EFiled: Feb 22 2011 4:20PM EST

Transaction ID 36077377
Case No. 6207IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

YAIR GOLDFINGER,
Petitioner,
v.
MPC HOLDING ESTABLISHMENT AND
DANIEL MATTES,
Respondents.

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C.A. No.

PETITION
Yair Goldfinger brings this Petition against MPC Holding Establishment
and Daniel Mattes and alleges as follows:
Parties
1.

Petitioner Yair Goldfinger (the Petitioner) is a citizen of Israel.

2.

MPC Holding Establishment (MPC or Respondent) is a

Liechtenstein corporation.
3.

Jajah, Inc. (Jajah) is a Delaware corporation that was founded in

4.

Jumio, Inc. (Jumio) is a Delaware corporation that was founded by

2005.

Daniel Mattes on February 9, 2010 and has a principal place of business in Los Altos
California.
5.

Daniel Mattes (Mattes) is a citizen of Austria who also maintains a

home in California and is the owner of MPC, was one of the founders of Jajah and is the
founder of Jumio.

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6.

When it was formed Jajah was a high tech startup in the

telecommunication sector.
7.

When it was formed, Jumio was a high tech startup in the electronic

bill payment sector.

8.

At all times relevant hereto, Mattes controlled MPC.

9.

At the beginning of the period covered by this Petition, MPC held all

of Daniel Mattes common stock in Jajah.

10. As is discussed more fully in Yair Goldfinger v. MPC Holding
Establishment, Case No. 5365 - VCS, Jajah obtained funding through the sales of
securities.

In connection with those sales, the stockholders of Jajah entered into a

stockholders agreement which provided for certain restrictions on the transfer of Jajah
common stock (the Transfer Restrictions).
11.

Shortly after the second round of financing for Jajah, Mattes needed

money and his only immediate source was his Jajah stock.
12.

Mattes approached Petitioner to try to find a way for Mattes to

obtain the cash that he needed without violating the Transfer Restrictions.
13.

To that end, Mattes and Petitioner entered into an arrangement that

was designed to provide Mattes with current funds without violating the Transfer
Restrictions which was evidenced in a written agreement executed on December 20,
2006. (The MPC Agreement, Exhibit A hereto).
14.

Because it had to work around the Transfer Restrictions, payments to

the Petitioner under the MPC Agreement depended on the occurrence of one or more
events in the future that might or might not occur. The amount to be paid to Petitioner

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under that agreement was also dependent on both the occurrence of future events and the
financial effect of such future event or events. (Exhibit A at 7)
15.

More specifically Petitioner and Mattes agreed that Petitioner would

pay MPC and Mattes a sum of money currently and, in return, MPC would pay Petitioner
a sum of money in the event that a Change of Control of Jajah were to occur at some
time in the future. The term Change of Control was defined broadly to include, among
other things, a merger, acquisition or sale of substantially all of the assets of Jajah. Upon
a Change of Control, Petitioner would be entitled to receive a sum of money from the
proceeds received by MPC for 356,406 shares (the Original Amount) of its Jajah stock
in the Change of Control transaction. The amount of that payment would vary according
to the amount that MPC would receive for the Original Amount as a result of the Change
of Control event and certain elections that MPC was entitled to make based upon the
amount of the proceeds it was to receive in the Change of Control transaction. (Exhibit A
at 7).
16.

Once the MPC Agreement became effective, MPC held the Original

Amount of its Jajah shares for the benefit of Petitioner. (Exhibit A at 3).
17.

Petitioner was counting on the availability of the Original Amount of

MPCs Jajah shares identified to the MPC Agreement to ensure that there would be a
source of funds from which Petitioner would be paid in the event of a Change of Control
transaction.
18.

By 2010 the Original Amount had grown to 1,425,624 (the

Adjusted Amount) as a result of a 4 for 1 stock split in 2007.

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19.

In early 2010, a Change of Control transaction occurred in which

Jajahs stockholders were cashed out.

20.

Petitioner then sought payment by MPC under the MPC Agreement.

21.

MPC refused to make payment under the MPC Agreement.

22.

