GHF v. Cardtronics, Rock COMPLAINT (14-Cv-05038)

8/10/2019 GHF v. Cardtronics, Rock COMPLAINT (14-Cv-05038)

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MINNESOTA

Greene Holcomb & Fisher LLC,

Plaintiff,

v.

Cardtronics USA, Inc., a DelawareCorporation; Cardtronics, Inc., a DelawareCorporation; and Phillip A. Rock, anIndividual,

Defendants.

))) Court File No. ______________)))) COMPLAINT AND) JURY TRIAL DEMAND))))

COMPLAINT

Plaintiff Greene Holcomb & Fisher LLC (GHF) states and alleges as follows:

PARTIES

1. Plaintiff is a Minnesota limited liability company in good standing, with its

offices located at 90 South 7th Street, 54th Floor, Minneapolis, Minnesota 55402.

2. Plaintiff is duly licensed and in the business of investment banking, including

sell-side merger and acquisition advisory services.

3. Plaintiff is an eight-member LLC and seven of its members are citizens of the

State of Minnesota and one member is a citizen of the State of Washington.

4. Defendant Cardtronics USA, Inc., is a Delaware corporation with its

principal place of business at 3250 Briarpark Drive, Suite 400, Houston, Texas 77042.

5. Defendant Cardtronics, Inc. is a Delaware corporation with its principal place

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of business at 3250 Briarpark Drive, Suite 400, Houston, Texas 77042.

6. Defendants Cardtronics USA, Inc. and Cardtronics, Inc. are known herein

collectively as Cardtronics.

7. Cardtronics manages and provides self-service financial kiosks and ATMs in

North America and Europe.

8.

Upon information and belief, Defendant Phillip A. Rock (Rock) is a

resident of Texas, residing at 134 Firestone Place, Meadowlakes, Texas 78654.

9. Rock was, at all times relevant, the president, CEO, and sole shareholder of

ATM Network, Inc., a Minnesota corporation with its principal place of business in

Minnesota.

10. ATM Network, Inc. (ATM) changed its name to Bon Voyage Network

Services, Inc. on August 14, 2012 and again changed its name to I LOVE YOU ATM

SERVICES, INC. on September 14, 2012, as filed with the Minnesota Secretary of State.

Exhibit A.

11. In September 2010, Rock sought to sell his company, ATM, and entered into

a contract with Plaintiff whereby Plaintiff was to act as ATMs exclusive agent and

investment broker regarding the sale of ATMs stock or assets.

12. On August 7, 2012, ATMs assets were sold to Cardtronics, but Plaintiff was

never paid the fee for its service or its costs, as detailed herein.

13. On March 27, 2013, Plaintiff initiated arbitration with the Financial Industry

Regulatory Authority (FINRA) against, among others, ATM, Rock, Cardtronics, Inc. and

Cardtronics USA, Inc.



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14. Cardtronics, Inc., Cardtronics USA, Inc. and Rock opted out of the

arbitration proceeding.

15. On November 6, 2014, a FINRA arbitration panel issued an award in favor of

Plaintiff and against ATM in an amount that currently exceeds $1,200,000 with costs,

interest and attorney fees awarded by the arbitration panel. Exhibit B.

16.

This Complaint does not join as a party ATM because, pursuant to the

contract between ATM and Plaintiff, the claims against ATM were litigated in FINRA

Arbitration.

SUBJECT MATTER JURISDICTION

17. The amount in controversy, without interest and costs, exceeds the sum or

value of $75,000.

18.

The Plaintiff GHF is a citizen of Minnesota and Washington.

19. The Defendant Cardtronics USA, Inc. is a corporation incorporated under the

laws of Delaware with its principal place of business in Texas.

20. Defendant Cardtronics, Inc. is a corporation incorporated under the laws of

Delaware with its principal place of business in Texas.

21. Defendant Phillip A. Rock is a citizen of Texas.

22. The matter in controversy is between citizens of different states.

23.

This Court has Subject Matter Jurisdiction over the parties pursuant to 28

U.S.C. 1332 (a)(1).

IN PERSONAMJURISDICTION

24. The nature and quality of the Defendants contacts with Minnesota are



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substantial.

25. On or about August 7, 2012, Cardtronics purchased all or substantially all the

assets of ATM Network, Inc., a Minnesota Corporation with its principal place of

business in Minnesota.

26. Cardtronics, Inc. conducts business in the State of Minnesota.

27.

Cardtronics, Inc.s website states, Please visit one of our 53,900 ATMs

located in minnesota at the 7-Eleven, Chevron, Circle K, Costco, Cumberland Farms,

CVS, ExxonMobil, Ez Money, Food 4 Less, Hess, Kroger, Kwik Shop, Loaf N Jug, Quik

Mart, Quik Stop, Ralphs, Rite Aid, Safeway, Speedway, Sunoco, Target, Vons,

Walgreens and other retail locations.

http://locator.cardtronics.com/local/Minnesota/atm-locations/index.html.

28.

Cardtronics, Inc.s website also lists its Top Customers as Costco

Wholesale, CVS/Pharmacy, Target, and Walgreens, which all have operations in the

State of Minnesota. http://www.cardtronics.com/about/top-customers.asp.

29. On its website, Cardtronics, Inc. has approximately 450 separate links to

cities and towns in the state of Minnesota where Cardtronics ATMs can be found.

http://locator.cardtronics.com/local/minnesota/atm-locations/index.html.

30. On its website, Cardtronics, Inc. lists ATM Network as a division of

Cardtronics with its office located at 10749 Bren Road E, Minnetonka, Minnesota

55343. http://www.cardtronics.com/about/atmnetwork.asp.

31. Cardtronics USA, Inc. is registered in Minnesota as a Foreign Corporation

under Minnesota Statute ch. 303 with its registered agent listed as Capital Corporate



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Services, Inc. and its registered office at 402 21st Str S, Moorhead, Minnesota 56560.

Exhibit C.

32. According to the Cardtronics, Inc. 2013 10-K Annual Report filed with the

Securities and Exchange Commission, Cardtronics USA, Inc. is the primary domestic

operating subsidiary of Cardtronics, Inc. Exhibit D.

33.

On or about August 14, 2012, Cardtronics USA, Inc. assumed the name of

ATM Network, Inc., as filed with the Minnesota Secretary of State. Exhibit E.

34. At all times relevant and at the time this cause of action arose, Rock was

conducting business in the State of Minnesota.

35. On information and belief, Rock had extensive personal involvement as the

sole shareholder, president and CEO of ATM, a Minnesota corporation with its principal

place of business in Minnesota.

36. During the term of the contract between Plaintiff and ATM, Rock visited the

offices of Plaintiff in Minnesota to discuss the sale of ATM on numerous occasions.

37. Rock reaped the economic benefits of ATM as the sole shareholder, president

and CEO.

38. Rock reaped the economic benefits from the sale of ATM as he received the

vast majority of the sale proceeds.

39.

Rock further reaped economic benefits from the sale of ATM when he, on

information and belief, made distributions to himself, with outstanding debt owed to

Plaintiff that was never paid.

40. Through his actions as shareholder, president and CEO of ATM and through



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his dealings with Plaintiff, Rock purposefully availed himself to the benefits and

protections of the laws of Minnesota. The extensive contacts were more than random,

fortuitous, or attenuated.

41. Minnesota has great interest in providing a forum for Plaintiff, a Minnesota

company with its offices in Minnesota, which was the victim of substantial wrongful

behavior while conducting business in the State of Minnesota.

42. As articulated below, the injury giving rise to this lawsuit occurred within

and has a strong connection to the State of Minnesota.

43.

As articulated below, the Defendants purposely directed their activities at the

State of Minnesota and Plaintiffs injury and its claims arose out of and relate to those

activities.

44.

The District Court of Minnesota has In Personam jurisdiction over the

Defendants in this case under Fed. R. Civ. P. 4(k) and Minn. Stat. 543.19, subd. 1.

VENUE

45. A substantial part of the events or omissions giving rise to Plaintiffs claims

occurred in the State of Minnesota, as described herein.

46. This Court has Venue pursuant to 28 U.S.C. 1391 (b).

FACTS

47.

