[00:00:00] Speaker 03:
So please, as the court, I would like to start by saying that I think that the briefing actually covered most of the ground fairly well and comprehensively.

[00:00:07] Speaker 03:
And so I did not plan on spending too much time elaborating on things.

[00:00:11] Speaker 03:
We believe that the core issue that's being presented here really relates to the third prong of the claim for fraud, which is knowledge of falsity on behalf of the defendant.

[00:00:21] Speaker 03:
And we believe here that we provided more than adequate information to establish this.

[00:00:26] Speaker 03:
First of all, we want to note that the entire defense of this knowledge

[00:00:30] Speaker 03:
is based on the declaration of Mike Curran.

[00:00:33] Speaker 03:
And in that declaration he basically says that the company had a good faith belief that the value of the shares was the $5 transaction price from the previous investor event.

[00:00:43] Speaker 03:
However, when you get into his testimony, when you look at what he actually said, he never inquired.

[00:00:49] Speaker 03:
He never saw the documents to know what the price was.

[00:00:52] Speaker 03:
He didn't inquire as to what the rationale was in terms of using the $5 investor price versus the audited price that they had attained for the common shares of stock.

[00:01:03] Speaker 03:
And therefore, Mike Curran cannot form an evidentiary basis to establish a good faith belief in the $5 valuation.

[00:01:11] Speaker 03:
Further,

[00:01:12] Speaker 03:
As we noted, and we provided you law on this, which is that ordinarily speaking, a good faith belief is something that needs to go to a jury.

[00:01:21] Speaker 03:
So we believe one, they do not have preclusive evidence.

[00:01:24] Speaker 03:
Two, we believe that when you look at the audited value, which was specifically related to the common shares of stock for employee compensation, which is an issue here, versus the $5 investor event,

[00:01:37] Speaker 03:
You can see that there is evidence that Tania made a knowledgeable misrepresentation of fact to Howard to induce him to employment.

[00:01:44] Speaker 03:
And we know that Howard made it crystal clear from the outset that compensation was the key factor in why he was going to move from one employment to another.

[00:01:53] Speaker 00:
Counsel, there's a quite old California Supreme Court case that appears to say that notice to one agent of a corporation is notice to the whole corporation.

[00:02:08] Speaker 00:
In other words, that it's imputed.

[00:02:10] Speaker 00:
Is there anything that has undermined that general principle in recent years?

[00:02:19] Speaker 03:
No.

[00:02:19] Speaker 03:
In fact, at this point in time, it's codified.

[00:02:21] Speaker 03:
And we provided that to you.

[00:02:23] Speaker 03:
Let's see if I can find that clarification.

[00:02:26] Speaker 03:
But the civil code, it actually says that the knowledge goes in both directions, and we have that in the briefing as well, that the current state of California law is that if an agent or an officer has knowledge in either direction, it's imputed upon the company.

[00:02:43] Speaker 03:
And here that we know all the knowledge came from the CFO, whether it came through Curran down to Evans, or whether it came from

[00:02:52] Speaker 03:
Brown directly to Evans, we're not clear, there's no evidence on that, but what we do know is that the CFO, Eric Brown, who obtained the audited report, communicated out to the recruiting office that this was the value they were intending to use.

[00:03:04] Speaker 00:
Well, I guess my question is, what if he didn't communicate it?

[00:03:08] Speaker 00:
Isn't it still the company's problem?

[00:03:11] Speaker 03:
It's still the company's problem because they have the knowledge, but here we know from Mike Curran that it actually was communicated out to at least the recruiting staff.

[00:03:19] Speaker 03:
We know that he got the information about the valuation from Eric Brown.

[00:03:25] Speaker 04:
Mr. Bayer, I want to go back to a little more basic point.

[00:03:29] Speaker 04:
One element of your fraud claim is that

[00:03:34] Speaker 04:
there was a misrepresentation of fact.

[00:03:36] Speaker 04:
Is that right?

[00:03:37] Speaker 04:
Correct.

[00:03:38] Speaker 04:
Now what is the fact that was misrepresented?