The MPC Agreement contained an exclusive jurisdiction provision

providing that any litigation arising out of or related to the MPC Agreement would take
place only in the courts of Delaware. Mattes signed the MPC Agreement on behalf of
MPC and also in his personal capacity.
23.

Litigation ensued in this Court and on August 12, 2010.

24.

MPC initially entered an appearance in the action, but, after seeking

and obtaining two extensions of the time to answer the petition, Mattes instructed MPCs
counsel not to file an answer and to inform Petitioners counsel that MPC would not be
participating in the Delaware litigation.
25.

This Court entered a default judgment against MPC in favor of

Petitioner in the amount of $5,584,523.40 (the Judgment).

26. After entry of the Judgment, Petitioner set out to collect from MPC.
However, it soon became evident that MPC had almost no money. The reason for this
sorry state of affairs is a tale in itself.
27.

In June of 2009, Mattes caused MPC to enter into an agreement with

Industry Ventures Fund V, L.P. (Industry Ventures) in which MPC was to sell
3,101,072 shares (the IV Shares) of Jajah common stock to Industry Ventures for
$2,387,825.44 (the IV Agreement, Exhibit B hereto, at first Whereas clause and

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1.2(a)). The IV Agreement provided for additional consideration to MPC under certain
circumstances. (Exhibit B at 1.2(b)).
28.

The IV Agreement also included a condition that no one had made or

threatened to make a claim that such person had any ownership interest in or right to
payment from the proceeds of the IV Shares. (Exhibit B at 4.5).
29.

The IV Agreement contained express warranties by MPC. (See,

Exhibit B at 2). For example, MPC warranted that as of the closing date, the seller
would own and have all right, title and interest (both legal and beneficial) to the IV
Shares (Exhibit B at 2.1). MPC also warranted that the IV Shares would be free and
clear of any lien, pledge, claim, security interest, encumbrance or restriction of any sort
whatsoever. (Id.). In addition, MPC warranted that the selling shareholder had the
absolute and unrestricted capacity to enter into the IV Agreement and that it had not, at
any time, taken any action that would have had an adverse effect on its ability to perform.
(Exhibit B at 2.2 and 2.3).
30. Mattes negotiated the IV Agreement and executed it on behalf of
MPC. (Exhibit B at p. 10).
31.

Mattes knew that MPC had obligations under the MPC Agreement at

the time that he caused MPC to enter into the IV Agreement.

32.

The sale of stock contemplated in the IV Agreement closed in June

of 2009, the IV Shares were transferred and Industry Ventures paid the consideration
called for in the IV Agreement.
33. The IV Agreement provided that payment would be made to a bank
account specified by the seller. (Exhibit B 1.2(a)).

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34.

Mattes, purportedly on behalf of MPC, designated the bank account

to which the funds were to be delivered.

35.

Upon information and belief, the payment from Industry Ventures

was made via a wire transfer to Bank Julius Baer & Co. Ltd. Zurich Switzerland via the
following routing: CH94 0851 5611 0200 1.
36.

On August 14, 2009, Mattes caused MPC to enter into a stock

purchase agreement with various entities associated under the Globespan banner. (The
Globespan Agreement, Exhibit C hereto).
37.

The Globespan Agreement provided for the purchase by Globespan

of 3,124,888 shares of Jajah stock from MPC for $2,406,163.76. (Exhibit C at first
Whereas clause and 1.2(a)).
38. The Globespan Agreement is essentially a carbon copy of the IV
Agreement. Thus the Globespan Agreement also provided for additional payments to
MPC under certain circumstances. (Exhibit C at 1.2(b)).
39.

The Globespan Agreement included a condition that no one had

made or threatened to make a claim that such person had any ownership interest in or
right to payment from the proceeds of the IV Shares. (Exhibit C at 4.5).
40.

The Globespan Agreement contained express warranties by MPC.

(See, Exhibit C at 2). For example, MPC warranted that as of the closing date, the seller
would own and have all right, title and interest (both legal and beneficial) to the
Globespan Shares (Exhibit C at 2.1). MPC also warranted that the Globespan Shares
would be free and clear of any lien, pledge, claim, security interest, encumbrance or
restriction of any sort whatsoever. (Id.). In addition, MPC warranted that the selling

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shareholder had the absolute and unrestricted capacity to enter into the Globespan
Agreement and that it had not, at any time, taken any action that would have had an
adverse effect on its ability to perform. (Exhibit C at 2.2 and 2.3).
41.

