limited joinder and limited objection of thomas
TRANSCRIPT
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
JMO WIND DOWN, INC., ) Case No. 16-10682 (BLS)
)
Debtor. )
LIMITED JOINDER AND LIMITED OBJECTION OF THOMAS KASTENHOFER
TO MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS (I) TO
ENFORCE THE PLAN CONFIRMATION ORDER AND SALE ORDER AND
(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION
AND SIMILAR CLAIMS IN OTHER FORUMS
Thomas Kastenhofer, individually by and through his undersigned counsel, hereby
submits this limited joinder and limited objection to the motion (the “Motion”) [Docket No.
585]1 for entry of an order (i) enforcing the terms of (a) the Plan, (b) the Confirmation Order and
(c) the Sale Order and (ii) enjoining Plaintiff from prosecuting the Civil Action. In support of his
joinder and objection, Mr. Kastenhofer respectfully states as follows:
Preliminary Statement
1. Mr. Kastenhofer supports the arguments set forth in the Motion; however, if the
Court rules that the claims Plaintiff has against the Non-Founder Defendants are derivative in
nature and, as a result, Plaintiff lacks standing to pursue such claims under the terms of the Plan,
then it necessarily follows that Plaintiff also lacks the standing to pursue the same derivative
claims against Mr. Kastenhofer.
2. The proposed form of order the Non-Founder Defendants submitted as Exhibit 1
to the Motion overlooks this fact and, based on the use of the narrowly defined term “Estate
Claims” and other limiting language, seeks relief only as to Plaintiff’s claims against the Non-
1 Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Motion.
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Founder Defendants. Such an order is not appropriate: if relief is going to be granted as to the
Non-Founder Defendants then relief should also be granted as to Mr. Kastenhofer, as the basis
for the relief for all Defendants is the same, and the Plan’s injunctive provisions apply equally to
any attempt to exercise control over a cause of action belonging to the Liquidating Trust. Also,
entry of the Order proposed by the non-Founder Defendants would not be judicially efficient as
its entry would just result in Mr. Kastenhofer filing his own motion for the same relief.
3. Accordingly, Mr. Kastenhofer objects to the form of Order submitted with the
Motion and respectfully submits that the form of order attached hereto as Exhibit A should be
entered by the Court on the Motion.
All of Plaintiff’s Claims are Derivative
4. As more fully set forth in the Motion, direct and derivative Causes of Action that
could be asserted by or on behalf of Jumio were transferred to the Liquidating Trust pursuant to
the Plan and Confirmation Order. All third parties were enjoined from pursuing such claims
pursuant to the Plan and Confirmation Order. In addition, holders of Jumio common stock who
did not opt-out of the Plan released and were enjoined from asserting both direct and derivative
Causes of Action against the Non-Founder Defendants. Holders of Jumio common who did opt-
out of the Plan, like Plaintiff, lost the right to pursue (and were enjoined from pursuing)
derivative claims that could be asserted on Jumio’s behalf against the Non-Founder Defendants,
but retained the right to pursue direct claims they had against the Non-Founder Defendants.
5. Thus, whether Plaintiff can pursue the causes of action it asserted in Counts I, III,
IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS turns completely on whether the
claims are derivative or direct. If the claims are derivative, then (i) the claims as to the Non-
Founder Defendants were sold, released, exculpated and/or assigned to the Liquidating Trust and
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(ii) the claims as to Mr. Kastenhofer were assigned to the Liquidating Trust. If the claims are
individual, then Plaintiff retains the right to pursue its claims against both Mr. Kastenhofer and
the Non-Founder Defendants.
