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LAW OFFICES OF NEIL M. SUNKIN s eriorcoun of California---—I 2 22908 Gershwin Drive ugountv of Los Angeles<1’: 3 Woodland Hills, CA 91364 1,521.; 01 2015Z nmS@sunkmlaw'com ‘ live Ollicer/ClerkE5 4 Telephone: 818/876-9975 sh Depu1y

By ' , i .""" 5 DOUGLAS L. CARDEN, SBN 76006 ”“‘”''°Whmgm0: 6 32022 Grenville CourtCD Westlake Village, California 91361

7 [email protected]: 818/706-2271

8ATTORNEYS FOR PLAINTIFF

9 KYME DANG

10SUPERIOR COURT OF THE STATE OF CALIFORNIA

11FOR THE COUNTY OF LOS ANGELES

12

13 ' *'KYME DANG, an individual, ) CASE No: L C 1 0 2 8 0 -l14 )

Plaintiff, )15 )

vs. )15 ) COMPLAINT FOR:

FUTURE SOUND ENTERTAINMENT, LLC, )17 a Delaware limited liability company; BARRY ) (1) FRAUDULENT TRANSFER [CIVIL

HANKERSON, an individual; JOMO ) CODE §3409.04 AND 3409.05];13 HANKERSON, an individual; WALTER ) (2) FRAUDULENT TRANSFER [CIVIL

MOSLEY, an individual; BERNARD ) CODE § 3409.04 AND 3409.05];19 PARKER, an individual; CLAYTON MOORE, ) (3) COMMON LAW FRAUD;

an individual; BLACKGROUND RECORDS, ) (4) COMMON LAW FRAUD;20 LLC, a business entity of unknown form; ) (5) DECLARATORY JUDGMENT;

BLACKGROUND MUSIC, INC., a business ) (6) BREACH OF CONTRACT;21 entity of unknown form; BLACKGROUND ) (7) INTENTIONAL INTERFERENCE

ENTERPRISES, INC., a business entity of ) WITH CONTRACT;22 unknown form; BARRY & SONS, INC., 2: ) (8) DECLARATORY RELIEF (ALTER

business entity of unknown form; BLACK ) EGO); AND23 FOUNTAIN PUBLISHING, INC., a business ) (9) INJUNCTION

entity of unknown form; BLACK FOUNTAIN, )24 INC., a business entity of unknown form; )

RESERVOIR MEDIA MANAGEMENT, INC.,)25 a New York corporation; KATHY )

HANKERSON, an individual; MOGAME )26 ENTERTAINMENT, LLC, a business entity of )

unknown form; JEFFREY TURNER, an )1:1 27 individual; and DOES 1 through 125, inclusive, ).;lJ. )

:_:i 23 DEFENDANTS. )

iii :?—— COMPLAINT A

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O O1 Kyme Dang, for her Complaint, alleges as follows:

2 1. Plaintiff is informed and believes and based thereon alleges that Defendant

3 Barry Hankerson ("Hankerson") is an individual who resides in Woodland Hills,

4 California.


6 Jomo Hankerson ("Jomo") is an individual, is a member of and manages Defendant

7 Future Sound, and manages Defendant Blackground Records, and has resided in and has

8 done and continues to do business in Los Angeles County, California.


10 Future Sound Entertainment, LLC ("Future Sound") is a limited liability company formed

11 under the laws of the State of Delaware and has done and does business in Los Angeles

12 County, California.

13 4. Plaintiff is informed and believes and based thereon alleges that Walter

14 Mosley ("Mosely"), an individual, is an attorney licensed in California, is a member of

15 Defendant Future Sound, and resides and does business in Los Angeles County,

16 California.

17 5. Plaintiff is informed and believes and based thereon alleges that Bernard

18 Parker ("Parker"), an individual, is a member of Defendant Future Sound and has done

19 and does business in Los Angeles County, California.

20 6. Plaintiff is informed and believed and based thereon alleges that Clayton

21 Moore ("Moore"), an individual, is a member of Defendant Future Sound and has done



24 Blackground Records, LLC ("Blackground Records") is a limited liability company

25 formed under the laws of the State of California and has done and does business in Los

26 Angeles County, California. Plaintiff is informed and believes that Blackground Records

27 is a suspended corporation.

28 8. Plaintiff is informed and believes and based thereon alleges that DefendantU,

COMPLAINT

O O1 Blackground Music, Inc. ("Blackground Music") is a business entity ofunknown fonn

2 that has done and does business in Los Angeles County, California.


4 Blackground Enterprises, Inc. ("Blackground Enterprises") is a business entity of

5 unknown form that has done and does business in Los Angeles County, California.


7 Barry & Sons, Inc. ("Barry & Sons") is a business entity of unknown form that has done


9 1 1. Plaintiff is informed and believes and based thereon alleges that Defendant

10 Black Fountain Publishing, Inc. ("Black Fountain Publishing") is a business entity of

11 unknown form that has done and does business in Los Angeles County, California.


13 Black Fountain, Inc. ("Black Fountain") a business entity of unknown form that has done



16 Mogame Entertainment, LLC ("Mogame") is a business entity ofunknown form that has

17 done and does business in Los Angeles, County California.


19 Kathy Hankerson ("Kathy"), an individual, is married to Hankerson and resides in

20 Woodland Hills, California.


22 Reservoir Media Management, Inc. ("Reservoir") is a New York corporation and does

23 and has done business in Los Angeles County, California, as more particularly alleged

24 below.


