“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

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Discussing conversion, and the minimum needed, 4m, yet in court insisting only 1m was needed. More to follow-

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(@PageSix)
5/23/12 9:32 AM
Paul Allen’s Cannes bash rocks until 4 a.m. — even though his yacht had to be moved to avoid heavy sea swells

nyp.st/LBcQjI“@Paul Allen’s Cannes bash until 4 a.m.nyp.st/LBcQjI”  

“Paul Allen’s Cannes bash is being talked about as one of the most rocking Film Festival parties this year. Guests, including Antonio Banderas and Jeremy Irons, danced until the early hours to the Microsoft co-founder’s band (in which he plays guitar) at Monday’s party. One guest told us, ‘Paul has a new band, and they are actually really very good — people were dancing until 4 a.m.‘(Ha!) Also there were Cyndi Lauper, Ray Liotta, Tom Freston and Sony Pictures Classics’ Michael Barker and Tom Bernard. All braved bad weather to get onboard Allen’s 303-foot yacht Tatoosh, which was moved to a new mooring for the bash because of heavy swells and ‘to stabilize the boat.’ The party-goer added, “Paul told the crowd, ‘I have got a funny song for you,’ then launched into ‘Purple Rain,’ poking fun at the bad weather.” Over at the Chopard bash, also on Monday,Sean “Diddy” Combs was walking around with a camera crew filming a documentary for his new network.” (PageSix)

Last month, it looked like Microsoft cofounder Paul Allen was getting kind of serious.

He released his memoir, “Idea Man,” and took some public digs at Bill Gates on “60 Minutes.” He also did a speaking tour for the book where he talked about the early days of Microsoft and why he’s suing a bunch of companies for patent infringement.

But now he’s back to his billionaire lifestyle: according to a report in the NY Post, he threw a Brazilian themed bash on his 483-foot yacht, the Octopus, to celebrate the kickoff of the Cannes Film Festival.

Guests included a bunch of big Hollywood stars like Jodie Foster and Jane Fonda, as well as Israeli model Bar Refaeli. Like usual, Allen held a rock and roll jam.

Now check out: The Pile Of Absolutely Amazing Toys Paul Allen Has Collected.

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Departing Yahoo CEO Could Face Radar Fraud Suit

(update: moments ago we were given notice of a new delay- and, so it goes. Should we go public?) Law360, New York (July 16, 2012, 10:22 PM ET) — The trustee overseeing the bankruptcy of Radar Networks Inc. has reached a deal that could allow a fraud suit against outgoing Yahoo Inc. CEO Ross Levinsohn to go forward, according to a stipulation filed Thursday.

Kate Paley, the daughter of the late founder and chairman of CBS William S. Paley, claims that Levinsohn, a Radar director who was Yahoo’s interim CEO until his replacement Monday, and other insiders at Radar transferred about $3 million she lent to the company to another entity.

Her suit, claiming fraud and conversion, was stymied after Radar, a web applications company, filed for bankruptcy, but her lawyer said Thursday in a court filing that the Radar trustee has reached a stipulation that could let her suit go forward.

“The stipulation is in the best interests of the estate and should be approved,” lawyers for Paley and the trustee said in the stipulation. Paley will require court approval if her suit is to ultimately go forward.

Levinsohn, who was Yahoo’s interim CEO until the Yahoo board appointed former Google Inc. executive Marissa Mayer to the job effective Tuesday, would be a key target in the suit.

Paley’s lawyers said that the fraud suit, a state court action in California, is essentially a two-party action between Paley on one side, and Levinsohn, Radar founder Nova Spivack and Evri Inc., which eventually bought it, on the other.

The insiders had been litigating against Paley, but used Radar’s bankruptcy to put off a trial scheduled for February after a partial summary judgment order went against them, according to the motion.

The trustee does not have the resources to pursue the action himself, the stipulation says.

Paley will be responsible for the choosing the lawyers that prosecute the case.

“This agreement will eliminate delay and allow the claims against Levinsohn to proceed to a public trial,” said Trent Freeman, a spokesman for Paley.

