Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 1 of 29 Page ID #:415

1 Ryan G. Baker (Bar No. 214036)

rbaker@bakermarquart.com
2 F. Lucas Paule (Bar No. 313282)
3 lpaule@bakermarquart.com
BAKER MARQUART LLP
4 777 S. Figueroa St., Suite 2850
5 Los Angeles, California 90017
Telephone: (424) 652-7800
6 Facsimile: (424) 652-7850
7
Attorneys for Plaintiff Tony Bobulinski
8
9
UNITED STATES DISTRICT COURT
10
11 CENTRAL DISTRICT OF CALIFORNIA

12
13 TONY BOBULINSKI, an individual, Case No. 2:19-cv-02963-MWF-SSx
14
Plaintiff, FIRST AMENDED COMPLAINT
15
16 vs. 1. FRAUD IN THE INDUCEMENT;
2. NEGLIGENT
17 ADAM ROSEMAN, an individual; and MISREPRESENTATION; AND
18 DOES 1-20, 3. BREACH OF FIDUCIARY
DUTY
19 Defendants. DEMAND FOR JURY TRIAL
20
The Hon. Michael W. Fitzgerald
21 Courtroom: 5A
22
23
24
25
26
27
28

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1 NATURE OF THIS ACTION

2 1. Adam Roseman proclaims on social media that he gives “everyone the
3 ability to maximize their income potential.” But unlike so many others on social
4 media, who perhaps innocently project a false reality to their “followers” or
5 “friends,” Roseman’s deception was not limited to the virtual world, nor was his
6 deception innocent. In this case, Roseman’s misrepresentations cost Tony
7 Bobulinski, a long-time (former) business associate and friend, well over $1.5
8 million.
9 2. Through a series of material misrepresentations, Roseman convinced
10 Bobulinski to invest a total of $650,000 in China Branding Group (“CBG”), a
11 company Roseman controlled, by pledging various assets as security for Bobulinski’s
12 loan. Pursuant to the terms of the Senior Secured Promissory Note (the “Note”) and
13 a corresponding Pledge Agreement (the “Pledge Agreement”), which memorialized
14 the security interest, Bobulinski’s Note was secured by assets purportedly owned by
15 CBG, including CBG’s “content library, license agreements, and physical assets,
16 such as production equipment” in the United States (collectively, the “Collateral”).
17 3. Roseman represented to Bobulinski that the Collateral was owned by
18 CBG. But it was not. In fact, it was owned by RAAD Productions LLC (“RAAD”),
19 a completely separate entity from CBG which was not affiliated with CBG in any
20 way. Roseman, who controlled RAAD, later admitted this under oath.
21 4. Roseman also promised Bobulinski that his Note would be senior
22 secured by the Collateral, which meant that Bobulinski’s loan was to be “paid off in
23 first priority.” Roseman assured Bobulinski that if CBG failed, Bobulinski would be
24 protected because his note would be senior in order of funding
25 5. Bobulinski would not have entered into the Senior Secured Promissory
26 Note or the Pledge Agreement if he had known that CBG did not own the Collateral
27 or that his Note would not be senior secured by the Collateral, as Roseman falsely
28 promised. In reality, there was nothing to secure Bobulinski’s Senior Secured Note.

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1 This was also significant, because Bobulinski had planned to use the cash he invested
2 in CBG for a different investment opportunity. Based on Roseman’s representations,
3 Bobulinski was assured his CBG investment would be returned in time for
4 Bobulinski to make the other investment.
5 6. The gig was up shortly after Bobulinski entered into the Note. On April
6 28, 2016, CBG’s largest creditor presented a creditor’s winding up petition against
7 CBG because CBG continued to face financial difficulties. The petition was
8 submitted to the Grand Court of the Cayman Islands (the “Cayman Court”) as CBG
9 is a company incorporated in the Cayman Islands. The Joint Official Liquidators of
10 CBG (the “JOLs”) were appointed pursuant to an August 28, 2016 winding up order
11 issued by the Cayman Court. Thereafter, on September 20, 2016, CBG entered into
12 an agreement, to sell all of its assets to another company, Remark Media Inc.
13 (“Remark”).
14 7. Based on his belief that he was a senior secured creditor of CBG, whose
15 loan was secured by the Collateral, Bobulinski submitted a Proof of Debt to the JOLs
16 during CBG’s liquidation proceedings in the Cayman Islands (the “Cayman
17 Liquidation”) for a total of $1,625,000, which included the principal Note amount
18 plus a 2.5x multiplier, as required by the Note and which Roseman promised
19 Bobulinski would receive.
20 8. Ultimately, the JOLs rejected Bobulinski’s Proof of Debt, claiming that
21 Bobulinski was only owed a balance of the principal $650,000 and that he was not
22 senior secured because CBG did not own the Collateral. This dispute was the basis
23 for a separate legal proceeding in the Grand Court of the Cayman Islands entitled In
24 the Matter of China Branding Group Limited (In Official Liquidation), Cause No.
25 FSD 52 of 2016 (RMJ) (the “Cayman Litigation”).
26 9. The Cayman Litigation took nearly two and a half years. Bobulinski
27 litigated under the belief that he was a senior secured creditor with a security interest
28 in the Collateral. During this time, these difficult legal proceedings consumed

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1 Bobulinski’s life, but it was through these proceedings that Bobulinski ultimately
2 discovered the truth about the security interest in his investment – he learned he had
3 been duped. Ultimately, the Cayman Court accepted the JOLs’ argument that CBG
4 never owned the Collateral and that those assets were actually owned by RAAD –
5 contrary to everything Roseman promised in order to induce Roseman to enter into
6 the Note. Therefore, the Cayman Court found that Bobulinski never had a security
7 interest in the Collateral. Roseman’s deception had not only cost Bobulinski the
8 timely return of any funds invested, it also caused Bobulinski to waste thousands of
9 hours over two and a half years fighting to enforce Roseman’s false promises.
10 10. Bobulinski incurred significant damages as a result of Roseman’s lies.
11 Bobulinski has recovered nothing on his $650,000 loan. As explicitly provided in
12 the Note, and as falsely promised by Roseman, Bobulinski was owed the principal
13 amount of his loan plus a 2.5x return, for a total of $1,625,000, which should have
14 been paid on or before the sale of CBG to Remark. Instead of receiving the promised
15 payout, Bobulinski was forced to spend well over $700,0001 litigating in the Cayman
16 Islands, in a vain attempt to obtain the benefits Roseman had promised. Litigating in
17 the Cayman Islands was not only taxing on Bobulinski’s wallet, he also suffered
18 significant emotional distress. Unable to recover anything from his loan, Bobulinski
19 was unable to utilize the significant capital he thought he had temporarily loaned
20 CBG.
21 11. Bobulinski now seeks compensation for the damages he has incurred as
22 a result of Roseman’s misrepresentations, which amount to well over $1.5 million,
23 and to finally hold Roseman accountable for the distress he has caused.
24 THE PARTIES
25 12. Plaintiff Tony Bobulinski is an individual residing in the State of
26 California.
27 1
On top of his own legal fees, the JOLs are now claiming that Bobulinski must pay
28 their legal fees amounting to $634,393.52.

