91w /1 - wordpress.com · 2020. 11. 28. · 14 mosley ("mosely"), anindividual, is...
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0 ‘ ' ' /10 ,§,6"35,X\ 91 W 01 NEIL M. SUNKIN, SBN 153868 L-;EL1f.;E}i
LAW OFFICES OF NEIL M. SUNKIN s eriorcoun of California---—I 2 22908 Gershwin Drive ugountv of Los Angeles<1’: 3 Woodland Hills, CA 91364 1,521.; 01 2015Z nmS@sunkmlaw'com ‘ live Ollicer/ClerkE5 4 Telephone: 818/876-9975 sh Depu1y
By ' , i .""" 5 DOUGLAS L. CARDEN, SBN 76006 ”“‘”''°Whmgm0: 6 32022 Grenville CourtCD Westlake Village, California 91361
7 [email protected]: 818/706-2271
8ATTORNEYS FOR PLAINTIFF
9 KYME DANG
10SUPERIOR COURT OF THE STATE OF CALIFORNIA
11FOR THE COUNTY OF LOS ANGELES
12
13 ' *'KYME DANG, an individual, ) CASE No: L C 1 0 2 8 0 -l14 )
Plaintiff, )15 )
vs. )15 ) COMPLAINT FOR:
FUTURE SOUND ENTERTAINMENT, LLC, )17 a Delaware limited liability company; BARRY ) (1) FRAUDULENT TRANSFER [CIVIL
HANKERSON, an individual; JOMO ) CODE §3409.04 AND 3409.05];13 HANKERSON, an individual; WALTER ) (2) FRAUDULENT TRANSFER [CIVIL
MOSLEY, an individual; BERNARD ) CODE § 3409.04 AND 3409.05];19 PARKER, an individual; CLAYTON MOORE, ) (3) COMMON LAW FRAUD;
an individual; BLACKGROUND RECORDS, ) (4) COMMON LAW FRAUD;20 LLC, a business entity of unknown form; ) (5) DECLARATORY JUDGMENT;
BLACKGROUND MUSIC, INC., a business ) (6) BREACH OF CONTRACT;21 entity of unknown form; BLACKGROUND ) (7) INTENTIONAL INTERFERENCE
ENTERPRISES, INC., a business entity of ) WITH CONTRACT;22 unknown form; BARRY & SONS, INC., 2: ) (8) DECLARATORY RELIEF (ALTER
business entity of unknown form; BLACK ) EGO); AND23 FOUNTAIN PUBLISHING, INC., a business ) (9) INJUNCTION
entity of unknown form; BLACK FOUNTAIN, )24 INC., a business entity of unknown form; )
RESERVOIR MEDIA MANAGEMENT, INC.,)25 a New York corporation; KATHY )
HANKERSON, an individual; MOGAME )26 ENTERTAINMENT, LLC, a business entity of )
unknown form; JEFFREY TURNER, an )1:1 27 individual; and DOES 1 through 125, inclusive, ).;lJ. )
:_:i 23 DEFENDANTS. )
iii :?—— COMPLAINT A
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O O1 Kyme Dang, for her Complaint, alleges as follows:
2 1. Plaintiff is informed and believes and based thereon alleges that Defendant
3 Barry Hankerson ("Hankerson") is an individual who resides in Woodland Hills,
4 California.
5 2. Plaintiff is informed and believes and based thereon alleges that Defendant
6 Jomo Hankerson ("Jomo") is an individual, is a member of and manages Defendant
7 Future Sound, and manages Defendant Blackground Records, and has resided in and has
8 done and continues to do business in Los Angeles County, California.
9 3. Plaintiff is informed and believes and based thereon alleges that Defendant
10 Future Sound Entertainment, LLC ("Future Sound") is a limited liability company formed
11 under the laws of the State of Delaware and has done and does business in Los Angeles
12 County, California.
13 4. Plaintiff is informed and believes and based thereon alleges that Walter
14 Mosley ("Mosely"), an individual, is an attorney licensed in California, is a member of
15 Defendant Future Sound, and resides and does business in Los Angeles County,
16 California.
17 5. Plaintiff is informed and believes and based thereon alleges that Bernard
18 Parker ("Parker"), an individual, is a member of Defendant Future Sound and has done
19 and does business in Los Angeles County, California.
20 6. Plaintiff is informed and believed and based thereon alleges that Clayton
21 Moore ("Moore"), an individual, is a member of Defendant Future Sound and has done
22 and does business in Los Angeles County, California.
23 7. Plaintiff is informed and believes and based thereon alleges that Defendant
24 Blackground Records, LLC ("Blackground Records") is a limited liability company
25 formed under the laws of the State of California and has done and does business in Los
26 Angeles County, California. Plaintiff is informed and believes that Blackground Records
27 is a suspended corporation.
28 8. Plaintiff is informed and believes and based thereon alleges that DefendantU,
COMPLAINT
O O1 Blackground Music, Inc. ("Blackground Music") is a business entity ofunknown fonn
2 that has done and does business in Los Angeles County, California.
3 9. Plaintiff is informed and believes and based thereon alleges that Defendant
4 Blackground Enterprises, Inc. ("Blackground Enterprises") is a business entity of
5 unknown form that has done and does business in Los Angeles County, California.
6 10. Plaintiff is informed and believes and based thereon alleges that Defendant
7 Barry & Sons, Inc. ("Barry & Sons") is a business entity of unknown form that has done
8 and does business in Los Angeles County, California.
9 1 1. Plaintiff is informed and believes and based thereon alleges that Defendant
10 Black Fountain Publishing, Inc. ("Black Fountain Publishing") is a business entity of
11 unknown form that has done and does business in Los Angeles County, California.
12 12. Plaintiff is informed and believes and based thereon alleges that Defendant
13 Black Fountain, Inc. ("Black Fountain") a business entity of unknown form that has done
14 and does business in Los Angeles County, California.
15 13. Plaintiff is informed and believes and based thereon alleges that Defendant
16 Mogame Entertainment, LLC ("Mogame") is a business entity ofunknown form that has
17 done and does business in Los Angeles, County California.
