STATE OF MINNESOTA F1L EDPS u DISTRICT COURT

STATE OF MINNESOTA
COUNTY OF HENNEPIN
F1L E D P S u
DISTRICT COURT
lei! K°H S 3 H^ 3M 3
TBNTff JUDICIAL DISTRICT
CASE TYPE: DERIVATIVE ACTION
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James Bergeron and Gilbert Gutknecht, on
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behalf of themselves and derivatively on behalf \
of Bixby Energy Systems, Inc.,
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Court File No. Cr fL * ' '
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Plaintiffs,
v.
COMPLAINT
Bixby Energy Systems, Inc., as a nominal
defendant, Robert Walker, Dennis DeSender,
Peder Davisson and John Does 1 - 5 ,
Defendants.
INTRODUCTION
This case is brought by directors and shareholders of Bixby Energy Systems, Inc.
("Bixby") as a derivative action. The claims of Plaintiffs James Bergeron ("Bergeron") and
Gilbert Gutknecht ("Gutknecht") are primarily for breaches of fiduciary duties by certain officers
of Bixby who engaged in acts of corporate waste, self-dealing, violations of their duty of candor,
as well as engaging in reckless conduct in violation of their duty of care. The Individual
Defendants have mismanaged Bixby and have conspired with one another and others to pilfer
Bixby for their own purposes. The Individual Defendants' wrongful conduct has now caused
Bixby to be unable to meet its commitments as they become due, making Bixby insolvent as a
practical matter. The continuation of such wrongful conduct threatens Bixby and its
shareholders with irreparable injury.
255267.1
While serving as Directors, Plaintiffs were largely kept in the dark concerning the
Individual Defendants' wrongful acts. The Individual Defendants denied Plaintiffs access to
information from Bixby employees and, despite their positions as Directors, Plaintiffs were told
by Defendants not to "meddle" in the management of Bixby. The Individual Defendants
repeatedly concealed information from Plaintiffs about Bixby, the efficacy of its technology, its
dire financial condition, its ability to meet its commitments, and the civil and criminal liability to
which Bixby is now exposed as a result of the Individual Defendants' misfeasance and
malfeasance. Despite repeated requests, the Individual Defendants have denied Plaintiffs access
to Bixby's books and records, refused to conduct meetings of the Bixby Board of Directors and
declined to schedule a meeting of Bixby shareholders.
Plaintiffs bring this action to, in part, obtain equitable relief without which Bixby will be
lost and the investment made by so many will become worthless. Specifically, Plaintiffs request
that this Court issue an Order appointing new interim management or a receiver charged with the
responsibility to (1) conduct a financial accounting and a legal assessment of pending claims, (2)
handle all future Bixby shareholder communications, (3) appoint an independent Special
Litigation Committee to further assess and prosecute the allegations set forth herein, and (4)
conduct a shareholder meeting within 20 days to elect new directors. For all the reasons set forth
below, making a demand on the current Bixby Board of Directors has been, and will continue to
be, futile and is excused under the applicable Rules.
THE PARTIES AND THE PLAYERS
1.
Plaintiff Bergeron is a resident of the State of Illinois residing at7S410 Green
Acres Drive, Naperville, Illinois. Bergeron owns, controls, or has the right to acquire at least
4,410,625 shares of common stock in Bixby. In addition to investing over $3.25 million of his
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own money in Bixby, Bergeron's family members and close friends invested an additional $2.0
million in Bixby. Bergeron has served on the Bixby Board of Directors since December 2006,
although that service has been repeatedly frustrated by the conduct of the Individual Defendants.
2.
Plaintiff Gutknecht is a resident of the State of Minnesota residing at 3936 N.W.
Birmingham Lane, Rochester, Minnesota. Gutknecht owns, controls, or has the right to acquire
3 57,425 shares of common stock in Bixby. Gutknecht has served on the Bixby Board of
Directors since April 2007, although that service has been repeatedly frustrated by the conduct of
the Individual Defendants.
3.
Nominal Defendant Bixby was founded hi 2001 and was incorporated as a
Delaware corporation in 2002. Bixby's headquarters and principal place of business are located
at 68931 139th Lane N.W., Ramsey, Minnesota. Despite raising tens of millions of dollars since
it was founded, Bixby is an unproven business which is now, as a practical matter, insolvent.
Upon information and belief, Bixby is also the subject of investigations by several government
entities, the full scope of which are unknown to Plaintiffs Bergeron and Gutknecht in part
because the Individual Defendants have concealed such information from them.
4.
Defendant Robert Walker ("Walker") is the President, Chief Executive Officer,
and Chairman of the Board of Directors of Bixby. Walker has controlled Bixby at all times since
it was founded in 2001. Walker has directed all aspects of Bixby's activities, which have
primarily focused on raising money from investors and spending that money in a wasteful,
imprudent fashion.
5.
Defendant Dennis DeSender ("DeSender") is a resident of the State of Minnesota
temporarily residing in Minneapolis, Minnesota. DeSender is titled a "consultant" to Bixby, but
at all relevant times has served as Defendant Walker's primary confederate and agent in
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conducting the affairs of Bixby. Upon information and belief, DeSender has even held himself
held out as Bixby's Chief Financial Officer. DeSender's primary functions appear to have been
to raise money for Bixby and collaborate with Walker on Bixby's strategic directions.
Defendant DeSender is a felon who, according to a criminal docket, was convicted of bank fraud
in 1998. (U.S. District Court Case. No. 0:97-er-00163 -RHK-FLN-1.) On March 30, 2011,
Defendant DeSender pled guilty to tax evasion and is awaiting sentencing by the United States
District Court for the District of Minnesota. Despite a demand from Plaintiffs that DeSender's
relationship with Bixby be terminated, Defendants Walker and Davisson have refused to do so.
6.
Defendant Peder Davisson ("Davisson") is a resident of the State of Minnesota
officing at 4125 Quebec Avenue North, Minneapolis, Minnesota. Defendant Davisson is a
lawyer who has served at all relevant times as Corporate Counsel to Bixby and has also served as
Bixby's Secretary. Davisson has assisted and facilitated the wrongful conduct of Defendants
Walker and DeSender. (Jointly, Defendants Walker, DeSender, and Davisson may be referred to
in this Complaint as the "Individual Defendants.")
7.
Defendants John Doe 1 - 5 are persons whose identity is currently unknown to
Plaintiffs and who have conspired with, assisted, and engaged in the wrongful conduct asserted
herein which sought to deprive Bixby of its assets, rights and opportunities.
8.
Non-party Kenneth Casavant ("Casavant") is a Director of Bixby serving in that
position since 2006. Casavant is Walker's brother-in-law. While a very accomplished
academician, Casavant has no experience in the business world. Casavant, while serving as an
outside director of Bixby, has never taken a position contrary to the interests or desires of
Walker. Casavant, because of his relationship with Walker, is not an independent director.
