limited joinder and limited objection of thomas

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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11

)

JMO WIND DOWN, INC., ) Case No. 16-10682 (BLS)

)

Debtor. )

LIMITED JOINDER AND LIMITED OBJECTION OF THOMAS KASTENHOFER

TO MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS (I) TO

ENFORCE THE PLAN CONFIRMATION ORDER AND SALE ORDER AND

(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION

AND SIMILAR CLAIMS IN OTHER FORUMS

Thomas Kastenhofer, individually by and through his undersigned counsel, hereby

submits this limited joinder and limited objection to the motion (the “Motion”) [Docket No.

585]1 for entry of an order (i) enforcing the terms of (a) the Plan, (b) the Confirmation Order and

(c) the Sale Order and (ii) enjoining Plaintiff from prosecuting the Civil Action. In support of his

joinder and objection, Mr. Kastenhofer respectfully states as follows:

Preliminary Statement

1. Mr. Kastenhofer supports the arguments set forth in the Motion; however, if the

Court rules that the claims Plaintiff has against the Non-Founder Defendants are derivative in

nature and, as a result, Plaintiff lacks standing to pursue such claims under the terms of the Plan,

then it necessarily follows that Plaintiff also lacks the standing to pursue the same derivative

claims against Mr. Kastenhofer.

2. The proposed form of order the Non-Founder Defendants submitted as Exhibit 1

to the Motion overlooks this fact and, based on the use of the narrowly defined term “Estate

Claims” and other limiting language, seeks relief only as to Plaintiff’s claims against the Non-

1 Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Motion.

Case 16-10682-BLS Doc 596 Filed 09/20/17 of 6

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Founder Defendants. Such an order is not appropriate: if relief is going to be granted as to the

Non-Founder Defendants then relief should also be granted as to Mr. Kastenhofer, as the basis

for the relief for all Defendants is the same, and the Plan’s injunctive provisions apply equally to

any attempt to exercise control over a cause of action belonging to the Liquidating Trust. Also,

entry of the Order proposed by the non-Founder Defendants would not be judicially efficient as

its entry would just result in Mr. Kastenhofer filing his own motion for the same relief.

3. Accordingly, Mr. Kastenhofer objects to the form of Order submitted with the

Motion and respectfully submits that the form of order attached hereto as Exhibit A should be

entered by the Court on the Motion.

All of Plaintiff’s Claims are Derivative

4. As more fully set forth in the Motion, direct and derivative Causes of Action that

could be asserted by or on behalf of Jumio were transferred to the Liquidating Trust pursuant to

the Plan and Confirmation Order. All third parties were enjoined from pursuing such claims

pursuant to the Plan and Confirmation Order. In addition, holders of Jumio common stock who

did not opt-out of the Plan released and were enjoined from asserting both direct and derivative

Causes of Action against the Non-Founder Defendants. Holders of Jumio common who did opt-

out of the Plan, like Plaintiff, lost the right to pursue (and were enjoined from pursuing)

derivative claims that could be asserted on Jumio’s behalf against the Non-Founder Defendants,

but retained the right to pursue direct claims they had against the Non-Founder Defendants.

5. Thus, whether Plaintiff can pursue the causes of action it asserted in Counts I, III,

IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS turns completely on whether the

claims are derivative or direct. If the claims are derivative, then (i) the claims as to the Non-

Founder Defendants were sold, released, exculpated and/or assigned to the Liquidating Trust and


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(ii) the claims as to Mr. Kastenhofer were assigned to the Liquidating Trust. If the claims are

individual, then Plaintiff retains the right to pursue its claims against both Mr. Kastenhofer and

the Non-Founder Defendants.

