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Deaver Brown Named Personally in Legal Actions Brought By CD-Titles

UNITED STATES BANKRUPTCY COURT

DISTRICT OF MASSACHUSETTS

In Re:                                                               )

)

CD TITLES, INC.,                         )            CHAPTER 7

Debtor                                                 )            CASE NO. 98-17026-JNF

Mark DeGiacomo, Esq., Chapter 7 Trustee )

For the Estate of CD Titles, Inc.,                 )

            Plaintiff                                     )

                                                                        )            Adversary Proceeding

v.                                                                     )            Case no.

                                                                        )

David Deaver Brown, individually and             )

doing business as Simply Magazine and            )

Simply Media; Simply Magazine, Inc.; and       )

Simply Media, Inc.                                          )

COMPLAINT

I.            Introduction

1. This is an action for fraudulent conveyance of literally all of the debtor’s material assets.  The individual defendant, David Deaver Brown, while president and CEO of the debtor corporation, did in February, 1998, deliberately and wantonly convey all of the material assets of the debtor to himself and the related corporate defendant Simply Magazine, Inc., for absolutely no consideration or value, and with the intent to hinder, delay or otherwise defraud debtor’s creditors, including but not limited to the Court-acknowledged unsecured judgment creditor, H. David Schmerin d/b/a The Wrightwood Company, who on March 30, 1998 obtained a judgment against the debtor for in excess of $500,000.  In late 1998, faced with new creditors’ demands, the defendant David Deaver Brown re-conveyed the debtor’s assets to himself and his newly formed and related corporate entity, the defendant Simply Media, Inc.  Plaintiff seeks avoidance of the fraudulent transfer of CD Titles’ assets to the defendants, including but not limited to: computer software and source code, CD-roms, trademarks, goodwill, copyrights and internet domain names.  Plaintiff also seeks monetary damages to the extent necessary to satisfy the Chapter 7 creditors’ claim, and brings claims for violations of G.L. c. 93A, seeking multiple damages, attorney’s fees and litigation costs.  Finally, plaintiff seeks pre-judgment injunctive relief -- by freezing all of the defendants’ assets -- to secure the likely amount of damages to be assessed at trial.

II.            Jurisdiction and Venue

2. This is a core proceeding, as defined in 28 U.S.C. § 157, relating directly to the property and affairs of the Debtor and the administration of the Debtor’s estate.  Among other things, this proceeding affects the assets of the estate or the adjustment of the relationship between the Debtor and its creditors, and seeks recovery of money which should be paid to the Debtor’s estate.  This Court has subject matter jurisdiction over this adversary proceeding pursuant to 11 U.S.C. § 157.  Venue is proper pursuant to 28 U.S.C. § 1409.

III.       Parties

3. The plaintiff, Mark DeGiacomo, Esq., is the Chapter 7 Trustee for the estate of the debtor CD Titles, Inc. (“CD Titles”), with a business address located at High Street, Boston, Suffolk County, Massachusetts.
4. Defendant, David Deaver Brown (“Brown”), is a natural person with residences located at 59 South Great Road, Lincoln, Massachusetts, and 3 Fisher Mountain Road, Campton, New Hampshire.  At times pertinent to this Complaint, Brown: (1) was president, shareholder, director and CEO of CD Titles; (2) did business as “Simply Media” and “Simply Magazine”; (3) served as president, sole shareholder and CEO of Simply Magazine, Inc.; and (4) served as president, shareholder and CEO of Simply Media, Inc.
5. Simply Media, Inc. (“Simply Media”), is a Delaware corporation with a principal place of business at Brown’s Massachusetts residence, 59 South Great Road, Lincoln, Massachusetts.
6. Simply Magazine, Inc. (“Simply Magazine”), is a New Hampshire corporation with a principal place of business at Brown’s Massachusetts residence, 59 South Great Road, Lincoln, Massachusetts.

