Stephen B. Trusa v. Norman Nepo

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

STEVEN B. TRUSA, individually and )
Derivatively on behalf of XION )
Management, LLC, )
)
Plaintiff, )
)
v. ) C.A. No. 12071-VCMR
)
NORMAN NEPO, BRYAN )
COLLINS, and FARHAAN MIR, )
)
Defendants, )
)
v. )
)
XION MANAGEMENT, LLC, )
)
Nominal Defendant. )
)

MEMORANDUM OPINION

Date Submitted: January 11, 2017
Date Decided: April 13, 2017

Kevin A. Guerke, Esquire, SEITZ, VAN OGTROP & GREEN, P.A., Wilmington,
Delaware; Attorney for Plaintiff.

Paul D. Brown, Esquire and Joseph B. Cicero, Esquire, CHIPMAN BROWN
CICERO & COLE LLP, Wilmington, Delaware; Attorneys for Defendant Norman
Nepo.

MONTGOMERY-REEVES, Vice Chancellor.
 In this action, a creditor of a limited liability company alleges that the

company’s managing members lured him into providing a loan to the company

through various misrepresentations regarding the company’s strategies and

omissions of conflicts of interest. The creditor asserts that the managing members

then used the loan for inappropriate purposes, including payments to insiders and

affiliates, depleted the company’s assets, and rendered the company unable to pay

back the creditor’s loan.

The creditor asserts claims for breaches of fiduciary duty, fraud, fraudulent

transfer, aiding and abetting fraud, and conspiracy to commit fraud. The creditor

also seeks dissolution of the company. One of the managing members moves to

dismiss the action for lack of standing, duplication, and failure to state a claim. For

the reasons discussed herein, I conclude that the creditor lacks standing to bring the

fiduciary duty and statutory dissolution claims; he does not state a claim for

equitable dissolution; and the declaratory judgment claim is duplicative. I also

conclude that the creditor fails to state a claim for fraud, fraudulent transfer, aiding

and abetting fraud, or conspiracy to commit fraud. Therefore, I grant the motion to

dismiss in its entirety.

2
I. BACKGROUND
The facts are drawn from the Amended Verified Complaint (the “Complaint”)

and the documents incorporated by reference therein.1

A. Parties
Plaintiff Stephen B. Trusa is a resident of the State of New York and lender

to XION Management LLC (“XION” or the “Company”), formerly known as IIG

Management, LLC (“IIG”), a Delaware limited liability company. XION

purportedly “specialize[d] in structural finance with a focus on providing corporate

debt. It claimed to be in the business of issuing short-term, secured notes to investors

and using the proceeds to provide debt funding to U.S. publically traded

companies.”2

Defendants Norman Nepo, Bryan Collins, and Farhaan Mir are managing

members of XION (collectively, the “Managing Members”). Nepo and Collins are

residents of the State of Florida, and Mir is a resident of Great Britain.

1
On a motion to dismiss under Rule 12(b)(6), the Court may consider a document
outside the pleadings if “the document is integral to a plaintiff’s claim and
incorporated into the complaint” or “the document is not being relied upon to prove
the truth of its contents.” Vanderbilt Income & Growth Assocs., L.L.C. v.
Arvida/JMB Managers, Inc., 691 A.2d 609, 613 (Del. 1996); see Allen v. Encore
Energy P’rs, 72 A.3d 93, 96 n.2 (Del. 2013).
2
Am. Compl. ¶ 6.

3
 B. Facts
In 2010, the Managing Members approached Trusa to request a loan for

XION. In connection with their efforts, the Managing Members allegedly “gave

presentations, made sales pitches, and provided other information” to convince

Trusa to invest in their company. Trusa claims that these presentations included

“material representations” regarding XION’s business and the three Managing

Members.3 Specifically, the Managing Members told Trusa that: (1) one hundred

percent of Trusa’s and other lenders’ money would be “invested in bonds convertible

into common stock of publicly traded companies”4; (2) Nepo was making

“significant personal investments in XION” as the “anchor investor”5; (3) Trusa and

“other lenders would be secured with XION debentures and that their underlying

assets would establish multiple cash streams to mitigate risk and ensure high levels

of cash reserve to service secured corporate notes”6; and (4) Trusa and other lenders

“would receive monthly reports showing the securities in the publicly traded

companies securing the investment.”7 Additionally, the Managing Members

3
Id. ¶ 7.
4
Id. ¶ 13.
5
Id. ¶¶ 14, 9.
6
Id. ¶ 10.
7
Id. ¶ 12.

4
purportedly touted Collins’s extensive investment experience and responsibility for

“negotiating debenture conversion terms, managing legal drafting, and supervising

share liquidation through XION’s institutional trading accounts.”8

In October of 2010, in reliance on these alleged representations, Trusa

executed a Loan and Security Agreement (the “Agreement”) and Secured

Promissory Note (the “Note,” collectively, with the Agreement, the “Loan”) of

$200,000 to XION. The Agreement, with IIG/XION as Borrower and Trusa as

Lender, contains a power of attorney provision, which states:

[T]he Borrower hereby irrevocably appoints the Lender,
with full power of substitution and revocation, the
Borrower’s attorney-in-fact effective upon occurrence of
an Event of Default, with full authority in the place and
stead of the Borrower and in the name of the Borrower or
otherwise, from time to time in the Lender’s discretion to
take any action and to execute any instrument which the
Lender may deem reasonably necessary or advisable in
pursuing its remedies set forth herein, including, without
limitation, to receive, endorse and collect all instruments
made payable to the Borrower representing any interest
payment, dividend or other distribution in respect of the
Collateral of any part thereof. This power of attorney is
irrevocable and shall be deemed to be coupled with an
interest and shall survive any disability of the Borrower.9

8
Id. ¶ 8. The Amended Complaint lists other alleged misrepresentations, but Plaintiff
fails to raise any of them in his briefiing. Therefore, I do not address them.
9
Id. ¶ 44; Pl.’s Answering Br. Ex. D, at § 7.2(g) (the “Loan and Security
Agreement”).

