Courtroom Drama

I put a phone call in to Freestone’s office to ask if anyone from the company attended the hearing on Wednesday.  I spoke to an individual at the company that attended the hearing, and he gave me a play-by-play of what occurred.  I will keep his identity anonymous out of respect for his privacy.  I have no ill will towards their company, because they have been hurt by this scam just as all the ESS investors have been hurt.    

Usually federal court hearings are pretty bland, but I am told that this one had a little excitement.  To begin, David Feuerborn and Thomas Jennings did not show up.  Neil Evans (David Feuerborn’s criminal attorney) was present as well as the new third partner, Larry Shultz. 

It sounds as if this hearing was more exciting than an episode of Law & Order.  I would have loved to have been a fly on the wall at this hearing, because according to my source at the company Larry Shultz was thrown out of the courtroom by Judge O’Connor for speaking out of turn while in the gallery.  Now I am more inclined than ever to get a transcript of the proceedings so I can find out exactly what was said that angered the Judge.  Shultz wasn’t just warned.  He was thrown out!  Not the best first impression on a Judge that will be presiding over your case if you ask me.  I wonder if the Judge knows about the criminal charges that have been brought against Feuerborn and Jennings by the U.S. Attorney's Office.  It looks as if this guy Shultz is now completely intertwined in their chemical scam, and if he has been involved in raising money for them he might be involved in their criminal activities which include defrauding the federal government, and tax fraud.  I hope someone investigates and follows the recent money transactions.    

   

(Note: The Judge allowed Shultz to come back in to testify as a witness in the hearing.  While on the stand Shultz apologized for his outburst.  It will be interesting to see what he said on the stand, and if it conflicts with any information that is known about the chemical scam.)

After the discovery of this news I am going to order a complete transcript of the proceedings.  I will update everyone when I get it. 

-ESS Investor

The Eyes of Texas are Upon You

It looks as if we have some life in the Civil Case.  Judge Reed O’connor has ordered both parties (Plaintiff and Defendants) to appear for a hearing on November 17, 2010 to hear verbal arguments on the jurisdiction challenge submitted by Neil Evans, the attorney for David Feuerborn, Thomas Jennings, Larry Shultz, and Environmental Services and Support, Inc. (“Defendants”). 

On November 17^th Freestone will argue that the Defendants had the minimal contact needed in the state of Texas to keep the jurisdiction in the Northern District Court in Texas.  According to my research, minimal contact is usually all one needs to prove in order to keep the original jurisdiction in which the complaint was originally filed.  According to Freestone’s response to the Motion to Dismiss, the Defendants had minimal contact with Texas in that they originally solicited a Freestone consultant and resident of Texas while he was in Texas, made multiple phone calls to Freestone’s Texas office, sent multiple emails to Freestone’s Texas office, visited Freestone’s office in Texas on multiple occasions where they gave misrepresentations during demonstrations of the solvent, a demonstration trip in Houston, and the Petro-Sog case indicating that at least one of the Defendants (David Feuerborn) has previously directed this scam at the state of Texas.

Neil Evans, the attorney for Feuerborn in the Criminal Case, argued that he didn’t have enough time to prepare a proper defense for his client, and requested a continuance multiple times in the Criminal Case.  Now, how are we supposed to believe that he has time to travel to Texas to represent all of the Defendants in the Civil Case?  What are the odds that he will come up with some obtuse reason to postpone the jurisdiction hearing in the Civil Case?  But then again the Judge must to approve his reason before he will allow the hearing to be postponed.  I have a feeling that Judge O’connor will not have a lot of patience for these guys if they attempt delay tactics when he hears about their criminal indictment. 

So now the Defendants’ attorney is going to fly back and forth between California and Texas on ESS investors’ funds.  This is the biggest travesty of them all.  On a phone conference with ESS investors David Feuerborn claimed he was looking for a joint venture partner, and that construction was underway on another machine.  Instead, it looks like any new money that might come into this venture will be spent on defending David Feuerborn and Thomas Jennings.    

Personally, I would like both cases to move forward as quickly as possible.  My goal is to collect any and all evidence in the Criminal Case and Civil Case that proves that Feuerborn and Jennings used fraud in their chemical scam in the hopes that an ESS class action can be put together.  If there is evidence that criminal actions have occurred then the authorities might even get involved and stop them once and for all!  No one else needs to get hurt by these guys and their scam. 

-          ESS Investor    

Back to the Basics: The Civil Case

Let's take a look at the Civil Case currently pending in the Northern District of Texas: 

On July 9, 2010 Freestone (the "Plaintiff") filed a lawsuit in the United States District Court for the Northern District of Texas, Dallas Division, Civil Action Number 3:10-cv-01349-O against Lawrence Shultz, Environmental Services and Support, Inc. (“ESSI”), David Feuerborn and Thomas Jennings (the "Defendants").  The Plaintiff is alleging that the Defendants committed "fraud by nondisclosure, the common law tort of conversion by pretext and swindling, deceptive trade practices, common law fraud and fraud by misrepresentation/statutory fraud."

On August 3, 2010 documents were filed with the Court to show that all of the Defendants had been served.  The documents indicate that the Defendants (and members of their families or live in companions) tried to avoid service by either denying their identities, or claiming a false identity.  (The service documents can be read on PACER under Pages 81-88.)

On August 19, 2010 a Stipulation was filed with the Court by Neil C. Evans, esq. who is representing all Defendants in the Civil Case.  (Note: He is also David Feuerborn's attorney in the Criminal Case.  Evans has also filed documents on behalf of Tom Jennings in the Criminal Case.)  The Stipulation states, "all Defendants will file their responsive pleadings to the Complaint in this action by Thursday, August 19, 2010" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 1).  Further it states that, "all Defendants waive any objection to process service" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 2).  (Note:  A response to the Complaint has never been filed by the Defendants.)

On August 19, 2010 the Defendants filed a "Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction" with the Court.  The Defendant's main argument is that "the Defendants lack the requisite contacts with the state of Texas" (Civil Case, Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction. Page #91, Paragraph 1).

On September 9, 2010 the Plaintiff filed a Response to the Defendant's Motion to Dismiss.  This Response states the Plaintiff's belief that jurisdiction is proper in the Northern District of Texas, because (i) Lawrence Shultz was working as a finder and consultant for Feuerborn and Jennings and made multiple unsolicited calls to a consultant working for the Plaintiff in order to pitch their solvent and structure a deal, (ii) Feuerborn and Shultz called and sent multiple emails to the Plaintiff before and after the Stock Purchase Agreement was signed, (iii) Jennings made multiple calls to the Plaintiff, (iv) Feuerborn and Shultz made multiple visits to both Houston and Dallas where the fraud occurred and the aforesaid misrepresentations were made to the Plaintiff and others, and (v) Feuerborn made business cards with the Plaintiff's address.  (Civil Case, Plaintiff's Response and Brief in Opposition to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction (Docket #10). Pages #106-115)  The Response goes into further detail, but those are the main points I noticed.

The parties are now awaiting a ruling from the Judge hearing the Civil Case.


-ESS Investor