MPC also warranted that performance of the Globespan Agreement

would not result in a violation or default under any other agreement to which MPC was a
party. (Exhibit C at 2.5).
42.

Mattes negotiated the Globespan Agreement and executed it on

behalf of MPC. (Exhibit C at p. 9).

43.

Mattes knew that MPC had obligations under the MPC Agreement at

the time that he caused MPC to enter into the Globespan Agreement. Moreover, Mattes
knew that the transactions contemplated by the Globespan Agreement violated MPCs
undertakings under the MPC Agreement.
44.

The sale of stock contemplated in the Globespan Agreement closed

in August of 2009, the Globespan Shares were transferred and Globespan paid the
consideration called for in the Globespan Agreement.
45.

The Globespan Agreement provided that payment would be made to

a bank account specified by the seller. (Exhibit B 1.2(a)).

46.

Mattes, purportedly on behalf of MPC, designated the bank account

to which the funds were to be delivered.

47. Upon information and belief, the payments from Globespan were
made via a wire transfer to Bank Julius Baer & Co. Ltd. Zurich Switzerland via the
following routing: CH94 0851 5611 0200 1.

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48.

Upon consummation of these two transactions, MPC no longer held

any Jajah common stock. Thus, Mattes had caused MPC to sell the Jajah stock that it
was holding for the benefit of Petitioner.
49.

On December 14, 2009, Mattes caused MPC to enter into an

agreement with Rokon Holding GmbH (Rokon) whereby MPC would sell Rokon
7,210,860 shares of Series B Preferred Stock in Talenthouse, Inc., a Delaware
corporation, for a price that was dependent upon the amount that Rokon would receive
for its Jajah stock in the Change of Control transaction discussed above (the Rokon
Agreement, attached hereto as Exhibit D).
50.

Upon information and belief, the Rokon Agreement was executed by

Mattes on behalf of MPC. (Exhibit D at p. 8).

51.

As was true of the other agreements, the Rokon Agreement provided

that payment would be made by wire transfer to a bank account specified by the selling
shareholder. (Exhibit D 1.2).
52.

As before, at the direction of Mattes on behalf of MPC, payment was

made to Bank Julius Baer & Co. Ltd. Zurich Switzerland via the following routing: CH94
0851 5611 0200 1. (Exhibit D at last page).
53.

When the Change of Control event took place in February of 2010,

the excess payment provisions under the IV Agreement and the Globespan Agreement
were triggered. Mattes and Industry Ventures agreed upon the amount of the excess
payment necessary under the IV Agreement and memorialized that agreement in a letter
signed by Mattes (the IV Letter, Exhibit E hereto).

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54.

Despite the fact that the parties to the IV Agreement were Industry

Ventures and MPC (Exhibit B), Mattes refers to the IV Agreement as between Industry
Ventures and Daniel Mattes in the IV Letter. (Exhibit E).
55.

Mattes then designated the same routing directions for the excess

payment that he had for the other payments: Bank Julius Baer & Co. Ltd. Zurich
Switzerland via the following routing: CH94 0851 5611 0200 1.
56.

However, the account at Bank Julius Baer represented by the routing

number CH94 0851 5611 0200 1 (the Bank Baer Account) is listed as belonging to
Mattes. (Exhibit F).
57. Since the Globespan Agreement also included excess payment
provisions, payments were also due under the Globespan Agreement as a result of the
Change of Control event. That fact is evident from contemporaneous e-mails discussing
the amount of those payments. (Exhibit G).
58.

To facilitate these payments Mattes sent an e-mail to Globespan in

which he said: The wire instructions have not changed. Daniel Mattes, Bank Julius Baer
& Co. Ltd. Zurich, IBAN: CH94 0851 5611 0200 1. (Exhibit H). This e-mail expressly
identifies the Bank Baer Account as one belonging to Mattes and also identifies the Bank
Baer Account as the account to which the previous payments from Globespan
purportedly had been made to MPC.
59.

