Verified Complaint

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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

VIACOM INTERNATIONAL INC.,

Plaintiff,

v.

WALTER A. WINSHALL, in his individual capacity and as the Stockholders’ Representative, ALI AL-BADER, DOUGLAS CARLSON, CREATIVE ARTISTS AGENCY, CHRISTOPHER E. DAWE, YAIR EGOZY,ANNE E. JENNINGS C/F CAITRIONA MCGOVERN, ANNE E. JENNINGS C/F DEIDRE MCGOVERN, W. GEOFFREY LITTLE, ESME C. LITTLE, DANIEL P. KRAFT, PETER N. RIGOPULOS FAMILY TRUST UAD 8/23/01 (GLORIA J. RIGOPULOS, TRUSTEE), JOHN SCHNEIDER, WILLIAM HERMAN, SEAN M. O’SULLIVAN REVOCABLE LIVING TRUST, GABRIEL GONCALVES, STANLEY FELD, JOHN L. STRAUSS, BRADLEY A. FELD, WARREN KATZ, GERALD ALAN POCH, TMC RETIREMENT TRUST, SAGE EQUITIES, INC., FAYERWEATHER DIVERSIFIED PORTFOLIO L.P., LESLIE B. TYLER, KRAFT GROUP, LLC, SHELDON RABINOVICI, CHERYL EPSTEIN, GILL FISHMAN, DOUGLAS E. GLEN, MARK HATVANY, ONDINA HATVANY, STEVEN M. BAUER, JULIEN NINIO, ABRAHAM LEVOVITZ, ROUDEBUSH PARTNERS, STANLEY M. GOLDSTEIN, ARNEE R. WINSHALL AS CUSTODIAN FOR AARON S. WINSHALL, SARAH G. WINSHALL 2004 CUSTODIAL PROPERTY TRUST, CABOT-WELLINGTON, LLC, COLLABORATIVE SEED AND GROWTH PARTNERS, LLC, STEFAN HATVANY, SANDOR HATVANY,MF LIMITED, BROOK ROAD NOMINEE TRUST, MOJO MUSIC, INC., NICHOLAS NEGROPONTE, KENNETH R. ROSSANO 1991 TRUST, DR. RONALD ZELAZO, FREDERICK B. BAMBER, DAVID BARONE,

C.A. No. __________

EFiled: Sep 16 2011 4:09PM EDT Transaction ID 39851767 Case No. 6874-

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RUSSELL GARDNER, EMANUEL GERARD, ISAO MIURA, JONATHAN SACKLER, RICHARD S. SACKLER, SOFTBANK CONTENTS FUND, ARNEE R. WINSHALLCUSTODIAN FOR SARAH G. WINSHALL UTMA MA, AARON GOLDSTEIN, LOUIS GOLDSTEIN, STANLEY GOLDSTEIN CUST FBO JOSHUA GOLDSTEIN UNDER MA UTMA, ACER TECHNOLOGY VENTURE FUND L.P., ACER INVESTMENT INC., IP FUND ONE, L.P., INDEPENDENT TALLOW COMPANY, ATHENA EDMONDS, NANCY JILK, HENDON PINGEON, JILK SYSTEMS, INC., DANIEL ROWE, AL HOSPERS, MARK JAFFE, OMAR KHUDARI, FRANCIS PHAN, JOELLEN YANNIS, JASON SCHNECK, BRYAN THOMAS BINIAK, CHRIS RIGOPULOS, MICHAEL C. JAMES, PHILIP WINSTON, JEFFREY LIGHT, MIDTOWN HOLDINGS LLC, MASSACHUSETTS CAPITAL RESOURCE COMPANY, WALTER A. WINSHALL ANNUITY TRUST NO. 25, MARK RABINOVICI, HAROLD GRINSPOON REVOCABLE TRUST DATED 4/26/91, AMERICAN FRIENDS OF TORAH B’YISRAEL, INC., CHRISTINE LEGGE, DANOGLES, ELENA SEIGMAN, ETHAN FENN, JOE BRISBOIS, JOE KOWALSKI, LEEANNE WILLIAMS, MARK FINCH, MATT MOSS,and ROB KAY,

Defendants.

VERIFIED COMPLAINT

Plaintiff Viacom International Inc. (“Viacom”), by its attorneys Paul,

Weiss, Rifkind, Wharton & Garrison LLP, brings this action against defendant Walter A.

Winshall, in his individual capacity and as the Stockholders’ Representative, and

defendants Ali Al-Bader, Douglas Carlson, Creative Artists Agency, Christopher E.

Dawe, Yair Egozy, Anne E. Jennings C/F Caitriona McGovern, Anne E. Jennings C/F

Deidre McGovern, W. Geoffrey Little, Esme C. Little, Daniel P. Kraft, Peter N.

