Archive for the ‘William S. Paley’ Category

unsealed-the briefs filed objecting to Ross Levinsohn of Yahoo and Steve Hall of Vulcan Capital’s attempts to declare they themselves are victims of their own fraud and are therefore owed money


“There is no real development without integrity, that is- a love of truth.” Frank Lloyd Wright

RADAR NETWORKS, INC., Debtor. Case No. 11-33990 Chapter 7 Date: Time: Place: Judge: June 8, 2012 9:30 a.m. Courtroom 23 235 Pine Street, 23rd Floor San Francisco, CA Hon. Thomas E. Carlson DECLARATION OF EVAN MANDEL IN SUPPORT OF REPLY TO OPPOSITION TO MOTION TO DISMISS I, Evan Mandel, declare:

1. I am an attorney licensed to practice law in the State of New York, and am a principal of the law firm of Mandel Bhandari LLP, counsel for Kate Paley (“Paley”), a creditor herein, in connection with her lawsuit pending in the San Mateo County Superior Court, San Mateo County Superior Court, Case N. CIV 494701 (the “State Court Action”) against Radar Networks, the debtor herein (“Radar” or the “Debtor”), its directors, Ross Levinsohn, Steve Hall, and Noah Spivack (“Insiders” or “Defendants”), and Evri, Inc. (“Evri”) for fraud, fraudulent conveyance, breach of contract, breach of fiduciary duty, declaratory judgment, conversion and constructive trust. In such capacity, I am personally familiar with each of the facts stated herein, to which I could competently testify if called upon to do so in a court of law.

2. In connection with the State Court Action, the following facts and evidence were obtained in the course of discovery: a. Paley’s $3 million loan, plus interest, was payable on demand by Paley any time on or after September 30, 2009, unless new funding of $4 million was received by the Debtor, in which case the note would be automatically converted. See, Exhibit C to Declaration of Noah Spivack filed in support of the Debtor’s Opposition (“Spivack Decl.”).

As of September 30, 2009, Radar had at least $1,002,557 cash on hand and an estimated value of $20,000,000. See Exhibit A (Financial Statement Compilation for the Nine Months Ended September 30, 2009). b. On June 25, 2009, Spivack wrote to Levinsohn explaining that “we need a minimum of 4M of new money,” which would result in “$3M from Kate [and] $4M+ from others.” See Exhibit B (June 25, 2009 email). The next day, Spivack explained further: “One wrinkle is that Kate’s note is due on 9/30/09. On that date, if she has not converted yet, she can request repayment. That would of course be bad. So we actually should convert her.” See Exhibit C (June 26, 2009 email). c. For several weeks, Hall tried to convince Paley to voluntarily relinquish her right to get repaid on September 30, however, she refused. Radar sent Paley a document purporting to be a release and an extension of the maturity date of her loan, however, Paley did not sign it.

d. On September 15, 2009, Levinsohn’s company, Fuse, and Hall’s company, Vulcan,[each investing exactly half of] $842,192.42 and the Directors purported to convert Paley’s $3 million loan to equity. The State Court found that the conversion was improper.

e. On September 15, 2009, before she knew about the conversion, Paley wrote to Hall, whom she thought she could trust. She implored him to help her work things out with her investment and Word Diamonds. Paley asked Hall to help her communicate with Radar because “I do need to see [Radar’s Financials] as an investor and also regarding the handling of my second 3m investment as regards the Twine [] agreement.” Insidiously, the next day, Hall replied, “I am sure it is an oversight and something the company can rectify immediately.” See Exhibit D (September 15, 2009 email).

Hall did not tell Paley that he had just implemented the scheme to convert Paley’s $3 million loan to equity. See Exhibit E (September 17, 2009 response from Hall).

f. In March 2010, all of the Debtor’s assets were sold to Evri for approximately $1,125,000 in cash, plus shares in Evri representing a 3% – 5% stake in Evri. The sale to Evri was made despite a February 2010 offer by Intellectual Ventures to pay $2.75 million for Radar’s patents alone, plus a non-exclusive license to Radar to use the patents. g. On July 26, 2009, Hall introduced Radar’s CEO Spivack to Evri CEO Hunsinger, and Spivack immediately recognized the introduction for what it was: “I bet Steve Hall is plotting to acquire our assets at firesale price into Evri.” See Exhibit F. And that is precisely what Hall was plotting, and it is exactly what he did.