18 14. Plaintiff is informed and believes and based thereon alleges that Defendant
19 Kathy Hankerson ("Kathy"), an individual, is married to Hankerson and resides in
20 Woodland Hills, California.
21 15. Plaintiff is informed and believes and based thereon alleges that Defendant
22 Reservoir Media Management, Inc. ("Reservoir") is a New York corporation and does
23 and has done business in Los Angeles County, California, as more particularly alleged
24 below.
25 16. Plaintiff is informed and believes and based thereon alleges that Defendant
26 Jeffrey Turner ("Turner"), an individual, is a certified public accountant, licensed by the
27 State of California and resides and works in Los Angeles County, California.
28 17. Plaintiff is informed and believes and based thereon alleges that the11;:
COMPLAINT
O O1 ctitiously named Defendants sued herein as 1 through 125, inclusive, are business
2 entities of unknown form or individuals affiliated with Hankerson and/or one or more of
3 the business entities or individuals described above or sued herein as a DOE party, and
4 that each of them is in some manner responsible or legally liable for the events, actions,
5 transactions, and circumstances alleged herein. The true names and capacities of said
6 ctitiously named Defendants are presently unknown to Plaintiff. Plaintiffwill amend
7 this Complaint to allege the true names when the same shall have become known to
8 Plaintiff.
9 18. Plaintiff is informed and believes and based thereon alleges that Defendants
10 Blackground Records, Blackground Music, Blackground Enterprises, Barry & Sons,
11 Black Fountain Publishing, Black Fountain, Future Sound, Hankerson, Jomo, Moore,
12 Parker, Mosely, Mogame, Kathy, Reservoir, Turner, and DOES 1-125, inclusive, entered
13 into one or more agreements under which said Defendants, acting in concert, conspired
14 and agreed to willfully or knowingly engage in the acts alleged herein for the purpose of
15 committing the fraud alleged herein and of depriving Plaintiff ofproperty and rights and
16 causing injury and damages to Plaintiff. The acts of said Defendants, and each of them,
17 were in furtherance of a conspiracy to violate a legal duty for their own personal financial
18 gain. Said Defendants at all times did the acts and things alleged herein pursuant to, and
19 in furtherance of, the conspiracy and agreements alleged herein.
20 19. Plaintiff is informed and believes and based thereon alleges that at all
21 relevant times, each of the individual Defendants was the agent and/or employee of each
22 of the remaining Defendants and at all times relevant herein was acting within the course
23 and scope of that agency as to the transactions alleged herein.
24 20. Plaintiff is informed and believes and based thereon alleges that Hankerson
25 was the 100% owner or majority owner, President, Chief Operating Officer of, and/or
26 directly or indirectly managed and directed the activities of, Defendants Blackground
H 27 Records, Blackground Music, Blackground Enterprises, Barry & Sons, Black Fountain
28 Publishing, and Black Fountain (collectively, the "Hankerson Entities"). Plaintiff is
iii
COMPLAINT
O I1 informed and believes and based thereon alleges that Hankerson used the Hankerson
2 Entities as his personal piggy bank, that there is a unity of interest between Hankerson
3 and the Hankerson Entities such that the separate personalities ofHankerson and the
4 Hankerson Entities does not exist, and the recognition of the separateness of them would
5 be inequitable. Accordingly, Plaintiff is informed and believes and based thereon alleges
6 that the Hankerson Entities are in reality mere alter egos ofHankerson.
7 21. Blackground Records was formed by Hankerson and became a successful
8 record label with many star artists under contract and multi-million dollar selling albums,
9 including albums that had reached numbers 1, 2, 3, 4, and 5 on the Billboard charts.
10 Blackground Records has sold over 16,000,000 albums and had distribution contracts
11 with Virgin Records, Universal Records and Interscope Records.
12 22. A judgment was entered on May 10, 2011, in favor of Plaintiff and against
13 Hankerson for $5,847,886.99. As of January 31, 2015, the Judgment, with interest,
14 exceeds $7,283,234.
15 23. Plaintiff entered into a settlement agreement with Hankerson effective
16 January 1, 2012, (the "Settlement Agreement") which, among other things, required
17 Hankerson to pay Plaintiff the principal amount of $4,600,000 together with interest at
18 ve percent (5%) per annum from January 1, 2014, through December 31, 2015, and ten
19 percent (10%) per annum from January 1, 2016, until the principal amount was paid in
20 full. The Settlement Agreement required Hankerson to pay to Plaintiff 35% of all
21 moneys that he or the Hankerson Entities and other entities identified in the Settlement
22 Agreement received after January 1, 2012 until the balance of the settlement amount set
23 forth in the Settlement Agreement was paid.
24 24. On or about January 1, 2012, Blackground Records signed and delivered to
25 Plaintiff a written guaranty (the “Guaranty”) in which Blackground Records guaranteed
26 payment to Plaintiff of the settlement amount in the Settlement Agreement together with
E3); 27 interest due thereunder. No amount of the Guaranty ever has been paid.
28 25. The Settlement Agreement also provides that payments to Hankerson or the
M 5COMPLAINT
1 Hankerson Entities were required to be paid to Turner, and he was to pay Plaintiff the
2 agreed upon percentage. Further, Turner was required to prepare and provide Plaintiff
3 periodic accountings. Turner is, and at all times has been, the long-time accountant for
4 Hankerson, Blackground Records and the Hankerson Entities and he facilitated all
5 payments that were made alleged below to Kathy, Mogame, Masonya Washington,
6 Laurence Muhammed, and Hankerson. The Settlement Agreement provides at paragraph
7 6, among other terms, as follows:
8 c. Collection of Cash Receits from Other Paors.9 Hankerson shall instruct each and every person, other than the
Interscope Related Entities, from whom he reasonably10 expects cash sums will be paid to himself, his wife or his11 minor children and step children that such cash sums shall be
paid to Turner for his benet. If any cash sums are received12 by Hankerson, Hankerson's wife, or Hankerson's minor
children and step children from any person other than Turner,13 then within five (5) days after his receipt of such cash sums,14 Hankerson shall provide to Neil M. Sunkin a full, complete
and accurate statement itemizing each such cash sum and15 setting forth, in reasonable detail, the following information:16 (i) the name, contact person and address of the payee, (ii) the
reason for the payment, (iii) whether Hankerson reasonably17 believes the payee or a person related to the payee will pay
additional cash sums to Hankerson, and (iv) whether the18 payee has been notied to make future payments of cash19 sums to Turner for the benefit of Hankerson.