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Rigopulos Family Trust UAD 8/23/01 (Gloria J. Rigopulos, Trustee), John Schneider,

William Herman, Sean M. O’Sullivan Revocable Living Trust, Gabriel Goncalves,

Stanley Feld, John L. Strauss, Bradley A. Feld, Warren Katz, Gerald Alan Poch, TMC

Retirement Trust, Sage Equities, Inc., Fayerweather Diversified Portfolio L.P., Leslie B.

Tyler, Kraft Group, LLC, Sheldon Rabinovici, Cheryl Epstein, Gill Fishman, Douglas E.

Glen, Mark Hatvany, Ondina Hatvany, Steven M. Bauer, Julien Ninio, Abraham

Levovitz, Roudebush Partners, Stanley M. Goldstein, Arnee R. Winshall as Custodian for

Aaron S. Winshall, Sarah G. Winshall 2004 Custodial Property Trust, Cabot-Wellington,

LLC, Collaborative Seed and Growth Partners, LLC, Stefan Hatvany, Sandor Hatvany,

MF Limited, Brook Road Nominee Trust, Mojo Music, Inc., Nicholas Negroponte,

Kenneth R. Rossano 1991 Trust, Dr. Ronald Zelazo, Frederick B. Bamber, David Barone,

Russell Gardner, Emanuel Gerard, Isao Miura, Jonathan Sackler, Richard S. Sackler,

Softbank Contents Fund, Arnee R. Winshall Custodian for Sarah G. Winshall UTMA

MA, Aaron Goldstein, Louis Goldstein, Stanley Goldstein Cust FBO Joshua Goldstein

Under MA UTMA, Acer Technology Venture Fund L.P., Acer Investment Inc., IP Fund

One, L.P., Independent Tallow Company, Athena Edmonds, Nancy Jilk, Hendon

Pingeon, Jilk Systems, Inc., Daniel Rowe, Al Hospers, Mark Jaffe, Omar Khudari,

Francis Phan, JoEllen Yannis, Jason Schneck, Bryan Thomas Biniak, Chris Rigopulos,

Michael C. James, Philip Winston, Jeffrey Light, Midtown Holdings LLC, Massachusetts

Capital Resource Company, Walter A. Winshall Annuity Trust No. 25, Mark Rabinovici,

Harold Grinspoon Revocable Trust dated 4/26/91, American Friends of Torah B’Yisrael,

Inc., Christine Legge, Dan Ogles, Elena Seigman, Ethan Fenn, Joe Brisbois, Joe

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Kowalski, Leeanne Williams, Mark Finch, Matt Moss, and Rob Kay, and alleges as

follows:

NATURE OF THE ACTION

1. This action arises from defendants’ failure to return to Viacom

their shares of a $131,827,980 contractual overpayment (the “Overpayment”) to which

they are not entitled.

2. Viacom made a payment of $149,770,149 to defendants and others

— all former stockholders of Harmonix Music Systems, Inc. (“Harmonix”) — based

upon the preliminary calculation of a contractual earn-out payment for 2007 under an

Agreement and Plan of Merger dated September 20, 2006 (the “Merger Agreement”), by

which Viacom acquired Harmonix in 2006. Viacom expressly conditioned the payment

as being “on account” and “without prejudice” to any of Viacom’s rights under the

Merger Agreement and stated that it “expressly reserves all rights and remedies available

to it under the Merger Agreement or otherwise.”

3. Viacom has since determined, based on the express terms of the

Merger Agreement — and has advised defendants through their designated representative

under the Merger Agreement, defendant Winshall — that the earn-out payment actually

due for 2007 was $17,942,169. Accordingly, Viacom is entitled to the return of

defendants’ shares of the $131,827,980 excess paid over $17,942,169.

4. Pursuant to the terms of the Merger Agreement, Viacom is

currently engaged in a Resolution Accounting proceeding with defendant Winshall in

order to resolve certain disputes regarding the earn-out payments pursuant to the Merger

Agreement, including disputes relating to the Overpayment. Winshall has taken the

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position that defendants have no obligation to return any part of the Overpayment,

regardless of the outcome of the Resolution Accounting proceeding and, further, that he

has no responsibility as defendants’ designated representative with respect to Viacom’s

efforts to secure a return of the Overpayment from defendants.

5. Defendants are in breach of the Merger Agreement by virtue of

their failure to return their share of the Overpayment or to acknowledge their obligation

to do so. In addition, to the extent that defendants, through their designated

representative, have taken the position that they are not obligated to return any portion of

the Overpayment, defendants have repudiated the Merger Agreement, and Viacom is

entitled to damages for that repudiation. In the alternative, if defendants do not have any

contractual obligations to Viacom in this regard, they have been unjustly enriched by

their retention of money to which they have no right, and Viacom is entitled to recover

for unjust enrichment.