Plaintiff has developed an outstanding reputation over the past 19 years by

providing superior investment banking services to business owners desiring to sell their

companies. Plaintiffs website is: www.ghf.net. Plaintiff provides strategic services to

evaluate and properly position companies, value them, market them, and find potential



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purchasers; and it further assists in all aspects of the sale through the closing.

48. In the September-October 2010 timeframe, Rock contacted Plaintiff to be

ATMs exclusive agent to find a purchaser for ATM on behalf of ATM and himself.

49. Rock, on behalf of ATM and himself, agreed to compensate Plaintiff for its

services upon the sale of ATM.

50.

Rock derived a direct benefit from the agreement between Plaintiff and

ATM.

51. Before Rock contacted Plaintiff, Rock and officers from Cardtronics had

developed a personal relationship, as both are involved in the automated teller machine

industry.

52. While negotiating the terms of a contract for Plaintiff to be ATMs exclusive

agent for the sale of ATM (Engagement Letter), Rock attempted to convince Plaintiff

to add language to the agreement that would prevent Plaintiff from earning any fee, or

else receiving a reduced fee, if ATM was sold to Cardtronics.

53. Plaintiff refused to eliminate or to discount its fee if ATM was sold to

Cardtronics.

54. Rock, on behalf of ATM and himself, agreed that there would be no

exception regarding a sale of ATM to Cardtronics.

55.

James Hovland, ATMs attorney, and Plaintiff drafted the Engagement Letter

between the parties, dated November 4, 2010.

56. On November 4, 2010, Rock on behalf of ATM and himself, signed the

Engagement Letter with Plaintiff, incorporated herein by reference. See Exhibit F.



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57. Under the terms of the Engagement Letter, ATM was to reimburse Plaintiff

its out-of-pocket costs (initially capped at $20,000) whether or not a sale is

consummated and pay Plaintiff a fee of 3.75% of the purchase price upon the sale of

ATM (Performance Fee). Id. at 2.

58. If the purchase price exceeded $25,000,000, Plaintiff was entitled to a

Performance Fee of 3.75% on the first $25,000,000 and 5% on all amounts over

$25,000,000. Id.at 3.

59. Through the Engagement Letter, ATM granted Plaintiff the exclusive right

to find a purchaser from the date you sign this letter until notice of termination is given

by either party upon thirty days prior written notice to the other party (the Exclusive

Period). Id. at 1.

60.

ATM was also obligated to advise GH&F immediately if any prospective

purchaser contacts or has contacted the Company. Id. at 1.

61. The Engagement Letter further requires that ATM represents and warrants

to GH&F that it has informed GH&F of all parties with whom it has had contact

regarding the potential sale of the Company and will inform GH&F of any party or

parties that contact the Company regarding the potential sale of the Company. Id. at

5.

62.

The Engagement Letter requires that ATM also represents to GH&F that

any information provided to GH&F does not and will not at any time contain any

misstatement or untrue statements of a material fact or omit to state any and all material

facts necessary to make the statements not false or misleading in light of the



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circumstances in which they were made. Id.

63. Under the Engagement Letter, Plaintiff was entitled to rely, without

investigation, upon all informationsupplied to it, by or on behalf of [ATM] or its

advisors. Id.

64. Under the Engagement Letter, ATM was also obligated to continue to

inform GH&F of any material developments or matters that occur or come to the

attention of the Company, its shareholders, directors, officers, members, employees or

affiliates. Id.

65.

Under the Engagement Letter, The fees, reimbursement, indemnity and

contribution obligations of the Company under this agreement shall be in addition to any

liability which the Company may otherwise have, shall survive any notice of termination

and shall be binding upon and extend to the benefit of any successors, assigns, heirs and

personal representatives of the Company and GH&F. Id.

66. At all times material hereto, Plaintiff acted diligently and in good faith, and

invested substantial time, effort and costs as ATMs exclusive agent to prepare, promote

the sale of, create a market for, find a buyer for, and close the sale of ATM.

67. Plaintiff also invested substantial time, effort and costs in preparing ATM

and its management team for the sale process, including the creation of substantial

marketing materials (work product) regarding ATM.

68. Plaintiff exerted substantial effort to identify, qualify, and contact potential

buyers, and worked with them to generate interest among the potential buyers in

furtherance of the sale of ATM.



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69. Plaintiff created and employed the unique name of Project Surf for the sale

of ATM.

70. Plaintiffs entire work product and services related to the sale of ATM were

included in Project Surf, and both ATM and Plaintiff referred to the sale of ATM as

Project Surf.

71.

Plaintiffs work product includes a Preliminary Valuation Analysis presented

on October 18, 2010, which provides extensive historical and prospective financial data

for ATM, a preliminary valuation analysis, analyses of comparable companies, analyses

of comparable transactions, and other detailed information. Cardtronics is included as a

comparable public company.

72. Plaintiffs work product includes a Project Surf Organizational Meeting

Presentation presented to ATM November 10, 2010, which laid out the entire sales

process to ATM, including the approximately 30 steps taken to sell the company,

explanation of the due diligence process, and review of the issues involved and

contemplated when attempting to sell ATM.

73. Plaintiffs work product includes a potential buyer list, which includes the

name, contact information and business description of approximately 260 potential

buyers, and the dates that confidentiality agreements were sent to these buyers.

74.

Plaintiffs work product includes a Confidential Overview sent to all

potential buyers which includes financial data about ATM, investment considerations,

and general information about ATM.

75. Plaintiffs work product includes a Confidential Information Memorandum



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which is a 73 page document sent to every potential buyer that signed a confidentiality

agreement. The Confidential Information Memorandum includes an executive summary,

investment considerations, business overview, information about management and

employees, select financial information, industry overview, review of financial

statements, company timeline, advertisements, website landing pages, and other

information relevant to ATM.

76. Plaintiffs work product includes multiple Management Presentations that

were presented to potential buyers. These presentations include a business overview,

business model, merchant value proposition, information on sales and marketing,

information on operations, information on management and employees, growth

opportunities, a financial overview, and an industry overview.

77.

Plaintiff also devoted substantial time and effort in creating and maintaining

an on-line (Internet) Data Room with password-protected access for potential buyers,

which contained significant and substantial materials for potential buyers review and

evaluation of ATM.

78. The Data Room was a valuable sales tool at all-times material hereto.

79. Plaintiff kept ATM informed of its efforts and progress throughout, and

periodically provided ATM with a Process Summary regarding its efforts. Numerous

Process Summaries were sent to ATM which included potential buyers contacted,

Confidentiality Agreements distributed, Confidential Memoranda distributed, and bid

request letters distributed.

80. For more than eight months, Plaintiff contacted 271 potential buyers and



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distributed 206 Confidentiality Agreements and Confidential Overviews. In addition,

Confidential Memoranda were sent to 77 parties, and bid requests were sent to 60 parties.

81. Plaintiff presented ATM with information regarding the interest among

potential buyers and various initial indications of interest received from potential buyers.

82. In March 2011, Plaintiff made authorized initial contact with and solicited

Cardtronics as a potential purchaser approved by ATM and provided Cardtronics with

marketing materials including the Confidentiality Agreement and Confidential Overview

regarding ATM.

83.

The Confidential Overview states Greene Holcomb & Fisher LLC

(GH&F) has been retained on a confidential basis to assist in exploring strategic

alternatives, potentially including a recapitalization or sale of the business. In its role as

the Companys exclusive financial advisor, GH&F will act as the sole contact with all

interested parties. Exhibit G.

84. On or about April 5, 2011, Chris Brewster, CFO of Cardtronics, Inc., initially

advised Plaintiff that Cardtronics was not interested in purchasing ATM at that time.

85. By May 2011, Plaintiff had received eight initial indications of interest from

potential buyers with preliminary valuation ranges for ATM of $12,750,000 to

$20,000,000.

86.

Plaintiff and ATM selected five of the eight potential buyers to attend

management presentations held at the Minneapolis offices of Plaintiff, and Plaintiff

provided substantial additional information to support the potential buyers due diligence.

87. As a result, one potential buyer indicated an interest to purchase ATM for



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$16,500,000, which Rock ultimately declined.

