throbber
Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 1 of 20
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
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`Civil Action No. 22-cv-02320
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`DAVID JOSHUA BARTCH,
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`Plaintiff,
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`v.
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`MACKIE A. BARCH, individually and in his capacity as Trustee of the Barch Family
`Enterprises Trust;
`KIMBERLY BARCH, individually and in her capacity as Trustee of the Barch Family
`Resource Trust; and
`JUSTIN BARCH, in his capacity as Trustee of the Barch Family Resource Trust,
`
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`Defendants.
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`COMPLAINT
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`PRELIMINARY STATEMENT
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`1.
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`This case arises out of a civil conspiracy among Defendant Mackie Barch,
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`his wife (Defendant Kimberly Barch), and his brother (Defendant Justin Barch) to hinder,
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`delay, and defraud Plaintiff David Joshua “Josh” Bartch in his efforts to collect a civil
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`judgment of $6,400,000 against Mackie and his holding company, Trellis Holdings
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`Maryland, Inc. (“Trellis”).1 As described in detail herein, Mackie, with the knowledge and
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`assistance of his wife and brother, undertook a concerted action to conceal and shield his
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`assets against collection and to frustrate the civil justice system.
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`1 Due to the entirely coincidental similarity between the parties’ last names, in the interest
`of avoiding confusion Plaintiff refers to himself as “Josh” and to each of the Barch
`defendants by their first names.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 2 of 20
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`PARTIES, JURISDICTION, AND VENUE
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`2.
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`Josh is a resident and citizen of Puerto Rico, where he moved in early 2021.
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`Prior to 2021, Josh was a resident and citizen of the State of Colorado.
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`3.
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`Mackie is a resident and citizen of the State of Maryland, who resides in
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`Kensington, Maryland. Until the events described in this Complaint, Mackie was the sole
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`owner, president, and director of Trellis. Today, Mackie remains the owner of all of
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`Trellis’s voting shares and directly or indirectly controls all Trellis shares, both voting and
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`non-voting.
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`4.
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`Mackie is the sole Trustee of the Barch Family Enterprises Trust
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`(“Enterprises Trust”), an irrevocable trust organized under the laws of Maryland whose
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`beneficiaries are Mackie and his three children.
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`5.
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`Kimberly is a resident and citizen of Maryland who resides in Kensington,
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`Maryland.
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`6.
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`Justin is a resident and citizen of Maryland who resides in Kensington,
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`Maryland.
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`7.
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`Kimberly and Justin are the two Trustees of the Bartch Family Resource
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`Trust (the “Resource Trust” and, collectively with the Enterprises Trust, the “Trusts”), an
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`irrevocable trust organized under the laws of Maryland whose beneficiaries are Kimberly,
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`Mackie’s three children, and Mackie’s parents.
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`8.
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`Jurisdiction is proper under 28 U.S.C. § 1332(a) because the amount in
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`controversy exceeds $75,000 and there is complete diversity between, on the one hand,
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`Josh, a citizen of Puerto Rico, and, on the other hand, Defendants, all of whom are
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 3 of 20
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`Maryland citizens.
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`9.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2) because
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`a substantial part of the events or omissions giving rise to the claim occurred in this
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`District. Specifically, pending litigation in this District gave rise to the fraudulent transfers
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`at issue in this case. As explained in detail herein, Mackie, Kimberly, and Justin executed
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`the fraudulent transfers at issue in this case for the purpose of evading a then-potential
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`(and now actual) judgment issued by a court in this District. Additionally, Defendants
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`conceived of and executed the transfers for the purpose of avoiding a debt incurred
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`pursuant to a contract that was negotiated and formed in substantial part in Colorado, for
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`which performance was due in Colorado, the non-performance of which caused injury to
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`a Colorado citizen.
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`10.
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`Jurisdiction is proper over Mackie because he transacted business within
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`the State of Colorado and entered into a continuing contractual relationship with Josh, at
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`that time a Colorado resident, with the expectation that the performance of those
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`contractual obligations would be due in Colorado. Jurisdiction is also proper over Mackie
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`because Mackie conceived of and executed the fraudulent transfers at issue in this case
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`to evade a then-potential and now actual judgment to be issued by a court in this District.
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`11.
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`Jurisdiction is proper over Kimberly and Justin because each of them
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`accepted from Mackie transfer of the assets at issue in this case knowing that those
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`assets were subject to an agreement with Josh, a Colorado resident when the agreement
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`was made, the satisfaction of which was due in Colorado. Jurisdiction is also proper over
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`Kimberly and Justin because they knew when they accepted the transfers at issue that
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 4 of 20
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`the transfers were for the purpose of shielding Mackie’s assets from a potential judgment
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`in this District and because they knowingly and willfully conspired with Mackie to
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`effectuate the transfers.