IV.       Facts Common To All Counts     

The Creation of CD Titles – March to December, 1995

7. On July 13, 1995, Brown incorporated CD Titles in the state of Wyoming.  A true and accurate copy of the Articles of Incorporation is appended as EXHIBIT 1.
8. According to its Articles of Incorporation, CD Titles was created expressly, inter alia, “to sue and be sued, complain and defend in its corporate name”. 
9. In addition, CD Titles was created for the purpose of purchasing via bulk transfer the assets of a Massachusetts corporation, called CDRP (the “CDRP Purchase”).  CDRP was in the business of, inter alia, publishing and selling CD-roms of compilation entertainment software, authored by other independent persons, who licensed said products to CDRP. 
10. On or about July 31, 1995, CD Titles did acquire via bulk transfer all of CDRP’s assets.
11. The purchase price of the bulk transfer was One Million, Two Hundred Twenty Five Thousand ($1.25M) Dollars (the “CDRP Purchase Price”).  Of that amount, Six Hundred Thousand ($600,000) Dollars was acknowledged to be payment for the goodwill of CDRP, and the remaining Six Hundred Twenty-Five Thousand ($625,000) Dollars was acknowledged to be the fair value of CDRP’s assets.  See deposition testimony of Brown, EXHIBIT 2.
12. CD Titles financed the CDRP Purchase through a publicly traded company called Palomar Medical Technologies, Inc. (“Palomar”). 
13. In consideration for financing the CDRP Purchase, Palomar took promissory notes from CD Titles for the CDRP Purchase Price, and also received a 100% equity interest in CD Titles.  As such, CD Titles became a wholly owned subsidiary of Palomar, and remained so until approximately November, 1997. 
14. Beginning shortly after the CDRP Purchase, CD Titles, by and through Brown, evaluated and re-negotiated all contracts with CDRP’s independent software authors with whom Brown desired to maintain a business relationship going forward as CD Titles.  In addition, CD Titles began the process of authoring its own CD-roms, and negotiated for new titles, including titles authored by the judgment creditor, H. David Schmerin d/b/a The Wrightwood Company (“Schmerin”).
15. By the end of 1995/beginning of 1996, CD Titles: (a) re-negotiated all licensing contracts it desired to maintain with CDRP’s former independent authors; (b) negotiated licensing contracts with Schmerin and other authors, including creditor Jon Gustafson, for several CD-rom titles;  and (c) began to author its own titles.
16. Brown, with a business background in retail trade, intended to target retailers with CD Titles’ products (e.g. Wal-Mart), as opposed to computer-based businesses, and to price the CD-roms in the ten dollar range, a market niche into which Brown believed he and CD Titles could strongly enter.

The “Simply” Titles/CD Titles’ financial success - 1996

17. In approximately October, 1996, CD Titles purchased the exclusive rights to a set of CD-roms from a business called Computer Associates.  The titles to these products are: “Simply Tax”, “Simply Money”, “Simply Kids”, “Simply House”, “Simply Citizen” and “Simply Vacation”.  Rather than obtaining mere licenses, CD Titles purchased the complete proprietary rights to each “Simply” software title, complete with assignments of copyrights, trademarks and all intellectual property rights to CD Titles.  CD Titles paid Four Hundred Thousand ($400,000) Dollars for the “Simply” titles.  See deposition testimony of Brown, EXHIBIT 3.
18. Each “Simply” CD-rom contained easy-to-follow guidelines for such common issues confronting the average American as annual income tax preparation, home buying, etc.
19. Much of the value of the “Simply” titles was in the copyright and trademark to each product.  See EXHIBIT 4.
20. In fact, the value of products in this niche of the consumer product/computer software industry largely fell into the categories of intellectual property such as trademarks and copyright.  Brown has admitted that trademarks have “a great deal of value . . .and so I have been careful.  And in this business, when you talk about trademarks, that happens to be one of the most valuable assets a company has.  We have the trademark ‘CD Titles’.  That is very valuable because it tells you what it [the company] does . . . so a good trademark is worth a lot of money, so I’m aware of that and what it means.” See deposition testimony of Brown, EXHIBIT 5.
21. The purchase of the Simply Titles was financed by Palomar.  That is, Palomar paid the Four Hundred Thousand Dollar purchase price, secured by another promissory note from CD Titles.  Therefore, CD Titles and Brown paid nothing for ownership rights to the Simply series of titles.
22. Brown has admitted that the purchase of the Simply series of titles was a “major event in the history of CD Titles”.  See deposition testimony of Brown, EXHIBIT 6.
23. Indeed, CD Titles’ purchase of the Simply series was covered in the journal, “Computer Retail Week”. EXHIBIT 7.
24. By the end of 1996, CD Titles’ library had grown to approximately fifty (50) different CD-rom titles, including the Simply series and four titles authored by Schmerin.
25. During 1996, CD Titles distributed these various titles to several retailers, as planned, to target the retail market.  Brown admits that, by year-end, CD Titles generated gross revenues totaling approximately One Million Five Hundred Thousand ($1,500,000) Dollars. See deposition testimony of Brown, EXHIBIT 8.