88. On or about July 14, 2011, Hovland sent ATMs required 30-day notice of

termination of the Engagement Letter which established a termination date of August 13,

2011.

89. The termination notice commenced the tail period defined in the

Engagement Letter, with the tail period expiring on August 13, 2012.

90. In September 2011, Rock contacted Plaintiff and orally requested that

Plaintiff re-engage as ATMs exclusive sales agent and continue in its efforts to find a

purchaser for ATM, and indicated that Rock and ATM were interested in the previously

discussed offer of $16,500,000 from a potential purchaser.

91. Plaintiff orally agreed to continue its efforts to find a purchaser for ATM as

ATMs exclusive sales agent, and ATM agreed to pay Plaintiff its costs and also its

Performance Fee upon the sale of ATM.

92. The September 2011 oral agreement included, but was not limited to, the

terms of the Engagement Letter, and Plaintiff immediately began working again as

ATMs exclusive sales agent.

93. Plaintiff immediately began contacting the potential buyers that had

previously expressed an interest in purchasing ATM and also new potential buyers.

94.

In September 2011, ATM was contacted by a new potential buyer, a Japanese

company Seven Bank, Ltd. (Seven Bank).

95. Rock contacted Plaintiff, as ATMs exclusive agent, to have Plaintiff contact

Seven Bank regarding its interest in purchasing ATM, just as Rock was required to do



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under the terms of the Engagement Letter and oral agreement with Plaintiff.

96. Upon information and belief, Seven Bank is an affiliate of an entity that owns

a controlling interest in numerous 7-Eleven stores.

97. Plaintiff contacted Seven Bank and exerted substantial time and effort to

prepare and present ATM to officials from Seven Bank. Plaintiff also provided Seven

Bank with the Confidentiality Agreement, Confidential Overview, Confidential

Memorandum, and other relevant information.

98. On September 21, 2011, Kurt Duhn, Vice President of Operations at ATM,

sent Seven Bank and email stating, In my discussion this morning with Mr. Rock, he

asked me to share with you that Mr. Jevnick is fully authorized to speak to our mutual

interests and that further, Mr. Jevnick should become your primary point of contact for all

communication and arrangements regarding ATM Network.

99. Mr. Jevnick refers to Paul Jevnick, Managing Director at Plaintiff.

100. This email confirmed the oral agreement that Plaintiff was ATMs exclusive

agent.

101. On October 10, 2011, Plaintiff held a meeting at its offices in Minneapolis,

Minnesota between officials of Seven Bank and ATM. Rock and other officers of ATM

attended.

102.

Plaintiff also exerted substantial time and effort to prepare and present ATM

to another potential buyer, Marquette Capital.

103. On October 24, 2011, Plaintiff facilitated a meeting between Marquette

Capital and ATM in Minnesota which Rock attended.



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104. Plaintiff, under the direction of Rock and ATM, continued its substantial

efforts to find a buyer for ATM with the understanding that Plaintiff was ATMs

exclusive agent, and that Plaintiff would be paid its costs and its Performance Fee upon

the sale of ATM.

105. Rock then directed Plaintiff to negotiate the sale of ATM to Seven Bank, and

on November 4, 2011, ATM and Seven Bank signed an Exclusivity Agreement. See

Exhibit H.

106. The Exclusivity Agreement prohibited Seven Bank and ATM from having

any contact with any other potential buyers of ATM.

107. The Exclusivity Agreement also did not allow the parties to disclose or

divulge, to any third party the content or existence of [the] agreement and the

transaction or any or all confidential and proprietary information received for a period of

two years. Id.

108. On or about November 4, 2011, ATM and Plaintiff drafted an Amendment to

the Engagement Letter (Amendment to Engagement Letter).

109. The Amendment to Engagement Letter did not reduce the entire agreement

between ATM and Plaintiff to writing, but renewed and revived the obligations,

protection for Plaintiff, and terms of the Engagement Letter.

110.

The actions of the parties, agreements (both oral and written), and

understanding between ATM and Plaintiff provided that ATM would pay Plaintiff its

costs and its Performance Fee upon the sale of ATM, that ATM would adhere to

Plaintiffs exclusive agency rights and use Plaintiff to negotiate and close the sale of



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ATM, and that ATM would not circumvent Plaintiffs exclusive agency rights or use

Plaintiff to merely provide a stalking horse for ATM.

111. On December 6, 2011, Plaintiff sent Rock an email saying that Plaintiff had

not yet received a signed copy of the Amendment to Engagement Letter; on December

12, 2011, ATM faxed Rocks signature page to the Amendment to Engagement Letter.

112.

From November 4, 2011 through March 2012, Plaintiff engaged in extensive

and exclusive contract negotiations with Seven Bank on behalf of ATM.

113. In February 2012, Seven Bank accepted a counteroffer made by Rock which

established the material terms of the agreement, including a purchase price of

$20,500,000.

114. On February 29, 2012, Rock attended the ATM Industry Association

Conference [ATMIA] in San Antonio, Texas.

115. On or about February 29, 2012 and while at that conference, Rock met with

Steven Rathgaber, Chief Executive Officer of Cardtronics.

116. Rock came in contact with Mr. Rathgaber through his relationship with

Michael Clinard, President of Global Services and former Chief Operating Officer of

Cardtronics.

117. On information and belief, during that meeting, Rock informed Mr.

Rathgaber that Seven Banks purpose in purchasing ATM was to displace Cardtronics as

the ATM provider at 7-Eleven stores in the United States by acquiring a U.S.-based ATM

business that it could use to provide ATM services itself, rather than contracting through

Cardtronics.



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118. The information regarding Seven Banks plans to displace Cardtronics was

obtained by Rock from Seven Bank and was subject to confidentiality as part of the

Exclusivity Agreement between ATM and Seven Bank.

119. The Cardtronics, Inc. 2013 10-K Annual Report states, 7-Eleven, which

represents the single largest merchant customer in the Companys portfolio, comprised

24.0% and 26.9% of the Companys unaudited pro forma revenues for the years ended

December 31, 2013 and 2012, respectively. Accordingly, a significant percentage of the

Companys future revenues and operating income will be dependent upon the successful

continuation of its relationship with these merchants. See Exhibit D.

120. The Cardtronics, Inc. 2013 10-K Annual Report states that no other merchant

customer generates more than 6% of total revenues.Id.

121.

The Cardtronics, Inc. 2013 10-K Annual Report further states, We derive a

substantial portion of our revenue from devices placed with a small number of merchants.

If one or more of our top merchants were to suffer a material deterioration of their

business and cease doing business with us, or to substantially reduce its dealings with us,

our revenues could decline. Id.

122. On information and belief, the confidential information provided by Rock to

Mr. Rathgaber regarding Seven Banks plans to displace Cardtronics as the ATM

provider for 7-Eleven stores motivated Mr. Rathgaber and Cardtronics to purchase ATM

in order to preserve its valuable business relationship with 7-Eleven.

123. Immediately after Rock met with Mr. Rathgaber at the ATMIA Conference,

and while negotiations with Seven Bank regarding the sale of ATM were still on-going



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and almost complete, Rock became unresponsive and unavailable to Plaintiff.

124. After his meeting with Mr. Rathgaber, Rock refused to negotiate in good

faith with Seven Bank and reneged on his own counter-offer that had been orally

accepted by Seven Bank.

125. At some point in time, and after receiving the full benefit of Plaintiffs efforts

and utilizing Plaintiffs work product for more than twelve months, including the

negotiated sale of ATM to Seven Bank for $20,500,000 and use of the Data Room

created by Plaintiff, Rock devised a scheme in an attempt to hinder, delay, defraud and

avoid paying Plaintiff its claim for the Performance Fee and costs by circumventing

Plaintiffs agreements and selling ATM directly to Cardtronics, which constitutes a

material breach of the agreement.

126.

On information and belief, ATM and Rock authorized the use of Plaintiffs

work product, including access to the confidential Data Room and confidential materials

prepared by Plaintiff which were all relevant to the sale of ATM, and either authorized

Cardtronics access to the confidential Data Room or sent the work product directly to

Cardtronics without Plaintiffs authority, consent, or informing Plaintiff, for Cardtronics

analysis and review regarding Cardtronics purchase of ATM.