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`GENERAL ALLEGATIONS
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`12. A trial to the Court was held on July 11-14, 2022 in the case Bartch v. Barch
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`et al., Case No. 18-cv-03016-RBJ-NYW (“Bartch I”). In Bartch I, Josh asserted claims
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`against Mackie and Trellis for breach of contract, civil theft, conversion, and unjust
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`enrichment. Earlier in the Bartch I litigation, Josh asserted claims for declaratory judgment
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`and specific performance, though Josh voluntarily withdrew both claims before trial.
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`13.
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`Josh’s allegations in Bartch I related to an agreement between Josh and
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`Mackie, formed in Colorado, to share equally any equity either of them acquired in Doctors
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`Orders Maryland LLC, now known as Culta, LLC (“DOMD”). Plaintiff refers to this
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`agreement as the “Equity Sharing Agreement.”
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`14.
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`In Bartch I, Josh alleged that Mackie repudiated the Equity Sharing
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`Agreement (by refusing to acknowledge its existence) and, in so doing, refused to return
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`50% of the equity Mackie acquired in DOMD. Josh thus sought damages measured by
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`the value of the wrongfully withheld equity.
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`15. At all relevant times, Mackie held his ownership interest in DOMD, including
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`the portion he wrongfully refused to return to Josh, through Trellis, his holding company.
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`16. On September 7, 2022, the Court entered judgment in Josh’s favor and
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`against Mackie and Trellis on Josh’s claim for breach of contract in the amount of
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`$6,400,000. See Bartch I, ECF No. 175.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 5 of 20
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`17. More than a year before Judge Jackson’s entry of judgment, and shortly
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`after the Court (per Judge Krieger, who was presiding at the time) denied Mackie and
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`Trellis’s Motion for Summary Judgment in Bartch I, Mackie, working in concert with
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`Kimberly and Justin, put in motion a plan to shield the vast majority of Mackie’s personal
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`assets from a potential adverse judgment in Bartch I.
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`18. Specifically, in February 2021, approximately two months after Judge
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`Krieger denied Mackie and Trellis’s Motion for Summary Judgment, Mackie transferred
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`99% of his Trellis shares to the Resource Trust and the Enterprises Trust (the
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`“Transfers”). The Transfers were done with actual intent to hinder, delay, and defraud
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`Josh in his efforts to pursue and, eventually, collect on his claims against Mackie and
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`Trellis.
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`19.
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`The Transfers took place simultaneously in a series of transactions that
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`consisted of three primary steps:
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`a. In step one, Mackie recapitalized Trellis’s stock into two classes: 10
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`shares of Class A stock, representing 1% of all Trellis stock, and 990
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`shares of Class B stock, representing 99% of all Trellis stock. The Class
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`A shares and Class B shares were identical in all respects except that
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`Class A shares were voting shares and Class B shares were not.
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`b. In step two, Mackie transferred 495 Class B shares to Kimberly, his wife,
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`for no consideration. Kimberly thus became owner of 49.5% of Trellis, in
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`the form of 495 non-voting Class B shares, with Mackie holding the
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`remaining 495 Class B shares and the 10 Class A shares.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 6 of 20
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`c. In step three, Mackie transferred his remaining 495 Class B shares to
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`the Resource Trust, of which his wife and brother are the trustees, and
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`Kimberly simultaneously transferred her 495 Class B shares to the
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`Enterprises Trust, of which Mackie is trustee. Mackie retained the 10
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`Class A shares for himself.
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`20. At the time of the Transfers, Trellis owned 30.784% of the equity in DOMD.
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`This amount was considerably less than the equity in Trellis Mackie initially took
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`possession of under the Equity Sharing Agreement.
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`21.
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`In light of Trellis’s 30.784% ownership interest in DOMD, the 495 Class B
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`shares Mackie transferred to Kimberly and the Resource Trust each constituted a
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`15.2381% indirect ownership interest in DOMD.
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`22. Mackie and Kimberly structured their assignment of 495 Class B shares in
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`Trellis to the Enterprises Trust and Resource Trust (collectively, the “Trusts” and as to
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`each, a “Trust”) as sales rather than gifts.
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`23.
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`In exchange for the 495 Class B shares, each of the Trusts executed a
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`promissory note in the amount of $6,424,010.84 – the Enterprises Trust issuing a note to
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`Kimberly and the Resource Trust issuing a note to Mackie (the “Notes”).
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`24. Mackie and Kimberly intended the face value of the Notes to appear to
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`reflect a rough approximation of the value of the DOMD ownership interests acquired by
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`each Trust. Because the 495 Class B shares of Trellis each represented a 15.2381%
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`ownership interest in DOMD, therefore, the Notes reflect a purported implied valuation of
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`DOMD of approximately $42,163,000.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 7 of 20
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`25.
