FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO.

651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK: PART 54

DANCO ENTERPRISES, LLC, WANTICKETS

RDM, LLC, WANTMCS HOLDINGS, LLC, and
JOSEPH SCHNAIER,

Plaintiffs,
Index No. 651538/2018
-against-
Hon. Jennifer Schecter
LIVEXLIVE MEDIA, INC., f/k/a LOTON
CORP., LIVEXLIVE TICKETS, INC., ROBERT Mot. Seq. No. 12
S. ELLIN, ALEC ELLIN, BLAKE INDURSKY,
COMPUTERSHARE TRUST COMPANY, N.A., ORAL ARGUMENT REQUESTED
CL, LLC, d/b/a LIGHT NIGHTCLUB, and
CDBC, LLC d/b/a DAYLIGHT BEACH CLUB.

Defendants.

PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO

DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

SCHLAM STONE & DOLAN LLP

Jeffrey M. Eilender
Joshua Wurtzel
Jessica Caterina
26 Broadway
New York, NY 10004
Tel.: (212) 344-5400
Fax: (212) 344-7677
E-Mail: jeilender@schlamstone.com
E-Mail: jwurtzel@schlamstone.com
E-Mail: jcaterina@schlamstone.com

Attorneys for Plaintiffs Danco Enterprises, LLC,

Wantickets RDM, LLC, Wantmcs Holdings, LLC,
and Joseph Schnaier

May 25, 2021

1 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .................................................................................................... 1

STATEMENT OF FACTS ............................................................................................................. 3
A. Ellin Makes Knowingly False, Material Misrepresentations to Schnaier to Induce
Him to Invest $1.25 Million in LiveXLive Media and to Sell Wantickets’s Assets .... 3
B. Plaintiffs Conduct Extensive Due Diligence Concerning LiveXLive Media ............... 6
ARGUMENT ................................................................................................................................ 12
TRIABLE ISSUES OF FACT EXIST CONCERNING PLAINTIFFS’ FRAUD CLAIMS ....... 12
A. The APA and Subscription Agreements Do Not Preclude Plaintiffs’ Reliance on
Defendants’ Misrepresentations.................................................................................. 12
1. The Merger and Disclaimer Clauses Do Not Apply to Defendants’
Misrepresentations ................................................................................................ 12
2. The Disclaimer Clause in the APA Does Not Apply to Misrepresentations By
Ellin ....................................................................................................................... 15
B. There Are Triable Issues of Fact Concerning Whether Plaintiffs Reasonably Relied
on Defendants’ Misrepresentations............................................................................. 16
C. There Are Triable Issues of Fact Concerning Plaintiffs’ Damages ............................ 20
CONCLUSION ............................................................................................................................. 22

2 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

TABLE OF AUTHORITIES

Cases Page(s)
Barnaba Realty Group, LLC v. Solomon,
121 A.D.3d 730 (2d Dep’t 2014) ............................................................................................ 15
Basis Yield Alpha Fund (Master) v. Goldman Sachs Grp., Inc.,
115 A.D.3d 128 (1st Dep’t 2014) ........................................................................................... 13
Danann Realty Corp. v. Harris,
5 N.Y.2d 317 (1959) ..................................................................................................... 1, 12, 13
Dubow v. Century Realty, Inc.,
172 A.D.3d, (1st Dep’t 2019) ................................................................................................. 15
Fresh Del Monte Produce v. Eastbrook Caribe A.V.V.,
40 A.D.3d 415 (1st Dep’t 2007) ............................................................................................. 21

Global Minerals and Metals Corp. v. Holme,

35 A.D.3d 93 (1st Dep’t 2006) ............................................................................................... 20
Laduzinski v. Alvarez & Marsal Taxand LLC,
132 A.D.3d 164 (1st Dep’t 2015) ........................................................................................... 12
Littman v. Magee,
54 A.D.3d 14 (1st Dep’t 2008) ............................................................................................... 20
Norddeutsche Landesbank Girozentrale v. Tilton,
178 A.D.3d 539 (1st Dep’t 2019) ........................................................................................... 16
Pate v. BNY Mellon-Alcentra Mezzanine III, LP,
163 A.D.3d 429 (1st Dep’t 2018) ........................................................................................... 15
Schulhof v. Jacobs,
157 A.D.3d 647 (1st Dep’t 2018) ........................................................................................... 17
Securitized Asset Funding 2011-2 v. Canadian Imperial Bank of Commerce,
167 A.D.3d 468 (1st Dep’t 2018) ........................................................................................... 16
Spectra Audio Research, Inc. v. Chon,
62 A.D.3d 561 (1st Dep’t 2009) ......................................................................................... 3, 21
SRS Capital Funds, Inc. v. Bujan,
2020 N.Y. Misc. LEXIS 2154 (Sup. Ct. N.Y. Cty. May 4, 2020) .......................................... 14
SS&J Morris, Inc. v. Mahoney Cohen & Co.,
264 A.D.2d, (1st Dep’t 1999) ................................................................................................. 17

ii

3 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Cases (cont.) Page(s)

Union Ave Estates, LLC v. Garsan Realty Inc.,
170 A.D.3d 498 (1st Dep’t 2019) ........................................................................................... 13

United Natural Foods, Inc. v. Goldman Sachs Group,

190 A.D.3d 578 (1st Dep’t 2021) ........................................................................................... 20

WT Holdings Inc. v. Argonaut Group, Inc.,

127 A.D.3d 544 (1st Dep’t 2015) ..................................................................................... 14, 15

iii

4 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Plaintiffs submit this brief in opposition to Defendants’ motion for partial summary

judgment.

PRELIMINARY STATEMENT

After years of extensive discovery, the evidence shows that Defendant Robert Ellin made

knowingly false, material statements of fact to Plaintiff Joseph Schnaier to induce him to invest

$1.25 million in LiveXLive Media, Inc. and to sell to LiveXLive Tickets, Inc. substantially all

the assets of his ticketing company, Wantickets RDM, LLC. In their summary-judgment motion,

Defendants do not even attempt to challenge this evidence, and thus concede that there are at

least triable issues of fact on these points.