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1 13. Defendant Adam Roseman is an individual residing, based upon

2 information and belief, in the State of Georgia.
3 14. Bobulinski does not presently know the true names and capacities of the
4 defendants sued herein as DOES 1 through 20, and therefore sues those defendants
5 by fictitious names. Plaintiff will amend this complaint to allege the true identities of
6 DOES 1 through 20 once they have been ascertained. Plaintiff is informed and
7 believes that each of the defendants sued as DOES 1 through 20 is in some manner
8 responsible for the occurrences, injuries and other damages alleged in this complaint.
9 15. Plaintiff is informed and believes, and on that basis alleges, that at all
10 times mentioned herein, each and every defendant was the agent, servant, employee,
11 joint venturer, partner, subsidiary, and/or co-conspirator of each other defendant and,
12 that in performing or failing to perform the acts herein alleged, each was acting
13 individually as well as through and in the foregoing alleged capacity and within the
14 course and scope of such agency, employment, joint venture, partnership, subsidiary
15 and/or conspiracy, and each other defendant ratified and affirmed the acts and
16 omissions of the other defendants. Plaintiff is further informed and believes that
17 each defendant, in taking the actions alleged herein and/or ratifying the actions
18 alleged herein, acted within the course and scope of such authority and, at the same
19 time, for their own financial and individual advantage, as well as in the course and
20 scope of such employment, agency and as an alter ego therein.
21 JURISDICTION AND VENUE
22 16. Plaintiff originally filed this complaint in the Superior Court of the State
23 of California for the County of Los Angeles on February 21, 2019. On April 17,
24 2019, Defendant Roseman removed this action to the United States District Court for
25 the Central District of California on the basis of diversity of citizenship under 28
26 U.S.C. §§ 1332(a), 1441, and 1446.
27 17. The diversity requirement of section 1332 is satisfied in this action
28 because the matter in controversy is “between citizens of different States.” 28 U.S.C.

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1 § 1332(a)(1). The citizenship of the fictitiously named defendants sued as DOES 1

2 through 20 is disregarded for purposes of the diversity requirement because this case
3 was removed from California state court. 28 U.S.C. § 1441(b)(1). The amount-in-
4 controversy requirement of section 1332 is satisfied in this action because Plaintiff is
5 seeking to recover a sum that “exceeds the sum or value of $75,000, exclusive of
6 interest and costs.” 28 U.S.C. § 1332(a)(1). Venue is proper pursuant to 28 U.S.C. §
7 1391 in that a substantial part of the events or omissions giving rise to the claims set
8 forth herein occurred in this judicial district.
9 18. The Court has personal jurisdiction over Roseman because Roseman has
10 availed himself of this Court, removing this action from California State Court on or
11 about April 17, 2019 pursuant to 28 U.S.C. § 1441. Moreover, Defendant has
12 engaged in business activities in, and directed to, the State of California and have
13 committed tortious acts within the state. Defendant has purposefully availed himself
14 of the opportunity to conduct commercial activities in this forum, and this Complaint
15 arises out of those activities.
16 FACTUAL BACKGROUND
17 China Branding Group Limited
18 19. Defendant Roseman is the founder and CEO of CBG. CBG is a
19 company incorporated in the Cayman Islands. CBG was the parent company of a
20 group of companies operating in China and the USA. The primary business of this
21 group of companies was to provide international live event content, social media
22 content, and non-studio Hollywood and related video content into the Chinese
23 marketplace.
24 Roseman Solicits Bobulinski
25 20. Plaintiff Bobulinski and Roseman have been business associates for
26 over 16 years. Bobulinski invested in a number of Roseman’s businesses.
27 Accordingly, Bobulinski trusted Roseman based on their longstanding professional
28 relationship and close personal friendship.

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1 21. In or around 2015, CBG was running out of money. CBG suffered
2 significant cashflow difficulties from its inception as a result of the need to find
3 working capital to fund its growth. As a result, Roseman urgently sought further
4 funding, and was looking for ways to quickly infuse funding into the company.
5 22. On or about March 5, 2015, Roseman sent an email to Bobulinski. The
6 email was intended to provide an update about CBG and to ask for a short-term
7 bridge loan “to allow [CBG] to acquire some additional top licenses that will help
8 increase our value in a sale.” The loan was to be a “a senior secured loan to be paid
9 off in first priority.” The email also stated the following: “Senior secured bridge
10 loan, secured by all our assets (content licenses, our production library and our fixed
11 production equipment in our 10k square foot studio in Culver City) and all bridge
12 loan principal and interest secured in first position.”
13 23. In response, Bobulinski expressed some interest in helping Roseman.
14 Consequently, Roseman followed up on March 10, 2015, when he emailed
15 Bobulinski stating “would there be a bridge structure that would incentivize you to
16 come in and then I would use that structure for all that are participating? Thanks!”
17 24. Roseman and Bobulinski then coordinated to meet in person to further
18 discuss CBG and the bridge loan. In an email on March 20, 2015, Roseman even
19 asked Bobulinski if he would “want to come see the Culver studio.”
20 25. Roseman and Bobulinski agreed to meet in person on March 25, 2015,
21 at the Peninsula Hotel in Beverly Hills, California. During this sit-down meeting,
22 Roseman went into further detail explaining CBG’s financial difficulties, including
23 CBG’s lack of sources of capital, and he discussed CBG’s purported assets.
24 Roseman explained the company’s desperate need for money and asked whether
25 Bobulinski could provide CBG with a loan. Roseman informed Bobulinski that
26 Roseman would take a loan on whatever terms Bobulinski asked for or needed in
27 order to move quickly. Neither the meeting nor the request was uncommon, as
28 Roseman had asked Bobulinski for financial assistance on multiple occasions over

