Adzone Research, Inc. (fka ADZR)

[harr449]

RE: Charles A. Cardona, III (Debtor/Chap. 7)/Adzone Research

Case 8-09-08286-dte Doc 1 Filed 07/14/09 Entered 07/14/09 14:48:23

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Excerpts from US Bankruptcy Court, Eastern District of NY filing

SUMMONS IN AN ADVERSARY PROCEEDING

YOU ARE SUMMONED and required to file a motion or answer to the complaint which is attached to this summons with the clerk of the bankruptcy court within 30 days after the date of issuance of this summons, except that the United States and its offices and agencies shall file a motion or answer to the complaint within 35 days.

NATURE OF PROCEEDING
1. This adversary proceeding arises from loans Defendant fraudulently
induced Plaintiffs into making to a public company known as Adzone Research, Inc. (“Adzone”) in the form of convertible promissory notes which Adzone subsequently defaulted on. At all relevant times, Defendant was the CEO and Chairman of Adzone and used his position not only to induce Plaintiffs’ loans, but to issue public statements
(press releases) and to make private statements to Plaintiffs that were knowingly false and designed to induce Plaintiffs to enter into the aforementioned transactions.
2. Makofske’s Note was in the principal amount of $107,500, and
Whitehead’s Note was in the principal amount of $105,000. The Notes plus 10% interest were to be re-paid in their entirety within one year of their making.
3. The loans made by Plaintiffs and the Promissory Notes memorializing these loans were induced by numerous representations Defendant made to Plaintiffs and to others, including the general investing public, falsely touting Adzone’s on-going success, including Defendant’s false statements regarding contracts Adzone had
purportedly signed with third parties that guaranteed Adzone tens of millions of dollars in annual revenues.
4. At the time Defendant made these representations, including during the time he issued numerous press releases relating to the foregoing, Defendant, as Adzone’s Chairman and CEO, knew these statements were false and material, and as they related to Plaintiffs, Defendant made these statements in order to induce Plaintiffs to loan Adzone
money and/or to refrain from taking action(s) on their respective Notes upon Adzone’s default. Plaintiffs did rely upon Defendant’s material misrepresentations to their detriment insofar as these statements induced Plaintiffs to loan Adzone money and after Adzone’s default, caused Plaintiffs to refrain from taking certain actions to enforce their
rights under their respective Notes.
5. This adversary proceeding is brought pursuant to Rule 7001 of the Federal Rules of Bankruptcy Procedure, and §523(a)(2) of 11 U.S.C. §§101 et. Seq. (the “Bankruptcy Code”) and other applicable laws. Plaintiffs object to Defendant obtaining a discharge of the debt he owes to each Plaintiff by virtue of his fraudulent conduct, and they further seek a declaratory judgment declaring the debt Defendant owes to each
Plaintiff non-dischargeable under §523(a)(2) of the Bankruptcy Code as the debts in question arise out of Defendant’s fraudulent conduct. Plaintiffs further seek to recover the damages each Plaintiff was caused to sustain by virtue of Defendant’s fraudulent conduct and intentional tortious interference with Plaintiffs’ contractual rights, as is more
fully set forth below.