NEW MEDIA HOLDING COMPANY L.L.C.,

Plaintiff,

- against -

KONSTANTIN KAGALOVSKY, IOTA LP, ASPIDA VENTURES LTD., AND SERAGILL HOLDINGS LTD.,

Defendants.

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To:

KONSTANTIN KAGALOVSKY IOTA LP Stanley House 500 Kings Road London S W 10 OUA United Kingdom

ASPIDA VENTURES LTD. Solonos 20 P.C. 3035 Limossol, Cyprus

Index No.

Date Purchased: Dec. 14,2009

Plaintiff designates New York County as place of trial.

SUMMONS 0 9 6 0 3 7 4 2 Venue is proper pursuant to CPLR 6 503(a) because Plaintiff has chosen to file in New York County.

SERAGILL HOLDINGS LTD. '*W Arch. Makariou C, 155 Proteas House, 5th F1. P.C. 3026 Limossol, Cyprus

You are hereby summoned to answer the complaint in this action and to serve

a copy of your answer, or if the complaint is not served with this summons, to serve a notice

of appearance on the Plaintiff's attorneys within 20 days after the service of this summons,

exclusive of the day of service (or within 30 days after the service is complete if this

summons is not personally delivered to you within the State of New York); and in case of

your failure to appear or answer, judgment will be taken against you by default for the relief

demanded in the complaint.

Dated: New York, New York December 1 1,2009

COVINGTON & B U h dl LLP

BY: + C. William P i

David Z. Pinsky Christopher Y. L. Yeung The New York Times Building 620 Eighth Avenue New York, New York 10018 (212) 841-1000

Attorneys for Plaintiff

2

.. -

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK

-X _ _ _ _ _ _ _ _ _ _ - _ - - - - - - - _ _ r _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

NEW MEDIA HOLDING COMPANY L.L.C., : IndexNo.

Plaintiff,

- against - : COMPLAINT

KONSTANTIN KAGALOVSKY, IOTA LP, ASPIDA VENTURES LTD., AND SERAGILL HOLDINGS LTD.,

De fendants.

0 9 6 0 3 7 4 2 -X _ _ “ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _

New Media Holding Company L.L.C. (“New Media Holding”), by its

undersigned attorneys, for its Complaint against Defendants Konstantin Kagalovsky

(“Kagalovsky”), Iota LP (“Iota”), Aspida Ventures Ltd. (“Aspida”), and Seragill Holdings Ltd.

(“Seragill”), alleges upon knowledge as to itself and its own acts, and upon i E d t i & a n

belief as to all other matters:

Nature of the Action

1. This complaint describes how Defendants conspi

belief as to all other matters:

Nature of the Action

1. This complaint describes how Defendants conspired, through a se&

improper actions in breach of their fiduciary and contractual duties, to seize control of and steal ’ ‘

the TVi Channel, a television network in Ukraine. This action seeks the return of that property.

2. New Media Holding is a Delaware limited liability company, owned and

controlled by Vladimir Gusinski, that owns a controlling stake in a leading producer of Russian-

language media and in one of the world’s largest Russian language film libraries. In late 2007,

Mr. Gusinski and Mr. Kagalovsky, long-time social acquaintances, agreed to create and to

manage a new television network in Ukraine, later named TVi. The two men agreed to form a

partnership for the purpose of creating and owning that network.

3. Mr, Gusinski brought to their partnership his unique knowledge and

experience in setting up and operating television networks, as well as the availability of his

media rights and assets owned by his family of companies (which included Some of the most

popular television series in Russia) and experienced technical and operating personnel. His

friend Mr. Kagalovsky, a Russian citizen living in London, had no television or media

experience, but was an experienced investor who took principal responsibility for organizing the

legal and financial structure of the partnership.

4. Mr. Gusinski and Mr. Kagalovsky agreed to be 50/50 partners and that the

appointment of TVi’s top managers would be jointly approved. In addition, the two partners

decided that there would be no mandatory capital calls to fund the partnership. The partners’

agreement governing the terms of their investment was reflected in a revised partnership

agreement for their partnership, called Iota Ventures LLP (hereafter, the “Partnership”), a

Delaware limited liability partnership.

5 . Separately, in a series of meetings held in New York City and in Mr.