Instead, Defendants unabashedly blame Schnaier for Ellin’s fraudulent scheme by

focusing their motion solely on their defense that Plaintiffs did not reasonably rely on Ellin’s

misrepresentations. According to them, Schnaier did not conduct sufficient due diligence before

investing in LiveXLive Media or executing the Asset Purchase Agreement (the “APA”). But the

record refutes Defendants’ claims and shows that Schnaier conducted extensive due diligence,

and that—despite Schnaier’s efforts—Ellin intentionally prevented Schnaier from accessing

documents and information that would have revealed his fraud. Thus, there are triable issues of

fact concerning whether Schnaier’s reliance was reasonable.

First, Defendants erroneously argue that boilerplate merger and disclaimer clauses in the

APA and Subscription Agreements bar Plaintiffs’ fraud claims. A “general merger clause”—like

the one in the APA—is “ineffective to exclude parol evidence to show fraud in inducing the

contract.” Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 320 (1959). And a disclaimer clause

will bar a plaintiff’s fraud claims only if it is a “disclaimer as to specific representations” that

Plaintiffs allege are false. Id. at 321 (emphasis added). The disclaimer clauses in the APA and

5 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Subscription Agreements are nonspecific and do not reference (generally or specifically) the

subject matter of the misrepresentations that form the basis of Plaintiffs’ fraud claim. And unlike

the cases Defendants cite—which involve clauses disclaiming the specific representations that

were alleged to have been fraudulent, or disclaim all other “understandings,” “agreements,” and

“commitments”—the clauses here disclaim only additional “representations or warranties.”

Further, the import of Defendants’ argument is that, by agreeing to a nonspecific, boilerplate

clause that—following a long list of standard “representations and warranties”—disclaims

additional “representations or warranties,” a plaintiff gives its counterparty carte blanche to

defraud it without reserving any recourse. This is not the law. And neither controlling case law

nor anything in the APA nor in the Subscription Agreements gave Defendants an unlimited

license to commit fraud.

Second, Defendants erroneously argue that Schnaier did not conduct sufficient due

diligence. As explained below, the evidence shows that Schnaier engaged in extensive efforts to

investigate the various statements Ellin made, including having detailed conversations with Ellin

and other LiveXLive Media management, making requests for documents and information, and

seeking to get information from LiveXLive Media’s underwriter, Bank of Montreal (“BMO”).

And while Ellin did not give Schnaier access to the third parties with which Ellin claimed to be

doing deals or copies of the term sheets for these deals, Schnaier explained that this was

unremarkable and unsurprising given that LiveXLive Media was a public company and could

share only so much information with him without also disclosing it publicly. Thus, Schnaier

conducted his diligence by collecting information from multiple sources within LiveXLive

Media—which was sufficient to make his reliance reasonable. And there is at least a triable issue

of fact on this point.

6 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Third, Defendants erroneously argue that Plaintiffs cannot prove damages, because they

cannot show the value of the LiveXLive Media stock they received at the time they received it

(as opposed to when they sold it). In making this “gotcha”-style argument, Defendants concede

that Plaintiffs suffered damages, but claim that, because these shares were not freely tradeable

when they were issued, Plaintiffs cannot put a dollar value on them. But Defendants ignore that

evidence showing the “‘existence and the extent’” of a plaintiff’s damages “‘will suffice, even

though the result is only an approximation.’” Spectra Audio Research, Inc. v. Chon, 62 A.D.3d

561, 564 (1st Dep’t 2009). And the amount of damages Plaintiffs suffered is for the jury to

decide at trial. Moreover, because there was little market for these shares when they were not

freely tradeable, the best evidence of the value of these shares at the time Plaintiffs received

them is the price at which these shares were sold, discounted to present value as of the time

Plaintiffs received them. Additionally, Defendants’ argument that Plaintiffs’ fraud claims are

asserted by the wrong plaintiffs fails, because each claim is asserted by the plaintiffs that

suffered the loss; and in any event, if this Court disagrees, this can be easily fixed with a

pleading amendment—which would not prejudice Defendants.

STATEMENT OF FACTS

A. Ellin Makes Knowingly False, Material Misrepresentations to Schnaier to Induce

Him to Invest $1.25 Million in LiveXLive Media and to Sell Wantickets’s Assets

Though Defendants deny making any knowing misrepresentations, they concede that

there are triable issues of fact on this element of Plaintiffs’ fraud claims. Mot. at 3–4.

The evidence shows that Ellin made the following knowingly false misrepresentations to

Schnaier concerning LiveXLive Media and its investors:

• On December 25, 2016, Ellin wrote to Schnaier that BMO had “[s]igned an IPO for

$75-125M.” Wurtzel Aff. Ex. B

7 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

o But BMO confirmed that this was false, and testified unequivocally that

“BMO never signed an IPO with LiveXLive Media.” Id. Ex. C (Kratus) at

54:10–11.

• On February 11, 2017, Ellin wrote to Schnaier that LiveXLive Media’s underwriter,

JMP Securities LLC, had agreed to invest “75mill or aas [sic] much as BMO” at “$6-

8” per share. Id. Ex. D.

o But Ellin admitted that this was false. Id. Ex. A (Ellin) at 130:20–131:13

(“They don’t agree to a certain amount of money”) (“Nobody—nobody

guaranteed what price it would.”).

• On February 21, 2017, Ellin wrote to Schnaier stating that LiveXLive Media was

“closing quello than [sic] sfx.” Aff. Ex. D at 2.

o But Ellin admitted that LiveXLive Media never closed a deal with either

Qello or SFX. Id. Ex. A at 34:19–22, 97:4–12 (Ellin).

o And concerning Qello, as of February 22, 2017—the day after Ellin made

this representation to Schnaier—LiveXLive Media sent only a draft term

sheet to Qello (id. Ex. E), to which Qello’s chairman, Gary Winnick,

responded that a deal between Qello and LiveXLive Media was “[n]ot

likely” (id. Ex. F); see also id. Ex. G (Winnick) at 65:7–9 (deal between

Qello and LiveXLive Media was “never serious”).

