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  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
  • STEVEN RASH  vs.  ARTFEST INTERNATIONAL INC, et alCNTR CNSMR COM DEBT document preview
						
                                

Preview

oe Fy \ CAUSE NO. 10-09236 2 > Ep STEVEN RASH, § IN THE DISTRICIEQURE Py 5. 5 § é es fom, "26 Plaintiff, § ALLE. eons § a +A v. § 192" JUDICIAL DISTRICT pps § Ury ARTFEST INTERNATIONAL, INC, § EDDIE VAKSER, and § PBS HOLDING INC. 8 § Defendants § DALLAS COUNTY, TEXAS PLAINTIFF’S FIRST AMENDED PETITION AND APPLICATION FOR INJUNCTIVE RELIEF Plaintiff Steven Rash (“Plaintiff” or “Mr. Rash”) files this First Amended Petition and Application for Injunctive Relief against Artfest International, Inc., Eddie Vakser and PBS Holding Inc. (“Defendants”) and would respectfully show the following: 1 Discovery Level Discovery is intended to be conducted under Level 2 as set forth in Rule 190 of the TEXAS RULES OF CIVIL PROCEDURE. il. Parties and Service of Process Plaintiff Steven Rash is an individual residing at 15610 Witt Place #2147, Addison, Texas 75001. Defendant Artfest International, Inc. is a Nevada corporation that maintains a regular place of business in Dallas County, Texas, engages in business in Dallas County, Texas and has committed torts in Dallas County, Texas. Defendant Artfest may be served with process by serving its Chief Executive Officer, Eddie Vakser, at 13300 Branch View Road, Dallas, Texas 75234. Plaintiff's First Amended Petition—Page 1 of 9Defendant Eddie Vakser is an individual residing in Collin County. Defendant Vakser is the Chief Executive Officer of Artfest International, Inc., and may be served at his office located at 13300 Branch View Road, Dallas, Texas 75234. \c4| Defendant PBS Holding Inc. is a Nevada corporation that maintains a regular place —_— of business in Dallas County, Texas, engages in business in Dallas County, Texas and has committed torts in Dallas County, Texas. Defendant PBS Holding Inc. may be served with process by serving its registered agent Incorp Services, Inc., 2360 Corporate Circle, Suite 400, Henderson, Nevada 89074-7722. Il. Jurisdiction and Venue Jurisdiction is proper because the damages sought by Plaintiff are within the jurisdictional limits of the Court. Personal jurisdiction is proper over all of the Defendants because each Defendant engaged in business in Dallas County, Texas and committed torts, in whole or in part, in Dallas County, Texas. In addition, Defendant Artfest’s principle place of business is Dallas County. Further, Defendant PBS Holding Inc.’s principle place of business is Dallas County. Venue is proper in this Court because all or a substantial part of the events or omissions giving rise to this cause of action occurred in Dallas County, Texas. TEx. Civ. PRrAC. & REM. CODE §15.002. IV. Factual Background On October 1, 2008, Plaintiff and Defendants Artfest and Vakser entered into a written employment agreement. As consideration for serving as President and Chief Operating Officer of Artfest and performing such duties as required, Plaintiff was to receive numerous benefits including, but not limited to, a hefty salary, stock grants, stock Plaintiff's First Amended Petition—Page 2 of 9options, and reimbursement for expenses incurred by Plaintiff in the performance of his - duties. Plaintiff abided by the terms of the the employment contract. However, Defendants failed and refused to live up to its end of the agreement. In short, Defendants never paid Plaintiff a salary, never provided the generous stock grants and options as promised in the contract, and never reimbursed Plaintiff for his expenses. Defendants currently owe Plaintiff over $800,000.00 pursuant to the terms of the executed employment contract. Upon information and belief, it appears that Defendants Artfest and Vakser have begun the process of conveying their assets to Defendant PBS Holding Inc., a wholly owned subsidiary of Defendant Artfest, in order to defraud creditors, and to avoid any potential judgment against them. It appears that this process began sometime in May of 2011. Defendants are attempting to divest the assets of Defendant Artfest by offering an exchange of stock in Defendant Artfest for stock in Defendant PBS Holding Inc. at a rate of one thousand (1,000) shares of Defendant Artfest stock for one (1) share of stock in Defendant PBS Holding Inc. Defendants have not made this offer to Plaintiff in spite of press releases stating that al! shareholders would be offered this opportunity. Vv. Causes of Action A. Breach of Contract Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would show that the Defendant Artfest materially breached its contractual obligations