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Casavant has refused to cooperate with the efforts of Plaintiffs Bergeron and Gutknecht to end
the wrongful conduct of the Individual Defendants.
9.
Non-party Philip Wood ("Wood") is a Director of Bixby serving in that position
since August 2010. Wood also serves as a consultant to Bixby and has, on information and
belief, been paid hundreds of thousands of dollars by Bixby without Bixby receiving any
commensurate benefits for those payments. Further, Wood's employer is receiving monies from
Bixby. Because of the financial relationship between Wood, his employer, and Bixby, Wood is
not an independent director and has never taken a position on the Bixby Board contrary to the
interests of Defendant Walker. Wood has refused to cooperate with the efforts of Plaintiffs
Bergeron and Gutknecht to end the wrongful conduct of the Individuals Defendants.
JURISDICTION AND VENUE
10.
The violation of various fiduciary duties as alleged herein, including the duty of
candor, care, and loyalty, all occurred in the State of Minnesota. Jurisdiction and venue are
proper in Hennepin County because Bixby regularly conducts business there. Further, all of the
Individual Defendants transact and conduct business in Hennepin County. Defendant Davisson
offices in Hennepin County and, until his upcoming sentencing, Defendant DeSender resides in
Hennepin County. Finally, another action is pending in Hennepin County which seeks similar
equitable relief in the form of the appointment of a receiver for Bixby {Global Partners United
LLC, a Nevada limited liability company, v. Bixby Energy Systems, Inc., a Delaware
corporation, and Robert Walker, an individual, Hennepin Co. Dist. Ct. File No. 27-CV-l 15321J. To avoid inconsistent adjudications and in the interest of judicial economy, the instant
action and the Global Partners action should be joined.
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11.
Although the Individual Defendants have periodically allowed its corporate
standing to lapse since 2002, Bixby is currently a Delaware corporation. This Court will be
asked to apply Delaware law to the Defendants' wrongful conduct. Plaintiffs' efforts to have a
Special Litigation Committee appointed to investigate the allegations set forth herein failed when
Defendant Walker and non-parties Casavant and Wood declined to participate in a properly
called Special Meeting of Bixby's Board of Directors. Instead, Defendants Walker and Davisson
proposed creating a committee whose makeup was not independent and which they could
control. Given the nature of Plaintiffs' allegations, any further prerequisite demand required
prior to the institution of a derivative action would be futile and is therefore excused.
BACKGROUND
Bixby - The Company's Dire Financial Condition Today
12.
Despite the fact that Bixby now has technology and a viable product which could
result in a meaningful return to its investors, Bixby finds itself in serious distress today as a result
of the wrongful conduct of Defendants. The distressful conditions which Bixby faces today
include:
255267.1
a.
Being under investigation by the Securities and Exchange Commission,
the scope of which investigation is not known to Plaintiffs;
b.
Upon information and belief, being under investigation by the Internal
Revenue Service, the scope of which investigation is not known to
Plaintiffs;
c.
Being the subject of grand jury subpoenas relating to potential claims, the
scope of which subpoenas are not known to Plaintiffs;
d.
Having Defendant DeSender, a previously convicted felon who served as
Walker's primary confederate, plead guilty on March 30, 2011 to evading
over $800,000 in taxes;
e.
Breaching its contract with its main distributor, Global Partners United,
LLC ("GPU"), and having GPU sue Bixby seeking, among other things,
the appointment of a receiver;
6
13.
f.
Having its main manufacturer/fabricator refuse to extend Bixby any credit,
being required to pay money in advance before any
manufacturing/fabrication takes place, and not having the cash to make
such payments;
g.
Being in default on a settlement agreement which required Bixby to pay
$800,000 as a result of a breach of contract; and
h.
Being in default on hundreds of thousands of dollars of notes which are
past their maturity date.
In the face of these problems, the Individual Defendants have:
a.
Abruptly canceled Board of Directors meetings and refused to schedule
such meetings despite Plaintiffs' requests that they do so;
b.
Failed to conduct a meeting of Bixby's shareholders in the past four years;
c.
Refused Plaintiffs' demand for a shareholder list;
d.
Declined to provide information to the Plaintiffs necessary to their role as
directors and have now required Plaintiffs to institute legal action to obtain
books and records to which Plaintiffs are legally entitled;
e.
Declined to terminate Defendant DeSender despite his criminal activities
and demand by Plaintiffs that he be terminated immediately;
f.
Upon information and belief, continued to attempt to raise money from
investors through the distribution of misleading information to existing
Bixby shareholders; and
g.
Used Bixby's assets to hire legal counsel to protect their own legal
interests, which interests are inconsistent with Bixby's interests.
Bixby - Its History
14.
The Individual Defendants have held Bixby out as a "new energy" company
dedicated to finding and developing technologies that provide clean, economical energy
solutions. For a decade, since its inception in 2001, the Individual Defendants have portrayed
Bixby as a "early stage" company which explores various types of "revolutionary" technologies.
Those "revolutionary" technologies have included using kernel corn and other biomass materials
as fuel pellets for a "corn burning stove," researching a vertical access technology to harness
255267.1
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energy from the wind, exploring the use of biomass materials like algae, and the development of
a more efficient carburetor. None of those technologies resulted in any meaningful net income
for Bixby.
15.
In recent years, Bixby has focused on a coal devolatilization and liquefaction
system which appears to have promise. This system is designed to super-heat coal (without
burning) thereby releasing natural gas and creating semi-activated carbon. It is the only asset of
meaningful value to Bixby today. The conduct of the Individual Defendants has now caused the
main distributor of that system to file a lawsuit against Bixby. In addition, the conduct of the
Individual Defendants has now caused the manufacturer/fabricator of that system to deny Bixby
any credit.
16.
Bixby has never been profitable and, today, Bixby cannot meet its obligations as
they become due. Bixby is currently in default on its obligations to note holders, to a party to a
settlement agreement in which Bixby remains obligated to pay nearly $400,000, to numerous law
firms it has retained to handle a variety of legal issues, and now, to the entity distributing
Bixby's only real product.
17.
For the past decade, the Individual Defendants kept Bixby in business by raising
funds from investors, including Plaintiffs. Defendants Walker and DeSender have repeatedly
advised investors and others that Bixby's success was just around the corner. From its inception,
the Defendants Walker and DeSender with the aid and assistance of Defendant Davisson have
raised over $60 million in equity and debt from nearly 1,800 people and entities. In the same
period, despite the ongoing investments and the repeated assurance of near term financial
success, Bixby's accumulated losses soared as reflected on its financial statements:
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Accumulated Deficit
2006
2007
2008
2009
($ 23,038,365)
($ 34,975,690)
($ 48,728,719)
($128,800,263)
2010
($141,218,000)
But for the reckless conduct of the Individual Defendants, this deficit would not be nearly as
staggering as it is today.