[00:03:40] Speaker 03:
That the value of the shares.

[00:03:41] Speaker 04:
The value of the shares.

[00:03:42] Speaker 03:
Correct.

[00:03:43] Speaker 04:
Now is that a fact?

[00:03:44] Speaker 04:
Yes.

[00:03:44] Speaker 04:
Or is that an opinion?

[00:03:46] Speaker 03:
No.

[00:03:46] Speaker 03:
That is a fact.

[00:03:47] Speaker 03:
It's a fact here for a couple of different reasons.

[00:03:49] Speaker 03:
It's a fact because it was not communicated to Howard as a statement of opinion.

[00:03:53] Speaker 03:
It was communicated to him that this is the fair market value.

[00:03:57] Speaker 03:
And two, we provided you case law and the district court actually held that in circumstances where one party holds all of the information, the other party has no ability to check that information out.

[00:04:09] Speaker 04:
How do you show that that was a falsehood?

[00:04:13] Speaker 04:
You show it by an opinion, the 409A, right?

[00:04:16] Speaker 03:
We show it by the 409A showing that they had... Which is an opinion or a fact?

[00:04:21] Speaker 04:
It's an opinion, isn't it?

[00:04:23] Speaker 03:
It is the opinion that Taneum sought, paid for, and relied upon, and therefore they treated it as a fact.

[00:04:29] Speaker 03:
Relyed upon for what purpose?

[00:04:31] Speaker 03:
They used it to demonstrate the value in the share works, the portfolio portal,

[00:04:36] Speaker 04:
For what purpose?

[00:04:37] Speaker 03:
For the purpose of employees being able to check the value of shares.

[00:04:42] Speaker 04:
For the purpose of, you know, taxes that might be due to the IRS, right?

[00:04:46] Speaker 03:
Correct.

[00:04:46] Speaker 03:
They also reported up to the IRS.

[00:04:48] Speaker 04:
It's a very common, you know, I'll call it, I don't know what the term of art is, but it's just, it's a tax documentation document, opinion, right?

[00:04:57] Speaker 03:
Correct.

[00:04:58] Speaker 03:
But here we know that the very purpose of the audit was to determine the value of common shares for employee compensation.

[00:05:05] Speaker 04:
for what purpose?

[00:05:06] Speaker 04:
Only for tax reporting purposes.

[00:05:08] Speaker 03:
Well, in this particular circumstance, they communicated it to him to induce him to employment.

[00:05:13] Speaker 03:
They used a higher value in order to induce him to take action.

[00:05:17] Speaker 03:
That's the definition of fraud.

[00:05:19] Speaker 03:
And we have cases that demonstrate that an opinion where that person holds all the information

[00:05:25] Speaker 03:
can be actionable fraud.

[00:05:28] Speaker 03:
And that's what happened here.

[00:05:29] Speaker 03:
And we know from Mike Curran, again, there was no way for Howard to check that valuation.

[00:05:35] Speaker 03:
And we also know from the communications that they did not provide Howard any information that would indicate to him that there might be something he needs to follow up on.

[00:05:43] Speaker 03:
that this was an investor event, that this was only an audited value, that this is different than what you would see in share works when it came to you.

[00:05:51] Speaker 03:
What they did is make an affirmative representation of a current value, we understand it's not a future value, but a current value for the purposes of inducing him to leave his old employ and seek employment with Tania.

[00:06:02] Speaker 03:
And that's what happened.

[00:06:03] Speaker 02:
What is the legal significance of the 409A submitting that value to the IRS?

[00:06:09] Speaker 02:
Can the IRS use that for purposes of calculating taxes?

[00:06:13] Speaker 03:
Well, it's an affirmative statement of truth to the government for the government to take appropriate action.

[00:06:19] Speaker 03:
I don't think it's done necessarily under penalty of perjury.

[00:06:21] Speaker 03:
I'm not a tax expert, but it is akin to that.

[00:06:24] Speaker 03:
You're making an affirmative representation to the government about what the value of those shares are for the purpose of taxing the employees.

