Letter to Judge Williams
June 6, 2023
The Honorable Gregory B. Williams
J. Caleb Boggs Federal Building
844 N. King Street
Unit 26, Room 6124
Wilmington, DE 19801-3555
Re: CBV, Inc. v. Chanbond, LLC, (1:21-cv-01456)
Dear Judge Williams:
I own a small position in UnifiedOnline, Inc. I am writing regarding your Order of June 1, 2023, denying Shareholders’ Motion to Intervene in the above referenced case. I would like this letter added to the docket and made a part of the public record.
As to Factor 1 in your order, timeliness and your comments regarding the resignation of the board members in the spring of 2015 and, “the record reflects that the Proposed Intervenors were aware of the risks to their rights-that William R. Carter Jr.' s ("Carter") purported corporate governance mismanagement of Unified and ChanBond could affect ChanBond's litigation campaign to monetize its patent portfolio and distribute its recovered funds-by at least 2015,” at the time the board members resigned, UnifiedOnline, Inc. was insolvent and William Ralph Carter, Jr. owned a block of preferred shares, which were later converted to 903,825,954 of the one billion authorized common shares on November 13, 2015. UnifiedOnline, Inc. did not own Chanbond at the time of the resignation of UnifiedOnline, Inc.’s board members, and there was no public interest in the stock. The contract for the purchase of Chanbond was signed late in 2015, on October 27, and was perceived as a positive development at the time.
Robert Howe, then CEO of UnifiedOnline, Inc., issued an additional 600,000,000 shares immediately following the purchase of Chanbond. It is those 600,000,000 shares that most of us own. I am sure you are aware that insider ownership of large blocks of common shares, in this case 903,825,954 owned by Carter and 44,700,000 acquired by Leane in the sale of Chanbond to UnifiedOnline, Inc., is also generally perceived by the market as a positive development. There was no reason for shareholders to believe our rights were at risk when most of us purchased those additional shares after October 2015.
You very specifically pointed out in your Order of June 1 what likely would have happened in the event shareholders had initiated litigation in 2015, since there was no indication of foul play other than the company board lacked a quorum (Robert Howe was still a director). Any action due to shareholders’ “speculation” that their rights “might become affected or impaired ...” (page 5, paragraph 2), would likely have been dismissed, as stated now in your June 1 Order. In fact, you repeat that, even now, shareholders’ concerns are “purely speculative in the last paragraph of page 6 on your order. At any rate, again, given the positive developments at the time, shareholders had no reason to believe their rights were at risk. In fact, it appeared as though the company was turning around.
Further to your comments regarding shareholders’ timeliness, “from the point at which the applicant knew, or should have known, of the risk to its rights,” shareholders first learned of Carter’s alleged intentional malfeasance when Ms. Leane filed an Emergency Request for Temporary Restraining Order, Dierdre Leane and IPNAV, LLC, Plaintiffs v. UnifiedOnline, Inc. and Chanbond, LLC, Defendants (Civil Action No. 3:20-cv-03097) in the U.S. District Court for the Northern District of Texas, Dallas Division, on October 9, 2020. It was at this time that we also learned that Carter had reinstated UnifiedOnline, Inc. in the State of Delaware, listing himself as CEO and Sole Director of UnifiedOnline, Inc. (attached). Again, Shareholders had no reason to believe prior to Dierdre’s Motion of October 9, 2020, that Carter may have had ill intentions, since Carter held 903,825,954 common shares, according to SEC filings. So it was at that time that shareholders began seeking counsel. Shareholders’ Motion to Intervene was filed just six days after Ms. Leane’s Motion, on March 21, 2022, and just seventeen months after shareholders became aware of Carter’s alleged misconduct, and a full fourteen months before your ruling.
It was also in Dierdre’s Request for Temporary Restraining Order in Texas that we learned Ms. Leane had rescinded her unilateral agreement between IPNav and Chanbond soon after the sale of Chanbond to UnifiedOnline, Inc., five years before she filed her Motion in Texas.