• On December 25, 2016, Ellin wrote to Schnaier that LiveXLive Media was in

discussions with Mr. Winnick to join LiveXLive “as a partner and strategic investor

for LiveXLive ($3M-$19M).” Id. Ex. B.

8 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

o But Mr. Winnick testified that he had no recollection of this. Id. Ex. G

(Winnick) at 24:23–25:11.

• Ellin repeatedly told Schnaier that LiveXLive Media was raising money from other

investors at $5 per share. Id. Ex. H (Schnaier) at 333:16–19. And Ellin also told

Schnaier that wealthy Texas family the Bass family had invested in LiveXLive Media

at $5 per share. Id. Ex. H (Schnaier) at 661:13–18.

o But documents produced by LiveXLive Media show that no investors

(other than Plaintiffs) paid anything close to $5 per share. Id. Ex. I. And

Ellin admitted that neither the Bass family nor any entity owned by the

Bass family ever invested in LiveXLive Media. Id. Ex. A (Ellin) at

186:10–13.

• Ellin repeatedly told Schnaier that he had invested his own money in LiveXLive

Media. Schnaier Aff. ¶ 8.

o But documents produced by LiveXLive Media show that this was false.

Id. Ex. I.

• Ellin repeatedly told Schnaier that former NBA star Shaquille O’Neal, who has

connections in the music industry, was advising LiveXLive Media’s board and

assisting it in securing streaming rights and raising money. Schnaier Aff. ¶ 9.

o But Mr. O’Neal confirmed that this was false. Id. Ex. J (O’Neal) at 15:12–

14, 18:23–25, 19:2–4.

9 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

• In July 2016, Ellin told Schnaier that LiveXLive Media was in the process of

getting the live-streaming rights for major music festivals including Coachella,

Tomorrow Land, Glastonbury Festival, Lala Palooza, and Bonnaroo. Schnaier

Aff. ¶ 10.

o But Ellin admitted that this was false, and LiveXLive Media never got any

of these streaming rights. Wurtzel Aff. Ex. A (Ellin) at 218:17–221:13.

• On December 25, 2016, Ellin wrote to Schnaier that LiveXLive Media was “close to

finalizing a distribution partnership of BBC’s premier music content.” Id. Ex.B.

o But Ellin admitted that this was false too. Id. Ex. A (Ellin) at 229:20–24.

• On February 8, 2017, Ellin wrote to Schnaier that LiveXLive Media had “landed

Glastonbury and Radio 1 BBC.” Dkt. No. 53.

o But Ellin admitted that this was false as well. Id. Ex. A (Ellin) at 229:25–

230:12.

In reliance on these misrepresentations, Plaintiffs invested $1.25 million in LiveXLive

Media in May 2016, and also sold substantially all Wantickets’s assets to LiveXLive Tickets in

exchange for LiveXLive Media stock in May 2017. Schnaier Aff. ¶ 13.

B. Plaintiffs Conduct Extensive Due Diligence Concerning LiveXLive Media

Defendants claim that Schnaier, as a “savvy and experienced investor,” failed to conduct

sufficient due diligence before relying on Defendants’ misrepresentations. Mot. at 4–14. But

Defendants are wrong, and there are triable issues of fact on this point.

Schnaier conducted due diligence on Ellin, explaining that he reviewed Ellin’s biography

on LiveXLive Media’s webpage, on which Ellin “mentioned different companies that he started

and exited successfully,” and then “matched it up when I did a search on it, and they all matched

10 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

up to what he said in his bio.” Wurtzel Aff. Ex. H (Schnaier) at 633:6–13. Schnaier also

researched Ellin’s “past deals” and “past capital raises,” all of which appeared to check out when

Schnaier conducted independent searches. Id. Ex. H (Schnaier) at 633:15–634:3. Schnaier also

met with Ellin personally, and even “met his wife, his children,” went “out to dinner,” and “met

some of his friends, especially people that work at LiveXLive”—all of which gave Schnaier the

impression that Ellin was “honest.” Id. Ex. H (Schnaier) at 634:4–10.

For several years leading up to the APA, Schnaier spent a lot of time with Ellin, including

having “phone calls on a daily basis” and regular “meetings in person.” Id. Ex. H (Schnaier) at

638:16–19. And Ellin also confirmed that Schnaier regularly called him to ask questions about

the various deals Ellin said LiveXLive Media was doing, explaining that Schnaier “probably

spoke to me on a regular basis every other day, God knows how many times I heard from

him . . . .” Id. Ex. A (Ellin) at 224:19–22; see also id. Ex. A (Ellin) at 225:2–9.

Concerning Ellin’s representations about exclusive streaming deals he had arranged or

was in the process of arranging for LiveXLive Media, Schnaier also engaged in a robust

investigatory process by interviewing LiveXLive Media’s management about these deals.

Specifically, Schnaier explained: “I spoke to Rob specifically, I asked him specific

questions. He answered, you know, he gave me detailed answers from what I remember. I spoke

to the management of the team, Blake Indursky, Doug Schaer, I spoke to Schiller. If it came

down to something in the financial department, I would speak to David Wells mostly.” Id. Ex. H

(Schnaier) at 650:18–25.

And to confirm that LiveXLive Media was seriously engaged with each of the music

festivals Ellin claimed it was, Schnaier also asked Ellin with whom he dealt at each festival. Id.

Ex. H (Schnaier) at 651:5–13. And Schnaier also asked Ellin for introductions to these people,

11 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

but Ellin said that he would introduce Schnaier “[a]fter we close.” Id. Ex. H (Schnaier) at

651:14–25.