Kagalovsky’s London home, the partners agreed upon the responsibilities for the operations of

TVi. Mr. Gusinski and his team of experienced media advisers (which included Yevgeny

Kiselyov, a prominent Russian journalist and the former CEO of NTV, Russia’s largest

independent television network; Igor Malashenko, a former general director of Channel One,

Russia’s largest television network, and a founder of NTV; and Yevgeny Yakovich, a former

head of NTV Plus, a prominent Russian satellite direct broadcasting company) were responsible

for the media operations of TVi. Mr. Kagalovsky and his representative, a Russian economist

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named Andrei Dementiev, were responsible for supervising the creation of the financial and legal

structures of the network. The partners agreed that the budget and financial decisions for the

network ( e g , disbursements to third parties) would be jointly approved,

6. Mr. Kagalovsky supervised and controlled the creation of an elaborate

ownership structure for TVi. The network was to be owned by a Ukrainian company,

Teleradiocompany TeleRadioSvit LLC (“TRS”), which in turn was held through a series of other

companies organized in Ukraine and in Cyprus. All of these intermediate subsidiaries were

owned, directly or indirectly, by the Partnership. Thus, through their 50 percent interests in the

Partnership, Mr. Kagalovsky (through his personal limited partnership, Iota) and Mr. Gusinski

(through his principal U.S. investment vehicle, New Media Holding) owned and controlled TRS

and TVi, the principal operating assets of the Partnership. The partners agreed to make equal

capital and voluntary contributions to the Partnership and ultimately each contributed $1 2

million to it.

7. TVi commenced broadcasting over Ukrainian airwaves in March 2008.

At the outset, TVi did not yet have its own broadcasting facilities; the programming content was

composed and integrated by personnel and in the New York City facilities of Overseas Media,

Inc., another media company managed by Mr. Gusinski, and transmitted, on the basis of a

mutually beneficial contract with Overseas Media, Inc., via satellite to Ukraine.

8. The partners began to disagree over operations in late spring or early

summer of 2009, leading Mr. Gusinski to propose a buy-out provision, amending the partnership

agreement, in order to resolve any deadlock between the partners. Mr. Kagalovsky initially

agreed to the solution, but then reneged and took matters into his own hands.

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9. In late September 2009, Mr. Kagalovsky - suddenly and without any

notice - unilaterally seized control of TVi’s operations, (upon information and belief) causing

Mr. Gusinski’s designated representative to be physically barred from the network and stopping

all payment of contractually required license fees for the television series previously purchased

from Mr. Gusinski’s production company, New Media Distribution Company L. L,C,

(“NMDC”), Network and Partnership personnel would not, or were not allowed to, provide

information discussing these decisions. The Partnership stopped paying license fees to NMDC

even while TVi continued to broadcast the licensed programming.

10. The reason for the network coup and infomation embargo became clear

over the Thanksgiving holiday in 2009. At that time New Media Holding discovered that two

months earlier, in September, contemporaneously with the physical ouster of Mr. Gusinski’s

representative fi-om TVi, TRS’s charter capital had been unilaterally increased and distributed to

outside parties, in secret and without authorization. As a result, the Partnership ’s ownership

stake in TRS and TVi - its principal operating assets - was reduced to less than one percent

while two non-Partnership entities headquartered in Cyprus became 99 percent owners of these

assets. This illegal conduct took place without the knowledge or consent of Mr. Gusinski or

New Media Holding. The new controlling owners of TRS and TVi have been identified as

Defendants Aspida and Seragill.

1 1. Although the beneficial ownership of those companies is secret, only Mr.

Kagalovsky, acting in concert with Iota and representatives of its subsidiaries, could have

effected these surreptitious actions. To complete the theft, on or around October 14,2009, the

Partnership executed an agreement assigning its rights to the trademarks associated with TVi to

TRS. In other words, the Partnership, without Mr. Gusinski’s or New Media Holding’s

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n

knowledge or consent, had not only given away its principal operating assets but had assigned its

rights to the TVi trademarks to an to an entity no longer controlled by the Partnership, The

Partnership could not have assigned these rights without Mr. Kagalovsky’s authorization, Mr.

Kagalovsky has acknowledged his knowledge and participation in the transfer.

12. In short, acting in concert and in breach of fiduciary and contractual

duties, Mr. Kagalovsky and the other Defendants surreptitiously caused the wrongful removal of

the operation and ownership of TRS and TVi, the principal assets of the Partnership. Without

the knowledge or any authorization of New Media Holding, more than 99 percent of the

Partnership’s interest in TRS and TVi has been transferred to third parties owned and controlled

(upon information and belief) by Mr. Kagalovsky. New Media Holding brings this action to

restore its rights in TRS and TVi, to stop any further liquidation of its ownership interests, and

for damages caused by Defendants’ improper actions.