6. The causes of action asserted against the Non-Founder Defendants and Mr.
Kastenhofer in Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are
identical in theory and similar in substance.2
7. Moreover, as set forth in the Motion, all of the causes of action asserted in Counts
I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative in nature
and, as a result, can only be pursued against Mr. Kastenhofer by the Liquidating Trust. See
Motion ¶ 3 (Counts I, III, IV, V, VI, VII, and IX “constitute claims that belong to and could be
asserted only by Jumio, Inc.’s . . . estate and . . .were . . . assigned exclusively to the Liquidating
Trust”); ¶ 5 (“the Civil Action asserts claims against . . . Kastenhofer . . . that were also assigned
exclusively to the Liquidating Trust under the Plan”); ¶ 24 (“The Plan established a Liquidating
Trust . . . which is exclusively empowered to pursue claims against the Officer Defendants”); ¶
29 (“the claims made in the Complaint against the . . . Officer Defendants are clearly
derivative”); and ¶ 34 (The Complaint improperly attempts to circumvent the Plan and usurp
claims belonging to the Debtor’s estate by asserting derivative claims”).
8. The limited joinder [Docket No. 586] to the Motion filed by the Liquidating Trust
confirms that the Liquidating Trust agrees that the causes of action asserted in Counts I, III, IV,
V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative and can only be (and
2 The theories of relief Plaintiff is pursuing -- breach of fiduciary duty, fraud, fraud in the inducement,
equitable fraud, unjust enrichment, fraudulent transfer and conspiracy -- are identical as to the Non-Founder
Defendants and Mr. Kastenhofer. The claims are slightly different in substance because Mr. Kastenhofer resigned
months before Jumio filed for bankruptcy and, therefore, he had no involvement in certain acts challenged by
Plaintiff.
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have been) asserted by the Liquidating Trust. See Docket No. 586 at ¶¶ 2 and 3 (“all Estate
Claims were released or are vested with the Liquidating Trust pursuant to the Plan and
Confirmation Order” and “the Liquidating Trust commenced the Estate Action by filing its
Complaint . . . against . . . [Mr.] Kastenhofer . . . Adversary No. 17-51042 (BLS)”).
9. Thus, just as the causes of action asserted against the Non-Founder Defendants in
Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative in
nature, the claims asserted against Mr. Kastenhofer in the same counts are derivative in nature.
Accordingly, for the reasons set forth in the Motion, Plaintiff should be enjoined (again) from
pursuing Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS against
Mr. Kastenhofer.
The Order
10. While all of the claims Plaintiff has asserted against the Non-Founder Defendants
and Mr. Kastenhofer are derivative and Plaintiff should be enjoined (again) from pursuing them
further, the form of Order the Non-Founder Defendants submitted with the Motion does not
appear to address claims against Mr. Kastenhofer. Paragraphs 2 and 3 of the Non-Founder
Defendants’ proposed Order dismisses with prejudice the “Estate Claims” and enjoins Plaintiff
from prosecuting the “Estate Claims,” but this term is defined in the Motion as only those claims
Plaintiff asserted against the Non-Founder Defendants. Motion ¶ 2. While the Non-Founder
Defendants’ proposed Order further dismisses Counts I, III, IV, V, VI, VII, and IX of the “Civil
Action,” suggesting these Counts will be dismissed in their entirety as to all of the defendants in
Bloso v. Mattes, C.A. No. 12787-VCS, the form of Order further states that Plaintiff is only
enjoined from pursuing “the claims and causes of action asserted against the Non-Founder
Defendants in the Civil Action.” Order at ¶¶ 2-3.
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11. The relief granted pursuant to the Motion should be broader than the relief set
forth in the Non-Founder Defendants’ proposed form of Order. Whether Plaintiff can pursue its
claims against the Non-Founder Defendants and/or Mr. Kastenhofer turns on the same issue: are
the claims derivative. Once the Court determines that the claims are derivative, Mr. Kastenhofer
is entitled to the same relief awarded to the Non-Founder Defendants, by operation of law and
the plain terms of the Plan’s injunctive provisions.
12. A proposed form of Order which extends the relief sought in the Motion to Mr.
Kastenhofer is attached as Exhibit A. A redline showing the difference between the Non-
Founder Defendants’ proposed order and Mr. Kastenhofer’s proposed order is attached as
Exhibit B.
13. Granting Mr. Kastenhofer’s proposed form of Order is legally appropriate under
the plain terms of the Plan’s injunctive provisions and promotes efficiency. If the Court finds
that the claims against the Non-Founder Defendants are derivative and enjoins Plaintiff from
pursuing them pursuant to the Plan and the Confirmation Order but does not extend that relief to
Mr. Kastenhofer, the result will be a new motion raising the same issues before the Court. The
new motion will be redundant of the Motion and this limited joinder and limited objection.
