CoreStream Energy, Inc. (fka ZLUS)

[Muckrakin]

To date there are no , as in none ,, illegal misdoings by either ZLUS or the ex CEO

So when did fraud become legal? See the cases with Bodnar and Glazer below. He's been convicted of fraud in a default judgement in case X (the Glazer one) the two cases in New York regarding breach of contract have also received default judgements. You can find the results by finding the court pages and entering the case numbers. I know from a news article that Bodnar has won his first lawsuit against Ault and has a few more cases against him.

I. Bodnar Capital Management, LLC v. Ault Glazer Capital Partners, LLC, et al.

United States District Court, District of Connecticut Case No: 3:08CV199 (JBA)


On February 6, 2008, Bodnar Capital Management, LLC (“Plaintiff”) filed a Complaint against Ault Glazer Capital Partners, LLC, Zealous Asset Management, LLC, and Milton Ault, III (“Defendants”) in the United States District Court, District of Connecticut under the case number 3:08CV199 (JBA). On June 27, 2008, all parties entered into a confidential settlement agreement. On August 7, 2008, the Court granted Plaintiff’s motion to enforce the settlement agreement and entered judgment in Plaintiff's favor in the amount of $350,000, plus interest to run from June 27, 2008, against Ault Glazer Capital Partners LLC, Zealous Asset Management, LLC and Milton "Todd" Ault, III, jointly and severally. On September 23, 2008 the Court granted the motion for amendment of judgment include reasonable attorney fees of $6,160.00. Defendants are pursuing settlement discussions with Plaintiff. Plaintiffs are seeking to enforce the Judgment in California. On April 28, 2009, Defendant Milton Ault, III was deposed in a debtor’s examination at the United States District Court, Central District in California.


II. Bodnar Capital Management, LLC v. Milton Ault, III, et al.
United States District Court, District of Connecticut Case No.: 3:08CV1601 (AWT)


On October 20, 2008, Bodnar Capital Management, LLC (“Plaintiff”) filed a Complaint against Milton Ault, III, William B. Horne, Lynne Silverstein, Melanie Glazer, Sothi Thillairajah, Scott Livingston, Zealous Holdings, Inc., Ault Glazer Bodnar Investment Management, LLC, Ault Glazer & Co., LLC, and Adult Entertainment Capital, Inc. (“Defendants”) for fraud, breach of fiduciary duty, and breach of contract. Plaintiff alleges that Defendants violated the Company’s Private Placement Memorandum, the Subscription Agreement, and other documents related to investing in the Company, and consequently, Plaintiff is seeking $1,523,103.60 in damages. Plaintiff filed this case under the United States District Court, District of Connecticut, under case number 3:08CV1601 (AWT). On February 23, 2009, Plaintiff filed a Motion for a Joint and Several Judgment against Milton Ault, III. Defendants are pursuing settlement discussions with Plaintiff.


III. Motivated Minds, LLC v. Ault Glazer Capital Partners, LLC, et al.
Superior Court of Arizona Case No.: CV2009-003478.


Motivated Minds, LLC (“Plaintiff”) filed a Complaint against Ault Glazer Capital Partners, LLC and Ault Glazer Asset Management, LLC (collectively referred to as “Defendants”). On February 4, 2009, Plaintiff filed a Complaint against Defendants in the Superior Court of Arizona for Breach of Contract. The case number is CV2009-003478. Plaintiff alleges that Defendants failed to repay Plaintiff in accordance with an executed Promissory Note, and Defendants failed to pay a Guarantee as executed between Plaintiff and Defendants. Plaintiff is alleging damages in an amount of $500,000.00, pre and


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post-judgment interest and attorneys’ fees and costs. Defendants are preparing responsive pleadings bringing affirmative defenses. In April 2009, Defendants also began settlement discussions with Plaintiffs.