Parties

13. New Media Holding is a Delaware limited liability company that does

business in Greenwich, Connecticut. New Media Holding owns 50 percent of the Partnership.

New Media Holding is owned and controlled by Mr. Gusinski, who owns and operates the

largest Russian language media group outside Russia, including several television networks and

film and television production companies.

14,

15.

Mr. Kagalovsky is a Russian citizen residing in London, England.

Iota is an Isle of Jersey limited partnership with a principal place of

business in Jersey. Along with New Media Holding, Iota is an equal partner in the Partnership.

Upon information and belief, Mr. Kagalovsky exercises complete dominion and control over

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Iota, including, but not limited to, owning 100 percent of its ownership interests through various

investment entities.

16.

17.

18.

Aspida is a company that is incorporated in Cyprus.

Seragill is a company that is incorporated in Cyprus.

Upon information and belief, Aspida, and Seragill are corporate and

limited partnership shells that are owned and controlled by, and have been used by, Mr.

Kagalovsky for his personal investment objectives. Each was used as part of the conspiracy to

effect the improper and surreptitious dilution of the Partnership’s interests in TRS and TVi, to

deprive New Media Holding of its ownership interest in TRS and TVi.

Jurisdiction and Venue

19. This Court has personal jurisdiction over Iota and Mr. Kagalovsky

pursuant to Civil Practice Law and Rule 302(a) because New York was the location for many of

the negotiations and discussions that led to the Partnership Agreement and the agreements and

discussions that followed to implement it, from which this action arises. This Court has personal

jurisdiction over Aspida and Seragill as co-conspirators and beneficiaries of the illegal dilution

and transfers of New Media Holding’s ownership interests.

20. Venue is proper in this Court pursuant to Civil Practice Law and Rule

503(a) because, although none of the parties reside in New York, plaintiff has chosen to file in

New York County.

21. New York law governs this case because the Partnership Agreement

specifically provides for its application.

Factual Background

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...

.*

The Formation of the Partnership.

22, Starting in 2007, Mr. Gusinski and Mr. Kagalovsky, who had known each

other socially nearly twenty years, began discussions about developing and operating a television

network in Ukraine, Mr. Gusinski and Mr. Kagalovsky agreed to form a joint venture to develop

this investment and, on April 14,2008, executed an amended and restated partnership agreement

for Iota Ventures LLP (the “Partnership Agreement”). Under this agreement, there is no

mandatory capital hnding of the Partnership. Instead, the Partnership is funded by equal and

voluntary loans to the Partnership pursuant to jointly approved budgets. To date each of the

partners has extended approximately $12 million in loans to the Partnership.

23. In their discussions, held in person and by telephone in Mr. Gusinski’s

offices in New York City and in Mr, Kagalovsky’s London home, the two men agreed that their

joint business - the television network - would be operated jointly, with each partner taking

responsibility for the area of his expertise. Because of his broad experience in the television and

media industry, Mr. Gusinski became responsible for the creative and programming aspects of

the television network and Mr. Kagalovsky became principally responsible for the organizational

and financial structure of the business. The parties further agreed that all strategic, financial, and

management decisions concerning the operation of the business, including appointment and

termiliation of top managers and key personnel of TRS and TVi, would be made by them by

consensus.

24. Mr. Kagalovsky proposed, and the partners agreed, to a corporate structure

using existing entities he had responsibility for setting up in Delaware, the British Virgin Islands,

Cyprus, and the Isle of Jersey, that were then (upon information and belief) owned and

controlled by Mr. Kagalovsky: the Partnership (and its predecessor entity Iota Ventures LLC),

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Iota (and the predecessor entity that previously owned Iota’s interest in the Partnership, Petal

Capital Holdings Ltd., a British Virgin Islands company (“Petal”)) and Winslow Enterprises

Limited, a Cyprus company (“Winslow”). The Ukrainian companies International Media

Company (“IMC”) and International Media Technologies (“IMT”) were then set up under the

supervision of Mr. Kagalovsky, Under the final investment structure, the Partnership owned 100

percent of Winslow, which in turn indirectly owned a 99 percent beneficial interest in TRS

through IMC. IMT owned the remaining one percent beneficial interest in TRS. Winslow had a

99.9 percent interest in IMT, with the Partnership owning 0.1 percent.