Bixby - Defendant Walker's Control and Mismanagement
18.
Bixby was founded by Walker. Walker's history includes the founding of Select
Comfort Beds, which he invented and tried to manage until he was forced to leave. Walker
holds himself out to be an inventor and visionary. As confessed in articles in the Star Tribune in
2006 and in the Twin City Business in 2007, Walker understands his own limitations:
"I'm very good at starting a company, but there are others who are
more interested in running them." (Star Tribune, May 2006.)
"I will design and build the racecar, but I'm not as interested in
racing it, because I think I can find people out there who are better
racecar drivers." (Twin City Business, May 2007.)
Walker has not followed his fleeting introspective insight. While conceding that Bixby has
evolvedfiroma company focused on research and development to an operating company, Walker
stated in a January 2010 email to Plaintiffs, "Your job is not to run the company; that is mine."
Walker now, in concert with Individual Defendants DeSender and Davisson, has driven Bixby
into insolvency and exposed Bixby to possible civil and criminal liabilities.
19,
Walker has used improper means to retain control of Bixby. Walker's improper
means have included removing directors who question him, denying information necessary for
255267.1
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Board members to exercise business judgment, loading the Bixby Board with individuals he
controls, and failing to hold meetings of Bixby shareholders.
20,
In 2006, two former officers of Medtronic and Deluxe Corporation - Arnold A.
Angeloni and Wendell King - were serving on Bixby's Board of Directors. These two directors
became concerned about how investors' money was being spent, requested a forensic audit of
Bixby and retained the law firm of Greene Espel P.L.L.P. to conduct the audit. These two
directors also attempted to stop the solicitation of money by the Individual Defendants while the
forensic audit was occurring. Defendant Walker's response was to corral a majority of Bixby
shareholders and, by using misleading information, convince them to vote to remove these
outside directors. Walker explained the removal to Bixby shareholders as necessary to avoid
"closing the company's doors." Walker failed to disclose that he had put his own children on the
Bixby payroll for tasks which Bixby did not need to have performed, which tasks his children
were incapable of performing, and for which they were being paid, with benefits, nearly
$200,000 a year. Walker knew that the result of a forensic audit would have unearthed his
misuse of Bixby's assets.
21.
Having removed the only two truly independent directors, Walker then invited his
own brother-in-law, Casavant, to join the Bixby Board. Plaintiffs Bergeron and Gutknecht were
also asked to join the Bixby Board in late 2006 and early 2007, without the benefit of accurate
information about the events leading to the removal of the two prior outside directors. Walker
told Bixby shareholders that Bergeron would bring "financial expertise" and that Gutknecht
would bring insights into public policy. In a newsletter to Bixby shareholders in 2007, Walker
specifically stated that Bergeron would bring a "keen understanding to the Board of the
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challenges faced with starting, building and operating a new business." Gutknecht, because of
his high profile, was featured on the cover of the company's March/April 2007 newsletter.
22.
Walker used the installment of Bergeron and Gutknecht as Directors to establish
Bixby's credibility with Bixby shareholders and potential investors. However, Walker never
utilized or enlisted Bergeron or Gutknecht's advice or judgment with respect to the management
of Bixby and, in fact, ignored it. Further, Walker and Davisson increasingly kept Bergeron and
Gutknecht in the dark with respect to the operations of the company by, for example,
downplaying the seriousness of government investigations and overstating Bixby's prospects.
23.
When Bergeron and Gutknecht attempted to get confirmatory information from
Bixby employees, those employees were told by Individual Defendants Walker and Davisson not
to talk to Bergeron and Gutknecht. When Bergeron attempted to get information about Bixby
from third parties doing business with Bixby, Defendant Walker accused him of "meddling." At
one point, Defendant Davisson as Corporate Counsel and Secretary intervened on Defendant
Walker's behalf and wrote: "My advice to the Board and management is to suspend all
communications with the Board since it isn't being handled properly." In order to ensure that
there was no effective oversight of his activities, Walker reduced the number of Bixby Board
meetings and, ultimately, canceled scheduled Board meetings and conference calls, refused to
reschedule such meetings and declined to attend Special Board meetings called by Plaintiffs
themselves. The Individual Defendants stopped providing any information to Plaintiffs and
required Plaintiffs, in their capacity as Bixby directors, to seek judicial relief to obtain
information as benign as a list of Bixby shareholders, Bixby financial statements and Bixby tax
returns.
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24.
From late 2006 through early 2010, Bixby's Board of Directors consisted of
Bergeron, Gutknecht, Walker, and Walker's brother-in-law Casavant. After Bergeron had been
told to stop "meddling," Walker installed Wood on the Board in the summer of 2010. Wood is a
resident of London who was allegedly brought on the Bixby Board to assist Bixby with going
public on a foreign exchange, to raise still more money for Bixby, and to assist Bixby's efforts to
open markets in Europe. In order to secure Wood's allegiance and consolidate his own control
over the Bixby Board, Walker arranged for Bixby to pay Wood over $150,000 in consulting fees
as well as for an expense account and gave Wood's company a monthly retainer. Upon
information and belief, neither Wood nor his company has ever performed any services which
resulted in any value to Bixby. In addition, Plaintiffs were never told that Wood had worked for
Langbar International, a company based in England which, according to news report, had been
tainted by scandal.
25.
The Individual Defendants have not kept Bixby shareholders appraised of Bixby's
condition which has effectively deprived them of their rights. On information and belief, the last
shareholder meeting of Bixby occurred in 2006. Efforts by the Plaintiffs to call and schedule a
shareholder meeting have been prevented by the Individual Defendants who have repeatedly
refused to provide Plaintiffs a shareholder list.
The Individual Defendants Misled Investors
26.
From Bixby's inception, the Individual Defendants sought to raise money using
the vision of developing alternative technology to entice investors. Bixby raised over $60
million primarily in the form of equity. Numerous offering documents were generated by
Davisson, Walker, and, upon information and belief, DeSender. DeSender, who had been
convicted of bank fraud, would share the offering documents with potential investors conveying
255267.1
\2
a story of Bixby's great potential. Specifically, there were several offerings of Bixby common
stock, two Series A preferred stock offerings and a Series B preferred stock offering. The
Individual Defendants also solicited investors to provide debt financing by offering notes with
high interest rates and substantial grants of warrants to purchase Bixby stock.
27.
At the end of Bixby's fiscal year on May 31, 2010, Bixby had over forty million
shares of common stock outstanding, over 600,000 shares of Series A stock outstanding, over 2.2
million options outstanding, and over forty million warrants outstanding. Since that time, on
information and belief, the number of shares or rights to acquire Bixby stock have increased in
light of other offerings orchestrated by the Individual Defendants.
