United Protection Security Group Inc V.UZZ

In the interest of all shareholders, including the bloggers.

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Case 1:13-cv-06927-HB Document 9

Filed 12/02/13 Page 1 of 19

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

FAUNUS GROUP INTERNATIONAL, INC.,

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Civil Action No. 13-cv-6927 Hon. Harold Baer, Jr.

ANSWER, AFFIRMA TIVE DEFENSES, AND

COUNTERCLAIMS

v.

FREDY V. RAMSOONDAR,

Plaintiff,

Defendant.

Defendant Fredy V. Ramsoondar (“Ramsoondar”), by his undersigned counsel, as and for his Answer and Affirmative Defenses to the Complaint of Plaintiff Faunus Group International, Inc. (“FGI”), his counterclaims against FGI, and the counterclaims of putative Counter-Plaintiff United Protection Services, Inc. (“United Protection”) against FGI,1 respectfully alleges, upon information and belief, as follows:

PRELIMINARY STATEMENT ON BEHALF OF RAMSOONDAR AND UNITED PROTECTION

United Protection agreed to sell its accounts receivable to FGI pursuant to a Sale of Accounts and Security Agreement dated October 5, 2011 (attached to this Answer as Exhibit A, as amended, the “Accounts Agreement”). Ramsoondar guarantied United Protection’s obligations under the Accounts Agreement pursuant to a Guaranty of Validity dated October 13, 2011 (attached to this Answer as Exhibit B, the “Guaranty”). United Protection and FGI also entered into a Side Letter (the “Side Letter”), which obligated FGI to purchase and make

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United Protection is currently in bankruptcy proceedings in Canada under the Companies’ Creditors Arrangement Act (“CCAA”). Ramsoondar is seeking the consent of the MNP, Ltd., the trustee overseeing the proceedings, to assert counterclaims on behalf of United Protection pursuant to section 38 of Canada’s Bankruptcy and Insolvency Act.

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advances on accounts receivable that were likely to remain unpaid for 120 days or longer (the “120 Day Accounts”).

In commencing this lawsuit against Ramsoondar, FGI got it wrong. Contrary to what FGI alleges in its Complaint, Ramsoondar does not owe FGI anything. Indeed, it is the other way around: FGI owes Ramsoondar and United Protection at least $10 million.2 This is because FGI willfully, at best, and at worst, with gross negligence, engaged in improper conduct that severely restricted and crippled United Protection’s cash flow, caused the bankruptcy filing of United Protection in Canada pursuant to the CCAA, and ultimately destroyed all of the value in United Protection as an operating entity. As described in more detail below, FGI did this by: (a) willfully failing to timely credit United Protection for payments received, thereby increasing the interest and the fees earned by FGI to excessive and impermissible levels; and (b) willfully failing to advance funds to United Protection for the 120 Day Accounts, despite agreeing to do so.

The parties knew and agreed that the immediacy of the financing from FGI was of critical importance to United Protection and therefore, a material part of the transaction. Indeed, the Guaranty itself states that Ramsoondar is entering to the Guaranty “in order to induce” FGI to enter into the Accounts Agreement (i.e., the Guaranty’s consideration), which FGI admits in paragraph 10 of its Complaint, by reference to its accounts receivables financing transactions generally, was for United Protection to receive “immediate liquidity.” (Emphasis added.)

The persistent, improper, and unjustifiable delay by FGI, as well as the racking up of excess fees and charges, not only gives rise to the counterclaims against FGI as discussed below, it also eviscerates any recovery FGI purports to have under the Guaranty in this action originally

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counterclaims, to the extent the damages for those counterclaims overlap.

Ramsoondar and United Protection are not seeking double recovery on account of their respective 2

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commenced by FGI against Ramsoondar, because FGI’s failures constitute a complete and utter failure of consideration for the Guaranty. Under New York law, the law that governs here, when a Guaranty fails for consideration, it is unenforceable, and provides a right of action against the party responsible for that failure. Here, that party is FGI, and FGI should be found liable and ordered to compensate Ramsoondar and United Protection for their losses, which, again, exceed $10 million.

PRELIMINARY STATEMENT OF FGI3
1. The documents referred to in this paragraph speak for themselves. To the extent

the allegations contained in this paragraph call for a legal conclusion, no response is required.
2. The documents referred to in this paragraph speak for themselves. To the extent

the allegations contained in this paragraph call for a legal conclusion, no response is required.

