Big Apple Consulting Clients

[nodummy]

Big Apple Consulting vs Somatic Systems Inc (SMAS)

This old lawsuit which ended up being dismissed gives us some interesting information into how Big Apple Consulting may have gained control of some of these companies then enslaved them under their terms ensuring that Big Apple Consulting would be able to enrich themselves for many months to come at the expense of the common shareholders.

http://decisions.courts.state.ny.us/10jd/nassau/decisions/index/index_new/warshawsky/2008sept/023104-07.pdf


In early 2006, the plaintiffs Big Apple Consulting, USA, Inc. ("Big Apple ) and its wholly owned subsidiary, MJMM Investments, Inc. ("MJMM"), together agreed to, inter alia, finance, promote and otherwise arrange for a so-called "reverse merger " by which its client, the plaintiff Somatics Systems, Inc. ("Somatics ) - then a private company- would become a publicly held entity.

Big Apple is a Delaware Corporation and "full service financial public relations firm which touts itself on its website as the "number one public relations and consulting firm in the Country for small cap companies (ww.BigAppleconsulting.com). Co-plaintiff MJMM is a Pennsylvania limited liability company which specializes in, among other things, "assisting private small to mid-size companies who go public" through the use of a unique "going public method" - i.e. the so-called "reverse merger" or reverse takeover www.BigAppleconsulting.com/partners.htm ).

In February of 2006, Somatics, through its principal, Steven Aronstein, simultaneously executed the three, operative contract documents governing the subject merger transaction, which included:

(1) a Note agreement with MJMM, by which Somatics borrowed $200,000.00 from MJMM to finance purchase of the public "shell" (to be supplied by Big Apple's associate codefendant Belmont Partners, LLC ("Belmont") [Joseph Meuse];

(2) a "Pledge Agreement" with Big Apple pursuant to which Somatics agreed inter alia to surrender majority control of the publicly held vehicle in the event that it breached the terms of the Note

(3) and a "Consulting Agreement" under which Big Apple agreed to provide, among other things, funding, investor and public relations services, stock trading analysis, and other services over a 24 month period for the stated sum of $1.8 million - payable at Somatic's option in either stock or in cash.

The Consulting Agreement also required Somatics to provide notice to Big Apple in the event Somatics stock was issued to third parties. Significantly, the contemporaneously executed MJMM note, precluded Somatics from inter alia engaging in third-par financing arrangements/stock sales without MJMM's prior, written consent and further conferred upon MJMM the "exclusive right of first refusal to acquire any free trading equity in (the public) vehicle".

Lastly, Somatics agreed to place a resolution into escrow providing for the issuance of stock to MMJM necessar to ensure that MJMM would acquire majority control in the event Somatics breached the terms of the Note.




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The lawsuit was filed because Big Apple was upset that SMAS started issuing "free trading" and restricted securities at "steep market discounts" to Mazuma Corp. Big Apple claimed this was a breach of their contract and a violation of the prior written notice and "first refusal" contained in the merger documents.

According to Somatics, however, after the loan was made and it acquired the "public shell" from Belmont, Big Apple effectively abandoned it and affirmatively breached the merger documents by doing "virtually none of the things it promised (to do) in its consulting agreement". Somatics contends that the plaintiffs violated the terms of the agreements by failing to supply promised funding and support; by stonewalling its inquiries and requests for assistance; and by failing to provide vital promotion, as expressly required by the underlying agreements.