WHEREFORE, Mr. Kastenhofer respectfully requests that the Court enter the form of
Order attached hereto as Exhibit A granting the Motion, and award Mr. Kastenhofer such further
relief as is just and proper.
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Dated: September 20, 2017 Respectfully Submitted,
DRINKER BIDDLE & REATH LLP
/s/ Todd C. Schiltz
Todd C. Schiltz (ID No. 3253)
Ryan T. Costa (ID No. 5325)
222 Delaware Avenue, Suite 1410
Wilmington, DE 19801
(302) 467-4200
Attorneys for Thomas Kastenhofer
Case 16-10682-BLS Doc 596 Filed 09/20/17 Page 6 of 6
Exhibit A
(Proposed Order)
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
JMO WIND DOWN, INC.,1
Debtor
Chapter 11
Case No. 16-10682 (BLS)
Re: Docket No. ____
ORDER APPROVING MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS
(I) TO ENFORCE THE PLAN, CONFIRMATION ORDER, AND SALE ORDER AND
(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION AND
SIMILAR CLAIMS IN OTHER FORUMS
Upon consideration of the Motion of Eduardo Saverin, Peng-Tsin Ong, Scott
Weiss, Andreessen Horowitz, LLC, Andreessen Horowitz Fund, II, L.P., and Stephen Stuut
(collectively, the “Non-Founder Defendants”) (i) to enforce the Plan, Confirmation Order and
Sale Order and (ii) to order Plaintiff to dismiss the Civil Action and enjoin, bar and/or estop
Plaintiff from prosecuting Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No.
12787-VCS and similar claims and causes of action in other forums (the “Motion”),2 the Court
finds that: (i) it has jurisdiction over the matters raised in the Motion; (ii) this is a core
proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334 upon which this Court may issue a final
order; (iii) notice of the Motion and any hearing thereon was sufficient, proper, and adequate;
and (iv) upon the record herein and after due deliberation thereon, good and sufficient cause
exists for the granting of the relief as set forth herein. Accordingly, the Court hereby ORDERS
that:
1 The last four digits of the Debtor’s tax identification number are 6822.
2 Defined terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.
Case 16-10682-BLS Doc 596-1 Filed 09/20/17 Page 2 of 3
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1. The Motion is GRANTED in all respects; and Plaintiff shall immediately take all
necessary action, at its sole cost and expense, to effectuate the dismissal with prejudice of Counts
I, III, IV, V, VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCS, currently pending in
the Delaware Court of Chancery; and
3. Plaintiff is enjoined, barred and estopped from asserting or prosecuting Counts I,
III, IV, V , VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCS, and Plaintiff is hereby
directed to immediately cease and refrain from any further acts to prosecute or continue the claims
and causes of action asserted against the Non-Founder Defendants and Thomas Kastenhfer in
Bloso v. Mattes, C.A. No. 12787-VCS (whether in the Delaware Court of Chancery or any other
court) or to, in any other manner, seek to enforce such claims and causes of action against the Non-
Founder Defendants, Thomas Kastenhofer or other parties; and
4. This order shall be effective immediately upon entry and shall not be stayed
pursuant to any applicable rule of the Federal Rules of Bankruptcy Procedure or Federal Rules of
Civil Procedure.
Dated: __________, 2017
Wilmington, Delaware ____________________________________
HONORABLE BRENDAN L. SHANNON
UNITED STATES BANKRUPTCY JUDGE
Case 16-10682-BLS Doc 596-1 Filed 09/20/17 Page 3 of 3
Exhibit B
(Blackline)
Case 16-10682-BLS Doc 596-2 Filed 09/20/17 Page 1 of 3
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
JMO WIND DOWN, INC.,1
Debtor
Chapter 11
Case No. 16-10682 (BLS)
Re: Docket No. ____
ORDER APPROVING MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS
(I) TO ENFORCE THE PLAN, CONFIRMATION ORDER, AND SALE ORDER AND
(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION AND
SIMILAR CLAIMS IN OTHER FORUMS
Upon consideration of the Motion of Eduardo Saverin, Peng-Tsin Ong, Scott
Weiss, Andreessen Horowitz, LLC, Andreessen Horowitz Fund, II, L.P., and Stephen Stuut
(collectively, the “Non-Founder Defendants”) (i) to enforce the Plan, Confirmation Order and
Sale Order and (ii) to order Plaintiff to dismiss the Civil Action and enjoin, bar and/or estop
Plaintiff from prosecuting Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No.