I believe the statute of limitations for Breach of Contract in Delaware is three years, and in Texas I believe the statute of limitations for Breach of Contract is four years. Yet, Ms. Leane, who filed her claim for breach of contract five years after rescinding her unilateral agreement with Chanbond, has managed to prevail in arbitration and has been admitted as an intervenor in CBV v. Chanbond without argument. Indeed, counsel for both CBV and Chanbond agreed that Ms. Leane was a necessary party. Shouldn’t Ms. Leane have known of Carter’s intentions sooner, given her close business relationship with Carter? If it was not an expectation that Leane should have known of Carter’s alleged misconduct, how can it be expected that shareholders, who did not have a close business relationship with Carter, should have known of Carter’s alleged misconduct before Ms. Leane made that alleged misconduct public in October 2020? How can the court justify denial of shareholders’ right to intervene derivatively on behalf of UnifiedOnline, Inc., when they filed a Motion to Intervene seventeen months after becoming aware of Carter’s alleged misconduct and just six days after Leane filed her Motion. and not apply the same standard to Leane?
The following further give rise to shareholder concerns as to whether UnifiedOnline, Inc. is adequately represented in this action:
1. How is CBV’s claim not time-barred, given that they filed their lawsuit seven years after selling the patents to Chanbond, and more than six years after becoming aware of Ms. Leane’s and Mr. Carter’s alleged misconduct in 2015? There is testimony via depositions in the docket for this action wherein the patent creators testified that they knew of Ms. Leane’s alleged misconduct as early as 2015, opposed the sale of Chanbond to UnifiedOnline, Inc., in 2015, and had reason to believe their rights might be impaired as early as 2015. Wouldn’t the court’s rule of timeliness apply here as well? Why did counsel for Chanbond not file a Motion for Dismissal based on “timeliness” in response to CBV’s complaint? Can shareholders “speculate” that UnifiedOnline, Inc. is not being adequately represented by counsel for Chanbond?
2. Why did Leane wait until October 2020, five years after rescinding her contract, to file a Breach of Contract suit against UnifiedOnline, Inc. and Chanbond in Texas? Why was Leane admitted as an intervenor in this litigation? Why did counsel for Chanbond not file a Motion for Dismissal due to “timeliness” when Leane filed her Motion to Intervene, but instead immediately agree that she was a necessary party without objection? Can shareholders “speculate” that UnifiedOnline, Inc. is not being adequately represented by counsel for Chanbond here?
3. The parties filed a proposed Stipulation and Order to have UnifiedOnline, Inc. bound by the judgment in this case. Why? It was signed, purportedly on behalf of UnifiedOnline, Inc., by a Texas law firm. The proposed intervenors objected to this Stipulation.
4. Why did counsel for Chanbond, who admitted UnifiedOnline, Inc. is a necessary party, and agreed UnifiedOnline, Inc. should be bound by the judgment in this case, vehemently protest shareholder intervention on behalf of UnifiedOnline, Inc., Chanbond’s Parent Company, while insisting that Ms. Leane had a legitimate claim, even though counsel for Chanbond knew or should have known that Leane rescinded her contract five years prior to initiating litigation for Breach of Contract, and that the statute of limitations for Breach of Contract had expired? If Chanbond’s counsel is adequately representing the interests of both Chanbond and Chanbond’s parent company, UnifiedOnline, Inc., and not the disparate interests of the person who has unlawfully seized control of UnifiedOnline, Inc., why would counsel for Chanbond permit Leane to intervene in this case?
5. How did Carter know that Leane backdated her unilateral agreement, dated July 29, 2015, between Chanbond and IPNAV to April 29, 2015, as alleged by Carter in his response to Leane’s Request for TRO in Dallas? When did Carter know Leane had backdated her agreement? Was Carter present at the time Leane signed her unilateral agreement?
