Spherature Investments Brings Charges Against a Marketing Company, Alleges Fiduciary Breach, Trademark infringement, Constructive Fraud
March 5, 2021, Eastern District of Texas - Debtor Spherature Investments LLC d/b/a/ WorldVentures Holdings, LLC (“WorldVentures”) and its affiliated debtors (collectively, “Plaintiffs”) recently sued a network marketing company for tortious interference, aiding and abetting fiduciary breach, trademark infringement, conversion, misappropriation of effort, breach of contract, injunctive relief and constructive fraud.
The case presumably concerns a scheme by Defendant Seacret Direct, LLC to infiltrate and steal Plaintiff's downline organization - its most valuable asset and intellectual property. According to the complaint, Seacret planned to gain an unfair competitive advantage over the Plaintiffs in the multi-level marketing travel industry, so that it could profit at the expense of the Plaintiffs’ creditors.
The Debtor and Seacret entered into a Limited Solicitation Agreement (the "LSA"). Under LSA, the Plaintiffs granted Seacret certain rights to solicit Plaintiffs’ exclusive network of sales representatives to sell Seacret’s products and access certain confidential information. In exchange, Seacret agreed to pay Plaintiffs a future product-sales royalty in an amount not to exceed $12 million - based on the amount of the Seacret products sold by Plaintiffs’ sales representatives.
The Plaintiffs assert that the LSA did not permit Seacret to solicit or recruit Plaintiffs’ members (i.e., customers), employees, suppliers, or vendors directly. Nor did the LSA establish a joint venture or partnership between the parties. Despite these prohibitions, Seacret allegedly solicited members directly. Seacret started marketing its membership-based travel services through direct sales to the Plaintiffs’ sales representatives and also had plans to start selling those memberships to the Plaintiffs’ members in future.
The Plaintiffs filed a complaint, asserting that Seacret never intended to perform the LSA and intended to start its own competing travel business. The complaint states that the Plaintiffs' president breached its fiduciary obligations to act in the best interests of the Plaintiffs, including full disclosure about the transactions involving Seacret, and not usurping Plaintiffs’ confidential information, business opportunities, and relationships with members, vendors, etc. Further, Seacret knew of and knowingly participated in, and benefitted from, each of the Plaintiff’s president’s fiduciary breaches and induced or aided him in his breach of fiduciary duties to Plaintiffs. Thus, allegedly, Seacret was a conspirator with the president and liable as a joint tortfeasor.
The Plaintiffs contend that as a direct and proximate result of the Seacret’s knowing participation in the president’s fiduciary breaches, Plaintiffs have been injured in an amount not less than $100,000,000.00 as damages. Further, the Plaintiffs also seeks to hold Seacret liable for direct, contributory, and/or vicarious trademark infringement U.S.C. § 1114(1). Since, as per the complaint, Seacret perpetrated the fraudulent transfer of the Plaintiffs valuable assets without proving reasonably equivalent value, the Plaintiffs seek a judgment to set aside the LSA and recover actual and exemplary damages.