Kuengtech Llc Legal Dispute

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"GENERAL ALLEGATIONS January *, *, Eric Grigsby founded “KUENGTECH LLC”. The ensuing three years, Eric inittiated the development of a gravity packing centrifug.a machine that could pack a hundred joints or more in about a minute’s time. In *-*, Eric began forming contacts with people in the industry and started some small sales. Sometime in *, Eric recruited Sarah to help him operate the business and manage customers and staff. Eric Grigsby would continue to remain responsible for technology, invention, and product design and primary point of contact to introduce sales to generate revenue through personal connections. Sarah Ho was responsible for daily operations such as managing finances, hiring people, customer contacts, product shipping, etc. In early *, Hai Lam and Mark Arnold joined the company. An operating agreement was prepared, but no executed copy is in Plaintiff’s possession. Later in *, Hai Lam and Mark Arnold left the company. A true and correct copy of the operating agreement after Hai Lam and Mark Arnold’s departure is attached as Exhibit B (the “* Operating Agreement”). This was only signed by Sarah Ho. The agreement did not specify how Hai Lam’s and Mark Arnold’s equity would be relinquished to the company (hereafter, the “Relinquished Equity”). According to K-1s filed by the company, Sarah unilaterally assigned the Relinquished Equity to herself, increasing her ownership percentage from *% to *%. A true and correct copy of the K-* filed in * is attached as Exhibit C. On information and belief, the Second Operating Agreement did not specify the redistribution of equity, and there was no other agreement among the remaining members to apportion the equity to Sarah Ho. By default, the equity should have been redistributed proportionally: *.*% to Eric Grigsby and *.*% to Sarah Ho. At the end of *, disputes arose between Eric Grigsby and Sarah Ho over operations and finances. Eric Grigsby demanded to see the financial records, but Sarah Ho refused. On information and belief, beginning in *, Sarah Ho began forming other companies including but not limited to, Savvy-Faire, MKTS, In early *, the Covid-* Pandemic began, which put a damper on the business. Eric’s shop in San Jose was eliminated and the equipment was moved to Sarah’s Savvy-Faire (catering) shop in San Francisco. On information and belief, Sarah Ho began using KungTech profits to cover the rent of her Savvy-Faire which was not doing so well due to Covid lockdowns while starting an LGBTQ+ cannabis “edibles” business using KungTech Inc., IP.. Before the end of *, Eric Grigsby moved to Las Vegas at the end of *. Sarah felt this a good idea so he could focus on production design and keep in touch with her and team via phone and zoom calls. Sarah encouraged the move. She said Eric’s job can be done remotely. In retrospect this was to her advantage. Eric is not close-by to check on her activities. On information and belief, sometime in *, Sarah Ho opened at least one new bank account that did not include Eric Grigsby, and without notifying Eric Grigsby or authority from KungTech. On information and belief, Sarah Ho fraudulently represented herself to the bank (Chase) as the sole owner of Kungtech or opened up the account in another name in order for Eric Grigsby not to be able to have access to this account. On information and belief, Sarah Ho collected funds with this account paying herself and others from this account without authority from the Company. At some point in *, Eric got a glimpse of another savings account in person. When questioned she said it was a total of unpaid accounts from bill payers. There is a money market account that is also controlled by Sarah. It is believed that there are at least * other business accounts she controls. In *, Sarah Ho further increased her equity in KungTech, reducing Eric Grigsby’s ownership from *% to *%. A true and correct copy of the K-* filed in * is attached as Exhibit [XX]. On information and belief, Sarah Ho reassigned her equity percentage without any supporting documentation and without consideration to the company. In *, Andrew Goei and Travis Lee were hired as consultants to raise money and attract investors. They received a monthly salary of $*,* each, plus a sign-on bonus. In late *, Andrew and Travis told Eric they needed to change to a C-corporation so that the company could attract investors. They did not perform their duties and were later found to have ruined business relationships and disparaged vendors. By the end of *, the LLC was converted to a C corporation, and a board consent supposedly signed by Eric Grigsby approved a *-* equity split. A copy is attached as Exhibit [##]. On information and belief, Eric Grigsby’s signature was forged on this document. Over the years of *-*, it is believed that Sarah began funneling money from KungTech using companies she controls, bank accounts only she had access to, and fake expenditures. In the fall of *, Eric Grigsby discovered some of these