26 Jeffrey Turner ("Turner"), an individual, is a certified public accountant, licensed by the

27 State of California and resides and works in Los Angeles County, California.

28 17. Plaintiff is informed and believes and based thereon alleges that the11;:

COMPLAINT

O O1 ctitiously named Defendants sued herein as 1 through 125, inclusive, are business

2 entities of unknown form or individuals affiliated with Hankerson and/or one or more of

3 the business entities or individuals described above or sued herein as a DOE party, and

4 that each of them is in some manner responsible or legally liable for the events, actions,

5 transactions, and circumstances alleged herein. The true names and capacities of said

6 ctitiously named Defendants are presently unknown to Plaintiff. Plaintiffwill amend

7 this Complaint to allege the true names when the same shall have become known to

8 Plaintiff.

9 18. Plaintiff is informed and believes and based thereon alleges that Defendants

10 Blackground Records, Blackground Music, Blackground Enterprises, Barry & Sons,

11 Black Fountain Publishing, Black Fountain, Future Sound, Hankerson, Jomo, Moore,

12 Parker, Mosely, Mogame, Kathy, Reservoir, Turner, and DOES 1-125, inclusive, entered

13 into one or more agreements under which said Defendants, acting in concert, conspired

14 and agreed to willfully or knowingly engage in the acts alleged herein for the purpose of

15 committing the fraud alleged herein and of depriving Plaintiff ofproperty and rights and

16 causing injury and damages to Plaintiff. The acts of said Defendants, and each of them,

17 were in furtherance of a conspiracy to violate a legal duty for their own personal financial

18 gain. Said Defendants at all times did the acts and things alleged herein pursuant to, and

19 in furtherance of, the conspiracy and agreements alleged herein.

20 19. Plaintiff is informed and believes and based thereon alleges that at all

21 relevant times, each of the individual Defendants was the agent and/or employee of each

22 of the remaining Defendants and at all times relevant herein was acting within the course

23 and scope of that agency as to the transactions alleged herein.

24 20. Plaintiff is informed and believes and based thereon alleges that Hankerson

25 was the 100% owner or majority owner, President, Chief Operating Officer of, and/or

26 directly or indirectly managed and directed the activities of, Defendants Blackground

H 27 Records, Blackground Music, Blackground Enterprises, Barry & Sons, Black Fountain

28 Publishing, and Black Fountain (collectively, the "Hankerson Entities"). Plaintiff is

iii

COMPLAINT

O I1 informed and believes and based thereon alleges that Hankerson used the Hankerson

2 Entities as his personal piggy bank, that there is a unity of interest between Hankerson

3 and the Hankerson Entities such that the separate personalities ofHankerson and the

4 Hankerson Entities does not exist, and the recognition of the separateness of them would

5 be inequitable. Accordingly, Plaintiff is informed and believes and based thereon alleges

6 that the Hankerson Entities are in reality mere alter egos ofHankerson.

7 21. Blackground Records was formed by Hankerson and became a successful

8 record label with many star artists under contract and multi-million dollar selling albums,

9 including albums that had reached numbers 1, 2, 3, 4, and 5 on the Billboard charts.

10 Blackground Records has sold over 16,000,000 albums and had distribution contracts

11 with Virgin Records, Universal Records and Interscope Records.

12 22. A judgment was entered on May 10, 2011, in favor of Plaintiff and against

13 Hankerson for $5,847,886.99. As of January 31, 2015, the Judgment, with interest,

14 exceeds $7,283,234.

15 23. Plaintiff entered into a settlement agreement with Hankerson effective

16 January 1, 2012, (the "Settlement Agreement") which, among other things, required

17 Hankerson to pay Plaintiff the principal amount of $4,600,000 together with interest at

18 ve percent (5%) per annum from January 1, 2014, through December 31, 2015, and ten

19 percent (10%) per annum from January 1, 2016, until the principal amount was paid in

20 full. The Settlement Agreement required Hankerson to pay to Plaintiff 35% of all

21 moneys that he or the Hankerson Entities and other entities identified in the Settlement

22 Agreement received after January 1, 2012 until the balance of the settlement amount set

23 forth in the Settlement Agreement was paid.

24 24. On or about January 1, 2012, Blackground Records signed and delivered to

25 Plaintiff a written guaranty (the “Guaranty”) in which Blackground Records guaranteed

26 payment to Plaintiff of the settlement amount in the Settlement Agreement together with

E3); 27 interest due thereunder. No amount of the Guaranty ever has been paid.

28 25. The Settlement Agreement also provides that payments to Hankerson or the

M 5COMPLAINT

1 Hankerson Entities were required to be paid to Turner, and he was to pay Plaintiff the

2 agreed upon percentage. Further, Turner was required to prepare and provide Plaintiff

3 periodic accountings. Turner is, and at all times has been, the long-time accountant for

4 Hankerson, Blackground Records and the Hankerson Entities and he facilitated all

5 payments that were made alleged below to Kathy, Mogame, Masonya Washington,

6 Laurence Muhammed, and Hankerson. The Settlement Agreement provides at paragraph

7 6, among other terms, as follows:

8 c. Collection of Cash Receits from Other Paors.9 Hankerson shall instruct each and every person, other than the

Interscope Related Entities, from whom he reasonably10 expects cash sums will be paid to himself, his wife or his11 minor children and step children that such cash sums shall be

paid to Turner for his benet. If any cash sums are received12 by Hankerson, Hankerson's wife, or Hankerson's minor

children and step children from any person other than Turner,13 then within five (5) days after his receipt of such cash sums,14 Hankerson shall provide to Neil M. Sunkin a full, complete

and accurate statement itemizing each such cash sum and15 setting forth, in reasonable detail, the following information:16 (i) the name, contact person and address of the payee, (ii) the

reason for the payment, (iii) whether Hankerson reasonably17 believes the payee or a person related to the payee will pay

additional cash sums to Hankerson, and (iv) whether the18 payee has been notied to make future payments of cash19 sums to Turner for the benefit of Hankerson.