Schnaier also followed up with LiveXLive Media management to ask specific questions

about the “terms” of each deal, “what exactly the deal entailed, where in the hierarchy of the

management team, who he was dealing with and negotiating with, and how we can get business

for Wantickets out of it.” Id. Ex. H (Schnaier) at 655:8–656:2.

To confirm the accuracy of Ellin’s statements that, after closing the APA, Wantickets

could do all the ticketing for LiveXLive Media’s events, Schnaier investigated the underlying

agreements Ellin claimed to have with these festivals—stating: “Specifically, I asked them, I

wanted to see what part of the management he was dealing with in each of the festivals and each

of the companies he was saying we would obtain the ticketing business from. I wanted to know,

you know, how long these agreements are, you see, see if he could send me a term sheet so I

could see the terms, and most importantly, how it would affect the Wantickets company in

getting these tickets—the ticketing business.” Id. Ex. H (Schnaier) at 653:4–654:8.

Schnaier also asked Ellin for copies of signed contracts and term sheets with some of

these festivals. Id. Ex. H (Schnaier) at 656:10–12. In response, Ellin stated that these term sheets

and contracts were “proprietary,” but that, once Wantickets was part of LiveXLive Media, he

could “start marking introductions.” Id. Ex. H (Schnaier) at 654:19–18, 656:12–14.

While Defendants fault Schnaier for not sensing that something was amiss when Ellin

would not share these supposed term sheets and contracts (Mot. at 15), Schnaier explained that

Ellin’s position did not strike him as odd—explaining: “They were his relationships. And he

wanted to make sure, I guess, that we were going to be, you know, doing the deal with him. And,

you know, I guess in his mind, maybe he thought that if he introduced us earlier than closing the

12 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

APA, that we would maybe try to get business with these companies or we wouldn’t need him.”

Id. Ex. H (Schnaier) at 654:19–655:5.

And further supporting Ellin’s position, Schnaier believed there were limits on what

information Ellin could show him, testifying: “I understood that, you know, in order for me to

see it he would have to show it either in a press release, so it would be fair for everyone to see it.

And that’s how he made it sound to me. It was a proprietary deal and he couldn’t show it to me

because they were a public company.” Id. Ex. H (Schnaier) at 656:15–657:7.

Thus, far from the “red flag” Defendants claim this should have raised (Mot. at 15),

Schnaier believed that there was a reasonable explanation for Ellin’s reluctance to share the term

sheets or specific contacts with him, and there is at least a triable issue of fact concerning

whether Schnaier’s belief was reasonable. And while Defendants argue that Schnaier “admitted

that this raised a ‘red flag’” (Mot. at 15), this is false. Indeed, Schnaier, who initially

misunderstood or misheard the form of the question, immediately confirmed that this did not

raise a red flag for him. Wurtzel Aff. Ex. H (Schnaier) at 657:8–11 (Q. “So is your answer, no, it

didn’t raise red flags?” A. “No, it didn’t raise red flags.”).

Concerning the $5 price per share that Plaintiffs paid for LiveXLive Media stock,

Schnaier had “very detailed conversations with Rob” and “spoke to David Wells in regards to

investors coming in,” and also spoke to Blake Indursky. Id. Ex. H (Schnaier) at 660:8–22.

Schnaier also asked for some of the names of other investors who were paying $5 per

share; and while Ellin was naturally “very careful” with his investors, he “did mention the Bass

family, and he mentioned Gary Winnick investing to me, the billionaire.” Id. Ex. H (Schnaier) at

661:13–20. And Ellin also sent Schnaier “some sort of a term sheet from the Bass family that he

said he sent to them” to “show me the terms of the deal.” Id. Ex. H (Schnaier) at 661:21–662:2.

13 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Schnaier also asked Ellin to show him a cap table, which would show “all the investors

and how many shares they own and how much they pay,” but Ellin said he couldn’t show that to

Schnaier because LiveXLive Media was a public company and the cap table was “proprietary

information.” Id. Ex. H (Schnaier) at 662:3–17. Schnaier again explained that this was not

surprising and that this explanation was reasonable to him, and thus did not raise any “red flags.”

Id. Ex. H (Schnaier) at 662:18–25.

Further, Schnaier explained that he did not reach out to any of the investors Ellin had

named, because “it’s not typical in the business world to go behind” the CEO’s back to speak

with investors, especially since Ellin was “very detailed of who he spoke to and how many times

he spoke to them, and, you know, their position and how much they’re putting in and at what

price.” Id. Ex. H (Schnaier) at 663:2–21. Nor was Schnaier in contact with any of these

purported investors. Schnaier Aff. ¶ 13.

Concerning Ellin’s representations that Bank of Montreal (“BMO”) committed to a $100

million IPO, Schnaier asked Ellin an “enormous amount of questions,” and also spoke with

Wells, Indursky, and Schaer about it. Id. Ex. H (Schnaier) at 670:16–671:9. Schnaier also asked

Ellin to put him in touch with someone at BMO, but Ellin said he couldn’t because Wantickets

wasn’t “part of the company” and because it was “all proprietary information being exchanged

between them and it wasn’t for public knowledge.” Id. Ex. H (Schnaier) at 672:5–16.

Schnaier also had some colleagues try to get information for him from BMO, since

Schnaier “couldn’t call [BMO] and they probably wouldn’t have spoken to me if I just asked

them out of the blue.” Id. Ex. H (Schnaier) at 671:10–16. And Schnaier further “even went out of

the way to call one of the syndicate partners in the IPO, Craig Hallum, investment bankers over

there” to “try to speak to someone in the capital markets who would know about the LiveXLive

10

14 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

potential IPO.” Id. Ex. H (Schnaier) at 671:17–23. But Schnaier was unsuccessful in getting

information from any of these angles. Id. Ex. H (Schnaier) at 671:23–24. Schnaier also asked

Ellin for signed agreements or term sheets with BMO, but Ellin said it “wasn’t public, it was

proprietary.” Id. Ex. H (Schnaier) at 672:17–673:2.