127. On Monday, March 5, 2012, officers from ATM returned to Minnesota from

the ATMIA conference.

128. By Friday, March 9, 2012, ATM, without informing Plaintiff, set up security

clearance and permissions for four employees of Cardtronics to access the on-line Data

Room for Project Surf. See Exhibit I.



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129. On June 6, 2012, after Cardtronics was given access to the Data Room for

almost three months, ATM documents show, Edits to data room documents to remove

Seven Bank name. Id.

130. On information and belief, while ATM and Plaintiff were negotiating a sale

to Seven Bank, ATM was simultaneously and surreptitiously negotiating a sale to

Cardtronics.

131. Throughout March and April, correspondence between ATM, Plaintiff and

Seven Bank continued regarding the sale of ATM to Seven Bank.

132.

Cardtronics, a sophisticated public company with world-wide operations, was

made aware that Plaintiff was ATMs exclusive sales agent in March 2011 and again in

February and/or March 2012.

133.

Cardtronics failed to contact Plaintiff regarding its interest as a potential

purchaser of ATM despite being aware that Plaintiff was ATMs exclusive sales agent.

134. Without Plaintiffs knowledge, on or about August 7, 2012, all or

substantially all of the assets of ATM were sold and transferred to Cardtronics for a

purchase price of approximately $20,500,000 or more.

135. The sale of ATM to Cardtronics closed on or about August 7, 2012, which

was within the tail period as defined by the Engagement Letter, and within the

timeframe that the oral agreement designated Plaintiff as ATMs exclusive agent.

136. Plaintiff sent an invoice to ATM and Rock for $788,750 after learning of the

sale of ATM to Cardtronics, with $768,750 being for the Performance Fee for said sale

and $20,000 being for costs.



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137.Neither ATM nor Rock paid the amount due in the invoice.

138. ATM, its shareholder, directors, officers, and employees breached their

obligations to Plaintiff, which included obligations to inform Plaintiff: 1) of Cardtronics

renewed interest as a potential purchaser of ATM, 2) regarding the potential sale of

ATM, and 3) of material developments regarding ATM and Cardtronics, in an effort to

avoid paying Plaintiff its Performance Fee. See Exhibit F.

139. ATM, its shareholder, directors, officers, and employees made the transfer of

all or substantially all of ATMs assets directly to Cardtronics in an effort to hinder, delay

and defraud Plaintiff from receiving its Performance Fee and costs.

140. ATM, Rock and Cardtronics concealed the transfer of assets and did not

disclose to Plaintiff the sale of the assets to Cardtronics.

141.

Plaintiff learned of the sale of ATMs assets to Cardtronics through a public

press release in August 2012.

142. The transaction with Cardtronics was a property transfer as defined in Minn.

Stat. 513.41(12).

143. According to the terms of the Engagement Letter, Plaintiff has a claim for the

entire fee payable to Plaintiff and it shall be paid in cash to GHF at closing. See

Exhibit F.

144.

ATM failed to pay Plaintiff its claim for out-of-pocket costs or its

Performance Fee as had been agreed.

145. For a purchase price of $20,500,000, Plaintiffs Performance Fee is

calculated to be $768,750, with out-of-pocket expenses are capped at $20,000, for a total



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of $788,750.

146. On information and belief, the purchase price for ATMs assets paid by

Cardtronics was at least $20,500,000.

147. If the purchase price exceeded $20,500,000, the Performance Fee will

increase pursuant to the Engagement Letter.

148.

On information and belief, at the closing, Rock personally received proceeds

from the sale of ATMs assets.

149. On or after August 7, 2012, on information and belief, ATM made

distributions to Rock as ATMs sole shareholder, and to other officers and employees of

ATM pursuant to individual agreements, of the total purchase price paid for ATM, except

an amount that was held by Cardtronics as a hold-back.

150.

There was a hold-back of a portion of the purchase money for the said sale

held by Cardtronics in an original amount of at least $1,000,000 pursuant to Section 7.8

of the Purchase Agreement between Cardtronics and ATM for any unpaid indemnity

obligations of ATM.

151. The holdback is paid to ATM in deferred installments over time.

152. The Engagement Letter signed by ATM and Plaintiff states, Any dispute or

controversy arising out of this agreement shall be determined by arbitration conducted in

accordance with the rules of the Financial Industry Regulatory Authority (FINRA). See

Exhibit F.

153. The Engagement Letter also entitles Plaintiff to attorney fees.

154. On March 27, 2013, Plaintiff filed a Statement of Claim with FINRA



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naming, among others, ATM, Rock, Cardtronics, Inc. and Cardtronics USA, Inc. as

Respondents.

155. ATM was required to and agreed to participate in the FINRA proceeding per

the Engagement Letter and the FINRA Arbitration Submission Agreement signed by

ATM counsel on May 30, 2013.

156.

Rock, Cardtronics, Inc. and Cardtronics USA, Inc. chose to opt out of the

arbitration proceeding.

157. A FINRA Arbitration Panel consisting of three arbitrators (Arbitration

Panel) was agreed to by ATM and Plaintiff.

158. An arbitration hearing was scheduled with due notice to each of the parties

and an opportunity to be heard.

159.

ATM and Rock appeared at the arbitration hearing and were represented by

counsel.

160. Rock testified at the arbitration hearing.

161. On September 24, 2014, the Arbitration Panel unanimously ruled in favor of

Plaintiff.

162. In a November 6, 2014 award issued by the Arbitration Panel (Award),

Plaintiff was awarded $788,750 for the Performance Fee for said sale to Cardtronics that

was not paid by ATM, $20,000 in out of pocket expenses that ATM did not pay, interest

at 10% per annum, and attorney fees and costs totaling $257,348.01. The total due

pursuant to the Award with interest, costs and attorney fees awarded by the Arbitration

Panel currently exceeds $1,200,000. See Exhibit B.



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163. On November 12, 2014, Plaintiff filed a motion in Hennepin County District

Court in Minnesota to have the Award confirmed as a judgment against I LOVE YOU

ATM SERVICES, INC, formerly known as Bon Voyage Network Services, Inc.,

formerly known as ATM Network, Inc.

164. Pursuant to 9 U.S. Code 13, a judgment confirming an arbitration award

shall have the same force and effect, in all respects, as, and be subject to all the

provisions of law relating to, a judgment in an action; and it may be enforced as if it had

been rendered in an action in the court in which it is entered.

165.

On information and belief, Cardtronics still holds $1,000,000 in holdback,

from which a substantial amount of Plaintiffs Award can be paid.

166. On information and belief, the $1,000,000 in holdback held by Cardtronics

is expected to be released to ATM on August 7, 2015.

167. Debtor ATM retains potential possessory interest in the proceeds of the sale

of at least $1,000,000.

168. On information and belief, ATM currently does not have sufficient funds to

pay the Award.

169. On information and belief, the distributions to Rock resulted in ATM being

unable to pay its debt to its creditor, Plaintiff.

170.

Cardtronics was on notice of its vendor and agents (Rock and ATM) intent

to hinder, delay and defraud Plaintiffs claim.

171. Cardtronics received notice of Plaintiffs claims when it received Plaintiffs

FINRA Arbitration Statement of Claim on March 27, 2013 and was put on notice of the



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Award on November 12, 2014.

COUNT IDECLARATORY JUDGMENT PURSUANT TO FEDERAL RULE OF CIVIL

PROCEDURE 57 AND 28 U.S.C. 2201

(Cardtronics, Inc. and Cardtronics USA, Inc.)1

172. Paragraphs 1 through 171 as set forth above are incorporated herein by

reference as though set forth in full.

173. Cardtronics currently holds approximately $1,000,000 of proceeds from the

sale of ATM in holdback.

174.

The funds in holdback are due to be released by Cardtronics to ATM on

August 7, 2015.

175. Plaintiff is or will be entitled to the holdback funds held by Cardtronics

based on the Counts III-XIII outlined below and the Award.