to Plaintiff. As described above, although Plaintiff upheld his end of the bargain, Defendant Artfest failed and refused to pay and/or reimburse Plaintiff. Plaintiff's First Amended Petition—Page 3 of 9Plaintiff provided Defendant Artfest valuable consideration and fully performed all duties required of Plaintiff under the contract. As a wholly owned subsidiary of Defendant Artfest, Defendant PBS Holding Inc. received the benefit of Plaintiff's performance of the employment agreement Defendant Artfest breached the contract by refusing to follow the express and implied terms of said contract. In particular, Defendant Artfest breached this contract by refusing to perform its duties under the contract. As a direct and proximate consequence of said breach, Plaintiff suffered (and continues to suffer) damages in an amount in excess of the minimum jurisdictional limits of this court. B. Fraud Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that the Defendants are liable to Plaintiff for fraud. In particular, Defendants made numerous material misrepresentations in an effort to persuade Plaintiff to join the company. Defendants made the misrepresentations with knowledge of their falsity and without any knowledge of the truth. Unfortunately, Plaintiff relied upon Defendants’ misrepresentations in signing the employment contract and accepting the job as President and Chief Operating Officer of Artfest. Defendant PBS Holding is now engaging in fraud to dilute Plaintiff’s interests and to avoid a judgment debt of Defendant Anfest. Plaintiff has in the past and continues to suffer reasonably foreseeable damages as a direct and proximate result of Defendants’ fraud. Plaintiff's First Amended Petition—Page 4 of 9 4Cc Fraudulent Inducement Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that Defendants are liable to Plaintiff for their fraudulent inducement. Defendants fraudulently induced Plaintiff into the contract at issue based on false promises and representations that Defendants had no intention of honoring. Specifically, and without limitation, Defendants had no intention of every paying any Plaintiff any salary or providing any benefit to Plaintiff. Regrettably, Plaintiff reasonably relied on Defendants’ false representations and was fraudulently induced into the employment contract. Plaintiff has in the past and continues to suffer reasonably foreseeable damages as a direct and proximate result of Defendants’ fraudulent inducement. D. Fraud by Misrepresentation Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that the Defendants are liable to Plaintiff for their fraudulent misrepresentations. Among other things, and without limitation, Defendants fraudulently misrepresented that they would pay Plaintiff a certain salary, provide stock grants and stock options, and reimburse Plaintiff for expenses incurred by him in the performance of his duties. After getting what they wanted from Plaintiff, Defendants failed and refused to abide by their promises. Plaintiff has in the past and continues to suffer reasonably foreseeable damages as a direct and proximate result of his reasonable reliance on Defendants’ fraudulent misrepresentations. Plaintiff's First Amended Petition—Page 5 of 9E. Unjust Enrichment Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that the Defendants are liable to Plaintiff for unjust enrichment. Defendants have been unjustly enriched because its value has been enhanced by Plaintiff's work, for which Plaintiff has not been paid. Plaintiff has been harmed in direct proportion to the unjust benefits the Defendants have reaped by failing to pay Plaintiff. F. Breach of Fiduciary Duty Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that Defendant Eddie Vakser is liable to Plaintiff for breach of fiduciary duty. As the Chief Executive Officer of Defendant Artfest International, Inc. and of Defendant PBS Holding Inc., Defendant Vakser owed a fiduciary duty to Plaintiff, who served as President and Chief Operating Officer. Defendant Vakser had a duty not to usurp corporate opportunities for personal gain. Defendant Vakser breached his fiduciary duty to Plaintiff and is liable for numerous instances of self-dealing and usurping corporate opportunities, such as (and without limitation) converting Plaintiff's accrued salary into preferred company shares in Defendant Vakser’s name. Plaintiff has been damaged by Defendant Vakser’s breach of fiduciary duty, and Defendant Vakser gained personally from the breach. , VI. Pre-Judgment/Post-Judgment Interest Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that many of his damages may be determined by known Plaintiff's First Amended Petition—Page 6 of 9standards of value and accepted rules of