Law Offices of David Yerushalmi Wins Judgment Against Marc Bell and Daniel Staton

By: PRLog
FEDERAL COURT: Porn merchants Marc Bell and Daniel Station owe creditors millions
PRLog - Nov. 11, 2014 - NEW YORK -- Last Tuesday a federal court in Manhattan issued its ruling finding that Marc H. Bell and Daniel C. Staton, who have made millions through thousands of websites peddling pornography, owe their creditors millions of dollars personally and through their shell company, Strategic Media I LLC.
         Judge William H. Pauley III, one of the most respected judges sitting in the Southern District of New York, granted the Senior Creditors summary judgment on their claims that Strategic owed them more than $20 million on defaulted note payments dating back to December 31, 2011. Judge Pauley also granted the Senior Creditors judgment against Bell and Staton personally for $2.4 million, which today, with interest, exceeds $3 million.
        Finally, the federal court also ruled that the Senior Creditors may pursue their alter ego claims against Bell and Staton, which if successful, will require Bell and Staton to pay Strategic’s $20 million plus obligations personally.
        Lead counsel for the Senior Creditors, David Yerushalmi, with offices in New York and Washington D.C., responded to the judgments: “Marc Bell and Daniel Staton live and work in Boca Raton, Florida, and present themselves to their business associates and communities as upstanding and successful businessmen. What we’ve discovered in this litigation is that both men are deadbeats who made millions peddling pornography and then left their creditors and investors holding the bag—unfortunately, an empty bag.”
        Yerushalmi was referring to the fact that Bell and Staton took FriendFinder Networks (FFN) public, raising $50 million from public investors, only to have it file bankruptcy and wiping out all of the public shareholders. While FFN presented itself as the adult version of Facebook, it turned out to be little more than an aggregate of pornography websites that allowed “hook-ups” between users. FFN, however, was never profitable, even as Bell and Staton skimmed millions in various payouts from the company.
        Prior to the FFN IPO, Bell and Staton had to settle various legal claims made against them by creditors, who in turn had acquired FFN shares.  To clean up FFN’s litigation outlook to entice an underwriter to take FFN public, Bell and Staton obtained releases from the creditors, including the Strategic Senior Creditors, and promised that Strategic would pay their creditors more than $30 million by December 31, 2011. After taking FFN public and raising $50 million dollars, however, Bell and Staton paid their creditors nothing and had FFN file for bankruptcy.
        Bell and Staton have been in involved in several deals with public companies, making public representations about their business acumen and sophistication.  For example, Bell and Staton are connected to various publicly traded real estate investment trusts, such as Armour Residential REIT (NYSE: ARR) and Javelin Mortgage Investment Corp, (NYSE: JMI). Both public companies continue to pay Bell and Staton millions every year through layered sub-management agreements.
        Yerushalmi noted the irony: “Notwithstanding the millions of dollars Bell and Staton have taken from the public investors of these various entities, they are deadbeats who could care less about the public, who has been robbed of all their share value.  Instead, Bell and Staton hide behind very high-priced Manhattan lawyers to avoid paying their personal and corporate obligations. One must suppose that their personal ethics are in line with all of the other online porn merchants.”
        Yerushalmi concluded: “You can count on one thing: we will not rest until we collect our clients’ millions from Bell and Staton.  We will find and track their hidden assets.  We will watch to see if Armour Residential REIT (NYSE: ARR) and Javelin Mortgage Investment Corp, (NYSE: JMI) make the requisite disclosures to their investors about the company they keep.  We will expose both men as deadbeats who have made their livelihood through the sex trade and who use bankruptcy and corporate shells as a game.  One federal court in Manhattan, however, has begun to put a stop to that game.”
        The federal lawsuit is captioned Cougentakis v. Strategic, Case No. 1:13-cv-8361.

The Law Offices of David Yerushami, P.C. is a boutique litigation firm, established in 1984, with a reputation for the highest quality work product and trial and appellate advocacy.  David Yerushalmi is an AV®Preeminent™ rated lawyer licensed to practice in New York, Washington, D.C., California, and Arizona and is a member of federal district and circuit courts throughout the country, as well as a member of the bar of the United States Supreme Court.  Visit us at www.davidyerushalmi.com.

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