20 d. Pament of Cash Receits y Hankerson.Concurrently with the delivery of a statement made pursuant

21 to paragraph 6.c., Hankerson shall pay Dang, in the manner22 set forth in Paragraph 5.b., an amount equal to 35% of the

Cash Receipts received by Hankerson less the federal and23 state income taxes due on such Cash Receipts determined in24 the same manner as set forth in Paragraph 6.a.(vii).

25 e. Accountin and Pament y Turner.

26 (i) Within ten (10) business days after the Partiesc; 27 sign and deliver this Agreement, Hankerson shall cause

Turner to provide Dang with an accounting of all Cash:;_f 23 Receipts from January 1, 2012, through the date theg, Agreement is signed and delivered. The accounting shall

:__COMPLAINT

l1 disclose, at a minimum, the Cash Receipts from the l2 Interscope Related Entities and the Cash Receipts, if any,

from each of the Other Payors, including the name, contact3 person and address of each payor.

4 (ii) On a quarterly basis from the date the Partiessign and deliver this Agreement, Turner shall account to

5 Dang for all of the Cash Receipts in his possession, custody6 or control. The accounting shall include, at a minimum, the

amount of each cash sum and cash equivalent sum received7 by Turner, the amounts deducted from such cash and cash

equivalent sums and the reasons therefore, the date each cash8 sum and cash equivalent sum was received by Turner, the9 name, contact person and address of the payor, and the reason

for the cash sum and cash equivalent sum being paid to10 Turner for the benefit of Hankerson, if Turner knows or can11 reasonably ascertain the reason for the payment.

(iii) Within ten (10) business days after the Parties12 sign and deliver this Agreement,

13 (A) Hankerson shall cause Blackground Records to14 pay Dang, for the benefit of Hankerson, an amount equal to

35% of the Cash Receipts paid by the Interscope Related15 Entities between January 1, 2012, and the date the Parties ‘

sign and deliver this Agreement and continuing thereafter16 until Turner begins to collect the Cash Receipts from the ’17 Interscope Related Entities, and

18 (B) Hankerson shall pay Dang an amount equal to35% of the Cash Receipts paid by the Other Payors between

19 January 1, 2012, and the date the Parties sign and deliver this20 Agreement.

(iv) Turner shall pay Dang 35% of the Cash21 Receipts in his possession, custody or control as often as he22 pays any of the Cash Receipts to Hankerson, Blackground

Records or any Controlled Entity, but not less frequently than23 quarterly.

24 Additionally, the Settlement Agreement required Turner to maintain various records for

25 the benet of Plaintiff. Plaintiff is informed and believes and based thereon alleges that

26 at all times relevant, Turner had knowledge of the Settlement Agreement, its terms, and1::

l<'.": 27 the obligations imposed on him in the Settlement Agreement.

ff-{V 28 ///{3}}

__ COMPLAINT p

O O1 FIRST CAUSE OF ACTION

2 (Fraudulent Transfer [Civil Code §§ 3409.04 and 3409.05] Regarding

3 Payments to Future Sound by Reservoir Against Defendants,

4 Hankerson, Jomo, Future Sound, Moore, Parker, Mosely, Blackground

5 Records, Blackground Music, Blackground Enterprises, Barry & Sons,

6 Black Fountain Publishing, Black Fountain, Inc., Reservoir, Turner,

7 and DOES 1-90)

8 26. Plaintiff realleges and incorporates herein by reference each of the

9 allegations above as if set forth in full herein.

10 27. Prior to the date of the Judgment, through one or more of the Hankerson

11 Entities, Hankerson owned and controlled certain valuable assets, including music

12 publishing rights, recording rights, and copyrights. These assets, hereinafter referred to as

13 the "Hankerson's music rights" are more particularly described in a Composition and

14 Master Co-Publishing And Administration Agreement (hereinafter referred to as the

15 "Reservoir Agreement") made effective as of June, 2012. Plaintiff is informed and

16 believes and based thereon alleges that in Spring or Summer of 201 1, Hankerson and the

17 Hankerson Entities had been negotiating with Reservoir for the sale of Hankerson's music

18 rights to Reservoir by Hankerson and the Hankerson Entities.

19 28. Plaintiff is informed and believes and based thereon alleges that several

20 months after Hankerson, with Jomo’s knowledge, began negotiating with Plaintiff to

21 settle the Judgment and only one month before the Reservoir Agreement was made,

22 Hankerson, Jomo, Mosely, Parker and Moore made an agreement to form Future Sound.

23 Plaintiff is informed and believe and based thereon alleges these defendants formed

24 Future Sound specically for the purpose of receiving payment for the sale of

25 Hankerson's music rights, to conceal the sale of the music rights from Plaintiff, to

26 fraudulently deprive Plaintiff of any interest in the music rights, to defraud Plaintiff from

27 receiving any of the payments to which she was entitled pursuant to the Settlement

28 Agreement, and to hinder and delay Plaintiff from collecting money that Hankerson and13;:

COMPLAINT

O O1 Blackground Records owed to her.

2 29. Plaintiff is informed and believes and based thereon alleges that Hankerson,

3 Blackground Records, and the Hankerson Entities transferred to Future Sound all of their

4 valuable assets for no consideration and that such transfer was made when Hankerson,

5 Blackground Records, and the Hankerson Entities were insolvent or they became

6 insolvent as a result of such transfer.

7 30. Plaintiff is informed and believes and based thereon alleges that Hankerson,

8 Blackground Records, the Hankerson Entities and Future Sound sold Hankerson's music

9 rights to Reservoir pursuant to the Reservoir Agreement in exchange for the payments

10 totaling at least $1,366,000 to Future Sound directly, and the payment of approximately

11 $360,000 to persons or entities to whom Hankerson and/or the Hankerson entities were

12 purportedly indebted. In addition, the Reservoir Agreement provides that future

13 payments in connection with the exploitation of Hankerson's music rights will be made to

14 Future Sound, rather than to Hankerson, Blackground Records, and/or the Hankerson

15 Entities who had owned the Hankerson music rights. Plaintiff is informed and believes

16 and based thereon alleges that a purpose of this provision and the expected effect is to

17 deprive Plaintiff of and make it more difficult for Plaintiff to collect and enforce her

18 Judgment, the Guaranty, and the Settlement Agreement. Future Sound paid no

19 consideration to Hankerson, Blackground Records, or the Hankerson Entities in exchange

20 for the payments made to it by Reservoir for the Hankerson music rights.