In connection with the excess payments by Globespan, Globespan

asked Mattes to supply it with a form W-8 so that Globespan would not have to withhold
a portion of the excess payments for the IRS. (Exhibit H). In response, Mattes provided
Globespan with an IRS W-8 form showing that MPC had received the excess payments

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despite the fact that the account those payments were sent to was in the name of Mattes.
(Exhibit H at p. 3).
60.

When Petitioner sought, through court proceedings in a Swiss court,

to attach the Bank Baer Account on the basis of his judgment against MPC, Mattes
appeared and defended on the basis that the Bank Baer Account belonged to him and him
alone.
61.

Thus, by means of the transactions described above, Mattes stripped

MPC of its assets leaving a bare shell in its place.

62.

In a move reminiscent of the Producers, Mattes had sold the rights to

the same stock twice in the apparent expectation that the company would fail and no one
would ever be the wiser.
63.

Upon information and belief, in early 2010, Mattes used the

proceeds that he received from the IV Agreement and the Globespan Agreement to form,
and later to fund, Jumio, a Delaware Corporation.

COUNT I
Fraudulent Transfer
64.

Petitioner repeats and realleges the allegations of paragraphs 1 - 63

as if fully set out herein.

65.

Mattes is an affiliate and the sole owner of MPC.

66.

At all times relevant hereto, Mattes controlled MPC.

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67.
Globespan

Mattes arranged to have MPC enter into the IV Agreement, the

Agreement

and

the

Rokon

Agreement

(together,

the

Stripping

Transactions).
68.

Mattes designated the Bank Baer Account as the account into which

the proceeds from the Stripping Transactions were to be placed.

69.

Mattes knew that the Bank Baer Account was his personal bank

account, not MPCs.

70.

Mattes gave no consideration, much less fair value, to MPC in

exchange for the transfer of the proceeds of the Stripping Transactions to his personal
bank account.
71.

MPC became insolvent as a result of the transfers of the proceeds of

the Stripping Transactions.

72.

The transfers of the proceeds from the Stripping Transactions were

done with the intent to prevent, or at least to hinder and delay, Petitioner from gaining
access to those proceeds to satisfy the obligations underlying the Judgment.
73.

The transfers of the proceeds from the Stripping Transactions to the

Bank Baer Account constituted fraudulent transfers of MPCs funds.

74.

Mattes formation of Jumio and subsequent transfer of the proceeds

of the Stripping Transactions to Jumio was done with actual intent to prevent, or at least
hinder or delay, Petitioner from gaining access to those funds to satisfy the Judgment.
75.

Petitioner has been damaged by the fraudulent transfers of the

proceeds of the Stripping Transactions.

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76.

Petitioner is entitled to the proceeds of the Stripping Transactions

77.

Petitioner is entitled to the proceeds of the Stripping Transactions

from Mattes.

that were transferred to Jumio, directly or indirectly, from MPC.

COUNT II
Constructive Trust
78.

Petitioner repeats and realleges the allegations of paragraphs 1 - 77

as if fully set out herein.

79.

MPC held the Original Amount of its Jajah stock for the benefit of

80.

Prior to the Change of Control transaction, MPC was obligated to

Petitioner.

hold the Adjusted Amount for the benefit of Petitioner.

81. Mattes caused MPC to sell the Adjusted Amount prior to the Change
of Control transaction in the Stripping Transactions in violation of MPCs duty to hold
the Adjusted Amount for the benefit of Petitioner.
82.

Mattes caused MPC to divert the proceeds of the Stripping

Transactions to himself in violation of his duties to Petitioner and MPC.

83.

Absent Mattes diversion of the proceeds of the Stripping

Transactions to himself, the proceeds of the Stripping Transactions would have been
available to MPC to satisfy the obligations underlying the Judgment and the Judgment
itself.

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84.

Mattes then used the diverted proceeds, in part, to found, and later to

85.

On information and belief, Mattes received stock (the Founders

fund, Jumio.

Shares) in Jumio as a result of his use of the diverted proceeds to found Jumio.
86. On information and belief, Mattes provided Jumio with additional
funds from the diverted proceeds in return for additional Jumio securities and/or debt
instruments (together with the Founders Shares, the Jumio Securities).
87.

Mattes obtained the Jumio Securities with proceeds that MPC should

have retained for the benefit of Petitioner.

