SECOND AMENDED COMPLAINT
Gibson, Dunn &Crutcher LLP
In order to induce her to make these investments, Radar and its executives and agentsdeceived Ms. Paley by making misrepresentations to her concerning Radar’s financial condition and prospects. In addition, they preyed on her desire to expose Word Diamonds to a larger audience by promising to integrate Word Diamonds into Radar’s flagship product, Twine.com.8.
Radar also breached the 2008 Purchase Agreement by using the proceeds of Ms.Paley’s investment for a variety of improper purposes, most of which were designed to keep Radar afloat long enough for its assets to be fraudulently conveyed to a friendly company, Evri Inc.(“Evri”), with strong ties to Radar’s management and board of directors.9.
In addition, rather than develop Word Diamonds, as it had promised to do, Radar effectively destroyed much of the value that Ms. Paley had created.10.
Specifically, pursuant to a December 20, 2008 Cross-Licensing and ServicesAgreement (the “Services Agreement”) between Word Diamonds and Radar, Radar was supposed toimprove the cross-functionality of the Word Diamonds website, and integrate the Word Diamondswebsite with Twine.com.11.
Radar was unable or unwilling to execute on many of the tasks that it had agreed to perform, however, including making the visual interface of the Word Diamonds website morevisceral. And when Ms. Paley directed Radar to discontinue those efforts and move on to more productive work, Radar ignored her directive, and instead allowed an outside company, Stimulant, tocompletely dismantle the Word Diamonds site, which, in effect, tripled the complexity and workload,destroying its ability to function for the purpose for which it was built and designed.12.
In addition, for a period of nearly a year, Radar refused to allow Ms. Paley to accessthe site or correct any of the problems that Radar itself had created.13.
Unsurprisingly, Ms. Paley’s investment in Radar has proved disastrous. As a result of Defendants’ fraud, and Radar’s breaches of the Purchase Agreements, Ms. Paley’s entire investmenthas been lost. After three years, millions of dollars, and thousands of hours, she has been left withnothing to show for her efforts except a broken site with no functionality.