3. Ramsoondar admits that after he executed the Guaranty, FGI purchased a number of United Protection’s accounts receivable. Ramsoondar further states that he does not have adequate knowledge or information to admit or deny the remaining allegations set out in this paragraph.

4. The allegations contained in this paragraph call for a legal conclusion, for which no response is required.

5. Ramsoondar admits that he received formal notice of default from FGI and a demand for payment from FGI, but does not have sufficient knowledge or information to admit or deny the remaining allegations contained in this paragraph. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

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the Complaint (¶¶ 1-43).

The numbered paragraphs comprising Ramsoondar’s “Answer” correspond to the numbered paragraphs in 3

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PARTIES, JURISDICTION AND VENUE

6. Ramsoondar does not have sufficient knowledge or information to admit or deny the allegations contained in this paragraph.

7. Admitted.

8. The allegations contained in this paragraph call for a legal conclusion, for which

no response is required.

9. The allegations contained in this paragraph call for a legal conclusion, for which no response is required. Ramsoondar further states that any agreements referred to in this paragraph speak for themselves.

BACKGROUND

A. The Parties

10. Ramsoondar does not have sufficient knowledge or information to admit or deny the allegations contained in this paragraph.

11. Admitted.

    The Guaranty between FGI and Ramsoondar

12. The document referred to in this paragraph speaks for itself. To the extent the

allegations contained in this paragraph call for a legal conclusion, no response is required.

13. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

14. The document referred to in this paragraph speaks for itself.

15. The document referred to in this paragraph speaks for itself. To the extent the

allegations contained in this paragraph call for a legal conclusion, no response is required.

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16. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

17. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

18. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

19. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

20. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

21. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

22. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

23. The document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

C. Ramsoondar Purportedly Breached the Guaranty

24. Denied. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

25. Ramsoondar does not have sufficient knowledge or information to admit or deny the allegations set out this paragraph, except denies that FGI paid United Protection for the account of an account debtor that was a debtor of an entity known as United Protection Services Group.

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26. Ramsoondar does not have adequate knowledge or information to admit or deny the allegations set out in this paragraph.

27. Denied.

28. Denied.

29. Denied.

30. Denied.

31. Denied.

32. Denied.

33. Denied.

34. Ramsoondar admits that FGI sent him a formal notice of default. Ramsoondar

further states that the document referred to in this paragraph speaks for itself.

35. The document referred to in this paragraph speaks for itself.

36. The document referred to in this paragraph speaks for itself. To the extent the

allegations contained in this paragraph call for a legal conclusion, no response is required.

37. Denied.

    COUNT I
    FGI V. FREDY RAMSOONDAR BREACH OF CONTRACT (GUARANTY)

38. Ramsoondar incorporates by reference the foregoing paragraphs of its Answer as

though the same were set forth at length in this paragraph.

39. Ramsoondar admits that he signed the Guaranty. Ramsoondar further states that

the document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

40. Denied.

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41. The allegations contained in this paragraph call for a legal conclusion, for which no response is required. Otherwise, denied.

42. Ramsoondar admits that he personally has not made any payments to FGI, pursuant to the Guaranty or otherwise. Ramsoondar further states the document referred to in this paragraph speaks for itself. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

43. Ramsoondar does not have sufficient knowledge or information to admit or deny the allegations set out in this paragraph. To the extent the allegations contained in this paragraph call for a legal conclusion, no response is required.

AFFIRMATIVE DEFENSES

44. FGI’s claims are barred in whole or in part for failure to state claims upon which relief can be granted.

45. FGI’s claims are barred in whole or in part because it has suffered no damages and no harm as a result of the actions of United Protection or Ramsoondar.

46. FGI’s claims are barred in whole or in part because any damages it claims to have suffered were a result of its own willful misconduct and gross negligence.

47. FGI’s claims are barred in whole or in part because the alleged injuries were caused by the actions of parties over whom Ramsoondar has no control, and for whom Ramsoondar is not responsible.

48. FGI’s claims are barred in whole or in part because Ramsoondar’s actions and conduct were lawful and justified.

49. FGI’s claims are barred in whole or in part because FGI breached its obligations under the Accounts Agreement and the Side Letter.