5
 The “Remedies” section of the Agreement provides, in relevant part, that the

Lender (1) may, in the event of default, sue in equity for specific performance of any

covenant or condition contained in the Agreement, cease disbursing advances under

the Note, or declare the unpaid balance of the Note together with all accrued interest

payable; (2) may sell all or any part of the collateral at a private sale; (3) may restrict

prospective purchasers of the collateral, provide purchasers business and financial

information, and offer the collateral for sale with or without first employing an

appraiser, investment banker, or broker; and (4) shall have all rights, remedies, and

recourse granted pursuant to the Note or existing at common law or equity.10

The Agreement also contains the following pertinent provisions:

2.3 Use of Proceeds. Borrower shall use the proceeds of
the Loan to fund and/or purchase direct and/or third party
convertible debt, debentures, and bridge loans, as
determined by Borrower in its sole discretion.
4.5 Full Disclosure. All information furnished by
Borrower to Lender concerning Borrower, its financial
condition, or otherwise for the purpose of obtaining credit
or an extension of credit, is, or will be, at the time the same
is furnished, accurate and correct in all aspects and
complete insofar as completeness may be necessary to
give lender a true and accurate knowledge of the subject
matter.

4.12 Representations True. No representation or warranty
by Borrower contained herein or in any certificate or other
document furnished by Borrower pursuant hereto contains
any untrue statement of material fact or omits to state a
10
Loan and Security Agreement § 7.2(a)-(d).

6
 material fact necessary to make such representation or
warranty not misleading in light of the circumstances
under which it was made.11

Attached as Exhibit A to the Agreement is a Borrower’s Certificate (the “Borrower’s

Certificate”) executed by Nepo, which states that “all representations and warranties

set forth within the Loan Agreement are true and correct as of the date hereof.”12

XION allegedly borrowed a total of $1,100,000 from Trusa and other lenders.

In October 2012, the Loan matured and XION defaulted. After the default,

Trusa began to inquire about the activity at XION. “XION, in response, represented

to Trusa that it was purportedly pursuing claims against Collins.” 13 Trusa learned

that at the time of the 2010 representations, Collins owned and controlled Greystone

Capital Partners, Inc. (“Greystone”) and IBC Funds, LLC (“IBC”), which allegedly

created conflicts of interest with XION. Through these other companies, Collins

acquired convertible bonds in the same companies as XION—facts of which the

Managing Members purportedly were aware but did not disclose to Trusa.

Additionally, Trusa alleges that the Managing Members did not use one hundred

percent of the Loan to purchase convertible bonds in publicly traded companies as

they had represented. Instead, the Managing Members paid themselves and funneled

11
Id. §§ 2.3, 4.5, 4.12.
12
Id. Ex. A.
13
Am. Compl. ¶ 30.

7
the investment proceeds to entities they owned, controlled, or from which they

profited. Trusa asserts that of the $1,100,000 loaned to XION, “only $682,500 [is]

observable on documentation in SEC filings.”14 XION also allegedly never

“obtained secured collateral backing the Loan nor provided monthly reports

identifying the secured collateral.”15 Moreover, the Managing Members allegedly

did nothing to protect XION during the economic decline despite the fact that Collins

“took action to make money and prevent losses for his other companies,”16 including

negotiating better terms and converting certain bonds for these companies.

Consequently, XION’s financial position deteriorated.

On July 2, 2014, counsel for XION informed Trusa that he was “presently

reviewing all documents and determining the best course of action.”17 But, on

September 9, 2014, the same counsel informed Trusa that he no longer represented

XION and that his firm had “worked diligently on an amicable, confidential asset

sale/settlement which did not conclude due to the non-performance of the other

party.”18 The e-mail also stated that XION was engaging other counsel in order to

14
Id. ¶ 16.
15
Id. ¶ 21.
16
Id. ¶ 22.
17
Id. ¶ 31.
18
Id. ¶ 32.

8
“review litigation options, prepare legal and accounting reports for its lenders, and

recover monies due to XION and its lenders.”19 Trusa subsequently followed up

with XION regarding its “pursuit of Collins,” and on October 30, 2014, Mir replied

that:

XION’s previous attempts to reach an amicable
settlement with debtors and third party service providers
were unsuccessful, despite being advised by opposing
counsel that a deposit was in escrow.

Consequently, XION is currently working with a
securities litigation firm in Miami to establish its claim for
pursuing remuneration from debtors and third party
service providers.

Shortly once the firm completes formulating its
proposal, you will be contacted by the firm and it will be
presented to you.

This proposal will include XION restating the notes
to you and appointing a trustee to work with the attorneys
to manage disbursements to all parties.

Going forward lenders will be provided with
transparent updates from the trustee on progress. The
reports will provide full details on legal and financial
issues.

The attorneys and trustee will be working with
limited resources so they will be establishing
communication protocols to limit fees.20

19
Id.
20
Id. ¶ 33.

9
Mir then told Trusa that XION was “establishing a working relationship” with a

commercial litigation specialist who would decide whether to take XION’s case.

Mir expressed his understanding that “there is a solid path to compensation for

XION.”21 On January 19, 2015, Mir told Trusa that XION could not afford the

sizable retainer that the Miami litigation law firm required, was “working on

alternatives,” and would update Trusa on its completed efforts.22 By August 2015,

XION’s registered agent had resigned.

Nepo’s son, David Nepo, allegedly called Trusa on various dates between

April and May 2016. In those conversations, David23 purportedly represented to

Trusa that he and his father had “accumulated sufficient evidence to implicate

Collins, a broker dealer, and a law firm in the wrongful scheme.”24 David confirmed

“Collins’ and others’ scheme where a broker dealer aided and abetted Collins and

others in a scheme where Collins converted various convertible bonds into publicly

traded common stock and Collins’ affiliated companies . . . benefitted from more

21
Id. ¶ 34.
22
Id. ¶ 35.
23
Any references to first names are for clarity and no familiarity or disrespect is
intended.
24
Id. ¶ 47.

10
favorable allocations than investments Collins made for XION.”25 David

represented to Trusa “that he would provide hard evidence of the wrongful conduct

he described,”26 but has failed to do so.

C. Procedural History
On April 28, 2015, Trusa filed a complaint in the Delaware Superior Court.

XION failed to answer the complaint. On June 3, 2015, the Superior Court entered

a default judgment against XION in the amount of $363,504.74, plus post-judgment

interest and costs and fees.27 On June 26, 2015, Trusa served XION with discovery

requests, and XION did not respond. The Superior Court granted Trusa’s motion to

compel responses to the discovery on September 11, 2015. XION is in contempt of

that order.28

Trusa filed this action on March 4, 2016. Thereafter, Nepo filed his initial

motion to dismiss on May 23, 2016. Trusa amended the Complaint on July 21, 2016.