20 d. Pament of Cash Receits y Hankerson.Concurrently with the delivery of a statement made pursuant
21 to paragraph 6.c., Hankerson shall pay Dang, in the manner22 set forth in Paragraph 5.b., an amount equal to 35% of the
Cash Receipts received by Hankerson less the federal and23 state income taxes due on such Cash Receipts determined in24 the same manner as set forth in Paragraph 6.a.(vii).
25 e. Accountin and Pament y Turner.
26 (i) Within ten (10) business days after the Partiesc; 27 sign and deliver this Agreement, Hankerson shall cause
Turner to provide Dang with an accounting of all Cash:;_f 23 Receipts from January 1, 2012, through the date theg, Agreement is signed and delivered. The accounting shall
:__COMPLAINT
l1 disclose, at a minimum, the Cash Receipts from the l2 Interscope Related Entities and the Cash Receipts, if any,
from each of the Other Payors, including the name, contact3 person and address of each payor.
4 (ii) On a quarterly basis from the date the Partiessign and deliver this Agreement, Turner shall account to
5 Dang for all of the Cash Receipts in his possession, custody6 or control. The accounting shall include, at a minimum, the
amount of each cash sum and cash equivalent sum received7 by Turner, the amounts deducted from such cash and cash
equivalent sums and the reasons therefore, the date each cash8 sum and cash equivalent sum was received by Turner, the9 name, contact person and address of the payor, and the reason
for the cash sum and cash equivalent sum being paid to10 Turner for the benefit of Hankerson, if Turner knows or can11 reasonably ascertain the reason for the payment.
(iii) Within ten (10) business days after the Parties12 sign and deliver this Agreement,
13 (A) Hankerson shall cause Blackground Records to14 pay Dang, for the benefit of Hankerson, an amount equal to
35% of the Cash Receipts paid by the Interscope Related15 Entities between January 1, 2012, and the date the Parties ‘
sign and deliver this Agreement and continuing thereafter16 until Turner begins to collect the Cash Receipts from the ’17 Interscope Related Entities, and
18 (B) Hankerson shall pay Dang an amount equal to35% of the Cash Receipts paid by the Other Payors between
19 January 1, 2012, and the date the Parties sign and deliver this20 Agreement.
(iv) Turner shall pay Dang 35% of the Cash21 Receipts in his possession, custody or control as often as he22 pays any of the Cash Receipts to Hankerson, Blackground
Records or any Controlled Entity, but not less frequently than23 quarterly.
24 Additionally, the Settlement Agreement required Turner to maintain various records for
25 the benet of Plaintiff. Plaintiff is informed and believes and based thereon alleges that
26 at all times relevant, Turner had knowledge of the Settlement Agreement, its terms, and1::
l<'.": 27 the obligations imposed on him in the Settlement Agreement.
ff-{V 28 ///{3}}
__ COMPLAINT p
O O1 FIRST CAUSE OF ACTION
2 (Fraudulent Transfer [Civil Code §§ 3409.04 and 3409.05] Regarding
3 Payments to Future Sound by Reservoir Against Defendants,
4 Hankerson, Jomo, Future Sound, Moore, Parker, Mosely, Blackground
5 Records, Blackground Music, Blackground Enterprises, Barry & Sons,
6 Black Fountain Publishing, Black Fountain, Inc., Reservoir, Turner,
7 and DOES 1-90)
8 26. Plaintiff realleges and incorporates herein by reference each of the
9 allegations above as if set forth in full herein.
10 27. Prior to the date of the Judgment, through one or more of the Hankerson
11 Entities, Hankerson owned and controlled certain valuable assets, including music
12 publishing rights, recording rights, and copyrights. These assets, hereinafter referred to as
13 the "Hankerson's music rights" are more particularly described in a Composition and
14 Master Co-Publishing And Administration Agreement (hereinafter referred to as the
15 "Reservoir Agreement") made effective as of June, 2012. Plaintiff is informed and
16 believes and based thereon alleges that in Spring or Summer of 201 1, Hankerson and the
17 Hankerson Entities had been negotiating with Reservoir for the sale of Hankerson's music
18 rights to Reservoir by Hankerson and the Hankerson Entities.
19 28. Plaintiff is informed and believes and based thereon alleges that several
20 months after Hankerson, with Jomo’s knowledge, began negotiating with Plaintiff to
21 settle the Judgment and only one month before the Reservoir Agreement was made,
22 Hankerson, Jomo, Mosely, Parker and Moore made an agreement to form Future Sound.
23 Plaintiff is informed and believe and based thereon alleges these defendants formed
24 Future Sound specically for the purpose of receiving payment for the sale of
25 Hankerson's music rights, to conceal the sale of the music rights from Plaintiff, to
26 fraudulently deprive Plaintiff of any interest in the music rights, to defraud Plaintiff from
27 receiving any of the payments to which she was entitled pursuant to the Settlement
28 Agreement, and to hinder and delay Plaintiff from collecting money that Hankerson and13;:
COMPLAINT
O O1 Blackground Records owed to her.
2 29. Plaintiff is informed and believes and based thereon alleges that Hankerson,
3 Blackground Records, and the Hankerson Entities transferred to Future Sound all of their
4 valuable assets for no consideration and that such transfer was made when Hankerson,
5 Blackground Records, and the Hankerson Entities were insolvent or they became
6 insolvent as a result of such transfer.
