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COMMONWEALTH OF PUERTO RICO COURT OF FIRST INSTANCE JUDICIAL CENTER OF SAN JUAN UPPER ROOM MINTVEST CAPITAL, Ltd., in case and how member in derivative capacity of
COINTMINT, LLC;
PRIEUR LEAURY, III, by itself and as a representative of Mintvest Capital, Ltd.
Civil No .:
Claimants
v. COINMINT, LLC .; COINMINT LIVING TRUST; ASHTON SONIAT; ADAM SINN, ABC COMPANY,
Envelope: Declaratory Judgment; Dissolution of
Limited Liability Company, Receivership and / or Judicial Administration; Derivative Action;
JOHN DOE AND JANE DOE
Defendants
MOTION REQUESTING PROVISIONAL URGENT ORDER OF CESSATION AND WITHDRAWAL AND / OR INJUNCTION AND APPOINTMENT OF JUDICIAL TRUSTEE
TO THE HONORABLE COURT: APPEAR, through the undersigned legal representation, the plaintiff PRIEUR LEARY, representing MINTVEST CAPITAL Ltd. as a member and representative in derivative capacity of COINMINT, LLC., and respectfully Expose, They claim and Request:
1.
On this same date, the plaintiffs have filed an Affidavit, in which
among other remedies, request the granting of a cease and desist order and / or an Injunction against
the defendants.
2.
In his application the plaintiff MINTVEST CAPITAL, Ltd. states that it is
member of COINMINT LLC, a limited liability company organized under Laws of Puerto Rico with main offices in San Juan, Puerto Rico, which is a mining company of private bitcoin operating one of the largest digital currency centers in the world.
FACTS
3.
COINMINT's majority partner, COINMINT LIVING TRUST (CLT)
beneficiary of a personal Puerto Rican tax exemption decree, has a broad and documented history of leading controversies with partners to aggressively contentious litigation to protect itself from the acts of appropriation and embezzlement that it has committed against the
interests of the companies it has controlled and of its minority partners, has disobeyed orders
of other courts in the course of two lawsuits that have been filed over COINMINT, and has
kept MINTVEST and LEARY in the dark about financial operations, both routines such as specials, which he has carried out in clear disregard of the best interests
by COINMINT. Four.
The majority partner of COINMINT, CLT and, Mr. Ashton SONIAT, by himself and / or
through the multiple and numerous companies that SONIAT controls, on numerous occasions, for
information and belief, as recently as June 2021, has been appropriated for your personal use of COINMINT assets, without giving any notice to MINTVEST or LEARY, of
his actions.
5.
SONIAT is the brain who has organized, planned and executed, by itself or
through employees who work for other entities in its range of companies, including CLT, Dufossat Capital, Dorado Family Holdings LP, among others, to remove assets from
COINMINT and forced COINMINT to take out loans, all in order to reduce the value of
COINMINT fair market.
6.
Among the schemes used by SONIAT, SONIAT, by itself or through third parties, has
transferred to companies controlled by him millions of dollars in bitcoin (hereinafter "BTC")
thrown into the COINMINT data center. SONIAT has used its absolute control that exerts on access to information systems to hide their acts of embezzlement.
7.
As an example, on four occasions during 2017, COINMINT added
additional servers to your data center through joint procurement with third parties investors of new equipment. On each occasion, SONIAT and CLT informed the investors that the mining production of these new acquired equipment had begun in
a date after the date production started, thus creating a time interval during which BTC were being produced without these investors knowing. On every occasion,
SONIAT redirected all the BTC produced during these intervals to a virtual "wallet" personal, which has the effect of serving as an account to store the BTCs. Thus, SONIAT stripped COMINMINT and its investors of mining production and their respective BTCs.
8.
Between February 28, 2107 and March 14, 2017, SONIAT redirected 38,535
BTC; between May 28, 2017 and July 10, 2017, SONIAT redirected 132.73 BTC; Come in on August 12, 2017 and September 6, 2017, SONIAT redirected 111.4358 BTC; and between
On December 9, 2017 and January 7, 2018, SONIAT redirected 166.0285 BTC. Total, SONIAT embezzled and usurped at least 448.7193 BTC, and, by information and belief, SONIAT
sold all of the embezzled BTC for $ 18,250 each. Investors were not paid the
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part of these BTC that corresponded to them, nor was MINTVEST granted the distribution that
corresponded. SONIAT enjoyed a profit of about$8,189,127.22.