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1 the course of their professional relationship. Therefore, Bobulinski did not have any
2 reason to believe Roseman’s representations during this meeting about CBG or its
3 assets were untrue.
4 26. Bobulinski informed Roseman that in order for him to provide a loan, he
5 would need the loan to be senior secured by all of CBG’s assets. Roseman assured
6 Bobulinski that any loan he provided would be senior secured by all of CBG’s assets
7 through a pledge agreement. Roseman outlined CBG’s purported assets, including
8 certain studio operations and license agreements. Roseman stated that those assets
9 were owned by CBG and would secure Bobulinski’s loan. On information and
10 belief, those assets included all of CBG’s assets in the United States.
11 27. Roseman also assured Bobulinski that if CBG failed, Bobulinski would
12 be protected because his note would be senior in order of funding. Desperate for
13 funding and wanting to move quickly, Roseman assured Bobulinski that their
14 understanding would be properly documented by the law firm Sheppard Mullin,
15 counsel for CBG. In fact, Roseman recommended against Bobulinski retaining
16 separate counsel, as Roseman felt it would slow down the process of obtaining
17 Bobulinski’s loan. Roseman assured Bobulinski that Sheppard Mullin would
18 properly document the deal with both of their interests in mind. Again, because
19 Bobulinski trusted his longtime friend and business partner, and because Roseman
20 expressed an urgency in obtaining the loan, Bobulinski did not secure his own
21 separate counsel to negotiate or review the terms of the purported security interest in
22 CBG’s assets.
23 28. Following the March 25 meeting, and based on Roseman’s serial
24 misrepresentations, which Bobulinski had no reason to disbelieve at the time,
25 Bobulinski agreed to lend CBG $500,000. Over the next few weeks after the
26 meeting, Roseman and Bobulinski negotiated the terms of the loan. Roseman
27 assured Bobulinski that his security interest would encompass all of CBG’s assets in
28 the United States.

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1 The Senior Secured Promissory Note and Pledge Agreement

2 29. Bobulinski ultimately executed a Senior Secured Promissory Note (the
3 “Note”) and a Pledge Agreement (the “Pledge Agreement”) on or about April 15,
4 2015. Roseman signed both documents on behalf of CBG. True and correct copies
5 of the Note and Pledge Agreement are attached as Exhibits 1 and 2, respectively.
6 Bobulinski would not have agreed to enter into the Note, or at the very least, would
7 have sought alternate terms if he knew that CBG did not actually own the Collateral
8 and if he had full knowledge of what assets CBG owned at the time he entered into
9 the agreements, especially because this would affect his senior security interest.
10 Bobulinski relied on Roseman’s statement that Sheppard Mullin would document
11 their understanding and the agreements and did not retain his own counsel before
12 executing the Note or the Pledge Agreement.
13 30. Roseman signed the Note and the Pledge Agreement on behalf of CBG.
14 Section 4 of the Note states: “[CBG’s] performance of its obligations hereunder is
15 secured by a first priority security interest in the collateral specified in the Pledge
16 Agreement.” Pursuant to Section 2(a) of the Pledge Agreement, the collateral was
17 defined as “all assets (including intangible assets) of [CBG] in the United States,
18 including without limitation its content library, license agreements, and physical
19 assets, such as production equipment” (the “Collateral”).” As Roseman later
20 admitted, CBG never owned those assets.
21 31. The Pledge Agreement was intended to represent and warrant that CBG
22 was the sole and beneficial owner of the Collateral.
23 32. Section 5(a) of the Pledge Agreement states: “[CBG] represents and
24 warrants as follows… At the time the Collateral becomes subject to the lien and
25 security interest created by this Agreement, [CBG] will be the sole, direct, legal and
26 beneficial owner thereof, free and clear of any lien, security interest, encumbrance,
27 claim, option or right of others except for the security interest created by this
28 Agreement.”

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1 33. Section 5(c) of the Pledge Agreement states: “[CBG] represents and
2 warrants as follows… [CBG] is duly formed and has full power, authority and legal
3 right to…pledge the Collateral pursuant to this Agreement and perform its
4 obligations under this Agreement.”
5 34. Section 6(b) of the Pledge Agreement states: “[CBG] agrees that at any
6 time and from time to time, at the expense of [CBG], [CBG] will promptly execute
7 and deliver all further instruments and documents, obtain such agreements from third
8 parties, and take all further action, that may be necessary or desirable in order to
9 perfect and protect any security interest granted hereby or to enable [Bobulinski] to
10 exercise and enforce its rights and remedies hereunder, under the Note, or under any
11 other agreement related to any Collateral.”
12 35. Section 7 of the Pledge Agreement states: “[CBG] agrees that it will not
13 sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option
14 with respect to, restrict, or grant, create, permit or suffer to exist any mortgage,
15 pledge, Lien, security interest, option, right of first offer, encumbrance or other
16 restriction or limitation of any nature whatsoever on, any of the Collateral or any
17 interest therein except as expressly provided for herein or with the prior written
18 consent of [Bobulinski], which may be granted or withheld in its sole and absolute
19 discretion.”
20 36. Bobulinski would not have agreed to enter into the loan transaction
21 documented in the Note and the Pledge Agreement but for his understanding of the
22 assets comprising the Collateral at the time he entered into the agreements, April 15,
23 2015, as misrepresented by Roseman up to that point. The Note and Pledge
24 Agreement are governed by California law.
25 37. Bobulinski was one of eight noteholders (the “Noteholders”) who
26 entered into promissory notes with CBG starting in or about April 2015 in order to
27 help CBG meet its working capital requirements.
28

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1 38. In February 2016, CBG needed additional cash to meet its payroll costs.
2 Roseman, again, asked Bobulinski for a loan to CBG. Bobulinski agreed to provide
3 an additional $150,000 pursuant to a second note, dated February 1, 2016, which
4 provided the same terms as the first Note.
5 39. On or about April 11, 2016, Bobulinski signed an amendment to the
6 Note reflecting the increase in the loan amount from $500,000 to $650,000. Nothing
7 in this amendment was intended to affect either CBG’s or Bobulinski’s rights or
8 obligations under the Note or the Pledge Agreement.
9 RAAD Productions LLC
10 40. RAAD Productions LLC (“RAAD”), another entity controlled by
11 Roseman, owned certain license agreements and media content. Roseman was the
12 sole member or manager of RAAD. Furthermore, RAAD had three shareholders
13 including Tapirdo Enterprises, LLC, which is owned by Roseman’s wife and a
14 family trust. Before September 19, 2016, RAAD was a completely separate entity
15 from CBG and was not affiliated with CBG in any way.
16 41. RAAD owned the very license agreements and media content Roseman
17 had purported to pledge in the Note and Pledge Agreement. In other words, at the
18 time Bobulinski entered into the Pledge Agreement, the Collateral was owned by
19 RAAD, not CBG. Those assets were never owned by CBG, although Roseman
20 would later transfer certain RAAD ownership interests to CBG to facilitate CBG’s
21 sale.
22 42. Bobulinski was not aware of the existence of RAAD or its ownership of
23 the Collateral that purportedly secured his Note until long after Bobulinski entered
24 into the Note and Pledge Agreement. Had Roseman made Bobulinski aware that the
25 Collateral was owned by RAAD and not CBG, Bobulinski would not have entered
26 into the Note. At all times during Roseman’s solicitation of Bobulinski and during
27 the negotiation of the Note and Pledge Agreement, Roseman never mentioned
28 RAAD and acted as if the Collateral was owned by one company, CBG.