7 30. Plaintiff is informed and believes and based thereon alleges that Hankerson,
8 Blackground Records, the Hankerson Entities and Future Sound sold Hankerson's music
9 rights to Reservoir pursuant to the Reservoir Agreement in exchange for the payments
10 totaling at least $1,366,000 to Future Sound directly, and the payment of approximately
11 $360,000 to persons or entities to whom Hankerson and/or the Hankerson entities were
12 purportedly indebted. In addition, the Reservoir Agreement provides that future
13 payments in connection with the exploitation of Hankerson's music rights will be made to
14 Future Sound, rather than to Hankerson, Blackground Records, and/or the Hankerson
15 Entities who had owned the Hankerson music rights. Plaintiff is informed and believes
16 and based thereon alleges that a purpose of this provision and the expected effect is to
17 deprive Plaintiff of and make it more difficult for Plaintiff to collect and enforce her
18 Judgment, the Guaranty, and the Settlement Agreement. Future Sound paid no
19 consideration to Hankerson, Blackground Records, or the Hankerson Entities in exchange
20 for the payments made to it by Reservoir for the Hankerson music rights.
21 31. All of these payments of $1,726,000 were made directly to Future Sound
22 and to other third persons in order conceal the payments from Plaintiffwho had a right to
23 receive 35% of the payments pursuant to the Settlement Agreement.
24 32. Further, the transfer of assets to Future Sound and the payments directly to
25 Future Sound and certain third persons were made with an actual intent of hindering,
26 delaying and defrauding Plaintiff in her ability to collect money owed to her under the
27 Settlement Agreement, the Judgment, and the Guaranty.
28 33. Alternatively, Future Sound's receipt of $1,366,000 from Reservoir for the(u
COMPLAINT
O O1 sale of the Hankerson music rights without giving reasonably equivalent value to
2 Hankerson, Blackground Records, or the Hankerson Entities in exchange for the receipt
3 of the proceeds of the sale of the Hankerson music rights was made at a time when
4 Hankerson and Blackground Records were engaged in and/or were about to engage in a
5 transaction for which their remaining assets were unreasonably small in relation to the
6 transaction, including the Settlement Agreement and Guaranty.
7 34. At the time that Future Sound received payment for the sale of the
8 Hankerson music rights Hankerson and Defendant Blackground Records were about to
9 sign the Settlement Agreement which required, among other things, that Hankerson pay
10 Plaintiff immediate cash of $1,000,000. Plaintiff is informed and believes and based
ll thereon alleges that neither Hankerson nor Blackground Records had sufficient assets or
12 even borrowing ability to pay Plaintiff the amounts required by the Settlement Agreement
13 or the Guaranty.
14 35. At the time that Future Sound received $1,366,000 from Reservoir for the
15 sale of the Hankerson music rights, Hankerson and Blackground Records intended to
16 incur, believed, or reasonably should have believed that they would incur, debts beyond
17 their ability to pay as they became due.
18 36. At the time that Reservoir paid Future Sound $1,366,000 for the sale of the
19 Hankerson music rights, Hankerson was insolvent or became insolvent shortly after the
20 transfer was made.
21 37. Prior to the date of the Judgment, Hankerson, Blackground Records, and
22 the Hankerson Entities were actively engaged in business, including by producing
23 albums, actively seeking new artists, and making contracts with and forming partnerships
24 with various other businesses in the music and entertainment industries.
25 38. Plaintiff is informed and believes and based thereon alleges that in
26 connection with the making of the Reservoir Agreement, Reservoir was represented by
27 counsel and conducted extensive due diligence such that Reservoir knew of Plaintiffs
28 Judgment against Hankerson, knew that Future Sound was a newly created entity, and(L3
10COMPLAINT
O CI knew that the assets to be transferred to Reservoir had been owned by Blackground
2 Records and other of the Hankerson Entities and that such assets were not, in fact, owned
3 by Future Sound.
4 39. Plaintiff is informed and believes and based thereon alleges that Reservoir
5 knew that it was not Future Sound, but Hankerson, Blackground Records, and/or the
6 Hankerson Entities that had owned the Hankerson music rights transferred to Reservoir
7 under the Reservoir Agreement.
8 40. Plaintiff is informed and believes and based thereon alleges that Turner: (21)
9 was involved in the formation of Future Sound; (b) knew that the assets that were
10 transferred to Reservoir in the Reservoir Agreement never had been owned by Future
11 Sound but that they had been owned by Hankerson, Blackground Records and the
12 Hankerson Entities; (c) knew Future Sound gave no consideration for the assets
13 transferred to it; ((1) was involved in the making of the Reservoir Agreement; (e) had
14 knowledge of the payments from Reservoir to Future Sound; and (f) knew that Plaintiff
15 was entitled to receive 35% of the payments made under the Reservoir Agreement.
16 Turner intentionally concealed from Plaintiff the Reservoir Agreement and payments
17 made under the Reservoir Agreement. Turner intentionally mislead Plaintiff by telling
18 Plaintiff that no money had been received by Hankerson, Blackground Records, and the
19 Hankerson Entities that were to be accounted for under the Settlement Agreement in
20 response to specic requests for accountings to which Plaintiff was entitled under the
21 Settlement Agreement.
22 41. Defendants’ conduct as described herein was intentional, oppressive,
23 willful, malicious, and/or fraudulent, and was in conscious disregard ofPlaintiffs rights.
24 The acts complained of were performed directly by Defendants and Defendants’ ofcers,
25 directors or managing agents, or were authorized and ratified by such persons. Punitive
26 and exemplary damages should be imposed on Defendants for the sake of example and
27 by way ofpunishing Defendants in amount according to proof.
28in
11COMPLAINT
O O1 SECOND CAUSE OF ACTION
2 (Fraudulent Transfer [Civil Code §§ 3409.04 and 3409.05] Regarding
3 Payments from Blackground Records and/or Future Sound to Kathy
4 and Mogame Against Hankerson, Jomo, Blackground Records, Kathy,
5 Mogame, Turner, and DOES 50-90)
6 42. Plaintiff realleges and incorporates herein by reference each of the
7 allegations above as if set forth in full herein.