9.
As recently as June 21, 2021, SONIAT, by letter dated
of June 17, 2021 of Lcdo. Randy Foret, General Counsel for COINMINT, was sent to MINTVEST and LEARY a “Capital Call" the amount of $8,500,000.00. See Annex 1 Capital Call June 17, 2021.
10.
For information and belief, in what perhaps the parties will have the audacity to
characterize it as a mere fortuitous coincidence, on June 17, 2021, SONIAT, by itself or through third parties who work for him or who followed his instructions, initiated a transfer electronics for the amount of $8,500,000.00 from one or more bank accounts belonging to
COINMINT to one or more accounts owned or controlled by SONIAT. See Annex 2 Evidence of transfer to SONIAT personal accounts $ 8.5MM. eleven.
None of the communications initiated by SONIAT and / or its agents about this
“Capital Call” refers to the transfer of the $ 8,500,000.00 out of the accounts of COINMINT to SONIAT's personal accounts, in gross violation of its obligations according to established in the Operating Agreement and its fiduciary duties.
12.
In June 2019, SONIAT began to rely on the advice of Mr. Jay Morton,
an investment banker, following Morton's recommendations on investment decisions businesses that have caused damage to COINMINT and therefore to MINTVEST and LEARY, ignoring the objections of LEARY and MINTVEST. Jay Morton has been the subject of numerous lawsuits before
the Securities and Exchange Commission ("SEC ”) and the Financial Industry Regulatory Authority
(“FINRA”), by information and belief, is also not a registered broker. Morton also has a long history of having been involved in scams documented by specialized media in the investment world. In 2014, Forbes magazine wrote that the Morton's career began in 1992, “and he has run into trouble in the past. In 2003 a client sued Morton for $ 750,070, accusing the broker of unauthorized and excessive trading in his account. The client was paid $ 49,000 in a settlement.
13.
"
1
SONIAT, without ever having consulted or informed MINTVEST and LEARY,
hired Michael Maloney as the Chief Financial Officer for COINMINT, with full
1 See " https://fortune.com/2014/12/22/wall-street-sec-fsquared/.
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knowledge that Mr. Maloney had been fired from Galaxy Digital, after having working for them for one (1) year. Galaxy Digital is one of the main companies in the sector of cryptocurrencies in the United States. According to the president ofGalaxy Digital, as soon
they found out that COINMINT had hired Mr. Maloney, they were no longer interested
more in financing COINMINT. In an email, the president ofGalaxy Digital wrote: "Mike Maloney CFO of Coinmint? WTF?","if this is true, Galaxy is out" and "Mike Maloney is a bundle that cannot add."Maloney worked does not have the experience, background, education
or training consistent with that of responsibly held for a finance officer, lacerating the finances of the Company.
14.
Since Morton and Maloney were hired, MINTVEST and LEARY have been
has reduced access to information on the important operational and financial aspects of the
COINMINT business. On the limited information they have had access, MINTVEST and LEARY have asked pertinent questions that have not been answered. Broadly speaking, between
These questions are the following unanswered questions:
to. Yes COINMINT achieved approximately income from mining of BTC in the amount of $ 28 million, and achieved income from fees for the amount of $ 5.4 million, for a total of $ 33 million, for what reason Cash flow statements do not reflect this?
b. According to Steve Wang, COINMINT sold approximately $ 17.2 million in tokens / hashrate, without taking into account SONIAT's mining contract for $ 10
millions. In the cash flow statement, only the amount of $ 14.8 was published
million, leaving an unjustified discrepancy of $ 2.4 million. c. The same statements do not reflect an alleged $ 10 million SONIAT loan and SONIAT's mining contract for $ 10 million. d. Based on all of the above, the cash flow should have been $ 70 million. The expenses during the period are $ 36 million for the purchase of mining equipment,
approximately $ 5 million to finish enabling the data center of Massena, NY, $ 7.7 million in payments for mining contracts, $ 6.6 million for the purchase of electric power, total operating expenses of $ 8 million which approximately $ 2.5 million were collected to the account of “G&A & Professional Services ”which are excessive and unjustified.