6. The causes of action asserted against the Non-Founder Defendants and Mr.

Kastenhofer in Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are

identical in theory and similar in substance.2

7. Moreover, as set forth in the Motion, all of the causes of action asserted in Counts

I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative in nature

and, as a result, can only be pursued against Mr. Kastenhofer by the Liquidating Trust. See

Motion ¶ 3 (Counts I, III, IV, V, VI, VII, and IX “constitute claims that belong to and could be

asserted only by Jumio, Inc.’s . . . estate and . . .were . . . assigned exclusively to the Liquidating

Trust”); ¶ 5 (“the Civil Action asserts claims against . . . Kastenhofer . . . that were also assigned

exclusively to the Liquidating Trust under the Plan”); ¶ 24 (“The Plan established a Liquidating

Trust . . . which is exclusively empowered to pursue claims against the Officer Defendants”); ¶

29 (“the claims made in the Complaint against the . . . Officer Defendants are clearly

derivative”); and ¶ 34 (The Complaint improperly attempts to circumvent the Plan and usurp

claims belonging to the Debtor’s estate by asserting derivative claims”).

8. The limited joinder [Docket No. 586] to the Motion filed by the Liquidating Trust

confirms that the Liquidating Trust agrees that the causes of action asserted in Counts I, III, IV,

V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative and can only be (and

2 The theories of relief Plaintiff is pursuing -- breach of fiduciary duty, fraud, fraud in the inducement,

equitable fraud, unjust enrichment, fraudulent transfer and conspiracy -- are identical as to the Non-Founder

Defendants and Mr. Kastenhofer. The claims are slightly different in substance because Mr. Kastenhofer resigned

months before Jumio filed for bankruptcy and, therefore, he had no involvement in certain acts challenged by

Plaintiff.


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have been) asserted by the Liquidating Trust. See Docket No. 586 at ¶¶ 2 and 3 (“all Estate

Claims were released or are vested with the Liquidating Trust pursuant to the Plan and

Confirmation Order” and “the Liquidating Trust commenced the Estate Action by filing its

Complaint . . . against . . . [Mr.] Kastenhofer . . . Adversary No. 17-51042 (BLS)”).

9. Thus, just as the causes of action asserted against the Non-Founder Defendants in

Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS are derivative in

nature, the claims asserted against Mr. Kastenhofer in the same counts are derivative in nature.

Accordingly, for the reasons set forth in the Motion, Plaintiff should be enjoined (again) from

pursuing Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No. 12787-VCS against

Mr. Kastenhofer.

The Order

10. While all of the claims Plaintiff has asserted against the Non-Founder Defendants

and Mr. Kastenhofer are derivative and Plaintiff should be enjoined (again) from pursuing them

further, the form of Order the Non-Founder Defendants submitted with the Motion does not

appear to address claims against Mr. Kastenhofer. Paragraphs 2 and 3 of the Non-Founder

Defendants’ proposed Order dismisses with prejudice the “Estate Claims” and enjoins Plaintiff

from prosecuting the “Estate Claims,” but this term is defined in the Motion as only those claims

Plaintiff asserted against the Non-Founder Defendants. Motion ¶ 2. While the Non-Founder

Defendants’ proposed Order further dismisses Counts I, III, IV, V, VI, VII, and IX of the “Civil

Action,” suggesting these Counts will be dismissed in their entirety as to all of the defendants in

Bloso v. Mattes, C.A. No. 12787-VCS, the form of Order further states that Plaintiff is only

enjoined from pursuing “the claims and causes of action asserted against the Non-Founder

Defendants in the Civil Action.” Order at ¶¶ 2-3.


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11. The relief granted pursuant to the Motion should be broader than the relief set

forth in the Non-Founder Defendants’ proposed form of Order. Whether Plaintiff can pursue its

claims against the Non-Founder Defendants and/or Mr. Kastenhofer turns on the same issue: are

the claims derivative. Once the Court determines that the claims are derivative, Mr. Kastenhofer

is entitled to the same relief awarded to the Non-Founder Defendants, by operation of law and

the plain terms of the Plan’s injunctive provisions.

12. A proposed form of Order which extends the relief sought in the Motion to Mr.

Kastenhofer is attached as Exhibit A. A redline showing the difference between the Non-

Founder Defendants’ proposed order and Mr. Kastenhofer’s proposed order is attached as

Exhibit B.

13. Granting Mr. Kastenhofer’s proposed form of Order is legally appropriate under

the plain terms of the Plan’s injunctive provisions and promotes efficiency. If the Court finds

that the claims against the Non-Founder Defendants are derivative and enjoins Plaintiff from

pursuing them pursuant to the Plan and the Confirmation Order but does not extend that relief to

Mr. Kastenhofer, the result will be a new motion raising the same issues before the Court. The

new motion will be redundant of the Motion and this limited joinder and limited objection.