Freeman said the defendants are expected to oppose the arrangement in order to delay the trial. A hearing is scheduled for July 27 in California bankruptcy court.

Paley is represented by Katherine D. Ray of Goldberg Stinnett Davis & Linchey PC.

The trustee is represented by Michael A. Issacs of McKenna Long & Aldridge LLP.

Levinsohn is represented by Eric J. Amdursky and Jennifer Taylor of O’Melveny & Myers LLP. Spivack is represented by Jonathan M. Reymann. Radar is represented by John Walshe Murray of Murray & Murray PC. Evri is represented by Stephen C. Willie of Savitt Bruce & Willey LLP.

The case is Paley v. Radar Networks Inc. et al., case number CIV-494701, in the Superior Court of the State of California, County of Mateo.

The case is In re: Radar Networks Inc., case number 11-bk-33990, in the U.S. District Court for the Northern District of California.

[surprisingly no mention made of Paul Allen’s Vulcan Capital, which orchestrated the fraud and fraudulent conveyance].

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~

For over four years the defendants have poured forth their scorn on us, most recently through their attorneys. All their efforts are now simply to draw out the legal proceedings, messing them up with bogus legal acrobatics, wasting not only our time, but the time and expense of the courts. None of this matters to Ross Levinsohn or Paul Allen. Their self interest dictates their actions and code of conduct. This is real, and it is happening now.

These men have stolen and destroyed our life’s work, with nothing but a sneer looking back, the same utter scorn and contempt with which they address the law, as if it were merely a chess game with no basis in reality.

They never thought it would get this far. Everyone else cowers in fear, why aren’t we responding the same way? They thinks its ludicrous that anyone would think they could outspend them, out lawyer them, etc.

Meanwhile, what they don’t realize, is that their usual modus operendi is being displayed for all to one day see. Each tactic to keep covered their actions, to pay off and cleverly jiggle the legal system to be manipulated in their own favor, represents nothing but a classic play by play of the unscrupulous.

Hitler and the Nazi’s unwittingly supplied the careful documentation of their crimes, never realizing it would be the most condemning factor, studied over and analyzed for years- centuries? to come.

(Their attorneys do threaten us concerning what we publish on the blog.)

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 ~

 ~   Before the end of WORLD WAR ll, no one knew who the good guys really were. Nobody today considers the French having to recover from the trauma of being occupied by the Nazis, being sliced and diced into resistance, collaborators, spies, double agents, etc. Would the Nazi’s now be considered the good guys if they had won? We’d sure have to say so in public if we wanted to live.

So now, let’s be real- everyone is watching the economy poised to collapse, and witnessing the bad guys scramble by whatever means possible to fill their coffers to be able to survive economic Armageddon. Fraud has been on the rise, and a lot of bad guys are really thriving now. But we still have to keep our eyes on the ball- every generation faces a choice to be made without knowing how things will turn out beforehand.

Did those who denounced friends during the McCarthy hearings believe they were doing the right thing? Weren’t Nazi collaborators merely hedging their bets? The equivalent of modern day hedge funds? I’m just asking.

Is there anywhere an agreed upon code of conduct that transcends national interests, so that we could make informed decisions on whether what we were doing was right or wrong? I know the 10 Commandments are banned from schools as if they were pornographic materials. That’s sort of illogical. In the Bible it does say there will come a time when what is bad will be called good, and what is good will be called bad. Are we there yet?

~

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~

 

At the last possible moment on the night before trial, defendants, including Ross Levinsohn and Steve Hall, filed a last minute bankruptcy claim in order to delay a public trial of plaintiff Kate Paley’s claims of fraud and unfair dealing. The bankruptcy claim lacks any merit and was nothing more than an attempt to avoid a public airing of defendants’ misconduct.  The case has since been delayed for months while defendants attempted to keep their actions from the public eye. Trying to create the conditions for inertia is not a new tactic for them.