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and. Based on the broken down numbers, the total expenses that should have been reported in the cash flow statement total $ 63.3 million, thus leaving a cash flow
positive cash flow of $ 7 million. However, the state reports a negative flow for $ 600,000.00. F. As of today, neither COINMINT, SONIAT, CLT, Maloney nor Morton have responded or given a convincing explanation to the complainant explaining the discrepancies
in the cash flow statement. This pattern is repeated over and over again by
COINMINT, SONIAT and CLT, in full disregard of rights as investor and manager of the applicant here.
g. Likewise, the plaintiff has been cut off all access to financial information and Bank accounts of the Company, which previously had, in clear disregard for the operational agreements and rights of the plaintiff. fifteen.
If this in itself were insufficient, the injuries to COINMINT and its partner
minority MINTVEST continue, even though MINTVEST has submitted legitimate offers for the acquisition of COINMINT, by a public company listed on the Toronto Stock Exchange, interested in developing, modernizing and expanding COINMINT's mining production.
16.
SONIAT has rejected multiple offers, serious and from solid companies, including
offers obtained by MINTVEST and / or LEARY from public companies listed on the securities interested in acquiring COINMINT, one for three (3) times and another for almost seven (7) times
the absurd amount that SONIAT intentionally and incorrectly valued COINMINT in August
of 2021. See Annex 3 - Letter of Intent for the purchase of COINMINT by BITFARMS, Besides of Annex 4 - COINMINT statement on fair market value and the Annex 5 COINMINT offer to buy the MINTVEST share.
17.
In August 2019, LEARY asked SONIAT if what he really wanted was
get it out of COINMINT. To which SONIAT replied in its affirmative, yes, and expressed that
agreed to let LEARY restart conversations with a company called NOVACAP in order for them to produce a sale offer. NOVACAP has delivered multiple offers, since September 2019. However, SONIAT and CLT have not been
expressed or responded to any of these NOVACAP offers.
18.
SONIAT has refused to consider offers for the purchase of COINMINT for
third parties presented by MINTVEST and LEARY, preferring to bleed the assets of the company,
of not making the capital investments necessary to keep the mining operation of
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COINMINT. Among the necessary capital investments it is imperative that the servers
used in cryptocurrency mining are of the latest generation. The servers of COINMINT are not new and are much more inefficient than fresh wedge. Having bled the assets of COINMINT into their personal coffers SONIAT and CLT have put COINMINT in a disadvantageous position before its competitors. This is nothing but a example of the many that exist that shows how SONIAT has failed to perform its duties
trusts.
19.
SONIAT prefers to harvest and dispose of COINMINT's mining production for
their exclusive whim and personal profit, in full disregard for the best interests of the company and your minority partner. twenty.
Faced with the pressures that the offers must undoubtedly have felt
highly attractive to acquire COINMINT, SONIAT has the duty to present some answer, which has not happened so far. twenty-one.
On August 3, 2021, SONIAT, as COINMINT manager and as
trustee of CLT, made to MINTVEST AND LEARY an offer to buy for its entire participation in COINMINT. The offer made assigned a fair market value for COINMINT of $ 24,169,237.33. According to SONIAT, MINTVEST's participation in COINMINT was 5.27%, ignoring the final and firm determination of the Delaware Court that had set of
permanent way, MINTVEST's participation in COINMINT is 18.2%.
22.
The above, with the clear intention of disguising the true motivations of
SONIAT and CLT to avoid the sale of COINIMINT on favorable terms for the interests trustees of the corporation; starting from an absurd valuation of COINMINT, being the
very insignificant and unreasonable. See Annex 5 - COINMINT Offer to buy the participation of MINTVEST and Annex 4, Declaration of COINMINT on fair market value. 2. 3.
Timely, MINTVEST and LEARY rejected SONIAT's proposal.
See Annex 6 - Letter where MINTVEST and LEARY reject the purchase offer for the MINTVEST participation
24.
For purposes of determining the fair market value of COINMINT, the
SONIAT's actions to take out assets and borrow COINMINT, as it did so recently By June 2021, it suppresses the real fair value of the company. The effect of borrowing money
to third parties while transferring company assets to bank accounts controlled by
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SONIAT significantly reduces the assets and increases the liabilities of COINMINT, against of the fiduciary duty towards the corporation.
25.
The appreciation of COINMINT in the SONIAT offer of August 3, 2021
of $ 24,169,237.33 contrasts with a legitimate offer recently made by a third party to acquire the Company for the sum of $ 140,000,000.00. See Annex 3 - Letter of Intent for the purchase of COINMINT by BITFARMS, in addition to the Annex 4 - COINMINT statement
about fair market value.