6. In view of defendants’ position that they have no obligation to

return any part of the Overpayment, and that their contractually designated representative

has no responsibility with respect to Viacom’s efforts to secure a return of the

Overpayment, Viacom has commenced this action to enforce its right to the return of

defendants’ shares of the Overpayment.

THE PARTIES

7. Plaintiff Viacom is a Delaware corporation with its principal place

of business in New York, New York.

8. On information and belief, defendant Walter A. Winshall resides at

3 Ferndale Road, Weston, MA 02394. He received a portion of the Overpayment and

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executed a Joinder and Release Agreement. He was appointed as the Stockholders’

Representative pursuant to section 10.8(d) of the Merger Agreement.

9. On information and belief, defendant Ali Al-Bader resides at

House 20, Block 6, Street 7, Gada 2, Mishref, Kuwait City, Kuwait. He received a

portion of the Overpayment and executed a Joinder and Release Agreement.

10. On information and belief, defendant Douglas Carlson resides at

4576 Sanderling Circle West, Boynton Beach, FL 33436. He received a portion of the

Overpayment and executed a Joinder and Release Agreement.

11. On information and belief, defendant Christopher E. Dawe resides

at Two Southpoint Lane, Ipswich, MA 01938. He received a portion of the Overpayment

and executed a Joinder and Release Agreement.

12. On information and belief, defendant Yair Egozy resides at 39

Grape Shot Road, Sharon, MA 02067. He received a portion of the Overpayment and

executed a Joinder and Release Agreement.

13. On information and belief, defendant Anne E. Jennings C/F

Caitriona McGovern resides at 215 Middleton Road, Boxford, MA 01921-2727. She

received a portion of the Overpayment and executed a Joinder and Release Agreement.

14. On information and belief, defendant Anne E. Jennings C/F Deidre

McGovern resides at 215 Middleton Road, Boxford, MA 01921-2727. She received a


15. On information and belief, defendant W. Geoffrey Little resides at

28 Coventry Lane, Longmeadow, MA 01106. He received a portion of the Overpayment


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16. On information and belief, defendant Esme C. Little resides at 28

Coventry Lane, Longmeadow, MA 01106. She received a portion of the Overpayment


17. On information and belief, defendant Daniel P. Kraft resides at 19

Ferndale Road, Weston, MA 02493. He received a portion of the Overpayment and


18. On information and belief, defendant Peter N. Rigopulos Family

Trust UAD 8/23/01 (Gloria J. Rigopulos, Trustee) has a principal address at 4509 S.

Lockwood Ridge Road, Sarasota, FL 34239, ATTN: Gloria Rigopulos, Trustee; the trust


19. On information and belief, defendant John Schneider resides at 21

E. Huron Street, No. 1206, Chicago, IL 60611. He received a portion of the


20. On information and belief, defendant William Herman resides at

Eight Cobblestone Place, Sudbury, MA 01776. He received a portion of the


21. On information and belief, defendant Sean M. O’Sullivan

Revocable Living Trust has a principle mailing address at c/o Sean O’Sullivan, Cliff

House, Compass Hill, Kinsale, Co. Cork, Ireland; the trust received a portion of the


22. On information and belief, defendant Gabriel Goncalves resides at

5103 Oak Tree Circle, Dallas, TX 75287. He received a portion of the Overpayment and


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23. On information and belief, defendant Stanley Feld resides at 7310

Hillwood Lane, Dallas, TX 75248. He received a portion of the Overpayment and


24. On information and belief, defendant John L. Strauss resides at

3409 Hanover Avenue, Dallas, TX 75225. He received a portion of the Overpayment


25. On information and belief, defendant Bradley A. Feld has a

mailing address at c/o Mobius Venture Capital, 100 Superior Plaza Way, Superior, CO

80027. He received a portion of the Overpayment and executed a Joinder and Release

Agreement.

26. On information and belief, defendant Warren Katz resides at 66

Plymouth Street, Cambridge, MA 02141. He received a portion of the Overpayment and


27. On information and belief, defendant Gerald Alan Poch resides at

152 Canfield Drive, Stamford, CT 06902-1323. He received a portion of the


28. On information and belief, defendant TMC Retirement Trust has a

principal address at c/o Technical Marketing Consultants, Inc., 108 Westlake Drive,

Valhalla, NY 10595, ATTN: Gerald LeBow, President; the trust received a portion of the


29. On information and belief, defendant Sage Equities, Inc. has a

principal address at 86 Lake Street, Burlington, VT 05401, ATTN: David Fassler, MD;

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the entity received a portion of the Overpayment and executed a Joinder and Release

Agreement.

30. On information and belief, defendant Fayerweather Diversified

Portfolio L.P. has a principal address at 48 Fayerweather Street, Cambridge, MA 02139;


Agreement.