financial issues, consultants pocketing money, lack of access to records, and substandard products delivered to customers. In November *, Eric Grigsby discovered an empty bank account and lack of sales communication. Sarah Ho admitted knowing about the lack of funds but had not communicated this to Eric Grigsby. Sometime in December * was the last date KungTech paid Eric anything. He has not been paid on any sales since. From November * to January *, Eric Grigsby’s email was disabled, preventing him from accessing crucial business communications. The email records recovered after this period show evidence of invoices being paid to accounts controlled by Sarah. On December *, *, Armando Castro resigned from the Board of Directors, citing an inability to r****lve the stalemate between Eric Grigsby and Sarah Ho. In truth, Armando Castra began to collude with Sarah Ho and advise her on how to take over the company. On information and belief, Sarah Ho used Eric Grigsby’s gmail account for KungTech to impersonate him, pretend she was speaking with him on google hangouts and send unauthorized communications, attempting to convert clients and stakeholders to support her control over the company. On information, Sarah Ho has been operating the company fraudulently, without paying Eric Grigsby, and misrepresenting his involvement to vendors. Videos exist showing Sarah Ho pretending Eric Grigsby was present in video calls when he was not. In January *, Eric Grigsby again requested access to all company accounts and records, which Sarah Ho denied. In early *, Eric Grigsby, with the advice of attorney Omar Bengali, contacted the FBI due to theft and fraud conducted by Sarah Ho. An FBI complaint was submitted detailing email jacking, bank account fraud, and identity theft. On May *, *, a shareholder meeting was held to vote Sarah Ho out of the Board of Directors. On May *, *, a unanimous written board consent was executed, firing Sarah Ho and other purported officers and contractors. In June *, Eric Grigsby discovered that Sarah Ho had been running a separate operation and pretending Eric Grigsby was still involved with KungTech. Evidence includes videos where Sarah Ho pretended Eric was on video calls but he wasn't actually there. Sarah Ho denied Eric Grigsby access to bank accounts, contracts, and financial records, despite multiple requests. She used company funds for personal expenses, opened additional accounts and businesses without Eric Grigsby’s approval, misrepresented her ownership and role, slandered Eric Grigsby, and used his email account fraudulently. She ignored shareholder requests and misled other members and stakeholders. FIRST CLAIM FOR RELIEF FIRST CAUSE OF ACTION: BREACH OF FIDUCIARY DUTY As a shareholder, member, alleged board member, and officer of KungTech, Defendant, Sarah Ho, owed fiduciary duties of loyalty, care, and good faith to Plaintiff. Defendant breached these duties by misappropriating company funds, engaging in fraudulent activities, forging Eric Grigsby’s signature on board consents, refusing to provide financial transparency, and acting in her own interest rather than in the best interest of the company and its members. Defendant’s actions included unauthorized equity reallocation, opening separate bank accounts, and diverting company funds for personal use. As a direct and proximate result of Defendant’s breach, Plaintiff has suffered damages, including financial losses, loss of control over the company, and reputational harm, in an amount to be determined at trial. SECOND CAUSE OF ACTION: FRAUD Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant, Sarah Ho, made material misrepresentations regarding the company’s finances [etc] to Plaintiff. Defendant knew these representations were false and intended to deceive Plaintiff. Plaintiff reasonably relied on these misrepresentations, resulting in significant financial losses, including lost profits, diminished company value, and reputational damage. As a direct and proximate result of Defendant’s fraudulent actions, Plaintiff has suffered damages in an amount to be determined at trial. THIRD CAUSE OF ACTION: BREACH OF CONTRACT Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. A valid and enforceable operating agreement existed between the parties. (See Exhibit A). Plaintiff performed all obligations under the agreement or was excused from performance. Defendant breached the agreement by unilaterally reallocating equity, refusing to provide financial records, and opening separate bank accounts without authorization. Defendant’s actions violated specific provisions of the operating agreement, including those related to equity distribution, financial transparency, and the duty to act in the best interest of the company. As a direct and proximate result of Defendant’s breach, Plaintiff has suffered damages, including financial losses, loss of control over the company, and diminished company value, in an amount to be determined at trial. FOURTH CAUSE OF ACTION: CONVERSION Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Plaintiff