[00:06:31] Speaker 00:
That's a very serious assertion.

[00:06:32] Speaker 00:
This is an issue that bothered me when I was preparing also.

[00:06:39] Speaker 00:
But it seems to me that the missing item and maybe opposing counsel can deal with this when it's her turn to speak.

[00:06:51] Speaker 00:
I think it may be that this tax-related value is not what people

[00:06:58] Speaker 00:
do or should rely on in assessing current value, but they have no expert witness, no declaration, nothing to support that theory.

[00:07:12] Speaker 00:
So maybe they'll win and maybe they'll lose, but it seems to me that on the summary judgment record, there really isn't anything to prevent this from being potentially a current value.

[00:07:29] Speaker 03:
Correct.

[00:07:30] Speaker 03:
And so one of the things I'd said to you earlier is there's no preclusive evidence.

[00:07:33] Speaker 03:
And I am looking at this strictly from the summary judgment standard of they must produce evidence which precludes our ability to prevail.

[00:07:39] Speaker 03:
And I don't believe that they've done that.

[00:07:40] Speaker 03:
And that may be an issue upon which this stands.

[00:07:44] Speaker 00:
And I probably should know the answer to this, but is this a case in which the parties have attempted mediation?

[00:07:51] Speaker 03:
There were court-involved settlement discussions early in my involvement.

[00:07:57] Speaker 03:
I did not start at the outset of the case.

[00:08:00] Speaker 03:
That happened once.

[00:08:01] Speaker 03:
There have been some discussions between parties, but there has not been a full-on mediation.

[00:08:05] Speaker 03:
There was just a settlement conference.

[00:08:07] Speaker 00:
Would that, from your client's perspective, would that be a useful possible exercise here?

[00:08:14] Speaker 03:
That's hard for me to say without discussing that with him first.

[00:08:17] Speaker 03:
I can say that at this juncture that may be difficult because I think that either party is looking at this from the perspective of prevailing on the appeal and you're going to have diametrically different valuations based on one outcome or the other.

[00:08:30] Speaker 03:
So he may be open to that.

[00:08:32] Speaker 00:
Well, that's ordinarily the whole point of mediation, because somebody wins and somebody loses, if without it.

[00:08:40] Speaker 03:
But normally you're doing that with the color of not having any previous decisions about the underlying merits.

[00:08:46] Speaker 03:
And I think here that weighs things a little bit.

[00:08:49] Speaker 00:
Well, I shouldn't really be arguing with you about this, but it seems to me that the best possible outcome for you is merely to say that there's an issue of fact, not to say anything conclusive.

[00:08:59] Speaker 03:
Correct.

[00:09:00] Speaker 03:
I do think that this is an issue of fact for trial.

[00:09:02] Speaker 03:
That is, what our briefing has been pretty clear about throughout in each step is that these are— And at a trial, even if you win here, you could win or you could lose, correct?

[00:09:11] Speaker 03:
Correct.

[00:09:13] Speaker 03:
Okay.

[00:09:13] Speaker 03:
Post the appeal, would mediation be a useful tool?

[00:09:16] Speaker 03:
I think it's always a useful tool.

[00:09:18] Speaker 00:
Okay.

[00:09:21] Speaker 03:
I am seeing that I'm close to the five minutes.

[00:09:23] Speaker 03:
I'm not sure when the clock started, if that was down to 10.

[00:09:26] Speaker 02:
You've used up almost 10 minutes.

[00:09:28] Speaker 02:
So if you stop now, you'll have that time for rebuttal.

[00:09:31] Speaker 03:
Thank you very much.

[00:09:32] Speaker 03:
Unless you have further questions for me now.

[00:09:34] Speaker ?:
Thank you.

[00:09:46] Speaker 01:
Good morning.

[00:09:47] Speaker 01:
May it please the court.

[00:09:48] Speaker 01:
My name is Margaret Bell.

[00:09:49] Speaker 01:
I represent Tainium Inc.

[00:09:51] Speaker 01:
There is a motion before the court to augment the record, which was not addressed by my opponent, but I did want to address briefly.