176. Plaintiff is or will be entitled to the holdback funds held by Cardtronics

after the Award is confirmed by the Minnesota District Court or entry of judgment in this

case, or otherwise adjudicated herein.

177. Plaintiff will be irreparably harmed if the holdback funds are released prior

to entry of judgment in this case or confirmation of the Award in the state court

proceeding because there is a significant probability that ATM will not be able to satisfy

the Award once confirmed.

178. An actual and substantial controversy exists between parties with adverse

legal interests, Plaintiff and Cardtronics, with respect to the $1,000,000 in holdback.

1 Cardtronics, Inc. and Cardtronics USA, Inc. are still collectively known herein as

Cardtronics.



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179. The immediacy and reality of the situation warrants a declaratory judgment

because Cardtronics will or may release the holdback funds to ATM, itself, or another

business or individual on or before August 7, 2015, denying Plaintiff the ability to collect

the Award from ATM, a company that, on information and belief, currently has no assets,

no business operations and operates as an alter ego of Rock.

180.

Practicality and wise judicial administration warrant a declaratory judgment

in this case because a judicial determination of the respective rights and interests of the

parties declaring Plaintiffs rights to the holdback funds would simplify and resolve

most, if not all, of the claims in this lawsuit.

181. Plaintiff seeks specific relief in the form of a declaration that it has a lawful

right to the $1,000,000 in holdback so that there will be no controversy clouding the

Plaintiffs right in and to the funds, a declaration prohibiting Cardtronics from releasing

the $1,000,000 in holdback to ATM, Rock, Cardtronics or any other entity or

individual, and a declaration requiring Cardtronics to pay to Plaintiff the $1,000,000 in

holdback to satisfy part the Award upon its confirmation or to satisfy all or part of a

judgment in this case.

COUNT II

INJUNCTIVE RELIEF PURSUANT TO FEDERAL

RULE OF CIVIL PROCEDURE 65

(Cardtronics, Inc. and Cardtronics USA, Inc.)



183. ATM agreed to arbitration under FINRA rules which requires all awards to



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be paid within 30 days.

184. On November 6, 2014, the Arbitration Panel issued the Award finding ATM

liable to Plaintiff for approximately $1,200,000, with interest still accruing.

185. The 30-day period has passed since the Award was issued and ATM has not

paid any portion of the Award to Plaintiff.

186.

Cardtronics currently has in holdback a portion of the proceeds of the sale

between Cardtronics and ATM.

187. On information and belief, the holdback amount was originally

approximately $1,000,000.

188. On information and belief, the $1,000,000 holdback is set to be released to

ATM on August 7, 2015.

189.

Cardtronics claims it has a right to offset its losses and against Plaintiffs

claim from the holdback amount.

190. Plaintiff will suffer irreparable injury if the $1,000,000 holdback is

released to ATM, Rock, Cardtronics or any other person or business at any time during

this lawsuit, or if the funds are used to offset Cardtronics losses, because there is a

significant probability that ATM will not be able to satisfy the Award once confirmed by

the District Court.

191.

The threatened injury caused by release of the $1,000,000 holdback is real

and substantial.

192. More harm will result from the denial of the injunction than its issuance

because the $1,000,000 holdback may be Plaintiffs only chance of recovering any



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money owed by ATM and its successor Cardtronics, and the impact on Cardtronics is

minimal as it is merely maintaining the status quo and continuing to hold the funds it has

had in its possession for over two years.

193. Plaintiff has a reasonable probability of success in a trial on the merits as

outlined in the facts section and the counts below and has already been unanimously

awarded $1,200,000 by the Arbitration Panel.

194. The public interest is served by the injunction because actual enforcement of

court judgments enhances the credibility and effectiveness of the rule of law in the State

of Minnesota.

195. Pursuant to Federal Rule of Civil Procedure 65, Plaintiff is entitled to an

injunction that prevents Cardtronics from releasing the holdback to ATM, Rock,

Cardtronics, or any other person or entity, and that prevents Cardtronics from using the

holdback funds to offset its losses, until ordered by the Court.

COUNT IIITRANSFEREE/SUCCESSOR LIABILITY UNDER

MINNESOTA STATUTE 302A.661




197. Minnesota Statute 302A.661, subd. 4 provides that a transferee is liable for

the debts, obligations, and liabilities of the transferor to the extent provided in the

contract or agreement between the transferee and the transferor, or to the extent provided

by this chapter or other statutes of this state.



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198. On or about August 7, 2012, Cardtronics, the transferee, signed an agreement

to purchase all or substantially all the assets of ATM, the transferor, for a price equal to

or greater than $20,500,000.

199. On information and belief, Cardtronics assumed debts, obligations and

liabilities of ATM in the contract or agreement when it purchased all or substantially all

the assets of ATM on August 7, 2012.

200. The Engagement Letter between Plaintiff and ATM states, The fees,

reimbursement, indemnity and contribution obligations of the Company [ATM] under

this agreement shall be in addition to any liability which the Company may otherwise

have, shall survive any notice of termination and shall be binding upon and extended to

the benefit of any successors, assigns, heirs and personal representatives of the Company

and GH&F.

201. Pursuant to Minn. Stat. 302A.661, subd. 4 and the agreement between

successor/transferee Cardtronics and transferor ATM, Cardtronics is liable for the debts,

obligations and liabilities of ATM, including the entire Award.

202. Plaintiff is entitled to recover from ATMs successor Cardtronics the entire

$1,200,000 Award, including the damages, interest, attorney fees and costs awarded by

the Arbitration Panel, plus statutory interest and costs.

COUNT IV

TRANSFEREE/SUCCESSOR LIABILITY UNDER MINNESOTA STATUTE

513.41-51, MINNESOTA UNIFORM FRAUDULENT TRANSFER ACT(Cardtronics USA, Inc. and Cardtronics, Inc.)




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204. Minnesota Statute 513.44(a) states: A transfer made or obligation incurred

by a debtor is fraudulent as to a creditor, whether the creditors claim arose before or

after the transfer was made or the obligation was incurred, if the debtor made the transfer

or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditor

of the debtor.

205. On August 7, 2012, Cardtronics executed an agreement whereby it purchased

all or substantially all the assets of ATM for a price equal to or greater than $20,500,000.

206.

ATM concealed the transfer of ATMs assets to Cardtronics from Plaintiff to

avoid paying Plaintiff its Performance Fee and costs.

207. The transfer to Cardtronics was substantially all of the debtor ATMs assets.

208.

ATM and its president, shareholder and CEO Rock ceased communicating

with Plaintiff while negotiating the transfer of assets with Cardtronics and following the

transfer of the assets.

209. On information and belief, ATM became insolvent shortly after the sale of

ATMs assets to Cardtronics by Rocks siphoning of all funds from the corporation.

210. The transfer to Cardtronics was made and the debt to Plaintiff was incurred

simultaneously.

211.

The transfer of ATMs assets was a fraudulent transfer under the Uniform

Fraudulent Transfer Act.

212. The Performance Fee, costs and Award are each a claim pursuant to Minn.

Stat. 513.41(3), which is defined as, [A] right to payment, whether or not the right is



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reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,

disputed, undisputed, legal, equitable, secured, or unsecured.

213. Plaintiff is a Creditor under the statute because it has a Claim against ATM.

214. Pursuant to Minnesota law, a successor/transferee is liable for any damages

resulting from a fraudulent transfer made by the transferor.

215.

In its Statement of Claim filed with FINRA on March 27, 2013, Plaintiff

brought a claim against ATM, Cardtronics and Rock under Minn. Stat. 513.41-.51,

with Count VI stating in part: Here, the transfer of the assets of ATM to successor-in-

interest Cardtronics (as to the entity ATM), and to Respondents Rock, Hovland,

Woolson, Duhn, James, and Poluha were fraudulent as to GHF, because ATM made the

transfer or incurred the obligation with the actual intent to hinder, delay or defraud GHF

and to not pay GHF any fee.

216. The Award issued by the Arbitration Panel is binding and conclusively

establishes creditor Plaintiffs claim and a fraudulent transfer by transferor/debtor ATM

to successor/transferee Cardtronics under Minn. Stat. 513.41-51.