Nepo filed his motion to dismiss the amended complaint (the “Motion to Dismiss”)

on August 4, 2016. Following briefing by the parties, this Court held oral argument

on the Motion to Dismiss on January 11, 2017.

25
Id. ¶ 48.
26
Id. ¶ 50.
27
Id. ¶ 39.
28
Id. ¶ 41.

11
 D. Parties’ Contentions
Trusa asserts eight counts against the Managing Members. Count I seeks a

declaration from the Court that: (1) the Managing Members breached their fiduciary

duties to XION; (2) Trusa has standing to pursue breach of fiduciary duty claims

against the Managing Members; (3) XION is insolvent; (4) it is not reasonably

practicable for XION to carry on the purpose of its existence; (5) XION should be

dissolved; and (6) a trustee or receiver should be appointed. Count II alleges that

Collins, Nepo, and Mir breached their fiduciary duties. Count III alleges a breach

of fiduciary duty against Collins for failing to put XION’s best interests above his

own. Count IV seeks dissolution of XION because it is insolvent, has been

abandoned by the managing members, and cannot carry on the purpose of its

existence.

Count V asserts fraud against the Managing Members for knowingly making

false representations and intentionally concealing Collins’s conflicts of interest in

order to induce Trusa to loan money to XION. Count VI asserts a claim for

fraudulent transfer against the Managing Members. Count VII alleges that the

Managing Members conspired to commit fraud in their representations to Trusa to

attain his loan. Count VIII alleges aiding and abetting against the Managing

Members for assisting in the perpetration of the fraud.

12
 In his Motion to Dismiss, Nepo contends that the entire Complaint should be

dismissed. First, Nepo argues that Trusa, as a creditor, lacks standing to assert

breach of fiduciary duty claims or seek dissolution of the company. Second, Nepo

maintains that the declaratory judgment claim is duplicative of the other claims and

should be dismissed. Third, Nepo argues that the Complaint fails to state a claim for

fraud, fraudulent transfer, conspiracy to commit fraud, and aiding and abetting fraud.

I discuss each in turn below.

II. ANALYSIS
Under Court of Chancery Rule 12(b)(6), the Court will dismiss the Complaint

if the “plaintiff could not recover under any reasonably conceivable set of

circumstances susceptible of proof.”29 The Court will accept all well-pled

allegations of fact and draw all reasonable inferences in favor of the plaintiff; but,

the Court need not accept factually unsupported, conclusory allegations.30

A. Trusa Does Not Have Standing to Pursue Fiduciary Duty Claims
Trusa asserts derivative breach of fiduciary duty claims against Collins, Nepo,

and Mir on behalf of the Company.31 Trusa argues he may pursue these claims as a

29
In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006).
30
Id.; Price v. E.I. duPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011) (citing
Clinton v. Enterprise Rent-A-Car Co., 977 A.2d 892, 895 (Del. 2009)).
31
Pl.’s Answering Br. 15-18. Nepo suggests that Trusa attempts to assert direct and
derivative breach of fiduciary duty claims. Def.’s Opening Br. 10. In the
Complaint, Trusa asks for a declaration that he has standing to pursue both direct
13
creditor of the Company and through the power of attorney granted to him by the

Agreement.32 For the reasons set forth below, Trusa does not have standing to assert

claims for breach of fiduciary duty on behalf of XION.

1. Trusa does not have standing as a creditor to assert breach
of fiduciary duty claims on behalf of XION
The Delaware Limited Liability Company Act (the “Act”) provides the right

and outlines the requirements to bring a derivative action. Section 18-1001 entitled

“Right to bring action” states:

A member or an assignee of a limited liability company
interest may bring an action in the Court of Chancery in
the right of a limited liability company to recover a
judgment in its favor if managers or members with
authority to do so have refused to bring the action or if an
effort to cause those managers or members to bring the
action is not likely to succeed.33

Section 18-1002, entitled “Proper plaintiff” provides:

In a derivative action, the plaintiff must be a member or an
assignee of a limited liability company interest at the time
of bringing the action and

and derivative claims against the Managing Members, but in his briefing, he only
argues the fiduciary duty claims are derivative, and I fail to see how any of them are
direct. Am. Compl. ¶ 47; Pl.’s Answering Br. 15-18. Furthermore, because Trusa
did not brief these issues, they are waived. Emerald P’rs v. Berlin, 2003 WL
21003437, at *43 (Del. Ch. Apr. 28, 2003).
32
Pl.’s Answering Br. 15-18.
33
6 Del. C. § 18-1001.

14
 (1) At the time of the transaction of which the
plaintiff complains; or

(2) The plaintiff’s status as a member or an assignee
of a limited liability company interest had
devolved upon the plaintiff by operation of law
or pursuant to the terms of a limited liability
company agreement from a person who was a
member or an assignee of a limited liability
company interest at the time of the
transaction.”34

Thus, the plain language of the Act provides that only members and assignees may

assert derivative claims on behalf of the Company.

In CML V, LLC v. Bax, this Court addressed the question of whether a creditor

had standing to bring derivative breach of fiduciary duty claims on behalf of an

insolvent limited liability company.35 There, creditor CML V, LLC lent money to

JetDirect Aviation Holdings, LLC (“JetDirect”). JetDirect subsequently defaulted

on its loan obligations, became insolvent, and purportedly began selling its assets to

interested managers.36 CML V, LLC argued that the individual managers breached

their duty of care by being inadequately informed about the financial condition of

the company, acted in bad faith by failing to create an appropriate system of internal

controls, and breached their duty of loyalty by benefiting from self-interested asset