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1 Remark Media Inc.’s Purchase of China Branding Group Limited

2 43. After Bobulinski entered into the Note and Pledge Agreement, Roseman
3 continued to represent to him that the Collateral was owned by CBG and not by
4 RAAD. Not once did Roseman even mention RAAD.
5 44. In the fall of 2015, believing he could facilitate the sale of CBG and
6 realize a return on his investment in CBG, Bobulinski introduced Roseman to Shing
7 Tao, the CEO and Chairman of Remark Media Inc. (“Remark”). Remark initially
8 had minimal interest in purchasing CBG believing the company had little value.
9 Again, Roseman misrepresented to Bobulinski what assets CBG owned, including
10 the Collateral, in order to get Bobulinski to assist in increasing Remark’s interest in
11 CBG. For example, in emails on October 9, 2015 and November 5, 2015, Roseman
12 continued to explain to Bobulinski purported CBG deals and assets. Again, at no
13 point did he mention RAAD. Ultimately, with Bobulinski’s assistance, Remark was
14 convinced to purchase CBG’s business and assets.
15 45. Of course, many of the assets Remark sought were not owned by CBG;
16 instead those assets were held by other entities controlled by Roseman, such as
17 RAAD. To facilitate the sale of CBG to Remark, CBG needed to ensure that those
18 assets owned by RAAD would ultimately be transferred to Remark.
19 46. On April 28, 2016, with CBG facing financial difficulties, CBG’s
20 largest creditor presented a creditor’s winding up petition against CBG. The petition
21 was submitted to the Grand Court of the Cayman Islands (the “Cayman Court”) as
22 CBG is a company incorporated in the Cayman Islands. Ultimately, the Joint
23 Official Liquidators of CBG (the “JOLs”) were appointed to begin the liquidation
24 process (the “Cayman Liquidation”) pursuant to a winding up order dated August 28,
25 2016 issued in the Cayman Islands.
26 47. On September 20, 2016 CBG entered into an agreement to sell all of its
27 assets to Remark. It was a condition precedent to that agreement for all of CBG’s
28 Noteholders to enter into respective distribution agreements (the “Distribution

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1 Agreements”), which would subordinate their claims to CBG’s general body of

2 unsecured creditors. The Distribution Agreements also had the result of negating the
3 pledge agreements of all Noteholders, which all included the same Section 7 as
4 Bobulinski’s Pledge Agreement and which prevented CBG from transferring assets
5 without the Noteholders’ consent. All the Noteholders signed their Distribution
6 Agreements, except one – Bobulinski. Therefore, Bobulinski’s Pledge Agreement
7 remained effective, and Bobulinski had the contractual right to stop any deal by CBG
8 to transfer its assets.
9 48. Despite this, CBG pushed for the deal with Remark to close. Roseman
10 transferred a certain ownership interest in RAAD to CBG on or about September 19,
11 2016, although the Collateral – which Bobulinski still believed CBG owned, and
12 which purportedly secured his loan – were never transferred. Furthermore, this deal
13 occurred over a year after Bobulinski first entered into the Pledge Agreement.
14 49. CBG never owned the Collateral, which purportedly secured
15 Bobulinski’s Note. Those assets were owned by RAAD, which later became a
16 subsidiary of CBG for one day. To be clear, CBG only owned shares of RAAD for a
17 short period of time in order to complete the sale of CBG to Remark, over a year
18 after Bobulinski and CBG entered into the Note and Pledge.
19 Cayman Litigation
20 50. Remark’s purchase of CBG constituted a “Liquidity Event” under the
21 Note. Under the terms of the Note, and as promised by Roseman, CBG was required
22 to pay Bobulinski the principal of the Note ($650,000) with a 2.5x return upon the
23 close of the sale to Remark for a total of $1,625,000.
24 51. Based on his belief that he was a senior secured creditor of CBG, whose
25 loan was secured by the Collateral, and because he never signed his Distribution
26 Agreement, Bobulinski submitted a Proof of Debt to the JOLs during the Cayman
27 Liquidation for a total of $1,625,000, which included the principal Note amount plus
28 a 2.5x multiplier, as Roseman promised. Ultimately, the JOLs of CBG rejected

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1 Bobulinski’s Proof of Debt, claiming that Bobulinski was only owed a balance of the
2 principal $650,000 and concluding that Bobulinski’s Note was not secured by the
3 Collateral. This dispute was the basis for a separate legal proceeding in the Grand
4 Court of the Cayman Islands entitled In the Matter of China Branding Group Limited
5 (In Official Liquidation), Cause No. FSD 52 of 2016 (RMJ) (the “Cayman
6 Litigation”).
7 52. It was during the Cayman Litigation that Bobulinski first discovered
8 CBG did not actually own the Collateral, which was supposed to secure his Note.
9 Bobulinski first discovered Roseman’s misrepresentation on or about September 1,
10 2017 when Mark C. Dosker of Squire Patton Boggs provided a report on behalf of
11 the JOLs in the Cayman Litigation analyzing issues under California law. Mr.
12 Dosker reported the following:
13 “To the extent that any ‘content library’, ‘license
agreements’ and/or ‘production equipment’ existed but
14 were not located ‘in the United States’ as of the date the
JOLs took control of CBG, or were assets of a subsidiary or
15 affiliate of CBG rather than of CBG, they are not within the
definition of ‘Collateral’ and under California law the
16 security interest created by the Pledge Agreement does not
apply to such ‘content library’, ‘license agreements’ and/or
17 ‘production equipment’. Accordingly, a court applying
California law would not recognize a security interest in
18 such assets.” (See Cayman Judgment ¶ 108, a true and
correct copy of which is attached as Exhibit 4).
19
53. Mr. Dosker also commented on the Second Amended and Restated
20
Asset and Securities Purchase Agreement by and among China Branding Group
21
Limited (In Official Liquidation) and The Joint Official Liquidators and Seller
22
Management and Target Entities and KanKan Limited and Remark Media, Inc. (the
23
“APA”). The APA was the agreement by which all of CBG’s assets and interest in
24
its subsidiaries were sold to Remark. Mr. Dosker reported the following:
25
“To the extent, if any, that CBG previously owned any
26 assets in the United States consisting of ‘content library’,
‘license agreements’ or ‘production equipment’, they were
27 sold as part of all the assets sold pursuant to the APA as
approved by the Grand Court of the Cayman Islands. The
28 APA does not identify any such assets of CBG in the

