UNITED STATES DISTRICT COURT FOR THE SOUTHERN … · 2019-12-04 · UNITED STATES DISTRICT COURT...

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

PARTNERS BIOMEDICAL SOLUTIONS, LLC,

a Florida limited liability company, and

MAC 15, LLC,

a Florida limited liability company,

Plaintiffs,

CASE NO. 19-cv-81316-RAR

v.

EUGENE SALTSMAN, individually,

DARCY SALTSMAN, individually,

ALFATWO HOLDINGS, LLC,


EVAN SALTSMAN, individually,

STEVEN D. FRIEDMAN, individually,

REICHEL REALTY & INVESTMENTS, INC.,

a Florida corporation,

SEZ HOLDING CORP., a Florida corporation,

MATRIX INSTRUMENT SERVICES, INC.,

a New York corporation, and

BENJAMIN CHEVERE, individually,

Defendants.

___________________________________________

EUGENE SALTSMAN, EVAN SALTSMAN,

and ALPHA TWO HOLDINGS, LLC,


Counter-plaintiffs,

v.

ROBERT BURKE, individually, LOUIS WELTMAN,

individually, PARTNERS BIOMEDICAL SOLUTIONS, LLC,

a Florida Limited Liability Company,

GULF COAST BIOMEDICAL, LLC.,

a Florida Limited Liability Company,

MAC 15, LLC, a Florida Limited Liability Company,

LOSOWE CAPITAL, INC., a Florida Corporation,

and PERKINS BIOMEDICAL SERVICES, LLC,

Case 9:19-cv-81316-RAR Document 21 Entered on FLSD Docket 12/04/2019 of 77

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a New Hampshire Limited Liability Company,

Counter-defendants.

__________________________________________________/

DEFENDANTS, EUGENE SALTSMAN, DARCY SALTSMAN, ALFATWO HOLDINGS,

LLC, EVAN SALTSMAN, BEN CHEVERE, AND MATRIX EQUIPMENT SYSTEMS,

INC.'S ANSWER AND AFFIRMATIVE DEFENSES TO PLAINTIFFS' COMPLAINT,

AND COUNTERCLAIMS BY EUGENE SALTSMAN, ALPHATWO HOLDINGS, LLC

AND EVAN SALTSMAN

Defendants, Eugene Saltsman ("Gene"), Darcy Saltsman ("Darcy"), Alfatwo Holdings,

LLC ("Alfatwo"), Evan Saltsman ("Evan"), Benjamin Chevere (“Chevere”), and Matrix

Equipment Systems, Inc. ("Matrix"), file their Answer and Affirmative Defenses to Plaintiffs'

Complaint. Gene, Alphatwo, and Evan file their counterclaims more fully described herein.

GENERAL ALLEGATIONS

Common to All Counts

Summary and Nature of the Action

1. Denied.

2. Denied.

3. Denied.

4. Admitted as to Gene having previously participated in a mediation with

Plaintiffs. Defendants1 deny the remainder of the allegations in paragraph 4 of the Complaint.

5. Admitted as to the Transaction Documents governing the dispute resolution

jurisdiction and venue for and amongst Mac 15,LLC (MAC 15") Partners Biomedical Services,

LLC ("Partners") and the Defendant signatories thereto. Defendants deny the remainder of the

allegations in paragraph 5 of the Complaint.

1 Given the method in which the Complaint is drafted, the use of the word Defendants in this Answer pertains

to all of Gene, Darcy, Alphatwo, Evan, Matrix and Chevere.

Case 9:19-cv-81316-RAR Document 21 Entered on FLSD Docket 12/04/2019 Page 2 of 77

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6. Denied.

Jurisdiction, Venue, and the Parties

7. Denied, except admit that the Court has original jurisdiction as to The Defend

Trade Secrets Act of 2016.

8. Defendants admit that venue is proper in this Court because Gene, Darcy, and

Alphatwo reside and/or conduct business in this District. Defendants deny the remainder of the

allegations in Paragraph 8 of the Complaint.

9. Admitted as to Partners being a Florida limited liability company having its

principal place of business in West Palm Beach, Florida. Defendants deny the remainder of the


10. Denied, except admit that Partners is a Florida limited liability company.

11. Admitted.

12. Admitted as to MAC 15 being a Florida limited liability company owned by

Robert Burke, M.D., and a Member and Manager of Partners and that Burke acted as Manager

on behalf of MAC 15 in connection with Partners' management and control. Defendants deny

the remainder of the allegations in paragraph 12 of the Complaint.

13. Denied, except admit that MAC 15 is a Manager of Partners, holds a 40.01%

membership interest in Partners and holds certain voting proxies.

14. Admitted as to Gene being sui juris and residing and conducting business at the

stated addresses in Palm Beach County; admitted that Gene, at all times, was the majority owner

of Alfatwo and further and state that Gene, at all times, was and is the sole owner of Alfatwo,

which is a party to the Operating Agreement; deny that the Operating Agreement "followed"

the SPA, and deny the remainder of the allegations in paragraph 14 of the Complaint.


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15. Admitted as to Darcy being sui juris and residing at the stated address in Palm

Beach County and as to Darcy being the wife of Gene; Defendants deny the remainder of the


16. Admitted as to Alfatwo being a Florida limited liability company that has an

office in and conducts business from the stated address in Delray Beach, Florida; Composite

Exhibit J attached to Plaintiffs' Complaint speaks for itself; Defendants deny the remainder of

the allegations in paragraph 16 of Plaintiffs' Complaint.

17. Admitted as to Defendant SEZ Holding Corp. ("SEZ") being a Florida

corporation solely owned by Defendant Steven Friedman ("Friedman") and being a Member,

but not a Manager, of Partners, holding 15.00% of the Partners' voting membership units;

Defendants deny the remainder of the allegations in paragraph 17 of the Complaint.

18. Admitted as to Evan being a natural person residing at the stated address in

Beacon, New York, and being sui juris; Defendants deny the remainder of the allegations in

paragraph 18 of the Complaint.

19. Admitted as to Defendant Friedman being sui juris and residing at and

conducting business from the stated address in Palm Beach Gardens, Florida; Defendants deny

the remainder of the allegations in paragraph 19 of Plaintiffs' Complaint.

20. Denied, except Defendants do not have sufficient information as to whether

Friedman was ever employed by Reichel Realty and therefore deny same.

21. Admitted.

22. Admitted as to Defendant Matrix being a New York corporation that has the

stated address in Elsmford, New York. Defendants deny the remainder of the allegations in

paragraph 22 of Plaintiffs' Complaint.


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23. Denied, except Defendants admit that Chevere previously conducted business

on behalf of Progressive Medical Lab, LLC and appeared as a representative of that company.

24. Denied.

25. Admitted as to Defendant Gene having previously participated in a mediation

with Plaintiffs. Defendants deny the remainder of the allegations in paragraph 25 of Plaintiffs'

Complaint.

26. Admitted as to Gene, Evans and Friedman, these Defendants had

communications and conducted business with Plaintiffs at Plaintiffs' place of business in Palm

Beach County; Defendants deny the remainder of the allegations in paragraph 26 of Plaintiffs'

Complaint.

27. Admitted as to Defendants residing or conducting business in Palm Beach

County; Defendants deny the remainder of the allegations in paragraph 27 of Plaintiffs'

Complaint.

Underlying Factual Allegations

I. The Entities.

28. Admitted, except denied that the Entities were predominately in Florida.

29. Admitted.

II. The Offering.

30. Denied, except admitted that non-party Weltman formed non-party NABS for

the purpose of purchasing Gene’s interest in the Entities.

31. Denied.

32. Admitted that Friedman, with the assistance of Gene, prepared and distributed

the referenced Confidential Memorandum; Denied as to Darcy.


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33. To the extent Plaintiffs are referring or citing to a document, the document

speaks for itself. Defendants otherwise deny Paragraph 33 to the Complaint.

34. Admitted.

35. Defendants are without knowledge of the allegations in paragraph 35 of

Plaintiffs' Complaint.

36. Denied.

III. The Business Brokerage and Friedman's Self-Dealing.

A. Friedman and Reichel Realty Look for a Buyer.

37. Admitted.

38. Admitted as to Defendant Friedman presenting the opportunity to purchase the

Entities to Dr. Burke; Defendants are without knowledge as to the remainder of the allegations

in paragraph 38 of Plaintiffs' Complaint.

39. Denied.

40. Denied, except admitted that Reichel Realty and Burke entered into an

agreement and that Gene paid Reichel Realty a commission.

41. Denied.

42. Denied. The Defendants are without knowledge that Burke was referred to

Friedman by Reichel; admitted that Friedman acted as Reichel’s agent. The Defendants are

without knowledge and therefore deny the remaining allegations in paragraph 42 of Plaintiffs'

Complaint.

B. Misrepresentation of the Financials.

43. Denied. The Defendants are without knowledge of the allegations in paragraph

43 of Plaintiffs' Complaint.


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44. Admitted.

45. Denied.

46. Admitted.

47. Denied.

48. Denied. The Defendants are without knowledge of the formation of MAC 15.

49. Denied.

50. Denied.

51. Denied.

C. Friedman's Self-Dealing.

a. Friedman's Equity Grab.

52. Denied. The Defendants are without knowledge as Friedman expressing an

interest; the remaining allegations are admitted.

53. Admitted.

54. Admitted as to Dr. Burke forming Partners to assume NABS contractual rights

under the SPA and to consolidate the three Entities; Defendants deny and are without

knowledge of the remainder allegations in paragraph 54 of Plaintiffs' Complaint

55. Admitted as to Defendant Friedman forming Defendant SEZ on May 24, 2018;

Defendants are without knowledge of Friedman‘s purpose of forming the entity; admitted that

Gene formed Alphatwo; denied Gene formed Alphatwo with Evan; admitted Weltman used

Losowe for holding 25% of Partners.

56. Admitted as to the Transaction closing on October 19, 2018; Defendants are

without knowledge as to the remainder of the allegations in paragraph 56 of Plaintiffs'

Complaint.


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b. Friedman's Self-Dealing Dual Agency.

57. Denied.

58. Denied.

59. Denied, except admitted Friedman had an obligation not to violent any covenant

he may have made.

60. Denied.

61. Denied.

62. Denied.

IV. The "Pump and Dump" Promotion.

63. Denied as written.

64. Admitted.

65. Denied.

V. The Disclosures and Obligations of Defendants Under the Transaction Documents.

66. Denied, except admitted as to Defendant Gene entering into the SPA.

67. Denied.

68. The document speaks for itself.

A. The Scheme

69. Denied as written.

70. Denied.

71. Denied.

72. Denied.

73. Denied.

74. Denied.


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75. Denied.

76. Admitted as to Alfatwo's resignation from PBS membership on May 16, 2019,

and resignation as a Manager, without compensation, on June 4, 2019; Defendants deny the

remainder of the allegations in paragraph 76 of Plaintiffs' Complaint.

77. Admitted as to Friedman's offer to resign his PBS membership; Defendants deny

the remainder of the allegations in paragraph 77 of Plaintiffs' Complaint.

VI. Defendants Improperly Take, Distribute and Use Trade Secrets and Violate Non-

Competition Covenants.

78. Admitted, except denied that Alphatwo is owned 95% by Gene and 5% by Evan.

79. Admitted, except denied that Alphatwo had more than one member at any time.

80. The documents speak for themselves.

81. The documents speak for themselves.

82. Denied.

83. Admitted.

A. Non-Solicitation, Non-Competition and Non-Hiring (the "Restrictive

Covenants").

84. Admitted.

85. Denied.

86. Denied.

87. Admitted.

88. Denied.

89. Denied. The agreement speaks for itself.

90. Denied.

91. Denied.


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92. Denied.