34
Id. § 18-1002.
35
CML V, LLC v. Bax (“Bax I”), 6 A.3d 238 (Del. Ch. 2010).
36
Id. at 240.

15
sales.37 The Court of Chancery dismissed the derivative claims for lack of standing

and held that “under the plain language of Section 18-1002, standing to bring a

derivative action is limited to a ‘member or an assignee.’”38 The statute “denies

derivative standing to creditors of an insolvent LLC.”39 The Delaware Supreme

Court, in its affirmance of that opinion, also construed the Act’s language to be

unambiguous and “susceptible of only one reasonable interpretation.”40 “Only LLC

members or assignees of LLC interests have derivative standing to sue on behalf of

an LLC—creditors do not.”41 Thus, as a creditor, Trusa lacks standing to bring the

derivative claims he is attempting to assert.42

37
Id.
38
Id. at 242, 254.
39
Id.
40
CML V, LLC v. Bax (“Bax II”), 28 A.3d 1037, 1043 (Del. 2011).
41
Id.
42
As this Court explained in In re Carlisle Etcetera LLC, creditors have adequate
remedies at law to protect their interests through “strong covenants, liens on assets,
and other negotiated contractual provisions,” as well as the implied covenant of
good faith and fair dealing. 114 A.3d 592, 604 (Del. Ch. 2015) (quoting Prod. Res.
Gp., L.L.C. v. NCT Gp., Inc., 863 A.2d 772, 789-90 (Del. Ch. 2004) (footnotes
omitted)). For example, Trusa could have used his “significant contractual
flexibility to protect [his] unique, distinct interests” by bargaining for additional
covenants or contractual provisions in the Loan documents, such as “automatic
assignment of membership interests upon insolvency clauses.” Bax II, 28 A.3d at
1043 & n.20. Additionally, “[b]oth state and federal law provide a panoply of
remedies in order to protect creditors injured by a wrongful conveyance, including
avoidance, attachment, injunctions, appointment of a receiver, and virtually any
other relief the circumstances may require.” Carlisle, 114 A.3d at 604 (quoting
16
 2. The power of attorney clause of the Agreement does not
grant Trusa a contractual right to assert breach of fiduciary
duty claims on behalf of XION
The Agreement allows Trusa “to take any action and to execute any

instrument which the Lender may deem reasonably necessary or advisable in

pursuing its remedies set forth herein.”43 Trusa’s argues that this includes the ability

to assert derivative claims, but that argument ignores the fact that the power of

attorney is expressly limited to pursuing remedies provided in the Agreement. Such

remedies include, for example, in an event of default, (1) a suit in equity for “specific

performance of any covenant or condition contained in any loan document,” (2) the

cessation of disbursement of advances under the Note, and (3) a declaration that the

unpaid balance of the Loan together with all accrued interest is due and payable.44

The Agreement additionally provides Trusa with the ability to exercise “all the rights

of a secured party under the Code”45 and sell “all of the Collateral or any part thereof

Trenwick Am. Litig. Trust v. Ernst & Young, L.L.P., 906 A.2d 168, 199 (Del. Ch.
2006) (footnotes omitted)).
43
Loan and Security Agreement § 7.2(g).
44
Id. § 7.2(a).
45
Id. § 7.2(b)(i).

17
at private sale and at such price or prices as Lender may reasonably deem

satisfactory.”46

Section 7.2(g) of the Agreement, the power of attorney provision, lists as an

example remedy, to “receive, endorse and collect all instruments made payable to

the Borrower representing any interest payment, dividend or other distribution in

respect of the Collateral or any part thereof.”47 Trusa points to the immediately

preceding “including, without limitation” clause in Section 7.2(g) and argues these

remedies are not exclusive. Contrary to Trusa’s argument, I do not read this clause

to grant a broad power of attorney that would allow Trusa to pursue derivative breach

of fiduciary duty claims on behalf of XION.48 And, Trusa does not point to anything

in the Agreement that even suggests that the parties intended to provide Trusa with

the ability to assert fiduciary duty claims on behalf of the Company. Therefore,

Trusa does not have standing to bring the fiduciary duty claims.

46
Id. § 7.2(b)(ii).
47
Id. at 7.2(g).
48
Nepo argues that the contract could not as a matter of Delaware law and policy
provide standing to assert derivative claims for breach of fiduciary duty because it
is contrary to Section 18-1002, which expressly provides that “[i]n a derivative
action, the plaintiff must be a member or an assignee of a limited liability company.”
6 Del. C. § 18-1002. I need not address that issue because the plain language of the
agreement simply does not provide the authority Trusa seeks to assert.

18
 B. Trusa May Not Obtain Dissolution
Trusa seeks dissolution under Sections 18-801 through 18-806 of the Act or,

alternatively, equitable dissolution. For the reasons discussed below, Trusa is not

entitled to dissolution of XION.

1. Trusa does not have standing to pursue a statutory
dissolution claim
A statute that is “clear and unambiguous on its face, need not and cannot be

interpreted by a court . . . .’”49 “If the statute as a whole is unambiguous, there is no

reasonable doubt as to the meaning of the words used and the Court’s role is then

limited to an application of the literal meaning of the words.”50 Section 18-802 of

the Act states, “[o]n application by or for a member or manager the Court of

Chancery may decree dissolution of a limited liability company whenever it is not

reasonably practicable to carry on the business in conformity with the limited

liability agreement.”51 Because Trusa is neither a member nor a manager, he may

not seek dissolution through Section 18-802.

49
Bax I, 6 A.3d 238, 241 (Del. Ch. 2010) (quoting Harrigan v. City of Wilm., 2006
WL 258061, at *3 (Del. Super. Jan 5, 2006)).
50
Id. (citing Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242,
1246 (Del. 1985)).
51
6 Del. C. § 18-802.

19
 Trusa argues that under Section 18-805, Trusa may, in his capacity as a

creditor, seek the appointment of a receiver for XION because the Company was

canceled as a matter of law under Section 18-203(a). Section 18-805 states:

When the certificate of formation of any limited liability
company formed under this chapter shall be canceled by
the filing of a certificate of cancellation pursuant to § 18-
203 of this title, the Court of Chancery, on application of
any creditor, member or manager of the limited liability
company, or any other person who shows good cause
therefor, at any time, may . . . appoint 1 or more persons
to be receivers, of and for the limited liability company.52
Section 18-203(a) provides, in relevant part:

A certificate of formation shall be canceled upon the
dissolution and the completion of winding up of a limited
liability company, or as provided in § 18-104(d)
or (i)(4) or § 18-1108 of this title, or upon the filing of a
certificate of merger or consolidation or a certificate of
ownership and merger if the limited liability company is
not the surviving or resulting entity in a merger or
consolidation or upon the future effective date or time of a
certificate of merger or consolidation or a certificate of
ownership and merger if the limited liability company is
not the surviving or resulting entity in a merger or
consolidation, or upon the filing of a certificate of transfer
or upon the future effective date or time of a certificate of
transfer, or upon the filing of a certificate of conversion to
non-Delaware entity or upon the future effective date or
time of a certificate of conversion to non-Delaware entity.
A certificate of cancellation shall be filed in the office of
the Secretary of State to accomplish the cancellation of a
certificate of formation upon the dissolution and the