[00:09:58] Speaker 01:
Generally, when we're at the appellate level, the record is limited to the record at the district court unless there are very limited circumstances.

[00:10:11] Speaker 01:
My opponent has indicated that one of them is judicial notice that he's basing his motion on, the other is

[00:10:17] Speaker 01:
that there would be extraordinary, this is an extraordinary case or extraordinary circumstances.

[00:10:22] Speaker 01:
Judicial notice would only apply to the first document, which is a corporate filing bitaneum, and it can only apply to the fact of the filing, not to the contents or the

[00:10:32] Speaker 01:
facts contained in that document which Which mr. Howard was relying on?

[00:10:38] Speaker 00:
Whatever it's worth my questions all pertain to the existing record okay, and I would ask you to address whether there is anything in the record that deals with the question of the usage of

[00:10:55] Speaker 00:
or usages of the 409A valuation versus the last transaction?

[00:11:04] Speaker 01:
Yes, thank you.

[00:11:06] Speaker 01:
There is, at the record, page 145 is the evaluation report.

[00:11:13] Speaker 01:
In the first paragraph, it states the company plans to use this report solely for the purpose of granted, already granted, employee stock awards.

[00:11:21] Speaker 01:
And above that, it does say, for financial reporting and tax compliance purposes.

[00:11:27] Speaker 00:
So it is, as Your Honor... It doesn't say exclusively, and there's nothing that explains whether this is or is not something that a reasonable potential employee would rely on.

[00:11:43] Speaker 00:
There's no expert discussion.

[00:11:45] Speaker 00:
There's no expert testimony or declaration that I'm aware of.

[00:11:50] Speaker 00:
Is that true?

[00:11:51] Speaker 01:
That is true.

[00:11:52] Speaker 01:
There's something also to note that's different in this document is that it uses the term fair value.

[00:12:01] Speaker 01:
It does not use the term fair market value.

[00:12:03] Speaker 01:
It uses the term fair value of minority, non-marketable common stocks.

[00:12:08] Speaker 01:
And what Tanium and Mr. Evans were indicating, the one statement that's at issue

[00:12:14] Speaker 01:
is the following.

[00:12:15] Speaker 01:
Stock has a current fair market value of $5 a share.

[00:12:20] Speaker 00:
Well, that's not the only thing.

[00:12:21] Speaker 00:
Evans told plaintiff that he would receive, quote, $150,000 current value.

[00:12:28] Speaker 00:
So that's a pretty specific representation of the actual value.

[00:12:38] Speaker 01:
Based on what Tanium looks to,

[00:12:41] Speaker 01:
that there was an investor equity event where they were able to get in the market $5 per share.

[00:12:47] Speaker 01:
That is what is indicating to them what an investor would pay for a share of Tanium stock, and that was the indication to them of what that stock was worth at that time.

[00:12:58] Speaker 01:
They were also, and there's evidence in the record, they were getting ready for an IPO, which would, and I guess you're not looking at the preferred versus common stock, but everything would convert to common stock at that point.

[00:13:10] Speaker 01:
But that's the mind frame, is what can we get in the market?

[00:13:13] Speaker 01:
Not what an accountant's gonna look at for tax purposes.

[00:13:17] Speaker 02:
But my understanding, and perhaps this is why I think there would potentially need to be more evidence in the record, at least as like on the superficial reading of the IRS code, is that the purpose of the 49A evaluation is to provide an accurate assessment of fair market value of employee stock, right, that is a certainly deferred compensation, right?

[00:13:43] Speaker 02:
It seems to me as without more, right, there's two possible ways to determine the fair market value of this stock and there doesn't seem to me something conclusive or even assuming there was a good faith basis for Tanium selecting one over the other.

[00:14:04] Speaker 02:
drawing all inferences in favor of the non-moving party, it still seems to me a reasonable jury could conclude that the other number was more accurate and Tanium was either knowing or reckless in disregarding it or not at least disclosing it to Mr. Howard.

[00:14:22] Speaker 01:
And again, the tax assessment is a fair value.