Concerning Ellin’s representations about a deal with Qello and Gary Winnick, Schnaier

had “in-depth conversations” with Ellin and asked him “specific questions” about the deal, and

he also spoke with Indursky, Schaer, and Schiller Id. Ex. H (Schnaier) at 675:3–25. Moreover,

Schnaier asked Ellin for a copy of the term sheet, but consistently with his prior positions, Ellin

would not give it. Id. Ex. H (Schnaier) at 675:20–22. Schnaier also spoke with other members of

LiveXLive Media’s “management team” to confirm the accuracy of Ellin’s representations about

a deal with Qello, and “everyone said the same thing.” Id. Ex. H (Schnaier) at 681:19–682:22.

Concerning Ellin’s representations that a letter of intent for a deal with SFX was “going

out shortly,” Schnaier had “many, many conversations” with Ellin, during which Schnaier

questioned Ellin about “who he was speaking to, what properties he was—assets he was buying

from SFX,” and “how he would integrate it.” Id. Ex. H (Schnaier) at 68:8–679:10. Schnaier also

spoke with other members of LiveXLive Media’s “management team” to confirm the accuracy

of Ellin’s representations about a deal with SFX, and “everyone said the same thing.” Id. Ex. H

(Schnaier) at 681:19–682:17.

Concerning Ellin’s representations that LiveXLive had “landed” deals with Glastonbury

and Radio One BBC, Schnaier questioned Ellin extensively about both deals, and also asked to

see the term sheets—though Ellin said he couldn’t show them to Schnaier. Id. Ex. H (Schnaier)

at 679:19–25.

Defendants claim that Schnaier conceded that he “didn’t do enough due diligence.” Mot.

11

15 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

at 5. But Schnaier explained that, what he meant by this was that hindsight is 20/20. Id. Ex. H

(Schnaier) at 685:13–686:12. Indeed, according to Schnaier: “In hindsight, you know, had I

known that they were all misleading and misrepresentations, you know, obviously things would

have been different. But when I said we did the best we could, we did do a lot of due diligence.”

Id. Ex. H (Schnaier) at 686:5–10.

ARGUMENT

TRIABLE ISSUES OF FACT EXIST CONCERNING PLAINTIFFS’ FRAUD CLAIMS

A. The APA and Subscription Agreements Do Not Preclude Plaintiffs’ Reliance on

Defendants’ Misrepresentations

1. The Merger and Disclaimer Clauses Do Not Apply to Defendants’

Misrepresentations

Defendants argue that section 2.11 of the APA precludes Plaintiffs’ fraud claims, because

that section states that LiveXLive Media and Tickets made no “representations or warranties”

other than what is in the APA, and that any additional “representations or warranties” are

disclaimed. Mot. at 16–17. And Defendants also rely for the same conclusion on section 9.3 of

the APA, which states that the APA “supersedes” any prior representations. Id. at 17. But

Defendants are wrong.

Concerning section 9.3, a “general merger clause is ineffective to exclude parol evidence

to show fraud in inducing the contract.” Danann Realty Corp., 5 N.Y.2d at 320. So when a

plaintiff asserts a fraud claim, the “parol evidence rule is not a bar to showing the fraud—either

in the inducement or in the execution—despite an omnibus statement that the written instrument

embodies the whole agreement, or that no representations have been made.” Id.

Thus, the general merger clause in section 9.3 of the APA does not bar Plaintiffs’ fraud

claim. See Laduzinski v. Alvarez & Marsal Taxand LLC, 132 A.D.3d 164, 169 (1st Dep’t 2015)

(“The merger clause in this case states, ‘This Agreement constitutes the entire agreement

12

16 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

between the parties with respect to subject matter and supersedes all previous understandings,

representations, commitments or agreements, oral or written.’ This boilerplate language is too

general to bar plaintiff’s claim since it ‘makes no reference to the particular misrepresentations

allegedly made here by [defendants].’”) (alteration in original) (citation omitted).

Concerning section 2.11, a disclaimer clause will bar a plaintiff’s fraud claims only if it

is a “disclaimer as to specific representations” that Plaintiffs allege are false. Danann Realty

Corp., 5 N.Y.2d at 321 (emphasis added). Indeed, to preclude a fraud claim, a plaintiff must have

“in the plainest language announced and stipulated that it is not relying on any

misrepresentations as to the very matter as to which it now claims it was defrauded.” Id. at 320

(emphasis added). And so a contract will not bar a fraud claim unless it states that the parties are

“are not bound by or relying upon representations or omissions as to the specific matter” that is

the basis of the alleged misrepresentation. Basis Yield Alpha Fund (Master) v. Goldman Sachs

Grp., Inc., 115 A.D.3d 128, 137 (1st Dep’t 2014) (emphasis added).

Section 2.11 does not specifically address representations about the deals LiveXLive

Media was doing or its investors or how much its investors paid—which were the subjects of

Defendants’ misrepresentations. To the contrary, section 2.11 does not refer to any specific

representations by LiveXLive Media or Tickets, and refers only generally to “representations or

warranties.” This lack of specificity is fatal to Defendants’ argument, and section 2.11 is thus

insufficient to bar Plaintiffs’ fraud claim. Union Ave Estates, LLC v. Garsan Realty Inc., 170

A.D.3d 498, 498 (1st Dep’t 2019) (“disclaimer provisions” in contract not “sufficiently specific”

to bar fraud claim concerning misrepresentations about status of commercial tenants’ leases

when disclaimer provisions did not “specifically disclaim any warranties about the status of

commercial tenants’ leases, or indeed of any leases”); Basis Yield Alpha Fund (Master), 115

13

17 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

A.D.3d at 137 (disclaimer of reliance in contract did not bar fraud claim when it was not

“sufficiently specific to the particular type of fact misrepresented or undisclosed”).