IV. Investor Relations Group, Inc. v. Zealous Trading Group, Inc.
New York State Supreme Court Case No.: 602014108.


The Investor Relations Group, Inc. (“Plaintiff”) filed a Complaint against Zealous Trading Group, Inc. (“Defendant”) on July 2, 2008 in the Supreme Court of the State of New York, under case number 602014108. In their Complaint, Plaintiff alleges breach of contract, quantum meruit, and account stated. Plaintiff alleges that Defendants failed to pay Plaintiff for services performed in accordance with the investor relations services contract between Plaintiff and Defendants. Plaintiff is seeking compensatory damages in an amount of $41,457.14 and the accrued interest. On November 14, 2008, the New York Supreme Court entered default against Defendant in an amount of $41,457.14 for failure to answer the Complaint. Additionally, Defendant is pursuing settlement possibilities with Plaintiff.


V. California State Teachers’ Retirement System v. Zealous Trading Group, Inc., et al.
Los Angeles County Superior Court Case No.: SC100669


California State Teachers’ Retirement System (“Plaintiff”) filed a Verified Complaint against Zealous Trading Group, Inc., Initiative Legal Group, LLP, Younesi & Yoss, LLC and REM (“Defendants”) for Unlawful Detainer. Plaintiff filed their Complaint on November 20, 2008 in the Superior Court of California in Los Angeles County under case number SC100669. Plaintiff alleges that Defendant permitted an improper sublease and although the improper subtenant has vacated, Plaintiff wants to complete the unlawful detainer. Plaintiff is seeking damages in an amount of $1,166.89 per day from November 18, 2008. Defendants filed an answer asserting affirmative defenses on December 8, 2009. Plaintiff issued discovery requests to Defendants on December 23, 2008. Defendants are in the process of propounding and responding to discovery. Defendants are also engaged in settlement discussions with Plaintiff. Subsequent to further negotiations, the Plaintiff released the Company’s security deposit of $262,500 and accrued interest on the deposit of $5,899 from escrow to the Company in January 2009. The Company has not received any correspondence regarding the matter since that time.


VI. Sector 33 Creative v. Adult Entertainment Capital, Inc., et al.
Burbank Small Claims Court Case No.: BUR 08S00608


Sector 33 Creative (“Plaintiff”) filed a small claims case against Adult Entertainment Capital, Inc. dba Rock Candy Entertainment under case number BUR 08S00608 in California North Central District Court on October 6, 2008. Plaintiff alleges Defendant failed to pay Plaintiff for services rendered in the development of websites, and Plaintiff is seeking $5,000.00 in compensatory damages. Judgment was entered against Defendants on December 5, 2008. Defendants are pursuing settlement negotiations and drafting a Motion to Set Aside Default.


VII. Professional Offshore Opportunities Fund Limited v. Zealous Trading Group, Inc.

New York State Supreme Court Case No.: 650260


Professional Offshore Opportunities Fund Limited (“Plaintiff”) filed a Complaint against Zealous Trading Group, Inc. (“Defendant”) in the Supreme Court of the State of New York on July 23, 2008. The case number for this litigation is 650260. Plaintiff’s causes of action against Defendant include negligent misrepresentation, breach of the duty of good faith and fair dealing, and breach of the debenture. Plaintiff alleges that Defendants misled Plaintiff as to the nature of their convertible debentures, Plaintiff


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incorrectly told Plaintiff that the shares were eligible for Rule 144 treatment, and Defendants failed to abide by the default provision of the debenture. Plaintiff is seeking $53,171.60 plus pre-judgment interests for Defendants’ trading breach and $206,972.22 plus default interests for Defendants’ breach of the executed debenture. On January 30, 2009, the New York Court entered Judgment against Defendant in favor of Plaintiff. On February 3, 2009, Plaintiff filed a Restraining Notice against Plaintiff to prevent the sale of certain property. On February 23, 2009, Plaintiff filed with the Court a Notice of Entry of Default, dated January 16, 2009, against Defendants for the principal amount of $200,000.00, plus interest at the rate of five (5) percent from October 17, 2007 to June 24, 2008, plus interest at a rate of 18 percent from June 24, 2008 to the date of entry of judgment (January 16, 2009), plus the amount of $53,171.60, with interest at the statutory rate from July 23, 2008 to the date of the entry of judgment (January 16, 2009), costs and disbursements.