The Schmerin Litigation/Palomar Transfers CD Titles to Brown and Cancels Debt/Brown Prepares to Divert CD Titles assets – 1997

26. In late December, 1995, Schmerin filed suit against CD Titles for breach of contract and violations of the Massachusetts Consumer Protection Act, G.L. c. 93A, arising out of the debtor’s failure to pay Schmerin any monies due under the licensing agreements for the Schmerin titles.  Discovery took place during 1997, and the case was ready for trial by the Fall of 1997.
27. By April, 1997, Palomar decided to divest itself of CD Titles.  In connection therewith, on April 30, 1997, Palomar agreed to convey 49% stock ownership of CD Titles to Brown and 21% stock ownership to another individual, Joseph Levangie (“Levangie”).  In consideration, Palomar took a promissory note for Five Hundred Thousand ($500,000) Dollars from CD Titles and One Hundred Thousand ($100,000) Dollars from Brown and Levangie.  Palomar also agreed to release CD Titles from all existing debts – e.g. the CDRP Purchase Price and the $400,000 purchase price for the Simply titles from Computer Associates.  A copy of a Securities Purchase Agreement is appended as EXHIBIT 9.
28. Therefore, by April, 1997, Brown not only served as president, CEO and director of CD Titles, but also owned and controlled a majority of the debtor corporation.
29. After assuming control of CD Titles, Brown also commenced a new CD-rom business, and began to do business under the name “Simply Magazine”.
30. Just prior to Palomar’s divestment, by written agreement dated April 9, 1997 (“the CD Titles Asset Transfer Agreement”), EXHIBIT 10, Brown caused CD Titles to convey to Brown d/b/a Simply Magazine a non-exclusive license to publish all CD Titles products (e.g. the Simply series, the Gustafson titles, the CD Titles-authored titles) for a period of one year. 
31. Pursuant to the April 9, 1997 CD Titles Asset Transfer Agreement, Brown further caused CD Titles to convey to Brown d/b/a Simply Magazine sole and total control, and all of its rights, title and interest in all CD Titles products, including all assets, inventory, goodwill, accounts receivable, trademarks, copyrights, names, brands, source code and other intellectual property.  Said conveyance was to occur after the one year non-exclusive period, i.e. April, 1998.  Further pursuant to the CD Titles Asset Transfer Agreement, on February 9, 1998, CD Titles would transfer all source code, and would begin the process of transferring CD Titles’ trademarks and copyrights.  Schmerin’s products were excluded under the CD Titles Asset Transfer Agreement, as were the products authored by another Chapter 7 creditor, JLR Group.
32. According to the CD Titles Asset Transfer Agreement, EXHIBIT 10, in sole “consideration” for the CD Titles Asset Transfer Agreement, Brown d/b/a Simply Magazine agreed to obtain a loan for the benefit of CD Titles, in the amount of Sixty-Eight Thousand ($68,000) Dollars.  However, Brown d/b/a Simply Magazine further agreed to pay the principal of the loan amount, leaving CD Titles responsible only for paying the interest on the $68,000 loan, which upon information and belief totaled less than Twelve Thousand ($12,000) Dollars.
33. Subsequent to execution of the CD Titles Asset Transfer Agreement, Brown admits that CD Titles stopped developing new products, but continued to sell or publish existing titles, and that Brown d/b/a Simply Magazine “kind of took the project forward”.  See deposition testimony of Brown, EXHIBIT 11.
34. Brown has further admitted that he used the CD Titles products to establish the core of Simply Magazine, and to develop additional or up-dated titles.  See deposition testimony of Brown, EXHIBIT 12.  In other words, Simply Magazine assumed control of the CD Titles business, for no material consideration or value.
35. Brown admits that, by August 15, 1997, CD Titles was on track to surpass its $1.5 Million in gross sales from 1996. See deposition testimony of Brown, EXHIBIT 13.
36. On October 20, 1997, the matter of Schmerin v. CD Titles, Inc. was first called for trial, which was continued until March 16, 1998.
37. Approximately one week later, on October 29, 1997, Palomar agreed to cancel the Five Hundred Thousand ($500,000) Dollar promissory note issued by CD Titles, to release any and all debt to Palomar, and to completely relinquish its remaining 30% stock interest and control of CD Titles to Brown and Levangie.  See EXHIBITS 14 and 15.
38. Subsequently, Levangie conveyed his stock ownership in CD Titles to Brown, who then became the 100% stock owner of CD Titles.  See EXHIBIT 16.
39. Brown admits that he obtained total control of CD Titles, including equity ownership, without ever paying a dime to Palomar.  See deposition testimony of Brown, EXHIBIT 17.
40. On November 21, 1997, Brown incorporated in the state of New Hampshire a corporation called Simply Magazine, Inc. See EXHIBIT 18.
41. According to the articles of incorporation, EXHIBIT 18, Simply Magazine’s principal corporate purpose was to publish CD-Rom and magazine products.
42. Brown was and is the sole shareholder, president and CEO of Simply Magazine.
43. Brown has admitted that he “waited until Palomar was out of the picture” to incorporate Simply Magazine, Inc., to avoid, as he calls it, any “conflict of interest”.  See deposition testimony of Brown, EXHIBIT 19.