28.
On information and belief, the Individual Defendants used mail and telephonic
communications to make these solicitations. The Defendants knew, or should have known, that
Bixby's potential, which they were touting, was being mismanaged, grossly overstated, and
could subject Bixby to civil and criminal liability.
29.
While Plaintiffs never received any cash payment for serving on the Bixby Board
of Directors and now may lose the millions of dollars which they invested in Bixby, the money
raised by the Individual Defendants went to support salaries of well over $300,000 annually to
Defendants Walker and DeSender in addition to supporting Walker's own family members and
Walker's travels. On information and belief, hundreds of thousands of dollars were also paid to
Defendant Davisson's law firm. This remuneration was paid to the Individual Defendants
against a backdrop of accelerating losses for Bixby and over the objection of the Plaintiffs.
30.
To support their ongoing solicitation of investors and creditors, the Individual
Defendants employed a number of artifices, including a newsletter to Bixby shareholders called
"The Bixby Blaze" which contained misleading information about Bixby's accomplishments and
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13
prospects. Walker also gave numerous speeches touting Bixby and sought out promotional
opportunities in publications. It is now clear that Walker's public statements about Bixby's
operations, as well as its prospects, were grossly overstated. For example, to solicit investment
in Bixby, the Individual Defendants persistently asserted that Bixby would "go public" in the
near future:
Date
Source
09/05 Bixby Blaze
Article
Bixby Intending to Go Public This Winter
"This is the news that many of you have been
waiting to hear. The Board of Directors and
management have determined to go public this
winter."
02/06 Bixby Blaze
The Latest on Our Plan to Go Public
After discussing a reverse merger as a method
of going public, Walker writes "So . . . we're
now ready to take off. 2006 is the year that it
is all going to happen."
06/06 Star Tribune
Coal Burning Stove is Hot
"But all this is a preamble to Walker's business
plan. He figures to take Bixby public late this
year and raise another $15 to $20 million . . .."
03/07 Twin City Business
Bob Walker's Plan to Transform the Global
Energy Industry
Walker states that going public is
"imminent[.]"
04/09 Bixby Blaze
Bixby Files Its S-4 and What That Means
"After months of preparation and drafting we
are pleased to announce that the S-4 Joint
Proxy Statement was filed on Friday, April 20,
2009. At over 500 pages of disclosure, this
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Date
Source
Article
represents the first and largest step in bringing
the company public."
06/09 Bixby Blaze
Stock Plan
"As you are aware we recently filed our S-4
with SEC which was the next step in getting
our stock trading. While management is not
comfortable giving price targets for the stock,
we did ask Michael Membrado, a New York
securities attorney and partner in the merger
[who said] 'I'd say the stock could reasonably
be expected to trade in the $ 12 to $ 15 per share
range during the Chelyan Phase II and in the
$45 to $50 per share range during Chelyan
Phase III.'"
02/10 Bixby Blaze
S-4 Filing Update
"Bixby received its S-4 application back last
week with additional comments [from the
SEC]. . . . Bixby is reviewing the comments
now and working up the answers for these
comments so that they can submit an updated
S-4."
01/11 Letter to Shareholders
"As we have continued to tell you, please
understand that the important thing is not to go
public as soon as possible but rather to realize
liquidity at a time we are positioned properly."
5j*
T"
»1" -1-
"We became convinced that the London
Exchange was our best choice . .."
31.
Defendant Davisson, as Secretary and Corporate Counsel, knew, or should have
known, that Bixby could not go public in the United States. The Individual Defendants were
aware that Bixby operated without meaningful internal controls and was not Sarbanes-Oxley
compliant - which was required before Bixby could "go public" in the United States. The
Individual Defendants also knew that, after filing the Report on Form S-4 with the Securities and
255267.1
15
Exchange Commission ("SEC"), there was no indication the SEC would approve the registration,
given the dozens of questions being asked which, on information and belief, the Individual
Defendants could not effectively answer. Further, as early as 2006, an investment banking firm
advised Walker that "investors won't invest in a project if the company may not be a going
concern and there are fundamental open questions about the company's business model. The
multi-million dollar bridge loan suggests that management should consider putting the company
on a diet immediately." In part because of Walker's reckless inability to manage the expenditure
of cash by Bixby, Bixby was always the subject of a qualified audit and was in no position to go
public in the United States.
32.
In the spring of 2010, to continue the "going public soon" drumbeat, the
Individual Defendants purportedly began efforts to "go public" on a foreign exchange rather than
disclose to Bixby shareholders that "going public" in the United States was futile. However, the
Individual Defendants were quickly made aware that Bixby was also not positioned to "go
public" on a foreign exchange.
33.
The fact that Bixby's statements about going public were primarily an artifice the
Individual Defendants employed to raise money was concealed from Plaintiffs who were never
given truthful information about the actual status of efforts to register Bixby stock.
34.
Knowing that his own salary, and the salaries of Defendants DeSender and
Davisson, and those of his own children, depended on the infusion of more cash, Walker also
made efforts to be quoted in various publications touting Bixby's prospects. For example,
Walker made the following public statements - all of which now appear untrue or, at least,
misleading:
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Date
Source
Article
05/02/06
Star Tribune
Coal Burning Stove is Hot
Quoting Walker about Bixby's "stove"
business as saying "I see us as the Standard
Oil of biomass energy . . . I think this could
be a billion dollar business."
06/28/10
MinnPost
Bixby Launches Coal to Gas - Tech
Talking about getting out of Bixby's stove
business and Bixby's move to coal
devolatilization, Walker said this could be a
billion dollar business and we would really
be doing ourselves a disservice by focusing a
lot of our attention on the stove business,
which could only be multimillion."
04/26/10
Industrial Fuels and
Power Newsletter
Bixby Energy Systems Promises Fossil Fuel
Revolution
Citing Walker's speech in London and
stating that Bixby had a $ 1.3 billion deal
from Canada for the production of ammonia
and a $12 billion Memorandum of
Understanding from China.
35.
Walker also placated existing investors and enticed new investments by
suggesting that Bixby's opportunities were much grander than they actually were. Examples of
Walker's "exaggerations" include the following:
255267.1
Date
Source
Article
09/05
Bixby Blaze
United Parcel Service Interested in Bixby
Technology
02/06
Bixby Blaze
Bixby Energy Systems Acquires the Saltman
02/08
Bixby Blaze
Bixby Energy and GSP Minnesota
Enhancing Relationships, Stretching
Opportunities
17
05/08
Bixby Blaze
Bob Walker Attends Gasification Conference
in London
08/08
Bixby Blaze
Bixby To Sign Gas Sales Contracts With
ECA
Bixby Looking At Joint Venture
Opportunities In Other Countries
08/09
Bixby Blaze
Large Mineral Company Working with
Bixby
Bixby Energy Contracts Millward Brown for
Carbon Market Study
Bixby Energy Selects Sidley and Austin Firm
for International Business
General Mills Begins Meeting with Bixby
Energy
11/09
Bixby Blaze
Bixby Signs Deal with Bostonia for Chelvan
Will Steger to Champion Bixby Technology
Bob Walker Speaks at National Conference
in China
02/10
Bixby Blaze
More Chinese Delegations Visiting Bixby in
the Coming Weeks
36.