93. Admitted.

94. The document speaks for itself.

95. Admitted.

96. The Operating Agreement speaks for itself.

97. To the extent Plaintiff is referring or citing to a document, the document speaks

for itself.

98. Denied.

B. Theft and Misappropriation of Trade Secrets.

99. Denied.

100. Denied.

101. Denied.

102. Denied.

103. Denied.

104. Denied.

105. Denied.

106. Denied.

107. Denied.

VII. Defendants' Past Scheme, Which Continues to this Day.

A. Defendants Cooked the Books.

a. Misrepresentation of Working Capital.

108. Denied. The document speaks for itself.

109. Denied. The document speaks for itself.


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110. Denied.

111. Denied.

112. Denied.

113. Defendants are without knowledge as to the allegations in paragraph 113 and

therefore deny same.

114. Defendants are without knowledge as to the allegations in paragraph 114 and

therefore deny same.

115. Denied.

116. Denied

117. Denied.

118. Denied.

119. Denied.

120. Denied.

121. Denied.

122. Denied.

123. Denied.

B. Gene Takes a Lot of Money.

124. Denied as to any fraudulent activity.

125. Denied.

126. Denied.

127. Denied.

128. Denied.


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129. Denied. Defendants are without knowledge as to what PBS attempted to file

with the State of New York.

130. Denied. Defendants are without knowledge as to what PBS learned from its tax

professionals.

131. Denied.

132. Denied.

133. Denied.

134. Denied.

135. Denied.

IX. Defendants' Breach of the Restrictive Covenants.

136. Admitted.

137. Admitted.

138. Denied.

139. Denied.

140. Denied, including all subparts.

A. The Kickback Scheme and Defendant Chevere.

141. Denied.

142. Denied.

143. Denied as to stated bad acts. Admitted as to the remainder of the allegations in

Paragraph 143 of Plaintiffs’ Complaint.

X. The Closing.

144. Denied.

145. Denied.


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146. Denied.

147. Denied.

XII. Other Bad Acts.

A. The Improper UCC-1

148. Admitted.

149. Denied, except admitted that PBS is managed by MAC 15 and Losowe.

150. Denied.

B. Diversion of PBS Sales of Consumables.

151. Denied.

152. Denied.

153. Denied.

154. Denied as stated.

155. Denied.

156. Denied.

C. Improper Distribution and Fraudulent Transfers.

157. Denied.

158. Denied.

159. Denied, except admitted that Friedman was terminated by Gulf Coast after not

being paid.

160. Denied.

161. Denied.

162. Denied.

163. Denied.


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164. Denied.

165. Denied.

166. Denied.

167. Denied.

168. Denied.

169. Denied.

170. Denied.

171. Denied.

D. Further Material Misrepresentations.

172. Denied.

E. Disparagement in the Industry.

173. Denied.

174. Denied.

COUNT I

Breach of Contract – Stock Purchase Agreement

(against Defendant Gene Saltsman)

175. The Defendants adopt and re-assert all previous responses.


177. Denied.

178. Denied.

179. Denied.

180. Admitted.

181. Denied.



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183. Denied.

184. Denied.

185. Denied.

186. Admitted.

187. Admitted.

COUNT II

Breach of Contract – PBS Operating Agreement

(against Defendants Gene Saltsman, Evan Saltsman,

Alfatwo Holdings, Inc., Steven Friedman and SEZ Holding Corp.)


189. Denied.

190. Denied.

191. Denied.

192. Denied.

193. Denied.

194. Denied.

195. Denied.

196. Denied.

197. Admitted.

198. Admitted.

COUNT III

Breach of Contract – Post-Organizations Agreement




200. Denied.


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201. Denied.

202. Denied.

203. Denied.

204. Denied.

205. Denied.

206. Denied.

207. Denied.

208. Admitted.

COUNT IV

Breach of Co-Members' Statutory Duties of Loyalty – F.S. § 605.04091




210. Denied.

211. Denied.

212. Denied.

213. Denied.

214. Denied.

215. Denied.

216. Denied.

217. Denied.

218. Denied.

219. Admitted.

220. Admitted.


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COUNT V

Fraud – in the Inducement

(Plaintiff MAC 15 against Defendants Gene Saltsman,

Evan Saltsman, Darcy Saltsman, Alfatwo Holdings, Inc., Reichel Realty,

Steven Friedman and SEZ Holding Corp.)


222. Denied.

223. Denied.

224. Denied.

225. Denied.

226. Denied.

227. Denied.

228. Denied.

229. Denied.

230. Denied.

231. Denied.

232. Denied.

COUNT VI

Fraud – in the Performance of the Stock Purchase Agreement

(against Defendant Gene Saltsman)



235. Denied.

236. Denied.

237. Denied.

238. Denied.


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239. Denied.

240. Denied.

241. Denied.

242. Denied.

243. Denied.

244. Denied.

245. Denied.

246. Denied.

247. Denied.

248. Denied.

249. Denied.

COUNT VII

Fraud – in the Performance of the PBS Operating Agreement

(against Defendants Gene Saltsman, Evan Saltsman, Darcy Saltsman, Alfatwo

Holdings, Inc., Steven Friedman and SEZ Holding Corp.)


251. Denied.

252. Denied.

253. Denied.

254. Denied.


256. Denied.

257. Denied.

258. Denied.

259. Denied.


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260. Denied.

261. Denied.

262. Denied.

263. Denied.


265. Denied

266. Denied

267. Denied

COUNT VIII

Tortious Interference with Customer Relations

(against Defendants Gene Saltsman, Evan Saltsman, Alfatwo Holdings, Inc.,

Steven Friedman, SEZ Holding Corp., Matrix and Chevere)


269. Denied.

270. Denied.

271. Denied.

272. Denied.

273. Denied.

274. Denied.

COUNT IX

Tortious Interference with Employee and Contractor Contractual Relations

(against Defendants Gene Saltsman, Evan Saltsman, Alfatwo Holdings, Inc., Steven

Friedman, SEZ Holding Corp. and Matrix)


276. Denied.

277. Denied.


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278. Denied.

279. Denied.

280. Denied.

281. Denied.

COUNT X

Conspiracy to Interfere with Contract, to Interfere with

Other Relations, and to Prevent Competition


Steven Friedman, and Ben Chevere)


283. Denied.

284. Denied, except admit Chevere is associated with Advanced Dermatology.

285. Denied.

286. Admitted.

287. Denied.

288. Denied.

289. Denied.

290. Denied.

291. Denied.

292. Denied.

293. Denied.

294. Denied.

295. Denied.

296. Denied.


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COUNT XI

Violation of FDUTPA, F.S. § 501.201 et seq.


Steven Friedman, SEZ Holding Corp., Matrix and Chevere)


298. Denied.

299. Denied.

300. Denied.

301. Denied.

302. Admitted.

COUNT XII

Violation of The Defend Trade Secrets Act – 18 U.S.C. § 1836 et seq.


Steven Friedman, SEZ Holding Corp., Matrix, and Chevere)


304. Admitted.

305. Denied.

306. Admitted, except denied as to Evan.

307. Denied.

308. Denied.

309. Denied.

310. Denied.

311. Denied.

312. Denied.

313. Denied.

314. Denied.


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315. Denied

COUNT XIII

Violation of the Florida Uniform Secrets Act – F. S. §§ 688.001 et seq.




317. Admitted.

318. Denied.

319. Admitted, except denied as to Evan.

320. Denied.

321. Denied.

322. Denied.

323. Denied.

324. Denied.

325. Denied.

326. Denied.

327. Denied.

328. Denied.

329. Denied.

330. Denied.

COUNT XIV

Unjust Enrichment and Disgorgement

(against Defendant Gene Saltsman, Evan Saltsman, Alfatwo Holdings, Inc.,



332. Denied.


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333. Denied.

334. Denied.

335. Denied.

336. Denied.

337. Denied.

AFFIRMATIVE DEFENSES

AND NOW in further answering, Gene, Darcy, Alfatwo, Evan, Chevere, and Matrix

affirmatively state:

FIRST AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Count I.

SECOND AFFIRMATIVE DEFENSE

Gene is no longer bound any restrictive covenant or non-competition provision pursuant to

Section 6.5 of the SPA since Partners previously breached the SPA and related documents .

THIRD AFFIRMATIVE DEFENSE

Count I fails since Plaintiffs failed to take reasonable measures to restrict the use of the

purported trade secrets and confidential data.

FOURTH AFFIRMATIVE DEFENSE

Count I fails since the Plaintiffs breached the SPA first by, among other things, breaching

documents, including but not limited to the Pledge and Security Agreement, the Operating

Agreement and the Post Or. Agreement, and therefore the Note, and addition to failing to pay the

Purchase Price at that term is defined in the document.

FIFTH AFFIRMATIVE DEFENSE

Count II fails against Evan since he was not a party to the Operating Agreement.


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SIXTH AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Count II.

SEVENTH AFFIRMATIVE DEFENSE

Count II fails since Plaintiffs failed to take reasonable measures to restrict the use of the

purported trade secrets and confidential data.

EIGHTH AFFIRMATIVE DEFENSE

Count II fails as Partners and MAC 15 breached the Operating Agreement, by among other

things, failing to seek or obtain financing pursuant to Section 3.5 of the Operating Agreement.

NINTH AFFIRMATIVE DEFENSE

Count III fails against Evan as he is not a party to the agreement.

TENTH AFFIRMATIVE DEFENSE

Count III fails since Plaintiffs failed to take reasonably measures to restrict the Defendants'

use of the purported trade secrets and confidential data.

ELEVENTH AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action against in Count III.

TWELFTH AFFIRMATIVE DEFENSE

Count III fails since Partners and MAC 15, through Burke, breached Section 1.6 of the

agreement by failing and refusing to provide Gene with a security interest in Gulf Coast

Biomedical, LLC.

THIRTEENTH AFFIRMATIVE DEFENSE

Count IV fails against Evan since he is not a party to the Partners' Operating Agreement.

FOURTEENTH AFFIRMATIVE DEFENSE

Counts I, II, and III fails against Gene based on fraud. Gene was fraudulently induced to

enter into the SPA, the Note, the Pledge and Security Agreement, Partners' Operating Agreement,


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and Post Org. Agreement, to purportedly sell his interests in the Gene Entities, to provide his

experienced, valuable services, talents and energies to the financial and other advancement and

reward to Plaintiffs, without paying Gene, by cheating Gene out of his rightful ownership and

security interest in New Gulf Coast and by purloining and converting to their own use Gene's

business contacts and relationships. Gene was promised that his security interest would be

protected; Gene was promised that his $3,000,000.00 "Purchase Price" would be paid; and

Weltman, a managing member of Partners intentionally and materially omitted telling Gene that

his guaranty in the Partners' Operating Agreement was worthless as a result of his filing of a

Petition for Relief under Chapter 11 of Title 11 of the United States Code in 2014 resulting in the

confirmation of a Plan of Reorganization in 2016.

FIFTEENTH AFFIRMATIVE DEFENSE

Counts I, II, III, and IV fail based on the doctrine of unclean hands. MAC 15 and Partners

have breached the SPA, the Operating Agreement, the Pledge and Security Agreement, the Note,

the Post Org. Agreement by, among other things, (i) failing to pay Gene under the Promissory

Note, (ii) breaching the Security Agreement, (iii) destroying Gene's security interest in Gulf Coast,

Inc. by converting the company in Gulf Coast Biomedical, LLC and failing to provide Gene with

a security interest in the new entity, and (iv) taking Gene's companies without paying for them and

destroying them.

SIXTEENTH AFFIRMATIVE DEFENSE

Counts VI and VII fail based on Florida's economic loss rule.

SEVENTENTH AFFIRMATIVE DEFENSE

Counts VIII, IX, and X fail against Evan, Chevere, and Matrix since these counts are based

upon alleged breaches of agreements to which none of them were parties.


