a fact. Kindred v. Con/ Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983) (citation omitted). More than a scintilla of evidence exists when the evidence “tises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Merrell Dow Pharms., 953 S.W.2d at 711. C. Declaratory Judgment PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 15 of 30 Plaintiff seeks a declaratory judgment that Windspeed has assumed all obligations under the Note and Security Agreement noted above. Section (4) of the Security Agreement specifically provides that: “[uJpon any Fundamental Transaction, the successor entity to such Fundamental Transaction shall succeed to, and be substituted for .. . and shall assume all of the obligations of the Maker under this Note with the same effect as if such successor Person had been named as the Maker herein... .” See Petition, § 33. Windspeed incorrectly suggests that the requested declaratory judgment may not be granted because Windspeed was not a party to the Note ot the Security Agreement in question nor an assignee or transferee of the original maker. See Motion, § 14. Further, Windspeed argues that a “Fundamental Transaction” did not occur, as ACET Global was “not a party to the sale of the assets to Windspeed.” Id. at § 15. As an initial matter, both ACET Global and Windspeed (and their owners) were involved in— and were parties to—the “Fundamental Transaction” at issue. According to the Secured Promissory Note executed between Plaintiff and ACET Global, “Fundamental Transaction” is defined as follows: “Fundamental Transaction” means that the Maker [ACET Global] shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Maker is the surviving entity) another Person, or (ii) sell, ssign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Maker to another Person, or (iii) enter into _a stock purchase agreement or other business combination (including without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person the intent of which is to accomplish any of the foregoing, or (iv) any transaction or business combination resulting in, directly or indirectly, Holdco [Baymark ACET Holdco, LLC] not having control over Maker. Note, {| (25)(d) (emphasis added). Here, ACET Global engaged “in one or more related transactions” with Windspeed as part of a “scheme of atrangement” in order to “dispose of all or substantially all of the properties or assets of [ACET Global] to [Windspeed].” Windspeed took the property subject to the foregoing restriction. However, Windspeed attempts to carve up the series of related transactions, casting them as separate and distinct when they were (and, mote technically there is PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 16 of 30 evidence to provide a basis for an inference that) part of a series of related transactions that sold, assigned, transferred, conveyed or disposed of the properties or assets of ACET Global or that it entered into a stock purchase agreement (involving warrants or other business combination) with Baymark Partners Management, LLC and/or Super G Capital to accomplish such a result. However, there ate setious questions of material fact with respect to ACET Global’s relationship with Super G Capital and Windspeed, as well as the transfer of assets from ACET Global to Windspeed. And, evidence favorable to the non-movant—here, the Plaintiff—must be taken as true, and any doubts must be resolved in the non-movant’s favor. Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 549 (Tex. 1985). First, according to William Szeto’s own admission: Baymark Partners Management, LLC owns a warrant to purchase a 40% interest in Windspeed, which it has not exercised. Baymark Partners Management, LLC has a tight to appoint a manager to Windspeed’s board of managers. Anthony Ludlow is Baymark Partners Management, LLC’s appointee to the board. However, I am the 100% owner in Windspeed and there are a total of three managers on Windspeed’s board. Motion, Exhibit A, 4 (Motion App., p. 16). Additionally, Tony Ludlow was one of the ultimate owners of ACET Global. Specifically, after the execution of the APA, Defendants Tony Ludlow and David Hook controlled Defendant Baymark ACET Direct Invest, LLC. In turn, Baymark ACET Direct Invest, LLC controlled Baymark ACET Holdco, LLC and ACET Global. See Petition, §] 14. Thus, Tony Ludlow, who ultimately controlled ACET Global alongside David Hook, is a current manager on Windspeed’s three-person board. Second, William Szeto was involved on both sides of the transfer of ACET Global’s assets. According to the Affidavit of Monica Plaskett, a former employee of ACET Global, William Szeto (or “Bill”) became involved in ACET Global’s business after ACET Venture Partners executed the APA and related agreements. See Exhibit A, 6 (App., p. 32). After Tomer Damti was fired, William PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 17 of 30 Szeto became acting CEO of ACET Global. Id, 8 (App., p. 32). Notably, in June 2018, Ms. Plaskett recalls the following interaction with