Brown Conveys CD Titles’ Assets to Simply Magazine/Schmerin Obtains $500,000 Verdict/Bankruptcy Petition/The Internet Web Sites – 1998

44. On February 5, 1998, just five weeks before the Schmerin trial was scheduled to commence, CD Titles, by and through Karen Uminski (“Uminski”), confirmed in writing to Brown that the $68,000 loan had been satisfied in full, and that “all financial provisions of the April, 1997 agreement have been kept by Simply Magazine” and that “all other provisions have been maintained by the parties”.  See EXHIBIT 20.
45. In other words, by no later than February 5, 1998, Brown’s CD Titles company had conveyed all of its assets to Brown’s Simply Magazine company, for no value, in order to hinder, delay or otherwise defraud CD Titles’ creditors, especially Schmerin, while permitting Brown to continue to prosper from CD Titles’ assets.
46. On February 9, 1998, in furtherance of Brown’s plan, CD Titles commenced assignment of all trademarks to the Simply series, the most valuable of all titles in the CD Titles library, to Simply Magazine. Specifically, Simply Magazine was assigned the rights to the following trademarks: “Simply Business”, “Simply Sales”, “Simply Negotiations”, “Simply Money”, “Simply Kids”, “Simply Tax” and “Simply House”. See EXHIBIT 21.
47. On March 1, 1998, CD Titles amended its articles of incorporation to reflect a new corporate address, a “Mailboxes, Etc.” location.  See EXHIBIT 22.
48. Prior to March 1, 1998, Simply Magazine had occupied the CD Titles corporate address and had done business from said address.  After March 1, 1998, Simply Magazine became the sole occupant of the Waltham address.
49. On March 15, 1998, one day before the Schmerin trial, several key CD Titles employees resigned.  See EXHIBIT 23.
50. On March 16, 1998, trial commenced in the matter of Schmerin v. CD Titles, Inc.  Trial lasted five days.
51. On March 20, 1998, the members of the jury entered a verdict in Schmerin’s favor for Two Hundred Sixty Nine Thousand ($269,000) Dollars.
52. On March 21, 1998, one day after the Schmerin jury verdict, Brown resigned from CD Titles. See EXHIBIT 24.  All other remaining employees, except Uminski, resigned within the same time period. See EXHIBIT 25.
53. As evidenced by the foregoing, Brown conveyed all CD Titles assets, and caused CD Titles to be abandoned, in contemplation of the Schmerin trial, in order to prevent Schmerin from satisfying any judgment entered in his favor, as well as to hinder and defraud other creditors, such as JLR and Gustafson.
54. On March 28, 1998, the Court (van Gestel, J.) entered its findings of fact and rulings of law on Schmerin’s c. 93A claim, finding that:

CD Titles violated G.L. c. 93A in its brazen treatment of Schmerin under the agreement.  It acquired and used his copyrighted products and refused to pay for them.  Its reasons for non-payment were not valid.  Significantly, its excuses did not stop CD Titles from marketing the titles after acquiring the license to do so, even to the extent of selling them over the Internet until nearly the day of trial.  Even now, Brown admits to continuing to sell in “non-traditional channels”.  These activities not only make the violation of the law clear; they also reveal its knowing and willful nature.