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1 United States consisting of ‘content library’, ‘license

agreements’ or ‘production equipment’.”; and
2
“[T]he Pledge Agreement clearly states that what is
3 pledged are assets of CBG – not assets of any subsidiary of
CBG. And paragraph 4 of the First Affidavit of Shing Tao,
4 dated September 24, 2018, confirms that as of the closing
date of the APA transaction, CBG did not own any license
5 agreements or media content (which Shing Tao thinks are
synonymous with the phrases “content library” and “license
6 agreements” used in the Pledge Agreement). Since CBG
did not own those, they are not within the scope of the
7 pledge in the Pledge Agreement.”
(Cayman Judgment ¶ 113)
8 This was the first time Bobulinski learned that the Collateral was not owned by
9 CBG.
10 54. In sum, the JOLs argued that CBG never owned the Collateral. Rather,
11 they were owned by RAAD. This argument also served as the basis for why CBG
12 did not breach Section 7 of Bobulinski’s Pledge Agreement requiring his consent
13 before CBG could transfer its assets to Remark. The JOLs justified closing the
14 Remark transaction without Bobulinski’s approval and signature by arguing that
15 CBG had simply transferred shares of RAAD and had not transferred the assets
16 comprising the Collateral. Roseman provided support for this argument as well.
17 (See, e.g., Cayman Judgment ¶ 222 (“The JOLs emphasise that Mr. Roseman’s
18 evidence on this point was that the United States content was owned by RAAD.”).)
19 55. During the Cayman Litigation, Roseman later admitted while testifying
20 that CBG did not own the Collateral when he signed the Note and Pledge on behalf
21 of CBG. The October 3, 2018 transcript from those proceedings reads as follows:
22 “Counsel: So there is no doubt, is there, that [the Pledge]
was intended to create security in favour of Mr Bobulinski.
23 Roseman: No. There is no doubt in my mind.
…
24 Counsel: And the collateral includes specifically [CBG’s]
content library and licence agreements, doesn’t it?
25 Roseman: That’s correct.
Counsel: And it was intended that this document would be
26 an effective pledge over the content library and licence
agreements; correct?
27 Roseman: It was indeed.
28

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 16 of 29 Page ID #:430

1 Counsel: And the Company represented and warranted that

it was the sole and beneficial owner of the collateral, didn’t
2 it?
…
3 Roseman: I believe that’s the case but you would need to
confirm that with counsel. That goes a little beyond me, but
4 I believe that’s the case.
…
5 Counsel: If [CBG] didn’t own content library or licence
agreements it was a misleading statement, wasn’t it, to say
6 that it intended to create a security interest in those assets.
Roseman: I would guess that’s the case, yes.
7 …
Counsel: [Section 5(c) of the Pledge is] a representation
8 and a warranty that [CBG] had full power, authority and
rights to pledge the collateral. Do you see that?
9 Roseman: I do.
Counsel: And again, if the Company didn’t own the
10 content library and the license agreements, that was also
misleading, wasn’t it.
11 Roseman: I would believe so, yes.”
12 56. During these proceedings, Roseman also admitted that CBG did not act
13 to perfect the security interest granted by the Pledge to enable Bobulinski to exercise
14 his rights and remedies under the Pledge. The October 3, 2018 transcript from those
15 proceedings reads as follows:
16 “Counsel: Now, the Company took no action to perfect the
security interest granted by the pledge to enable Mr.
17 Bobulinski to exercise his rights and remedies under the
pledge, did it?
18 Roseman: I do not know the answer to that. I would have
to consult with Shepherd Mullan. None that I can recall.
19 Counsel: Did you give any instructions to Shepherd
Mullan to do so?
20 Roseman: No. I would have expected that Shepherd
Mullan would have advised me to whatever actions I would
21 have needed to take. I have never entered into a security
agreement before, never perfected a security interest.
22 …
Counsel: Thank you. As far as you are aware, [CBG]
23 didn’t take any action to protect the security interest
granted by the pledge to enable Mr. Bobulinski to exercise
24 his rights and remedies under the pledge, did it?
Roseman: That’s correct…”
25
A true and correct copy of Roseman’s October 3, 2018 transcript
26
is attached as Exhibit 3.
27
28

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 17 of 29 Page ID #:431

1 57. While Roseman also testified that CBG’s content library and license
2 agreements were in the United States, he failed to distinguish which “content library
3 and license agreements” in the U.S. belonged to RAAD as opposed to CBG. At a
4 minimum, Roseman continued to conflate the two entities, as he did with Bobulinski,
5 failing to distinguish between the two companies.
6 58. Bobulinski’s counsel later questioned Roseman about whether CBG’s
7 sale of assets to Remark constituted a breach of section 7 of the Pledge. Of note,
8 Roseman’s Cayman counsel, objected to the questioning and commented:
9 “Mr. Smith: I’m sorry, I intervene because [Bobulinski’s
counsel] is confusing here the license agreement and the
10 media content with what was actually sold to Remark,
which is what we have been previously which is the shares
11 in the subsidiaries and the intercompany receivables. The
two are quite different. They are being completely
12 conflated here, and in my submission the witness is being
misled in a quite unfair way
13 …
Mr. Smith: My Lord, to be clear, my point isn’t that the
14 witness doesn’t understand the question. It’s that the
question is misleading because he put to the witness that
15 what was being sold to Remark was the media content, the
license agreements and so on. We know that isn’t the case.
16 My learned friend is putting a question on a wholly
misleading and incorrect basis.”
17
59. Ultimately, the Cayman Court accepted the JOLs’ argument that CBG
18
never owned the Collateral and therefore Bobulinski never had a security interest in
19
the Collateral. The Cayman Court issued a judgment (the “Cayman Judgment”),
20
rejecting Bobulinski’s appeal on January 23, 2019, which agreed with the arguments
21
made by the JOLs. Specifically, the Cayman Court held:
22
“…there is no evidence that the Company had any assets
23 falling within the operative part of the definition of
Collateral in the Pledge, i.e., content library, license
24 agreements, and physical assets such as production
equipment in the United States. Instead, the JOLs maintain
25 that the Company carries on business as au investment
company. It was a parent company for the Group. As such,
26 the Company had relatively few assets.
…
27 …in fact, there is no evidence that the Pledge attached to any
assets of the Company, But, even if had attached to any
28 “content library, licence agreement, and physical assets such