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50. FGI’s claims are barred in whole or in part because any damages it claims to have incurred are offset by the damages incurred by Ramsoondar and United Protection as a result of FGI’s willful misconduct and gross negligence as set forth in this Answer.

51. FGI’s claims are barred in whole or in part based on the doctrine of estoppel.

52. FGI’s claims are barred in whole or in part based on the doctrine of unclean

hands.

53. FGI’s claims are barred in whole or in part based on the doctrine of laches.

54. FGI’s claims are barred in whole or in part due to FGI’s consent.

55. FGI’s claims are barred in whole or in part due to its failure to mitigate any

damages.
56. FGI cannot recover damages from Ramsoondar because Ramsoondar did not

materially breach any of his purported obligations to FGI, whether contractual or otherwise.
57. FGI cannot recover damages from Ramsoondar for any purported liabilities of

United Protection.

58. FGI’s claims against Ramsoondar are barred in whole or in part to the extent that FGI seeks to recover more from Ramsoondar than it is entitled to recover from United Protection under the Accounts Agreement.

59. FGI’s claims against Ramsoondar are barred in whole or in part to the extent that FGI already has been or will be made whole through the collection of accounts receivable and the sale of United Protection’s assets as part of the bankruptcy proceedings for United Protection under the CCAA, and the sale of any other collateral that FGI purports to hold as security under the Accounts Agreement and is not otherwise subject to United Protection’s CCAA proceeding.

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60. FGI’s claims against Ramsoondar are barred in whole or in part to the extent the damages alleged by FGI were caused, if at all, by non-parties, and not by Ramsoondar.

61. FGI’s claims fail in whole or in part to the extent they are predicated on the filing of United Protection for bankruptcy under the CCAA, which is an impermissible event of default under the law applicable here.

62. FGI’s claims fail in whole or in part for failure of consideration under the Guaranty.

63. FGI’s claims fail in whole or in part because the Accounts Agreement, by its terms, never became effective.

64. Ramsoondar reserves the right to assert additional affirmative defenses based upon further investigation and discovery.

COUNTERCLAIMS

65. Ramsoondar and United Protection, as and for their counterclaims against FGI, respectfully allege, upon information and belief, as follows:

P ARTIES

66. Ramsoondar is an individual who resides at 5044 McLuhan Rd, Edmonton, Alberta, Canada, TR 0J4.

67. United Protection is a Canadian corporation with its principal offices at 5909-83 Street, Edmonton, Alberta, Canada T6E 4YE.

68. Upon information and belief, FGI is a Delaware corporation with its principal place of business located at 80 Broad Street, 22nd Floor, New York, New York 10004.

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JURISDICTION AND VENUE

69. Pursuant to 28 U.S.C. § 1367, the Court has supplemental jurisdiction over all counterclaims asserted by Ramsoondar and United Protection because the counterclaims arise out of the same transaction and occurrences underlying the claims alleged by FGI in its Complaint. The counterclaims arise under the Guaranty executed by Ramsoondar – the purported breach of which is the basis of FGI’s claims – and agreements related to the Guaranty, including the Accounts Agreement, as well as the Side Letter. United Protection is a proper putative Counter-Plaintiff in this action pursuant to Fed. R. Civ. P. 20.

STATEMENT OF FACTS APPLICABLE TO COUNTERCLAIMS

70. United Protection is wholly owned by the publicly-traded company United Protection Security Group, Inc. (“UPSG”).4 United Protection operated as a provider of private security services, and was formed in 1989; Ramsoondar joined United Protection in 2000 and eventually became its CEO in 2011.

71. Subject to the CCAA and the manner in which equity holders are treated in the context of a proceeding under the CCAA, Ramsoondar owns 25% of the equity in UPSG.

72. In 2011, United Protection was growing rapidly. It grew from 320 employees in June 2011 to 900 in December 2011, and to 1,200 by December 2012. Due to the 2009 recession, United Protection found that the Royal Bank of Canada, which had until then been United Protection’s main funding source, lacked enough capital to provide the immediate funding needed for the company to continue growing.