6. Paragraph 33 of Leane’s complaint in the General Court of Justice, Superior Court Division, in Guilford County, North Carolina, Dr. Dierdre Leane, derivatively on behalf of UnifiedOnline, Inc., a Delaware Corporation, Plaintiff v. William Ralph “Billy” Carter, Jr. (Case No. 2021CVS5405), suggests that Carter forged Robert Howe’s signature to a contract in 2018 and backdated the contract to 2015, an “Advisory and Services Management Agreement (ASMA),” giving one of Carter’s private entities, UO! IP, LLP, 20% of the proceeds of any settlement or award Chanbond might receive in the litigation against the thirteen ISP providers. If this is in fact true, how did Leane discover this information? When did Leane know about this contract? Was Leane present when Carter purportedly forged this agreement? Why did Leane wait until October 2020 to come forward?
7. When did Leane first learn of Carter’s additional loans from Bentham for his personal use, giving Bentham an increased percentage of the proceeds Chanbond may receive, as alleged in Leane’s Emergency Request for TRO in Texas, and in her complaint filed in North Carolina? Paragraph 43 of her initial complaint in North Carolina states that Carter “unilaterally negotiated multiple amendments…” to the agreement with Bentham, “…including but not limited to amendments executed on or about 23 October 2018.” How did Leane learn of these amendments? Is Leane aware of any amendments made prior to 23 October 2018? Was Leane present at the time any of these amendments were signed? Why did Leane wait until October 2020 to come forward with this information?
8. Where did the preferred shares come from in the UnifiedOnline, Inc. reinstatement filing in April 2020, since Carter’s preferred shares were converted to common shares in November 2015, according to SEC filings, and there were no preferred shares in UnifiedOnline, Inc. when Rob Howe passed away and the stock was delisted. Who owns these preferred shares? How much are these preferred shares worth?
9. Who appointed Carter CEO and Sole Director of UnifiedOnline, Inc., as evidenced in the 2020 reinstatement of UnifiedOnline, Inc. with the State of Delaware?
10. Why did Carter, the apparently self-appointed CEO and Sole Director of UnifiedOnline, Inc., not reach out to the transfer agent of record, Olde Monmouth Stock Transfer Company in Atlantic Highlands, New Jersey, to get a list of shareholders after the settlement with the thirteen ISP providers was filed in July 2021 and prior to CBV’s lawsuit March 2022? Has Carter ever reached out to Olde Monmouth? If not, can shareholders “speculate” that UnifiedOnline, Inc.’s rights and shareholders’ rights may be “impaired?”
11. When did Ms. Leane dispose of her 44,700,000 shares of UnifiedOnline, Inc., as evidenced in the Joint Motion for Dismissal in North Carolina? How did Leane dispose of her 44,700,000 shares? Why did Leane dispose of her 44,700,000 shares since her award for 22% of the proceeds has not yet been confirmed? Was there an agreement reached in the North Carolina case between Carter and Ms. Leane that was not filed with the court and made a matter of public record? If so, what might the impact of that agreement be to Chanbond and UnifiedOnline, Inc.?
12. Why did CBV insist on having the entire docket sealed? Why did counsel for Chanbond agree to have the entire docket sealed? Why are the parties still permitted to file documents under seal without filing motions for the court’s permission to do so?
13. Why has CBV not insisted on subpoenas of the thirteen ISP providers, along with Cisco, Arris and RPX, (who all had an interest in the litigation against the 13 ISP providers, as evidenced by numerous public filings, including filings with the U.S. Supreme Court) during discovery to confirm the settlement amount, when they allege dishonesty and shady backroom dealings on the part of Leane and Carter throughout this entire proceeding? Indeed, it was Cohen, who previously insisted his client, Ms. Leane, could adequately represent UnifiedOnline, Inc. derivatively though she has sued UnifiedOnline, Inc. and is now asking the court to confirm her arbitration award, who reached out to counsel for the thirteen ISP providers for the sole purpose of preventing UnifiedOnline, Inc. shareholders access to filings and intervention.