Hall used confidential information about Radar’s business that he acquired as director and fiduciary of Radar to assist Evri in acquiring Radar’s assets at a price that was far below their fair market value. Spivack valued Radar’s assets as being “worth more than $20 million” in November 2009. See Exhibit G. h. In March 2010, Radar’s assets were sold to Evri for $1,125,000 in cash and 1,746,016 in Evri restricted shares. Depending on the valuation of Evri’s restricted shares, Evri was able to purchase substantially all of Radar’s assets for approximately $1,125,000.1

i. In seeking approval from the Evri Board of Directors to enter into negotiations to purchase Radar’s assets, Hunsinger explained that Hall had provided his insider’s perspective: Working closely with Steve H to come to this conclusion, I strongly believe that Evri has an opportunity to acquire valuable assets and talent from Radar Networks on very attractive terms. . . . Given the target companies[‘] situation, Evri has significant leverage and we are uniquely positioned to execute a clean, pure equity deal obtaining significant option value on assets for a relatively low price.”

1 Defendant Levinsohn claims that his investment fund is “carrying [the Evri shares] at zero” but “to this day, it’s unclear what the total amount of consideration [Levinsohn’s investment fund] received as part of the purchase agreement for Radar’s assets is.” Exhibit Y (Levinsohn Deposition Transcript, 259:2-17.) .

Exhibit H. Hall also provided Hunsinger with Radar’s confidential information as to whether Evri could poach Radar engineers. Exhibit I. j. Obtaining Radar’s assets at a firesale price was not Hall’s only motive for wanting to drive Radar out of business. The Vulcan entity that had invested in Radar, Vulcan II, had realized a significant amount of taxable income, and Radar’s bankruptcy would permit Vulcan II to realize a total tax loss of its Radar investment. See Exhibit J (“[F]or months [Hall] has been saying Vulcan could use the write off, and now he’s happy to have the company shut down and take the write-off.”)) k. Indeed, in numerous private communications, Spivack and his COO accused Hall of (1) “letting [Radar] fall apart” so that Vulcan (or Evri) could “tak[e] over the assets” (Exhibit K); (2) having a plan to facilitate Evri’s acquisition of Radar at a “firesale price” (Exhibit L); (3) wanting to “drive [Radar] into bankruptcy and take our assets” (Exhibit M); (4) intentionally “starv[ing] [Radar], forc[ing] layoffs, and then corner[ing] us and forc[ing] a sale to Evri” (Exhibit M); and (5) Hall “wants us to fails so that Evri can get us in a wind down” (Exhibit N).

l. The sale to Evri enabled Hall to increase his ownership interest in Radar’s assets, obtain a tax advantage and reputational benefits.

In 2006, Vulcan made its first investment in Radar. Hall holds a carried interest in the Vulcan investment fund that owned an equity position in Radar and a contractual right to receive profits generated by the fund. At the time of the transfer of Radar’s assets to Evri, Evri was, and still is, in effect a subsidiary of Vulcan. Vulcan has invested at least $36 million in Evri. Vulcan owns more than 90% of the issued and outstanding capital stock of Evri and Paul Allen controls Vulcan.

In deposition, Hall freely acknowledged that Vulcan controlled Evri. Hall has personally invested in the Vulcan entity that manages Evri. (Exhibit O) (Vulcan Capital Venture Capital II LLC (“Venture II”) owns Evri; Venture II is managed by Vulcan Capital Venture Capital Management II LLC (“Management II”)). Hall has invested money in Management II. m. Hall received substantial benefits from Radar’s sale of its assets to Evri. As a director and indirect owner of Evri, as a result of the asset sale, Hall obtained control of all of  Radar’s assets and a greater ownership interest in such assets through his interest in Evri.

Hall also received a major tax advantage from the asset sale: the Vulcan fund that owned Radar had realized approximately $85 million in taxable income as a result of at least one extremely successful investment; the dissolution of Radar that followed the asset sale allowed Vulcan to realize the tax loss that it suffered in its Radar investment; and that loss became a valuable deduction for the owners of the Vulcan fund that owned Radar. (Exhibit O) (Hall Dep. at 258:2-259:25.)