73. The need for immediate liquidity motivated United Protection to seek financing from FGI. To induce FGI to provide that much needed financing to United Protection (i.e., to

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UPSG was publicly traded (symbol: UZZ) on the TSX Venture Exchange, which is a Canadian market 10

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enter into the Accounts Agreement), Ramsoondar signed the Guaranty.
74. Under the Accounts Agreement, FGI was obligated to provide United Protection

with immediate funding by advancing money to United Protection for accounts receivable FGI agreed to purchase from United Protection. To facilitate these purchases, United Protection regularly sent FGI a list of accounts receivable available for purchase, and FGI regularly selected accounts receivable to purchase from that list. Once FGI selected the accounts for purchase, FGI advanced to United Protection up to eighty-five (85) percent of the purchase price of each of the accounts FGI selected, less any fees United Protection owed to FGI under the Accounts Agreement.

75. On those advanced funds, FGI earned interest at a rate of either: (a) seven (7) percent per annum; or (b) 2.25 percent per annum above the prime rate for U.S. banks.5 Within four (4) business days after FGI received payment from United Protection’s customers on account of advanced invoices, pursuant to the Accounts Agreement, FGI was obligated to: (x) credit United Protection for the customer’s payment on FGI’s electronic processing system; and (y) stop earning and charging interest.

76. Pursuant to the Accounts Agreement, FGI also charged and collected a monthly “collateral management fee” on the average monthly balance of accounts purchased by FGI for as long as they remained unpaid; this fee was initially set at 0.35% of that average monthly balance. To the extent that crediting United Protection for customer payments on accounts lowered the average monthly balance, it also reduced the amount of the collateral management fee collected by FGI.

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The Accounts Agreement provides that the “prime rate for U.S. banks” is the prime rate published in the “Money Rates” section of The Wall Street Journal or, should The Wall Street Journal cease to publish a prime rate, the average of the prime rates announced by the three largest U.S. money center commercial banks as determined by FGI.

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77. However, after the Accounts Agreement became effective, FGI stripped United Protection of what United Protection bargained for (i.e., immediate financing), and instead failed to timely credit United Protection for payments received on purchased accounts, thereby causing United Protection to accrue excessive interest and fees on advances.

78. This was all due to repeated unexpected and then-undisclosed changes at FGI in terms of how FGI accounted for and credited United Protection pursuant to the Accounts Agreement: shortly after the Accounts Agreement was executed, FGI unilaterally began to delay crediting United Protection by at least two weeks, with delays as long as several weeks – much longer than the four-day period agreed in the Accounts Agreement.

79. This was corroborated in October 2012, when United Protection hired a new Chief Financial Officer, Brent Moore, who uncovered this consistent pattern of FGI crediting United Protection customer payments for periods ranging from several days to several weeks after it had received them – again, a far cry from the four-day period agreed in the Accounts Agreement. This practice crippled United Protection’s cash flow and ability to operate.

80. Despite repeated efforts by United Protection, from October 2012 through May 2013, to persuade FGI to correct the problem of delayed crediting of customer payments, FGI refused to do so without explanation and remained silent.

81. On April 10, 2013, Ramsoondar in his capacity as President and CEO e-mailed FGI employees Raj Idiculla (“Idiculla”) and Sami Altaher (“Altaher”) to put FGI on notice that auditors of United Protection had identified $20,000 per month in excess interest charges, and delays in crediting United Protection that ranged from six days to several weeks. A copy of Ramsoondar’s email is attached to this Answer as Exhibit C.

82. The following day, Ramsoondar emailed another FGI employee, Nikki Rangra 12

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(“Rangra”), to notify FGI that FGI’s reports failed to account for crediting to United Protection of approximately $500,000 worth of payments made by customers of United Protection. A copy of Ramsoondar’s email to Rangra is attached to this Answer as Exhibit D.

83. FGI employees later admitted that several payments had been credited to United Protection late. On May 15, 2013, Ramsoondar emailed Idiculla and Altaher a spreadsheet of the balances United Protection owed to FGI at the time, and asked them to have someone look into the issue of late crediting of United Protection for customer payments. A copy of the email is attached to this Answer as Exhibit E. However, FGI’s employees never explained FGI’s reasons for crediting payments late, nor did they take any other action to address the concerns of Ramsoondar and others at United Protection about late crediting of United Protection for customer payments. Instead, FGI continued to credit United Protection for payments late, United Protection’s indebtedness to FGI rose, and United Protection’s cash flow continued to constrict and deteriorate.