217. Cardtronics is liable for the debts, obligations and liabilities of ATM as a

successor/transferee of a fraudulent transfer.

218. Pursuant to Minn. Stat. 513.41-.51, Plaintiff is entitled to any and all the

relief afforded in the statute and to recover from ATMs successor/transferee Cardtronics

the entire $1,200,000 Award, including the damages, interest, attorney fees and costs

awarded by the Arbitration Panel, plus statutory interest and costs.



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COUNT V

TRANSFEREE AND TRANSFEROR LIABILITY UNDER MINNESOTA

STATUTE 513.47 (a)(3)(iii) and (b)

(Phillip A. Rock, Cardtronics USA, Inc. and Cardtronics, Inc.)

219.

Paragraphs 1 through 218 as set forth above are incorporated herein by


220. On information and belief, Rock received the vast majority of the

$20,500,000 in proceeds from the sale of ATM via distributions.

221. The facts surrounding the fraudulent transfer of ATM to Cardtronics are

outlined in the Facts and Count IV.

222. The Award issued by the Arbitration Panel is binding and conclusively

establishes creditor Plaintiffs claim and a fraudulent transfer by transferor/debtor ATM

to successor/transferee Cardtronics under Minn. Stat. 513.41-51.

223. Minnesota Statute 513.47(b) states, If a creditor has obtained a judgment

on a claim against the debtor, the creditor, if the court so orders, may levy execution on

the asset transferred or its proceeds.

224. Minnesota Statute 513.47(a)(3)(iii) states, In an action for relief against a

transfer or obligation under sections 513.41 to 513.51, a creditor, subject to the

limitations in section 513.48, may obtain: subject to the applicable principles of equity

and in accordance with the applicable Rules of Civil Procedure: any other relief the

circumstances may require.

225.

In light of the Award by the Arbitration Panel and the wrongful behavior by

Rock as the sole shareholder and CEO of ATM and Cardtronics as transferee/successor,



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principles of equity dictate and Minn. Stat. 513.47(a)(3)(iii) and (b) allow Plaintiff to

recover the proceeds from the sale of the assets of ATM to satisfy the Award of

approximately $1,200,000.

226. The $1,000,000 currently in the possession of Cardtronics in holdback, is

proceeds from the sale of ATM to Cardtronics, to be paid in deferred installments.

227.

Pursuant to Minn. Stat. 513.47(a)(3)(iii) and (b), Plaintiff is entitled to the

proceeds from the sale of ATMs assets currently possessed in holdback by

Cardtronics and any proceeds possessed by Rock up to an amount to satisfy the

$1,200,000 Award.

228. Pursuant to Minn. Stat. 513.47(a)(3)(iii) and (b), Plaintiff is entitled to

recover from Cardtronics and Rock the proceeds from the sale of ATMs assets to

Cardtronics in an amount up to the entire $1,200,000 Award, including the damages,

interest, attorney fees and costs awarded by the Arbitration Panel, plus statutory interest

and costs.

COUNT VI

VIOLATIONS OF MINN. STAT. 302A.551 and 302A.557

(Phillip A. Rock)



230.

Minn. Stat. 302A.557, Liability of Shareholders for Illegal Distributions,

states that: A shareholder who receives a distribution made in violation of the provisions

of section 302A.551 is liable to the corporation, its receiver or other person winding up

its affairs.



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231. Minn. Stat. 302A.551 sets forth the criterion for permitted distributions to

shareholders, which may occur when the corporation will be able to pay its debts in the

ordinary course of business after making the distribution and the board does not know

before the distribution is made that the determination was or has become erroneous.

232. Thus, the corporation may make the distribution if it is able to pay its debts in

the ordinary course of business after making the distribution.

233. Here, ATM shareholder Rock knew of the Performance Fee and costs owed

to Plaintiff on August 7, 2012 and, on information and belief, received and continues to

receive distributions from the corporation thereafter without first paying Plaintiff and

without leaving enough assets available in ATM to pay Plaintiff.

234. Rock is personally liable as a shareholder of ATM pursuant to Minn. Stat.

302A.557.

235. As a direct and proximate result of Rocks conduct, Plaintiff suffered

damages in excess of $1,200,000.

236. Plaintiff is entitled to recover from Rock the entire $1,200,000 Award,

including the damages, interest, attorney fees and costs awarded by the Arbitration Panel,

plus statutory interest and costs, up to the amount he received in distributions from ATM

in violation of Minn. Stat. 302A.551 and 302A.557.

COUNT VII

EQUITABLE RELIEF TO PIERCE CORPORATE VEIL AND HOLD

SHAREHOLDER LIABLE AS ALTER EGO

(Phillip A. Rock)




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238. On information and belief, ATM has insufficient capitalization for purposes

of its corporate undertaking and is not engaged in any business operations at this time.

239. On information and belief, ATM does not observe corporate formalities and

does not engage in any business at this time.

240.

On information and belief, ATM is currently insolvent, with no funds left to

pay the debt owed to Plaintiff.

241. On information and belief, ATM is nothing more than a shell from which

dominant shareholder Rock can siphon funds from when Cardtronics makes deferred

installment payments due from the sale proceeds that were used as holdback from the

sale of ATM.

242.

On information and belief, the officers and directors of ATM perform no

functions at this time and ATM does not currently engage in any business operations.

243. On information and belief, ATM currently exists for the sole purpose of

allowing Rock to collect holdback payments from Cardtronics making the corporation

merely a faade for Rocks individual dealings.

244. It will be an injustice and fundamentally unfair if Rock is permitted to siphon

funds from ATM as its alter ego while Plaintiff is denied its right to the approximately

$1,200,000 in debt it is owed by ATM.

245. Minnesota law dictates that with the characteristics of ATM identified above,

it is proper to pierce the corporate veil to hold shareholder Rock liable for the debts of

ATM where Rock is the alter ego of the corporation and piercing the corporate veil is



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necessary to avoid injustice or fundamental unfairness.

246. Under Minnesota law and corporate veil piercing principles, Plaintiff is

entitled to recover from Rock the entire $1,200,000 Award, including the damages,

interest, attorney fees and costs awarded by the Arbitration Panel, plus statutory interest

and costs.

COUNT VIII

FRAUDULENT MISREPRESENTATION

(Phillip A. Rock)



248. Under Minnesota law, an officer and shareholders fraudulent conduct

renders the shareholder directly liable for fraud.

249.

Rock made false representations of a material past or present fact susceptible

of knowledge, specifically, that Plaintiff would be ATMs exclusive agent, ATM would

be sold through the efforts of Plaintiff, ATM would pay Plaintiff its Performance Fee and

costs, and ATM would abide by the Exclusivity Agreement with Seven Bank.

250. Rock continued for an extended period of time to express interest in selling

ATM to Seven Bank, but such representations were false as Rock was merely using ATM

as a stalking horse so that he could obtain valuable confidential information from

Seven Bank and sell ATM to Cardtronics and in doing so used confidential information

about Seven Banks plans to displace Cardtronics as the provider of ATM services for 7-

Eleven stores.

251. Rock knew the representations made were false as he orchestrated the plan to



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use Seven Bank as a stalking horse and use confidential information obtained through

Plaintiffs efforts in order to sell ATM to Cardtronics at a premium.

252. He further knew of and orchestrated the plan to obtain confidential

information from Seven Bank and make false representations that Plaintiff would be

ATMs exclusive agent, ATM would be sold through Plaintiff, ATM would pay Plaintiff

its performance fee, and ATM would abide by the exclusively agreement with Seven

Bank.

253. Rock intended to induce Plaintiff to act in reliance on his representations.

254.

Rock orchestrated the plan to induce Plaintiff to work for more than twelve

months to create a market for the sale of ATM and prepare ATM and its management

team for ATMs sale, identify and contact hundreds of potential buyers, and negotiate

with Seven Bank to provide a bona fide purchaser with a maximum purchase price for

ATM.

255. Rock orchestrated and executed this plan so that he could use Seven Bank as

a stalking horse to establish the minimum sales price when Rock sold ATM to

Cardtronics and to avoid paying Plaintiff its costs and Performance Fee.