Defendant Walker's statements were made in a reckless and misleading fashion
designed to entice further investment in Bixby and distract Bixby shareholders from Bixby's
mismanagement and accelerating losses. Upon information and belief, Defendants DeSender
and/or Walker repeatedly collaborated with Walker to prepare and disseminate these misleading
statements.
37.
Plaintiffs' efforts to determine the veracity of such statements were criticized by
Walker as "meddling" and Walker chastised Plaintiffs saying it was "not their job to run the
business" — it was his.
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18
The Global Partners United Contract and Bixby's Breach of That Contract
38.
On August 20, 2009, Bixby entered into a Licensing Agreement with Global
Partners United, LLC ("GPU"). The Licensing Agreement gave GPU the exclusive right to
secure customers, market, and distribute Bixby's coal devolatilization and liquefaction
technology in China. Pursuant to the Licensing Agreement, GPU then entered into agreements
with numerous parties in China assuming that Bixby could and would perform. Bixby entered
into a second agreement with GPU on December 9, 2009. Under that second agreement, Bixby
was to manufacture and ship a number of test units to China. A series of other agreements
followed in the spring of 2010. Under those agreements, Bixby was to manufacture and provide
GPU with five "test" units by specific dates. The agreements with GPU presented Bixby with an
opportunity to begin manufacturing, testing, and proving its patented technology and to begin to
generate meaningful revenue.
39.
The agreements with GPU presented an opportunity for the Individual Defendants
to entice still more investment in Bixby. Defendants Walker and DeSender went to China and,
upon their return, exaggerated the relationship with GPU to Bixby shareholders and potential
investors by stating "at this meeting, GPU requested 770 of our units to be delivered to various
locations in China this year. Further, they responded that we plan our production in the future so
that we will be positioned to deliver 1,500 of our units to them in 2011, 2,500 in 2012 and 3,500
in 2013."
40.
The Individual Defendants knew but did not disclose to Bixby's shareholders that
Bixby would not be able to fully perform the GPU agreements due to Bixby's poor cash position.
Bixby quickly breached the contract with GPU in part because it did not have sufficient funds to
meet the terms of the contract as a result of the Individual Defendants' mismanagement.
255267.1
19
41.
In addition, upon information and belief, the Individual Defendants caused Bixby
to breach its agreements with GPU, in part, because having determined the scope of the China
opportunity they turned their attention to grand ambitions and lost focus of the steps necessary to
success and future growth.
42.
In the Fall of 2010, GPU's counsel wrote to Defendant Davisson stating:
This firm represents Global Partners United LLC ("GPU"). I am
writing to address Bixby Energy Systems, Inc.'s ("Bixby")
ongoing and disturbing conduct concerning Bixby's failure to
satisfy its contractual commitments to GPU, and the potentially
catastrophic consequences thereof. Both Bixby and GPU sit on the
precipice of achieving tremendous success in China, yet Bixby's
inability to complete fully even the first operational gasification
system threatens to derail this immense opportunity. In this letter,
GPU offers several immediate steps that can keep both Bixby and
GPU on track to take advantage of the opportunities currently
available in China.
43.
GPU has now filed a lawsuit against Bixby and, because of Bixby's insolvency,
has sought the appointment of a receiver. GPU has asserted in its Complaint that:
255267.1
a.
GPU had to advance $4.5 million to enable Bixby to perform under the
agreements given Bixby's insolvent state;
b.
Bixby did not use the money advanced by GPU to perform on its contract
with GPU, but used it for other purposes;
c.
Walker acknowledged in a letter to Bixby shareholders that Bixby does
not have sufficient money to stay in business absent additional fundraising
beyond the $60 million in equity and debt he has already raised.
d.
Bixby has "repeatedly breached and continues to breach its contractual
obligations and commitments to GPU."
e.
Walker has repeatedly made misrepresentations to potential investors, to
the public and to Bixby shareholders.
f.
That "many Chinese customers want nothing to do with Bixby."
g.
Walker made representations about Bixby liquefaction technology which
contradict representations made to GPU about that technology's current
viability.
20
h.
44,
Walker has terminated Bixby employees who are indispensable to Bixby's
ability to perform its agreements with GPU.
Plaintiffs have not been kept fully informed of the status of compliance with the
GPU agreement and were not even provided a copy of the GPU Complaint by the Individual
Defendants.
Bergeron and Gutknecht Try to Shift Bixby's Direction
45.
After 2006 - when Defendant Walker removed the two Directors who questioned
his expenditures and after being told that he needed to put Bixby on a "diet" - Walker was also
told directly by Plaintiffs Bergeron and Gutknecht that costs were out of control. In early
November 2009, Bergeron wrote to Walker advising him of the need to slash over $700,000 in
excessive salaries which were primarily going to Walker, Walker's children and Defendant
DeSender. Specifically, Bergeron wrote:
With that in mind I am going to share with you (board members
only) what I would do to reduce costs if this were my company.
Cost Reductions
1. Bob [Walker]- $162,000. Bob, you will remember when the
board approved your salary increase it was based on a survey you
had done by a compensation company for a CEO running a
$25,000,000 business. At the time, Bixby was doing $10,000,000
in sales and was forcasted to do $40,000,000 in the coming year.
Based on this information we approved a salary of $325,000 which
seemed reasonable given the projected sales. Prior to the review
you were making $135,000 and you agreed to defer taking the
increase until Bixby could afford to pay for it.
Somewhere along the line you began taking the full amount even
though the company sales went to zero. . .. Under the
circumstances, I think the fair thing would be for you to defer half
of your salary until such time the company is producing positive
operating revenue. This amounts to $162,000.
2. Dennis [DeSender] - $151,000. Dennis makes about $302,000
in consulting fees and I would ask that he also defer half this
255267.1
21
amount until Bixby has positive operating revenue and is able to
pay for it. This amounts to $151,000.
3. Melanie [Walker] - §110.000. Melanie runs the marketing
department but since we are not a consumer products company and
do no marketing this position is not needed.
4. Tim [Walker] - 565,000. With an office of eight people there
is no need for an IT manager.
5. Payroll Taxes - $40,000. These are the taxes associated with
the above payroll reductions.