[00:14:27] Speaker 01:
What Tanium was looking at is what can we get in the market, which are two different things.

[00:14:32] Speaker 01:
car may be worth blue book is different than what you probably can pay for on the market in various times.

[00:14:38] Speaker 01:
Same with housing.

[00:14:39] Speaker 01:
These are, again, to the point earlier,

[00:14:43] Speaker 01:
is these are evaluations, they're opinions, they're not statements of fact, it's an evaluation.

[00:14:47] Speaker 00:
But it was presented to him as a statement of fact.

[00:14:49] Speaker 00:
He was told he was gonna get $150,000 of value, current value.

[00:14:54] Speaker 00:
That is a statement of fact, what you are getting.

[00:14:58] Speaker 00:
Typically it's true that value is considered an opinion, but not always.

[00:15:07] Speaker 00:
And I don't see where the district court went wrong on that aspect of the case.

[00:15:14] Speaker 01:
Well, that's interesting.

[00:15:14] Speaker 01:
You have two different values, so it's not necessarily a statement of fact, it's a statement of value.

[00:15:21] Speaker 01:
But I understand what you're saying, and that district court did not decide in our favor at that point.

[00:15:25] Speaker 01:
But what the district court really grappled with, and I think correctly,

[00:15:28] Speaker 01:
was that what is the knowledge of First Mr. Evans in making this representation?

[00:15:34] Speaker 00:
Well, what is your answer to my question of opposing counsel?

[00:15:37] Speaker 00:
There is a case from the 1930s from the California Supreme Court that says basically that the knowledge of one officer or representative of a company is the knowledge of all, that it's imputed the way we do in criminal law with the police knowledge.

[00:15:54] Speaker 00:
So, if that's true, what difference does it make whether he remembered or noticed that this other value was out there?

[00:16:06] Speaker 01:
Well, two things.

[00:16:07] Speaker 01:
One is all the cases, including that Supreme Court case, is not a fraud case and not dealing with the particular prong of knowledge of falsity.

[00:16:15] Speaker 01:
And fraud is an intentional misrepresentation.

[00:16:18] Speaker 01:
You have to look into the mind frame of the person.

[00:16:20] Speaker 00:
But intentionality is different than knowledge.

[00:16:24] Speaker 00:
I mean, the question of knowledge, it seems to me, is separate from the question of intent to defraud.

[00:16:31] Speaker 01:
But as the district court correctly pointed out, there is no case cited.

[00:16:38] Speaker 01:
that says that a manager in making a representation has to know all the information by every other manager in the corporation.

[00:16:46] Speaker 00:
Well, but it is possible that the person making the offer is willfully blind to all the information that is there for that individual to understand.

[00:16:59] Speaker 00:
I mean, if, for example, someone says, well, I've never read

[00:17:02] Speaker 00:
employee's personnel manual, I just haven't bothered, so I don't know anything that's in there.

[00:17:08] Speaker 00:
It seems to me that just saying you didn't know is not the whole story.

[00:17:16] Speaker 01:
And I am pointing out just for, you're asking about those other cases that address this.

[00:17:22] Speaker 01:
There are no cases we could find that address it in a fraud situation with a manager making such a comment, and especially pertaining to the knowledge element.

[00:17:32] Speaker 01:
But also the information, the evidence that Taney presented below was that there was no knowledge of falsity and there was an honest belief that this is what the shares are gonna go for on the market.

[00:17:49] Speaker 02:
But you can still have reckless disregard for falsity.

[00:17:52] Speaker 01:
And the only thing that would be based on is that the fact that there is a 409A report out there that touches on tax liability for

[00:18:01] Speaker 01:
deferred compensation purposes.

[00:18:03] Speaker 01:
That's not what they were looking at when they were trying to figure out what is the fair market value.

[00:18:07] Speaker 01:
What can we get in the market?

[00:18:08] Speaker 01:
They have a more accurate, precise resource, which is the equity sale that had occurred previously.

[00:18:20] Speaker 01:
This is what we can get for it on the market.

[00:18:22] Speaker 04:
Let me ask you a question about that equity event.