52
Id. § 18-805 (emphasis added).

20
 completion of winding up of a limited liability company. .
. .53

Section 18-104(d) in turn states that after the limited liability company receives the

notice of resignation of its registered agent, the company shall obtain a new

registered agent.54 If the company “fails to obtain and designate a new registered

agent as aforesaid prior to the expiration of the period of 30 days after the filing by

the registered agent of the certificate of resignation, the certificate of formation of

such limited liability company shall be canceled.”55

Trusa would have me read any cancellation method under Section 18-203(a)

as triggering the rights granted to creditors in Section 18-805, but the statute’s plain

language does not allow for this interpretation. Instead, the filing of a certificate of

cancellation and the automatic cancellation of a certificate of formation are treated

differently in this context. The statute lists seven ways in which a certificate of

formation may be canceled.56 But, a certificate of cancellation may only be filed

53
Id. § 18-203(a) (emphasis added).
54
Id. § 18-104(d).
55
Id.
56
Id. § 18-203(a) (A certificate of formation may be canceled (1) upon dissolution or
winding up; (2) as provided in 6 Del. C. § 18-104(d) when a company fails to “obtain
and designate a new registered agent, to take the place of the registered agent so
resigning” before 30 days after the filing of the certificate of resignation; (3) as
provided in 6 Del. C. § 18-104(i)(4) upon entry of a court order enjoining any person
or entity from acting as registered agent and the company fails to obtain and
designate a new registered agent within 30 days; (4) as provided in 6 Del. C. § 18-
21
“upon the dissolution and winding up of the company,” not for any of the other

reasons listed in Section 18-203(a).57 And, a certificate of cancellation is a statutory

prerequisite to the applicability of Section 18-805.58 Thus, a creditor may only seek

the appointment of a trustee or receiver when a certificate of cancellation is filed

after the dissolution and winding up of the company, not where the certificate of

formation has been canceled by operation of law for want of a registered agent.59

1108 if the company fails to pay the annual tax due under 6 Del. C. § 18-1107 for
three years after the tax becomes due; (5) upon the filing of a certificate of merger
or consolidation or certificate of ownership and merger if company is not the
surviving entity or upon the future effective date of such certificate; (6) upon the
filing of a certificate of transfer or upon the effective date of such certificate; (7)
upon the filing of a certificate of conversion to a non-Delaware entity or upon the
effective date of such certificate).
57
Id.
58
Id. § 18-805.
59
Id.; ROBERT L. SYMONDS, JR. & MATTHEW J. O’TOOLE, SYMONDS & O’TOOLE ON
DELAWARE LIMITED LIABILITY COMPANIES § 15.07, at 15-15 to -16, (2d ed. 2015)
(“The circumstances under which a creditor may pursue and also may find it
worthwhile to seek the appointment of a trustee or receiver for a terminated
company under Section 18-805 are likely to be fairly narrow. The actual prior filing
of a certificate of cancellation for the debtor limited liability company is a statutory
prerequisite.”) (internal citations omitted); id. § 16.09[A], at 16-69 to -70 (“Section
18-805 on its face permits the appointment of a trustee or receiver only when the
limited liability company’s certificate of formation has been cancelled by the filing
of a certificate of cancellation. . . . Section 18-805, however, clearly does not
sanction the appointment of a trustee or receiver in a situation where the certificate
of formation has not been cancelled or where the certificate has been cancelled by
other means, for example, as a result of the filing of a certificate of merger, a
certificate of transfer, or a certificate of conversion to a non-Delaware entity, or by
operation of law for want of a registered agent or for non-payment of annual tax.”)
(internal citations omitted).

22
Trusa has not alleged that the Company is dissolved or has begun the winding up

process, much less that the Company has filed a certificate of cancellation; therefore,

Section 18-805 does not confer upon Trusa, as a creditor, a statutory right to seek

the appointment of a receiver.

2. Trusa is not entitled to equitable dissolution
Trusa also argues that this Court may use its equitable jurisdiction to dissolve

the Company upon the request of a creditor. This Court has noted that:

Section 18-802 does not state that it establishes an
exclusive means to obtain dissolution, nor does it contain
language overriding this court’s equitable authority. To
the contrary, the LLC Act elsewhere recognizes that equity
backstops the LLC structure by providing generally that
“the rules of law and equity” shall govern in “any case not
provided for in this chapter.”60

Thus, “this Court, as a court of equity, has the power to order the dissolution of a

solvent company and appoint a receiver to administer the winding up of those

assets.”61 Given its extreme nature, however, equitable dissolution is a remedy that

should be granted sparingly.

60
In re Carlisle Etcetera, LLC, 114 A.3d 592, 601-02 (Del. Ch. 2015) (quoting 6 Del.
C. 18-1104).
61
Id. at 601 (quoting Weir v. JMACK, Inc., 2008 WL 4379592, at *2 (Del. Ch. Sept.
23, 2008)).

23
 Trusa argues that XION should be dissolved because the Managing Members

drove the Company into insolvency and then completely abandoned the Company.62

Nepo responds that neither of those are sufficient reasons to grant equitable

dissolution to a creditor.63 I need not address that dispute, however, because Trusa’s

arguments on this point are wholly conclusory and contrary to the specific

allegations of the Complaint. The Complaint concedes that Mir and Nepo (through

his son, David) are trying to resolve creditor claims.64 For example, Mir engaged

counsel to attempt “to reach an amicable settlement with debtors and third party

service providers” and to pursue “remuneration from debtors and third party service

providers.”65 When it became clear that XION did not have the resources to cover

the law firm’s required “sizable retainer,”66 Mir informed Trusa in January 2015 that

XION management was “working on alternatives” and would update him again

“once this effort is complete.”67 Likewise, Nepo, through his son David, contacted

62
Pl.’s Answering Br. 14-15.
63
Def.’s Opening Br. 17-18.
64
Am. Compl. ¶¶ 33-36, 46-50 (showing communications between Mir, Nepo’s son,
and Trusa).
65
Id. ¶¶ 33-34.
66
Id. ¶ 35.
67
Id.