25. Pursuant to the Partnership Agreement, New Media Holding acquired a 50

percent interest in the Partnership. Petal owned the other 50 percent, which Petal eventually

transferred to Iota. The Partnership was thus the indirect owner of TVi, through several layers of

subsidiaries:

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0.1% lW?

26, Mr. Gusinski and Mr. Kagalovsky further agreed that each would have a

representative on the network’s premises to oversee the day-to-day operations of TVi. The

representative for New Media Holding was Mr. Yakovich, who became the Executive Director

of TRS and TVi with the function of a Chief Operations Officer. Mr. Dementiev represented

Mr. Kagalovsky as a consultant with the function of a Chief Financial Officer. Together these

two representatives acted as co-managers of TVi and TRS, with a third individual, Nikolai

Knyazhitskiy, jointly appointed to act as CEO of TRS.

27. The partners’ representatives worked together to submit to Mr.

Kagalovsky and to Mr. Gusinski monthly and quarterly budgets for the television network’s

... .

income and expenses, After approval, these budgets were used to prepare payment schedules

and Partnership funding requests, which also were approved by both Mr. Kagalovsky and Mr.

Gusinski, At the conclusion of this process Mr, Dementiev (Mr. Kagalovsky’s representative)

submitted the final payment instructions to the Partnership’s manager for payment.

TVi Licenses Programming from NMDC.

28. The partners agreed that TRS would obtain licenses to broadcast Russian-

language television programming from NMDC, which owned the distribution rights to several of

the highest rated television series in Russia. Mr, Kagalovsky knew that Mr. Gusinski owned a

majority interest in NMDC prior to the Partnership’s decision to negotiate and sign licensing

agreements with NMDC, Indeed, Mr. Gusinski’s extensive media experience and media

holdings, including the holdings NMDC, were a central reason that Mr. Kagalovsky, through

Petal and later Iota, entered into the Partnership, Access to NMDC’s film library was a

substantial incentive for Mr. Kagalovsky and a substantial contribution by Mr. Gusinski to the

Partnership and joint business.

29. Mr. Kagalovsky was personally involved in the negotiation of the

licensing agreements and reviewed and approved all material terms of the licensing agreements.

With Mr. Kagalovsky’s full knowledge and approval of all terms of the agreements, the

Partnership signed licensing agreements with NMDC dated January 1,2009, January 14,2009,

and April 10, 2009 (collectively, the “Licensing Agreements”).

30. Pursuant to the Licensing Agreements, the Partnership acquired

distribution rights to Russian-language programming at market and below-market rates, Mr.

Kagalovsky personally screened the television series offered by NMDC for licensing, selected

the series for TVi’s audience and discarded those he did not want. Mr. Gusinski and Mr.

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Kagalovsky also discussed acquiring content from other, third-party distributors. Following

those discussions, TRS signed a substantial number of licensing agreements with third-party

distributors.

Kagalovsky Seizes Control.

3 1, Beginning in the late spring or early summer of 2009, the partners began

to have various disagreements over the operation of TVi. The Partnership Agreement did not

provide for a mechanism for resolving a deadlock between the partners, Accordingly, Mr.

Gusinski proposed to resolve deadlock situations by amending the Partnership Agreement to

include a buyhell option mechanism, pursuant to which one partner could cause the other to buy

or sell his interests in the Partnership. Although Mr. Kagalovsky agreed to the buylsell option

mechanism in meetings with New Media Holding representatives, he subsequently reneged on

the agreement and took things into his own hands in a series of illegal actions.

32. On September 30,2009, shortly after New Media Holding had extended to

the Partnership another tranche of financing in the amount of $850,000, Mr. Kagalovsky

(through his representatives) seized control of TVi. Without explanation, notice or the consent

of Mr. Gusinski, Mr. Gusinski’s representative, Mr. Yakovich, was physically barred from the

premises of TVi and denied access to TVi’s and TRS’s business information. The power of

attorney Mr. Yakovich had been granted to conduct TVi business was revoked. No explanation

was given for the ouster. Upon information and belief, Mr, Kagalovsky ordered the removal of

MI-. Yakovich from the premises, the denial of his access to TVi’s and TRS’s business

information, and the revocation of his power of attorney.