21 31. All of these payments of $1,726,000 were made directly to Future Sound

22 and to other third persons in order conceal the payments from Plaintiffwho had a right to

23 receive 35% of the payments pursuant to the Settlement Agreement.

24 32. Further, the transfer of assets to Future Sound and the payments directly to

25 Future Sound and certain third persons were made with an actual intent of hindering,

26 delaying and defrauding Plaintiff in her ability to collect money owed to her under the

27 Settlement Agreement, the Judgment, and the Guaranty.

28 33. Alternatively, Future Sound's receipt of $1,366,000 from Reservoir for the(u

COMPLAINT

O O1 sale of the Hankerson music rights without giving reasonably equivalent value to

2 Hankerson, Blackground Records, or the Hankerson Entities in exchange for the receipt

3 of the proceeds of the sale of the Hankerson music rights was made at a time when

4 Hankerson and Blackground Records were engaged in and/or were about to engage in a

5 transaction for which their remaining assets were unreasonably small in relation to the

6 transaction, including the Settlement Agreement and Guaranty.

7 34. At the time that Future Sound received payment for the sale of the

8 Hankerson music rights Hankerson and Defendant Blackground Records were about to

9 sign the Settlement Agreement which required, among other things, that Hankerson pay

10 Plaintiff immediate cash of $1,000,000. Plaintiff is informed and believes and based

ll thereon alleges that neither Hankerson nor Blackground Records had sufficient assets or

12 even borrowing ability to pay Plaintiff the amounts required by the Settlement Agreement

13 or the Guaranty.

14 35. At the time that Future Sound received $1,366,000 from Reservoir for the

15 sale of the Hankerson music rights, Hankerson and Blackground Records intended to

16 incur, believed, or reasonably should have believed that they would incur, debts beyond

17 their ability to pay as they became due.

18 36. At the time that Reservoir paid Future Sound $1,366,000 for the sale of the

19 Hankerson music rights, Hankerson was insolvent or became insolvent shortly after the

20 transfer was made.

21 37. Prior to the date of the Judgment, Hankerson, Blackground Records, and

22 the Hankerson Entities were actively engaged in business, including by producing

23 albums, actively seeking new artists, and making contracts with and forming partnerships

24 with various other businesses in the music and entertainment industries.

25 38. Plaintiff is informed and believes and based thereon alleges that in

26 connection with the making of the Reservoir Agreement, Reservoir was represented by

27 counsel and conducted extensive due diligence such that Reservoir knew of Plaintiffs

28 Judgment against Hankerson, knew that Future Sound was a newly created entity, and(L3

10COMPLAINT

O CI knew that the assets to be transferred to Reservoir had been owned by Blackground

2 Records and other of the Hankerson Entities and that such assets were not, in fact, owned

3 by Future Sound.

4 39. Plaintiff is informed and believes and based thereon alleges that Reservoir

5 knew that it was not Future Sound, but Hankerson, Blackground Records, and/or the

6 Hankerson Entities that had owned the Hankerson music rights transferred to Reservoir

7 under the Reservoir Agreement.

8 40. Plaintiff is informed and believes and based thereon alleges that Turner: (21)

9 was involved in the formation of Future Sound; (b) knew that the assets that were

10 transferred to Reservoir in the Reservoir Agreement never had been owned by Future

11 Sound but that they had been owned by Hankerson, Blackground Records and the

12 Hankerson Entities; (c) knew Future Sound gave no consideration for the assets

13 transferred to it; ((1) was involved in the making of the Reservoir Agreement; (e) had

14 knowledge of the payments from Reservoir to Future Sound; and (f) knew that Plaintiff

15 was entitled to receive 35% of the payments made under the Reservoir Agreement.

16 Turner intentionally concealed from Plaintiff the Reservoir Agreement and payments

17 made under the Reservoir Agreement. Turner intentionally mislead Plaintiff by telling

18 Plaintiff that no money had been received by Hankerson, Blackground Records, and the

19 Hankerson Entities that were to be accounted for under the Settlement Agreement in

20 response to specic requests for accountings to which Plaintiff was entitled under the

21 Settlement Agreement.

22 41. Defendants’ conduct as described herein was intentional, oppressive,

23 willful, malicious, and/or fraudulent, and was in conscious disregard ofPlaintiffs rights.

24 The acts complained of were performed directly by Defendants and Defendants’ ofcers,

25 directors or managing agents, or were authorized and ratified by such persons. Punitive

26 and exemplary damages should be imposed on Defendants for the sake of example and

27 by way ofpunishing Defendants in amount according to proof.

28in

11COMPLAINT

O O1 SECOND CAUSE OF ACTION

2 (Fraudulent Transfer [Civil Code §§ 3409.04 and 3409.05] Regarding

3 Payments from Blackground Records and/or Future Sound to Kathy

4 and Mogame Against Hankerson, Jomo, Blackground Records, Kathy,

5 Mogame, Turner, and DOES 50-90)



8 43. Plaintiff is informed and believes and based thereon alleges that from and

9 after January 1, 2012 and through December 31, 2012, Defendant Kathy, Hankerson's

10 wife, received so-called "payroll" payments from Defendant Blackground Records in the

11 amount of approximately $4,626/month totaling $52,500. Plaintiff is informed and

12 believes and based thereon alleges that Kathy did not provide services to Blackground

13 Records having a value of at least $4,626/month. In addition, Blackground Records gave

14 Kathy in excess of $390,000 between January 2012 and January 2013 for which there

15 was no consideration even ostensibly given. These transfers were referenced on the books

16 of Blackground Records as "household expenses". In reality, these were transfers from

17 Blackground Records to Hankerson.

18 44. Plaintiff is informed and believes and based thereon alleges that from

19 January 1, 2012 through 2013, Blackground gave Mogame $253,000 under the guise of

20 "consulting fees". In reality, these were payments to Hankerson.