24
Trusa on numerous occasions throughout 2016 and communicated to Trusa that he

had “accumulated sufficient evidence to implicate Collins, a broker dealer, and a law

firm in the wrongful scheme.”68 Thus, rather than showing abandonment, Trusa’s

complaint shows active engagement on the part of Nepo and Mir. Trusa disagrees

with their actions. This is not a basis for dissolution.

Similarly, Trusa states that the Company is insolvent but provides no non-

conclusory allegations to support that statement. Specifically, Trusa alleges “XION

has no money to operate its business,” and “XION has taken no action to protect or

monetize its investments.”69 Other than invoking the word “insolvent” to refer to

XION in the allegations of the Complaint, Trusa does not plead any additional

factual support.70 These bare assertions are insufficient to allege insolvency,

abandonment, or managerial dysfunction; therefore, no basis for dissolution exists.71

68
Id. ¶¶ 46-47.
69
Id. ¶ 36.
70
Id. ¶¶ 36, 43.
71
The declaratory judgment count is either completely duplicative of or asserts the
necessary determinations the Court would make in resolving Counts II, III, and IV.
ESG Capital P’rs II, LP v. Passport Special Opportunities Master Fund, LP, 2015
WL 9060982, at *15 (Del. Ch. Dec. 16, 2015); Great Hill Equity P’rs IV, LP v. SIG
Growth Equity Fund I, LLLP, 2014 WL 6703980, at *28-29 (Del. Ch. Nov. 26,
2014). Further, because I am dismissing the underlying claims for failure to state a
claim or lack of standing, there is no need to resolve the declaratory judgment count.
Therefore, this claim is dismissed.

25
 C. Trusa Has Not Adequately Alleged a Claim for Fraud
In order to state a claim for fraud, a plaintiff must allege that (1) the defendant

made a false representation or omission of fact that the defendant had a duty to

disclose; (2) the defendant knew or believed that the representation was false or

made the representation with reckless indifference to the truth; (3) the defendant

intended to induce the plaintiff to act or refrain from acting; (4) the plaintiff acted or

did not act in justifiable reliance on the representation; and (5) the plaintiff suffered

damages as a result of the reliance.72

Under Court of Chancery Rule 9(b), “[i]n all averments of fraud or mistake,

the circumstances constituting fraud or mistake shall be stated with particularity,”

while “[m]alice, intent, knowledge and other condition of mind of a person may be

averred generally.”73 “To support a claim for fraud, the putative misrepresentation

must concern either a past or contemporaneous fact or a future event that falsely

implies an existing fact.”74 “[T]he plaintiff must allege circumstances sufficient to

72
Addy v. Piedmonte, 2009 WL 707641, at *18 (Del. Ch. Mar. 18, 2009); Abry P’rs
V, L.P. v. F & W Acquisition LLC, 891 A.2d 1032, 1050 (Del. Ch. 2006).
73
Ct. Ch. R. 9(b); Addy, 2009 WL 707641, at *19; Abry P’rs, 891 A.2d at 1050.
74
Winner Acceptance Corp. v. Return on Capital Corp., 2008 WL 5352063, at *7
(Del. Ch. Dec. 23, 2008) (citing Berdel, Inc. v. Berman Real Estate Mgmt., Inc.,
1997 WL 793088, at *8 (Del. Ch. Dec. 15, 1997)).

26
fairly apprise the defendant of the basis for the claim.”75 “To satisfy Rule 9(b), a

complaint must allege: (1) the time, place, and contents of the false representation;

(2) the identity of the person making the representation; and (3) what the person

intended to gain by making the representations.”76

Trusa alleges that the Managing Members knowingly made false

representations with the intent to induce him to make the Loan to XION. Trusa

states that he justifiably relied on these misrepresentations in giving the Loan, and

he would not have made the Loan had he known the truth.77 Specifically, Trusa

alleges that the Managing Members falsely represented the following facts: (1) one

hundred percent of the Loan would be invested in publicly traded companies; (2)

Nepo was making a significant financial investment in XION; (3) Trusa’s Loan

would be secured by identifiable collateral; and (4) Trusa would receive monthly

reports identifying the secured collateral. Trusa alleges that these misrepresentations

were made throughout 2010 in “a series of sales pitches, presentations, and . . .

documentation before Trusa made the Loan.”78

75
Addy, 2009 WL 707641, at *19 (citing H-M Wexford LLC v. Encorp Inc., 832 A.2d
129, 145 (Del. Ch. 2003)); Abry P’rs, 891 A.2d at 1050.
76
Abry P’rs, 891 A.2d at 1050 (citing H-M Wexford LLC, 832 A.2d at 145); see Addy
v. Piedmonte, 2009 WL 707641, at *19.
77
Am. Compl. ¶¶ 76-82.
78
Pl.’s Answering Br. 20.

27
 All of the alleged misrepresentations lack the particularity required by Rule

9(b) to state a claim for fraud.79 First, the Complaint does not allege with

particularity when the alleged misrepresentations were made—no specific dates or

times frames are given. Trusa alleges that the purported misrepresentations occurred

“before the Loan Agreement was signed in October 2010.”80 But, this “fails to allege

in any meaningful sense when” the alleged misrepresentations were made.81 It is

“the functional equivalent to providing no time parameter at all because the

misrepresentations logically could not have occurred during any other period of

time” if Trusa relied on them to sign the Agreement.82 Second, the Complaint

mentions that the alleged misrepresentations occurred in sales pitches, presentations,

and other documentation, but does not give any detail about “where or by what

means”83 the representations were made, nor does it supply any such

documentation.84 Third, the Complaint alleges that Collins, Nepo, and Mir

79
See supra note 76 and accompanying text.
80
Pl.’s Answering Br. 20.
81
Fortis Advisors LLC v. Dialog Semiconductor PLC, 2015 WL 401371, at *7 (Del.
Ch. Jan. 30, 2015).
82
Id.
83
Id. at *8.
84
Am. Compl. ¶ 7; Pl.’s Answering Br. 20.