33. Contemporaneously with Mr. Yakovich’s abrupt ouster, the Partnership

wrongfully stopped its payments to NMDC for licensed television programming. These

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payments already had been authorized in the budgets approved by Mr. Gusinski and Mr.

Kagalovsky through the end of 2009. Upon information and belief, Mr. Kagalovsky ordered the

Manager of the Partnership to refuse to pay NMDC, even though the payments had been

previously approved and funded and were required under the applicable Licensing Agreements.

34, NMDC tried to persuade the Partnership to resume the payments owed

under the Licensing Agreements and, when the default continued, served a Notice of Default and

gave the Partnership the opportunity to cure. When the payments continued to be withheld,

NMDC brought suit in US . District Court for the Southern District of New York for breach of

contract.

Kagalovsky Steals TRS and TVi.

35. In September 2009 - contemporaneous with Mr, Kagalovsky’s seizure of

TVi’s operations and the exclusion of New Media Holding’s representative - (upon information

and belief) Mr, Kagalovsky surreptitiously caused TRS to increase its charter capital, which

diluted the Partnership’s ownership stake in TRS and TVi from 100 percent to less than one

percent. This change in TRS’s ownership structure resulted in independent entities associated

with and (upon information and belief) controlled by Mr. Kagalovsky taking a greater than 99

percent ownership stake in TRS and TVi.

36. Specifically, approximately 92 percent of IMC’s interest in TRS was

transferred to a company by the name of Seragill and about 90 percent of Winslow’s interest in

IMC was transferred to a company by the name of Aspida. Both Seragill and Aspida are entities

incorporated in Cyprus. Upon information and belief, Seragill and Aspida are owned, controlled,

and operated for the benefit of Mr. Kagalovsky. Upon information and belief, Mr. Kagalovsky

caused this transfer of ownership as part of his effort to steal from New Media Holding all rights

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to TVi. Mr. Kagalovsky has acknowledged that he accomplished this change in the ownership

structure and did not inform the Partnership or its Manager, all in violation of the Partnership

Agreement. New Media Holding received no consideration in return for its interest in TRS.

37. The following chart shows the ownership structure of TVi after the illegal

dilution TRS’s ownership interests took place:

7.4% 1

I J

I

38. Additionally, on or around October 14,2009, the Partnership and TRS

signed an agreement assigning the TVi trademark from the Partnership to TRS, at the behest and

upon the authorization of Mr. Kagalovsky’s personal representative, Mr. Dementiev. On or

around November 3,2009, an application was filed with the Ukrainian Patent and Trademark

- 1 3 -

Authority seeking to register the assignment of the TVi trademark from the Partnership to TRS.

Both the application and the assignment were made without Mr. Gusinski’s or New Media

Holding’s knowledge or consent. The ownership of the TVi tradernark thus has been illegally

transferred, in effect, from the Partnership to an entity in which the Partnership now owns less

than one percent.

39. Upon information and belief, Mr. Kagalovsky caused the assignment of

rights and the filing of the application. With the re-assignment of the TVi trademark from the

Partnership to TRS - of which the Partnership now owns less than one percent - Mr.

Kagalovsky effectively will have stolen everything of value from the Partnership.

40. On or around October 21,2009, the National Council of Ukraine for

Television and Radio Broadcasting passed a resolution on re-issuing the broadcasting license to

TRS due to changes in its ownership structure, editorial board, and editorial board members’

addresses. Thus, the broadcast license for the network is now controlled by an entity in which

the Partnership owns less than one percent.

41. Neither New Media Holding nor Mr. Gusinski had any contemporaneous

knowledge of these any of transactions or transfers, nor did they approve of them.

FIRST CLAIM FOR RELIEF (Breach of Fiduciary Duty Against Iota)

42. Plaintiff repeats and realleges the preceding allegations of this Complaint

as if fully set forth.

43. The Partnership was formed for the purpose of owning and operating a

Ukrainian television network - ultimately, TVi, as set forth above.

44. As a co-partner in the Partnership, Iota owed New Media Holding

fiduciary duties.

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45. In dereliction of its respective fiduciary duties, Iota, with the assistance of

others and at the direction of Mr. Kagalovsky, enabled TRS to increase its charter capital, This

caused the Partnership’s ownership stake in TRS and TVi - its principal operating assets - to

be diluted to less than one percent and handed a 99 percent ownership stake in the assets to non-

Partnership entities incorporated under the laws of Cyprus. Upon information and belief, the

transaction was self-interested in that Mr. Kagalovsky, alone or through Iota or other corporate

entities, is the indirect andor beneficial owner of those entities.