31. On information and belief, defendant Leslie B. Tyler has a mailing

address at THAT Corporation, 45 Sumner Street, Milford, MA 01757-1656. He received

a portion of the Overpayment and executed a Joinder and Release Agreement.

32. On information and belief, defendant Kraft Group, LLC has a

principal address at 1 Patriot Place, Foxborough, MA 02035; the company received a


33. On information and belief, defendant Sheldon Rabinovici resides

at 27 Cameo Ridge Road, Monsey, NY 10952. He received a portion of the


34. On information and belief, defendant Cheryl Epstein resides at 271

Linden Lane, Merion Station, PA 19066-1711. She received a portion of the


35. On information and belief, defendant Gill Fishman resides at 79

Holland Road, Brookline, MA 02445-5722. He received a portion of the Overpayment


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36. On information and belief, defendant Douglas E. Glen resides at

507 Bayview Drive, Manhattan Beach, CA 90266. He received a portion of the


37. On information and belief, defendant Mark Hatvany resides at Jas

St Jaume, Route Des Salins, St. Tropez 83990, France. He received a portion of the


38. On information and belief, defendant Ondina Hatvany resides at

P.O Box 2366, Mill Valley, CA 94942. She received a portion of the Overpayment and


39. On information and belief, defendant Steven M. Bauer resides at

20 Coolidge Hill Road, Cambridge, MA 02138. He received a portion of the


40. On information and belief, defendant Julien Ninio resides at 8721

Santa Monica Blvd #24, Los Angeles, CA 90069. He received a portion of the


41. On information and belief, defendant Roudebush Partners has a

principal address at 147 University Rd., Brookline, MA 02445, ATTN: Marc

Roudebush. Roudebush Partners received a portion of the Overpayment and executed a

Joinder and Release Agreement.

42. On information and belief, defendant Stanley M. Goldstein resides

at 24 Hobart Terrace, Newton, MA 02459-1354. He received a portion of the


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43. On information and belief, defendant Walter A. Winshall has a

mailing address at c/o The Enterprise Collaborative, Inc., 1340 Centre Street, Suite 207,

Newton Center, MA 02459. He received a portion of the Overpayment and executed a


44. On information and belief, defendant Arnee R. Winshall as

Custodian for Aaron S. Winshall has a principal address at Three Ferndale Road, Weston,

MA 02493-2233. He received a portion of the Overpayment and executed a Joinder and

Release Agreement.

45. On information and belief, defendant Sarah G. Winshall 2004

Custodial Property Trust has a principal address at Three Ferndale Road, Weston, MA

02493-2233. She received a portion of the Overpayment and executed a Joinder and

Release Agreement.

46. On information and belief, defendant Cabot-Wellington, LLC has a

principal address at 70 Federal Street, Boston, MA 02110; the entity received a portion

of the Overpayment and executed a Joinder and Release Agreement.

47. On information and belief, defendant Collaborative Seed and

Growth Partners, LLC, has a principal address at c/o The Enterprise Collaborative, Inc.,

1340 Centre Street, Suite 207, Newton Center, MA 02459; the entity received a portion


48. On information and belief, defendant Stefan Hatvany resides at

15b Berens Road, London NW10 5DX, UK. He received a portion of the Overpayment


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49. On information and belief, defendant Sandor Hatvany resides at

Flat 4, 4 St Michaels Gardens, London W10 5SP, UK. He received a portion of the


50. On information and belief, defendant MF Limited has a principal

address at 24 Washington Street, Belmont, MA 02478, ATTN: John Huysmans; the

entity received a portion of the Overpayment and executed a Joinder and Release

Agreement.

51. On information and belief, defendant Brook Road Nominee Trust

has a principal address at 1752 Gerritsen Avenue, Brooklyn, NY 11229-2613, ATTN:

Morris Smith c/o Esther Smith; the trust received a portion of the Overpayment and


52. On information and belief, defendant Mojo Music, Inc., Jay Rifkin,

President, has a mailing address at c/o Susan A. Wolf, Esq., Ervin, Cohen & Jessup LLP,

9401 Wilshire Blvd., Suite 900, Beverly Hills, CA 90212; the entity received a portion of

the Overpayment and executed a Joinder and Release Agreement.