WHEREFORE, Mr. Kastenhofer respectfully requests that the Court enter the form of

Order attached hereto as Exhibit A granting the Motion, and award Mr. Kastenhofer such further

relief as is just and proper.


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Dated: September 20, 2017 Respectfully Submitted,

DRINKER BIDDLE & REATH LLP

/s/ Todd C. Schiltz

Todd C. Schiltz (ID No. 3253)

Ryan T. Costa (ID No. 5325)

222 Delaware Avenue, Suite 1410

Wilmington, DE 19801

(302) 467-4200

[email protected]

[email protected]

Attorneys for Thomas Kastenhofer


Exhibit A

(Proposed Order)

Case 16-10682-BLS Doc 596-1 Filed 09/20/17 Page 1 of 3

1



In re:

JMO WIND DOWN, INC.,1

Debtor

Chapter 11

Case No. 16-10682 (BLS)

Re: Docket No. ____

ORDER APPROVING MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS

(I) TO ENFORCE THE PLAN, CONFIRMATION ORDER, AND SALE ORDER AND

(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION AND

SIMILAR CLAIMS IN OTHER FORUMS

Upon consideration of the Motion of Eduardo Saverin, Peng-Tsin Ong, Scott

Weiss, Andreessen Horowitz, LLC, Andreessen Horowitz Fund, II, L.P., and Stephen Stuut

(collectively, the “Non-Founder Defendants”) (i) to enforce the Plan, Confirmation Order and

Sale Order and (ii) to order Plaintiff to dismiss the Civil Action and enjoin, bar and/or estop

Plaintiff from prosecuting Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No.

12787-VCS and similar claims and causes of action in other forums (the “Motion”),2 the Court

finds that: (i) it has jurisdiction over the matters raised in the Motion; (ii) this is a core

proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334 upon which this Court may issue a final

order; (iii) notice of the Motion and any hearing thereon was sufficient, proper, and adequate;

and (iv) upon the record herein and after due deliberation thereon, good and sufficient cause

exists for the granting of the relief as set forth herein. Accordingly, the Court hereby ORDERS

that:

1 The last four digits of the Debtor’s tax identification number are 6822.

2 Defined terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.


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1. The Motion is GRANTED in all respects; and Plaintiff shall immediately take all

necessary action, at its sole cost and expense, to effectuate the dismissal with prejudice of Counts

I, III, IV, V, VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCS, currently pending in

the Delaware Court of Chancery; and

3. Plaintiff is enjoined, barred and estopped from asserting or prosecuting Counts I,

III, IV, V , VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCS, and Plaintiff is hereby

directed to immediately cease and refrain from any further acts to prosecute or continue the claims

and causes of action asserted against the Non-Founder Defendants and Thomas Kastenhfer in

Bloso v. Mattes, C.A. No. 12787-VCS (whether in the Delaware Court of Chancery or any other

court) or to, in any other manner, seek to enforce such claims and causes of action against the Non-

Founder Defendants, Thomas Kastenhofer or other parties; and

4. This order shall be effective immediately upon entry and shall not be stayed

pursuant to any applicable rule of the Federal Rules of Bankruptcy Procedure or Federal Rules of

Civil Procedure.

Dated: __________, 2017

Wilmington, Delaware ____________________________________

HONORABLE BRENDAN L. SHANNON

UNITED STATES BANKRUPTCY JUDGE


Exhibit B

(Blackline)


1



In re:

JMO WIND DOWN, INC.,1

Debtor

Chapter 11

Case No. 16-10682 (BLS)

Re: Docket No. ____

ORDER APPROVING MOTION OF NON-FOUNDER CIVIL ACTION DEFENDANTS

(I) TO ENFORCE THE PLAN, CONFIRMATION ORDER, AND SALE ORDER AND

(II) TO ENJOIN PLAINTIFF FROM PROSECUTING THE CIVIL ACTION AND

SIMILAR CLAIMS IN OTHER FORUMS

Upon consideration of the Motion of Eduardo Saverin, Peng-Tsin Ong, Scott

Weiss, Andreessen Horowitz, LLC, Andreessen Horowitz Fund, II, L.P., and Stephen Stuut

(collectively, the “Non-Founder Defendants”) (i) to enforce the Plan, Confirmation Order and

Sale Order and (ii) to order Plaintiff to dismiss the Civil Action and enjoin, bar and/or estop

Plaintiff from prosecuting Counts I, III, IV, V, VI, VII, and IX in Bloso v. Mattes, C.A. No.