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EIGHTEENTH AFFIRMATIVE DEFENSE

Counts VIII, IX, and X fail against Gene since the Plaintiffs breached the SPA, the Pledge

and Security Agreement, the Post. Org. Agreement, the Operating Agreement, and the Note.

NINETEENTH AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Counts VIII, IX, and X.

TWENTIETH AFFIRMATIVE DEFENSE

Counts VIII, IX, and X fail as the employees and independent contractors were terminated

or quit due to Partners' mismanagement or lack of management, and any contact was unsolicited.

Further, any customers ceased doing business with Partners, to the extent they conducted business

with Partners at all, based on mismanagement or lack of management. No Defendants caused or

induce any employee, independent contractor or customer to sever their relationship with Partners.

TWENTY-FIRST AFFIRMATIVE DEFENSE

Counts VIII, IX, and X fail as the Defendants' actions were justified to safeguard their own

contractual interests.

TWENTY-SECOND AFFIRMATIVE DEFENSE

Count XI fails to a state a claim upon which relief may be granted. Count X is a hodgepodge

of elements of different causes of action under the guise of a FDUPTA claim. Plaintiffs combine

a breach of contract claim and a tortious interference claim, but fail to plead the elements of a

FDUPTA claim.

TWENTY-THIRD AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Count XI.

TWENTY-FOURTH AFFIRMATIVE DEFENSE

Count XII and XIII fail since Plaintiffs failed to take reasonable measures to restrict the

use of the purported trade secrets and confidential data.


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TWENTY-FIFTH AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Counts XII and Count XIII.

Rather, any claim must be brought derivatively on behalf of Partners.

TWENTY-SIXTH AFFIRMATIVE DEFENSE

Counts XII and XIII fail against Evan, Chevere, and Matrix since they were not parties to

the Partners' Operating Agreement.

TWENTY-SEVENTH AFFIRMATIVE DEFENSE

Gene was relieved of any restrictive covenant or non-competition provision pursuant to

Section 6.5 of the SPA since Plaintiffs failed to pay Gene $3,000,000.00 due to him under the

agreement, failed to provide with a security interest in stock of the newly formed Gulf Coast

Biomedical, LLC entity, failed to obtain financing under the Operating Agreement, transferred or

caused the transfer of Gulf Coast Biomedical, LLC's assets, continually defaulted under Gulf Coast

Biomedical, Inc.'s Line of Credit with Chase Bank, failed to advise Chase Bank of the conversion

of Gulf Coast Biomedical, Inc. to Biomedical, LLC and its consequent effect upon both Chase's

security interest in Gulf Coast Biomedical, Inc.'s assets and its effect upon Gene's personal

guarantee to Chase Bank. Counts XII and XIII fail as a matter of law.

TWENTY-EIGHTH AFFIRMATIVE DEFENSE

Counts XII and XIII fail as a matter of law since Plaintiffs breached every agreement with

Gene and Alphatwo. Plaintiffs failed to pay Gene $3,000,000.00 due to him under the agreements,

failed to provide with a security interest in stock of the newly formed Gulf Coast Biomedical, LLC

entity, failed to obtain financing under the Operating Agreement, transferred or caused the transfer

of Gulf Coast Biomedical, LLC's assets, continually defaulted under Gulf Coast Biomedical , Inc.'s

Line of Credit with Chase Bank, failed to advise Chase Bank of the conversion of Gulf Coast

Biomedical, Inc. to Biomedical, LLC and its consequent effect upon both Chase's security interest


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in Gulf Coast Biomedical, Inc.'s assets and its effect upon Gene's personal guarantee to Chase

Bank. .

TWENTY-NINTH AFFIRMATIVE DEFENSE

Count XIV fails as to Evan, Chevere, and Matrix, since none of them received $750,000.00

from either Plaintiff.

THIRTIETH AFFIRMATIVE DEFENSE

Count XIV fails based on MAC 15's/and or Partners' breaches of the Stock Purchase

Agreement (as assigned), the Pledge and Security Agreement, The Note, The Operating

Agreement and the Post Or. Agreement, in addition to statutory violations.

THIRTY-FIRST AFFIRMATIVE DEFENSE

MAC 15 does not have standing to assert a direct action in Count XIV.

THIRTY-SECOND AFFIRMATIVE DEFENSE

Plaintiffs' claims barred by the doctrine of unclean hands. Plaintiffs participated in an effort

to withhold payment to Evan Saltsman notwithstanding services he performed. Eugene Saltsman

was deprived of the purchase price for his companies, and was stripped of his security interest for

his companies. Alphatwo, likewise, failed to receive the benefit of its bargain on the agreements

based on Plaintiffs breaching every agreement to which Alpha Two is a party.

THIRTY-THIRD AFFIRMATIVE DEFENSE

Plaintiffs have failed to properly effectuate service of process against Chevere.

THIRTY-FOURTH AFFIRMATIVE DEFENSE

Partners does not have standing to bring any of the counts in the Complaint, other than the

counts based upon alleged breaches of the Stock Purchase as assigned and the Operating

Agreement.

JURY DEMAND


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Plaintiffs' demand for a jury trial should be stricken based, in part, on waivers identified in

the SPA, Partners' Operating Agreement, and Post Org. Agreement.

COUNTERCLAIMS

Counter-plaintiffs, EUGENE SALTSMAN ("Gene"), EVAN SALTSMAN ("Evan"), and

ALPHATWO HOLDINGS, LLC ("ALPHATWO"), sue Counter-defendants, PARTNERS

BIOMEDICAL SOLUTIONS, LLC ("Partners" or the "Company") and MAC 15, LLC, ("MAC

15") and defendants, ROBERT BURKE ("Burke"), LOUIS WELTMAN ("Weltman"), GULF

COAST BIOMEDICAL, LLC ("Gulf Coast, LLC" or "New Gulf Coast") as successor in interest

to GULF COAST BIOMEDICAL, INC. ("Gulf Coast, Inc." or "Old Gulf Coast"), LOSOWE

CAPITAL, INC. ("Losowe"), and PERKINS BIOMEDICAL SERVICES, LLC ("Perkins") and

allege:

PARTIES

1. Gene is an individual who resides in Palm Beach County, Florida.

2. Evan is an individual who resides in Dutchess County, New York.

3. Alfatwo is a Florida Limited Liability Company with its principal place of business

in Palm Beach County, Florida. Gene is a member of Alphatwo and a resident of Palm Beach

County, Florida.

4. At all times relevant to this case, Gene owned 100% of Alfatwo, presently owns

100% of Alfatwo and controls Alfatwo.

5. Burke is an individual who resides in Palm Beach County, Florida.

6. Weltman is an individual who resides in Palm Beach County, Florida.


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7. Partners is a Florida limited liability company with its principal place of business

in Palm Beach County, Florida. MAC 15, Losowe and SEZ are Members of Partners and residents

of Palm Beach County, Florida.

8. Burke and Weltman are the remaining Managers of Partners

9. Gulf Coast, LLC is a Florida limited liability company with its principal place of

business in Palm Beach County, Florida. Weltman is a Member and a resident of Palm Beach

County, Florida.

10. Perkins is a New Hampshire limited liability company with its principal place of

business in Merrimack County, New Hampshire. Upon information and belief, Shane Perkins is a

member of Perkins and a resident of Merrimack County, New Hampshire.

11. MAC 15 is a Florida limited liability company with its principal place in Palm

Beach County. At all times relevant to this case, MAC 15 was and presently is owned and

controlled by Burke. Burke is a resident of Palm Beach County, Florida.

12. Losowe is a Florida corporation with its principal place of business in Palm Beach

County, Florida. At all times relevant to this case, Losowe was and presently is owned and

controlled by Weltman.

JURISDICTION AND VENUE

13. This Court has supplemental jurisdiction over the counterclaims against MAC 15

and Partners pursuant to 28 U.S.C. §1367(a) and Federal Rule of Civil Procedure 13(a). This

Court has supplemental jurisdiction over the counterclaims against Burke, Weltman, Gulf Coast,

LLC, Losowe, and Perkins pursuant to Federal Rule of Civil Procedure 13(h), 20(a)(2)(A) and (B)

on the basis that the right to relief against them is asserted jointly, severally or in the alternative

with respect to or arising out of the same transactions, occurrences, series of transactions and series


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of occurrences set forth above and below and any question of law or fact common to all

counterclaim defendants will arise in this action.

14. Venue is proper in Palm Beach County, Florida for the following reasons: (i) Burke

and Weltman are residents of Palm Beach County, Florida,(ii) Gulf Coast, LLC and Partners'

principal office is or was last located in Palm Beach County Florida, and Partners presently

conducts business in Palm Beach County Florida, (iii) Perkins entered into an agreement with one

or more of Burke, Weltman, Gulf Coast, LLC, or Partners in order to obtain certain of Gulf Coast,

LLC's assets and service certain accounts, and is a party to a continuing contract and business

arrangement with Gulf Coast, LLC and/or Partners; (iv) all causes of action asserted in this

Complaint arose from actions or events occurring in Palm Beach County Florida.

15. This Court has personal jurisdiction over Burke and Weltman as they are residents

of Florida. This Court has personal jurisdiction over Partners, Gulf Coast, LLC MAC 15, and

Losowe as they are Florida entities operating, present, and/or doing business in Palm Beach

County, Florida, and some or all of these Defendants' breaches and tortious activity occurred in

Palm Beach County.

16. This Court has long-arm jurisdiction over Perkins pursuant to Florida Statutes,

§48.193(1)(b) by committing a tortious act in the state, as well as entering into an agreement with

Gulf Coast, LLC which required performance in Florida by remitting funds to or for the benefit of

Gulf Coast, LLC.

17. All conditions precedent to bringing this action have been satisfied, waived or

excused.

18. Counter-plaintiffs have engaged the services of the undersigned counsel and are

obligated to pay them a reasonable fee for their services.


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FACTUAL BACKGROUND

I. The Acquisition Of Gene Entities

19. On August 24, 2014, Gene formed and organized Gulf Coast, Inc. On December

14, 2006 and November 11, 2017, respectively, Gene formed Gulf Coast Instrument Company, a

New York limited liability company ("Instrument") and Advanced Laser Service, Inc., a New York

corporation ("Laser") (Gulf Coast, Inc., Instrument, and Laser are collectively referred to as the

"Gene Entities").

20. Prior to October of 2018, Gene owned 100% of the issued and outstanding stock or

units, as appropriate, of the Gene Entities.

21. From January of 2016 through October 22, 2018, Gulf Coast, Inc. had annual

revenues of approximately $2,200,000.00.

22. On March 30, 2017, Gene executed a Standard Exclusive Right of Sale Listing

Agreement with Reichel Realty & Investments, Inc. for the purpose of selling one or more of the

Gene Entities.

23. On October 18, 2017, Gene executed a First Amendment to Standard "Exclusive

Right of Sale" Listing Agreement with Reichel Realty & Investments, Inc. A copy of this

agreement is attached as Exhibit "1".

24. On June 22, 2017, Steven Friedman ("Friedman"), an independent contractor

affiliated with Reichel Realty & Investments, Inc., contacted Burke about the Gene Entities.

25. Commencing in July of 2017, Burke engaged in due diligence. Burke, along with

his agents, including a financial consultant and a certified public accountant, researched and

analyzed Gulf Coast, Inc.'s books and records, including but not limited to profit and loss

statements, corporate tax returns, balance sheets, contracts , accounts receivable ledgers and bank

statements.


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26. In November of 2017, Gene advised Burke that he was no longer interested in

engaging in further discussions with him due to Burke's lack of progress in coming to an

arrangement to purchase the Gene Entities.

27. In May of 2018, Friedman introduced Gene and Burke to Weltman and re-initiated

communications about an acquisition of the Gene Entities.