The Court doubled the jury verdict, and awarded reasonable attorney’s fees.  The Schmerin judgment, with interest, totals in excess of Five Hundred Thousand ($500,000) Dollars.  See EXHIBIT 26.

55. By March, 1998, Simply Magazine had begun in earnest to utilize the CD Titles products, assets, good will and intellectual property to generate its own revenue.
56. For example, on April 8, 1998, Simply Magazine entered into an agreement with MacMillan Digital Publishing USA (“MacMillan”) to license certain CD Titles products.  See EXHIBIT 27.
57. During its active corporate existence, CD Titles used the Internet as a marketing base.  CD Titles is the registered owner of the Internet domain name, “CD Titles.com”.  Between 1995 and 1998, a consumer could travel to this website and peruse the CD Titles library of products, and submit purchase orders for said products.
58. Until recently, CD Titles was also the registered owner of the Internet domain names, “Simply Media.com”, see EXHIBIT 28, as well as “Simply Tax.com”, “Simply CDs.com”, and “Simply Magazine.com”.
59. From April, 1998 until September 14, 1998, Brown maintained the CD Titles web site and created and/or revised web sites for: “Simply Media.com”, “Simply Tax.com”, “Simply CDs.com” and “Simply Magazine.com”.  These sites were all “hyper linked”, that is, these sites were all connected so that a web-browser could travel between them by “double clicking” the appropriate icon on the screen.  See EXHIBIT 29. 
60. All of these “dot coms” listed as their address 411 Waverly Oaks Road.  Sometimes, the CD Titles page listED an address on Massachusetts Avenue in Cambridge, which is THE MailBoxes, Etc. location.
61. Until September, 1998, each web site (described in par. 59 above) offered to the consumer products originally created and owned by CD Titles, including the Simply Series, the Gustafson titles, and CD Titles-authored products, as evidence by the following:

a.         The Simply Tax web page referred to the Simply CDs “bookshop” but an image on the page shows the CD Titles bookshop. See EXHIBIT 30.

b.         The Simply Tax page contained a full-page copyright which states that the 1998 copyright for Simply Tax is owned by CD Titles.  Id.

c.         The Simply CDs page listed all the CD roms owned by CD Titles.  See EXHIBIT 31.

d.         According to its own page, CD Titles owned Simply Money and Simply Tax 1996.  Also, the site provided phone numbers for technical support for the Simply Series.  See EXHIBIT 32.

62. On July 8, 1998, the United States Patent and Trademark office recorded, and thereby officially confirmed, the assignment of the Simply trademarks to Simply Magazine.  See EXHIBIT 21.
63. One week later, on July 16, 1998, three creditors, Schmerin, JLR and Gustafson, filed a petition with the United States Bankruptcy Court for the District of Massachusetts, to place CD Titles into involuntary Chapter 7 bankruptcy (the “Chapter 7 Petition”)
64. On July 29, 1998, Simply Magazine entered into another licensing agreement with MacMillan for CD Titles’ products. See EXHIBIT 33.
65. On September 15, 1998, the Bankruptcy Court (Feeney, J.) heard and denied CD Titles’ motion to dismiss the Chapter 7 Petition.
66. On that same date, Brown withdrew all of his web pages from the internet and created only one new web page, for Simply Media.  The contents of that page (as it existed on September 15, 1998) is appended as EXHIBIT 34.    The last page of the site offers several of CD Titles’ most popular products.
67. At about the same time, Brown recognized that he could not obtain new investors for Simply Magazine, because he would have to (and did not want to) disclose the company’s history and relation to CD Titles, as well as CD Titles’ various litigation matters and pending bankruptcy.  In addition, Simply Magazine faced problems with new creditors, such as MacMillian.  See deposition testimony of Brown, EXHIBIT 35.
68. For these reasons, to once again avoid his creditors, Brown re-conveyed the CD Titles assets, from Simply Magazine to Simply Media, Inc. The consideration for the conveyance was, according to Brown, approximately Twenty Thousand ($20,000) Dollars, which Brown gave to himself.  See deposition testimony of Brown, EXHIBIT 35.
69. In 1998, Simply Magazine generated revenue in an amount totaling approximately $500,000 to $750,000, of which $250,000 to $500,000 reflected sales of the CD-roms conveyed from CD Titles to Simply Magazine.  See deposition testimony of Brown, EXHIBIT 36.
70. Thereafter, Simply Media continued to sell, and to this day continues to sell, CD-roms from the CD Titles library.  In 1999, Simply Media generated revenue in an amount totaling approximately “several hundred thousand dollars” from the sale of CD-roms from the CD Titles library.  See deposition testimony of Brown, EXHIBIT 37.
71. On May 31, 2000, the Chapter 7 Trustee moved this Court (Feeney, J.) for permission to retain the undersigned counsel to pursue the instant adversary proceeding, which motion was granted on May 31, 2000.
72. Upon information and belief, in June, 2000, upon learning that the instant adversary proceeding for fraudulent conveyance would be pursued, Brown withdrew his remaining web site for Simply Media.
73. On July 19, 2000, Brown revised his web site for “SimplyMedia.com”.  The pages of that web site are appended as EXHIBIT 38.  Brown continues to offer for sale CD Titles products through Simply Media, including “Simply Money”, “Three Stooges”, “TV Commerials”, “Clip-Art Warehouse”, “Rockets & Robots”, “Dragons and Dinosaurs” and “Sci-Fi Clipart”.
74. To date, while Brown continues to reap the financial benefits from his pattern of creditor-defeating fraudulent conveyances of CD Titles’ assets, the Chapter 7 creditors’ debts of approximately $1.5 -2 Million remains unpaid.