Further, section 2.11 states only that LiveXLive Media and LiveXLive Tickets make no

further “representations or warranties” other than what is in the APA. Dkt. No. 54. This

reference to only “representations or warranties” is critical, since section 2.11 appears at the end

of Article II titled “Representations and Warranties of the Buyer and Loton”—which lists many

standard representations and warranties, such as authorization, validity, and compliance with

laws. Thus, section 2.11 merely means that there are no additional “representations or

warranties” other than those listed in sections 2.1 through 2.10 of the APA. In contrast, the

misrepresentations that form the basis of Plaintiff’s fraud claim are not “representations or

warranties” as that term is used in the APA. See SRS Capital Funds, Inc. v. Bujan, 2020 N.Y.

Misc. LEXIS 2154, at *4 (Sup. Ct. N.Y. Cty. May 4, 2020) (Cohen, J.S.C.) (disclaimer clause

that stated that defendant “has not made and does not make any representations or warranties,

express or implied, to [plaintiff] except as specifically set forth herein” was not “‘sufficiently

specific to the particular type of fact misrepresented or undisclosed’”) (citation omitted); see also

id. Dkt. No. 19 at 12 (describing clause). And at the very least, there is a triable issue of fact

concerning the parties’ intent about this term.

Defendants rely on this Court’s decision in WT Holdings Inc. v. Argonaut Group, Inc. for

the proposition that a “No Additional Representation” clause in an agreement that “‘disclaims

liability and responsibility for any extra-contractual representation, render[s] the fraud claim not

viable.’” Mot. at 17 (alteration in original) (quoting 127 A.D.3d 544, 544 (1st Dep’t 2015)). But

the disclaimer in WT Holdings disclaimed not only “representations or warranties”—like section

2.11 here—but also any “statement or information made or communicated.” WT Holdings Dkt.

14

18 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

No. 67-3 at 48. And in any event, the representations and warranties in the agreement in WT

Holdings also expressly addressed reserves, which was the subject of the alleged

misrepresentations. WT Holdings Dkt. No. 145 at 12. Thus, WT Holdings is inapposite.

The disclaimer clauses in the other cases that Defendants cite (Mot. at 17–18) are

similarly more inclusive and specific than section 2.11, and these cases thus show that section

2.11 is insufficient to bar a fraud claim. See Dubow v. Century Realty, Inc., 172 A.D.3d 622, 622

(1st Dep’t 2019) (fraud claim barred when disclaimer clause disclaimed all “agreements,

understandings and discussions” concerning the “subject matter herein”); Pate v. BNY Mellon-

Alcentra Mezzanine III, LP, 163 A.D.3d 429, 430 (1st Dep’t 2018) (fraud claim barred when

alleged misrepresentations were based on prior term sheet and correspondence and contract

expressly superseded any “prior term sheet or correspondence”); Barnaba Realty Group, LLC v.

Solomon, 121 A.D.3d 730, 731 (2d Dep’t 2014) (fraud claim barred when alleged

misrepresentations concerned leased premises and disclaimer clause disclaimed additional

“promises” concerning leased premises and stated that plaintiff reviewed “facts, circumstances,

and the physical condition of the Building”).

The same is also true of the disclaimer clauses in the Subscription Agreements, which

similarly apply to only “representations or warranties” and “economic considerations,” and do

not specifically refer to the subject of any of the misrepresentations that form the basis of

Plaintiffs’ fraud claim. See Dkt. No. 50 §§ 2(h), (i).

2. The Disclaimer Clause in the APA Does Not Apply to Misrepresentations By

Ellin

Even if the disclaimer clause in the APA applied here (it doesn’t), it disclaims only

representations or warranties made by LiveXLive Media and LiveXLive Tickets. Dkt. No. 54

§ 2.11. And unlike the disclaimer clauses in the Subscription Agreements (Dkt. No. 50 §§ 2(h),

15

19 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

(i)), the disclaimer clause in the APA does not apply to representations or warranties by these

companies’ officers. Thus, this clause does not disclaim misrepresentations made by Ellin, who

(and there is at least a triable issue of fact about this) made these misrepresentations so he could

get access to and steal Wantickets’s valuable subscriber information for his own personal benefit.

Dkt. No. 52.

B. There Are Triable Issues of Fact Concerning Whether Plaintiffs Reasonably Relied
on Defendants’ Misrepresentations

Generally, the issue of reasonable reliance is “not subject to summary disposition.”

Securitized Asset Funding 2011-2 v. Canadian Imperial Bank of Commerce, 167 A.D.3d 468,

470 (1st Dep’t 2018). And so it is only in a “rare circumstance” that reasonable reliance can be

determined on a motion for summary judgment. Norddeutsche Landesbank Girozentrale v.

Tilton, 178 A.D.3d 539, 539 (1st Dep’t 2019).

Defendants argue that Schnaier did not conduct any diligence other than researching

members of LiveXLive Media management and having conversations with Ellin and others at

LiveXLive Media. Mot. at 6. Not so.

As explained above, Schnaier engaged in extensive efforts to investigate the various

statements Ellin made, including having detailed conversations with Ellin and other LiveXLive

Media management, making requests for documents and information, and seeking to get

information from BMO. Schnaier Aff. ¶ 14. And while Ellin did not give Schnaier access to the

third parties with which Ellin claimed to be doing deals or copies of the term sheets for these

deals, Schnaier explained that this was unremarkable and unsurprising given that LiveXLive

Media was a public company and could share only so much information with him without also

disclosing it publicly. Id. ¶ 15. Thus, Schnaier conducted his diligence by collecting information

from multiple sources within LiveXLive Media and attempting to do so from BMO—which was

16

20 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

sufficient to make his reliance reasonable. Id. ¶ 13; see Schulhof v. Jacobs, 157 A.D.3d 647, 648

(1st Dep’t 2018) (plaintiff’s reliance was reasonable when he was “prevented” from conducting

further due diligence because defendant did not make otherwise unavailable source available to

him); SS&J Morris, Inc. v. Mahoney Cohen & Co., 264 A.D.2d 343, 343 (1st Dep’t 1999)

(reliance not unreasonable as a matter of law when plaintiffs were “prevented from making an

independent investigation of the books and records of the company due to the requirement of

secrecy imposed on the transaction”).