8 43. Plaintiff is informed and believes and based thereon alleges that from and
9 after January 1, 2012 and through December 31, 2012, Defendant Kathy, Hankerson's
10 wife, received so-called "payroll" payments from Defendant Blackground Records in the
11 amount of approximately $4,626/month totaling $52,500. Plaintiff is informed and
12 believes and based thereon alleges that Kathy did not provide services to Blackground
13 Records having a value of at least $4,626/month. In addition, Blackground Records gave
14 Kathy in excess of $390,000 between January 2012 and January 2013 for which there
15 was no consideration even ostensibly given. These transfers were referenced on the books
16 of Blackground Records as "household expenses". In reality, these were transfers from
17 Blackground Records to Hankerson.
18 44. Plaintiff is informed and believes and based thereon alleges that from
19 January 1, 2012 through 2013, Blackground gave Mogame $253,000 under the guise of
20 "consulting fees". In reality, these were payments to Hankerson.
21 45. Plaintiff is informed and believes and based thereon alleges that when
22 Blackground Records gave Kathy approximately $442,000 and Mogame approximately
23 $253,000, Blackground Records was engaged in and/or was about to engage in a
24 transaction for which his remaining assets were unreasonably small in relation to the
25 transaction. At the time that Future Sound received payment for the sale of the
26 Hankerson music rights Hankerson and Defendant Blackground Records were about to
27 sign the Settlement Agreement which required, among other things, that Hankerson pay
28 Plaintiff immediate cash of $1,000,000, and at the same time, Blackground Records wasU,
12COMPLAINT
O O1 giving a Guaranty of the full amount of the Settlement, which was at least $4,600,000.
2 Plaintiff is informed and believes and based thereon alleges that Hankerson did not have
3 sufcient assets or even borrowing ability to pay Plaintiff the amounts required by the
4 Settlement Agreement and that Blackground Records did not have sufficient assets or
5 even borrowing ability to pay Plaintiff the amounts required by the Guaranty.
6 46. At the time that Kathy was given approximately $442,000 and Mogame
7 was given $253,000 by Blackground Records, Blackground Records intended to incur,
8 believed, or reasonably should have believed that it would incur debts beyond its ability
9 to pay as they became due.
10 47. At the time that Kathy was give approximately $442,000 and Mogame was
11 given at least $253,000 by Blackground Records, Blackground Records was insolvent or
12 became insolvent shortly after the transfer was made.
13 48. Plaintiff is informed and believes and based thereon alleges that each of the
14 payments made to Kathy and Mogame were facilitated by Turner and that each payment
15 was made in derogation of Plaintiffs right under the Settlement Agreement to receive
16 payments concurrently with Hankerson, his immediate family members and the
17 Hankerson Entities. The payments to Kathy and to Mogame were disguised payments to
18 Hankerson. In reality, the payments to Kathy and to Mogame were payments to
19 Hankerson and were made to conceal them from Plaintiff and to avoid the need to pay
20 Plaintiff her 35% as was required by the Settlement Agreement.
21 49. Plaintiff is informed and believes and based thereon alleges that each of the
22 payments made to Kathy and Mogame were made with an actual intent to hinder, delay,
23 and/or defraud Plaintiff.
24 50. Turner was specifically asked to provide the accountings for payments, but
25 to protect his long-time clients, Turner intentionally misled Plaintiff by telling her that
26 there had been no payments received for which accountings needed to be provided.
E; 27 51. Defendants’ conduct as described herein was intentional, oppressive,
28 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.[3,]
13 —COMPLAINT
O O1 The acts complained of were performed directly by Defendants and Defendants’ officers,
2 directors or managing agents, or were authorized and ratied by such persons. Punitive
3 and exemplary damages should be imposed on Defendants for the sake of example and
4 by way ofpunishing Defendants in amount according to proof.
5 THIRD CAUSE OF ACTION
6 (Common Law Fraud Against Turner, Blackground Records, and
7 Hankerson and DOES 50-90)
8 52. Plaintiff realleges and incorporates herein by reference each of the
9 allegations above as if set forth in full herein.
10 53. The Settlement Agreement provides that payments to Hankerson or the
11 Hankerson Entities were required to be made to Turner and he was to pay Plaintiff the
12 agreed upon percentage. Further, Turner was to prepare and to provide Plaintiffperiodic
13 accountings. Turner was the long-time accountant for Hankerson, Blackground Records
14 and the Hankerson Entities and he had knowledge of and facilitated all payments that
15 were made to Kathy and Hankerson as alleged herein. Plaintiff is informed and believes
16 and based thereon alleges that at all times relevant, Turner has had knowledge of the
17 Settlement Agreement, its terms and the obligations imposed on him in the Settlement
18 Agreement.
19 54. On or about August 20, 2013 and December 9, 2013, Plaintiff requested in
20 writing the accountings to which she was entitled under the Settlement Agreement.
21 55. In response, shortly after December 9, 2013, Turner informed Plaintiff that
22 Hankerson and his businesses made no income and that Hankerson had no cash receipts
23 to report.
24 56. Turner's statements were utterly false. In fact, there were income and cash
25 receipts, including cash payments alleged above made by Reservoir in the amount of
26 $1,726,000 after June 2012. In addition, there were cash payments made to Kathy of in
I 27 excess of $442,000 as alleged above. In addition, Plaintiff is informed and believes and
28 based there on alleges that there were cash payments made to Hankerson directlyI“.
14COMPLAINT
O O1 between August 2012 and January 2013 of in excess of $144,500. Further, Plaintiff is
2 informed and believes and based thereon alleges that from January 1, 2012 through 2013,
3 Blackground made cash payments to Mogame of at least $253,000 under the guise of
4 "consulting fees", but in reality these were payments to Hankerson. Further, Plaintiff is
5 informed and believes and based thereon alleges that from January 1, 2012 through 2013,
6 Blackground made cash payments to Masonya Washington, Hankerson's former wife, of
7 at least $24,700, and these were payments made on Barry's behalf for spousal support.
8 Further, Plaintiff is informed and believes and based thereon alleges that from January 1,
9 2012 through 2103, Blackground Records made cash payments on behalf of Hankerson
10 to a "Laurence Muhammed" of at least $31,831.