[00:18:25] Speaker 04:
Now, didn't that involve the sale of preferred stock?

[00:18:31] Speaker 01:
According to the information that is asked, that my opponent is asking to be augmented in the record, the new documents, but it was of preferred, yes.

[00:18:43] Speaker 04:
All right.

[00:18:43] Speaker 04:
Now, isn't there usually a difference in the value between preferred and common?

[00:18:51] Speaker 04:
Just as something's known on the street.

[00:18:57] Speaker 01:
Not that I'm aware of.

[00:18:59] Speaker 04:
You mean to say, as far as you know, preferred and common are always the same.

[00:19:04] Speaker 04:
What's the point of having two classes then if there's no difference in valuation?

[00:19:10] Speaker 01:
There's difference in rights that go with that.

[00:19:12] Speaker 04:
That's right.

[00:19:13] Speaker 04:
And rights give rights to value, right?

[00:19:15] Speaker 01:
There's no affirmative statement that says that preferred is always going to be treated differently or higher.

[00:19:21] Speaker 04:
No, I'm not saying that.

[00:19:22] Speaker 04:
I'm saying that preferred is not necessarily the same as common.

[00:19:26] Speaker 01:
Not necessarily until you get to a public offering and then the preferred converts into common shares.

[00:19:34] Speaker 01:
And that is what they were getting ready for at that time was an IPO.

[00:19:41] Speaker 01:
And again, what the leadership is looking at is what can we get, what are the stocks going for on the market?

[00:19:49] Speaker 01:
And the communication, the discussion, everything that's done with Intanium,

[00:19:53] Speaker 01:
And again, this is a startup company where there's a lot of talk about this at the time.

[00:19:58] Speaker 00:
Which makes it all the more important, doesn't it, to be accurate when you're dealing with someone because it's not something you can go look up and find out for sure what it sold for yesterday.

[00:20:12] Speaker 00:
Right, and they believe they were... Makes Reliance much more...

[00:20:18] Speaker 01:
The evidence in the record is that they did believe that to be accurate and it was based on that equity event.

[00:20:24] Speaker 02:
But the subject of belief doesn't end the legal inquiry because the law is that they could have had reckless disregard for the accuracy or falsity of their belief.

[00:20:36] Speaker 02:
The question is whether a reasonable jury drawing all the inferences

[00:20:40] Speaker 02:
In favor of Mr. Howard, a reasonable juror could find that Taneum knew or was reckless, had reckless disregard for the accuracy or falsity of its statement.

[00:20:54] Speaker 01:
That is a way that you can get through this prong, but there's no evidence to support it.

[00:20:59] Speaker 01:
There's nothing scientific.

[00:21:00] Speaker 00:
There's no evidence to the contrary either.

[00:21:02] Speaker 00:
It's blank.

[00:21:03] Speaker 00:
I mean, just like the question that I asked you about expert explanation, there are a lot of holes in this record.

[00:21:13] Speaker 02:
Right.

[00:21:14] Speaker 02:
I mean, I think it's a matter of...

[00:21:18] Speaker 02:
law, the purpose of the 409A valuation is to provide a good faith estimate valuation of fair market value.

[00:21:28] Speaker 02:
Is it not?

[00:21:28] Speaker 01:
Fair value for tax purposes.

[00:21:30] Speaker 02:
I understand that's what your document says, fair value, but it does in that my understanding is that as far as a tax code matter, it RS code is asking for a fair and accurate assessment of fair market value and it provides for a variety of ways in which the in a closely held corporation that fair market value can be estimated.

[00:21:53] Speaker 02:
So as a matter of law, that report is

[00:21:57] Speaker 02:
by definition, supposed to be an accurate assessment of fair market value.

[00:22:03] Speaker 02:
So on this record, drawing all inferences in favor of Mr. Howard, why couldn't the jury conclude that having had that valuation report in hand, that it was just going ahead and choosing the $5 over the two, was recklessly disregarding the possible falsity of the $5 valuation.

[00:22:26] Speaker 01:
Because the mere existence of that 409A report doesn't mean they don't truly believe that they can get $5 per share on the market.