21 45. Plaintiff is informed and believes and based thereon alleges that when

22 Blackground Records gave Kathy approximately $442,000 and Mogame approximately

23 $253,000, Blackground Records was engaged in and/or was about to engage in a

24 transaction for which his remaining assets were unreasonably small in relation to the

25 transaction. At the time that Future Sound received payment for the sale of the

26 Hankerson music rights Hankerson and Defendant Blackground Records were about to

27 sign the Settlement Agreement which required, among other things, that Hankerson pay

28 Plaintiff immediate cash of $1,000,000, and at the same time, Blackground Records wasU,

12COMPLAINT

O O1 giving a Guaranty of the full amount of the Settlement, which was at least $4,600,000.

2 Plaintiff is informed and believes and based thereon alleges that Hankerson did not have

3 sufcient assets or even borrowing ability to pay Plaintiff the amounts required by the

4 Settlement Agreement and that Blackground Records did not have sufficient assets or

5 even borrowing ability to pay Plaintiff the amounts required by the Guaranty.

6 46. At the time that Kathy was given approximately $442,000 and Mogame

7 was given $253,000 by Blackground Records, Blackground Records intended to incur,

8 believed, or reasonably should have believed that it would incur debts beyond its ability

9 to pay as they became due.

10 47. At the time that Kathy was give approximately $442,000 and Mogame was

11 given at least $253,000 by Blackground Records, Blackground Records was insolvent or

12 became insolvent shortly after the transfer was made.

13 48. Plaintiff is informed and believes and based thereon alleges that each of the

14 payments made to Kathy and Mogame were facilitated by Turner and that each payment

15 was made in derogation of Plaintiffs right under the Settlement Agreement to receive

16 payments concurrently with Hankerson, his immediate family members and the

17 Hankerson Entities. The payments to Kathy and to Mogame were disguised payments to

18 Hankerson. In reality, the payments to Kathy and to Mogame were payments to

19 Hankerson and were made to conceal them from Plaintiff and to avoid the need to pay

20 Plaintiff her 35% as was required by the Settlement Agreement.

21 49. Plaintiff is informed and believes and based thereon alleges that each of the

22 payments made to Kathy and Mogame were made with an actual intent to hinder, delay,

23 and/or defraud Plaintiff.

24 50. Turner was specifically asked to provide the accountings for payments, but

25 to protect his long-time clients, Turner intentionally misled Plaintiff by telling her that

26 there had been no payments received for which accountings needed to be provided.

E; 27 51. Defendants’ conduct as described herein was intentional, oppressive,

28 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.[3,]

13 —COMPLAINT

O O1 The acts complained of were performed directly by Defendants and Defendants’ officers,

2 directors or managing agents, or were authorized and ratied by such persons. Punitive

3 and exemplary damages should be imposed on Defendants for the sake of example and


5 THIRD CAUSE OF ACTION

6 (Common Law Fraud Against Turner, Blackground Records, and

7 Hankerson and DOES 50-90)



10 53. The Settlement Agreement provides that payments to Hankerson or the

11 Hankerson Entities were required to be made to Turner and he was to pay Plaintiff the

12 agreed upon percentage. Further, Turner was to prepare and to provide Plaintiffperiodic

13 accountings. Turner was the long-time accountant for Hankerson, Blackground Records

14 and the Hankerson Entities and he had knowledge of and facilitated all payments that

15 were made to Kathy and Hankerson as alleged herein. Plaintiff is informed and believes

16 and based thereon alleges that at all times relevant, Turner has had knowledge of the

17 Settlement Agreement, its terms and the obligations imposed on him in the Settlement

18 Agreement.

19 54. On or about August 20, 2013 and December 9, 2013, Plaintiff requested in

20 writing the accountings to which she was entitled under the Settlement Agreement.

21 55. In response, shortly after December 9, 2013, Turner informed Plaintiff that

22 Hankerson and his businesses made no income and that Hankerson had no cash receipts

23 to report.

24 56. Turner's statements were utterly false. In fact, there were income and cash

25 receipts, including cash payments alleged above made by Reservoir in the amount of

26 $1,726,000 after June 2012. In addition, there were cash payments made to Kathy of in

I 27 excess of $442,000 as alleged above. In addition, Plaintiff is informed and believes and

28 based there on alleges that there were cash payments made to Hankerson directlyI“.

14COMPLAINT

O O1 between August 2012 and January 2013 of in excess of $144,500. Further, Plaintiff is

2 informed and believes and based thereon alleges that from January 1, 2012 through 2013,

3 Blackground made cash payments to Mogame of at least $253,000 under the guise of

4 "consulting fees", but in reality these were payments to Hankerson. Further, Plaintiff is

5 informed and believes and based thereon alleges that from January 1, 2012 through 2013,

6 Blackground made cash payments to Masonya Washington, Hankerson's former wife, of

7 at least $24,700, and these were payments made on Barry's behalf for spousal support.

8 Further, Plaintiff is informed and believes and based thereon alleges that from January 1,

9 2012 through 2103, Blackground Records made cash payments on behalf of Hankerson

10 to a "Laurence Muhammed" of at least $31,831.