Defendants also argue that Schnaier improperly took what Ellin said as “gospel.” Id. But

as explained above, Schnaier sought to verify the accuracy of Ellin’s statements in whatever way

he could, and his reference to Ellin’s word being “gospel” meant only that he trusted Ellin—not

that he blindly accepted everything Ellin said. See Wurtzel Aff. Ex. H (Schnaier) at 638:4–22.

Defendants also argue that Schnaier should have known that Ellin’s statements about the

deals Ellin said LiveXLive Media had secured or was about to secure were false, since those

deals were never listed on LiveXLive Media’s website or made public through announcements.

Mot. at 10–11. But Schnaier explained that this was not extraordinary and did not raise a “red

flag” either. Id. Ex. H (Schnaier) at 684:9–23. Indeed, according to Schnaier, “deals sometimes

take longer than expected to transpire and finalize”—with the Wantickets deal being the

perfect example. Id. Ex. H (Schnaier) at 684:9–23.

Schnaier further explained that he didn’t see it as strange that deals he discussed with

Ellin in 2016 hadn’t been announced by May 2017, since “I looked at my own deal with him,

and, you know, you could have said the same thing about my deal, Wantickets and the

acquisition with LiveXLive.” Id. Ex. H (Schnaier) at 684:24–685:12. Thus, that deals about

which Ellin told Schnaier had not been announced by the time the APA closed was not, as

17

21 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Defendants claim, a red flag as a matter of law, and so this at least raises a triable issue of fact.

Defendants argue that Schnaier should have known that something was amiss with Ellin’s

representations when he received a mass e-mail update on November 17, 2015 that stated that

LiveXLive Media had “6–8 festivals to be secured for May 2016–May 2017,” even though

Schnaier knew that “this could occur only if the acquisition of Wantickets closed and ‘that deal

wasn’t done yet.’” Mot. at 11 (citing Dkt. No. 47 and quoting Isser Aff. Ex. 8 at 250:19–23). But

as of November 2015, Schnaier expected that the Wantickets deal would be closed by mid-2016.

Schnaier Aff. ¶ 18. And since this mass e-mail stated that these festivals were “to be secured”

(meaning in the future), Schnaier had no reason to believe as of November 2015 that this

statement was false or misleading—even if Schnaier later agreed that, with the benefit of

hindsight, it was misleading. See Wurtzel Aff. Ex. H (Schnaier) at 250:9–251:2; see also

Schnaier Aff. ¶ 18.

Defendants further argue that Schnaier’s testimony that he “believed that the Qello

acquisition would close soon after the APA was not justified,” and that “[i]n light of the many

times Plaintiffs claimed to have been told that Qello ‘closed’ or would soon be closing, it was not

reasonable to rely on any claimed statements by Ellin that a Qello deal would soon close after the

APA.” Mot. at 13–14.

But as Schnaier explained in his deposition, deals—just like the Wantickets deal (which

eventually closed)—often take a long time. So that this deal was supposedly in various stages of

negotiation over the course of a year was not extraordinary, and certainly not a “red flag” to

Schnaier. Moreover, Schnaier explained that he was not sure about the actual timing of when

Ellin said the Qello deal had closed, and made clear that, as of the time of the APA, he knew the

Qello deal had not yet closed, but—based on all Ellin’s statements—believed it was about to

18

22 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

imminently close. Wurtzel Aff. Ex. H (Schnaier) at 431:3–432:2.

Defendants also argue that “it was not reasonable for Plaintiffs to rely on any

representation that a deal with SFX would close,” because Ellin was telling Schnaier that an

acquisition of SFX was “imminent” since December 20, 2016. Mot. at 14. But again, as Schnaier

explained during his deposition, deals take a long time to close, so a delay of a few months

between when a deal was deemed “imminent” and when it closed did not trigger any “red flags”

for Schnaier. And at the very least, there is a triable issue of fact on this point.

Defendants further argue that, because Ellin supposedly told Schnaier the details of deals

that Ellin claimed were proprietary but would not show him the term sheets or agreements for

these deals should have raised a further “red flag,” because this meant that “Ellin disclosed the

information Schnaier claims Ellin told him was proprietary.” Id. But contrary to Defendants’

argument, this does not conclusively show that Schnaier should have realized that Ellin was

lying. Indeed, it was not unreasonable for Schnaier to believe that Ellin could give him high-

level updates about otherwise “proprietary” deals, but could not show him confidential deal

documents. And at the very least, a reasonable jury could draw this inference. See Orchard Hotel

LLC v. D.A.B. Grp. LLC, 2018 NYLJ LEXIS 2025, *18 (Sup. Ct. N.Y. Cty. June 11, 2018)

(Ramos, J.S.C.) (“question of whether a reasonable person would have investigated further is a

question of fact”).

Defendants rely on this Court’s holding in Global Minerals and Metals Corp. v. Holme

for the proposition that a sophisticated plaintiff’s reliance on misrepresentations is unreasonable

without further investigation or verification. Mot. at 18–19 (citing 35 A.D.3d 93 (1st Dep’t

2006)). But as explained above, Schnaier didn’t blindly accept Ellin’s representations as true,

and he sought to confirm the accuracy of Ellin’s representations by speaking with other members

19

23 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

of LiveXLive Media management, asking to speak with third parties, in some cases trying to

speak with those third parties himself, and asking detailed questions about the specifics of each

deal. And in Global Minerals, the plaintiff knew that some of defendant’s representations were

false at the time they were made, and made no attempt at all to verify the defendant’s statements

about his dealings with third parties, even though the plaintiff was in “direct contact” with these

third parties. Id. at 100–01.

In contrast, there is no evidence showing that Schnaier knew that Ellin’s representations

were false when made. Nor was Schnaier in “direct contact” with any of the third parties Ellin

claimed to be dealing with, and Schnaier further attempted (unsuccessfully) to speak with some

of these third parties, or asked Ellin to put him in touch. See Littman v. Magee, 54 A.D.3d 14,

18–19 (1st Dep’t 2008) (reliance not unreasonable as a matter of law when, and distinguishing

Global Minerals because, plaintiff had “no ready means to force defendants to turn over

documents” concerning their misrepresentations).