11 57. Additionally, Turner concealed from Plaintiff: (a) the formation ofFuture
12 Sound, (b) the transfer of the assets of Hankerson, Blackground Records and the
13 Hankerson Entities to Future Sound, (c) the payments made to Future Sound under the
14 terms of the Reservoir Agreement, and (d) the foregoing alleged payments to Kathy,
15 Hankerson, Masonya Washington, and Laurence Mohammed.
16 58. Plaintiff is informed and believes and based thereon alleges that at the time
17 Turner made the statements alleged herein he knew that the statements were false,
18 including, because he had been involved in the making of the Reservoir Agreement, had
' 19 facilitated the payments to Hankerson, Kathy, Mogame, Masonya Washington, and
20 Laurence Muhammed, including by issuing and arranging for the payments, and Turner
21 had performed the bookkeeping and accounting for Hankerson and the Hankerson
22 Entities for many years. Moreover, Plaintiff is informed and believes and based thereon
23 alleges that Turner was involved in the formation of Future Sound and is the accountant
24 for Future Sound.
25 59. Turner's false representations and concealment were made with the intent of
26 inducing Plaintiff to forbear from taking action to collect on her Judgment, enforcing the
27 Settlement Agreement, and exercising her rights in and enforcing the Guaranty.
28 60. Plaintiff reasonably relied on Turner's statements in that she did so forbear.,1,
15COMPLAINT
1 Plaintiffs reliance was reasonable, because, according to Turner, there were no cash
2 receipts to as to which Plaintiff would have been entitled to 35% under the Settlement
3 Agreement and Turner is a licensed Certied Public Accountant.
4 61. As a proximate cause of Turner's fraudulent conduct, Plaintiff has suffered
5 damages in an amount to be proven at trial, including the amounts paid by Reservoir and
6 the amounts paid to Hankerson, Kathy, Mogame, Masonya Washington, and Laurence
7 Muhammed, which are not less than $2,622,031.
8 62. Defendants’ conduct as described herein was intentional, oppressive,
9 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.
10 Punitive and exemplary damages should be imposed on Defendants for the sake of
I 1 example and by way ofpunishing him in an amount according to proof.
12 FOURTH CAUSE OF ACTION
13 (Common Law Fraud Against Hankerson and Does 91-100)
14 63. Plaintiff realleges and incorporates herein by reference each of the
15 allegations above as if set forth in full herein.
16 64. In the Settlement Agreement, Hankerson made certain representations and
17 warranties that Plaintiff has discovered were false. Hankerson identified all of the
18 "Controlled Entities" as that term was defined in the Settlement Agreement. In the
19 Settlement Agreement "Controlled Entities" is defined as:
20 any existing or future corporation, limited liability company,21 partnership or other business entity in which a portion of the
capital stock or other ownership interests are owned, directly22 or indirectly, by Hankerson and/or Hankerson's parents, wife,23 wife's parents or minor children, step children or
grandchildren (collectively, "Hankerson's immediate family")24 and that portion, collectively with any portion of the capital
stock or other ownership interests owned, directly or25 indirectly, by Hankerson's adult children constitute more than26 fifty percent (50%) of the ownership interest.
27 Further, the Settlement Agreement contains the following provision:
{Ii 28 Hankerson represents and warrants that after havingconducted a diligent search of his records, the business
16COMPLAINT
1 entities listed on Exhibit A attached hereto and incorporated2 herein as though fully set forth, are the only business entities
which he believes currently exist and which come within the3 denition of Controlled Entity.
4 Further, in the Settlement Agreement Hankerson expressly represented that the facts
5 stated in Exhibit A thereto, being the list of "Controlled Entities" were true.
6 65. The representations Hankerson made in the Settlement Agreement
7 concerning the identity of the "Controlled Entities" were false. In the Settlement
8 Agreement, Hankerson failed to identify, but instead concealed, the existence of several
9 "Controlled Entities", including several of his entities that were parties to the Reservoir
10 Agreement and who, according to the Reservoir Agreement, transferred assets to Future
11 Sound. To wit, Hankerson concealed the identity of (a) Future Sound, (b) Barry & Sons,
12 Inc., (c) Black Fountain, Inc., (d) Blackground Music, Inc., and (e) Blackground
13 Entertainment, Inc. This concealment is particularly egregious given that Hankerson
14 signed the Settlement Agreement making the false representation just weeks after signing
15 the Reservoir Agreement, which he signed both individually and as the President and
16 CEO of these concealed entities.
17 66. In the Settlement Agreement, Hankerson expressly represented that the
18 initial payment required under the Settlement Agreement of $1,000,000 would be paid by
19 means of a loan from a person who20 . . . . .is not and will not be a business entity which employs21 Hankerson or any member ofHankerson's immediate family
or in which Hankerson or any member ofHankerson's22 immediate family has a management position or ownership23 interest; Blackground Records; any entity of which
Blackground Records is a member; a Controlled Entity2425 Additionally, through his agents and attorneys, after the execution of the Settlement
26 Agreement, Hankerson expressly represented that the source of his initial payments under
1.] 27 the Settlement Agreement were loans from one or more lenders. Further, in the(ll
.3 28 Settlement Agreement and negotiations in connection therewith and in discussions after
execution of the Settlement Agreement and in connection with payment of the initial17
COMPLAINT
C O1 payment due under the Settlement Agreement, Hankerson refused to disclose the identity
2 of the lender.
3 67. Plaintiff is informed and believes and based thereon alleges that
4 Hankerson's representations and those of DOES 90-100 as to the source of funds for
5 Hankerson's initial payments due under the Settlement Agreement and Hankerson's
6 representation that the "lender" was not a "Controlled Entity" were false. The true facts,
7 which were concealed from Plaintiff, are that either (a) Hankerson did not borrow money
8 to make the initial payment under the Settlement Agreement or (b) the "lender" was
9 Future Sound, which employs Jomo, who is Hankerson's son and also is a Controlled
10 Entity. Financial statements of Future Sound show payments to attorney(s) who claimed
1 1 to be representing "the lender" and who Plaintiff is informed and believes was/were paid
12 by Hankerson or one or more of his entities, and because Jomo testified that some of the
13 money received from Reservoir was used to pay Plaintiff.