11 57. Additionally, Turner concealed from Plaintiff: (a) the formation ofFuture

12 Sound, (b) the transfer of the assets of Hankerson, Blackground Records and the

13 Hankerson Entities to Future Sound, (c) the payments made to Future Sound under the

14 terms of the Reservoir Agreement, and (d) the foregoing alleged payments to Kathy,

15 Hankerson, Masonya Washington, and Laurence Mohammed.

16 58. Plaintiff is informed and believes and based thereon alleges that at the time

17 Turner made the statements alleged herein he knew that the statements were false,

18 including, because he had been involved in the making of the Reservoir Agreement, had

' 19 facilitated the payments to Hankerson, Kathy, Mogame, Masonya Washington, and

20 Laurence Muhammed, including by issuing and arranging for the payments, and Turner

21 had performed the bookkeeping and accounting for Hankerson and the Hankerson

22 Entities for many years. Moreover, Plaintiff is informed and believes and based thereon

23 alleges that Turner was involved in the formation of Future Sound and is the accountant

24 for Future Sound.

25 59. Turner's false representations and concealment were made with the intent of

26 inducing Plaintiff to forbear from taking action to collect on her Judgment, enforcing the

27 Settlement Agreement, and exercising her rights in and enforcing the Guaranty.

28 60. Plaintiff reasonably relied on Turner's statements in that she did so forbear.,1,

15COMPLAINT

1 Plaintiffs reliance was reasonable, because, according to Turner, there were no cash

2 receipts to as to which Plaintiff would have been entitled to 35% under the Settlement

3 Agreement and Turner is a licensed Certied Public Accountant.

4 61. As a proximate cause of Turner's fraudulent conduct, Plaintiff has suffered

5 damages in an amount to be proven at trial, including the amounts paid by Reservoir and

6 the amounts paid to Hankerson, Kathy, Mogame, Masonya Washington, and Laurence

7 Muhammed, which are not less than $2,622,031.


9 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.

10 Punitive and exemplary damages should be imposed on Defendants for the sake of

I 1 example and by way ofpunishing him in an amount according to proof.

12 FOURTH CAUSE OF ACTION

13 (Common Law Fraud Against Hankerson and Does 91-100)



16 64. In the Settlement Agreement, Hankerson made certain representations and

17 warranties that Plaintiff has discovered were false. Hankerson identified all of the

18 "Controlled Entities" as that term was defined in the Settlement Agreement. In the

19 Settlement Agreement "Controlled Entities" is defined as:

20 any existing or future corporation, limited liability company,21 partnership or other business entity in which a portion of the

capital stock or other ownership interests are owned, directly22 or indirectly, by Hankerson and/or Hankerson's parents, wife,23 wife's parents or minor children, step children or

grandchildren (collectively, "Hankerson's immediate family")24 and that portion, collectively with any portion of the capital

stock or other ownership interests owned, directly or25 indirectly, by Hankerson's adult children constitute more than26 fifty percent (50%) of the ownership interest.

27 Further, the Settlement Agreement contains the following provision:

{Ii 28 Hankerson represents and warrants that after havingconducted a diligent search of his records, the business

16COMPLAINT

1 entities listed on Exhibit A attached hereto and incorporated2 herein as though fully set forth, are the only business entities

which he believes currently exist and which come within the3 denition of Controlled Entity.

4 Further, in the Settlement Agreement Hankerson expressly represented that the facts

5 stated in Exhibit A thereto, being the list of "Controlled Entities" were true.

6 65. The representations Hankerson made in the Settlement Agreement

7 concerning the identity of the "Controlled Entities" were false. In the Settlement

8 Agreement, Hankerson failed to identify, but instead concealed, the existence of several

9 "Controlled Entities", including several of his entities that were parties to the Reservoir

10 Agreement and who, according to the Reservoir Agreement, transferred assets to Future

11 Sound. To wit, Hankerson concealed the identity of (a) Future Sound, (b) Barry & Sons,

12 Inc., (c) Black Fountain, Inc., (d) Blackground Music, Inc., and (e) Blackground

13 Entertainment, Inc. This concealment is particularly egregious given that Hankerson

14 signed the Settlement Agreement making the false representation just weeks after signing

15 the Reservoir Agreement, which he signed both individually and as the President and

16 CEO of these concealed entities.

17 66. In the Settlement Agreement, Hankerson expressly represented that the

18 initial payment required under the Settlement Agreement of $1,000,000 would be paid by

19 means of a loan from a person who20 . . . . .is not and will not be a business entity which employs21 Hankerson or any member ofHankerson's immediate family

or in which Hankerson or any member ofHankerson's22 immediate family has a management position or ownership23 interest; Blackground Records; any entity of which

Blackground Records is a member; a Controlled Entity2425 Additionally, through his agents and attorneys, after the execution of the Settlement

26 Agreement, Hankerson expressly represented that the source of his initial payments under

1.] 27 the Settlement Agreement were loans from one or more lenders. Further, in the(ll

.3 28 Settlement Agreement and negotiations in connection therewith and in discussions after

execution of the Settlement Agreement and in connection with payment of the initial17

COMPLAINT

C O1 payment due under the Settlement Agreement, Hankerson refused to disclose the identity

2 of the lender.

3 67. Plaintiff is informed and believes and based thereon alleges that

4 Hankerson's representations and those of DOES 90-100 as to the source of funds for

5 Hankerson's initial payments due under the Settlement Agreement and Hankerson's

6 representation that the "lender" was not a "Controlled Entity" were false. The true facts,

7 which were concealed from Plaintiff, are that either (a) Hankerson did not borrow money

8 to make the initial payment under the Settlement Agreement or (b) the "lender" was

9 Future Sound, which employs Jomo, who is Hankerson's son and also is a Controlled

10 Entity. Financial statements of Future Sound show payments to attorney(s) who claimed

1 1 to be representing "the lender" and who Plaintiff is informed and believes was/were paid

12 by Hankerson or one or more of his entities, and because Jomo testified that some of the

13 money received from Reservoir was used to pay Plaintiff.