II. The Initial Stock Purchase Agreement

28. On June 7, 2018,Weltman, through Losowe, formed North American Biomedical

Services, LLC ("NABS"), ostensibly for the purchase of acquiring Gene's interest in the Gene

Entities.

29. NABS' original members were Weltman and SEZ Holding Corp., a Florida

corporation owned by Friedman.

30. On or about June 11, 2018 Gene and NABS entered into a Stock Purchase

Agreement, a true copy of which is attached as Exhibit "2", which provided that NABS would

purchase Gene's interest in the Gene Entities for the sum of $3,000,000.00 and receipt of a 19.99%

interest in NABS. Under the Stock Purchase Agreement, Gene would receive $500,000.00 at

closing, with the balance of the cash portion of the purchase price-- $2,500,000.00-- to be paid

pursuant to the terms of a Secured Convertible Promissory Note (the "Note") . A copy of the Note

is attached as Exhibit "3".

31. On July 12, 2018, Weltman wrote an email to Burke, copying Friedman and

William Reichel, confirming Burke's …"interest and readiness to proceed on the purchase of Gulf

Coast." A copy of this email is attached as Exhibit "4".

32. On August 16, 2018, Burke formed Partners as a Florida Limited Liability

Company.

III. Gene Is Granted Secured Creditor Status


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33. On August 17, 2018, NABS and Gene entered into a Pledge and Security

Agreement, granting Gene a pledge of and security interest in all of the shares/membership

interests of the Gene Entities, which were identified by three separate certificates. The

stock/membership interests of the Gene Entities, which in turn were to be combined into a wholly

owned subsidiary of Partners, were to serve as collateral for payment of Partners' obligations under

the Note. The agreement was executed by Partners by MAC 15 (by and through its manager,

Burke) and Losowe (by and through its President, Weltman). The Note was Exhibit A to the

agreement. A copy of the Pledge and Security agreement is attached as Exhibit "5".

34. The Pledge and Security Agreement provides in part:

2. Pursuant to the documents attached hereto as Composite

Exhibit "B," the Company hereby grants and pledges to Saltsman a

security interest in and to all of the Shares, as evidenced by

Biomedical certificate number 1, Instrument certificate number 1

(100 units) and Advanced certificate number 1 (100) shares….

* * *

3.2 The Company shall defend Saltsman's right, title, lien and

security interest in and to the Pledged Securities against the claims

and demands of any and all persons and entities.

* * *

6. If The Company shall default under the terms and conditions

of this Agreement or the Promissory Note, such default shall

constitute a default under this Agreement, and … (ii) Saltsman shall

have, in additional to all other rights and remedies including those

of a secured party under the Uniform Commercial Code of the State

of Florida, the right at any time and from time to time to acquire for

his own account, sell and deliver, or other take any action with

respect to the Pledged Securities in any manner and at any time

whatsoever.

* * *

8. Until such time as all amounts due under the Promissory

Note are paid in full, the Company, shall not, without the prior

written consent of Saltsman: (i) transfer or attempt to transfer the


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Pledged Securities, (ii) transfer or cause the transfer of any assets of

Biomedical, Instrument or Advanced, ….

9. A "default" or "event of default" under this Agreement shall

be deemed to have occurred up any of the following: (i) and "Event

of Default" under the Note, (ii) any representation, covenant or

warranty of the Company made herein shall be or become false in

any material respect; . . . (vii) or take any action for the purpose of

effecting any of the foregoing.

IV. Gene Enters Into An Employment Agreement With Gulf Coast, Inc.

35. On August 17, 2018, Gene and Gulf Coast, Inc. entered into an Employment

Agreement (the "Gene Employment Agreement"), whereby Gene became employed by Gulf

Coast, Inc. as an executive for a five year term. A copy of the "Employment Agreement" is

attached as Exhibit "6".

36. On October 19, 2018, Gene and Gulf Coast, Inc. entered into an "Amendment To

Employment Agreement." This Amendment changed the term of Gene's full time employment

from five years to 120 days, and provided that Gene would then work for Gulf Coast, Inc. on a

daily basis only as requested by Gulf Coast, Inc. and agreed to by Gene. A copy of the

"Amendment to Employment Agreement" is attached as Exhibit "7".

V. Partners Executes The Note

37. On October 19, 2018, the Note, signed by Burke and Weltman in their capacity as

Managers of Partners, was executed. See Exhibit "3".

The Note provides in part:

1. Principal. Partners [] for value received, hereby promises to

pay to the order of [Gene], the principal amount of Two Million Five

Hundred Thousand Dollars ($2,500,000), together with interest as

set forth below.

2. Interest: Payment Schedule and Maturity….Commencing on

the first (1st) anniversary of the Execution Date and continuing

annual thereafter, a principal payment of $500,000 together with all


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accrued interest, unpaid interest shall be due and payable to the

Holder.

* * *

5. Covenants. The Company covenants and agrees that…

(a) This Note is secured by a Pledge and Security Agreement

made by the Company in favor of the Holder of even date herewith

(b) This Note shall rank senior to any other debt incurred by the

Company and the Company shall at all times until this Note is paid

in full inform in writing any subsequent lender of its subordinate

position. For the avoidance of doubt, the Company shall enter into a

subordination agreement with any other lender to ensure that the

provisions of this Section 5(b) are not breached.

(c) The Company shall not take any action or become subject to

(including, without limitation, by way of amendment to or

modification of), any agreement or instrument which by its terms

would (under any circumstances) restrict the Company's right or

ability to perform the provisions of this Note or the Security

Agreement.

(d) The Company shall not amend its Articles of Organization

or Operating Agreement in any manner that adversely affects the

rights and obligations associated with this Note or the Security

Agreement.

* * *

7.1 Events of Default. An "Event of Default" shall occur

hereunder if:

(a) the Company shall default in the payment of any interest or

principal of this Note,…

(b) the Company shall default in the due observance or

performance of any covenant, representation, warranty, condition or

agreement on the part of the Company to be observed to be

performed pursuant to this Note or the Security Agreement,…

(e) The Company's board of managers consents to, or otherwise

approves the transfer of all or substantially all of the Company's

assets or the cessation of substantially all of the Company's

operations or the winding-up of the Company's affairs.

* * *


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8. No Dilution or Impairment. Except in the manner provided

in the last sentence of Section 8(b) of the Security Agreement, the

Company will not, by amendment of its Articles of Organization,

Operating Agreement or other governing documents, each as

amended, or through any reorganization, transfer of assets,

consolidation, merger, dissolution, issue or sale of securities or any

other voluntary action, avoid or seek to avoid the observance or

performance of any of the terms of this Note, but will at all times in

good faith assist in the carrying out of all such terms and in the

taking of all such action as be necessary or appropriate in order to

protect the rights of the Holder against dilution or other impairment.

VI. The Partners' Operating Agreement

38. On or about October 19, 2018, the Members of Partners executed an Operating

Agreement which provided, among other things, that its Members were MAC 15 (40.01% interest),

Losowe (25% interest), Alfatwo (19.99% interest) and Sez Holdings, Inc. (15% interest). Burke,

Weltman, and Friedman also signed the Operating Agreement in their individual capacities, in

order to confirm their agreement to personally guarantee certain obligations in connection with

financing that Partners was required to obtain pursuant to the Operating Agreement. A copy of the

Operating Agreement is attached as Exhibit "8".

Section 3.5 of the Operating Agreement provides, in pertinent part:

Financing. The Members acknowledge and agree that in

connection with the Company's business, the Company shall obtain

financing as may be required…Losowe, MAC15, and Friedman

(and/or their respective members and principals) shall be required to

provide such personal guaranties and credit enhancements as the

lender reasonably requires…The Members acknowledge that as of

the Effective Date, the Company is indebted to Saltsman pursuant

to a Secured Convertible Promissory Note dated as of the Effective

Date in the original principal amount of $2,500,000 (the "Saltsman"

Note"), which Saltsman Note shall at all times remain senior in

priority to all other debts of the Company, including the repayment

and priority of the collateral securing the repayment of the amounts

owed pursuant to the Saltsman Note (emphasis supplied).

39. Partners is a manager-managed Limited Liability Company.


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40. Neither Partners nor Weltman, Losowe, Burke, or MAC15 sought financing as

required by Section 3.5 of the Operating Agreement.

41. The Operating Agreement provides that initially the Managers of the Company

would be appointed by MAC 15, Losowe and Alfatwo. MAC 15 appointed Burke as a Manager,

Losowe appointed Weltman as a Manager, and Alfatwo appointed Gene as a Manager.

42. The Operating Agreement further provides that a majority of the Managers have

the ability to control both the day-to-day affairs of the Company and make what is defined as

"Major Decisions" of the Company (see Operating Agreement at ¶¶ 5.1, which addresses day-to-

day operations and 5.2, which addresses "Major Decisions," which require a "Required Vote, "

which is defined in ¶1.2(x) of the Operating Agreement as the "affirmative vote of Members who

hold a majority of units then outstanding").

43. MAC 15 and Losowe, through their designated and appointed managers, Burke and

Weltman, controlled all of Partners' operations, based on their ownership interest in Partners.

Conversely, neither Gene nor any other Member had any control over any of Partners' operations,

but for the exception in Section 5.3, the terms of which are not relevant to the allegations or counts

in this pleading.

VII. NABS Assigns its Interests and Obligations To Partners: Gene and Partners Execute

An Amended Stock Purchase Agreement

44. NABS and Partners entered into an agreement wherein in NABS assigned its rights

and obligations under the Stock Purchase agreement to Partners. A copy of this agreement is

attached as Exhibit "2".

45. On October 19, 2018, Gene and Partners entered into an Amended Stock Purchase

Agreement. A copy of the Amended Stock Purchase Agreement is attached as Exhibit "9". A

pertinent provision of this Agreement provides:


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2. All uses of the terms NABS in the [Stock Purchase]

Agreement are hereby amended to be [Partners,] including without

limitation NABS shall read [Partners]…The parties agree that such

changes reflect the assignment of the Agreement and all of the rights

and obligations of Buyer under the Agreement by N[ABS] to

[Partners].

VIII. Partners' Amended And Restated Post Organization Agreement For Investment And

Operation Of A Business

46. On October 19, 2018, an agreement entitled "Amended and Restated Post

Organization Agreement for Investment and Operation of a Business" was entered into among

Gene, Alfatwo, MAC 15 (which in the agreement is defined as "Burke" or "the Investor"), SEZ

and Losowe (defined as Weltman). The Agreement is referred to herein as the "Post Org.

Agreement". A copy of the Post Org. Agreement is attached as Exhibit "10".

47. The Post Org. Agreement defines the Stock Purchase Agreement, Amended Stock

Purchase Agreement, the Note and certain other documents entered into in connection with the

Stock Purchase Agreement, including but not limited to, the Pledge and Security agreement, as the

"Transaction Documents." The Post Org. Agreement provides that NABS assigned and Partners

assumed all rights and obligations in the "Transaction Documents."

48. Section 1.6 of the Post Org. Agreement provides that the Gene Entities shall be

converted to Limited Liability Companies and merged into Gulf Coast, LLC.

Section 1.6 of the Post Org. Agreement provides that:

On such conversion and merger, Partners and Saltsman shall amend

the Saltsman Pledge to reflect the conversion and merger and

Saltsman may file updated financing statements to reflect the then

obligors and collateral with respect to the Saltsman Pledge.

49. The "Saltsman Pledge" is defined in the Post Org. Agreement as the pledge of stock

and membership interests in the Gene Entities.


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50. Gulf Coast, LLC was formed as a Florida Limited Liability Company on or about

December 27, 2018 by virtue of filing Articles of Conversion ("Articles"). The Articles were

signed by Weltman on behalf of the newly converted entity and Burke on behalf of Gulf Coast,

Inc. The address of Gulf Coast, LLC is Weltman's residence in Boynton Beach, Florida. A copy

of the Articles of Conversion is attached as Exhibit "11”.

