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John W. Fink v. Edgelink

March 27, 2012

JOHN W. FINK, PLAINTIFF,
v.
EDGELINK, INC., AND KAYDON A. STANZIONE, DEFENDANTS.



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

OPINION

This dispute concerns plaintiff's claims that defendants are obligated to pay on contracts plaintiff entered into with an alleged predecessor company of defendants. Presently before the Court are the motions of the defendants for summary judgment in their favor on all of plaintiff's claims against them.*fn1 For the reasons expressed below, defendants' motions will be granted.

BACKGROUND*fn2

In 2000, plaintiff, John W. Fink, began working as a financial consultant for Advanced Logic Systems, Inc. ("ALSI"), which was founded by defendant, Kaydon Stanzione. A year later, Fink entered into a series of credit agreements with ALSI to provide working capital to the company's operations. Fink provided over $500,000 to ALSI, and in return, he received rights to purchase a certain amount of stock in ALSI.

Eventually the financial condition of ALSI deteriorated. Fink ceased providing consulting services, and in March 2003, he ultimately filed suit against ALSI, Stanzione and other related entities in New Jersey Superior Court, claiming breaches of the various credit agreements, as well as fraud. Three years later, the parties entered into a settlement agreement. A year after that, in May 2007, a hearing was held in state court regarding Fink's claims that the state court defendants had breached their settlement agreement. The matter was referred to binding arbitration, and in July 2008, the arbitrator issued his decision, wherein the arbitrator found that ALSI did not breach the settlement agreement, but that ALSI owed Fink fees in his enforcement of the agreement, and the case was reactivated in state court.

Ultimately, ALSI filed for bankruptcy in October 2008, and Fink's state court case was dismissed without prejudice. Around this same time, ALSI failed to make a scheduled repayment to Fink, and Stanzione, as guarantor of the agreement, owed $100,000 to Fink.

On January 27, 2009, defendant, EdgeLink, Inc., was incorporated. Fink claims that ALSI's proceeds and assets were fraudulently transferred to Advanced Logic Systems, Inc., a corporation set-up by Kaydon Stanzione in his mother Katherine's name, in June 2005, and then upon her death in December 2008, were transferred to EdgeLink as a means of depriving Fink of his rightful ownership in ALSI's assets.

As a result, Fink has brought claims against EdgeLink for breach of contract for two agreements Fink entered into with ALSI: (1) the warrant agreement (which included a methodology for calculating the price per share of ALSI common stock and the number of shares being offered to sale to Fink), and (2) the settlement agreement. Fink claims that EdgeLink is liable for these breaches because it is a "mere continuation of" or a "defacto merger with" ALSI.

Fink has also brought claims for unjust enrichment against EdgeLink. He also claims that the transfer of substantially all of ALSI's assets to EdgeLink violated New Jersey's Fraudulent Transfer Act, N.J.S.A. 25:2-25 et seq., and that EdgeLink and Stanzione are liable to Fink for this fraudulent transfer. Finally, Fink claims that Stanzione breached his fiduciary duties he owed to Fink as a creditor of ALSI.

Since the filing of his complaint against EdgeLink and Stanzione in October 2009, the parties have engaged in extensive discovery, and have provided this Court with voluminous correspondence,*fn3 briefing, and exhibits relating to various discovery motions, as well as motions relating to Fink's legal representation, which have resulted in Fink's current pro se status after the termination of five law firms. After other protracted proceedings, the defendants' motions for summary judgment are now ripe for consideration.*fn4

What this case boils down to is whether Fink has provided sufficient evidence to refute EdgeLink and Stanzione's position that they cannot be held liable for the conduct of ALSI. As explained below, Fink has failed to do so.

DISCUSSION

A. Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. ยง 1332 because there is complete diversity of citizenship between the parties and ...


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