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 18 of 29 Page ID #:432

1 as production equipment” of the Company in the United

States, there is nothing to suggest that the proceeds of sale
2 received under the APA are the identifiable proceeds of such
assets. On the contrary, the proceeds of sale received under
3 the APA were, if anything, attributable to the shares in the
subsidiary companies being sold under the APA…these
4 assets were never located in the United States and, on any
view, fall outside the scope of the Pledge.” (See Cayman
5 Judgment ¶¶ 221, 230, 232).
6 60. The end result was that Bobulinski was unable to recover the 2.5x return
7 Roseman led him to believe he was entitled to. Bobulinski has also been left duped
8 and confused about what he was led to believe was a security interest in the
9 Collateral.
10 Bobulinski’s Earmarked Funds
11 61. Bobulinski had originally earmarked the money he used for the
12 $650,000 Note to fund another company (“Investment Company”)2. Bobulinski was
13 part of an investment group (the “Purchasing Group”) who planned to buy
14 Investment Company in 2017. Bobulinski had earmarked $2.5 million as his share of
15 the Purchasing Group’s investment, which was then reduced by the money he used to
16 fund the Note for CBG, which Bobulinski entered into because of Roseman’s
17 misrepresentations. Because he believed he was receiving a 2.5x return on his
18 $650,000 Note, he also intended for his 2.5x return to be put into Investment
19 Company to increase his investment share.
20 62. The Purchasing Group ultimately bought Investment Company in 2017.
21 Following the Cayman Litigation, Bobulinski has been unable to recoup the
22 $650,000 principle amount on his Note or collect the 2.5x return. Furthermore, he
23 has spent additional money out of his own pocket in legal fees during the Cayman
24 Litigation. These amounts were all supposed to be included in Bobulinski’s total
25 investment in Investment Company, originally at the amount of $2.5 million, which
26 was specifically carved out and allocated to him as his share of Purchasing Group’s
27 2
The actual name of Investment Company is being kept anonymous to protect the
28 privacy of the company.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 19 of 29 Page ID #:433

1 total investment. When Bobulinski could not recoup the amounts he was owed from
2 CBG, Purchasing Group was forced to reallocate part of his share to other
3 individuals.
4 63. Since 2017, Investment Company has continued to rise in value.
5 Because Bobulinski was forced to reduce his original intended investment,
6 Bobulinski lost out on the opportunity to obtain a much more valuable share of
7 Purchasing Group’s investment.
8 FIRST CAUSE OF ACTION
9 (Fraud in the Inducement against all defendants)
10 64. Bobulinski repeats and re-alleges each preceding paragraph as if set
11 forth in full herein.
12 65. As described above, Bobulinski entered into the Note because Roseman
13 led him to believe that the Note was secured by the Collateral. In his March 5, 2015
14 email, Roseman explained that a bridge loan to CBG would be senior secured by “all
15 our assets (content licenses, our production library and our fixed production
16 equipment in our 10k square foot studio in Culver City).” Roseman also acted as if
17 those assets were owned by CBG. For example, Roseman offered to have
18 Bobulinski “come see the Culver studio” in a March 20, 2015 email when they were
19 discussing a day and time to meet to discuss CBG and the loan. Roseman also
20 misrepresented that the Collateral was owned by CBG during his March 25, 2015
21 meeting with Bobulinski, when he explained the purported assets that would secure
22 Bobulinski’s loan. On information and belief, those assets included all of CBG’s
23 assets in the United States. Roseman never explained that those assets were actually
24 owned by RAAD. Furthermore, during the negotiation discussions for the Note
25 (between March and April 2015), Roseman never clarified that those assets were
26 owned by RAAD. In fact, at all times during Roseman’s solicitation of Bobulinski
27 and during the negotiation of the Note and Pledge, Roseman never mentioned RAAD
28 and acted as if the Collateral was owned by one company, CBG.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 20 of 29 Page ID #:434

1 66. Use of the terms “license agreements,” “content library,” and “physical
2 assets” in defining the Collateral in the Note and Pledge Agreement also led
3 Bobulinski, at the time he entered into the Note and the Pledge Agreement, to believe
4 that it was CBG that owned the referenced “license agreements” and “content
5 library” because the Pledge stated that they were assets of CBG.
6 67. Roseman represented and warranted to Bobulinski that CBG was the
7 sole and beneficial owner of the Collateral, when in fact, the assets Roseman
8 promised as security were owned by RAAD. As the sole member or manager of
9 RAAD, Roseman knew or should have known these representations to be false
10 and/or misleading. RAAD was a separate entity from CBG at the time Bobulinski
11 entered into the Note and CBG never owned RAAD’s assets.
12 68. Roseman’s misrepresentations were essential to Bobulinski’s decision to
13 enter into the Note and Pledge Agreement. Bobulinski informed Roseman that a
14 vital condition to providing a loan was that his loan needed to be senior secured by
15 CBG’s assets. Bobulinski was then led to believe that CBG owned the Collateral
16 that would secure his loan. Bobulinski would not have agreed to enter into the Note
17 and the Pledge but for this agreement that the Note would be secured by the
18 Collateral. In reality, the Collateral, which Roseman led Bobulinski to believe was
19 owned by CBG, was actually owned by RAAD.
20 69. Roseman’s misrepresentations were made with the intention to induce
21 Bobulinski to enter into the Note and Pledge Agreement, as evidenced by his stated
22 need to secure funding for CBG.
23 70. Bobulinski justifiably relied on the misrepresentations in entering into
24 the Note and Pledge Agreement. Bobulinski and Roseman had been business
25 partners and friends for over 16 years. And because Roseman was the CEO and
26 founder of CBG, Bobulinski had no reason to believe that Roseman’s
27 misrepresentations about the ownership of the Collateral were untrue.
28

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 21 of 29 Page ID #:435

1 71. Roseman’s misrepresentations about the Collateral are the actual and
2 proximate cause of these damages because had Roseman been truthful about the true
3 ownership of the Collateral, Bobulinski would not have entered into the Note and
4 Pledge Agreement. And had Bobulinski not entered into the Note and Pledge
5 Agreement, there would have been no need for the Cayman Litigation on
6 Bobulinski’s Proof of Debt. Furthermore, if Bobulinski’s Note had actually been
7 secured by the Collateral, he would have had the contractual right to stop the Remark
8 deal, as the deal could not have closed without his signature, pursuant to Section 7 of
9 the Pledge Agreement. With this veto power, Bobulinski could have held up the
10 Remark deal and received further assurance and confirmation that he was getting his
11 2.5x return on the Note before the deal closed, which also would have rendered the
12 Cayman Litigation unnecessary. As it turned out, the Remark deal closed without his
13 consent because CBG did not own the Collateral, as Roseman misrepresented.
14 72. As an actual and proximate cause of these misrepresentations,
15 Bobulinski has been damaged in an amount to be proven at trial. Bobulinski has
16 suffered damages in an amount of $650,000 – the principal amount of the Note,
17 which he has lost and has been unable to recover3. Bobulinski has also suffered
18 financial damages due to the legal fees and costs he incurred litigating the Cayman
19 Litigation for nearly two and a half years – over $700,000. Finally, Bobulinski has
20 also suffered financial lost opportunity damages based on the difference between the
21 value of his actual share in Investment Company and the value of what his share
22 would have been had been able to invest the full amount of money he had originally
23 earmarked, but which was eventually used for CBG.
24
25 3
To the extent that the Cayman Liquidation is ongoing, the fact remains that it is
26 highly unlikely that Bobulinski will ever recover his $650,000 or any part of it given
the multitude of creditor claims CBG is facing and CBG’s current insolvency.
27 Furthermore, the JOLs are now claiming that Bobulinski must pay their legal fees
amounting to $634,393.52. Therefore, even in the unlikely event that Bobulinski
28 recovered any amount, it would undoubtedly be reduced to satisfy the JOLs’ fees.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 22 of 29 Page ID #:436