53. On information and belief, defendant Nicholas Negroponte resides

at One Laptop per Child, One Cambridge Center, 10th floor, Cambridge, MA 02142. He


54. On information and belief, defendant Kenneth R. Rossano 1991

Trust has a principal address at c/o Kenneth R. Rossano, 63 Hundreds Circle, Wellesley

Hills, MA 02481-1414. He received a portion of the Overpayment and executed a


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55. On information and belief, defendant Frederick B. Bamber resides

at c/o Solstice Capital, 15 Broad Street, No. 300, Boston, MA 02109. He received a


56. On information and belief, defendant David Barone resides at

Seven Walter Griffin Road, Sharon, MA 02067-1076. He received a portion of the


57. On information and belief, defendant Russell Gardner resides at

P. O. Box 270476, West Hartford, CT 06127-0476. He received a portion of the


58. On information and belief, defendant Emanuel Gerard resides at 1

East End Ave., New York, NY 10021. He received a portion of the Overpayment and


59. On information and belief, defendant Isao Miura resides at 3-18-3,

Tokura, Kokubunji-shi, Tokyo 185-0003, Japan. He received a portion of the


60. On information and belief, defendant Jonathan Sackler has a

mailing address at c/o Purdue Pharma LP, One Stamford Forum, 201 Tresser Boulevard,

Stamford, CT 06901-3431, received a portion of the Overpayment and executed a Joinder

and Release Agreement.

61. On information and belief, defendant Richard S. Sackler resides at

c/o Jonathan Sackler, Purdue Pharma LP, One Stamford Forum, 201 Tresser Boulevard,

Stamford, CT 06901-3431. He received a portion of the Overpayment and executed a


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62. On information and belief, defendant Softbank Contents Fund has

a principal address at Izumi Garden Tower 19F, 1-6-1 Roppongi, Minato-ku, Tokyo 1-

106-6019, Japan, Attn: Akihiro Yamamoto, Manager, Incubation Department; the entity


63. On information and belief, defendant Arnee R. Winshall,

Custodian for Sarah G. Winshall UTMA MA has a principal address at Three Ferndale

Road, Weston, MA 02493-2233; she received a portion of the Overpayment and executed

a Joinder and Release Agreement.

64. On information and belief, defendant Aaron Goldstein resides at 24

Hobart Terrace, Newton, MA 02459-1354. He received a portion of the Overpayment


65. On information and belief, defendant Louis Goldstein resides at 24

Hobart Terrace, Newton Center, MA 02459-1354. He received a portion of the


66. On information and belief, defendant Stanley Goldstein Cust FBO

Joshua Goldstein Under MA UTMA has a principal address at 24 Hobart Terrace,

Newton, MA 02459-1354. He received a portion of the Overpayment and executed a


67. On information and belief, defendant Acer Technology Ventures

Fund L.P. has a principal address at c/o iD Ventures America, 5201 Great America

Parkway, Suite 270, Santa Clara, CA 95054, ATTN: Ted Lai; the entity received a


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68. On information and belief, defendant Acer Investment Inc. has a

principal address at Acer Digital Service Corp., 7F, 122 DunHua North Road, Taipei,

105, Taiwan, ROC, ATTN: Alan Tan; the entity received a portion of the Overpayment


69. On information and belief, defendant IP Fund One, L.P. has a

principal address at c/o iD Ventures America, 5201 Great America Parkway, Suite 270,

Santa Clara, CA 95054, ATTN: Ted Lai; the entity received a portion of the


70. On information and belief, defendant Independent Tallow

Company has a principal address at 1215 Chestnut Street, Newton, MA 02464; the entity


71. On information and belief, defendant Athena Edmonds has a

principal address at 30 Shady Brook Lane, Belmont, MA 02478. She received a portion


72. On information and belief, defendant Nancy Jilk resides at 26

Sandown Road, Savannah, GA 31419. She received a portion of the Overpayment and


73. On information and belief, defendant Hendon Pingeon resides at 9

Baker Bridge Road, Lincoln, MA 01773. He received a portion of the Overpayment and

executed a Joinder and Release Agreement

74. On information and belief, defendant Jilk Systems, Inc. has a

principal address at c/o David J. Jilk, 3118 Galileo Lane, Boulder, CO 80301; the entity


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75. On information and belief, defendant Daniel Rowe resides at 136

Bay View Ave., Salem, MA 01970. He received a portion of the Overpayment and


76. On information and belief, defendant Al Hospers resides at 92

Bow Lane. North Conway, NH 03860. He received a portion of the Overpayment and


77. On information and belief, defendant Mark Jaffe resides at 24869

Jim Bridger Road, Hidden Hills, CA 91302. He received a portion of the Overpayment


78. On information and belief, defendant Omar Khudari resides at 57

Bedford Street, Suite 120, Lexington, MA 02420. He received a portion of the


79. On information and belief, defendant Francis Phan resides at 10

Williams Street, No. 23, Boston, MA 02119. He received a portion of the Overpayment


80. On information and belief, defendant JoEllen Yannis resides at 66

South Hobart Street, No. Two, Brighton, MA 02135. She received a portion of the


81. On information and belief, defendant Jason Schneck resides at

4447 N. Beacon St. #1S, Chicago, IL 60640. He received a portion of the Overpayment


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82. On information and belief, defendant Bryan Thomas Biniak resides

at 10864 Savona Rd., Los Angeles, CA 90077. He received a portion of the


83. On information and belief, defendant Chris Rigopulos resides at 45

Carmine Street, No. 1A, New York, NY 10014. He received a portion of the


84. On information and belief, defendant Michael C. James resides at

187 Tremont Street, No. Three, Somerville, MA 02143-4124. He received a portion of

the Overpayment and executed a Joinder and Release Agreement.