COUNT I – FRADULENT CONVEYANCE – UNDER 11 U.S.C. §§ 548(a) and 550; and M.G.L. c. 109A § 5

(Each Defendant)

75. Plaintiff repeats and realleges the allegations set forth in paragraphs 1 through 74 above and incorporates them by reference as if fully set forth herein.

76. The above transfer of the CD Titles assets to the defendants was fraudulent because:

a.         The defendants made the transfer with actual intent to hinder, delay or defraud creditors of CD Titles, including but not limited to Schmerin;

b.         CD Titles received no reasonably equivalent value for the transfer of its assets to the defendants;

c.         CD Titles intended to incur, or believed or reasonably should have believed that it would incur debts beyond its ability to pay as they became due;

      d.            The transfer of CD Titles’ assets was made to an insider, David Deaver Brown;

      e.            Before the transfer, CD Titles had been sued;

      f.            the transfer was of substantially all of CD Titles’ assets;

      g.            CD Titles became insolvent shortly after the transfer; and

h.         the transfer occurred shortly before a substantial debt was incurred, to wit, the Schmerin Judgment.

77. As a result thereof, CD Titles has suffered damages as hereinbefore alleged.

COUNT II – FRADULENT CONVEYANCE – UNDER 11 U.S.C. §§ 548(a) and 550; and M.G.L. c. 109A § 6

(Each Defendant)

78. Plaintiff repeats and realleges the allegations set forth in paragraphs 1 through 77 above and incorporates them by reference as if fully set forth herein.

79. The above transfer of the CD Titles assets to the defendants was fraudulent because: (a) CD Titles’ creditors’ claims arose before the transfer was made; (b) CD Titles transferred its assets to the defendants without receiving a reasonably equivalent value in exchange for the transfer; and (c) CD Titles was insolvent at that time or became insolvent as a result of the transfer.

80. As a result thereof, CD Titles has suffered damages as hereinbefore alleged.

COUNT III – VIOLATION OF M.G.L. c. 93A

(Each Defendant)

81. Plaintiff repeats and realleges the allegations set forth in paragraphs 1 through 80 above and incorporates them by reference as if fully set forth herein

82. Each defendant is engaged in trade or commerce within the meaning of G.L.c. 93A, sec. 1.

83. The acts and practices alleged above constitute unfair or deceptive acts and practices declared unlawful by G.L.c. 93A, sec. 2, and regulations promulgated by the Attorney General thereunder.

84. Each Defendant’s use or employment of said acts or practices were willful or knowing violations of G.L.c. 93A, sec. 2.

85. CD Titles has suffered a loss of money and property as a result of the use of unfair and deceptive acts or practices by each Defendant as hereinbefore alleged.