6. Health Insurance - $84,000. I can't figure out what is
happening here. From the cash flow statement it appears Bixby is
spending $168,000 per year insuring about 8 employees (some
with families). This amounts to over $20,000 per employee. In
our fence business we insure 11 employees (some with families),
for an annual cost of $44,000, or $4,000 per employee.
7. Selzer/Hayward - up to $156,000. We had taken these two
consultants off the payroll when we did our last pass at cost
reduction. Since then the activity in North Wilkesboro has
dropped but they seem to be back permanently. Every time I ask
someone what they are doing they don't seem to know. They cost
us $3,000 a week. That is $156,000 a year. Why are they back on
the payroll?
The items above total $768,000.
T*
*P
T*
*F
Bob, I realize the situation with Melanie and Tim presents a
hardship for you and your family. But, your situation is not
unique. We all have to deal with these types of issues in one form
or another. The point is, you can't use shareholder money to solve
your family's problems. It is not your money.
46.
Bergeron's cost cutting advice was ignored; Walker claimed he was too busy.
When Bergeron again raised the issue of cutting costs in the summer of 2010, Walker again
ignored it, invited Wood to join the Board so he could consolidate his control, and focused on
raising more money to support his expenditures.
255267.1
22
47.
Walker cut off all meaningful communication with Plaintiffs by directing Bixby
employees not to share information with Bergeron and Gutknecht. Unable to get information
from Bixby employees or the Individual Defendants, Bergeron and Gutknecht were required to
seek information directly from others with which Bixby was doing business. When they raised
questions about the status of Bixby's defaults on its patents, Walker criticized Bergeron and
Gutknecht for "meddling." Walker stated, "Your job is not to run the company; that is mine."
48.
Davisson also worked to cutoff communications between Bixby employees and
Plaintiffs. After learning that GPU was in communication with Board members including
Plaintiffs Bergeron and Gutknecht, Davisson attempted to cut off those communications by
describing them as "inappropriate" and stating that "management manages the affairs of the
company."
49.
In November 2010, in order to save Bixby, Plaintiffs Bergeron and Gutknecht
formally approached Walker about "succession" planning to bring in a new President and Chief
Executive Officer. On November 16, 2010 Walker responded stating that he "did not intend to
resign." On or about December 1, 2010 Plaintiff Gutknecht wrote to the Board stating "it is time
for fresh faces and a fresh approach. The time has come for Bob [Walker] to move on . . . "
50.
In December 2010, the Bixby Board met and was told by a consultant invited to
the meeting by the Individual Defendants that the problems at Bixby were so severe that no one
competent would want to succeed Walker, Walker, as Chairman, prevented the Board from
considering a resolution to remove him.
51.
In March 2011, the Bixby Board was to meet again. Walker knew that Bergeron
and Gutknecht were planning to seek to have him removed. Walker abruptly cancelled the
meeting.
255267.1
23
52.
When Bergeron and Gutknecht then tried to hold a special meeting to remove
Walker, Walker refused to attend and convinced the other Board members that he controlled Casavant and Wood - to not participate, denying Bergeron and Gutknecht a quorum. When
Plaintiffs made a demand on Walker to hold a Board meeting, Walker refused. When Plaintiffs
demanded that a long overdue Bixby shareholder meeting be immediately called, Walker
refused. When Plaintiffs sought a shareholder list to call a shareholder meeting themselves,
Defendants Walker and Davisson refused to make the information available and ignored a Writ
of Mandamus issued by the Anoka County District Court. When Plaintiffs demanded that
Defendant DeSender be terminated as a result of his guilty plea to tax evasion as well as his
earlier felony conviction, Walker and Davisson refused to take action.
53.
The Individual Defendants' malfeasance has now exposed Bixby to potential civil
liabilities. Further, Bixby is the subject of a grand jury investigation and an investigation by the
Securities and Exchange Commission which, despite repeated requests, the Individual
Defendants have denied providing even basic information about to the Plaintiffs. Despite their
positions as outside Directors, Bergeron and Gutknecht have been forced to ask for judicial
intervention to obtain information about Bixby and the ongoing investigations.
54.
Plaintiffs now bring this action to protect what remains of Bixby by seeking
damages on the part of Bixby and equitable relief in the form of a judicial order requiring that
new interim management or a receiver be appointed, that a shareholder meeting be held, and that
an accounting be made.
255267.1
24
COUNTI
Breach of Fiduciary Duty - Duty of Care
(Against Defendants Walker and Davisson)
55.
Plaintiffs restate and reallege Paragraphs 1 through 54 above and incorporate
those allegations by reference as though fully set forth herein.
56.
Defendants Walker and Davisson, in their capacities as officers of Bixby, owe
Bixby, its shareholders, and its creditors, a duty to operate Bixby in a reasonable and prudent
manner.
57.
Defendants have violated the duty of care owed to Bixby, its shareholders, and
creditors through a series of reckless acts including, but not limited to, the following:
a.
The hiring and retention of Defendant DeSender, a person who was
convicted of bank fraud and has recently pled guilty to tax evasion.
Defendant DeSender was retained by Defendant Walker to engage in
fundraising for Bixby. On information and belief, DeSender was paid
millions of dollars by Bixby and was not a registered broker-dealer.
Defendant Davisson, as Corporate Counsel, failed to advise the Board
members, including Plaintiffs, that the specifics surrounding DeSender's
criminal history prohibited his solicitation of monies for Bixby or payment
of "finders' fees" by Bixby to DeSender. Furthermore, Defendants
Davisson and Walker knew, or but for their reckless conduct should have
known, that allowing DeSender to sell Bixby shares exposed Bixby to
possible criminal and civil liabilities.
255267,1
b.
When entering into agreements with GPU, Defendants Walker and
Davisson knew, or but for their reckless conduct should have known, that
Bixby would be unable to perform the terms of the agreements. Walker
and Davisson, through their reckless conduct, have now exposed Bixby to
a multimillion dollar claim by GPU in the United States, possible exposure
in China, and placed Bixby under the threat of having a receiver
appointed.
c.
Although they knew Bixby lacked the type of internal controls and
bookkeeping necessary to permit Bixby to become a publicly held
company, Defendants Walker and Davisson had Bixby enter into a
contract with an entity known as GCAI Acquisition Corporation ("GCA")
to attempt to "go public" through a reverse merger. Because of Bixby's
inability to perform, Bixby was forced to settle with GCA for
approximately $800,000 of which nearly $400,000 remains unpaid. Since
25
they knew Bixby could never "go public" in the United States, entry into
the contract with GCA was reckless and improvident.
58.
d.
Defendants Davisson and Walker had Bixby enter into a contract with
Wood and paid Wood large consulting fees. Additionally, Wood's
company received a monthly retainer to perform certain services. On
information and belief, Wood and his company have failed to perform on
the contract or provide any services and Bixby has not yet sought a return
of the monies.
e.
