This case was last updated from PACER on 09/22/2021 at 05:39:42 (UTC).

Reputation.com, Inc. v. Mullarkey et al

Case Summary

On September 21, 2021, Reputation.com, Inc. (“Reputation” or “Plaintiff”), represented by Nicole Lynn Chessari of Goodwin Procter LLP, filed a personal property fraud lawsuit against Michael Mullarkey (“Mullarkey”), Social Mecca, Inc. d/b/a Nuvi (“Nuvi”) and Fortis Advisors LLC (solely in its capacity as the Stockholder’s Agent, “Fortis”) (collectively, “Defendants”) seeking damages and cost of the suit, among other reliefs, for alleged fraudulent misrepresentation by the Defendants. This case was filed in U.S. District Court in the Northern District of California with Judge Donna M. Ryu presiding. 

 

In the complaint, the Plaintiff alleged that, “Defendant Mullarkey—the largest Nuvi shareholder (43.3%), through what Reputation believes is his wholly owned entity, ODK Capital Management, LLC (“ODK”)—defrauded Reputation into acquiring and merging with Social Mecca, Inc. d/b/a Nuvi and d/b/a Brickfish (“Nuvi”) through fraudulent representations about Nuvi’s historical revenue and annual recurring revenue (“ARR”)” and “Mullarkey lied and falsified records regarding what he claimed to beNuvi’s largest customer, Hertz Corporation and certain of its affiliated entities including Hertz Car Sales, Thrifty, and Dollar (“Hertz”), to make it appear as though Nuvi’s prospects were over $4 million brighter than they were to make Nuvi more desirable to prospective buyers. Throughout the negotiations, Mullarkey represented to Reputation that Nuvi had $4.7 million of “bad debt” with Hertz and Hertz-affiliated entities (“Hertz”), which factored into the Nuvi financial statements that Mullarkey provided to Reputation.”

 

The Plaintiff further alleged that, “the Hertz “bad debt” was never collectable, and Mullarkey knew it.Most of the Hertz “revenue” was based upon fake and backdated invoices created by Mullarkey months after Hertz initiated bankruptcy proceedings” and “Aware that these invoices were fake and not collectable, Mullarkey did not file atimely bankruptcy claim with the court. Rather, to cover his tracks, just a few weeks before the Merger closed Mullarkey caused Social Mecca, Inc. d/b/a Brickfish to file a fraudulent bankruptcy claim for $4.7 million—many months after such claims were barred by the court—to make it appear to Reputation that this revenue would be collectable through those bankruptcy proceedings.”

 

The Plaintiff also alleged that, “Through these blatant lies, Mullarkey successfully convinced Reputation to pay a higher premium to acquire Nuvi than it would have paid had it known the truth. If it were not for Mullarkey’s and Nuvi’s fraudulent misrepresentations, Reputation would not have entered into the Merger Agreement under the agreed-upon financial terms.”

 

There are two claims of relief laid down by the Plaintiff. The first claim is for alleged partial rescission/reformation against all Defendants. The second claim is for alleged fraud against Michael Mullarkey and Nuvi.

 

In its prayer for relief, the Plaintiff requested the Court for declaratory reliefs and damages along with punitive damages, partial rescission and/or reformation of the Merger Agreement and restitution, disgorgement of all ill-gotten gains, attorneys’ fees and costs of suit and any other relief the Court deems just and equitable.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    3:21-CV-07340

  • Filing Date:

    09/21/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Personal Property Fraud

Judge Details

Presiding Judge

Donna M. Ryu

 

Party Details

Plaintiff

Reputation.com, Inc.

Defendants

Michael Mullarkey

Social Mecca, Inc. d/b/a Nuvi

Fortis Advisors LLC

Attorney/Law Firm Details

Plaintiff Attorney

Nicole Lynn Chessari

Attorney at Goodwin Procter LLP

601 Marshall Street

Redwood City, CA 94063

 

Court Documents

3 #5

*Restricted*

3 #4

*Restricted*

3 #3

Redacted Version of Complaint

3 #2

Proposed Order

3 #1

Declaration of Nicole Chessari in Support of Administrative Motion to File Under

#3

(#3) Administrative Motion to File Under Seal Portions of Plaintiff's Complaint filed by Reputation.com, Inc.. (Attachments: #1 Declaration of Nicole Chessari in Support of Administrative Motion to File Under Seal Portions of Plaintiff's Complaint, #2 Proposed Order, #3 Redacted Version of Complaint, #4 Unredacted Version of Complaint, #5 Unredacted Version of Exhibit A to Complaint)(Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

#2

(#2) Proposed Summons. (Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

1 #2

Civil Cover Sheet

1 #1

Exhibit A Placeholder

#1

(#1) COMPLAINT FOR: 1. RESCISSION/REFORMATION; AND 2. FRAUD; DEMAND FOR JURY TRIAL against Fortis Advisors LLC, Michael Mullarkey, Social Mecca, Inc., (Filing Fee: $402.00, receipt number 0971-16414345). Filed by Reputation.com, Inc.. (Attachments: #1 Exhibit A Placeholder, #2 Civil Cover Sheet)(Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

 

Docket Entries

  • 09/21/2021
  • Docket(#4) Case assigned to Magistrate Judge Donna M. Ryu. Counsel for plaintiff or the removing party is responsible for serving the Complaint or Notice of Removal, Summons and the assigned judge's standing orders and all other new case documents upon the opposing parties. For information, visit E-Filing A New Civil Case at http://cand.uscourts.gov/ecf/caseopening.Standing orders can be downloaded from the court's web page at www.cand.uscourts.gov/judges. Upon receipt, the summons will be issued and returned electronically. Counsel is required to send chambers a copy of the initiating documents pursuant to L.R. 5-1(e)(7). A scheduling order will be sent by Notice of Electronic Filing (NEF) within two business days. Consent/Declination due by 10/5/2021. (mbcS, COURT STAFF) (Filed on 9/21/2021) (Entered: 09/21/2021)

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  • 09/21/2021
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  • Docket(#3) Administrative Motion to File Under Seal Portions of Plaintiff's Complaint filed by Reputation.com, Inc.. (Attachments: #1 Declaration of Nicole Chessari in Support of Administrative Motion to File Under Seal Portions of Plaintiff's Complaint, #2 Proposed Order, #3 Redacted Version of Complaint, #4 Unredacted Version of Complaint, #5 Unredacted Version of Exhibit A to Complaint)(Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

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  • 09/21/2021
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  • Docket(#2) Proposed Summons. (Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

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  • 09/21/2021
  • View Court Documents
  • Docket(#1) COMPLAINT FOR: 1. RESCISSION/REFORMATION; AND 2. FRAUD; DEMAND FOR JURY TRIAL against Fortis Advisors LLC, Michael Mullarkey, Social Mecca, Inc., (Filing Fee: $402.00, receipt number 0971-16414345). Filed by Reputation.com, Inc.. (Attachments: #1 Exhibit A Placeholder, #2 Civil Cover Sheet)(Chessari, Nicole) (Filed on 9/21/2021) (Entered: 09/21/2021)

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