In fact, Hall repeatedly told Spivack and other Radar personnel that he wanted Radar to go bankrupt so that he and Vulcan could obtain the associated tax benefits. (Exhibit J). n. Radar’s assets were worth significantly more than $1.125 million, based on the February 2010 offer from Intellectual Ventures to pay $2.75 million for Radar’s patents, Spivack’s valuation of Radar at approximately $45 million to $50 million as of the fall of 2009 (Exhibit P); and Exhibit Q (“45M+ is reasonable”), and Vulcan’s willingness to pay more for Radar’s assets

(Exhibit R) (Hall email to Paul Allen, the head of Vulcan that, at the time of the Intellectual Ventures offer, Vulcan was willing to pay more: “So we are in the middle of playing some hardball maneuvering to get this over the goal line without having to pay any more money for it.”); and Radar’s potential claim against Evri for violating Radar’s patents (Exhibit S (“[T]here is a potential lawsuit here. A big one, I think.”), (“They are violating many of our patents.”).)

o. Levinsohn’s sworn testimony in the State Court litigation is that anything that benefited Fuse’s ComVentures VI fund also benefited him personally. Also, Levinson’s “personal money” was at stake “in our fund,” i.e. ComVentures VI. p. ComVentures loaned Radar $271,000 on November 30, 2009 and was one of Radar’s unsecured creditors. The Levinsohn Fund was also promised additional shares in Evri several months after the transaction for Radar’s assets closed.

Indeed, The Levinsohn Fund received 381,595 “excess shares” of Evri’s common stock from the Asset Sale in June 2010, and 571,770 shares of Evri common stock in June 2011. Exhibit T (Corrected Levinsohn Decl. ¶31.)

This additional payment to Levinsohn’s investment fund was not disclosed in the March 2010 Asset Purchase Agreement.

Levinsohn also received a reputational benefit by orchestrating a pay-out to his investment fund and achieving a “soft landing” for his investment. Levinsohn was responsible for the loan being made and, as a result, was “out on a limb with [his] firm.” Exhibit U.

q. As for Spivack, he knew that unless Radar commanded a sale price in excess of $63 million, he and his management team would not be able to cash in their shares at all. See Exhibit V (“The preferred shareholders have up to $63 mm of liquidation preferences from the A and B rounds in place.”) In that same email, Spivack explains that even if the sale price to Microsoft (rather than Evri) is somewhere in the range of $40 million, unless the deal comes with a “management carve out” he and the other common stock holders will “get[] nothing.”

Faced with the prospect of Radar’s investors making millions of dollars on their investments with Spivack “getting nothing” or Spivack making some money and the investors getting nothing, Spivack chose the latter option.

In negotiations with Evri, Spivack’s primary concern was not maximizing shareholder value – it was fluffing his own golden parachute. In a November 4, 2009 email, Spivack told Hall that the main financial goal for “other investors” is to offer them just enough value to “get their votes and avoid liability issues.” But for himself, he was very specific: (i) a salary of $250,000; (ii) a six month severance package; (iii) 10% of equity in Evri with “some of it already vested at signing”; (iv) if less equity, then a higher salary; (v) a seat on the Evri board; and (vi) “to be able to monetize some of my Radar equity now, at the time of sale, to cash.” When Evri closed the deal, it offered him a salary of approximately $250,000/year, Spivack served as a consultant for approximately six months, and he was given a substantial amount of equity in Evri. Spivack believed this was payment for “keeping my mouth shut about what they did to us.” Exhibit W. The deal also included a payment to Lucid Ventures, Inc., which is an investment vehicle owned and operated by Nova Spivack. I declare under penalty of perjury that the foregoing is true and correct, and that this declaration was executed on June 1, 2012 at New York, New York. _________________________________ Evan Mandel -7- Case: 11-33990 Doc# 30-2 Filed: 06/01/12 Entered: 06/01/12 16:04:03 Page 7 of 10777/MANDEL AFF. V.5 7


STAND UP TO BULLIES ! Paul Allen’s Vulcan Capital, Yahoo’s Ross Levinsohn, Steve Hall-update: pillars of Silicon Valley caught committing fraud

Integrity is not something you can decide to have one day, and not have on another day.


press release- SiliconValley VC JuryTrial Starts 2-27-1

There is no personal animosity on our part towards anyone in this case. While unrelenting animosity has been expressed towards us, attacks and threats of a personal nature, that is not the motivation on our part.

The depositions themselves tell the story of the contemptuous attitude these men exhibit towards the law. We are merely saying, it’s not all right to aggressively try and convince someone to invest more money in your start up, when they have clearly and repeatedly declined to do so again; and, by lies, false promises, ending in outright fraud no less- to then try to blame them publicly, for your business’s failure. It’s not alright to commit fraud! It’s not all right to do that. It’s not all right to leave that person with nothing, to destroy what it took years for them to build, in an attempt to get them “to freak out and throw more money at it” directly into your pockets, to purportedly fix it. And it’s not all right, especially if your pockets already contain billions, to commit fraud merely for a tax write off. This is about illegal activities being conducted by those who present themselves as pillars of the community. This is about getting justice gentlemen. But mostly, this is about standing up to bullies.