1 73. Bobulinski, alternatively, seeks rescission of the Note and the Pledge
2 Agreement. Bobulinski is entitled to a rescission of the Note and the Pledge
3 Agreement, which should both be declared void based on Roseman’s fraudulent
4 misrepresentations. Bobulinski is also entitled to an order requiring Roseman to
5 restore Bobulinski to the pre-contractual status quo. Such an order should require
6 Roseman to return Bobulinski’s $650,000 and pay all costs incurred as a
7 consequence of Bobulinski signing the Note and Pledge, including but not limited to,
8 all attorneys’ fees incurred in connection with the Cayman Litigation.
9 74. Bobulinski is informed and believes, and on that basis alleges, that
10 Roseman engaged in the conduct described above with fraudulent intent, and with a
11 conscious or reckless disregard for Bobulinski’s rights and welfare. Roseman
12 thereby acted toward Bobulinski with malice, oppression, and fraud. Accordingly,
13 Bobulinski is entitled to an award of punitive and exemplary damages against
14 Roseman in an amount sufficient to punish and make an example of Roseman and to
15 deter him and others similarly situated from engaging in similar wrongful conduct in
16 the future.
17 SECOND CAUSE OF ACTION
18 (Negligent Misrepresentation against all defendants)
19 75. Bobulinski repeats and re-alleges each preceding paragraph as if set
20 forth in full herein.
21 76. As the CEO of CBG, Roseman was or should have been kept apprised
22 of all assets owned by CBG. And as the sole member or manager of RAAD,
23 Roseman knew or should have known that RAAD and CBG were separate entities
24 and that RAAD owned those “license agreements” and “content library” which
25 Bobulinski was led to believe would secure his Note. Roseman knew or should have
26 known that inclusion of the terms “license agreements” and “content library” within
27 the scope of the Collateral were misleading because those assets were owned by
28 RAAD.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 23 of 29 Page ID #:437

1 77. Despite this, Roseman failed to inform Bobulinski of the

2 misrepresentations contained in the Pledge. Roseman never explained the Collateral
3 was owned by RAAD or that RAAD was a separate entity from CBG. As CEO of
4 CBG and a member or manager of RAAD, Roseman had no reasonable grounds for
5 believing the representations were true when he made them.
6 78. Roseman’s misrepresentations were essential to Bobulinski’s decision to
7 enter into the Note. Bobulinski informed Roseman that a vital condition to providing
8 a loan was that his loan needed to be senior secured by CBG’s assets. Bobulinski
9 was then led to believe that CBG owned the “content library” and “license
10 agreements” that would secure his loan. Bobulinski would not have agreed to enter
11 into the Note and the Pledge Agreement but for this agreement that the Note would
12 be secured by the Collateral. In reality, the Collateral, which Roseman led
13 Bobulinski to believe was owned by CBG, was actually owned by RAAD.
14 79. Bobulinski reasonably relied on such misrepresentations made by
15 Roseman. Bobulinski and Roseman had been business partners and friends for over
16 16 years. And because Roseman was the CEO and founder of CBG, Bobulinski had
17 reason to believe that Roseman had knowledge of CBG’s assets and no reason to
18 believe that Roseman’s misrepresentations about the ownership of the Collateral
19 were untrue.
20 80. Roseman’s misrepresentations about the Collateral are the actual and
21 proximate cause of these damages because had Roseman been truthful about the true
22 ownership of the Collateral, Bobulinski would not have entered into the Note. And
23 had Bobulinski not entered into the Note, there would have been no need for the
24 Cayman Litigation on Bobulinski’s Proof of Debt. Furthermore, if Bobulinski had
25 actually been secured by the Collateral, he would have had the contractual right to
26 stop the Remark deal as the deal could not have closed without his signature,
27 pursuant to Section 7 of the Pledge. With this veto power, Bobulinski could have
28 held up the Remark deal and received further assurance and confirmation that he was

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 24 of 29 Page ID #:438

1 getting his 2.5x return on the Note before the deal closed, which also would have
2 rendered the Cayman Litigation unnecessary. As it turned out, the Remark deal
3 closed without his consent because CBG did not own the Collateral, as Roseman
4 misrepresented.
5 81. As a direct and proximate cause of Roseman’s actions, Bobulinski has
6 suffered damages in an amount to be proven at trial. Bobulinski has suffered
7 damages in an amount of $650,000 – the principal amount of the Note, which he has
8 lost and has been unable to recover. Bobulinski has also suffered financial damages
9 due to the legal fees and costs he incurred litigating the Cayman Litigation for nearly
10 two and a half years – over $700,000. Finally, Bobulinski has also suffered financial
11 lost opportunity damages based on the difference between the value of his actual
12 share in Investment Company and the value of what his share would have been had
13 he been able to invest the full amount of money he originally earmarked, but which
14 was eventually loaned to CBG without recovery.
15 82. Bobulinski is informed and believes, and based thereon alleges,
16 Roseman’s conduct was performed with a conscious disregard of Bobulinski’s rights,
17 such as to constitute oppression, fraud, or malice, thereby rendering Roseman liable
18 for punitive damages in an amount to be proven at trial.
19 THIRD CAUSE OF ACTION
20 (Breach of Fiduciary Duty against all defendants)
21 83. Bobulinski repeats and re-alleges each preceding paragraph as if set
22 forth in full herein.
23 84. Roseman owed Bobulinski a fiduciary duty based on their long-standing
24 professional relationship as business partners and close friends. By virtue of their
25 16-year partnership, Roseman and Bobulinski formed a confidential relationship,
26 which is synonymous with a fiduciary relationship in that it gives rise to fiduciary
27 duties. Roseman and Bobulinski’s confidential relationship obligated Roseman to
28 act with the utmost good faith for the benefit of Bobulinski in their business dealings.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 25 of 29 Page ID #:439