85. On information and belief, defendant Philip Winston resides at 265

Rubinette Way, Winchester, VA 22602. He received a portion of the Overpayment and


86. On information and belief, defendant Jeffrey Light resides at c/o

Myman Abell Fineman Greenspan & Light, 11601 Wilshire Boulevard, Suite 2200, Los

Angeles, CA 90025. He received a portion of the Overpayment and executed a Joinder

and Release Agreement.

87. On information and belief, defendant Midtown Holdings LLC has

a principal address at c/o Manny Gerard, One East End Avenue, New York, NY 10021;


Agreement.

88. On information and belief, defendant Walter A. Winshall Annuity

Trust No. 25 has a principal address at Attention Walter A. Winshall, Trustee, 3 Ferndale

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Road, Weston, MA 02493; the trust received a portion of the Overpayment and executed

a Joinder and Release Agreement.

89. On information and belief, defendant Mark Rabinovici resides at

27 Cameo Ridge Road, Monsey, NY 10952. He received a portion of the Overpayment


90. On information and belief, defendant Creative Artists Agency has

a principal address at 9830 Wilshire Blvd., Beverly Hills, CA 90212.

91. On information and belief, defendant Abraham Levovitz resides at

1215 Chestnut Street, Newton, MA 02464.

92. On information and belief, defendant Dr. Ronald Zelazo resides at

772 Santa Fe Trail, Franklin Lakes, NJ 07417-2224.

93. On information and belief, defendant Massachusetts Capital

Resource Company has a mailing address at 420 Boylston Street, Boston, MA 02116,

Attention: President.

94. On information and belief, defendant Harold Grinspoon Revocable

Trust dated 4/26/91 has a mailing address at 380 Union Street, Suite 300, West

Springfield, MA 01089, Attn: Steven Korn.

95. On information and belief, defendant American Friends of Torah

B’Yisrael, Inc. has a principal address at Attn: Neal Twersky, 99 Park Avenue, Suite

2240, New York, NY 10016.

96. On information and belief, defendant Christine Legge resides at 50

Hancock Street, Watertown, MA 02472.

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97. On information and belief, defendant Dan Ogles resides at 65

Bynner Street, Jamaica Plain, MA 02130.

98. On information and belief, defendant Elena Seigman resides at 576

Trapelo Road, Belmont, MA 02478.

99. On information and belief, defendant Ethan Fenn resides at 270

Highland Ave., No. 46, Somerville, MA 02143.

100. On information and belief, defendant Joe Brisbois resides at 160

Seminary Drive, #2F, Mill Valley, CA 94941.

101. On information and belief, defendant Joe Kowalski resides at 307

Beacon St., #8, Boston, MA 02116.

102. On information and belief, defendant Leeanne Williams resides at

364 Washington Street, Cambridge, MA 02139.

103. On information and belief, defendant Mark Finch resides at 29

Indian Ridge Road, Natick, MA 01760.

104. On information and belief, defendant Matt Moss resides at 51

Royal Street, Allston, MA 02134.

105. On information and belief, defendant Rob Kay resides at 7 Merrill

Street, Cambridge, MA 02139.

JURISDICTION

106. This Court has jurisdiction over defendants pursuant to Section

10.10 of the Merger Agreement, which provides that “[e]ach of the parties hereto hereby

irrevocably and unconditionally consents to submit to the sole and exclusive jurisdiction

of the courts of the State of Delaware and of the United States District Court for the

District of Delaware (the ‘Chosen Courts’) for any litigation arising out of or relating to

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this Agreement,” and by virtue of the fact that defendants who received the vast majority

of the Overpayment at issue executed the Joinder and Release Agreement annexed as

Exhibit A to the Merger Agreement, under which they submitted to the “exclusive

jurisdiction and venue of the Federal or state courts of Delaware.” (Joinder and Release

Agreement § 7.)

107. This Court has jurisdiction pursuant to 8 Del. C. § 111 as this is an

action “to interpret, apply, enforce or determine the validity of” the Merger Agreement

from which Viacom’s claims arise.

FACTUAL BACKGROUND

108. Viacom and its acquisition subsidiary, Orpheus Acquisition Corp.,

entered into the Merger Agreement with Harmonix, the “Joining Stockholders” of

Harmonix, and Walter A. Winshall, as the Stockholders’ Representative on behalf of the

selling stockholders of Harmonix, on September 20, 2006.