Wherefore, the plaintiff, Mark DeGiacomo, Esq., Chapter 7 Trustee for the Estate of CD Titles, Inc., respectfully requests this Honorable Court (Feeney, J.) to:

1.   Upon notice and after hearing, preliminarily enjoin the defendant, David Deaver Brown, or anyone on his behalf, including but not limited to his wife, Christina Rago a/k/a Christina Brown, from conveying, assigning, transferring, encumbering or in any way attempting to pass out of his control any assets of the defendant, including but not limited to real estate (held directly in his name or indirectly, as beneficiary of real estate trusts or otherwise); motor vehicles; cash; stocks; bonds; securities; security options; banking accounts; certificates of deposit; promissory notes and mortgages;

2.   Upon notice and after hearing, preliminarily enjoin the defendant, David Deaver Brown, or anyone on his behalf, including but not limited to his wife, Christina Rago a/k/a Christina Brown, from conveying, assigning, transferring, encumbering or in any way attempting to pass out of his control any assets of the defendant which were owned or controlled by the defendant as of April, 1997 (whether directly or indirectly as beneficiary or otherwise), regardless of whether the property is presently in the possession, custody or control of the defendant;

3.   Upon notice and after hearing, preliminarily enjoin the defendant, Simply Magazine, Inc., or anyone on its behalf, from conveying, assigning, transferring, encumbering or in any way attempting to pass out of its control any assets of the defendant, including but not limited to real estate (held directly in its name or indirectly, as beneficiary of real estate trusts or otherwise); motor vehicles; cash; stocks; bonds; securities; security options; banking accounts; certificates of deposit; promissory notes and mortgages; inventory, copyrights, trademarks, other intellectual property, accounts receivable, domain names and equipment;

4.   Upon notice and after hearing, preliminarily enjoin the defendant, Simply Media, Inc., or anyone on its behalf, from conveying, assigning, transferring, encumbering or in any way attempting to pass out of its control any assets of the defendant, including but not limited to real estate (held directly in its name or indirectly, as beneficiary of real estate trusts or otherwise); motor vehicles; cash; stocks; bonds; securities; security options; banking accounts; certificates of deposit; promissory notes and mortgages; inventory, copyrights, trademarks, other intellectual property, accounts receivable, domain names and equipment;

5.   Upon notice and after hearing, preliminarily enjoin the defendant, Simply Media, Inc., or anyone on its behalf, from using the domain name, “Simplymedia.com” – the domain name for which is still registered to CD Titles, Inc. -- pending the resolution of this matter;

6.   Upon notice and after hearing, preliminarily enjoin the defendant, Simply Media, Inc., or anyone on its behalf, from utilizing in any manner the assets of CD Titles, including but not limited to domain names, trademarks, copyrights, software, inventory and source code (or any products derivative of those assets), as conveyed by Simply Magazine, Inc., David Deaver Brown, or anyone on their behalf, pending the resolution of this matter;

7.   Attach for purposes of pre-judgment security all real estate owned (directly or indirectly) by the defendants, or otherwise standing in the name of the defendants, including but not limited to the following real property:

a.      59 South Great Road, Lincoln, Massachusetts;

b.      3 Fisher Mountain Road, Campton, New Hampshire;

c.         all real property held in the name of the First Marcus Trust (declaration of trust dated February 14, 1992 and recorded at Middlesex County Registry of Deeds, Book 21775, Page 491) ; and

d.         all real property held in the name of 59 South Great Road Nominee Trust (declaration of trust dated November 19, 1991 and recorded at Middlesex County South Registry of Deeds, Book 21546, Page 556).

8.   Enter judgment in favor of the plaintiff, against each defendant, on all counts of the Complaint;

9.   Avoid the transfer of CD Titles’ assets to the defendants, to the extent necessary to satisfy the Chapter 7 creditors’ claims;

10. Award triple damages in favor of the plaintiff, against each defendant, on Count III of the Complaint;

11. Award the plaintiff his reasonable attorney’s fees and costs incurred in connection with this action, pursuant to G.L. c.93A;

12. Award all interest allowable by law;

13. Attach all assets transferred by CD Titles to the defendants, as well as additional property of the defendants’ assets, to the extent necessary to satisfy the creditors’ claims;

14. Enter a permanent injunction against further disposition by the defendants, of the CD Titles assets and other property held by the defendants, as demanded in pars. 1-6 above; and

15. Award such further relief as the Court finds appropriate.

Respectfully submitted,

Mark DeGiacomo, Esq., Chapter 7 Trustee for the Estate of CD Titles, Inc.,

Plaintiff,

By his attorneys,

ROBINSON & COLE LLP

_________________________________

James D. Gotz BBO #567157

One Boston Place

Boston, MA  02108-4404

(617) 557-5900

Date: August 7, 2000