1 85. Over the course of their 16-year partnership, Bobulinski invested in a

2 number of Roseman’s businesses throughout that time period. Roseman’s
3 solicitation of the loan from Bobulinski was not uncommon. However, their
4 relationship stretched beyond just their business dealings. Having worked together
5 for over a decade and a half, Roseman and Bobulinski had become close friends and
6 confidants. Because they had worked together so closely for such a long period of
7 time, Bobulinski placed his trust and confidence in Roseman.
8 86. Roseman breached his fiduciary duty to Bobulinski when he
9 misrepresented CBG’s ownership of the Collateral in order to secure a loan from the
10 unknowing Bobulinski. Because Roseman was the CEO and controlling member of
11 CBG, he had superior knowledge than Bobulinski about what assets CBG actually
12 owned. Because Bobulinski had no reason to believe that the CEO of CBG, and his
13 close friend, would lie about CBG’s assets, Bobulinski placed his trust and
14 confidence in Roseman when agreeing to enter into the Note.
15 87. Because Roseman was much more knowledgeable about CBG and its
16 assets, Bobulinski was placed in a vulnerable position resulting in Roseman’s
17 empowerment over Bobulinski during the solicitation and negotiation of the Note.
18 See Persson v. Smart Inventions, Inc., 125 Cal. App. 4th 1141, 1161 (2005)
19 (describing the elements required for a confidential relationship).
20 88. When Roseman solicited Bobulinski’s financial assistance, Bobulinski
21 was asked to urgently enter into a deal. Because Roseman was desperate for funding
22 and wanted to move quickly to secure a loan, Roseman assured Bobulinski that their
23 understanding about his security interest would be properly documented by the law
24 firm Sheppard Mullin, counsel for CBG, and recommended that Bobulinski not
25 retain his own lawyer, as Roseman felt it would slow down the process of obtaining
26 Bobulinski’s loan. Roseman assured Bobulinski that Sheppard Mullin would
27 properly document the deal with both of their interests in mind.
28

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 26 of 29 Page ID #:440

1 89. Because Bobulinski trusted his longtime friend and business partner,
2 and because of the stated urgency of the needed loan, Bobulinski did not secure his
3 own separate counsel to negotiate or review the terms of the purported security
4 interest in CBG’s assets.
5 90. In sum, Roseman had superior knowledge about CBG’s assets, made the
6 decision to secure counsel to review and draft the terms of the Note while assuring
7 Bobulinski that he need not retain his own counsel, and took advantage of his sixteen
8 year business partnership with Bobulinski to induce Bobulinksi into entering into the
9 Note quickly. Roseman utilized his confidential relationship with Bobulinski to
10 Bobulinski’s detriment. The “essence” of a confidential relationship is “that the
11 parties do not deal on equal terms, because the person in whom trust and confidence
12 is reposed and who accepts that trust and confidence is in a superior position to exert
13 unique influence over the dependent party.” Richelle L. v. Roman Catholic
14 Archbishop, 106 Cal. App. 4th 257, 271 (2003).
15 91. Roseman took advantage of Bobulinski’s vulnerability by offering to
16 take a loan on whatever terms Bobulinski asked for or needed to move quickly,
17 knowing full well that neither he nor CBG could fulfill the terms Bobulinski
18 requested.
19 92. Yet, Roseman owed a fiduciary duty to Bobulinski to fully and frankly
20 disclose all relevant information necessary for just, equitable and open dealings
21 between the two business partners. Roseman failed to fully disclose all material facts
22 within his knowledge to Bobulinski about the Collateral and the purported security of
23 the Note. Roseman did not explain that the “license agreements” and “content
24 library” which purportedly secured Bobulinski’s Note were not actually owned by
25 CBG; rather, they were owned by RAAD. Had Roseman fully disclosed this
26 information, Bobulinski would not have entered into the Note.
27 93. Roseman knowingly undertook to act on behalf of Bobulinski and with
28 Bobulinski’s confidence and trust when he solicited Bobulinski for a loan to CBG.

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 27 of 29 Page ID #:441

1 Roseman abused that trust when he fraudulently misrepresented that CBG owned the
2 Collateral.
3 94. Roseman’s breach of his fiduciary duty to fully disclose all relevant
4 information about the Collateral is the actual and proximate cause of these damages
5 because, had Roseman been truthful about the true ownership of the Collateral,
6 Bobulinski would not have entered into the Note. And, had Bobulinski not entered
7 into the Note, there would have been no need for the Cayman Litigation on
8 Bobulinski’s Proof of Debt. Furthermore, if Bobulinski had actually been secured by
9 the Collateral, he would have had the contractual right to stop the Remark deal as the
10 deal could not have closed without his signature, pursuant to Section 7 of the Pledge.
11 With this veto power, Bobulinski could have held up the Remark deal and received
12 further assurance and confirmation that he was getting his 2.5x return on the Note
13 before the deal closed, which also would have rendered the Cayman Litigation
14 unnecessary. As it turned out, the Remark deal closed without his consent because
15 CBG did not own the Collateral, as Roseman misrepresented.
16 95. As a direct and proximate cause of Roseman’s breach of his fiduciary
17 duty, Bobulinski has suffered damages in an amount to be proven at trial. Bobulinski
18 has suffered damages in an amount of $650,000 – the principal amount of the Note,
19 which he has lost and has been unable to recover. Bobulinski has also suffered
20 financial damages due to the legal fees and costs he incurred litigating the Cayman
21 Litigation for nearly two and a half years – over $700,000. Finally, Bobulinski has
22 also suffered financial lost opportunity damages based on the difference between the
23 value of his actual share in Investment Company and the value of what his share
24 would have been had been able to invest the full amount of money he had originally
25 earmarked, but which was eventually used for CBG.
26 96. Bobulinski is informed and believes, and based thereon alleges,
27 Roseman’s conduct was performed with a conscious disregard of Bobulinski’s rights,
28

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 28 of 29 Page ID #:442

1 such as to constitute oppression, fraud, or malice, thereby rendering Roseman liable

2 for punitive damages in an amount to be proven at trial.
3 PRAYER
4 WHEREFORE, Plaintiff prays for judgment against Defendants as follows:
5 1. For actual and consequential damages to be proven at trial;
6 2. Compensatory damages, in an amount to be proven at trial;
7 3. For punitive and exemplary damages;
8 4. In the alternative, rescission of the Note and Pledge Agreements as to
9 Plaintiff’s First Cause of Action;
10 5. For costs of suit;
11 6. For attorneys’ fees as permitted by law; and
12 7. For such other and further relief that this Court deems proper.
13
14 DATED July 10, 2019 BAKER MARQUART LLP
15
16 By:
17 Ryan G. Baker
Lucas Paule
18 Attorneys for Plaintiff
19 Tony Bobulinski

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Case 2:19-cv-02963-MWF-JPR Document 23 Filed 07/10/19 Page 29 of 29 Page ID #:443

1 DEMAND FOR JURY TRIAL

2 Plaintiff Tony Bobulinski hereby demands a jury trial of all claims, defenses
3 and requests for relief in this matter for which there is a right to a jury trial.
4
5 DATED July 10, 2019 BAKER MARQUART LLP
6
7
8 By:
Ryan G. Baker
9 Lucas Paule
10 Attorneys for Plaintiff
Tony Bobulinski
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