 Today, attorneys on behalf of Ms. Kate Paley and the bankruptcy trustee agreed on terms for Ms. Paley to proceed with her state court action, including prosecuting, on behalf of the bankruptcy estate, claims that Radar’s assets were fraudulently transferred in order to enrich defendants at Ms Paley’s expense.  This agreement will eliminate delay and allow the claims against Ross Levinsohn and the other defendants, including Paul Allen’s Vulcan Capital, to proceed to a public trial. Ms. Paley expects Mr. Levinsohn to oppose this stipulation in a further attempt to avoid trial on the fraud claims.

Indeed, all defendants have attempted to dissuade the trustee from doing so and are expected to oppose the arrangement, in order to further delay a state court trial on the merits.  A bankruptcy court hearing to approve the arrangement between the bankruptcy trustee and Ms. Paley is currently scheduled for July 27 at 1:00 pm.  Ms Paley will continue to aggressively pursue these claims so that defendants’ actions will finally be publicly aired.

~

Neither Paul Allen or Ross Levinsohn are bankrupt.

But, that is what they want you to believe- better

than fraud-but equally as deceptive.

Is this par for the course?

Does everybody do it?

Is there any integrity left,

anywhere?

~

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In Afghanistan, men in a dispute organize a fake court, and shoot a woman, nine times, to save face, cheering for their actions.

This resonates because it is so universal, not because it is isolated.

This is what is happening to Worddiamonds. Paul Allen’s Vulcan Capital, Ross Levinsohn of Yahoo, solely for the purpose of making a ‘soft landing’ for a company they still own in the form of Evri, dismantled and destroyed the Worddiamonds website. They stole all our development funds to use

for their “own purposes” (a quote from the directive made by Steve Hall, of Vulcan Capital, to Nova Spivack, concerning Worddiamonds partnership with Radar- Vulcan Capital was calling the shots).

Through lies, bullying, and continued spurious contortions of the law, they fraudulently converted funds to ‘save face’ and make a ‘soft landing’ for the closing and sale of Twine- to themselves-and another company they own, Evri.

To stop the trial from proceeding after the judge ruled that they clearly committed fraud against Worddiamonds, now Ross Levinsohn of Yahoo and Paul Allen’s Vulcan Capital have declared bankruptcy of the very company they closed and now still own in the form of Evri.

This same manipulation of the law continues with which they have attempted to get away with their fraud. They have consistently twisted the law, to pervert it’s intent, for

almost 5 years. Only to save face! Thats how little value they consider others to have. That’s how far they will go to deceive their community and peers.

People keep asking what has happened, where are all the women in tech?

–Woman shot nine times as men cheer

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Why, for so little gain, beyond reputational and a few million dollars, pennies to them, are Ross Levinsohn of Yahoo and Paul Allen’s Vulcan Capital, still so determined to get away with defrauding Worddiamonds?

What has compelled them to attack us for these last 4 years- stealing all our development funds, destroying Worddiamonds patent pending website, and telling us how worthless we are, how unimportant, and bullying and threatening us at every turn? Why have they stopped the trial that exposes their fraud by the spurious argument they are now bankrupt? Come on, they are not bankrupt. Except it seems morally.

Their continued attempts at misinterpreting the law has never varied. Because they think it is so easy to get away with! They count on lies, lawyers, bullying and threats to make way for them. This is their modus operandi. 

Not all of the one percent of the %1 are dishonest.

But Paul Allen’s Vulcan Capital and the attorneys for Ross Levinsohn of Yahoo are furious that they as yet, haven’t completely buried us, outspent us, outbuzzed us. They cannot understand why their raging, threats, and bullying  isn’t working. So they continue. Its all they know. They cannot afford for this to be made public, and aired in an open court. It is unthinkable to them. But the more they lie, the higher the stakes.

  They are determined to prove our faith in God is wrong. They can’t stop scoffing at us- to them, we are so vulnerable, so easy to squash like a bug.  They are the Goliaths. We are David, with some stones, and a sling shot. We trust God to see us through, in His way, in His time, for His purposes.

Worddiamonds is free- we have not built this for the purposes of making money. But certainly we never expected everything to be stolen from us, by supposed pillars of the community, and for such chump change for these gentlemen. It’s a big Wow.

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