Davies and Warnock Pressing on with Fight Against Carl Freer & GetFugu

^{Published on 2010-10-14 23:20:41 - Market Wire}
 

Davies and Warnock Pressing on with Fight Against Carl Freer & GetFugu -- WASHINGTON, Oct. 14 /PRNewswire/ --

According to Davies and Warnock, there have been many flawed assertions made as to the true legal status of Davies/Warnock v. GetFugu/Carl Freer (09-cv-8724-GHK-FMOx). This provides a factual update on a suit filed in US District Court as well as the largely unreported news of the Superior Court case filed by Davies/Warnock setting forth claims for breach of fiduciary duty, aiding and abetting those breaches, securities fraud, fraud, breach of contract and other claims.

WASHINGTON, Oct. 14 /PRNewswire/ -- Simon Davies and David Warnock announced this week that they have filed a complaint against GetFugu, Inc., Carl Freer, GetFugu's officers and directors, and others in Superior Court of Los Angeles County, California (Case No. BC446462).  The suit includes claims for breach of fiduciary duty, aiding and abetting those breaches, securities fraud, fraud, breach of contract and other claims.  

As quoted in the complaint, "Freer is an admitted criminal and scam artist who has repeatedly schemed and conspired with others to take over companies, many of them publicly traded, and then exploit them for his own greedy and improper purposes.  Freer and those of his corrupt associates often benefit from classic 'pump and dump' schemes to talk up the value of penny stocks, sell their shares at the inflated prices, and then abandon the companies and its exploited shareholders, before moving on to their next business.  Further, Freer and his associates have used their management and control positions to strip corporate assets and to raid the corporate piggybank for their own benefit, to commit fraud, breach their fiduciary duties and stiff creditors."  Davies and Warnock are alleging that they were among the creditors taken advantage of. The complaint outlines in detail the alleged history of Freer and his scams.  

Davies and Warnock's complaint alleges that, "Freer and the current and former officers and directors of GetFugu have blatantly breached their fiduciary duties to the company and its shareholders. Not only have they operated GetFugu for their own personal benefit, they also routinely made false and misrepresentations of material fact to the plaintiffs, GetFugu shareholders, and the public."  Warnock, a GetFugu shareholder, filed the derivative and direct claims "in order to vindicate the rights of the injured GetFugu shareholders."

The complaint also names as defendants the joint liquidators of Freer's failed Gizmondo gaming device business and a Wisconsin company that valued eight patent applications on which Freer was the named inventor at more than $50,000,000.  In addition, Davies and Warnock allege that they are owed more than $26,000,000 by defendants Freer and another convicted criminal, Stefan Eriksson, in repayment of loans that they personally guaranteed. The complaint also asserts that Freer fraudulently transferred assets to a limited liability company run by his wife in an attempt to render himself judgment proof.  

Many of the claims alleged in the state court case had been part of a case filed in U.S. District Court for the Central District of California (09-cv-8724-GHK-FMOx).  On August 26, 2010, the District Judge in that action dismissed four Racketeering Influenced and Corrupt Organizations Act (RICO) claims based on a legal technicality that none of the defendants raised in their motions to dismiss.  In declining to exercise supplemental jurisdiction, the Court did not consider the merits of any of the non-RICO claims.  GetFugu and Freer, however, publicly stated that the ruling "vindicated us" and suggested that all of the claims were "frivolous."  The newly filed complaint alleges that these statements are "only the latest example of Freer and GetFugu's willingness to mislead the public."  Further, Davies and Warnock have appealed portions of the federal court dismissal to the U.S. Court of Appeals for the Ninth Circuit (Case No. 10-56522).  

Patton Boggs LLP is acting as counsel for Davies and Warnock in these cases.

Davies and Warnock's complaint alleges that a suit filed on August 26 by GetFugu and Freer against Davies, Warnock, their counsel, and others alleging malicious prosecution and defamation, seeking damages of $500,000,000, was "yet another example of waste of GetFugu's corporate assets.  The frivolous suit is nothing more than an obvious attempt to intimidate Davies and Warnock from pursuing their claims against Freer and his cohorts and to deprive them of their choice of counsel."

Contact:

Bernie Siena

PsyIntel

202-957-2204

[ Bernie@PsyIntel.com ]

SOURCE Davies and Warnock