14 68. At the time Hankerson and DOES 90-100 made the foregoing
15 representations they knew that they were false. The false representations were made to
16 induce Plaintiff to enter into the Settlement Agreement and/or to agree to certain
17 provisions in the Settlement Agreement, including those pertaining to the lender, and to
18 agree to certain releases of the "lender". The false representations also were made to
19 induce Plaintiff to enter into the Settlement Agreement and forbear from collecting on the
20 Judgment. Further, the false representations were made to conceal the sale of
21 Hankerson's assets to Reservoir and thereby avoid having to pay 35% of the sale
22 proceeds to Plaintiff and to avoid having Plaintiff place liens on his assets.
23 69. Plaintiff reasonably relied on the foregoing representations. Specically,
24 based on Hankerson's fraudulent representations in the Settlement Agreement, Plaintiff
25 executed and delivered to Hankerson's attorney, Virgil Roberts, a release of her judgment
26 lien on Hankerson's real property commonly known as 23460 Hatteras Street, Woodland
27 Hills, California 91367 (the Woodland Hills Property") and a release of her Fiere Facias
28 Lien for recording in Georgia against certain real property owned by Hankerson inm.
18COMPLAINT
O O1 Coweta County, Georgia (the "Georgia Property"). These releases are referred to herein
2 as the "Releases". Additionally, based on the false representations, Plaintiff did forebear
3 from collecting on the Judgment.
4 70. As a proximate cause of the fraudulent conduct of Hankerson and DOES
5 90-100, Plaintiff has suffered damage in an amount to be proven at trial, but which is not
6 less than $2,622,531, plus consequential damages proximately caused by the release of
7 liens, including damage caused by liens recorded against the Woodland Hills Property
8 and/or the Georgia Property after the Releases were recorded, in amounts to be proven at
9 trial.
10 71. The conduct of Hankerson and DOES 91-100 as described herein was
1 1 intentional, oppressive, willful, malicious, and/or fraudulent, and was in conscious
12 disregard ofPlaintiffs rights. Punitive and exemplary damages should be imposed on
13 said Defendants for the sake of example and by way ofpunishing them in an amount
14 according to proof.
15 FIFTH CAUSE OF ACTION
16 (Declaratory Judgment Against Defendants Hankerson and DOES 101 -125)
17 72. Plaintiff realleges and incorporates herein by reference each of the
18 allegations above as if set forth in full herein.
19 73. An actual controversy has arisen and now exists between Plaintiff,
20 Hankerson and DOES 101-125 concerning their respective rights regarding the Releases.
21 74. Plaintiff desires a judicial determination of her rights and a declaration that
22 the Releases are null and void and of no legal effect and that they should be cancelled;
23 and further, a declaration that any liens recorded by DOES 101-125 against the
24 Woodland Hills Property and/or the Georgia Property are junior to Plaintiffs liens.
25 75. A judicial declaration is necessary and appropriate at this time under the
26 circumstances so that the parties may ascertain their lien rights as to Woodland Hills
iii. 27 Property and/or the Georgia Property.
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19COMPLAINT
O O1 SIXTH CAUSE OF ACTION
2 (Breach of Contract Against Hankerson)
3 76. Plaintiff realleges and incorporates herein by reference each of the
4 allegations above as if set forth in full herein.
5 77. The Settlement Agreement required, among other things, that Hankerson
6 make certain payments to Plaintiff, including paying 35% of cash receipts to her and that
7 Hankerson give certain accountings to Plaintiff.
8 78. All conditions precedent to Hankerson's obligation to perform the contract
9 have been performed, waived, excused, or satised.
10 79. Hankerson breached the contract by failing to make payments to Plaintiff
l 1 that were required by the contract and by failing to provide Plaintiffwith the accountings
12 required by the contract.
13 80. As a direct and proximate result of Hankerson's breach of the contract,
14 Plaintiff has been damaged in an amount to be proven at trial, but which is not less than
15 $917,710.85.
16 81. As a result of Hankerson's breach of the Settlement Agreement, Plaintiff
17 has been required to retain attorneys.
18 SEVENTH CAUSE OF ACTION
19 (Intentional Interference with Contract Against Defendants, Jomo,
20 Future Sound, Moore, Parker, Mosely, Blackground Records, A’
21 Mogame, Turner, and DOES 1-100)
22 82. Plaintiff realleges and incorporates herein by reference each of the
23 allegations above as if set forth in full herein.
24 83. The Settlement Agreement is a valid contract that existed between Plaintiff
25 and Hankerson. Additionally, the Guaranty is a valid contract that existed between
26 Plaintiff and Blackground Records.
27 84. Plaintiff is informed and believes and on that basis alleges that each of the
28 Defendants knew of said contracts.
20COMPLAINT
C O1 85. By their conduct alleged herein, each of the Defendants engaged in conduct
2 that was intended to and did cause Hankerson to breach the Settlement Agreement and
3 Blackground Records to breach the Guaranty or to cause a disruption in the contractual
4 relationship between Plaintiff and Hankerson, and between Plaintiff and Blackground
5 Records.
6 86. But for the Defendants’ acts of interference with the contracts, the contracts
7 could have been performed as there would have been cash receipts available to pay
8 Plaintiff under the Settlement Agreement and/or Blackground Records would have had
9 assets to pay on its Guaranty.
10 87. As a result of Defendants‘ intentional interference with the contracts as
1 1 alleged herein, Plaintiff has been damaged in an amount to be proven at trial, but which is
12 not less than $2,622,531.
13 88. Defendants’ conduct as described herein was intentional, oppressive,
14 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.
15 The acts complained ofwere performed directly by Defendants and Defendants‘ ofcers,
16 directors or managing agents, or were authorized and ratified by such persons. Punitive
I7 and exemplary damages should be imposed on Defendants for the sake of example and
18 by way ofpunishing Defendants in amount according to proof.
19 EIGHTH CAUSE OF ACTION
20 (Declaratory Judgment Against Defendants Hankerson, Blackground
21 Records, Blackground Music, Blackground Enterprises, Barry & Sons,
22 Black Fountain Publishing, and Black Fountain and DOES 1-90)
23 89. Plaintiff realleges and incorporates herein by reference each of the
24 allegations above as if set forth in full herein.