28
collectively made these alleged statements but does not identify “who made any

particular misrepresentation.”85 A plaintiff cannot lump together defendants but

must “identify specific acts of individual defendants” and “who made any particular

misrepresentation.”86 The collective dearth of sufficiently detailed allegations about

the who, what, where, or when requires dismissal under Rule 9(b).87

Possibly recognizing the weakness of the pre-Agreement claims, Trusa

alleges that the misrepresentations are memorialized in the Agreement and reiterated

85
Fortis Advisors LLC, 2015 WL 401371, at *8.
86
Id. at *8 & n.48 (quoting Steinman v. Levine, 2002 WL 31761252, at *15 (Del. Ch.
Nov. 27, 2002)). Trusa cites to Anvil Holding Corp. v. Iron Acquisition Co. for the
proposition that every defendant is liable for his or her fraudulent conduct and for
causing the false representations in the Loan Agreement. Pl.’s Answering Br. 21.
In Anvil, however, the executives, on two distinct meeting dates, specifically were
asked about and affirmatively concealed pertinent information of which they
allegedly had actual knowledge. 2013 WL 2249655, at *3 (Del. Ch. May 17, 2013).
Thus, “plaintiffs did identify who committed the misrepresentations (and when) by
alleging all of the individual defendants participated in the omission of material
information. It does not follow from this scenario that where the alleged
misrepresentations consist of false promises rather than omissions, that one is
excused from identifying who made the false promises.” Fortis Advisors LLC, 2015
WL 401371, at *8.
87
Fortis Advisors LLC, 2015 WL 401371, at *8 (“[W]hen the lack of any such details
[regarding where or by what means any of the misrepresentations were made] is
considered together with the failure of the complaint to identify when any of the
alleged misrepresentations were made and who made any of them, the complaint
fails in my view to apprise Dialog of sufficient information concerning the
circumstances of the alleged fraud and thus does not satisfy the particularity
requirement of Rule 9(b).”).

29
in the Borrower’s Certificate.88 Specifically, Trusa argues these misrepresentations

appear in Sections 2.3, 4.5, and 4.12 of the Agreement.89 Sections 2.3, 4.5, and 4.12

generally provide that: (1) IIG, in its sole discretion, will use the proceeds of the loan

to purchase convertible debt; (2) all information given to the Lender by IIG

concerning IIG’s financial condition or for the purpose of obtaining credit is

accurate, correct, and complete; and (3) any representations made by IIG in the

Agreement or in any certificate or other document furnished by IIG are true, not

misleading, and do not omit or misstate a material fact necessary to make such

representation or warranty.90 It is unclear how the representations in the Agreement

relate to the alleged misrepresentations. Regardless, each fails to state a claim of

fraud for the following additional reasons.

According to Trusa, the Managing Members purportedly misrepresented that

one hundred percent of the Loan would be invested in publicly traded companies,

but the relevant representation identified by Trusa is that IIG/XION “shall use the

proceeds of the Loan . . . as determined by Borrower in its sole discretion.”91 There

88
Pl.’s Answering Br. 4-5; Loan and Security Agreement §§ 2.3, 4.5, 4.12.
89
Id.
90
Loan and Security Agreement §§ 2.3, 4.5, 4.12.
91
Id. § 2.3.

30
is no mention of publicly traded companies or “one hundred percent” of the Loan,

and the decision is left solely to the discretion of IIG/XION.

Trusa also alleges that the Managing Members purportedly misrepresented

that Nepo would be an anchor investor. But Trusa does not assert anywhere in the

Complaint that Nepo did not invest in the Company. Therefore, there is no allegation

that this was a fraudulent statement.

The remaining purported misrepresentations relate to the identifiable

collateral that will be acquired to secure the Loan and the monthly reports that Trusa

will receive if he invests.92 Even assuming these misrepresentations sufficiently

relate to sections of the Agreement to which Trusa cites, Trusa never explains why

these amount to anything more than unfulfilled contractual promises.93 At most,

Trusa has asserted a possible breach of contract claim, not a fraud claim. 94

92
Am. Compl. ¶ 77.
93
Loan and Security Agreement §§ 4.5, 4.12.
94
Winner Acceptance Corp. v. Return on Capital Corp., 2008 WL 5352063, at *10
(Del. Ch. Dec. 23, 2008) (“[T]he ability to plead intent generally raises the spectre
of parties using a claim for promissory fraud to pursue what in reality is a breach of
contract cause of action, but for one reason or another cannot be pleaded that way.
. . . [A] plaintiff must plead something more than a promise, mere nonperformance,
justifiable reliance, damages, and a general averment of a culpable state of mind.
To assert a claim for promissory fraud, the plaintiff also must plead specific facts
that lead to a reasonable inference that the promissor had no intention of performing
at the time the promise was made.”) (citing Berdel, Inc. v. Berman Real Estate
Mgmt., Inc., 1997 WL 793088, at *8-9 (Del. Ch. Dec. 15, 1997) (citations omitted)
(holding that “a party’s failure to keep a promise does not prove the promise was
31
 D. Trusa Has Not Adequately Alleged a Material Omission
Trusa alleges that the Managing Members of XION induced him into agreeing

to the Loan by omitting material information relating to Collins’s conflicts of

interest.95 In an arm’s length negotiation, where no special relationship between the

parties exists, “a party has no affirmative duty to speak”96 and “is under no duty to

disclose ‘“facts of which he knows the other is ignorant’ even if he ‘further knows

the other, if he knew of them, would regard them as material in determining his

course of action in the transaction in question.’”97 Thus, “any claim of fraud in an

arms’ length setting necessarily depends on some form of representation,” and “[a]

fraud claim in that setting cannot start from an omission.”98 But, if a party “chooses

to speak then it cannot lie,” and “once the party speaks, it also cannot do so partially

or obliquely such that what the party conveys becomes misleading.”99

false when made” and that the plaintiff did not adduce evidence showing that the
defendant intended to renege at the time it made the promise)).
95
Am. Compl. ¶ 80.
96
Prairie Capital III, L.P. v. Double E Hldg. Corp., 132 A.3d 35, 52 (Del. Ch. 2015)
(citing Airborne Health, Inc. v. Squid Soap, LP, 2010 WL 2836391, at *9 (Del. Ch.
July 20, 2010)).
97
Id. (quoting Prop. Assoc. 14 v. CHR Hldg. Corp., 2008 WL 963048, at *6 (Del. Ch.
Apr. 10, 2008)).
98
Id.
99
Id. (citing Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983)).