Defendants also rely on this Court’s holding in United Natural Foods, Inc. v. Goldman

Sachs Group for the proposition that a defendant’s “refusal to provide a document was ‘a red

flag that triggered a need to make additional inquiries.’” Mot. at 20 (quoting 190 A.D.3d 578,

579 (1st Dep’t 2021)). But there, the plaintiff failed to ask “follow-up questions” that could have

revealed the fraud, and critically, had a “contractual right” to the document the defendant refused

to produce. 190 A.D.3d at 579. In contrast, Schnaier held regular and detailed follow-up

conversations with LiveXLive Media management concerning Ellin’s representations, and had

no “contractual right” to any of the documents Schnaier requested but which Ellin said he could

not produce.

C. There Are Triable Issues of Fact Concerning Plaintiffs’ Damages

Defendants argue that Plaintiffs’ fraud damages must be calculated based on the “value

20

24 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

of the LXL shares received at the time of the Agreements,” rather than at the time of their sale.

Mot. at 21. And according to Defendants, while Plaintiffs have shown the value of the shares

they got from LiveXLive Media at the time these shares were sold, Plaintiffs’ fraud claims

should be dismissed because they have not “submitted any evidence concerning the value of the

LXL shares they received at the time of the Agreements.” Id. at 21–22. But Defendants err.

Critically, Defendants do not claim that Plaintiffs suffered no damages. Instead, they

claim only that the measure of damages in the Amended Complaint is wrong, and that Plaintiffs

will be unable to prove the exact amount of their damages—based on the value of the shares at

the time they were received—at trial. See id. at 21–22. But even assuming Defendants’ method

of calculating fraud damages is correct (which it isn’t), Defendants ignore that, while damages

“‘may not be determined by mere speculation or guess,’” evidence showing the “‘existence and

the extent’” of plaintiff’s damages “‘will suffice, even though the result is only an

approximation.’” Spectra Audio Research, Inc., 62 A.D.3d at 564 (emphasis added).

Indeed, the issue Defendants raise is, at most, a problem of proof at trial, and the measure

of Plaintiffs’ damages is a factual issue for the jury to determine. Moreover, under Defendants’

logic, even though Plaintiffs indisputably suffered a loss, they cannot recover because they

cannot prove what the exact value of their LiveXLive Media shares was at the time they received

them, since these shares were restricted and LiveXLive Media was not even traded on the

NASDAQ yet. See Schnaier Aff. ¶ 19. This is not the law. Fresh Del Monte Produce v.

Eastbrook Caribe A.V.V., 40 A.D.3d 415, 420 (1st Dep’t 2007) (plaintiff not required to prove

“precise relationship between the price of its unregistered, restricted stock and the publicly

traded stock,” because evidence showing damages’ “‘existence and the extent thereof will

suffice, even though the result is only an approximation’”).

21

25 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

And since there was little market for these shares when Plaintiffs received them, and

since the value of these shares was thus far less than when Plaintiffs were able to sell them in the

open market after getting all restrictions lifted (id. ¶ 19), the best evidence of the value of these

shares at the time Plaintiffs received them is the price at which these shares were sold,

discounted to present value as of the time Plaintiffs received them. And at the very least, there is

a triable issue of fact on this point.

Defendants also argue that Plaintiffs’ fraud claim concerning their 2016 investment is

asserted by Schnaier and Danco, even though the shares were received by Wantmcs Holdings.

Mot. at 22–23; Schnaier Aff. ¶ 20. But the payor of the $1.25 million to LiveXLive Media for

these shares was Danco, the beneficial owner of which is Schnaier. Schnaier Aff. ¶ 20. So the

loss here was suffered by Danco and Schnaier. Id. ¶ 20.

Defendants further argue that Plaintiffs’ fraud claim concerning the APA is asserted by

Schnaier, even though the shares were received by Danco. Mot. at 23. But the consideration for

these shares was Wantickets’s assets, which were substantially beneficially owned by Schnaier.

Schnaier Aff. ¶ 20. So the loss here was suffered by Schnaier. Id. ¶ 21.

In any event, to the extent the Court determines that either of these claims belong to a

different Plaintiff, we request leave to amend the Amended Complaint accordingly—which

would not cause Defendants any prejudice.

CONCLUSION

This Court should deny Defendants’ summary-judgment motion.

22

26 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

Dated: May 25, 2021

New York, New York
SCHLAM STONE & DOLAN LLP

By: /s/ Joshua Wurtzel

Jeffrey M. Eilender
Joshua Wurtzel
Jessica Caterina
26 Broadway
New York, New York 10004
Tel.: (212) 344-5400
Fax: (212) 344-7677
E-Mail: jeilender@schlamstone.com
E-Mail: jwurtzel@schlamstone.com
E-Mail: jcaterina@schlamstone.com

Attorneys for Plaintiffs Danco Enterprises, LLC,

Wantickets RDM, LLC, Wantmcs Holdings, LLC,
and Joseph Schnaier

23

27 of 28
FILED: NEW YORK COUNTY CLERK 07/16/2021 12:44 PM INDEX NO. 651538/2018
NYSCEF DOC. NO. 408 RECEIVED NYSCEF: 07/16/2021

WORD-COUNT CERTIFICATION

In accordance with Rule 17 of the Commercial Division Rules

I certify that this document was prepared on a computer using Microsoft Word 2016 in

12-point, Times New Roman font; that the word count of this document, as calculated in

accordance with Rule 17 of the Commercial Division Rules by the computer processing system

used to prepared this document, is 6,818; and that this document thus complies with the word-

count limit in Rule 17 of the Commercial Division Rules.

/s/ Joshua Wurtzel

Joshua Wurtzel

24

28 of 28