Defendant Walker placed his own children on the Bixby payroll and paid
them hundreds of thousands of dollars for work that was either not
necessary or for which they had little expertise or ability to perform.
f.
Defendants Davisson and Walker deprived the Bixby Board of its ability
to make reasonable business judgments for Bixby by denying or
concealing from Board members information necessary to make those
judgments, including, but not limited to, financial information, tax
information, and information about pending government investigations.
g.
Defendants failed to hold shareholder meetings and refused to hold
director meetings necessary to permit the Bixby Directors to supervise
their conduct.
h.
Defendants have used Bixby money to retain law firms to protect their
personal interests which interests are contrary to the interests of Bixby.
i.
Having raised millions of dollars for Bixby, Defendants have wasted
Bixby's money through reckless decisions designed to maintain their own
positions and have now placed Bixby in breach of numerous contracts and
promises to note holders, vendors, and others.
Because of their violations of the duty of care, Defendants have caused millions
of dollars of damage to Bixby. As a direct and proximate result of Defendants Walker and
Davisson's actions and failure to act, Bixby has been injured and is entitled to recover damages
in an amount far in excess of fifty thousand dollars ($50,000). Bixby is also entitled to obtain
equitable relief from the Court including the appointment of new management or a receiver, an
accounting, and the prompt scheduling of a shareholder meeting to elect new directors.
255267.1
26
COUNT II
Breach of Fiduciary Duty - Duty of Loyalty
(Against Defendant Walker and Davisson)
59.
Plaintiffs restate and reallege Paragraphs 1 through 58 above and incorporate
those allegations by reference as though fully set forth herein.
60.
Defendant Walker is an officer of Bixby and Chairman of the Bixby Board of
Directors. Walker has a duty to put the interest of Bixby as well as its shareholders ahead of his
own personal interests. Walker breached his duty by placing his own pecuniary interests ahead
of those of Bixby.
61.
Defendant Walker committed various acts of self-dealing, including, but not
limited to, placing his own children on the Bixby payroll, providing his children unwarranted
benefits and using Bixby's money for lavish travel.
62.
On information and belief, Defendant Walker has received over $300,000
annually from Bixby to operate and manage Bixby in a prudent fashion. However, Bixby has
been mismanaged and the payments made to Walker were wasteful and unwarranted.
63.
As Bixby's Secretary, Defendant Davisson owed Bixby and its shareholders a
duty of loyalty which, among other things, required the retention of competent counsel to
perform legal services Bixby needed. Defendant Davisson violated that duty of loyalty by
having Bixby retain Davisson's own law firm to provide legal services for which it was not
qualified and has thereby exposed Bixby to numerous claims, investigations and millions of
dollars of potential exposure,
64.
Because of the violations of duty of loyalty, Defendants Walker and Davisson
received hundreds of thousands of dollars to which they were not entitled and have caused
damage to Bixby. As a direct and proximate result of Defendants Walker and Davisson's actions
255267.1
27
and omissions, Bixby has been injured and is entitled to recover damages in an amount far in
excess of fifty thousand dollars ($50,000). Bixby is also entitled to obtain equitable relief from
the Court including disgorgement of remuneration Defendants Walker and Davisson improperly
received, misappropriated, and misused or the imposition of a constructive trust on assets these
Defendants improperly purloined from Bixby.
COUNT III
Breach of Fiduciary Duty - Duty of Candor
(Against Defendants Walker and Davisson)
65.
Plaintiffs restate and realiege Paragraphs 1 through 64 above and incorporate
those allegations by reference as though fully set forth herein.
66.
Defendants Walker and Davisson both have a duty to be candid and honest with
Bixby shareholders and prospective shareholders as well as the Bixby Board of Directors.
Walker and Davisson violated that duty in numerous respects including, but not limited to, the
following:
67.
a.
In offering documents used by Defendants to solicit investment, Walker
and Davisson routinely understated Bixby's liabilities and overstated
Bixby's prospects.
b.
In communications with Bixby shareholders, Walker and Davisson
portrayed Bixby in a misleading fashion and constantly suggested it was
"going public" in the near future.
c.
Davisson and Walker misled the Board by describing Bixby's prospects,
opportunities, and activities in a false and misleading manner and
concealing material information necessary for Plaintiffs to carry out their
duties as directors.
As recently as early February 2011, Defendant Walker sent out still another letter
to Bixby shareholders. Upon information and belief, DeSender participated with Walker in the
drafting of the shareholder communication. Defendant Davisson, as Secretary and Corporate
255267.1
28
Counsel, either did review or should have reviewed the shareholder communication before it was
distributed.
68.
Without any advance knowledge by Plaintiffs, this shareholder communication
was broadly distributed. It contains false and misleading information including, but not limited
to, the following:
255267.1
a.
"I am pleased to say that we accomplished that transition (to a new
manufacturer) who has exceeded our expectations in the quality of the
product they have produced for us as well as completing the units in a
timely fashion when given the go ahead to produce them." What
Defendants failed to state was that, because of Bixby's inability to pay the
new manufacturer, Bixby was required to pay in advance for all work
being performed, did not have sufficient cash to do so and GPU was
having to pay the manufacturer directly despite having already paid for the
machines.
b.
"We have already delivered one unit to GPU, have shipped the second unit
and intend to have the remaining three delivered in February 2011."
Defendants knew that the three units would not be shipped in February
2011 because there was no money available to pay the manufacturer. On
information and belief, a third unit was finally shipped in April 2011, but
that was only as a result of GPU's advancing money directly to the new
manufacturer.
c.
"Over the last several years, with the decline in the overall economy, there
have been a number of high profile companies charged with various
schemes involving investor fraud .. . Bixby has not escaped this n e t . . . .
At this point there is not a reasonable ability to predict the outcome of
such investigations." However, when this was written, Defendants knew
or should have known, the scope of the investigations and minimally knew
that Defendant DeSender, Bixby's chief fundraiser, was on the precipice
of pleading guilty to felony tax evasion.
d.
"As you know, we are intending to go public on the London Exchange
because we have determined, for a variety of reasons, that the U.S. market
is not the right place to be introducing our technology. We were
disappointed by the attitude on Wall Street towards doing business in
China." What Defendants failed to state is that, as a result of their
mismanagement of Bixby and the pending investigations, they could not
go public in the United States and, given Bixby's current financial state,
the likelihood of going public anywhere in the near future was untrue.
29
69.
When Plaintiffs learned of this misleading communication, they asked Defendants
Walker and Davisson to cause it to be supplemented with truthful and accurate information.
Although Defendant Davisson agreed that action was necessary, to date it has not happened.
70.