interest as damages during the period beginning on the 180th day after the date Defendants received notice of the claim or on the day suit was filed, whichever occurred first, and ending on the day preceding the date judgment is rendered, or as the Court otherwise directs, calculated at the legal rate, or as otherwise set by the TEXAS FINANCE CODE, any statute or the common law. VII. Conditions Precedent Piaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that all conditions precedent necessary to maintaining this action have been performed or have occurred. Alternatively, Defendants have wholly waived and are estopped to assert rights to any conditions precedent. VIII. Damages Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that he seeks any and all damages whatsoever and including, but not limited to, actual, punitive, exemplary, attorneys’ fees, and statutory damages, available and recoverable under statute and common law resulting from the actions of Defendants supporting Plaintiff's damages. IX. Agency Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that Defendant Artfest and Defendant PBS Holding Inc. acted by and through its officers, employees, agents and representatives and is therefore responsible for the acts of its officers, employees, agents and representatives. Plaintiff's First Amended Petition—Page 7 of 9Xx. Alternative Pleading Plaintiff incorporates by reference and re-alleges all preceding sections of this Petition and would further show that all pleadings herein, if deemed inconsistent, are made and should be construed in accordance with Rule 48 of the TEXAS RULES OF CIVIL PROCEDURE. XI. = Application for Injunctive Relief Upon information and belief, the Defendants have engaged in a deliberate process of liquidating the assets of Defendant Artfest in order to avoid any potential adverse judgment in the case at hand. In order to affect this scheme, Defendants have been converting shares of stock in Defendant Artfest into shares of stock in Defendant PBS Holding Inc. This process appears to have begun in May of 2011. It has been and continues to be a source of irreparable injury to Plaintiff. So, Plaintiff requests that this Court grant an immediate temporary restraining order enjoining Defendants, and their agents, servants and employees, and those persons in active concert or participation with them, from directly or indirectly engaging in, or aiding and abetting, the following: 1) Continuing with the planned exchange of stock as outlined above and 2) Trading shares of Defendant PBS Holding Inc. until such time as this action is concluded. Furthermore, Plaintiff asks the Court to direct Defendant Vakser to place all shares of stock he currently owns of Defendant PBS Holding Inc. into the registry of the Court. XI. Demand for Jury Trial Plaintiff demands a trial by jury and has tendered the appropriate jury contemporaneously with the filing of this Petition. Plaintiff's First Amended Petition—Page 8 of 9WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Defendants be duly cited to appear and answer herein and that, after trial, Plaintiff recover judgment against the Defendants for (1) actual damages; (2) reasonable and necessary attorneys’ fees; (3) statutory, punitive and/or exemplary damages; (4) pre- and post-judgment interest at the maximum legal rate; (5) costs of Court; and (6) such other and further relief to which Plaintiff may be entitled. Respectfully submitted, LAW OFFICE OF L. SEAN MATHIS, P.C. L. SEAN MATHIS Texas Bar No. 24011688 13155 Noel Road Suite 900 Dallas, Texas 75240 (214) 368-9000 FAX NO. (214) 692-5806 ATTORNEY FOR PLAINTIFF CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the above and foregoing document was forwarded as indicated below to the following individual on this the 28° day of July 2011. Edward Vakser via CMRRR Artfest International, Inc. 13300 Branch View Road Dallas, Texas 75234 lathis Plaintiff's First Amended Petition—Page 9 of 9“tay a THE LAW OFFICE OF L. SEAN MATHIS,P.c/L En 13155 Noel Road MU 2g o Suite 900 Sap, 9 Py 2 Dallas, Texas 75240 PPR, SE “QA Ps fo egos a 4 Telephone: (214) 368-9000 Facsintile: (866) Ares $511 Email: sean@mathis-law.com Ury July 28, 2011 VIA HAND DELIVERY Clerk 192"4 District Court George L. Allen, Sr. Courts Building 600 Commerce Street 7% Floor Dallas, Texas 75202 Re: Cause No. DC-10-09236-P; Steven Rash v. Artfest International, Inc., et al Dear Clerk: Enclosed please find the original and one copy of Plaintiffs First Amended Petition. Please file the original among the papers of the Court. Thank you for your attention to this matter. Should you have any questions, please do not hesitate to contact me at the above number. LSM/ccm Cc: Edward Vakser