12787-VCS the Civil Action and similar claims and causes of action in other forums (the
“Motion”),2 the Court finds that: (i) it has jurisdiction over the matters raised in the Motion;
(ii) this is a core proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334 upon which this Court
may issue a final order; (iii) notice of the Motion and any hearing thereon was sufficient,
proper, and adequate; and (iv) upon the record herein and after due deliberation thereon, good
and sufficient cause exists for the granting of the relief as set forth herein. Accordingly, the
Court hereby ORDERS that:
1 The last four digits of the Debtor’s tax identification number are 6822.
2 Defined terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.
Case 16-10682-BLS Doc 596-2 Filed 09/20/17 Page 2 of 3
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1. The Motion is GRANTED in all respects; and Plaintiff shall immediately take all
necessary action, at its sole cost and expense, to effectuate the dismissal with prejudice of the
Estate Claims, specifically Counts I, III, IV, V, VI, VII, VIII and IX in Bloso v. Mattes, C.A. No.
12787-VCS, in the Civil Action, currently pending in the Delaware Court of Chancery; and
3. Plaintiff is enjoined, barred and estopped from asserting or prosecuting Counts I,
III, IV, V , VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCSthe Estate Claims, and
Plaintiff is hereby directed to immediately cease and refrain from any further acts to prosecute or
continue the claims and causes of action asserted against the Non-Founder Defendants and Thomas
Kastenhfer in Bloso v. Mattes, C.A. No. 12787-VCSthe Civil Action (whether in the Delaware
Court of Chancery or any other court) or to, in any other manner, seek to enforce such claims and
causes of action against the Non-Founder Defendants, Thomas Kastenhofer or other parties; and
4. This order shall be effective immediately upon entry and shall not be stayed
pursuant to any applicable rule of the Federal Rules of Bankruptcy Procedure or Federal Rules of
Civil Procedure.
Dated: __________, 2017
Wilmington, Delaware ____________________________________
HONORABLE BRENDAN L. SHANNON
UNITED STATES BANKRUPTCY JUDGE
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90067880.1
CERTIFICATE OF SERVICE
I, Todd C. Schiltz, hereby certify that on September 20, 2017, I caused a true and correct
copy of the Limited Joinder And Limited Objection Of Thomas Kastenhofer To Motion Of
Non-Founder Civil Action Defendants (I) To Enforce The Plan Confirmation Order And
Sale Order And (II) To Enjoin Plaintiff From Prosecuting The Civil Action And Similar
Claims In Other Forums to be served via the Court’s CM/ECF system and first class mail upon
the parties listed below.
(Attorneys for Eduardo Saverin)
Michael R. Nestor
Elena C. Norman
Young Conway Stargatt & Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
(Attorneys for Eduardo Saverin)
Manny A. Abascal
Andrew R. Gray
Ted A. Dillman
Faraz R. Mohammadi
Latham & Watkins LLP
355 South Grand Avenue, Suite 100
Los Angeles, California 90071
(Attorneys for JMO Wind Down Liquidating Trust)
Christopher A. Ward
Shanti M. Katona
Polsinelli PC
222 Delaware Avenue, Suite 1101
Wilmington, Delaware 19801
David L. Buchbinder
Office of the U.S. Trustee
J. Caleb Boggs Federal Building
Suite 2207
Wilmington, DE 19801
Dated: September 20, 2017 /s/ Todd C. Schiltz.
Todd C. Schiltz (ID No. 3253)
Case 16-10682-BLS Doc 596-3 Filed 09/20/17 Page 1 of 1