12787-VCS the Civil Action and similar claims and causes of action in other forums (the

“Motion”),2 the Court finds that: (i) it has jurisdiction over the matters raised in the Motion;

(ii) this is a core proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334 upon which this Court

may issue a final order; (iii) notice of the Motion and any hearing thereon was sufficient,

proper, and adequate; and (iv) upon the record herein and after due deliberation thereon, good

and sufficient cause exists for the granting of the relief as set forth herein. Accordingly, the

Court hereby ORDERS that:

1 The last four digits of the Debtor’s tax identification number are 6822.

2 Defined terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.


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1. The Motion is GRANTED in all respects; and Plaintiff shall immediately take all

necessary action, at its sole cost and expense, to effectuate the dismissal with prejudice of the

Estate Claims, specifically Counts I, III, IV, V, VI, VII, VIII and IX in Bloso v. Mattes, C.A. No.

12787-VCS, in the Civil Action, currently pending in the Delaware Court of Chancery; and

3. Plaintiff is enjoined, barred and estopped from asserting or prosecuting Counts I,

III, IV, V , VI, VII, VIII and IX in Bloso v. Mattes, C.A. No. 12787-VCSthe Estate Claims, and

Plaintiff is hereby directed to immediately cease and refrain from any further acts to prosecute or

continue the claims and causes of action asserted against the Non-Founder Defendants and Thomas

Kastenhfer in Bloso v. Mattes, C.A. No. 12787-VCSthe Civil Action (whether in the Delaware

Court of Chancery or any other court) or to, in any other manner, seek to enforce such claims and

causes of action against the Non-Founder Defendants, Thomas Kastenhofer or other parties; and

4. This order shall be effective immediately upon entry and shall not be stayed

pursuant to any applicable rule of the Federal Rules of Bankruptcy Procedure or Federal Rules of

Civil Procedure.

Dated: __________, 2017

Wilmington, Delaware ____________________________________

HONORABLE BRENDAN L. SHANNON

UNITED STATES BANKRUPTCY JUDGE


90067880.1

CERTIFICATE OF SERVICE

I, Todd C. Schiltz, hereby certify that on September 20, 2017, I caused a true and correct

copy of the Limited Joinder And Limited Objection Of Thomas Kastenhofer To Motion Of

Non-Founder Civil Action Defendants (I) To Enforce The Plan Confirmation Order And

Sale Order And (II) To Enjoin Plaintiff From Prosecuting The Civil Action And Similar

Claims In Other Forums to be served via the Court’s CM/ECF system and first class mail upon

the parties listed below.

(Attorneys for Eduardo Saverin)

Michael R. Nestor

Elena C. Norman

Young Conway Stargatt & Taylor, LLP

Rodney Square

1000 North King Street

Wilmington, Delaware 19801

(Attorneys for Eduardo Saverin)

Manny A. Abascal

Andrew R. Gray

Ted A. Dillman

Faraz R. Mohammadi

Latham & Watkins LLP

355 South Grand Avenue, Suite 100

Los Angeles, California 90071

(Attorneys for JMO Wind Down Liquidating Trust)

Christopher A. Ward

Shanti M. Katona

Polsinelli PC

222 Delaware Avenue, Suite 1101

Wilmington, Delaware 19801

David L. Buchbinder

Office of the U.S. Trustee

J. Caleb Boggs Federal Building

Suite 2207

Wilmington, DE 19801

Dated: September 20, 2017 /s/ Todd C. Schiltz.

Todd C. Schiltz (ID No. 3253)


limited joinder and limited objection of thomas

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