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Oleksandr Usach v. Anatoly Tikhman

December 7, 2011

OLEKSANDR USACH, PLAINTIFF,
v.
ANATOLY TIKHMAN, INDIVIDUALLY AND AS TRUSTEE OF THE ANATOLY AND MARINA TICKHMAN LIVING TRUST U/A DATED 9/15/97 DEFENDANT.
BRAINBLUE, INC., PLAINTIFF,
v.
ANATOLY TIKHMAN, INDIVIDUALLY AND AS TRUSTEE OF THE ANATOLY AND MARINA TICKHMAN LIVING TRUST U/A DATED 9/15/97 DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge:

OPINION & ORDER

This Opinion addresses the motions to dismiss filed by the plaintiffs and counterdefendants in these related cases. Oleksandr Usach ("Usach") moves to dismiss all but the fifth counterclaim asserted in defendant and counterclaimant Anatoly Tikhman's ("Tikhman") Second Amended Answer and Counterclaims ("SACC"). Counterdefendant Brainblue, Inc. ("Brainblue") moves to dismiss both counterclaims asserted in Tikhman's First Amended Answer and Counterclaims ("FACC"). For the following reasons, both motions are granted in full.

Background

The following facts, unless otherwise stated, are drawn from the allegations contained in Tikhman's SACC and FACC, which are substantially the same. Tikhman resides in California. Counterdefendant Usach resides in the Ukraine. Counterdefendant Brainblue is a corporation formed under the laws of the British Virgin Islands and owned by Usach.

Tikhman, a Ukraine native, immigrated to the United States in 1980. Over the succeeding decades, he founded a number of software companies, some of which were acquired by larger entities. Sometime in the early 1990s, Usach cold-called Tikhman at the latter's home in California, identifying himself as a sub-contractor to a Russian consultant that one of Tikhman's businesses had been using. Usach suggested that he and Tikhman work with each other directly. Usach asserted that he could hire and train as many high-level programmers as needed to work on projects for Tikhman's businesses.

Following their initial phone conversation, Tikhman sent Usach a small programming project. Pleased with the work done on this project, Tikhman began sending additional projects to Usach and the two men developed a "close" friendship.

Usach used a variety of entities for the various projects that Tikhman's companies hired him to handle; however, Tikhman always dealt directly with Usach in negotiating and monitoring projects. Additionally, "Tikhman liberally extended credit" to Usach. "Tikhman never questioned Usach's invoices or billings" and the "only hint" that "Usach was not completely straightforward in his monetary affairs" was his "aversion to paying taxes." Usach recommended that Tikhman employ corporate entities and trusts headquartered in offshore tax havens and offered to refer Tikhman to professionals who could help Tikhman arrange his personal finances in such a way as to minimize his personal tax liabilities. Tikhman always demurred.

Over the years, Usach accrued substantial wealth. According to Tikhman, all of Usach's fortune is attributable to projects sent to him by Tikhman's businesses, or accounts and connections that Tikhman helped Usach establish.

In the spring of 2001, Tikhman and Usach had a conversation in the Ukraine regarding their future business ventures. Usach offered Tikhman a one-half interest in any one of his programming companies if Tikhman could structure its sale. Usach would build the workforce for the company and service the company's accounts. According to Usach, Tikhman would not share in any of the programming company's operating profits, but would own half the equity and be entitled to one-half of the consideration received upon a sale of the company.

Tikhman and Usach discussed their agreement several more times. This oral agreement provided that Usach would create a consulting group to service accounts that Tikhman had previously brought in; that Tikhman would use his contacts with executives at technology companies to continue to generate accounts; that these accounts should be based in the U.S., in order to generate a higher price for the eventual sale of the company; and that Tikhman would "pitch" the sale of the group to suitable U.S. buyers.

Usach's consulting group operated under the name Alex Usach Consulting and Technology Companies ("AUCT"), but the business was structured through a Bahamian corporation called Brainblue Holdings, Inc. ("Brainblue Holdings"), which in turn was a wholly owned subsidiary of defendant Brainblue. After Usach finished setting up the company, Tikhman and Usach memorialized their earlier oral agreement in a stock purchase agreement ("Stock Agreement"). The Stock Agreement was backdated to reflect the date of the oral agreement.

Tikhman built up the business by bringing in accounts and several years later, he presented an acquisition proposal to Flextronics International, Ltd. ("Flextronics"), an electronics manufacturing services corporation. After more than a year of negotiations, Flextronics acquired AUCT. Flextronics paid an initial purchase price of approximately $3 million and agreed to pay additional contingent consideration (the "Earnout") over a five year period. Tikhman structured the Earnout to be the more lucrative aspect of the deal.

As part of the sale of AUCT to Flextronics, Brainblue and Tikhman entered into a second stock purchase agreement ("Second Stock Agreement") dated April 30, 2004. The Second Stock Agreement implemented Tikhman's contractual right to half of the proceeds of the sale of AUCT to Flextronics. Pursuant to § 1 of the Second Stock Agreement, Brainblue agreed to pay [Tikhman] a purchase price . . . equal to 50% of the Purchase Price and 50% of the Contingent Consideration (as those terms are defined in the Stock Purchase Agreement, dated April 26, 2004) . . . by and among Flextronics Central Europe B.V., Brainblue Holdings, Inc. . . . and Brainblue, Inc. [Brainblue] shall make payments to [Tikhman] promptly upon receipt of such payments from [Brainblue Holdings] . . . . Flextronic's acquisition of AUCT closed in April 2004.*fn1

Brainblue and Usach paid Tikhman half of the $2.7 million received from Flextronics at the closing. On June 5, 2005, Usach sent Tikhman $675,000 as his half of the first Earnout payment. On June 5, 2006, Usach sent Tikhman $635,000 as his half of the second Earnout payment. Tikhman thought that the size of the Earnout payments was "disappointing" and he asked Usach why the payments were "less than [he] had hoped for at the time [he] negotiated the deal." Usach informed Tikhman that the business had not been doing as well as anticipated. During one of Tikhman's visits to the Ukraine, Usach "casually" showed Tikhman a printout of a report Usach said he was sending Flextronics to support that year's Earnout submission. Tikhman believed Usach's representations regarding the Earnout figures for 2005 and 2006, and did not seek to independently corroborate Usach's representations.

In late 2006, Tikhman learned that Flextronics was in negotiations to sell the AUCT group that it had acquired from Brainblue to Aricent Group ("Aricent"). Tikhman expected that Usach would contact him regarding these discussions since, among other things, there were still three Earnout payments outstanding from Flextronics's acquisition of AUCT, and if Aricent purchased AUCT, it would become responsible for making those payments to Usach and Tikhman. Usach assured Tikhman that Usach would ...


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