IX. Weltman, Burke, Their Companies, Partners and New Gulf Coast Breach The Post

Org. Agreement

51. Neither Partners nor Gulf Coast, LLC provided Gene with a security interest in Gulf

Coast, LLC's membership interests and therefore, any of its assets.

52. On August 12, 2019, Weltman filed a document with the Florida Department of

Corporations entitled, "Articles of Amendment to Articles of Organization of Gulf Coast

Biomedical, LLC." Weltman removed Gene as a Manager and Secretary of the company.

Weltman also removed Frank West as a Manager, removed Friedman as CFO, and removed Burke

as Chairman. The Amendment is attached as Exhibit "12".

53. Losowe, through Weltman, and Burke, through MAC 15, are the only Managers of

Gulf Coast, LLC.

54. Gulf Coast, Inc. has a checking account ("Gulf Coast Account") and a line of credit

with Chase Bank ("Gulf Coast Line"). The Gulf Coast Account and the Gulf Coast Line were

created before the Stock Purchase Agreement between Gene and NABS was executed.

55. The Gulf Coast Line was secured by a blanket lien against all of Gulf Coast, Inc.'s

assets, including, but not limited to, cash, accounts, accounts receivable, and equipment.

56. The outstanding amount due under this line of credit is approximately $140,000.00.

57. Gene personally guaranteed payment to Chase under the Line of Credit.


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58. Upon information and belief, Burke has exclusive control over the Gulf Coast

Account.

59. Burke and Weltman have taken substantial funds from the Gulf Coast Account and

used these company funds for their own use and benefit.

60. Burke and Weltman have taken substantial funds from the Gulf Coast Account and

have commingled them with funds in the accounts of Partners, Gulf Coast, Inc. and Gulf Coast,

LLC by moving money between the companies.

61. Weltman and Burke have caused Gulf Coast, LLC to repeatedly miss payments due

under the Chase Line of Credit.

62. Gulf Coast, LLC currently is in default on the Gulf Coast Line.

63. Upon information and belief, Burke has exclusive access to and control over

Partners' bank account and the use of its corporate credit card.

64. Upon information and belief, Burke has authorized charges against Partners' credit

card for the benefit of MAC, himself and Weltman.

65. Such charges were incurred with actual knowledge that Chase Bank had a lien

against Gulf Coast, Inc.'s assets, that Gene was to have a security interest in Gulf Coast, LLC's

assets, that Gene was the sole personal guarantor under the Gulf Coast Line and that Gene was a

creditor of Partners.

X. Post-Closing Business Operations

66. At the time of the execution of the documents dated October 19, 2019 (sometimes

referred to as the "Closing Date") or shortly thereafter, Gulf Coast, Inc. rented space at Vista

Parkway in West Palm Beach


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67. On or after the Closing Date, five people who had been affiliated with Gene and

Gulf Coast, Inc., Evan Saltsman, Mike Domingo, David Woods, Michael Loesel and Mike Field,

transitioned to work for Gulf Coast, Inc. under its new management.

68. By February of 2019, all five of these individuals were either terminated or quit

following poor treatment and non-payment of their compensation.

69. Approximately four months after the Closing, Gene was advised by Weltman that

his services for were no longer needed or wanted.

70. Following the Closing Date, Weltman and Burke hired new employees for Gulf

Coast and/or Partners, including, but not limited to, Robin Dean, Frank West, Michelle Whiteman,

Jared Horowitz and Israel Dominguez (collectively the "New Employees").

71. None of the New Employees are presently employed by Old Gulf Coast, New Gulf

Coast or Partners or affiliated with them in any way.

72. Friedman abandoned his business broker commission of $150,000.00 in order to

become CFO of Gulf Coast, Inc. and then Gulf Coast, LLC and own 15% of Partners. He was fired

and has an outstanding claim for services rendered against Gulf Coast, Inc. and/or Gulf Coast,

LLC for which he was not paid.

73. Through Weltman and Burke's gross mismanagement, New Gulf Coast was unable

to service its customers. New Gulf Coast's customers— who were Old Gulf Coast's customers,

trusted and valued Gene and the service his companies and their technicians provided.

74. On February 13, 2019, Friedman advised Burke that there was no leadership in New

Gulf Coast, only a dictator (meaning Weltman). Friedman also advised Burke that the collection

process on accounts receivable had changed seven times since October 19, 2018. A copy of an

email to this effect is attached as Exhibit "13".


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75. On or about July 1, 2019, New Gulf Coast entered into a business transaction with

Perkins. Upon information and belief, the agreement provided that Perkins would service New

Gulf Coast accounts in exchange for remitting a portion of the funds collected to New Gulf Coast.

76. On or about July 12, 2019, Michelle Whiteman sent an email to all of New Gulf

Coast's customers advising them that as of July 1, 2019, Perkins would be servicing New Gulf

Coast's accounts, and that funds due from before July 1, 2019 should be paid to New Gulf Coast,

and after July 1, 2019 to Perkins. A copy of this email is attached as Exhibit "14".

77. New Gulf Coast transferred certain of its equipment to Perkins and otherwise sold

the balance of the equipment that it had obtained from Gulf Coast, Inc.

COUNTERCLAIMS

COUNT I AGAINST PARTNERS

SPECIFIC PERFORMANCE (GENE AGAINST PARTNERS )

78. Gene repeats and re-alleges the allegations of paragraphs 1, 3, 4, 7-9, 11-15, 17-53

as if fully set forth.

79. Section 1.6 of the Post Org. Agreement provides that:





80. The merger never took place.

81. Partners failed to grant Gene a security interest in any member units or any assets

of Gulf Coast, LLC.

82. Gene stands ready, willing and able to execute all necessary documents related to

the Saltsman Pledge and accompanying documents and to file updated financing statements to

reflect the obligors and collateral with respect to the Saltsman Pledge.


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83. Gene has no adequate remedy at law. He is entitled to the equitable remedy of

specific performance.

WHEREFORE, Plaintiff, Eugene Saltsman, requests this Court to enter a judgment

compelling Defendants, Partners Biomedical Solutions, LLC and MAC 15, LLC, to take all steps

necessary to grant Gene a security interest in all membership interests in, and all assets of Gulf

Coast Biomedical, LLC, effective as of January 1, 2019, award Gene his reasonable attorneys' fees

and costs, and for such further and additional relief as the Court deems just and appropriate under

the circumstances.

COUNT II INJUNCTIVE RELIEF (GENE AGAINST PARTNERS AND MAC 15, LLC)

84. Gene repeats and re-alleges each and every allegation in paragraphs 1, 3-77 as if

fully set forth.

85. Partners is in default under the Note by virtue of, among other things, breach of the

Pledge and security agreement, breach of the Operating Agreement, breach of the Post Op,

Agreement, the transfer of assets to Perkins and the failure to make payment of $500,000.00

pursuant to the Note on or before October 19, 2019.

86. Partners, MAC 15, Burke, Weltman, and Gulf Coast, LLC have engaged in conduct

and are continuing to engage in conduct that violates the Transaction Documents and the Post Op.

Agreement. Such conduct includes, but it not limited to:

a. refusing to amend the Saltsman Pledge,

b. refusing to grant Gene a security interest in member units of Gulf Coast,

LLC., and

c. misappropriating both Partners' and Gulf Coast, Inc.'s and Gulf Coast,

LLC’s assets for their personal gain and to cause additional harm to Gene.


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87. Unless these parties are temporarily, preliminarily and thereafter permanently

enjoined, Gene will be irreparably harmed by at least: loss of his secured creditor status and his

rights to foreclose on New Gulf Coast's assets, and otherwise exercise his rights as a secured

creditor under Florida law.

88. Gene has no adequate remedy at law.

WHEREFORE, Plaintiff, Eugene Saltsman, requests that the Court enter the following

Orders and grant the following relief:

a. Issuing a Preliminary Injunction and, thereafter, a Permanent Injunction

against Partners and MAC 15,

(1) to grant Gene a security interest in all member units and assets of

Gulf Coast, LLC;

(2) enjoining Partners and MAC 15 from transferring any assets,

including any of Gulf Coast, LLC's assets and including but not limited to incurring any charges

against Partners' credit card, other than to pay Chase Bank, effective immediately

b. Granting such other and further equitable and legal relief that the Court

deems just and proper.

COUNT III

(GENE AGAINST PARTNERS ON THE NOTE)

89. Gene repeats and re-alleges each and every allegation in paragraphs 1, 3, 4, 7, 8,

11-15, 17-45 as if fully set forth.

90. On October 19, 2018, Partners executed the Gene Note.

91. Partners breached the Note by failing to pay by failing to pay the first installment

of $500,000.00 on October 19, 2019, and thereafter.


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92. As of October 19, 2019, Partners owes Gene $2,500,000 in unpaid principal in

connection with the Gene Note, plus allowed interest and other fees as provided in the Note.

93. Gene has been damaged as a result of Partners' failure to make payment under the

Note.

WHEREFORE, Plaintiff, Eugene Saltsman, demand judgment against Defendant, Partners

Biomedical Solutions, LLC, in the amount of $2,500,000.00 in unpaid principal as of October 19,

2019, together with interest, costs, additional interest, attorneys' fees, and any further relief that

this Court deems just and proper.

COUNT IV


94. Gene repeats and re-alleges each and every allegation in paragraphs 1, 7, 8, 11-15,

17-65 as if fully set forth.

95. On October 19, 2018, Partners executed the Note.

96. Partners breached Section 5 (b) of the Note which provides:

This Note shall rank senior to any other debt incurred by the

Company and the Company shall at all times until this Note is paid

in full inform in writing any subsequent lender of its subordinate

position. For the avoidance of doubt, the Company shall enter into a

subordination agreement with any other lender to ensure that the

provisions of this Section 5(b) are not breached.

97. Partners has incurred debts out of the ordinary course of business and paid them

without making payment under the Note.

98. As of October 19, 2019, Partners owes Gene $2,500,000.00 in unpaid principal in

connection with the Gene Note, plus allowed interest and other charges permitted by the Note.

99. Gene has been damaged as a result of Partners' wrongful acts.

WHEREFORE, Plaintiff, Eugene Saltsman, demands judgment against Defendant,

Partners Biomedical Solutions, LLC, in the amount of $2,500,000.00 in unpaid principal as of


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October 19, 2019, together with interest, costs, additional interest, attorneys' fees, and any further

relief that this Court deems just and proper.

COUNT V


100. Gene repeats and re-alleges each and every allegation in paragraphs 1, 7-65, and

75-77of this Complaint as if fully set forth.


102. Partners breached Section 5(c) of the Note which provides:

(c) The Company shall not take any action or become subject to

(including, without limitation, by way of amendment to or

modification of), any agreement or instrument which by its terms

would (under any circumstances) restrict the Company's right or

ability to perform the provisions of this Note or the Security

Agreement.

103. Gene's security interest in Gulf Coast, Inc. was not amended to become a security

interest in the ownership of Gulf Coast, LLC.

104. Assets of Gulf Coast, Inc. and Gulf Coast, LLC have been transferred to Perkins.

105. This constituted a breach of the Pledge and Security Agreement and a breach of the

Note.


connection with the Gene Note, plus allowed interest and related charges provided for under the

Note.







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COUNT VI





110. Partners breached 7(b) of the Note which provides:

(b) the Company shall default in the due observance or

performance of any covenant, representation, warranty, condition or

agreement on the part of the Company to be observed to be

performed pursuant to this Note or the Security Agreement,….

111. Section 8 of the Pledge and Security Agreement provides that Gulf Coast. Inc.'s or

Gulf Coast, LLC's (defined therein as Biomedical) assets shall not be transferred until the Note is

paid in full.

