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1201 Third Avenue, Suite 1600 Seattle, Washington 98101 (206) 274-2800
Plaintiffs BIONET SYSTEMS LLC, a Washington limited liability company, COLIN BRYAR, an individual, SARAH BRYER, an individual, HEATHER E. ERDMANN, an individual, J.B. CAPITAL LLC, a Washington limited liability company, ROBERT W. JOHNSON, an individual, STEVE MOORE, an individual, WILLARD B. SAMMS a/k/a ROBIN SAMMS, an individual, SHARON M. SAMMS, an individual (collectively, “Plaintiffs”) file this Complaint against defendants SCOUT ANALYTICS, INC., a Washington corporation, MARK UPSON, an individual, JOHN CONNORS, an individual, ADAM LUDWIN, an individual, IGNITION MANAGING DIRECTORS FUND III, LLC, a Delaware limited liability company, IGNITION VENTURE PARTNERS III, LP, a Delaware limited partnership, RRE VENTURES IV, LP, a Delaware limited partnership (collectively, “Defendants”) on personal knowledge of their own activities and on information and belief as to the activities of others as follows:
NATURE OF THE CASE
Plaintiffs collectively hold a near supermajority (63%) of the Series A Preferred and 73% of the Common shares issued by Defendant Scout Analytics, Inc. (“Scout”). 2.
Defendants Mark Upson, John Connors and Adam Ludwin (collectively, the Individual Defendants”) serve on Scout’s Board of Directors and constitute three of the four voting members. 3.
Defendant Connors is a partner at Defendants Ignition Managing Directors Fund III and Ignition Venture Partners III (collectively, “Ignition”). Defendant Ludwin is a partner with Defendant RRE Ventures IV (“RRE”). Collectively, Defendants Ignition and RRE hold nearly half of Scout’s Series B Preferred and 64% of Scout’s Series C and C-1 Preferred shares. Neither Ignition, RRE, nor any Individual Defendant holds any of Scout’s Series A Preferred or Common shares. 4.
Scout is a closely-held corporation and, as such, Defendants owe a fiduciary duty to Scout’s Series A Preferred and Common shareholders. Defendants have instead engaged in self-dealing, corporate waste, and gross negligence to the detriment of Scout’s