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`The approximately $42,163,000 valuation was chosen by Mackie’s trusts
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`attorney. During discovery in Bartch I, Mackie testified that he could not remember
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`whether the valuation of DOMD he used in setting the value of the Notes was based on
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`a formal valuation and refused to comment on whether he believes it accurately reflected
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`DOMD’s value as of the date of the Transfers.
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`26.
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`The two Notes, which are substantially identical, purportedly obligate the
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`Trusts to make interest-only payments at a rate of 0.56% per year on the Notes’ principal
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`from the date of the notes (February 5, 2021) until January 31, 2030, at which point the
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`full amount of the Notes would be due.
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`27.
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`In addition, the Resource Trust and the Enterprises Trust each executed a
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`Stock Pledge Agreement, each of which pledged the 495 Class B shares of Trellis as
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`security for the Trusts’ payment of the Promissory Notes.
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`28. At a deposition in Bartch I, Mackie acknowledged that he has no expectation
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`that the Resource Trust will pay interest on the Note held by Mackie when interest comes
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`due, testifying: “There’s no cash in the account, so I don’t know how [the Resource Trust]
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`would pay that.” Mackie indicated that he similarly did not expect that the Enterprises
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`Trust would make timely interest payments to Kimberly when they came due.
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`29. Aside from the 495 Class B shares of Trellis owned by each of the Trusts,
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`the only other assets in either Trust as of the time of the Transfers was the $10 with which
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`each Trust was capitalized.
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`30. On information and belief, neither the Enterprises Trust nor the Resource
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`Trust have received any cash distributions from their Trellis shares.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 8 of 20
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`31. Accordingly, neither Trust has any assets with which to pay the interest or
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`the principal on their respective promissory notes when such payment becomes due.
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`32. Although Mackie claims to have initiated the above-described Transfers for
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`estate planning purposes, the only personal assets Mackie has transferred into the Trusts
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`are the above-mentioned 990 Class B shares of Trellis.
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`33. Mackie testified that he has no knowledge of any estate planning rationale
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`for structuring the Transfers as sales to the Trusts rather than as gifts.
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`34. After the above-described Transfers, Mackie directly owns 1% of the shares
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`of Trellis, in the form of 10 Class A shares. Because the Class A shares are the only class
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`of Trellis shares with voting rights, however, Mackie owns 100% of Trellis’s voting shares.
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`35.
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`The Transfers rendered Mackie unable to pay the judgment in Bartch I from
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`his personal assets.
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`36.
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`The Transfers were of substantially all of Mackie’s assets. In a personal
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`balance sheet Mackie prepared in which he estimated his net worth shortly before the
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`Transfers, Mackie estimated that his Trellis shares – at his own valuation, the basis of
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`which he refuses to disclose – constituted more than 93% of his net worth, with
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`approximately 75% of Mackie’s remaining net worth consisting of the equity in his family
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`home, which he owns jointly with his mother.
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`37. Mackie did not receive reasonably equivalent value in the Transfers. In
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`exchange for 49.5% ownership in Trellis (the 495 shares Mackie transferred to Kimberly
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`in step one) Mackie received nothing at all. In exchange for an additional 49.5%
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`ownership in Trellis (the 495 shares Mackie transferred to the Resource Trust in step
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 9 of 20
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`three) Mackie received a promissory note for which he has no expectation of payment.
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`38. Moreover, the approximately $42,163,000 valuation of DOMD reflected in
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`the amount of the Notes substantially understates DOMD’s true value, which was
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`conservatively stated at approximately $55.3 million approximately one month before the
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`Transfers.
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`39. Even if the face value of the Notes accurately reflected DOMD’s value – that
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`is, even if the $42,163,000 valuation figure of undisclosed origin chosen for a non-arm’s
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`length transaction was a fair approximation of Trellis’s value – the Notes themselves are
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`worth less than half of their face value due to their terms, which require interest-only
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`payments at a substantially below market interest rate for a period of nearly nine years
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`before repayment of the principal on the Notes becomes due. Based on the unrebutted
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`testimony of a qualified damages expert in Bartch I, each Note has a present value of
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`approximately $2.86 million, a little under 45% of each Note’s face value.
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`40. Accordingly, even using the value of DOMD implied by the face value of the
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`Notes (without accepting that such implied value accurately reflected the value of DOMD),
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`only one of which is held by Mackie, Mackie exchanged assets worth approximately
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`$12,850,000 for a single Note worth approximately $2,860,000. The realizable
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`commercial value of the Note held by Mackie is thus not reasonably equivalent to the
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`realizable commercial value of the transferred DOMD ownership interest.