14 68. At the time Hankerson and DOES 90-100 made the foregoing

15 representations they knew that they were false. The false representations were made to

16 induce Plaintiff to enter into the Settlement Agreement and/or to agree to certain

17 provisions in the Settlement Agreement, including those pertaining to the lender, and to

18 agree to certain releases of the "lender". The false representations also were made to

19 induce Plaintiff to enter into the Settlement Agreement and forbear from collecting on the

20 Judgment. Further, the false representations were made to conceal the sale of

21 Hankerson's assets to Reservoir and thereby avoid having to pay 35% of the sale

22 proceeds to Plaintiff and to avoid having Plaintiff place liens on his assets.

23 69. Plaintiff reasonably relied on the foregoing representations. Specically,

24 based on Hankerson's fraudulent representations in the Settlement Agreement, Plaintiff

25 executed and delivered to Hankerson's attorney, Virgil Roberts, a release of her judgment

26 lien on Hankerson's real property commonly known as 23460 Hatteras Street, Woodland

27 Hills, California 91367 (the Woodland Hills Property") and a release of her Fiere Facias

28 Lien for recording in Georgia against certain real property owned by Hankerson inm.

18COMPLAINT

O O1 Coweta County, Georgia (the "Georgia Property"). These releases are referred to herein

2 as the "Releases". Additionally, based on the false representations, Plaintiff did forebear

3 from collecting on the Judgment.

4 70. As a proximate cause of the fraudulent conduct of Hankerson and DOES

5 90-100, Plaintiff has suffered damage in an amount to be proven at trial, but which is not

6 less than $2,622,531, plus consequential damages proximately caused by the release of

7 liens, including damage caused by liens recorded against the Woodland Hills Property

8 and/or the Georgia Property after the Releases were recorded, in amounts to be proven at

9 trial.

10 71. The conduct of Hankerson and DOES 91-100 as described herein was

1 1 intentional, oppressive, willful, malicious, and/or fraudulent, and was in conscious

12 disregard ofPlaintiffs rights. Punitive and exemplary damages should be imposed on

13 said Defendants for the sake of example and by way ofpunishing them in an amount

14 according to proof.

15 FIFTH CAUSE OF ACTION

16 (Declaratory Judgment Against Defendants Hankerson and DOES 101 -125)



19 73. An actual controversy has arisen and now exists between Plaintiff,

20 Hankerson and DOES 101-125 concerning their respective rights regarding the Releases.

21 74. Plaintiff desires a judicial determination of her rights and a declaration that

22 the Releases are null and void and of no legal effect and that they should be cancelled;

23 and further, a declaration that any liens recorded by DOES 101-125 against the

24 Woodland Hills Property and/or the Georgia Property are junior to Plaintiffs liens.

25 75. A judicial declaration is necessary and appropriate at this time under the

26 circumstances so that the parties may ascertain their lien rights as to Woodland Hills

iii. 27 Property and/or the Georgia Property.

28L0

19COMPLAINT

O O1 SIXTH CAUSE OF ACTION

2 (Breach of Contract Against Hankerson)



5 77. The Settlement Agreement required, among other things, that Hankerson

6 make certain payments to Plaintiff, including paying 35% of cash receipts to her and that

7 Hankerson give certain accountings to Plaintiff.

8 78. All conditions precedent to Hankerson's obligation to perform the contract

9 have been performed, waived, excused, or satised.

10 79. Hankerson breached the contract by failing to make payments to Plaintiff

l 1 that were required by the contract and by failing to provide Plaintiffwith the accountings

12 required by the contract.

13 80. As a direct and proximate result of Hankerson's breach of the contract,

14 Plaintiff has been damaged in an amount to be proven at trial, but which is not less than

15 $917,710.85.

16 81. As a result of Hankerson's breach of the Settlement Agreement, Plaintiff

17 has been required to retain attorneys.

18 SEVENTH CAUSE OF ACTION

19 (Intentional Interference with Contract Against Defendants, Jomo,

20 Future Sound, Moore, Parker, Mosely, Blackground Records, A’

21 Mogame, Turner, and DOES 1-100)



24 83. The Settlement Agreement is a valid contract that existed between Plaintiff

25 and Hankerson. Additionally, the Guaranty is a valid contract that existed between

26 Plaintiff and Blackground Records.

27 84. Plaintiff is informed and believes and on that basis alleges that each of the

28 Defendants knew of said contracts.

20COMPLAINT

C O1 85. By their conduct alleged herein, each of the Defendants engaged in conduct

2 that was intended to and did cause Hankerson to breach the Settlement Agreement and

3 Blackground Records to breach the Guaranty or to cause a disruption in the contractual

4 relationship between Plaintiff and Hankerson, and between Plaintiff and Blackground

5 Records.

6 86. But for the Defendants’ acts of interference with the contracts, the contracts

7 could have been performed as there would have been cash receipts available to pay

8 Plaintiff under the Settlement Agreement and/or Blackground Records would have had

9 assets to pay on its Guaranty.

10 87. As a result of Defendants‘ intentional interference with the contracts as

1 1 alleged herein, Plaintiff has been damaged in an amount to be proven at trial, but which is

12 not less than $2,622,531.


14 willful, malicious, and/or fraudulent, and was in conscious disregard of Plaintiffs rights.

15 The acts complained ofwere performed directly by Defendants and Defendants‘ ofcers,

16 directors or managing agents, or were authorized and ratified by such persons. Punitive

I7 and exemplary damages should be imposed on Defendants for the sake of example and


19 EIGHTH CAUSE OF ACTION

20 (Declaratory Judgment Against Defendants Hankerson, Blackground

21 Records, Blackground Music, Blackground Enterprises, Barry & Sons,

22 Black Fountain Publishing, and Black Fountain and DOES 1-90)



25 90. An actual controversy has arisen and now exists between Plaintiff, on the

26 one hand, and Defendants Hankerson and the Hankerson Entities, on the other hand,

27 concerning whether or not the Hankerson Entities are alter egos of Hankerson. Plaintiff

28 contends that there is a unity of interest between Hankerson and the Hankerson Entitiesm.