112. Some or all of Gulf Coast, Inc.'s assets were converted to Gulf Coast, LLC's assets

and subsequently some or all of these assets were transferred to Perkins.

113. The Note has not been paid in full.

114. The transfer of Gulf Coast's assets constitutes a default under the Note. Gene has

been damaged as a result.


connection with the Gene Note, plus allowed interest, reasonable attorneys' fees and additional

fees and costs.







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COUNT VII



fully set forth.


119. Partners breached Section 7(e) of the Note which provides:

(e) The Company's board of managers consents to, or otherwise

approves the transfer of all or substantially all of the Company's

assets or the cessation of substantially all of the Company's

operations or the winding-up of the Company's affairs.

120. Weltman and Burke have approved the winding up of Partners' affairs. Partners did

nothing other than receive a "management fee" from Old Gulf Coast and/or New Gulf Coast. Old

Gulf Coast and New Gulf Coast have no operations, no employees, no customers, and no business

location since the premises in West Palm Beach have been vacated.

121. Partners breached section 7 (e) of the Note.


connection with the Gene Note, plus allowed interest.






COUNT VIII



11-65, and 75-77as if fully set forth.


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126. Partners breached Section 8 of the Note which provides:

8. No Dilution or Impairment. Except in the manner provided

in the last sentence of Section 8(b) of the Security Agreement, the

Company will not, by amendment of its Articles of Organization,

Operating Agreement or other governing documents, each as

amended, or through any reorganization, transfer of assets,

consolidation, merger, dissolution, issue or sale of securities or any

other voluntary action, avoid or seek to avoid the observance or

performance of any of the terms of this Note, but will at all times in

good faith assist in the carrying out of all such terms and in the

taking of all such action as be necessary or appropriate in order to

protect the rights of the Holder against dilution or other impairment.

127. Partners has intentionally failed to protect Gene's rights, as holder of the Note, from

impairment.


connection with the Gene Note, plus allowed interest.






COUNT IX

BREACH OF CONTRACT (GENE AGAINST PARTNERS RE THE PLEDGE

AGREEMENT)



131. On October 19, 2018, Partners executed the Amendment to Stock Purchase

Agreement wherein Partners was assigned all of the rights and obligations owed to Gene by NABS.


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These obligations included the Stock and Pledge Agreement, guaranteeing Gene's security interest

in the stock and membership interests in Gene's entities.

132. Partners breached Section 6 of the Pledge Agreement by failing to pay under the

Gene Note.

133. As a result of Partners' breach, Gene has been damaged.


Partners Biomedical Solutions, LLC, for damages, together with interest, costs, additional interest,

attorneys' fees, and any further relief that this Court deems just and proper.

COUNT X

BREACH OF CONTRACT (GENE AGAINST PARTNERS RE PLEDGE AGREEMENT)



135. On October 19, 2018, Partners executed the Amendment to Stock Purchase

Agreement wherein Partners was assigned all of the rights and obligations owed to Gene by NABS.

136. Partners breached its agreement by failing to protect Gene's security interest in

Gene's Entities, failing to amend the Stock and Pledge Agreements to reflect the Gene Entities'

conversion and merger into Gulf Coast, LLC, and taking all other steps necessary and required to

create a protected security interest in Gulf Coast, LLC for Gene.

137. As a result, Gene has been damaged.


Partners Biomedical Solutions, LLC, for damages, together with interest, costs, additional interest,



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COUNT XI

(ALFATWO AND GENE AGAINST PARTNERS,MAC 15, AND LOSOWE RE POST

CLOSING AGREEMENT)

138. Gene and Alphatwo repeat and re-allege each and every allegation in paragraphs 1,

3, 4, 15, and 17-65 as if fully set forth.

139. The Post Org. Agreement also provides that NABS assigned and Partners assumed

all rights and obligations in the Transaction Documents.






141. Partners and MAC 15 have failed to comply with Section 1.6 of the Post Org.

Agreement and amend the Saltsman Pledge to reflect the conversion of Gulf Coast, Inc. to Gulf

Coast, LLC and provide Gene with a replacement security interest in Gulf Coast, LLC.

142. As a result, Gene and Alphatwo have been damaged.

WHEREFORE, Plaintiffs, Eugene Saltsman and Alphatwo Holdings, LLC, demand

judgment against Defendants, Partners Biomedical Solutions, LLC and MAC 15, LLC and

LOSOWE for damages together with interest, costs, attorneys' fees, and any further relief that this

Court deems just and proper.

COUNT XII

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTES, §726.105(1)(a)

(GENE AS AGAINST PARTNERS)

143. Gene repeats and re-alleges each and every allegation in paragraphs 1, 5-9, 11-15,

17-66, and 75-77 of this Complaint as if fully set forth.

144. Section 726.105, Florida Statutes provides in relevant part as follows:

Transfers fraudulent as to present and future creditors.


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(1) A transfer made or obligation incurred by a debtor is fraudulent

as to a creditor, whether the creditor's claim arose before or after the

transfer was made or the obligation was incurred, if the debtor made

the transfer or incurred the obligation:

(a) with actual intent to hinder, delay or defraud any creditor of the

debtor;

145. New Gulf Coast transferred assets to Perkins, including but not limited to

equipment and the right to service accounts (the "Transfer").

146. At the time of the Transfer, Gene was a creditor of Partners which owned Gulf

Coast, Inc. Gene held a security interest in Gulf Coast, Inc. which was converted to New Gulf

Coast. Gene was also a creditor of Gulf Coast, LLC by virtue of having claims for unpaid

compensation pursuant to the Amended Employment Agreement

147. Pursuant to Section 1.6 of the Post. Org Agreement, upon conversion and merger

of the Gene Entities into Gulf Coast, LLC, Partners was required to amend the Saltsman pledge to

reflect the conversion and merger reflecting Gulf Coast, LLC as the new obligor and Gene's

collateral.

148. Gene was a creditor of Partners at the time of the transfer of New Gulf Coast's

equipment and the servicing of New Gulf Coast's customers.

149. But for the transfer of equipment and services to Perkins, Gulf Coast, LLC could

have provided an income stream to Partners thereby enabling it to pay the obligation it owed to

Gene.

150. The transfer of equipment and customers to service to Perkins was done with actual

intent, delay or defraud Gene in collecting on the Note.

WHEREFORE, pursuant to section 726.108, Florida Statutes, Plaintiff, Eugene Saltsman,

(i) demands judgment against Defendant, Partners Biomedical Solutions, LLC, for avoiding the


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fraudulent transfer of the Gene Entities' equipment and services to Perkins; (2) an attachment or

an injunction against Perkins; or (3) entry of an order allowing Gene to levy by way of execution

on the assets fraudulently transferred and their proceeds to satisfy the Note; and (4) such other and

further relief as the circumstances may require.

COUNT XIII



151. Gene repeats and re-alleges each and every allegation in paragraphs 1, 3, 4, 5-9, 11-

15, 17-65 as if fully set forth.








debtor;

153. Gene was a creditor of Partners and held a security interest in Gulf Coast, Inc. which

was converted to New Gulf Coast.




collateral.

155. Gulf Coast, Inc.'s assets were transferred to New Gulf Coast upon its conversion.

156. No security interest was provided to Gene with New Gulf Coast.


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157. The transfer of Gulf Coast, Inc.'s assets to New Gulf Coast without providing Gene

with a security interest in New Gulf Coast was done with actual intent, delay or defraud Gene in

collecting on his Note.


(i) demands judgment against Defendant, Partners Biomedical Solutions, LLC for avoiding the

fraudulent transfer of the Gene security interest in Gulf Coast, Inc.; (2) an attachment or an

injunction against Gulf Coast, LLC and Gulf Coast, Inc.; or (3) entry of an order allowing Gene to

levy by way of execution on the assets fraudulently transferred and their proceeds to satisfy the

Note; and (4) such other and further relief as the circumstances may require.

COUNT XIV

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTE, § 726.105(1)(b)



fully set forth.






the transfer or incurred the obligation: . . . (b) Without receiving a

reasonably equivalent value in exchange for the transfer or

obligation, and the debtor: . . 2. Intended to incur, or believed or

reasonably should have believed that he or she would incur, debts

beyond his or her ability to pay as they became due.

160. At the time of the Transfer, Gene was a creditor of Partners and held a security

interest in Gulf Coast, Inc. which was converted to New Gulf Coast.




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collateral.

162. Partners and New Gulf Coast transferred to Perkins' certain of its equipment that it

had obtained from the Gene Entities, as well as, the servicing of the Gene Entities' customers

without receiving a reasonably equivalent value in exchange for the transfer.

163. Partners and Gulf Coast intended to incur, or believed, or reasonably should have

believed that they would incur debts beyond its ability to pay them as they became due because at

the time of the transfer, including but not limited to the Note. But for the transfer of certain of its

equipment that it had obtained from the Gene Entities, as well as, the servicing of the Gene Entities'

customers, could have provided an income stream to Partners and New Gulf Coast thereby

enabling Partners to pay the obligation it owed to Gene.





on the assets fraudulently transferred and their proceeds, including funds that have been transferred

back to Gulf Coast and/or Partners from Perkins or otherwise in order to satisfy the Note; and (4)

such other and further relief as the circumstances may require.

COUNT XV

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTES, §726.106(1)



fully set forth.

165. Section 726.106, Florida Statute provides in relevant part as follows:


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Transfers fraudulent as to present creditors


as to a creditor whose claim arose before the transfer was made or

the obligation was incurred if the debtor made the transfer or

incurred the obligation without receiving a reasonably equivalent

value in exchange for the transfer or obligation and the debtor was

insolvent at that time or the debtor became insolvent as a result of

the transfer or obligation.

166. At the time of At the time of the Transfer, Gene held as security interest in Gulf

Coast, Inc. which was converted to New Gulf Coast.




collateral.

168. Partners and New Gulf Coast transferred to Perkins' certain of the equipment that

it had obtained from Gulf Coast, Inc. and the servicing of Old Gulf Coast's and New Gulf Coast's

remaining customers without receiving a reasonably equivalent value in exchange for the transfer.

169. As a result of the transfer of New Gulf Coast's equipment and the servicing of New

Gulf Coast's customers, Partners became insolvent. They have liabilities greatly exceeding their

assets.

170. At the time of the transfer of New Gulf Coast's equipment and the servicing of

New Gulf Coast's customers, Gene was creditor of Gulf Coast, Inc. and New Gulf Coast pursuant

to the Amended Employment Agreement and a Creditor of Partners pursuant to the Pledge and

Security Agreement, the Operating Agreement, the Promissory Note, the Post. Org. Agreement

and a number of related documents




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on the assets fraudulently transferred and their proceeds to satisfy the Note; and (4) such other and

further relief as the circumstances may require.

PERMISSIVE COUNTERCLAIMS AND JOINDER OF PARTIES

Counter-plaintiffs, Gene, Evan, and Alphatwo sue counter-defendants, Burke, Weltman,

Gulf Coast, LLC, Losowe, and Perkins and allege:

COUNT XVI INJUNCTIVE RELIEF (GENE AGAINST BURKE, WELTMAN AND

GULF COAST, LLC)


75-77 as if fully set forth and brings the following claims as permissive counterclaims pursuant to

Rules 13 (h) and 20 (a)(2)(A) and (B) of the Federal Rules of Civil Procedure.

172. Partners is in default under the Note by virtue of, among other things, breach of the

Pledge and security agreement, breach of the Operating Agreement, breach of the Post Op,

Agreement, the transfer of assets to Perkins and the failure to make payment of $500,000.00

pursuant to the Note on or before October 19, 2019.

