From the Court’s judgment. For the full opinion, click here.
“Exeura and Herzum were the two joint venturers that formed the entities known as “Fourthcodex s.p.a.” and Fourthcodex LLC on Aug. 29, 2006. Exeura and Herzum each owned 50% of each of the Fourthcodex entities. The Exeura entities were owned by research and teaching professors in Italy who had individually developed certain software prototypes using grants from the Italian government. Professor Sergio De Julio was the Chairman of the Board of Exeura. He refers to Exeura as a software and professional services company with no experience in marketing or the ability to proceed from a research prototype to a product capable of being marketed. It was the parties’ intent that the Italian Fourthcodex would focus on technical development and the American Fourthcodex would focus on marketing in the U.S.”
“Exeura and Herzum stood in the relationship of joint venturers from Aug. 29, 2006, when the initial private agreement establishing Fourthcodex was signed, until Jan. 22, 2008, when the shareholders voted to dissolve Fourthcodex and to appoint a liquidator. The private agreement as to the distribution of the software components and licensing agreements, etc. was signed on Feb. 8, 2008.”
“It is clear from the evidence, not only as documented in the many emails that were placed into evidence, but also as freely admitted by the participants, that as early as October 2007, Exeura was working separately, not under the auspices of Fourthcodex, to garner customers that were prospects developed by Fourthcodex and to market as its own successes what were actually the successes of Fourthcodex… By November, Exeura had also stopped working on Fourthcodex projects altogether. By Nov. 3, 2007, Exeura was reviewing a proposed business plan for a company that would be called “Exeura Technologies.” The other members of the proposed business would be Herzum employees. Exeura’s Prof. Pasquale Rullo admitted to planning this new venture at this time. By Nov. 5, 2007, Exeura’s Prof. Rullo was working apart from Fourthcodex to develop a new version of one of the Fourthcodex components for Fourthcodex’ licensee…”
“On December 7, 2007, Exeura’s Prof. De Julio and Prof. Rullo and Herzum’s [employees] .. met secretly in Rome. Prof. De Julio freely acknowledged that this meeting was deliberately kept secret from Peter Herzum. There they continued their discussions as to forming a new company and continuing work on the Fourthcodex components, without Peter Herzum or Fourthcodex. By Dec. 10, 2007, they were looking for office space in Chicago and Exeura was assisting [Plaintiffs’ employee] with information about Exeura to provide to the prospective landlord. As soon as Defendant resigned from Herzum, on Dec. 14, 2007, Prof. De Julio and he discussed working to develop the leads that Fourthcodex had obtained from the KM trade show the preceding month. Prof. De Julio admitted he was well aware of the source of those leads. By Dec. 29, 2007, Prof. De Julio and Defendant baldly agreed to take over a “hot” Fourthcodex lead immediately. On the witness stand, Prof. De Julio acknowledged it was a Fourthcodex lead, and acknowledged they were trying to take it. Exeura’s breach of its fiduciary duties as a joint venturer has thus been well established.”