84. Through excessive accumulation of interest and fees, FGI’s practice of crediting United Protection late for payments it received from United Protection customers caused the total amount United Protection owed to FGI to skyrocket to unjustifiable levels; the amount of the increase in United Protection’s indebtedness reached $150,000 in late 2012 and jumped to $750,000 in 2013. This unjustified increase in United Protection’s debt not only wiped out the benefit to United Protection of receiving immediate advances on accounts receivable – the only reason United Protection entered into the Accounts Agreement and Ramsoondar entered into the Guaranty in the first place – but also substantially harmed United Protection by denying the company adequate financing to meet its payroll and tax obligations, a problem that – by itself – eventually forced United Protection, a company whose revenues topped $43 million as recently

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as 2012, to file for bankruptcy in Canada pursuant to the CCAA. In turn, United Protection’s bankruptcy not only denied Ramsoondar the immediate financing benefit he sought for United Protection to obtain by entering into the Guaranty, it also cost him the value of his twenty-five percent stake in United Protection (valued at over $2.125 million), his salary and bonuses for the next ten years ($420,000 per year multiplied by ten years equals $4,200,000) and longer, and the value of several loans he made to United Protection (approximately $420,000).

85. Upon information and belief, at the same time, FGI also breached the Side Letter. The extended payment terms for the 120 Day Accounts addressed by the Side Letter routinely occurred for many of United Protection’s key customers, including customers in the oil and gas industry. However, on May 23, 2013, without any warning or explanation, FGI Senior Account Executive Tracey Yang unilaterally advised Ramsoondar that FGI would no longer make advances on the 120 Day Accounts. A copy of the e-mail from Ms. Yang is attached to this Answer as Exhibit F. This sudden and willful withdrawal of funding by FGI prevented United Protection from meeting its financial obligations, further restricting United Protection’s cash flow, and ultimately driving United Protection into bankruptcy in Canada.

86. As a direct result of the above, Ramsoondar is entitled to have the Guaranty rescinded, and he is entitled to recover his corresponding damages, which approximate at least $6.7 million (e.g., the value of his equity in United Protection plus lost salary and bonuses for at least ten (10) years plus the value of loans Ramsoondar made to United Protection). Similarly, United Protection has been damaged by FGI’s conduct in the amount of at least $8,500,000 (the value of United Protection at the time of FGI’s breaches).

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COUNT I
(Failure of Consideration of Ramsoondar Guaranty)

87. Ramsoondar reasserts and realleges each and every allegation above as if fully set forth herein.

88. As discussed above, Ramsoondar and FGI are parties to the Guaranty, FGI and United Protection are parties to the Accounts Agreement, and FGI and United Protection are parties to the Side Letter.

89. Also as discussed above, FGI’s promise to provide immediate financing of accounts receivable held by United Protection under the Accounts Agreement served as consideration for Ramsoondar’s agreement to enter into the Guaranty.

90. The Side Letter between United Protection and FGI also served as consideration for Ramsoondar’s agreement to enter into the Guaranty.

91. For much of 2012 and during the first five months of 2013, FGI, by either willful misconduct or gross negligence, and in any event, in breach of FGI’s obligations under the Accounts Agreement, consistently delayed crediting United Protection for customer payments that FGI received, thereby increasing the interest FGI earned on advances made to United Protection for accounts receivable, increasing the management and other fees FGI earned on unpaid accounts receivable, and crippling United Protection’s cash flow.

92. The interest and management fees United Protection owed to FGI increased so much that it entirely eliminated the benefit of the “immediate” advances by FGI, and harmed United Protection. In fact, instead of having immediate financing from FGI as FGI originally agreed, United Protection was overcharged by FGI more than $20,000 per month in excess and unjustified interest and fees, which prevented United Protection from meeting its payroll, tax, and other financial obligations.

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93. In addition, on May 23, 2013, without any warning or explanation, Ms. Yang advised Ramsoondar that FGI would no longer make advances on the 120 Day Accounts as agreed to in the Side Letter. This abrupt and unanticipated withdrawal of funding prevented United Protection from meeting its financial obligations, and caused the company to file for bankruptcy.

94. The failures of FGI to perform under the Accounts Agreement and the Side Letter, both by themselves individually, and collectively, constitute failures of consideration under the Guaranty.