173. Partners, MAC 15, Losowe, Burke, Weltman and Gulf Coast, LLC have engaged

in conduct and are continuing to engage in conduct that violates the Transaction Documents and

the Post Op. Agreement. Such conduct includes, but it not limited to:

a. refusing to amend the Saltsman Pledge,

b. refusing to grant Gene a security interest in member units of Gulf Coast,

LLC., and

c. misappropriating both Partners' and Gulf Coast, Inc.'s and Gulf Coast,

LLC’s assets for their personal gain and to cause additional harm to Gene.


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174. Unless these parties are temporarily, preliminarily and thereafter permanently

enjoined, Gene will be irreparably harmed by at least: loss of his secured creditor status and his

rights to foreclose on New Gulf Coast's assets, and otherwise exercise his rights as a secured

creditor under Florida law.

175. Gene has no adequate remedy at law.

WHEREFORE, Plaintiff, Eugene Saltsman, requests that the Court enter the following

Orders and grant the following relief:

a. Issuing a Preliminary Injunction and, thereafter, a Permanent Injunction

against Defendants Robert Burke, Louis Weltman, and Gulf Coast Biomedical, LLC,

(1) to grant Gene a security interest in all member units and assets of

Gulf Coast, LLC;

(2) enjoining Burke, Weltman and Gulf Coast, LLC from transferring

any assets, including but not limited to incurring any charges against Partners' credit card, other

than to pay Chase Bank, effective immediately

b. Granting such other and further equitable and legal relief that the Court


COUNT XVII

BREACH OF STATUTORY DUTIES OF LOYALTY – F.S. §605.04091 (ALPHATWO

AGAINST BURKE AND WELTMAN)

176. Alfatwo repeats and re-alleges and incorporated the allegations of paragraphs 3-77

as if fully set forth herein.

177. Burke and Weltman are Partners' Managers.

178. The Florida Amended Limited Liability Act provides in part:


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(1) Each manager of a manager-membered limited liability

company . . .owes fiduciary duties of loyalty and care to the limited

liability company and members of the limited liability company.

(2) The duty of loyalty includes:

* * *

(c) The duty of care in the conduct…is to refrain from engaging

in grossly negligent or reckless conduct, willful or intentional

misconduct, or a knowing violation of the law.

179. Under Florida law and Partners' Operating Agreement, Burke and Weltman were

required to exercise their powers and otherwise perform their duties in good faith, using ordinary

prudence, as a person in a like position would use under similar circumstances.

180. Burke had no prior experience in the business of servicing biomedical equipment.

181. Weltman had no prior experience in the business of servicing biomedical

equipment.

182. Burke and Weltman intentionally failed to perform their duties and powers in good

faith in a number of ways, including, but not limited to:

a. Intentionally failing to obtain financing in contravention of Section 3.5 of

the Operating Agreement, thereby damaging the value of Alpha Two's interest and Partners' ability

to pay its obligations to Gene under the Note;

b. Grossly mismanaging Gulf Coast, Inc. and New Gulf Coast, which Partners

owned or intended to own, so as to alienate all of its employees and its customers, transferring its

assets and using the company's funds for their personal benefit, firing Gene when they had no one

else capable of managing Gulf Coast, Inc.'s or Gulf Coast, LLC's business, causing Partners to

default under various agreements with Gene, and causing Gulf Coast, Inc. to violate Gulf Coast,

Inc.'s agreements with Chase Bank.


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c. Grossly mismanaging Gulf Coast, Inc. and New Gulf Coast by terminating

Gene and, rather than hire a knowledgeable replacement, allowed Weltman, who had no prior

experience in the industry, to assume Gene's responsibilities; hiring Dean and West, personal

friends of Burke, to be the heads of sales and services, even though neither lived in the New York

tri-state area; and wasting company funds on computer software equipment that they thereafter did

not use because it was "no good," or words to that effect.

183. Weltman and Burke, through MAC 15 and Losowe, acquired a company that

regularly generated in excess of $2,000,000.00 in annual revenues, and within less than one year,

decimated it.

184. New Gulf Coast, which Partners owed or intended to own, has no employees, no

accounts, no equipment, no goodwill, all to the detriment of Gene, Alphatwo, the company's

former employees and its creditors, including, but not limited to, Gene and Chase Bank.

185. As a result, Alphatwo has been damaged by virtue of the diminution of the value

of its interest in Partners.

WHEREFORE, Plaintiff, Alphatwo Holdings, LLC, demands judgment against

Defendants, Robert Burke and Louis Weltman, for damages in an amount to be proven at trial,

together with interest, costs, additional interest, attorneys' fees, and any further relief that this Court


COUNT XVIII

BREACH OF CONTRACT (ALFATWO AGAINST BURKE AND WELTMAN UNDER

SECTION 3.5 OF PARTNERS' OPERATING AGREEMENT)

186. Alphatwo brings this action against Burke and Weltman, re-alleging and

incorporating the allegations of paragraphs 3 – 77 as if fully set forth herein.


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187. Paragraph 3.5 of the Operating Agreement provides in pertinent part: "Members

acknowledge and agree that in connection with the company's business, the Company shall obtain

financing, as may be required… Losowe, MAC15, and Friedman (and/or their respective members

and principals) shall be required to provide such personal guaranties and credit enhancements as

the lender reasonably requires…."

188. Burke and Weltman breached Section 3.5 of the Operating Agreement by failing to

obtain the required financing.

189. As a result of Burke and Weltman's breaches, Alphatwo has been damaged, since

Alfatwo's interest in Partners was rendered worthless.

WHEREFORE, Plaintiff, Alfatwo Holdings, LLC, demands that a judgment be entered

against Defendants, Robert Burke and Louis Weltman, for damages this Court determines Alfatwo

has suffered, the costs of this action, the pre-suit costs and attorneys' fees incurred, and any

additional relief this Court deems to be just and proper.

COUNT XIX BREACH OF CONTRACT

(GENE AGAINST LOSOWE, BURKE AND WELTMAN RE POST CLOSING

AGREEMENT)

190. Gene repeats and re-alleges each and every allegation in paragraphs 1, 5-9, 11-65-


191. The Post Org. Agreement also provides that NABS assigned and Partners assumed

all rights and obligations in the Transaction Documents.







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193. Losowe, Burke and Weltman have failed to comply with Section 1.6 of the Post

Org. Agreement and amend the Saltsman Pledge to reflect the conversion of Gulf Coast, Inc. to

Gulf Coast, LLC and provide Gene with a replacement security interest in Gulf Coast, LLC.

194. As a result, Gene has been damaged.

WHEREFORE, Plaintiffs, Eugene Saltsman, demands judgment against Defendants,

Robert Burke, Louis Weltman, and Losowe Capital Inc., for damages together with interest, costs,


COUNT XX

GROSS MISMANAGEMENT OF NEW GULF COAST (GENE AGAINST BURKE AND

WELTMAN)

195. Gene repeats and re-alleges each and every allegation in paragraphs 1, 5-9, 11-77


196. Burke and Weltman are the managers of Partners.

197. Burke and Weltman are the managers of New Gulf Coast.

198. The Florida Amended Limited Liability Act provides in part:

(1) Each manager of a manager-membered limited liability

company . . .owes fiduciary duties of loyalty and care to the limited

liability company and members of the limited liability company.

(2) The duty of loyalty includes:

* * *

(c) The duty of care in the conduct…is to refrain from engaging

in grossly negligent or reckless conduct, willful or intentional

misconduct, or a knowing violation of the law.

199. Burke and Weltman owed Gene an undivided duty of loyalty.

200. Burke and Weltman mismanaged New Gulf Coast, by among other things:

a. failing to understand the specific business, including its operations, how to

grow the business, deal with customers, acquire equipment,


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b. not adequately or improperly capitalizing and/or funding the company;

c. terminating technicians, thereby leaving an inadequate number of persons;

present to assist customer needs, resulting in a loss of those customers;

d. causing Partners and New Gulf Coast to incur expenses for services such

as payroll, management and administrative, but failing to place competent and knowledgeable

persons in those positions;

e. improperly using corporate funds for their own personal use and gain;

f. diverting funds from New Gulf Coast to Partners, even though Partners

performs no services and is in default under the Gene Note;

g. failing to take corrective action against corporate profits declined in

contravention of their personal and contractual obligations;

h. failing to properly and adequately supervise technicians, resulting in several

resignations due to a toxic working environment Weltman created;

i. failing to replace Gene with a knowledgeable replacement, and instead

allowing Weltman, who had no prior experience in the industry, to assume Gene's responsibilities;

j. hiring Dean and West, personal friends of Burke, to be the heads of sales

and services, even though neither lived in the New York tri-state area; and

k. wasting company funds on computer software equipment that they

thereafter did not use because it was "no good," or words to that effect.

201. As a direct and proximate result of Burke and Weltman's gross mismanagement,

Gene suffered substantial damages, including but not limited to the diminishment of the value of

his interest in Partners, and Partners' inability to honor its obligations under the Note.


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WHEREFORE, Plaintiff, Eugene Saltsman, demands judgment against Defendants, Robert

Burke and Louis Weltman, for damages together with interest, costs, attorney's fees, and any

further relief that this Court deems just and proper.

COUNT XXI FRAUD IN THE INDUCEMENT(GENE AGAINST WELTMAN)


15, 17, 19-53 as if fully set forth.

203. Weltman induced Gene to sign the Transaction Documents.

204. Weltman represented to Gene that he would execute the Operating Agreement in

the capacity of a guarantor pursuant to Section 3.5, providing a personal guarantee and credit

enhancements as any lender required.

205. Weltman intentionally and materially omitted telling Gene that his guaranty was

worthless as a result of his filing of a Petition for Relief under Chapter 11 of Title 11 of the United

States Code in 2014 (the "Weltman Bankruptcy Case") resulting in the confirmation of a Plan of

Reorganization in 2016.

206. By virtue of the Weltman Bankruptcy Case, no commercial lender would make

Partners a loan or otherwise provide financing based upon Weltman's personal guaranty.

207. Weltman knew that his guaranty was worthless at the time he executed section 3.5

of the Operating Agreement. Weltman's failure to disclose the Weltman Bankruptcy Case and the

fact that his obligation to provide a personal guaranty was worthless constituted an intentionally

false representation.

208. Gene relied upon this representation at the time it was made.

209. Partners does not have the ability to honor the Note.


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210. Gene has been damaged by Weltman's intentionally false statement and fraudulent

act in inducing Alfa Two to enter into the Operating Agreement .

WHEREFORE, Plaintiff, Eugene Saltsman, demands judgment against Defendant, Louis

Weltman, for damages together with interest, costs, punitive damages, and any further relief that

this Court deems just and proper.

COUNT XXII CIVIL CONSPIRACY (GENE AGAINST BURKE AND WELTMAN)


fully set forth.

212. Burke and Weltman conspired to commit an unlawful act against Gene; namely, to

defraud Gene out of the beneficial interest in the Gene Entities.

213. Burke and Weltman, commencing on a date unknown to Gene, but upon

information and belief sometime in May of 2018, and continuing thereafter up to and including

the filing of this pleading, agreed and conspired with each other to devise and scheme and

thereafter both perpetrated one or more overt acts within the state of Florida and in particularly

Palm Beach County in furtherance of the conspiracy in order to carry out their scheme and obtain

one or more of its objectives.

214. Burke and Weltman engaged in overt acts in furtherance of the conspiracy,

including, but not limited to, making misrepresentations of fact that:

a. Commencing on or about May 9, 2018, Weltman represented to Gene that:

(1) the acquisition of the Gene Entities would help Gene benefit form

an increase in value related to growth of his business by bringing in resources in the form of

management and strategy, as well as money, acquisitions and growth;

(2) the transaction would secure Gene with a pledge of securities that

would permit him to take his companies back in the event of a default on the Note; and


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(3) that the transaction was less of an acquisition but rather an

investment by Gene into his own business by bringing management on board to this companies

and allow for growth that he might otherwise be incapable or unwilling to do on his own;

(4) payment on the Note would occur;

(5) that they and the companies they managed and controlled would

protect Gene's Security Interest originally in the Gene Entities and then in New Gulf Coast,

including executing all necessary documents,

(6) they would bring financial resources to the table in the form of

management and strategy, as well as money.