had a right to possess the company funds and assets. Defendant intentionally interfered with Plaintiff’s possession by opening separate bank accounts and misappropriating funds. Defendant’s actions deprived Plaintiff of the use and benefit of the company’s funds and assets, causing financial harm. As a direct and proximate result of Defendant’s conversion, Plaintiff has suffered damages in an amount to be determined at trial. FIFTH CAUSE OF ACTION: DECLARATORY RELIEF Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. An actual controversy exists regarding the rightful ownership and equity distribution in KungTech. Plaintiff seeks a judicial declaration of the parties’ rights and obligations under the operating agreement and related documents, including the proper distribution of equity and control over company assets. SIXTH CAUSE OF ACTION: ACCOUNTING Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant has failed to provide an accurate accounting of the company’s finances. Plaintiff seeks an accounting to determine the extent of financial misconduct and misappropriation of funds by Defendant, including a detailed review of all company bank accounts and financial transactions. SEVENTH CAUSE OF ACTION: SECURITIES FRAUD Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant misrepresented or omitted material facts related to the sale or transfer of securities (equity in KungTech), including the true nature of her equity acquisitions and the alleged forgery of Plaintiff’s signature. Plaintiff reasonably relied on these misrepresentations, resulting in significant financial losses, including loss of equity, diminished company value, and loss of investor confidence. As a direct and proximate result of Defendant’s fraudulent actions, Plaintiff has suffered damages in an amount to be determined at trial. EIGHTH CAUSE OF ACTION: VIOLATION OF BUSINESS AND PROFESSIONS CODE § * Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant engaged in unfair, unlawful, and fraudulent business practices, including misappropriating company funds, forging signatures, and misleading investors and stakeholders. As a direct and proximate result of Defendant’s actions, Plaintiff has suffered damages, including financial losses, loss of business reputation, and diminished company value, in an amount to be determined at trial. NINTH CAUSE OF ACTION: BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant’s actions destroyed or injured Plaintiff’s right to receive the benefits of the agreement, including fair distribution of equity, financial transparency, and rightful compensation. Defendant’s actions were taken in bad faith and with the intent to undermine Plaintiff’s interests. As a direct and proximate result of Defendant’s actions, Plaintiff has suffered damages, including financial losses and loss of business opportunities, in an amount to be determined at trial. TENTH CAUSE OF ACTION: DECLARATORY JUDGMENT Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Plaintiff seeks a declaratory judgment to clarify the rights and obligations of the parties under the contract and any other relevant documents, including the rightful ownership and equity distribution in KungTech. ELEVENTH CAUSE OF ACTION: DEFAMATION Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant made false and defamatory statements about Plaintiff to third parties, including vendors and stakeholders, by misrepresenting Plaintiff’s involvement and actions within the company. Defendant’s statements were made with knowledge of their falsity or with reckless disregard for the truth. The defamatory statements were unprivileged and were published to third parties, causing harm to Plaintiff’s reputation. As a direct and proximate result of Defendant’s defamatory statements, Plaintiff has suffered damages, including reputational harm and loss of business opportunities, in an amount to be determined at trial. PIERCING THE CORPORATE VEIL Plaintiff realleges and incorporates by reference the allegations contained in Paragraphs * through *. Defendant Sarah Ho used the corporate form of KungTech and other related entities as mere instruments to perpetrate fraud, evade liability, and commit wrongful acts. Defendant commingled personal and corporate funds, failed to observe corporate formalities, and used corporate assets for personal purposes. Defendant's actions were done to the detriment of Plaintiff and in contravention of the purposes for which the corporation was formed. As a result, Defendant should be held personally liable for the debts and obligations of KungTech, including the damages suffered by Plaintiff as a result of Defendant’s wrongful actions. Notes: Took this out because we have no record of this: A true and correct copy of the operating agreement executed [DATE] is attached as Exhibit A (the “First Operating Agreement”). The members under the First Operating Agreement were Eric Grigsby (*%), Sarah Ho (*%), Hai Lam (*%), and Mark Arnold (*%). "

Can you condense it and supplement with sources if necessary

That is far too condensced