There needs to be a standard set- without a baseline of justice, Silicon Vallley will be more ruinous to this country than all the bankers that have been sucked into the powerful vortex of greed combined.

“For what shall it prophet a man, if he shall gain the whole world, and lose his own soul?” Mark 8:36


 In the name of Jesus Christ, Amen.

startups: CBS, Edward R. Morrow, Walter Cronkite, STANDING UP TO BULLIES


Well, my Dad did have a very successful start up back in the day. At the time, no one really understood what ‘television’ was.  Sixty years later the internet has defined it, only when the full arc of television is complete- and with CBS, that was then, the internet, this is now. Its a new era, but the same things that made for success then, make for success now, even though we’re still figuring out the ramifications of this new media and how it will ultimately play out.


Excellence. Integrity. Truth. Responsibility. Love of Country.

Dad had to be clean as a whistle.  Having been part of World War II in London and Paris, and there on the day they liberated Buchenwald, he also saw the full horrors of one of the major Nazi concentration camps. He was friend and boss of the great journalist Edward R. Morrow, when the love was bold and strong for the United States of America. We had come in and rescued the world, and the pride in the freedoms we fought and died for was cresting. Everyone felt a responsibility for doing the best they could. Dad felt a tremendous responsibility to his country, the USA, and the airwaves.

To compare those days to what is happening in Silicon Valley, its pretty tragic. Except, from afar, for Steve Jobs. The love, the thrill you felt he had for developing Apple products- we don’t know how blessed we are yet. He got it. Lets set a high standard. Let’s inspire. That was Dad and ‘the Tiffany network’. Excellence, in integrity, in quality, in design,in entertainment, in the news- being truthful. Those were the days Edward R. Morrow singlehandedly seemed to bring the McCarthy hearings to a hault- “have you no decency, sir, at long last?”  he said to Mr. McCarthy in a live interview. Someone needs to say that to some of Silicon Valley. But its mob rule in there right now. You’d be lynched.

And then there was Walter Cronkite. When Cronkite went to Vietnam and saw the horror of what was going on there- and when Cronkite spoke up on his live evening news broadcast and said outright that the war was wrong- that was the end of that war.

Lyndon Johnson famously said the next day, ‘if  we’ve lost Walter Cronkite, we’ve lost the nation’.

Who has the moral authority to stand up to anything anymore? Everyone has sold out. As I said, the warnings have been loud and clear. If you try to rock our boat….it isn’t said out loud, but you can see them making that gesture, that says, you will die.

Matthew 12:14


UPDATE: original notice of the trial regarding fraud perpetrated by Ross Levinsohn, Yahoo’s newly named interim CEO, and Steve Hall ( of Paul Allen’s Vulcan Capital). (republished)

the night before this trial, which has been scheduled for over 2 years, was to begin, the defendants declared bankruptcy in order to stop the trial from going forward. For over 4 years we have been dealing with these spurious legal tactics, originating in the fraud perpetrated against Worddiamonds. They continue their same ‘bad faith’  [intent to decieve] modus operandi. Never straightforward or truthful, here again they attempt to twist the law to suit their own dishonest, dishonorable intention- to deceive quite frankly. Obviously these guys are far from bankrupt!

Contact: Richard Lavinthal 202-596-1176

Daughter of CBS Founder William S. Paley’s Multi-Million-Dollar
Fraud Allegations Against Three High-Profile Silicon Valley
Venture Capitalists
; Evri, Inc.; and Radar Networks, Inc.; To Begin
Monday, February 27th, In San Mateo Superior Court, Judge Rules

Kate Paley’s Fraud Lawsuit Names Steve Hall, a Managing Director
of Paul Allen’s Vulcan Capital, Which Controls Evri; Ross Levinsohn of Fuse
Capital, and Now Yahoo Inc.’s newly named interim CEO,
and Nova Spivack of Lucid Ventures

Superior Court Judge V. Raymond Swope Denied
Summary Judgment Motions by Hall, Levinsohn,
and Vulcan-Owned Evri, on February 23rd

SAN MATEO, CA (February 25, 2012) – In an open-court rarity a California jury will hear a fraud lawsuit against three high-profile Silicon Valley venture capitalists and two entities alleged to have defrauded CBS founder William S. Paley’s daughter, Kate, of her multi-million investment in a start-up.

Steve Hall, of Vulcan Capital (“Vulcan” at www.Vulcan; Vulcan-owned Evri, Inc. (“Evri” at; Ross Levinsohn, of Fuse Capital ( and recently name interim CEO of Yahoo Inc. Nova Spivack of Radar Networks, Inc. (“Radar”); and Radar transferred assets with the intent to defraud Paley of her rights as a creditor, it is alleged.