109. Under the Merger Agreement, Viacom paid $175 million in Initial

Merger Consideration to the selling stockholders of Harmonix and also agreed, in Section

2.4 of the Merger Agreement, to pay to the selling stockholders Contingent Consideration

in the form of earn-outs for the years 2007 and 2008 if the Gross Profit of Harmonix —

as defined in the Merger Agreement — surpassed certain contractual thresholds, as

provided in Sections 2.1(c)(ii)(A) and (B) of the Merger Agreement. Specifically, the

contractual earn-outs payable to selling stockholders are equal to 3.5 times the amount by

which Gross Profit exceeds $32 million in 2007 and $45 million in 2008.

110. The Merger Agreement also sets forth procedures for the

resolution of any disputes that concern the calculation of the earn-outs. Specifically,

Sections 2.4(a) and (b) of the Merger Agreement provide the process by which Viacom is

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to provide to Winshall, as the Stockholders’ Representative, the bases for its calculations

of the 2007 and 2008 Earn-Out Payment Amounts, which Winshall may then timely

challenge. If the parties are unable to resolve the dispute on their own, they may submit

it to the Resolution Accountants for binding resolution, pursuant to Sections 2.4(c) and

(e) of the Merger Agreement.

111. Pursuant to Section 2.4(c) of the Merger Agreement, “[t]he

resolution of the dispute by the Resolution Accountants will be a final, binding and

conclusive resolution of the parties’ dispute.” Furthermore, pursuant to Section 2.4(e) of

the Merger Agreement, “[t]he determination of the 2007 Earn-Out Payment Amount or

the 2008 Earn-Out Payment Amount, as applicable (and if any), in accordance with the

foregoing provisions of this Section 2.4 shall be final and binding on all parties.”

112. On May 23, 2008, Viacom presented Winshall with a preliminary

calculation of the 2007 Earn-Out Payment Amount of $149,770,149, and offered to make

an initial payment “on account” based upon this preliminary calculation, “without

prejudice to any of [its] rights under the Merger Agreement,” and expressly reserving “all

rights and remedies available to it under the Merger Agreement or otherwise.” On

September 16, 2008, Viacom made that initial payment “on account” based upon its

preliminary calculation of the 2007 Earn-Out Payment Amount, providing each selling

stockholder with a pro rata portion thereof. On September 26, 2008, Winshall confirmed

that this payment was made “in the absence of an agreement on the subject” and “on

account.”

113. On June 22, 2009, Viacom presented Winshall with a revised

calculation of the 2007 Earn-Out Payment Amount and advised Winshall that he should

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“let the former stockholders of Harmonix know that it is possible that a portion of already

paid earn-out amounts may be required to be returned so that they can plan accordingly.”

114. In the fall of 2009, Viacom separately executed agreements with

certain selling stockholders, who were employees of Harmonix, agreeing to waive any

right of recoupment of the selling stockholder employees’ pro rata portions of the

Overpayment. Viacom does not seek to recover any portion of the Overpayment paid to

those persons.

115. On January 4, 2010, pursuant to Section 2.4(a) of the Merger

Agreement, Viacom presented Winshall with the final 2007 Earn-Out Statement,

containing a calculation of the 2007 Earn-Out Payment Amount of zero. Winshall set

forth a written description of his disagreements with the 2007 Earn-Out Statement in a

2007 Summary of Issues that he presented to Viacom on January 22, 2010, pursuant to

Section 2.4(a) of the Merger Agreement.

116. Pursuant to Section 2.4(c) of the Merger Agreement, Viacom and

Winshall agreed to submit Winshall’s disagreements concerning the Earn-Out Payment

Amounts in both 2007 and 2008 to Resolution Accountants for resolution.

THE RESOLUTION ACCOUNTING PROCEEDING

117. On December 8, 2010, the Resolution Accountants, Viacom, and

Winshall executed an engagement letter, providing for the resolution of Winshall’s

disagreements.

118. During the course of briefing for the Resolution Accounting

proceeding, Viacom revised its calculation of the final 2007 Earn-Out Payment Amount

to $17,942,169. Based upon this revision of the final 2007 Earn-Out Payment Amount,

Viacom has overpaid the 2007 earn-out by $131,827,980.

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119. The hearing in the Resolution Accounting proceeding is scheduled

for September 21, 2011, and a decision is expected, by agreement of the Resolution

Accountants and the parties, on or about November 20, 2011.

120. Winshall has taken the position that defendants have no obligation

to return any part of the Overpayment, regardless of the outcome of the Resolution

Accounting proceeding and, further, that he has no responsibility as defendants’

designated representative with respect to Viacom’s efforts to secure a return of the

Overpayment from defendants.

FIRST CAUSE OF ACTION

Breach of Contract

121. Viacom repeats and realleges paragraphs 1 through 120 as if fully

set forth herein

122. The Merger Agreement is a valid and enforceable contract made

and entered into by and among Viacom, its acquisition subsidiary Orpheus Acquisition

Corp., Harmonix, the “Joining Stockholders” of Harmonix, and Walter A. Winshall, as

the Stockholders’ Representative on behalf of the selling stockholders of Harmonix, as of

September 20, 2006.