88.

This Court should impose a constructive trust over the proceeds of

the Stripping Transactions sufficient to satisfy the Judgment together with additional
amounts to which Petitioner is entitled as indemnity under the MPC Agreement to cover
his expenses in attempting to collect on the Judgment.
89.

This Court should impose a constructive trust over the Jumio

Securities sufficient to satisfy the Judgment together with additional amounts to which
Petitioner is entitled as indemnity under the MPC Agreement to cover his expenses in
attempting to collect on the Judgment.
COUNT III
Piercing the Corporate Veil
90.

Petitioner repeats and realleges the allegations of paragraphs 1 - 89

as if fully set out herein.

91.

At all relevant times, Mattes controlled and dominated MPC.

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92.

At all relevant times, Mattes was an insider with respect to MPC.

93.

At the time MPC and Petitioner entered into the MPC Agreement,

MPC held substantial assets more than enough to perform its obligations under the
MPC Agreement.
94.

Mattes caused MPC to represent in the MPC Agreement that MPC

would hold the Original Amount for the benefit of Petitioner.

95.

MPC did not hold the Original Amount for the benefit of Petitioner.

96.

Instead, Mattes stripped MPC of its assets by causing MPC to sell

essentially all of its holdings in the Stripping Transactions.

97.

Mattes caused MPC to make false representations in connection with

the Stripping Transactions about its rights to the Jajah stock.

98.

These false representations allowed MPC to transfer all of the Jajah

stock in the Stripping Transactions.

99.

Mattes then diverted the proceeds of the Stripping Transactions to

the Bank Baer Account which was owned by him.

100. By causing MPC to enter into the Stripping Transactions and
diverting the proceeds of the Stripping Transactions to his own account, Mattes caused
MPC to become insolvent.
101. The diversion of the proceeds of the Stripping Transactions by
Mattes constituted fraudulent transfers of MPCs assets.

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102. Because Mattes stripped MPC of its assets, MPC was unable to
satisfy the Judgment.
103. On information and belief, at the time this Court entered the
Judgment, Mattes had diverted over $8,000,000 worth of assets from MPC to himself
without any consideration to MPC.
104. Mattes purposely diverted the proceeds of the Stripping Transactions
to put that money out of the reach of MPC and Petitioner.
105. Mattes is using MPC to insulate himself from personal liability
arising out of the MPC Agreement.
106. Because MPC was a sham and was used by Mattes to perpetrate a
fraud on Petitioner, the corporate existence of MPC should be disregarded by this Court
and Mattes should be held personally liable for the Judgment together with post judgment
interest and Petitioners costs and attorneys fees incurred in trying to collect on the
Judgment, including the expenses that Petitioner has incurred in the various garnishment
proceedings that Petitioner has filed in the United States, the attachment proceedings that
Petitioner filed in Switzerland and this proceeding.
COUNT IV
Alter Ego
107. Petitioner repeats and realleges the allegations of paragraphs 1 106
as if fully set out herein.
108. At all relevant times, Mattes has dominated and controlled MPC.

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109. Mattes has used MPC as a vehicle to obtain money that he needed to
further various personal projects that brought no benefit to MPC including, without
limitation, the Stripping Transactions and the formation of Jumio.
110. In the many transactions that Mattes has caused MPC to enter into
described above, Mattes did not maintain MPC as an entity separate from himself. Put
another way, Mattes has treated MPC as an extension of himself.
111. In each instance, when it was a benefit to Mattes to treat MPC as a
separate entity, he did so. On the other hand, when it was a benefit to Mattes to ignore
the legal distinction between Mattes and MPC, Mattes did so.
112. Mattes entered into the MPC Agreement, the IV Agreement, the
Globespan Agreement and the Rokon Agreement in the name of MPC to limit any
personal liability that might accrue from those transactions by hiding behind the
corporate shield of MPC.
113. However, at a later date when the excess proceeds were to be
distributed, Mattes referred to the IV Agreement, the Globespan Agreement and the
Rokon Agreement as agreements between the corporate purchasers and Mattes personally
thus dropping the fiction that MPC was the real party in interest.
114. Despite the fact that the Bank Baer Account is held in Mattes
personal capacity, Mattes has, when it is convenient for him to do so, alleged that the
Bank Baer Account actually belonged to MPC. Thus, when the IV Agreement, the
Globespan Agreement and the Rokon Agreement called for MPC to designate the
account into which each was to deposit proceeds of their agreements with MPC, Mattes