32
 Trusa concedes that the negotiations were arm’s length and does not argue

that the parties had a fiduciary relationship or other similar relationship of trust and

confidence. It is unclear whether Trusa alleges that the purported omission occurred

prior to the signing of the Agreement, in the Agreement itself, or both.100

Nevertheless, Trusa fails to allege how any representation is false or misleading or

how any representation creates an affirmative duty to disclose personal investment

information about a member.101 Thus, Trusa fails to state a claim for fraudulent

omission.

E. Trusa Has Not Adequately Alleged a Claim for Fraudulent
Transfer
Trusa alleges a fraudulent transfer occurred when XION’s managers

transferred the Loan money “other than as represented” in the prior discussions with

Trusa.102 In the chapter concerning fraudulent transfers, the Delaware Code defines

a “transfer” as “every mode, direct or indirect, absolute or conditional, voluntary or

involuntary, of disposing of or parting with an asset or an interest in an asset, and

100
Pl.’s Answering Br. 4; Loan and Security Agreement §§ 2.3, 4.5, 4.12.
101
See supra Section II.C.
102
Pl.’s Answering Br. 24.

33
includes payment of money, release, lease and creation of a lien or other

encumbrance . . . .”103 A transfer is fraudulent if a debtor makes the transfer:

(1) With actual intent to hinder, delay or defraud any
creditor of the debtor; or

(2) Without receiving a reasonably equivalent value in
exchange for the transfer or obligation, and the debtor:

a. Was engaged or was about to engage in a
business or transaction for which the remaining
assets of the debtor were unreasonably small in
relation to the business or transaction; or

b. Intended to incur, or believed or reasonably
should have believed that the debtor would incur,
debts beyond the debtor’s ability to pay as they
became due.104
A claim for fraudulent transfer also must comport with Rule 9(b) and be pled with

particularity.105

In the Complaint, Trusa states:

Any transfers to affiliates or insiders made when XION
was insolvent or which caused XION to become insolvent
are fraudulent transfers.

Upon information and belief, transfers were made to
XION’s insiders and affiliates including but not limited to

103
6 Del. C. § 1301.
104
Id. § 1304(a).
105
Renco Gp., Inc. v. MacAndrews AMG Hldgs. LLC, 2015 WL 394011, at *10 (Del.
Ch. Jan. 29, 2015) (citing Winner Acceptance Corp. v. Return on Capital Corp.,
2008 WL 5352063, at *12 (Del. Ch. Dec. 23, 2008); Dodge v. Wilm. Trust Co., 1995
WL 106380, at *6 (Del. Ch. Feb. 3, 1995)).

34
 Collins, Greystone Capital, Nepo, David Nepo, and
companies affiliated with Nepo and David Nepo.

To the extent that Collins, Mir, and Nepo cause XION to
transfer assets to themselves and their affiliated
companies, any such transfers were made with actual
intent to hinder, delay, or defraud Trusa and other
creditors.

. . . To the extent that Collins, Mir, and Nepo caused XION
to transfer assets to themselves and their affiliated
companies without receiving a reasonably equivalent
value in exchange for the transfer, any such transfers left
XION with insufficient remaining assets and incurred
debts beyond XION’s ability to pay Trusa and other
creditors.106

Count VI states, in part, “There is only evidence of $682,500 of the $1,100,000

loaned to XION invested in U.S. publicly traded companies based on SEC

filings.”107 In an effort to bolster his claims, Trusa’s brief argues this means

“$417,500 was not invested in publicly traded companies.”108 Trusa goes on to

assert that Nepo and other XION insiders and affiliates received this money “before

debts to creditors like Trusa were satisfied,” and this caused XION’s insolvency and

cancellation.109 But, Trusa fails to provide even the most basic details regarding the

106
Am. Compl. ¶¶ 90-94.
107
Id. ¶ 86.
108
Pl.’s Answering Br. 24; Am. Compl. ¶¶ 90-94.
109
Pl.’s Answering Br. 24; Am. Compl. ¶¶ 90-94.

35
“transfer.” Trusa does not state who received what assets or where or when any such

transfer of assets occurred.110 Merely parroting the elements of the statute does not

meet the minimum pleading requirements for a claim under Section 1304(a)(2).111

Therefore, this claim is dismissed.

F. Trusa Has Not Alleged a Claim for Conspiracy to Commit Fraud
or Aiding and Abetting Fraud
“The elements of civil conspiracy under Delaware law are: (i) a confederation

or combination of two or more persons; (ii) an unlawful act done in furtherance of

the conspiracy; and (iii) damages resulting from the action of the conspiracy

parties.”112 The elements of aiding and abetting are “(i) underlying tortious conduct,

(ii) knowledge, and (iii) substantial assistance.”113 As Trusa has failed to allege an

110
See Hospitalists of Delaware, LLC v. Lutz, 2012 WL 3679219, at *15 (Del. Ch.
Aug. 28, 2012) (“[T]he Complaint does not reference an imminent business or
transaction in which Integra was about to engage other than in conclusory fashion .
. . nor does the Complaint contain any information about the state of Integra’s
solvency before or after the redemption by BC2.”).
111
See Spring Real Estate, LLC v. Echo/RT Hldgs., LLC, 2013 WL 6916277, at *7
(Del. Ch. Dec. 31, 2013) (“The Complaint does not state a claim for constructive
fraudulent transfer because these allegations are conclusory and mere recitations of
the fraudulent transfer statute.”); Hospitalists of Delaware, 2012 WL 3679219, at
*13 (“[E]ven under Delaware’s minimal notice pleading standard, simply reciting
the statutory or common law elements of an offense, as Plaintiff has here, is
insufficient to state a claim upon which relief may be granted.”).
112
Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLLP, 2014 WL
6703980, at *22 (Del. Ch. Nov. 26, 2014) (quoting Albert v. Alex Brown Mgmt.
Servs., Inc., 2005 WL 2130607, at *10 (Del. Ch. Aug. 26, 2005)).
113
Id. at *23.

36
underlying “tortious” or “unlawful” act, I need not consider the other elements of

either cause of action, and both of these claims are dismissed.

III. CONCLUSION
For the foregoing reasons, Count I for a declaratory judgment is dismissed as

duplicative and for failure to state a claim. Counts II and III for breach of fiduciary

duty and Count IV for dissolution are dismissed for lack of standing and failure to

state a claim. Counts V, VI, VII, and VIII for fraud, fraudulent transfer, civil

conspiracy to commit fraud, and aiding and abetting fraud, respectively, are

dismissed for failure to state a claim.

IT IS SO ORDERED.

37