26.
During the last few years, both SONIAT, CLT, COINMINT and numerous
Puerto Rican corporations owned by SONIAT have enjoyed the benefits taxes granted to them, on behalf of the people of Puerto Rico, however, it rejects become a permanent resident of the Commonwealth of Puerto Rico.
27.
SONIAT and CLT have a documented history of ignoring and disregarding orders
issued in the case of Delaware. See Annex 7 - Order Enforcing Status quo Order.
28.
The Delaware Court has reiterated that SONIAT has ignored the provisions
of the Operating Agreement that establish the notice, documentation and consent requirements, which he continues to do at the moment.
29.
Faced with this excessive pattern of embezzlement, improper management of the corporation
and duty of loyalty and trust, the plaintiff requests the urgent intervention of this Court for the issuance of a provisional Injunction and Order of Cease and Desist
30.
The plaintiff requests that pursuant to the provisions of Rule 56.6 of
those of Civil Procedure, the party is ordered to refrain from carrying out any additional act
regarding the Company's assets, in which this Honorable Tribunal resolves the petitioned in the Complaint, for the purposes of ordering the dissolution of COINMINT and that appoint a trustee for the sale of the Company. This remedy proceeds because SONIAT and CLT
have a clear conflict of interest in their actions and their fiduciary duty with COINMINT, breaking their duty of loyalty and diligence. Epstein v. F&F Mortgage, 106 DPR 211 (1977); Llorens et al. v. Arribas, et al., 184 DPR 32 (2111).
31.
It is also requested that the defendants be held accountable and that the
allow a forensic accountant hired by the plaintiff or an expert that the Court designate, the examination of the books of the Company.
32.
Rule 56 of those of Civil Procedure authorizes this Court to dictate any
provisional order that you consider reasonable in a case, including receivership orders, and to make
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desist from doing, in order to ensure compliance with a sentence. The Court enjoys wide discretion when issuing such orders. The only limitation imposed by the Rule is that the measure is reasonable and adequate for its purpose, which is to guarantee the effectiveness of the judgment that in its
day could be dictated. FD Rich Co. v. Superior Court, 99 DPR 158 (1970).
33.
The resource of Injunction is regulated by Rule 57 of the Rules of Procedure
Civil, 32 LPRA Ap. VR57 and the Injunction Law, Art. 675 et. seq of the Code of Procedure Civil, 32 LPRA §3521 et seq. 3. 4.
Rule 57 of Civil Procedure, supra, also authorizes the Court to issue
provisional orders of injunction. This type of order proceeds to avoid irreparable damage In those situations in which there is no other adequate remedy in law, there is the probability
that the party prevails and that the cause of action becomes academic in the absence of a
temporary remedy. Puerto Rico Telephone Company v. Superior Court, 103 DPR 200 (1975).
35.
The Law of Injunction defines this resource as “a court order issued
in writing, under the seal of a court, requiring a person to abstain to do, or to allow it to be done by others under their intervention, a certain thing that infringes
or harms the right of another”. 32 LPRA § 3521.
36.
It's about a "peremptory remedy the purpose of which is to prevent imminent harm or
reestablish the rule of law caused by the illegal, oppressive or violent conduct of the transgressor
of the legal order”. Plaza las Americas v. N&H, 166 DPR 631, 643 (2005).
37.
It is incontrovertible that when examining the origin of a request for
injunction preliminary, the following criteria should be examined: (1) the nature of the damage
may be caused to the parties to grant or deny the Injunction; (2) the irreparability of damage or the existence of an adequate remedy in law; (3) the probability that the promoting party
eventually prevail when the dispute is resolved in its merits; (4) the probability that the cause becomes academic if not granted; (5) the possible impact on the public interest of the remedy that is requested. 32 LPRA Ap VR 57.3, supra; Assoc. Vec. Villa Caparra v. Assoc. Fom. Educational,
173 DPR 304, 319 (2008); PR Telephone Co. V. Superior Court, 103 DPR 200 (1975).
38.
The preliminary interdict or injunction preliminary is intended to require or prohibit
do a certain act, with the aim of preventing imminent damage being caused or irreparable damage to any person during the pending litigation.
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39.