123. Under the Merger Agreement, defendants were entitled to receive

no more than their proportionate share of $17,942,169 in connection with the 2007 earn-

out.

124. Defendants in fact received their proportionate share of

$149,770,149, but have failed to return their share of the Overpayment or to acknowledge

any obligation to do so.

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125. Sections 2.4(c) and (e) of the Merger Agreement provide that

defendants are to be bound by the Resolution Accountants’ determination of the parties’

disputes in the Resolution Accounting proceeding, including the parties’ dispute over the

2007 Earn-Out Payment Amount.

126. Winshall’s assertion to Viacom that defendants have no obligation

to return any part of the Overpayment, regardless of the outcome of the Resolution

Accounting proceeding and, further, that he has no responsibility as defendants’

designated representative with respect to Viacom’s efforts to secure a return of the

Overpayment from defendants, constitutes a repudiation of the Merger Agreement and an

anticipatory breach by defendants insofar as it evinces defendants’ intention not to be

bound by the Resolution Accountants’ determination, in violation of Sections 2.4(c) and

(e).

127. Viacom has suffered damages as a result of defendants’ breaches,

in an amount to be determined at trial.

128. In view of defendants’ position that they are not bound by the

Resolution Accounting proceeding if it imposes any obligation on them, Viacom has

commenced this action to enforce its right to the return of defendants’ shares of the

Overpayment.

SECOND CAUSE OF ACTION

Declaratory Judgment


set forth herein.

130. An actual controversy now exists between Viacom and defendants

as to the return of the Overpayment. That controversy has been created by defendants’

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failure to return to Viacom their pro rata portion of the Overpayment and by Winshall’s

insistence that he does not represent defendants in the Resolution Accounting proceeding

insofar as it may result in an enforceable determination that recipients of the

Overpayment are liable to Viacom.

131. The parties’ positions with respect to the Overpayment give rise to

an actual controversy that is ripe for judicial determination in that the parties require

declaratory relief in order to establish their rights and obligations under the Merger

Agreement.

132. By reason of the foregoing, pursuant to the Uniform Declaratory

Judgments Act, Del. Code Ann. tit. 10, § 6501, et seq., Viacom is entitled to a declaration

of this Court that:

(a) defendants breached the Merger Agreement;

(b) defendants are bound by any determination in the Resolution

Accounting proceeding; and

(c) in the alternative, defendants have been unjustly enriched.

THIRD CAUSE OF ACTION

Unjust Enrichment


set forth herein.

134. In the alternative, defendants have been unjustly enriched at

Viacom’s expense.

135. Through their retention of their pro rata portions of the

Overpayment, defendants have been enriched.

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136. Viacom has been prejudiced to the extent that the Overpayment

exceeds the calculation of the 2007 Earn-Out Payment Amount.

137. Viacom’s prejudice is directly related to defendants’ enrichment,

given that each results from the Overpayment.

138. Upon receipt of the Overpayment, Winshall had knowledge and

accepted that the Overpayment was “on account” and “without prejudice” to Viacom’s

rights under the Merger Agreement, which, upon information and belief, was conveyed to

the other defendants. As such, there is no justification for defendants’ unjust enrichment.

139. If defendants are determined not to have any contractual obligation

to Viacom in this regard, there will be no remedy at law against defendants to cure the

unjust enrichment resulting from the Overpayment.

140. Viacom has suffered damages as a result of this unjust enrichment,

in an amount to be determined at trial.

PRAYER FOR RELIEF

WHEREFORE, Viacom hereby demands judgment as follows:

(a) declaring that defendants breached the Merger Agreement;

(b) declaring that defendants are bound by any determination in the

Resolution Accounting proceeding;

(c) declaring, in the alternative, that defendants have been unjustly

enriched;

(d) awarding money damages to Viacom in an amount to be

determined;

(e) awarding Viacom the costs and expenses, including attorneys’

fees, incurred in prosecuting this action; and

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(f) awarding such other relief as the Court deems just and proper.

Dated: September 16, 2011

Leslie Gordon FagenDaniel J. LeffellRobert A. Atkins1285 Avenue of the AmericasNew York, New York 10019-6064Telephone: (212) 373-3000Facsimile: (212) 757-3990

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

By: /s/ Stephen P. Lamb Stephen P. Lamb (#2053)Joseph L. Christensen (#5146)500 Delaware Avenue, Suite 200Post Office Box 32Wilmington, Delaware 19899-0032Telephone: (302) 655-4410Facsimile: (302) 655-4420

Attorneys for Viacom International Inc.

Verified Complaint

Documents

Transcript of Verified Complaint