By their violations of duty of candor, Davisson and Walker have exposed Bixby
to claims for millions of dollars. As a direct and proximate result of Defendants Walker and
Davisson's actions and omissions, Bixby has been injured and is entitled to recover damages in
an amount far in excess of fifty thousand dollars ($50,000). Bixby is also entitled to obtain
equitable relief from the Court including enjoining Defendants from any further communications
with Bixby shareholders or potential investors.
COUNT IV
Civil Conspiracy
(Against AH Individual Defendants)
71.
Plaintiffs restate and reallege Paragraphs 1 through 70 above and incorporate
those allegations by reference as though fully set forth herein.
72.
The Individual Defendants and John Does 1 - 5 entered into a conspiracy and
concerted action designed to plunder Bixby, conceal information about Bixby from Bixby's
Board of Directors and shareholders, and breach fiduciary obligations owed to Bixby, its
shareholders, and, once Bixby entered the zone of insolvency, Bixby's creditors.
73.
As a direct and proximate result of Defendants' activities and failure to act, Bixby
has been injured and is entitled to damages far in excess of fifty thousand dollars ($50,000).
COUNTY
Unjust Enrichment
(Against AH Individual Defendants)
74.
Plaintiffs restate and reallege Paragraphs 1 through 73 above and incorporate
those allegations by reference as though fully set forth herein.
255267.1
30
75.
Bixby conferred valuable benefits on the Individual Defendants in the form of
cash compensation and other benefits in exchange for which it expected that competent and
honest management services would be rendered. The facts of this matter are such that it would
be unfair, unjust, and unconscionable to permit the Individual Defendants to retain the benefits
which Bixby conferred on them since, rather than rendering services, the Defendants plundered
Bixby, left it insolvent and exposed it to civil and criminal liability.
76.
Bixby is entitled to legal and equitable relief to prevent the Individual
Defendants' unjust enrichment. Such relief should include disgorgement of all improperly
gotten monies and warrants from Defendants, which are believed to be in excess of one million
dollars.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray that the Court enter an Order as follows:
1.
Employing its equitable powers to protect Bixby by removing the Individual
Defendants from any positions of influence over Bixby's operations including their positions as
officers and/or directors and appoint new management, a custodian or a receiver and then require
the custodian, receiver or new management to (1) conduct a financial accounting and an
assessment of pending legal claims, (2) handle all future shareholder communications, (3)
appoint an independent Special Litigation Committee to further assess and prosecute the
allegations set forth herein, and (4) conduct a shareholders meeting within 20 days to elect new
directors to the Bixby Board;
2.
Enjoining the Individual Defendants from selling any stock or debt in Bixby's
name and enjoining the Individual Defendants from engaging in any further communications
with Bixby shareholders or potential investors;
255267.1
31
3.
Requiring the Individual Defendants to disgorge monies and warrants improperly
taken from Bixby;
4.
Awarding Bixby actual, special, and consequential damages, including interest,
against each Individual Defendant in an amount to be proven at trial and reasonably believed to
be far in excess of fifty thousand dollars ($50,000);
5.
Awarding Plaintiffs their attorneys' fees, costs, and disbursements; and
6.
Any and all additional relief as to the Court seems just and proper.
ANTHONY OSTLUND BAER
& LOUWAGIE P.A.
Dated: April \% ,2011
By:.
Norman J. Baex (#163715)
Robert C. Moite&en (#74263)
3600 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
(612)349-6969
ATTORNEYS FOR PLAINTIFF
JAMES BERGERON
and
BEST & FLANAGAN
Thomas B. Heffelfinger (#004328X)
James C. Diracles (#0023036)
Justin P. Short (#387024)
225 South Sixth Street, Suite 4000
Minneapolis, MN 55402
(612)339-7121
ATTORNEYS FOR PLAINTIFF
GIL GUTKNECHT
255267.1
32
ACKNOWLEDGEMENT
The undersigned hereby acknowledges that costs, disbursements and reasonable attorney
and witness fees may be awarded pursuant to Minn. Stat. § 549.211, to the parties against whom
the allegations in the Summons and Complaint are asserted.
te-/(M
255267.1
33
\
V_^»
STATE OF MINNESOTA "'
COUNTY OF HENNEPIN
"J&H
James Bergeron and Gilbert Gutknecht^en
behalf of themselves and derivatively on
behalf of Bixby Energy Systems, Inc.,
DISTRICT COURT
TENTH JUDICIAL DISTRICT
CASE TYPE: DERIVATIVE ACTION
Court File No.
lnx<J
Plaintiffs,
CERTIFICATE OF
REPRESENTATION AND PARTIES
v.
Bixby Energy Systems, Inc., as a nominal
defendant, Robert Walker, Dennis DeSender,
Peder Davisson and John Does 1 - 5 ,
Defendants.
Pursuant to Rule 104 of the General Rules of Practice for District Courts, this form
must be completed and filed with the Court Administrator's Office at the time the case is
filed. The Court Administrator shall, upon receipt of the completed certificate, notify all
parties or their lawyers of the date of filing the action and the file number assigned. This
particular matter is related to Global Partners United LLQ a Nevada limited liability
company, v. Bixby Energy Systems, Inc., a Delaware corporation, and Robert Walker, an
individual, Hennepin Co. Dist. Ct. File No. 27-CV-l 1-5321.
LIST ALL LAWYERS/PRO SE PARTIES INVOLVED IN THIS CASE.
259291.1
LAWYER FOR DEFENDANT(S)
LAWYER FOR PLAINTIFF(S)
(If not known, name party and address)
James Bergeron
Bixbv Energy Systems. Inc.
Norman J. Baer (#163715)
Robert C. Moilanen (#74263)
Anthony Ostlund Baer & Louwagie P.A.
3600 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
(612)349-6969
Sean A. Shiff
Skolnick & Shiff, P.A.
2100 Rand Tower
527 Marquette Avenue South
Minneapolis, MN 55402
(612)677-7600
Mr. Robert A. Walker
CEO, President and Chairman
Bixby Energy Systems, Inc.
6893 139th Lane N.W.
Ramsey, MN 55305
Gilbert Gutknecht
Thomas B. Heffelfmger (#004328X)
James C. Diracles (#0023036)
Justin P. Short (#387024)
Best & Flanagan
225 South Sixth Street, Suite 4000
Minneapolis, MN 55402
(612)339-7121
Dennis DeSender
Bixby Energy Systems, Inc.
6893 139th Lane N.W.
Ramsey, MN 55305
Peder K. Davisson, Esq.
Davisson & Associates, PA
4124 Quebec Avenue North
Suite 306
Minneapolis, MN 55427
Dated: April 18, 2011
259291.1
H@~W^t<^\~
Norman J. Bae
Counsel for PlainEff James Bergeron
2