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designated the Bank Baer Account, thereby representing that the Bank Baer Account
belonged to MPC.
115. Later, Mattes dropped the fiction that the Bank Baer Account
belonged to MPC at least for some purposes. Thus, when Mattes wanted the additional
proceeds from the Stripping Transactions, he indicated that the Bank Baer Account was
in his name. By contrast, when, at the same time, he was trying to avoid tax liability with
the IRS, Mattes filed sworn statements to the effect that the proceeds of the Stripping
Transactions went to MPC rather than him.
116. As a result of this conduct by Mattes, MPC holds no assets in its own
name.
117. Indeed, all of the assets that MPC should hold in its own name, or
the proceeds from them, now appear in Mattes name.
118. Mattes inconstant view of his relationship to MPC has worked an
injustice on Petitioner.
119. As a result, this Court should treat MPC as the alter ego of Mattes
and Mattes should be personally responsible for satisfying the Judgment together with
post judgment interest and Petitioners costs and attorneys fees incurred in trying to
collect on the Judgment, including the expenses that Petitioner has incurred in the various
garnishment proceedings that Petitioner has filed in the United States, the attachment
proceedings that Petitioner filed in Switzerland and this proceeding.
COUNT V
Indemnity

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120. Petitioner repeats and realleges the allegations of paragraphs 1 119

as if fully set out herein.
121. Petitioner is entitled to indemnity from MPC under the MPC
Agreement for any losses Petitioner suffers as a result of any breach MPCs undertakings
in the MPC Agreement. (Exhibit A at 13).
122. Petitioner has suffered losses as a result of MPCs failure to make
the payments that it undertook to pay in the MPC Agreement including the costs
Petitioner has suffered in connection with his efforts to collect on the Judgment.
123. Petitioner has experienced costs for discovery in aid of execution to
try to locate assets of MPC which it could attach. Petitioner has also experienced costs
involved in prosecuting various attachment and garnishment proceedings in an attempt to
obtain satisfaction on the Judgment.

Finally, Petitioner has experienced costs in

connection with this litigation which was initiated to obtain satisfaction on the Judgment.
124. Petitioner is entitled to indemnification for all of his collection
efforts.
WHEREFORE: Petitioner asks that this Court:
(a)

Enter Judgment against Mattes in favor of Petitioner for that

amount of the proceeds of the Stripping Transactions sufficient to pay the Judgment
against MPC, including any indemnity resulting from Petitioners efforts to collect on the
Judgment;
(b)

Enter an order establishing a constructive trust over the proceeds of

the Stripping Transactions;

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(c)

Enter an order establishing a constructive trust over Mattes Jumio

(d)

Enter and order piercing the corporate veil between MPC and

Stock;

Mattes and enter judgment against Mattes in favor of Petitioner in an amount sufficient to
satisfy the Judgment including any indemnity resulting from Petitioners efforts to collect
on the Judgment;
(e)

Enter an order finding that Mattes and MPC are alter egos and

entering judgment against Mattes in favor of Petitioner in an amount sufficient to satisfy

the Judgment, including any indemnity resulting from Petitioners efforts to collect on the
Judgment; and
(f)

Enter judgment in favor of Petitioner and against MPC in an

amount equal to the costs Petitioner has experienced in connection with his efforts to
collect on the Judgment including the cost of this litigation.
(g)

Enter an order granting Petitioner such other and further relief as

this Court deems just.

Dated: February 22, 2011

/s/ Edmond D. Johnson
Edmond D. Johnson (Del. Bar No. 2257)
James G. McMillan (Del. Bar. No. 3979)
James H.S. Levine (Del. Bar No. 5355)
PEPPER HAMILTON LLP
Hercules Plaza, Suite 5100
1313 N. Market Street
P.O. Box 1709
Wilmington, DE 19899-1709
Telephone No. (302) 777-6500
Facsimile No. (302) 421-8390
Attorneys for Petitioner
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