[00:22:35] Speaker 01:
And that actually did happen.

[00:22:36] Speaker 01:
There's no dispute to that.

[00:22:39] Speaker 01:
That's what they're basing their indication on is an actual sale.

[00:22:43] Speaker 01:
If you own a duplex and your neighboring duplex exactly the same, sells it for a certain amount, you can look at that and think that's probably what I can sell it for.

[00:22:51] Speaker 02:
But didn't the district court say it was a genuine dispute of material fact as to whether that was the actual fair market value at the time?

[00:22:57] Speaker 01:
No, there's not a dispute of that in the record.

[00:22:59] Speaker 01:
There's no evidence coming forward and saying that they've presented that we didn't know that to be the case, that there was a $5

[00:23:06] Speaker 01:
shares value to the equity event.

[00:23:11] Speaker 00:
Counsel, before you time this up, I'm going to ask you the same question I asked opposing counsel.

[00:23:17] Speaker 00:
Is your client open to the possibility of mediation through our court program?

[00:23:24] Speaker 01:
You know, we went to a settlement conference before the district court.

[00:23:30] Speaker 01:
And then when this decision came out, I think, in my recollections, I did reach out to see if there was an interest.

[00:23:35] Speaker 01:
And I think the response was that there wasn't an interest in that.

[00:23:38] Speaker 00:
I'm not asking about history.

[00:23:39] Speaker 00:
I'm asking about now.

[00:23:41] Speaker 00:
I mean, if they're not, that's fine.

[00:23:43] Speaker 00:
I just would like an answer.

[00:23:45] Speaker 01:
Yeah.

[00:23:45] Speaker 01:
And we've actually had a pretty good communication on those issues.

[00:23:49] Speaker 01:
And I could certainly raise it with my client and get in touch with my opponent to see if there's an interest, certainly.

[00:23:55] Speaker 01:
OK.

[00:23:56] Speaker 01:
OK.

[00:23:57] Speaker 01:
Anything else?

[00:24:00] Speaker 01:
Thank you very much.

[00:24:09] Speaker 03:
Thank you, Your Honors.

[00:24:10] Speaker 03:
A couple of quick points related to the old California Supreme Court case, which was the Sanders v. McGill.

[00:24:21] Speaker 03:
We also gave you an affirmation of that from a 2005 appellate court case, and that's the Peregrine case, where it reaffirmed that same principle related to the officers.

[00:24:30] Speaker 03:
Also, I was able to locate the California Civil Code and its Section 2332, which states as against the principle, both principle and agent are deemed to have notice of whatever either has notice of and ought in good faith in the exercise of ordinary care and diligence to communicate to the other.

[00:24:47] Speaker 03:
So it is brought up to date with the 2005 Appellate Court case and is currently statute in the state of California.

[00:24:54] Speaker 03:
Related to the good faith belief in the $5 valuation, just want to go back to the fact that there's actually no evidence of that in the record.

[00:25:02] Speaker 03:
They don't have any information that actually demonstrates that the company had a good faith belief in the $5 per share value.

[00:25:10] Speaker 03:
They are relying solely upon the declaration of Mike Curran, who in testimony says he didn't know what the basis was and he didn't inquire as to the basis was.

[00:25:18] Speaker 03:
So the declaration itself is contradicted by his own testimony.

[00:25:22] Speaker 03:
and cannot form a basis for summary judgment in and of itself.

[00:25:26] Speaker 03:
And in terms of what information we have related to the falsity, the knowledge of falsity, they had the report in hand and they utilized it to report out to the employees and they utilized it to report out to the IRS.

[00:25:38] Speaker 03:
So they asserted their belief in the knowledge of that, both to the employees and publicly.

[00:25:44] Speaker 03:
And we believe that that is more than sufficient evidence to get us over the hump from summary judgment to trial.

[00:25:49] Speaker 03:
If you don't have any further questions, I can rest.

[00:25:53] Speaker 03:
Thank you very much.

[00:25:57] Speaker 02:
Thank you this matter is submitted.