Misconduct, self-dealing, and fraud allegations previously sealed will be aired publicly in the trial. Jury selection and opening statements will be scheduled at an initial conference with the San Mateo Superior Court trial assignment department on Monday at 9:30 AM.


On Thursday the court denied motions by Hall, Levinsohn and Evri to dismiss claims that they transferred assets with the actual intent to defraud Paley of her rights as a creditor to Radar, the now-defunct Silicon Valley start-up.

Paley’s Complaint alleges fraud, fraudulent conveyance, breach of contract and other claims related to her investment in Radar, an early-stage tech company focused on semantic search technology.

According to Paley’s lawsuit, the defendants actively conspired to cheat her out of her investment in Radar by (i) unlawfully converting her from a creditor to a shareholder; (ii) selling Radar’s assets for less than fair value to Evri, a business controlled by Vulcan, Microsoft co-founder Paul Allen’s investment vehicle; and (iii) not sharing any of the sale proceeds with Paley, while each of the defendants received substantial benefits.

Hall, a managing director of Vulcan, was on the board of directors of both Radar and Evri at the time that Evri purchased Radar’s assets for less than fair value. Levinsohn’s venture capital firm profited from the sale, as did he, and Spivack also benefitted from the sale of Radar to Evri, it is alleged. Radar had only three directors, Hall, Levinsohn, and Spivack.

In their motions for summary judgment, Evri, Hall, and Levinsohn denied any misconduct, claiming Paley did not even have standing to sue as a creditor, an argument Judge Swope rejected. In his ruling, Judge Swope determined that the relevant contracts were not ambiguous and held that, as a matter of law, the defendants did not have the right to convert Paley’s loan to equity.

“I’m very pleased with the Court’s decision and look forward to presenting my case starting Monday,” Paley said.

Paley is represented by Mandel Bhandari, LLP in New York City; and Colt/Wallerstein LLP in Redwood Shores, California

Case Caption: Kate Paley and Word Diamonds, LLC v. Radar Networks, Inc., Nova Spivack, Steve Hall, Ross Levinsohn, and Evri Inc., Case No. Civ-494701, California Superior Court in and for the County of San Mateo.

# # #

Attention Credentialed Reporters and Editors: If you are unable to retrieve the Complaint or Thursday court ruling online from the clerk’s office please call PRforLAW, LLC at 202-596-1176. Both documents will be posted on the homepage by early Sunday.

Contact: Richard Lavinthal 202-596-1176;

the night before the trial was to begin, Ross Levinsohn of Yahoo and Paul Allen of Vulcan Capital declared bankruptcy to stop the trial from going forward. Obviously neither of them is bankrupt monetarily, but perhaps in other ways.

will others also come forward?

The defendants Ross Levinsohn of Yahoo and Steve Hall of Vulcan Capital claiming, in this case, to be creditors of a company they shut down and own themselves, was another ploy to stop the trial that would expose their misdeeds- their serious, fraudulent activities. Essentially Mr. Levinsohn and Mr. Allen ( owner of Vulcan Capital ) and Mr. Hall are in denial that they haven’t been able to get away with what they thought would be a slam dunk fraudulent conveyance.

and so have thrown in a claim that they are the one’s who need to be repaid for the fraud they conducted..sweet, huh?

They feel they can commit fraud, but, they don’t feel they can afford to be exposed for doing so.  Yet, what is unusual in this case, is the continued determination of M. Hall, Mr. Levinsohn, and Mr. Allen, to insist on pretending this is not what they have done, in the face of such overwhelming evidence to the contrary.

They have here gone so far as to put forth the argument, that if anyone has been defrauded, it is themselves, and they present themselves in all guileful sincerity as the parties to whom monies are owed.

It begs the question, how often has this worked for the defendants in the past, as they seem so startled and frustrated not to be getting away with it on this occasion? How many others have been bullied into silence, outspent and out maneuvered, threatened, maligned, slandered, in efforts to prevent anyone from ever being able to hold them accountable? Their efforts persist to this day. We are faced with their same fury and scorn as we try to hold them accountable at this present moment.



Silicon Valley Needs Adult Supervision?


“There is no real development without integrity, that is- a love of truth” Frank Lloyd Wright


Silicon Valley has no adult supervision at this time. It would benefit from a few grown ups.

“You know neither me nor my Father. If you knew me, you would know my Father also” John 8:19

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