VIII. In Re: Zealous Holdings, Inc.
Central District of California Bankruptcy Court, Case No. 09-11425-ES

On February 20, 2009, Zealous Holdings (“Holdings”), a wholly owned subsidiary of Zealous, Inc., filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Central District of California Santa Ana Division (the "Bankruptcy Court"), Case No. 09-11425 ES. On May 1, 2009, the Bankruptcy Court, on its own initiative, filed a motion to convert the bankruptcy to a Chapter 7 bankruptcy. Holdings was notified of this change on May 8, 2009 via PACER.

Holdings believes that it is now in a position to start settling and paying its debts. Therefore Holdings would like to dismiss the bankruptcy action. Pursuant to this desire, Holdings filed an Emergency Hearing to Dismiss the Bankruptcy on May 11, 2009. That request was denied. Therefore, on Tuesday May 12, 2009, Holdings filed a motion requesting that the Bankruptcy Court schedule a Hearing on the Motion to Dismiss the Voluntary Bankruptcy Petition for June 11, 2009.

IX. Kent G. Wyatt, Sr. v. Adult Entertainment Capital, Inc., et al.
Eighth Judicial District of Nevada Case No.: A574309

Kent G. Wyatt, Sr. (“Plaintiff”) filed a Complaint against Adult Entertainment Capital, Inc. and Zealous Trading Group, Inc. (“Defendants”) in the Eighth Judicial District of Nevada under case number A574309 on October 24, 2008. Plaintiff’s complaint alleges breach of promissory note, breach of consulting agreement, unpaid loans and NSF checks, declaratory relief, breach of implied covenant of good faith and fair dealing, intentional misrepresentation, negligent misrepresentation, accounting, and conversion. Plaintiff then took a default judgment against both Defendants. Plaintiff alleges that Defendants failed to repay Plaintiff in accordance with the promissory notes, failed to pay Plaintiff in accordance with the consulting agreement, failed to pay back loans, and failed to abide by their fiduciary duty to pay Plaintiff the money owed. On December 26, 2008 the Court entered Default Judgment against all Defendants for the principal plus interests totalling $270,036.65, plus costs of $222.50 for a total of $270,259.15. Defendants engaged in a settlement conference with Plaintiff on March 30, 2009 and are continuing to pursue settlement discussions.

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X. Louis Glazer, et al. v. Milton Ault III, et al.>
Los Angeles County Superior Court Case No.: BC 407274

On February 6, 2009, Louis Glazer and Melanie Glazer, Plaintiffs, filed a Complaint in Los Angeles County Superior Court against Milton Charles Ault, III, Kristine Larsen Ault, Adult Glazer & Co., Zealous Holdings, Inc., Zealous, Inc., Zealous Asset Management LLC, and Zealous Capital Markets LLC. The case number is Los Angeles County Superior Court case number BC 407274. Plaintiffs’ complaint alleges negligent misrepresentation, breach of fiduciary duty, breach of 6 contracts, breach of implied covenant of good faith and fair dealing of 6 contracts, violations of Corp Code §§ 25400, 25401, 25500, 25501 25504, fraud, unjust enrichment on 2 contracts, equitable indemnity, constructive trust, and unfair business practices. Plaintiffs allege that Defendants, individually and/or separately, fraudulently induced Plaintiffs to invest in the Defendant companies, failed to repay in accordance with promissory notes, failed to pay management fees and violated Corporations Codes in certain mergers. Plaintiffs are seeking damages according to proof at trial and equitable relief that the Court deems just and proper. Defendants are engaged in settlement discussion with Plaintiffs, preparing responsive pleadings, and completing discovery responses. Defendants have responded to Plaintiffs’ Requests for Admissions and are in the process of completing additional discovery.