On the other hand, “the preliminary injunction or pending injunction lite is a resource that
is issued by the court before the holding of the trial in its merits and, ordinarily, after the holding a hearing where the parties have the opportunity to present evidence in support and opposition to the issuance of the same. The main objective of this resource is to maintain the state
current situation until the trial is held on its merits ”. Next Step Medical v. Bromedicon, 190 DPR 474, 486 (2014).
40.
Therefore, the cardinal factor that governs the issuance of this remedy
extraordinary, and which is closely linked to the doctrine of equity, is the existence of a real threat of suffering some impairment for which there is no adequate remedy in the law.
41.
Under Rule 53 of the Civil Procedure, the application of Rule 56 or the
Rule 57 in the granting of provisional remedy depends on whether an injunction has been requested
permanent on demand. In this case, the plaintiff has not requested the issuance of a permanent injunction, but has asked for other remedies in equity that could perhaps be considered
equivalents.
42.
The plaintiff has no other remedy to the law that allows him to protect his interest in
COINMINT, and avoid irreparable damage, in what is elucidated what is requested in the lawsuit. The
irreparability of the damages that may be caused do not need a further description; conduct to margin of law, arbitrary, capricious and unreasonable demonstrated by the defendant, has and it will have the effect of causing substantial damage to the plaintiff and to COINMINT; It is therefore that this part has no other remedy in law than the one that it begs for here.
43.
It is clear and conclusive that if an expeditious and immediate remedy is not obtained, the
situation and cause of action will become more complicated, putting at risk the eventual dissolution and
sale of the Company.
44.
The plaintiff also complies with the requirement of absence of remedy in law, since
that the plaintiff has exhausted his good faith and diligence efforts to address the disputes
object of your claim, resulting in futile and unsuccessful efforts. Four. Five.
The plaintiff also complies with the requirement of having the
probabilities of prevailing on the merits since it is evidently clear about the two main controversies planned in the lawsuit, (the reinstatement of the Plaintiff in the management of COINTMINT, resolve the dissolution and eventual sale of the corporation), and before this the here
Defendants do not have a valid defense or legal and / or contractual basis to assist them in
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refuse to fulfill its fiduciary duties as required and / or comply with resolutions issued by the Delaware Court.
46.
It arises from the sworn claim, which joins and makes part of this motion, which
to remain unaltered the actions of the defendant during the pendency of this litigation,
will cause pecuniary damages of an irreparable nature to the plaintiff. See Annex 7 Plaintiff's Affidavit. The plaintiff lacks any other recourse or adequate remedy in law to avoid irreparable damages that have to be suffered by the actions of the defendant here. The suspension of the illegal acts of the defendant that are requested here does not
harm the public interest and in the balance of equity, the defendant will not suffer harm, vis-à-vis
those that the plaintiff currently suffers and will continue to suffer if this is not remedied
situation by issuing the preliminary injunction. FOR ALL OF WHICH, the plaintiff respectfully requests from this Honorable Court, to declare this motion admissible and to: issue a peremptory order of Urgent provisional injunction and cease and desist order instructing the defendants to: (1) refrain from continuing to transfer COINMINT assets, (2) full and unrestricted access is ordered
of the Company's financial information to the plaintiff until the controversy is resolved; (3) and that once the dissolution of the Company has been ordered, appoint a trustee for the sale of
COINMINT; (4) a forensic accountant hired by the plaintiff or an expert is allowed that the Court designates, the examination of the books of the company; (5) a view is appointed consolidated within the term of law to consider the preliminary and permanent injunction and
dictate any remedy in law that proceeds.
RESPECTFULLY SUBMITTED. In San Juan, Puerto Rico, on September 24, 2021.
WE CERTIFY: that today we are sending a copy of this Request for Dismissal using the Unified Case Management and Administration System (SUMAC), Through which a copy will be sent to the parties that have appeared in the proceedings.
s / Carlos E. Matos Malec
s / Yamila Rodríguez Maldonado
CARLOS E. MATOS MALEC
YAMILA RODRÍGUEZ MALDONADO
RUA 11,428
RUA 21,221
Tel. (787) 378-1002 cemm787@gmail.com
Cel. (787) 412-4143 yamilarmlaw@gmail.com
Postal Address: PO Box 11249 San Juan, PR 00922-1249 s / María Teresa Pérez Torres
MARIA TERESA PÉREZ TORRES RUA 9,944 Collegiate No. 11,370 mt.pereztorres@mtptlaw.com (787)361-0002 130 Eleanor Roosevelt. San Juan, PR 00918-3105
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