215. Further overt acts include, but are not limited to, driving Gene out of his companies,

transferring the New Gulf Coast's assets to a third party, and using corporate funds for their own

personal use and benefit.

216. The representations and material omissions made by Weltman to Gene set forth

above were false and fraudulent when made and were part of an integral and continuing scheme

designed and perpetrated by Weltman, Burke, Losowe and MAC 15, to fraudulently induce Gene

to purportedly sell his interests in the Gene Entities, execute the Transaction Documents, provide

his experienced, valuable services, talents and energies to the financial and other advancement and

reward to the Defendants, and each of them, without paying Gene, to cheat Gene out of his rightful

ownership and security interest in New Gulf Coast and to purloin and convert to their own use

Gene's business contacts and relationships. Gene has been damaged as result of the acts done under

the conspiracy.


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WHEREFORE, Plaintiff, Eugene Saltsman, demands judgment against Defendants, Robert

Burke and Louis Weltman, for damages together with interest, costs, punitive damages, and any

further relief that this Court deems just and proper.

COUNT XXIII

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTES §726.105(1)(a)

(GENE AGAINST PARTNERS, GULF COAST, LLC AND PERKINS)

217. Gene repeats and re-alleges each and every allegation in paragraphs 1, 3-77 of this

Complaint as if fully set forth.








debtor;

219. New Gulf Coast transferred assets to Perkins, including but not limited to

equipment and the right to service accounts (the "Transfer").

220. At the time of the Transfer, Gene was a creditor of Partners .

221. At the time of the Transfer, Gene was a creditor of Gulf Coast, LLC.

222. At the time of the Transfer, Partners owned Gulf Coast.

223. At the time of the Transfer, Gene held a security interest in Gulf Coast, Inc. which

had been converted to New Gulf Coast.




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collateral.

225. Gene was a creditor of Partners and Gulf Coast, LLC at the time of the transfer of

New Gulf Coast's equipment and the servicing of New Gulf Coast's customers.

226. But for the transfer of equipment and services to Perkins, Gulf Coast, LLC could

have provided an income stream to Partners thereby enabling it to pay the obligation it owed to

Gene.

227. The transfer of equipment and customers to service to Perkins was done with actual

intent, delay or defraud Gene in collecting on his Note.


(i) demands judgment against Defendants, Gulf Coast Biomedical, LLC and Perkins Biomedical

Services, LLC, for avoiding the fraudulent transfer of the Gene Entities' equipment and services

to Perkins; (2) an attachment or an injunction against Partners, Gulf Coast, LLC and Perkins; (3)

entry of an order allowing Gene to levy by way of execution on the assets fraudulently transferred

and their proceeds, including proceeds returned to Gulf Coast LLC and /or Partners to satisfy the

Note; and (4) such other and further relief as the circumstances may require.

COUNT XXIV


(GENE AGAINST GULF COAST, LLC)


15, 17-77 as if fully set forth.






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debtor;

230. Gene was a creditor of Partners and held a security interest in Gulf Coast, Inc. which

was converted to New Gulf Coast.




collateral.

232. Gulf Coast, Inc.'s assets were transferred to New Gulf Coast upon its conversion.

233. No security interest was provided to Gene with New Gulf Coast.

234. The transfer of Gulf Coast, Inc.'s assets to New Gulf Coast without providing Gene

with a security interest in New Gulf Coast was done with actual intent, delay or defraud Gene in

collecting on his Note.


(i) demands judgment against Defendant, Gulf Coast Biomedical, LLC for avoiding the fraudulent

transfer of the Gene security interest in Gulf Coast, Inc.; (2) an attachment or an injunction against

Gulf Coast, LLC and any of its assets; or (3) entry of an order allowing Gene to levy by way of

execution on the assets fraudulently transferred and their proceeds to satisfy the Note; and (4) such

other and further relief as the circumstances may require.

COUNT XXV

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTE, § 726.105(1)(b)



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fully set forth.






the transfer or incurred the obligation: . . . (b) Without receiving a

reasonably equivalent value in exchange for the transfer or

obligation, and the debtor: . . 2. Intended to incur, or believed or

reasonably should have believed that he or she would incur, debts

beyond his or her ability to pay as they became due.

237. Partners and New Gulf Coast transferred to Perkins' certain of its equipment that it

had obtained from Gulf Coast, Inc., as well as the servicing of the Gulf Coast's customers without

receiving a reasonably equivalent value in exchange for the transfer.

238. At the time of the Transfer, Gene was a creditor of Partners

239. At the time of the Transfer, Gene was a creditor of Gulf Coast, LLC.

240. At the time of the Transfer, Gene held a security interest in Gulf Coast, Inc. which

had been converted to New Gulf Coast.




collateral.

242. At the time of the Transfer, Partners and Gulf Coast, LLC intended to incur, or

believed, or reasonably should have believed that they would incur debts beyond their ability to

pay them as they became due.


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(i) demands judgment against Defendants, Gulf Coast Biomedical, LLC and Perkins Biomedical


to Perkins; (2) an attachment or an injunction against Perkins and Gulf Coast, LLC; (3) entry of

an order allowing Gene to levy by way of execution on the assets fraudulently transferred and their

proceeds, including funds in the possession of Gulf Coast, LLC and Partners to satisfy the Note;

and (4) such other and further relief as the circumstances may require.

COUNT XXVI

FRAUDULENT TRANSFER PURSUANT TO FLORIDA STATUTES, §726.106(1)



fully set forth.

244. Section 726.106, Florida Statute provides in relevant part as follows:

Transfers fraudulent as to present creditors


as to a creditor whose claim arose before the transfer was made or

the obligation was incurred if the debtor made the transfer or

incurred the obligation without receiving a reasonably equivalent

value in exchange for the transfer or obligation and the debtor was

insolvent at that time or the debtor became insolvent as a result of

the transfer or obligation.

245. Partners and New Gulf Coast transferred to Perkins' certain of the equipment that

it had obtained from Gulf Coast, Inc. and the servicing of Old Gulf Coast's and New Gulf Coast's

remaining customers without receiving a reasonably equivalent value in exchange for the transfer.

246. At the time of At the time of the Transfer, Gene held as security interest in Gulf

Coast, Inc. which was converted to New Gulf Coast.




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collateral. Partners failed to comply with this requirement.


New Gulf Coast's customers, Gene was creditor of Partners.


New Gulf Coast's customers, Gene was creditor of Gulf Coast, Inc. and New Gulf Coast pursuant

to the Amended Employment Agreement and a Creditor of Partners pursuant to the Pledge and

Security Agreement, the Operating Agreement, the Promissory Note, the Post. Org. Agreement

and a number of related documents

250. As a result of the transfer of New Gulf Coast's equipment and the servicing of New

Gulf Coast's customers, Partners and New Gulf Coast became insolvent. They have liabilities

greatly exceeding their assets.


(i) demands judgment against Defendant, Gulf Coast Biomedical, LLC and Perkins Biomedical


to Perkins; (2) an attachment or an injunction against Partners and Gulf Coast, LLC, Perkins; or

(3) entry of an order allowing Gene to levy by way of execution on the assets fraudulently

transferred and their proceeds to satisfy the Note, including all funds in Partners' and Gulf Coast

LLC's possession; and (4) such other and further relief as the circumstances may require.

COUNT XXVII

BREACH OF CONTRACT (GENE AGAINST GULF COAST, LLC RE EMPLOYMENT

AGREEMENT)

251. Gene repeats and re-alleges each and every allegation in paragraphs 1, 5-9, 11-53



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252. An employment agreement existed between Gene and Gulf Coast, Inc.

253. Gulf Coast, Inc. was converted to Gulf Coast, LLC.

254. Pursuant to the Employment Agreement as amended, Gene was entitled to certain

payments, in the amount of $39,600.00.

255. Gulf Coast, Inc. wrongfully refused to pay Gene the amount due pursuant to his

amended Employment Agreement as amended.

256. Gulf Coast, Inc. breached the Employment Agreement as amended .

257. As a result, Gene has suffered damages in the amount of $39,600.00.

WHEREFORE, Plaintiff Eugene Saltsman, demands judgment against Defendant, Gulf

Coast Biomedical, LLC, for damages together with interest, costs, attorneys' fees, and any further


COUNT XXVIII

BREACH OF ORAL AGREEMENT (EVAN AGAINST GULF COAST, LLC RE

EMPLOYMENT AGREEMENT)

258. Evan repeats and re-alleges each and every allegation in paragraphs 2, 9, 13-15, 17,

50, 52, 53, 67, 68 as if fully set forth.

259. An oral Employment Agreement existed between Evan and New Gulf Coast.

260. Pursuant to the oral agreement, Evan provided services to New Gulf Coast.

261. New Gulf Coast breached the oral agreement by failing and refusing to pay Evan

for services performed.

262. As a result, Evan has suffered damages in the amount of $12,400.00.

WHEREFORE, Plaintiff, Evan Saltsman, demands judgment against Defendant, Gulf

Coast Biomedical, LLC, for damages together with interest, costs, and any further relief that this



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COUNT XXIX

QUANTUM MERUIT (EVAN AS AGAINST GULF COAST)

(Alternative Count)

263. Evan repeats and re-alleges each and every allegation in paragraphs 2, 9, 13-15, 17,

50, 52, 53, 67, 68 as if fully set forth.

264. Evan performed services on behalf of New Gulf Coast and New Gulf Coast

acquiesced in the provision of those services.

265. New Gulf Coast was aware that Evan expected to be compensated for the services

he performed.

266. New Gulf Coast was and has been unjustly enriched by Evan's services.

WHEREFORE, Plaintiff, Evan Saltsman, demands judgment against Defendant, Gulf

Coast Biomedical, LLC, for damages together with interest, costs, and any further relief that this


/s/ Eric A. Rosen

Eric A. Rosen

Fla. Bar No. 36426

Email: [email protected]

FOWLER WHITE BURNETT, P.A.

Northbridge Centre

515 North Flagler Drive, Suite 2100

West Palm Beach, Florida 33401

Telephone: (561) 802-9044

Facsimile: (561) 802-9976

Alexandra L. Tifford

Florida Bar No. 0178624

Email: [email protected]

FOWLER WHITE BURNETT, P.A.

Brickell Arch

1395 Brickell Ave., 14th Floor

Miami, FL 33131

Tel: 305-789-9200

Fax: 305-789-9201


mailto:[email protected]

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CERTIFICATE OF SERVICE

I hereby certify that on December 4th, 2019, the foregoing document was electronically

filed with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is

being served this day on all counsel of record on the attached Service List in the manner specified,

either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other

authorized manner for those counsel or parties who are not authorized to receive electronically

Notices of Electronic Filing.

s/ Eric A. Rosen

Eric A. Rosen


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SERVICE LIST

CASE NO.

Avery Chapman

Chapman Law Group, PLC

12008 South Shore Blvd., Ste. 105

Wellington, FL 33414

[email protected]

[email protected]

Counsel for MAC 15, LLC and Partners

Gary Woodfield, Esquire

Haile, Shaw & Pfaffenberger, P.A.

660 U.S. Highway One

Third Floor

North Palm Beach, FL 33408

[email protected]

[email protected]

Counsel for Reichel Realty & Investments, Inc.






UNITED STATES DISTRICT COURT FOR THE SOUTHERN … · 2019-12-04 · UNITED STATES DISTRICT COURT...

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Transcript of UNITED STATES DISTRICT COURT FOR THE SOUTHERN … · 2019-12-04 · UNITED STATES DISTRICT COURT...