21COMPLAINT

O O1 such that the separate personality of Hankerson and the Hankerson Entities do not exist,

2 that the recognition of the separateness of them would be inequitable, and that the

3 Hankerson Entitles are in reality mere alter egos of Hankerson. Plaintiff is informed and

4 believes and based thereon alleges that Defendants contend otherwise.

5 91. Plaintiff desires a judicial determination of her rights and a declaration that

6 the Hankerson Entities are alter egos of Hankerson.

7 92. A judicial declaration is necessary and appropriate at this time under the

8 circumstances so that the parties may ascertain their rights.

9 NINTH CAUSE OF ACTION

10 (Injunction Against All Defendants)

1 I 93. Defendants have violated and are continuing to violate Plaintiffs rights, and

12 caused and are causing great and irreparable injury to Plaintiff.

13 94. The injury caused to Plaintiff by Defendants’ wrongful acts cannot

14 adequately or readily be compensated by pecuniary compensation.

15 95. Without injunctive relief to prevent further fraudulent transfers and

16 interference with Plaintiffs’ rights, Defendants’ wrongful acts and injury to Plaintiff,

17 including as alleged above, will continue. l

18 96. An injunction is necessary to prevent a multiplicity ofjudicial proceedings. ‘

19 97. An injunction is expressly authorized by Civil Code § 3439.07 (a)(3)(A).

20 ’21 WHEREFORE, Plaintiff prays for a Judgment:

22 ON THE FIRST AND NINTH CAUSES OF ACTION

23 1. Declaring the payments made by Reservoir to or for the benet of

24 Hankerson and/or a Hankerson Entity, and to or for the benet of Future Sound, void and

25 of no legal effect;

26 2. Ordering that Plaintiff has a lien on all money transferred under the

jg; 27 Reservoir Agreement to Hankerson, to a Hankerson Entity, to Future Sound or to any

28 person, and that Plaintiff has a lien on all funds or money due or owing in the future andm

22COMPLAINT

C O1 presently under the Reservoir Agreement;

2 3. Ordering that Hankerson, and/or a Hankerson Entity, and/or Future Sound,

3 and any person who received money or payment from them return the payments and

4 funds to Reservoir for disposition and payment to Plaintiff to the extent ofher Judgment;

5 4. Enjoining the Defendants, and each of them, from further disposition of the

6 assets formerly owned by Hankerson, the Hankerson Entities, and/or Future Sound;

7 5. Enjoining the transfer by Reservoir to Hankerson, a Hankerson Entity,

8 Future Sound, or any person any payments to be made, due or owing under the Reservoir

9 Agreement, except upon further order of the Court;

10 6. Against all Defendants for the amount of money transferred under the

11 Reservoir Agreement to Hankerson, a Hankerson Entity, Future Sound or any person, in

12 an amount not less than $1,726,000;

13 7. For exemplary and punitive damages; and

14 8. For pre- and post judgment interest.

15 ON THE SECOND AND NINTH CAUSES OF ACTION

16 1. Declaring the payments made by Blackground Records to Kathy void and

17 of no legal effect;

18 2. Declaring the payments made by Blackground Records to Mogame void

19 and of no legal effect;

20 3. Ordering that Plaintiff has a lien on all money transferred to Kathy;

21 4. Ordering that Plaintiff has a lien on all moneys transferred to Mogame;

22 5. Ordering that Kathy return the payments and funds to Blackground Records

23 for disposition and payment to Plaintiff to the extent of the Guaranty;

24 6. Ordering that Mogame return the payments and funds to Blackground

25 Records for disposition and payment to Plaintiff to the extent of the Guaranty;

26 7. Against all Defendants for the amount of money transferred to Kathy and

27 Mogame in an amount not less than $695,000.

28 5. For exemplary and punitive damages; and11-.

23COMPLAINT

O O1 6. For pre-and post judgment interest.

2 ON THE THIRD CAUSE OF ACTION

3 1. For general, special, and consequential damages according to proof at trial

4 but for an amount not less than $2,622,531.


6 3. For pre-and post judgment interest.

7 ON THE FOURTH CAUSE OF ACTION




l 1 3. For pre-and post judgment interest.

12 ON THE FIFTH CAUSE OF ACTION

13 Declaring , cancelling, and ordering the Releases void and of no legal effect and

14 declaring that Plaintiffs’ liens on the Woodland Hills Property and the Georgia Property

15 are senior to any liens recorded against those properties after the Releases were recorded.

16 ON THE SIXTH CAUSE OF ACTION


18 but for an amount not less than $917,710.85.

19 2. For exemplary and punitive damages;

20 3. For pre-and post judgment interest; and

21 4. For attorney's fees.

22 ON THE SEVENTH CAUSE OF ACTION




26 3. For pre-and post judgment interest.

6}‘ 27 ON THE EIGHTH CAUSE OF ACTION28 Declaring that Defendants Blackground Records, Blackground Music,

W.

24COMPLAINT

O O1 Blackground Enterprises, Barry & Sons, Black Fountain Publishing, and Black Fountain

2 and DOES 1-90 are alter egos of Defendant Hankerson.

3 ON ALL CAUSES OF ACTION

4 1. For costs of suit; and

5 2. For such other and further relief, at law or in equity, which the Court deems

6 just and proper.

78 LAW ICE OF NEIL M. SUNKIN

9 DOUGLAS L. CARD N

10 By: Z :11 NEIL M. SUNKIN12 Attorneys for PlaintiffKyme Dang

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25COMPLAINT

91w /1 - wordpress.com · 2020. 11. 28. · 14 mosley ("mosely"), anindividual, is...

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