14. Why would the court wait fourteen months to rule on shareholders’ Motion to Intervene then deny shareholders’ Motion due to timeliness because shareholders “should have known” of shady backroom deals and alleged misconduct of Carter and Leane as early as Spring of 2015, prior to the purchase of Chanbond by UnifiedOnline, Inc., and before shareholders had ever even heard of Dierdre Leane?
15. How is it possible that a person or entity (CBV and Leane, in this case) can sell a product, or a company (Chanbond), then five to seven years later, after that property has increased significantly in value, sue the new owner of that property for a portion of, or the lion’s share of, that increased value? How is it that the company that purchased that entity and its assets (UnifiedOnline, Inc. in this case, a publicly traded company with hundreds of shareholders in the U.S., Canada, Europe, and Asia) has no right to representation in that litigation?
16. Though shareholders began to “speculate” as early as October 2020, that their rights and the rights of Chanbond’s parent company, UnifiedOnline, Inc., might be “impaired,” how are we to believe at this point, given the above, that UnifiedOnline, Inc.’s rights are not impaired? It seems clear to me, based on the above, that UnifiedOnline, Inc. is not represented in CBV v. Chanbond.
17. If shareholders filed a separate action, as suggested in your Order, how would that not be sufficiently related to this action to merit intervention or consolidation with this action? Is it not the purpose of the Intervention rules to prevent duplicative litigation, and the potential for inconsistent outcomes?
There have been some very serious allegations of comingling, forgery, fraud, and intentional malfeasance made in Texas, in North Carolina and in Delaware, beginning in October 2020 that have led shareholders to believe that UnifiedOnline, Inc.’s rights may be impaired, and that counsel for Chanbond (who is also Carter’s personal lawyer?) is not looking out for UnifiedOnline, Inc.’s interests. If it is perfectly legal for an executive of a wholly owned subsidiary to appoint himself CEO and Sole Director of the parent company, allow the stock to become delisted, make private side deals, borrow funds for his personal use using company proceeds as collateral, while shareholders of the parent company have no rights, why would anyone ever purchase shares in a publicly traded company?
Why would anyone ever invest in a publicly traded company if millions of dollars in shareholder cost basis can just be wiped out at a judge’s discretion fourteen months after filing a Motion with the court, long after the completion of discovery, and while the parties are negotiating a settlement less than two weeks before trial, so as not to prejudice the parties involved, two of whom filed Motions for Breach of Contract years after the statute of limitations had expired, and one of whom has unlawfully seized a publicly traded company and the assets in dispute?
To say this ruling is a disappointment would be a gross understatement. What is the purpose in having laws if it is entirely at the court’s discretion to determine who is bound by those laws and who is not and who is protected under those laws and who is not? The inexplicably biased conduct of the judicial officers assigned to this matter has prompted several UnifiedOnline, Inc. shareholders to consider filing complaints pursuant to the Judicial Conduct and Disability Act, 28 U.S.C. §§ 351-364.
Regards,
Michelle Johnson
cc:
David C. Weiss
U.S. Attorney's Office
District of Delaware
1313 N Market Street
PO Box 2046
Wilmington, DE 19801
Andrea Leslie-Fite
County Attorney
Greensboro Office
P.O. Box 3427
Greensboro, NC 27402
John Creuzot
Dallas County District Attorney
133 N. Riverfront Blvd., Suite 19
Dallas, TX 75207
Rob Bonta
Attorney General
California Department of Justice
874 W. Town and Country Road
Orange, CA 92868
Sally Malloy
Chief Corporate Enforcement
Compliance and Policy Unit
950 Constitution Avenue, NW
Washington, D.C. 20530
IRS Criminal Investigation
1111 Constitution Avenue NW
Room 2501
Washington, D.C. 20224