46. In further dereliction of their respective duties, Iota enabled the

Partnership to assign the Partnership’s rights to the TVi trademark to TRS, of which the

Partnership now owns less than one percent. This transaction was also self-interested, insofar as

TRS is owned or controlled by Mr. Kagalovsky or Iota as a result of the dilution of shares

described above.

47. The share dilution and trademark assignment were intentional, grossly

negligent and reckless, and are unsupportable by any legitimate business reason. Upon

information and belief, they served no legitimate purpose for and conferred no benefit upon the

Partners hip.

48. The share dilution and trademark assignment were made without the

Partnership’s or New Media Holding’s knowledge or consent. In fact, Iota made no attempt to

disclose any details concerning these transactions to the Partnership or to New Media Holding

and instead took affirmative measures to keep the transactions a secret, as alleged above.

49. The ouster of Mr. Yakovich from his role in TRS was an effort to conceal

this misconduct from New Media Holding and breached fiduciary duties owed to New Media

Holding,

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50. New Media Holding has been, and continues to be, damaged by Iota’s

breaches of fiduciary duty. Without ownership or control over TRS or the rights to the TVi

trademarks, New Media Holding has been left without any substantial ownership or managerial

authority over the business in which it invested time, energy, and money to develop and grow.

Indeed, the entire objective of the Partnership has been frustrated, and New Media Holding is left

with essentially nothing in return.

SECOND CLAIM FOR RELIEF (Breach of Contract Against Iota)

5 1. Plaintiff repeats and realleges the preceding allegations of this Complaint

as if fully set forth.

52. The purpose of the Partnership Agreement between New Media Holding

and Iota was the formation and operation of a Ukrainian television network.

53. The surreptitious transfer of the Partnership’s ownership interests in TRS

and TVi and in TVi’s trademark rights to third parties owned and controlled, directly or

indirectly, by Mr. Kagalovsky and the seizure of control of the operations of TRS and TVi from

Mr. Gusinski breached the express and implied terms of the Partnership Agreement.

54. New Media Holding has been, and continues to be, damaged by Iota’s

breach of the Partnership Agreement. Without ownership or control over TRS and TVi or the

rights to the TVi trademarks, New Media Holding has been left without any substantial

ownership or managerial authority over the business that is the primary reason for the

Partnership and the Partnership Agreement.

THIRD CLAIM FOR RELIEF (Aiding and Abetting Breach of Fiduciary Duties Against

Kagalovsky, Aspida, and Seragill)

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55 .

as if fully set forth.

Plaintiff repeats and realleges the preceding allegations of this Complaint

56. Iota owes fiduciary duties to its partner, New Media Holding.

57. Mr. Kagalovsky, Aspida, and Seragill were aware of the partnership

relationship between New Media Holding and Iota and therefore of the fiduciary obligations

owed by Iota to New Media Holding.

58. Defendants Mr. Kagalovsky, Aspida, and Seragill aided and abetted Iota’s

breach of fiduciary obligations to New Media Holding by substantially assisting Iota and Mr.

Kagalovsky to transfer ownership and trademark rights away from the Partnership or entities

owned by the Partnership, as described in detail above.

59. New Media Holding has suffered damages as a result of the concerted

efforts to misappropriate partnership assets. In addition to the monetary harm caused by the theft

of TVi and TRS described above, New Media Holding will suffer irreparable harm if Defendants

succeed in their effort, described above, to misappropriate assets and TVi trademark rights.

FOURTH CLAIM FOR RELIEF (Tortious Interference with Contract

Against Kagalovsky)

60. Plaintiff repeats and realleges the preceding allegations of this Complaint

as if fully set forth.

61, Mr. Kagalovsky had knowledge of the purpose of the Partnership

Agreement between New Media Holding and Iota and was aware that its purpose was the

formation and operation of a Ukrainian television network,

62. Upon information and belief, Mr. Kagalovsky caused Iota to breach the

Partnership Agreement by improperly and surreptitiously causing the transfer of ownership

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interests to independent companies under his control, removing 99 percent of the ownership of

the network from the Partnership; by unilaterally removing Mr. Yakovich from his managerial

role in the Partnership and TRS and preventing him from all business information and decisions

regarding the operations of TRS and TVi; and by causing the transfer of TVi trademark rights to

unknown third parties, out of the control of the Partnership.