256. Rock further intended to induce Plaintiff to continue its actions and

negotiations with Seven Bank while also negotiating with Cardtronics which is evidenced

by Rock withholding the material fact of his negotiations with Cardtronics, secretly

giving Cardtronics access to the Data Room, and providing confidential information to

Cardtronics that Seven Bank intended to displace Cardtronics as the provider of ATMs in

7-Eleven stores.



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257. The representations by Rock caused Plaintiff to rely thereon and such

reliance was justified because it is standard in the industry for a broker to be an exclusive

agent and this is the relationship outlined in the Engagement Letter, oral agreement

between ATM and Plaintiff and the actions of the parties


reliance was justified because it is standard in the industry for a broker to be the exclusive

agent of an entity and receive material information relating to sales activities while it is

being marketed and negotiations between buyer and seller are taking place.

259.

The representations by Rock caused Plaintiff to rely thereon and such

reliance was justified because it is standard in the industry for a corporation, such as

ATM, to pay its exclusive agent, such as Plaintiff, a Performance Fee and costs following

the sale of the corporation.


reliance was justified because the Exclusivity Agreement between ATM and Seven Bank

and confidentiality provisions continuing two years thereafter, which was an essential

part of the sales process, caused Plaintiff to believe that ATM would not conceal its

negotiations with Cardtronics and would not disclose to Cardtronics that Seven Bank

planned to displace Cardtronics as the provider of ATMs in 7-Eleven stores.

261.

Rocks representation that he intended to sell ATM to Seven Bank, even

making a counteroffer that was accepted, further caused Plaintiff to rely and act on these

representations because the agreements between ATM and Plaintiff and industry standard

do not allow a corporation to use an exclusive agent, such as Plaintiff, and another



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company, such as Seven Bank, as a stalking horse in order to receive a premium sale

price from another company, such as Cardtronics, and to avoid paying its costs and

Performance Fee to Plaintiff.

262. All or substantially all the assets of ATM were sold to Cardtronics and

Plaintiff was never paid its Performance Fee or costs which caused pecuniary damage as

a result of the reliance on Rocks false representations.

263. As an officer and shareholder of ATM and as a result of his fraudulent

misrepresentations, Rock is liable for damages suffered by Plaintiff which include the

entire $1,200,000 Award, including the damages, interest, attorney fees and costs

awarded by the Arbitration Panel, plus statutory interest and costs.

COUNT IX

NEGLIGENT MISREPRESENTATION




265. Cardtronics omitted past or present material facts when it withheld the

existence of its negotiations with ATM despite being aware of Plaintiffs exclusive

agency relationship with ATM and using the sales Data Room prepared by Plaintiff.

266. Cardtronics failed to make appropriate arrangements for payment of

Plaintiffs claim in an attempt to hinder, delay and defraud.

267. Cardtronics further omitted past or present material fact when it failed to

inform Plaintiff that it received confidential information from ATM in the form of Seven

Banks plan to displace Cardtronics as the provider of ATMs in 7-Eleven stores.



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268. On information and belief, Cardtronics, a sophisticated business entity, was

aware that the sensitive and highly valuable information about Seven Banks plans to

displace Cardtronics as the ATM provider for 7-Eleven was confidential.

269. The negotiations between Cardtronics and ATM and the breach of the

Exclusivity Agreement and confidentiality provisions were unknown to Plaintiff.

270.

Cardtronics had special knowledge of these material facts to which Plaintiff

did not have access because Plaintiff could not have known about the secret negotiations

between Cardtronics and ATM until after the sale or known about the breach of the

Exclusivity Agreement.

271. Cardtronics intended that Plaintiff would rely on these misrepresentations

and omissions so that it could purchase ATM and preserve its valuable relationship with

7-Eleven.

272. Cardtronics also specifically withheld information from Plaintiff regarding

the sale of ATM and made misrepresentations in an attempt to avoid having to pay

Plaintiff its Performance Fee and costs.

273. Plaintiff relied on and was justified in relying on these misrepresentations

and omissions because Plaintiff had no reason to suspect these secret negotiations were

taking place and was at all times material acting in good faith when marketing and

preparing for the sale of ATM.

274. Cardtronics was made aware and knew or should have known that Plaintiff

was ATMs exclusive agent when it received the Confidential Overview in March 2011

which stated, Greene Holcomb & Fisher LLC (GH&F) has been retained on a



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confidential basis to assist in exploring strategic alternatives, potentially including a

recapitalization or sale of the business. In its role as the Companys exclusive financial

advisor, GH&F will act as the sole contact with all interested parties. See Exhibit G.

275. Cardtronics was again made aware of the exclusive agency relationship when

it gained access to the Data Room in 2012, and, on information and belief, through its

relationship with and information supplied by Rock and ATM.

276. Cardtronics failed to use the care a reasonable business would use in the

same or similar circumstances because a reasonable business would have been aware of

and contacted ATMs exclusive agent, Plaintiff, if it was interested in purchasing ATM

and if it was provided with information it knows to be confidential and a reasonable

business would not have circumvented Plaintiffs right to the Performance Fee and costs.

277.

Plaintiff suffered pecuniary damages as a result of its reliance as payments of

the costs and Performance Fee were circumvented as a result of Cardtronics

misrepresentations and omissions.

278. As a direct and proximate result of Cardtronics negligent misrepresentations

and Plaintiffs reliance upon them, Plaintiff has suffered substantial damages of at least

$788,750, or 3.75% of the actual sales price up to $25,000,000 and 5% on amounts over

$25,000,000, whichever is greater, plus statutory interest and costs.

COUNT X

NEGLIGENT MISREPRESENTATION

(Phillip A. Rock)





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280. Under Minnesota law, the officer and shareholder of a corporation are liable

for the torts of the corporation if he actually participated in or acquiesced to the tort.

281. Here, Rock actually participated in the negligent misrepresentation and was

the individual who actually made the representations.

282. Rock supplied false information to Plaintiff relating to the sale of ATM,

including that ATM would pay Plaintiff its Performance Fee for its services as ATMs

exclusive agent upon the sale of ATM and that ATM would notify Plaintiff if there were

any parties interested in purchasing ATM.

283.

Rock communicated such representations to Plaintiff knowing them to be

false or without knowing whether such statements were true or false.

284. Rock concealed the existence of the negotiations with Cardtronics and

supplied Cardtronics with confidential information about Seven Bank, which were facts

that Rock had special knowledge of and facts Plaintiff could not have known.

285. Rock failed to use care that a reasonable person would use in the same or

similar circumstances in communicating the false information to Plaintiff because a

reasonable person would not misrepresent material terms to an agreement or omit

material information in order to circumvent paying Plaintiff its Performance Fee and

costs.

286.

As a direct and proximate result of the communications made to Plaintiff by

Rock and his omissions, Plaintiff relied upon the information and invested significant

time, effort and resources.

287. Plaintiff was justified in relying upon the communications by Rock because



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Plaintiff had no reason to believe Rock would make such false representations and

omissions and the parties agreed that Rock would provide true and accurate information

and that Plaintiff was entitled to act on the information provided by Rock.

288. Further justifying Plaintiffs reliance is industry standard and prior dealings

by Plaintiff whereby its clients conveyed accurate and truthful information in the same or

similar circumstances.

289. As a direct result of Rocks conduct, Rock received millions of dollars from

the sale of ATM to Cardtronics, due in large part to the work and services performed by

Plaintiff and materials created by Plaintiff, but failed to pay Plaintiff its Performance Fee

and costs.

290. As an officer and shareholder of ATM and as a direct and proximate result

Rocks negligent representations and omissions and Plaintiffs reliance upon them, Rock

is liable for damages suffered by Plaintiff which include the entire $1,200,000 Award,

including the damages, interest, attorney fees and costs awarded by the Arbitration Panel,

plus statutory interest and costs.

COUNT XI

INTERFERENCE WITH CONTRACTUAL RELATIONSHIPS

(Phillip A. Rock, Cardtronics USA, Inc., Cardtronics, Inc.)



292. Under the agreements, Plaintiff was to act as ATMs exclusive agent to

find a purchaser for ATM. Plaintiff performed under the agreement and exerted

substantial time and effort in preparing ATMs management team and marketing



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materials, and in locating potential buyers for ATM and generating their interest in ATM.