William Szeto: In June 2018, Bill called me into his office and mentioned that ACET Global had a high amount of debt and that he was going to “start another business.” He suggested he “had friends,” and that if ACET Global went bankrupt, Bill could continue the operations with a new company. Id.,§ 10 (App., p. 33) (emphasis added). Based on Windspeed’s own evidence, William Szeto filed (or William Szeto’s representative filed) a Certificate of Formation Limited Liability Company to form Windspeed on September 27, 2018. See Motion, Exhibit A-1 (Motion App., p. 20). Additionally, William Szeto admits he is the “President & Chief Executive Officer” of Windspeed, and he “was involved in the formation of Windspeed and [is] the 100% owner in Windspeed.” See Motion, Exhibit A, {J 2, 3 (Motion App., p. 16). Effectively, William Szeto was the CEO of both ACET Global and Windspeed when the transfer of ACET Global’s assets occurred. Third, evidence suggests that Windspeed was effectively transferring ACET Global’s business to itself prior to the execution of the Bill of Sale, Foreclosure Sale Agreement, and Amended and Restated Business Loan & Security Agreement on March 1, 2019. On January 10 2019, William Szeto executed a memo on Windspeed letterhead (and in his capacity as President & CEO of Windspeed), requesting that “three accounts under ACET Global LLC” be closed effective immediately. See Exhibit B-1 (App., p. 39). Additionally, Jane Lin, a former employee of ACET Global, executed an Authorize.Net Request for a New Account Owner on December 5, 2018. Using her Windspeed email address, Jane Lin listed herself as the “New Account Owner” for an account held in ACET Global’s name—the very same bank account listed in the Business Loan and Security Agreement between Super G Capital and ACET Global. Se Exhibit B-2 (App., p. 40); Supplement, p. 29. Fourth, evidence also suggests that Windspeed’s assumption of ACET Global’s assets was a foregone conclusion. While the agreements executed between Windspeed and Super G Capital did PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 18 of 30 not occur until March 1, 2019, a snapshot of Windspeed’s website on December 12, 2018 shows that Windspeed was already marketing inventory items included in Super G Capital, LLC’s Notice of Disposition and Sale of Collateral and the Bill of Sale executed between Super G Capital and Windspeed. See Exhibit B-5 (App., p. 63); Exhibit B-3 (App., pp. 47-52); Motion, Exhibit A-3 (Motion App., pp. 64-69). Such items include, but are not limited to, the “Iphone 6/6 Plus Sport Armband,” “Mini Portable USB Rechargeable Battery Clip Fan,” and “Bye Bye Clog.” Id. Even further, Windspeed knowingly and intentionally copied ACET Global’s website content. A scteenshot of Windspeed’s “Jewelry” webpage, dated December 12, 2018, is an exact copy of ACET Global’s “Jewelry” webpage, dated August 25, 2018. See Exhibit B-6 (App., p. 67); Exhibit B-7 (App. p- 69). Note the similarities—both webpages (1) market the exact same 10 jewelry products, (2) with the exact same 10 pictures, (3) in the exact same order, (4) with the exact same product descriptions, and (5) with the exact same typographical error (both webpages describe the fourth jewelry product as follows: “Moments of Happiness Crystal Necklace with Anstrain Crystals”— clear error intended to say “Austrian Crystals”). Id Notably, the second item on the Foreclosure Sale Agreement’s Inventory listing—‘“Tear of A Fairy Bracelet” (a uniquely described item)—directly corresponds to the ninth jewelry product marketed on Windspeed’s website in December 2018— “Tear Of Fairy Bracelet With Swarovski Elements.” See Motion, Exhibit A-4 (App., p. 94); Exhibit B- 6 (App., p. 68); Exhibit B-7 (App., p. 70). Further, Windspeed straight copied the favicon (the tab icon) used by ACET Global’s own website (koolulu.com), theteby stealing the signature wl eyes” of Koolulu’s official logo. See Exhibit B, {20 (App., p. 37); Exhibit B-5 (App., p. 66); Exhibit B-10 (App., p. 80). Fifth, Super G Capital is a related party to either Tony Ludlow or David Hook based on the representations of Matt Denegre. On September 14, 2020, Matt Denegre emailed Tomer Damti a copy of his 2019 Schedule K-1 issued by Baymark ACET Holdco LLC. See Exhibit B-4 (App., p. 56). PLAINTIFF’S RESPONSE TO DEFENDANT WINDSPEED TRADING, LLC’s AMENDED TRADITIONAL AND No EVIDENCE MOTION FOR SUMMARY JUDGMENT Page 19 of 30 Perplexed by a significant amount of cancellation of debt income, Tomer Damti requested an explanation from Matt Denegre multiple times. Jd. Matt Denegre provided the following tesponses: The company had loans from Super G and ACET Venture Partners (Seller Note). . . . Because we have a recourse lender, i.e. the lender is a related party to one of the partners . . There is recourse because the lender is a related party to one of the partners.... Id. Thus, based on Matt Denegte’s responses, Supet G Capital was a related patty to either Tony Ludlow or David Hook. If Tony Ludlow is the “partner” th