63. Mr. Kagalovsky tortiously interfered with the Partnership Agreement and

with New Media Holding’s ability to enjoy the benefits of that agreement by causing the

breaches of contract by Iota described above.

64. Mr. Kagalovsky acted without authority and without any legal justification

in taking these actions to deprive New Media Holding of its ownership interest in TRS and TVi.

Upon information and belief, Mr. Kagalovsky’s foregoing acts have been, 65.

and continue to be, willful and deliberate.

66. New Media Holding has been, and continues to be, damaged by Mr.

Kagalovsky’s tortious interference with the Partnership Agreement.

FIFTH CLAIM FOR RELIEF (Conspiracy to Breach Fiduciary Duties

Against Kagalovsky, Iota, Aspida, and Seragill)

67, Plaintiff repeats and realleges the preceding allegations of this Complaint

as if fully set forth.

68, Upon information and belief, Mr. Kagalovsky, Iota, Aspida, and Seragill,

conspired to breach fiduciary duties by agreeing to secretly transfer, and actually transferring the

Partnership’s ownership interest in TRS and TVi, and by agreeing to assign, and causing the

assignment of the Partnership’s rights to the TVi trademarks, all in breach of fiduciary duties, as

alleged above.

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69. Among other things, (upon information and belief) upon Mr.

Kagalovsky’s authorization and direction, Winslow agreed to, and actually did, transfer over 90

percent of its interest in IMC to Aspida, and TRS agreed to, and actually did, transfer an over 92

percent stake in its operations to Seragill, as alleged above.

70. Mr. Kagalovsky and Iota furthered this conspiracy by making efforts to

conceal it from the Partnership and New Media Holding. Mr. Kagalovsky organized and

coordinated the conspirators, including by laying the foundation for the conspiracy by creating

and implementing the corporate ownership structure that formed the mechanism for the secret

share dilution and trademark assignments, as alleged above.

71. Upon information and belief, Mr. Kagalovsky, Iota, Aspida, and Seragill

all had knowledge that Mr, Kagalovsky and Iota owed fiduciary duties to New Media Holding

and the Partnership, and that accomplishing the conspiracy’s objectives - to essentially steal

away the Partnership’s principal assets and goodwill - were in violation of these fiduciary

duties.

72. New Media Holding has been, and continues to be, damaged by this

conspiracy. Without ownership or control over TRS or the rights to the TVi trademarks, New

Media Holding has been lefi without any managerial authority over business that it invested

time, energy, and money to develop and grow. Indeed, the entire objective of the Partnership has

been frustrated, and New Media Holding is left with nothing in return.

SIXTH CLAIM FOR RELIEF (In the Alternative, Unjust Enrichment

Against Kagalovsky, Aspida, and Seragill)

73. Plaintiff repeats and realleges the preceding allegations of this Complaint

as if fully set forth.

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74. As described above, Mr. Kagalovsky surreptitiously and illegally caused

the transfer of more than 99 percent of the ownership of TVi and its parent company, TRS, to

defendants Aspida and Seragill, Mr. Kagalovsky, through his representatives, also caused the

assignment of TVi trademark rights from the Partnership to Aspida and Seragill. New Media

Holding’s ownership interests in these assets has been reduced to less than one percent. Upon

information and belief, Mr. Kagalovsky directly or indirectly owns and controls Aspida and

Seragill.

75. As a result of these illegal transfers and transactions, Mr. Kagalovsky,

Aspida, and Seragill have obtained a substantial benefit without adequate compensation to New

Media Holding.

WHEREFORE, Plaintiff seeks judgment as follows:

A.

B.

ordering the return of the Partnership’s beneficial interest in TRS;

barring the transfer of TVi’s trademark rights or, in the alternative,

ordering their return;

C. barring Mr. Kagalovsky from future involvement in the operation of the

Partnership;

D.

E.

awarding Plaintiff damages in an amount of not less than $20 million;

awarding Plaintiff its reasonable costs and attorneys fees incurred in this

litigation; and

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F.

and proper.

granting Plaintiff such other and further relief as the Court may deem just

Dated: New York, New York December 11,2009

COVING ON ND BURLING LLP At7

David Z. Pinsky Christopher Y. L. Yeung The New York Times Building 620 Eighth Avenue New York, New York 10018 Telephone: (2 12) 84 1 - 1000

Attorneys for Plaintiff

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