293. Under the agreements, Plaintiff was to be paid out of pocket costs capped at

$20,000 and a Performance Fee upon the sale of ATM.

294. Rock had knowledge of the agreements through his status as president, CEO

and sole shareholder of ATM.

295.

Cardtronics was made aware of the contract by the Confidential Overview it

was sent in March 2011.

296. Cardtronics was also made aware through its access to the Data Room in

March 2012, and, on information and belief, through its relationship with Rock and

ATM.

297. Rock and Cardtronics intentionally caused ATM to breach is contracts with

Plaintiff by, among other things, concealing the negotiations between ATM and

Cardtronics, sharing confidential information about Seven Banks intentions to displace

Cardtronics as the provider of ATMs in 7-Eleven stores, allowing Seven Bank

negotiations to continue while ATM secretly and simultaneously negotiated with

Cardtronics, and misleading Plaintiff through fraudulent and negligent misrepresentations

so that it could use Seven Bank as a stalking horse to sell ATM to Cardtronics.

298. On information and belief, Rock and Cardtronics each intentionally caused

ATM to breach its contract with Plaintiff so that, among other reasons, they could avoid

paying Plaintiff its costs and Performance Fee, so Rock could receive a premium

purchase price for ATM, and so that Seven Bank would not displace Cardtronics as the

supplier of ATMs in 7-Eleven stores.



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299. The actions of Rock and Cardtronics were not justified because Plaintiff

performed all of its legal duties in good faith and reasonably relied on the representations

and omissions by the Defendants and the Defendants actions were to hinder, delay and

defraud Plaintiff.

300. As a direct and proximate result of Rock and Cardtronics intentional

interference, Plaintiff has suffered substantial damages of at least $788,750, or 3.75% of

the actual sales price up to $25,000,000 and 5% on amounts over $25,000,000, whichever

is greater, plus statutory interest and costs.

COUNT XII

TORTIOUS INTERFERENCE WITH PROSPECTIVE

ECONOMIC ADVANTAGE

(Phillip A. Rock, Cardtronics USA, Inc., and Cardtronics, Inc.)



302.

Plaintiff established a relationship with ATM, in that Plaintiff was to act as

ATMs exclusive agent to find a purchaser for ATM.

303. Plaintiff exerted substantial time and effort in preparing ATMs management

team and marketing materials, locating potential buyers for ATM, generating buyers

interest in purchasing ATM, and negotiating the sale of ATM to Seven Bank.

304. Because of this relationship with ATM, Plaintiff had a reasonable expectation

of economic advantage in the form of costs capped at $20,000 and the Performance Fee

upon the sale of ATM.

305. Rock had knowledge of this expectation through his status as president, CEO



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and sole shareholder of ATM.

306. Cardtronics was made aware of this expectation by the Confidential

Overview it was sent in March 2011.

307. Cardtronics was also made aware through its access to the Data Room in

March 2012, and, on information and belief, through its relationship with Rock and

ATM.

308. Rock intentionally interfered with this reasonable expectation by, among

other things, engaging in the tortious conduct outlined in Count 8 for Fraudulent

Misrepresentation and Count 10 for Negligent Misrepresentation.

309. Cardtronics intentionally interfered with this reasonable expectation by,

among other things, engaging in the tortious conduct outlined in Count 9 for Negligent

Misrepresentation.

310. Absent the wrongful conduct by Rock and Cardtronics, it is reasonably

probable that Plaintiff would have realized its economic advantage through the receipt of

the costs and the Performance Fee.

311. As a direct and proximate result of Rock and Cardtronics tortious

interference with prospective economic advantage, Plaintiff has suffered substantial

damages of at least $788,750, or 3.75% of the actual sales price up to $25,000,000 and

5% on amounts over $25,000,000, whichever is greater, plus statutory interest and costs.

COUNT XIII

QUASI-CONTRACT / UNJUST ENRICHMENT / QUANTUM MERUIT

(Phillip A. Rock)




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313. Plaintiff conferred a benefit on Rock by investing significant time, effort and

costs in the preparation, marketing and negotiation of the sale of ATM and Rock was

aware Plaintiff expected to be paid for those services.

314. Rock accepted and retained the benefits of Plaintiffs services and as a direct

result he received millions of dollars from the sale of ATM to Cardtronics, due in large

part to the work and services performed by Plaintiff and materials created by Plaintiff.

315. Although Rock received millions of dollars from the sale of ATM to

Cardtronics due in large part to the work and services performed by Plaintiff and

materials created by Plaintiff, Plaintiff has not received reasonable compensation for the

value of the benefit it conferred on Rock.

316.

Rock knowingly received the value provided by Plaintiff that in equity and

good conscious he should pay for and he was unjustly enriched in a sense that his

behavior was illegal, unlawful or unconscionable.

317. Rock is not entitled to the benefit without just compensation paid to Plaintiff

and allowing Rock to retain the benefit under these circumstances is unjust.

318. Plaintiff is entitled to compensation for its damages measured by the value of

the benefit received by Rock which is at least $788,750, or 3.75% of the actual sales price

up to $25,000,000 and 5% on amounts over $25,000,000, whichever is greater, plus

statutory interest and costs.

DEMAND FOR JUDGMENT

1. As to Count I: Therefore, Plaintiff demands specific relief in the form of a



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declaration that it has a lawful right to the $1,000,000 in holdback so that there will be

no controversy clouding the Plaintiffs right in and to the funds, a declaration prohibiting

Cardtronics from releasing the $1,000,000 in holdback to ATM, Rock, Cardtronics or

any other entity or individual, and a declaration requiring Cardtronics to pay to Plaintiff

the $1,000,000 in holdback to satisfy part the Award upon its confirmation or to satisfy

all or part of a judgment in this case.

2. As to Count II: Therefore, Plaintiff demands a preliminary injunction that

prevents Cardtronics from releasing the holdback to ATM, Rock, Cardtronics, or any

other person or entity, and that prevents Cardtronics from using the holdback funds to

offset its losses, until ordered by the Court.

3. As to Count III: Therefore, Plaintiff demands judgment against

Cardtronics in an amount in excess of $1,200,000, plus interest and costs.

4. As to Count IV: Therefore, Plaintiff demands judgment against

Cardtronics for any and all the relief afforded in Minn. Stat. 513.41-.51 and in an

amount in excess of $1,200,000, plus interest and costs.

5. As to Count V:Therefore, Plaintiff demands judgment against Rock and

Cardtronics in an amount in excess of $1,200,000, plus interest and costs.

6. As to Count VI:Therefore, Plaintiff demands judgment against Rock in an


7. As to Count VII:Therefore, Plaintiff demands judgment against Rock in

an amount in excess of $1,200,000, plus interest and costs.

8. As to Count VIII:Therefore, Plaintiff demands judgment against Rock in



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an amount in excess of $1,200,000, plus interest and costs.

9. As to Count IX: Therefore, Plaintiff demands judgment against

Cardtronics in an amount in excess of $788,750, plus interest and costs.

10. As to Count X:Therefore, Plaintiff demands judgment against Rock in an


11. As to Count XI:Therefore, Plaintiff demands judgment against Rock and


12. As to Count XII:Therefore, Plaintiff demands judgment against Rock and


13. As to Count XIII:Therefore, Plaintiff demands judgment against Rock in

an amount in excess of $788,750, plus interest and costs.

14. For costs and disbursements and such attorney fees as are provided by

contract and law.

15. For such other and further relief as the Court shall deem just and proper.

DEMAND FOR JURY TRIAL

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff

demands a trial by jury.

Date: December 19, 2014 By: s/ James H. GilbertJames H. Gilbert (#34708)Beverly J. Aho (#0386521)Adam L. Sienkowski (#0395659)Attorneys for Plaintiff Greene Holcomb &Fisher LLCJames H. Gilbert Law Group P.L.L.C.12700 Anderson Lakes Parkway



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Eden Prairie, MN 55344Telephone: (952) 767-0167Fax: (952) [email protected]


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GHF v. Cardtronics, Rock COMPLAINT (14-Cv-05038)

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