95. As a direct result of the above, Ramsoondar is entitled to rescission of the Guaranty. Further, Ramsoondar has been damaged, and continues to be damaged, in an amount that includes, but is not limited to, the loss of Ramsoondar’s twenty-five percent share of United Protection (worth over $ 2.125 million), the salary and bonuses he would have earned for at least ten (10) years following the date United Protection filed for bankruptcy ($420,000 per year X ten years = $4,200,000), and the money he loaned to United Protection to try to keep the company going (approximately $420,000). Accordingly, Ramsoondar demands judgment against FGI for an amount of damages to be proven at trial (at least $6,745,000), plus interest, costs and disbursements, and reasonable attorneys’ fees and disbursements.

COUNT II
(Breach of the Accounts Agreement with United Protection)

96. United Protection reasserts and realleges each and every allegation above as if fully set forth herein.

97. As previously explained, FGI and United Protection are parties to the Accounts Agreement.

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98. United Protection substantially performed its obligations under the Accounts Agreement.

99. As previously stated, for much of 2012 and during the first five months of 2013, FGI, by either willful misconduct or gross negligence, and in any event, in breach of FGI’s obligations under the Accounts Agreement, consistently delayed crediting United Protection for customer payments that FGI received, thereby increasing the interest FGI earned on advances made to United Protection for accounts receivable, increasing the management and other fees FGI earned on unpaid accounts receivable, and crippling United Protection’s cash flow.

100. Also as previously stated, the interest and management fees United Protection owed to FGI increased so much that it entirely eliminated the benefit of the “immediate” advances by FGI, and harmed United Protection. In fact, instead of having immediate financing from FGI as FGI originally agreed, United Protection was overcharged by FGI more than $20,000 per month in excess and unjustified interest and fees, which prevented United Protection from meeting its payroll, tax, and other financial obligations.

101. As a direct result of the above, United Protection has been damaged, and continues to be damaged, and demands judgment against FGI for an amount of damages to be proven at trial (at least $8,500,000), plus interest, costs and disbursements, and reasonable attorneys’ fees.

COUNT III
(Breach of the Side Letter with United Protection)

102. United Protection reasserts and realleges each and every allegation above as if fully set forth herein.

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103. Upon information and belief, United Protection and FGI are parties to the Side Letter, which, as previously stated, made the 120 Day Accounts eligible for immediate financing under the Accounts Agreement.

104. Upon information and belief, United Protection substantially performed its obligations under the Side Letter.

105. On May 23, 2013, without any warning or explanation, Ms. Yang unilaterally advised Ramsoondar that FGI would stop making advances on the 120 Day Accounts.

106. FGI’s willful and unilateral withdrawal of financing of the 120 Day Accounts breached the Side Letter prevented United Protection from meeting its financial obligations, further limiting United Protection’s cash flow, and forcing United Protection to shut down and file for bankruptcy.

107. As a direct result of the above, United Protection has been damaged, and continues to be damaged, and demands judgment against FGI for an amount of damages to be proven at trial, plus interest, costs and disbursements, and reasonable attorneys’ fees.

WHEREFORE, based upon the foregoing, Ramsoondar and United Protection demand a Judgment of the Court in their favor against FGI, as follows:

1. a)  As for Ramsoondar, rescission of the Guaranty and compensatory and rescissory damages on the failure of consideration claim of Ramsoondar in an amount to be determined at trial (but at least $6,745,000), together with interest at 9% per annum from the date of harm;

2. b)  As for United Protection, compensatory damages on the breach of the Accounts Agreement claim of United Protection in an amount to be determined at trial (but at least $8,500,000), together with interest at 9% per annum from the date of harm;

3. c)  As for United Protection, compensatory damages on the breach of the Side Letter claim of United Protection in an amount to be

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Dated:

New York, New York December 2, 2013

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d)

determined at trial, together with interest at 9% per annum from the date of harm; and

Such other and further relief in favor of Ramsoondar and United Protection as the Court deems just and proper.

/s/ James J. DeCristofaro, Esq. James J. DeCristofaro, Esq. DeCristofaro Law
Mailing address:

260 W 26th Street, Suite 7Q New York, New York 10001 Tel. [phone]
Fax [phone]

Email: [e-mail]

Attorneys for Defendant Fredy V. Ramsoondar

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