25 90. An actual controversy has arisen and now exists between Plaintiff, on the
26 one hand, and Defendants Hankerson and the Hankerson Entities, on the other hand,
27 concerning whether or not the Hankerson Entities are alter egos of Hankerson. Plaintiff
28 contends that there is a unity of interest between Hankerson and the Hankerson Entitiesm.
21COMPLAINT
O O1 such that the separate personality of Hankerson and the Hankerson Entities do not exist,
2 that the recognition of the separateness of them would be inequitable, and that the
3 Hankerson Entitles are in reality mere alter egos of Hankerson. Plaintiff is informed and
4 believes and based thereon alleges that Defendants contend otherwise.
5 91. Plaintiff desires a judicial determination of her rights and a declaration that
6 the Hankerson Entities are alter egos of Hankerson.
7 92. A judicial declaration is necessary and appropriate at this time under the
8 circumstances so that the parties may ascertain their rights.
9 NINTH CAUSE OF ACTION
10 (Injunction Against All Defendants)
1 I 93. Defendants have violated and are continuing to violate Plaintiffs rights, and
12 caused and are causing great and irreparable injury to Plaintiff.
13 94. The injury caused to Plaintiff by Defendants’ wrongful acts cannot
14 adequately or readily be compensated by pecuniary compensation.
15 95. Without injunctive relief to prevent further fraudulent transfers and
16 interference with Plaintiffs’ rights, Defendants’ wrongful acts and injury to Plaintiff,
17 including as alleged above, will continue. l
18 96. An injunction is necessary to prevent a multiplicity ofjudicial proceedings. ‘
19 97. An injunction is expressly authorized by Civil Code § 3439.07 (a)(3)(A).
20 ’21 WHEREFORE, Plaintiff prays for a Judgment:
22 ON THE FIRST AND NINTH CAUSES OF ACTION
23 1. Declaring the payments made by Reservoir to or for the benet of
24 Hankerson and/or a Hankerson Entity, and to or for the benet of Future Sound, void and
25 of no legal effect;
26 2. Ordering that Plaintiff has a lien on all money transferred under the
jg; 27 Reservoir Agreement to Hankerson, to a Hankerson Entity, to Future Sound or to any
28 person, and that Plaintiff has a lien on all funds or money due or owing in the future andm
22COMPLAINT
C O1 presently under the Reservoir Agreement;
2 3. Ordering that Hankerson, and/or a Hankerson Entity, and/or Future Sound,
3 and any person who received money or payment from them return the payments and
4 funds to Reservoir for disposition and payment to Plaintiff to the extent ofher Judgment;
5 4. Enjoining the Defendants, and each of them, from further disposition of the
6 assets formerly owned by Hankerson, the Hankerson Entities, and/or Future Sound;
7 5. Enjoining the transfer by Reservoir to Hankerson, a Hankerson Entity,
8 Future Sound, or any person any payments to be made, due or owing under the Reservoir
9 Agreement, except upon further order of the Court;
10 6. Against all Defendants for the amount of money transferred under the
11 Reservoir Agreement to Hankerson, a Hankerson Entity, Future Sound or any person, in
12 an amount not less than $1,726,000;
13 7. For exemplary and punitive damages; and
14 8. For pre- and post judgment interest.
15 ON THE SECOND AND NINTH CAUSES OF ACTION
16 1. Declaring the payments made by Blackground Records to Kathy void and
17 of no legal effect;
18 2. Declaring the payments made by Blackground Records to Mogame void
19 and of no legal effect;
20 3. Ordering that Plaintiff has a lien on all money transferred to Kathy;
21 4. Ordering that Plaintiff has a lien on all moneys transferred to Mogame;
22 5. Ordering that Kathy return the payments and funds to Blackground Records
23 for disposition and payment to Plaintiff to the extent of the Guaranty;
24 6. Ordering that Mogame return the payments and funds to Blackground
25 Records for disposition and payment to Plaintiff to the extent of the Guaranty;
26 7. Against all Defendants for the amount of money transferred to Kathy and
27 Mogame in an amount not less than $695,000.
28 5. For exemplary and punitive damages; and11-.
23COMPLAINT
O O1 6. For pre-and post judgment interest.
2 ON THE THIRD CAUSE OF ACTION
3 1. For general, special, and consequential damages according to proof at trial
4 but for an amount not less than $2,622,531.
5 2. For exemplary and punitive damages; and
6 3. For pre-and post judgment interest.
7 ON THE FOURTH CAUSE OF ACTION
8 1. For general, special, and consequential damages according to proof at trial
9 but for an amount not less than $2,622,531.
10 2. For exemplary and punitive damages; and
l 1 3. For pre-and post judgment interest.
12 ON THE FIFTH CAUSE OF ACTION
13 Declaring , cancelling, and ordering the Releases void and of no legal effect and
14 declaring that Plaintiffs’ liens on the Woodland Hills Property and the Georgia Property
15 are senior to any liens recorded against those properties after the Releases were recorded.
16 ON THE SIXTH CAUSE OF ACTION
17 1. For general, special, and consequential damages according to proof at trial
18 but for an amount not less than $917,710.85.
19 2. For exemplary and punitive damages;
20 3. For pre-and post judgment interest; and
21 4. For attorney's fees.
22 ON THE SEVENTH CAUSE OF ACTION
23 1. For general, special, and consequential damages according to proof at trial
24 but for an amount not less than $2,622,531.
25 2. For exemplary and punitive damages; and
26 3. For pre-and post judgment interest.
6}‘ 27 ON THE EIGHTH CAUSE OF ACTION28 Declaring that Defendants Blackground Records, Blackground Music,
W.
24COMPLAINT
O O1 Blackground Enterprises, Barry & Sons, Black Fountain Publishing, and Black Fountain
2 and DOES 1-90 are alter egos of Defendant Hankerson.
3 ON ALL CAUSES OF ACTION
4 1. For costs of suit; and
5 2. For such other and further relief, at law or in equity, which the Court deems
6 just and proper.
78 LAW ICE OF NEIL M. SUNKIN
9 DOUGLAS L. CARD N
10 By: Z :11 NEIL M. SUNKIN12 Attorneys for PlaintiffKyme Dang
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25COMPLAINT