Announcements

8.14.12 | Ashcroft Law Firm Client Wins Significant Victory in Ownership Dispute Over RPost International

Contact: Mark Corallo
(703) 402-2249
August 14, 2012


Ashcroft Law Firm Client Wins Significant Victory in Ownership Dispute
Over RPost International

Washington, DC – The Ashcroft Law Firm is pleased to announce a significant victory for one of its clients in a California courtroom.

The Ashcroft Law Firm assisted plaintiff Ken Barton of Los Angeles in a case, Barton v RPost International Ltd. et al (Superior Court of CA, County of LA, Case #YC061581), involving the disposition of over 6 million shares of common stock in a company he helped start in the late 1990s, RPost International Limited.

Following a multi-week bench trial, Judge Stuart M. Rice found that Mr. Barton’s two co-founders, Zafar Khan and Terrance Tomkow (defendants), had taken actions with “malice, oppression and fraud” to “unlawfully convert [Mr. Barton’s] shares of stock.”

Judge Rice awarded Mr. Barton his original 6,016,500 shares of common stock, as well as $100,000 in general damages, punitive damages in an amount to be determined by the court in further proceedings, and his costs of suit as the prevailing party. 

In ruling that defendants had deprived Mr. Barton of his shares of RPost International stock, Judge Rice stated that the defendants “also retroactively created and modified corporate resolutions to re-create the history supporting the result that they sought…. It also defies credibility that the best evidence of the issuance of stock in RPost, that being the shareholder registry, has either been misplaced or destroyed.”

The Judge continued, “While the current RPost principals continue to engage in aggressive fundraising, extolling the anticipated future success of RPost, they have nonetheless adopted the position in this trial that the common shares of stock in RPost have no value…. The court cannot help but wonder, however, how the preferred shareholders would react had they listened to the testimony of Mr. Henry [RPost’s valuation expert witness] and defendant Khan in which they attempted to convince this court that the shares of RPost presently have no value.”
The Ashcroft Law Firm believes the ruling will have a significant impact on RPost investors, and will support Mr. Barton’s efforts as an active shareholder to advocate for good corporate governance at RPost. 

Mr. Barton has a separate complaint, filed in Los Angeles Superior Court in July 2011, which alleges that, as part of their scheme to defraud Mr. Barton as a creditor, RPost management transferred nearly $1 million in cash, as well as valuable patents to the Bermuda-based RMail entity, which is owned by insiders. Mr. Barton’s related complaint also alleges that RPost wrongfully transferred other assets to another recently created Bermuda-based entity, RPost Communications Limited (RComm).  The insider controlled RMail entity (along with RPost) is currently pursuing patent enforcement litigation against Adobe, Amazon, PayPal and others. The trial on the fraudulent conveyance claims (case #YC 065259) is expected to begin in Los Angeles in a matter of months before Judge Rice. 

In support of Mr. Barton’s current case, the Ashcroft Law Firm will continue to examine other corporate actions taken by the defendants in the past for compliance with U.S. laws, such as tax and transparency rules, including defendants’ past efforts to move assets and patents offshore.  On behalf of Mr. Barton, the Ashcroft Law Firm will also closely monitor the patent suits that the defendants have filed against large tech organizations.

In this case, former U.S. Attorney for the Eastern District of Texas John Ratcliffe, now a partner in the Ashcroft Law Firm, served in an advisory role to lead attorney Patrick McGarrigle of McGarrigle, Kenney & Zampiello, APC in Chatsworth, California. Also assisting with the international and securities aspects of the case were Ian Portnoy and Richard Kraut of Dilworth Paxson LLP. Mr. Barton can be reached via email at .(JavaScript must be enabled to view this email address). The complete ruling from the court has been posted at Barton RPost Win


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About The Ashcroft Group and the Ashcroft Law Firm: 

In 2005, Former U.S. Attorney General John Ashcroft and David Ayres founded the Ashcroft Group, LLC with offices in Washington DC and St. Louis, MO.  The Ashcroft Law Firm, LLC was established in 2007 and expanded the firm’s presence to Boston, Dallas, Austin and Nashville. 

The Ashcroft Group, LLC specializes in strategic consulting for corporations worldwide in the areas of homeland security, corporate governance, litigation strategy, data security, crisis management, regulatory advice, corporate finance and entrepreneurial ventures.  To best service its clients and their often-complex needs, they maintain two separate entities: the consulting firm and the law firm.

The Ashcroft Group, LLC and its affiliates advise and invest in companies in the homeland security and law enforcement marketplaces focusing on areas in public and private markets, particularly in the homeland security, law enforcement and regulatory fields, where there is a demonstrated demand for innovative solutions to today’s security needs and tomorrow’s security challenges. To learn more, visit www.ashcroftgroupllc.com.