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`41. Beyond transferring his Trellis shares to two irrevocable trusts to shield
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`them from judgment, Mackie took additional steps to attempt to ensure that his shares of
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`Trellis could not be transferred even upon an order of a court of competent jurisdiction.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 10 of 20
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`Specifically, before the Transfers, while Mackie was Trellis’s sole shareholder, Mackie
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`executed a Stockholders’ Agreement for Trellis that contained substantial restrictions on
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`the right of any future Trellis shareholder to transfer or otherwise dispose of Trellis stock.
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`Not only did the Stockholders’ Agreement restrict the right of Trellis shareholders to
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`transfer stock voluntarily, it also purports to prohibit any Trellis stockholder to “permit or
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`suffer any such Transfer to be effected by operation of law, by judicial process or
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`otherwise,” without the express written consent of each Trellis stockholder (emphasis
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`added). In so doing, by virtue of a document that required only his signature, Mackie
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`attempted to insulate his Trellis shares even from an order from a court of competent
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`jurisdiction ordering the transfer or sale of his shares in Trellis.
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`42.
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`In addition, in May 2020, Mackie executed an amendment to DOMD’s
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`operating agreement that contained a change that purported to restrict Trellis’s right to
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`transfer its shares without the consent of DOMD’s other members. Without Mackie’s
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`consent, the restriction on transfers of Trellis shares could not have taken effect.
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`43. At all relevant times, Mackie was aware that his ownership interest in
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`DOMD, which he held through Trellis, was the subject of the Bartch I lawsuit.
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`44. At all relevant times before the Transfers, Mackie was aware that a portion
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`of his ownership in DOMD, which he held through Trellis, was subject to a claim for which
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`Josh sought specific performance in the form of the return of that ownership interest to
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`Josh.
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`45. At all relevant times, Mackie was aware that Josh could seek to satisfy a
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`potential judgment in Bartch I by pursuing Mackie’s personal assets, including his shares
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 11 of 20
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`of Trellis.
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`46. Mackie did not inform Josh of the Transfers either before or after they
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`occurred.
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`47.
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`Instead of learning of them from Mackie, Josh only became aware that an
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`interest in DOMD and/or Trellis may have been transferred in May 2021 through a public
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`records request to the Maryland Medical Cannabis Commission, whose approval was
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`required to transfer any ownership interest in DOMD that exceeded 5% of the company’s
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`total equity.
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`48. Although Josh, acting through counsel, inquired about the transfers
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`promptly after learning that they may have occurred, Mackie did not acknowledge that the
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`Transfers took place until June 15, 2021, when the Court asked Mackie’s counsel about
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`the Transfers during a scheduling conference in Bartch I.
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`49.
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`Just two days before he effectuated the Transfers, Mackie participated in a
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`call with both his trusts attorney and his litigation counsel in Bartch I to discuss the
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`transfers and the Bartch I litigation.
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`50. On information and belief, Mackie conceived of and executed the Transfers
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`to shield his ownership in DOMD from a potential judgment in Bartch I.
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`51. Although Mackie testified at the trial in Bartch I that the Transfers were
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`solely for estate planning purposes and that he plans to “fully comply with whatever court
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`order is awarded,” on information and belief, Mackie has no intention to pay the Bartch I
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`judgment by selling the Trellis shares he transferred to the Trusts, which Mackie has
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`acknowledged are his only asset that is sufficient to satisfy the judgment.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 12 of 20
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`52. On information and belief, Mackie, working in concert with both his estates
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`and trust attorneys and litigation counsel and with the aid and knowledge of Kimberly and
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`Justin, structured step three of the Transfers as purported sales to give the false
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`appearance that Mackie took value back for his ownership interests in DOMD rather than
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`simply divesting himself of that ownership interest to protect it from a potential judgment.
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`53. On information and belief, at all relevant times, Kimberly and Justin were
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`aware that Mackie’s ownership interest in DOMD, which Mackie held through Trellis, was
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`the subject of Bartch I.
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`54. On information and belief, at all relevant times, Kimberly and Justin were
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`aware that Josh could seek to satisfy a potential judgment in Bartch I by pursuing Mackie’s
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`personal assets, including his shares of Trellis.
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`55.
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`In accepting 495 shares of Trellis from Mackie for no consideration,
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`Kimberly knew that she was receiving a valuable asset without providing reasonably
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`equivalent value in return.
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`56.
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`In accepting 495 shares of Trellis on behalf of the Resource Trust in
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`exchange for one of the Notes, Kimberly and Justin knew that they were receiving on
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`behalf of the Resource Trust a valuable asset without providing reasonably equivalent
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`value in return.
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`57.
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`In agreeing to the Transfers, Kimberly and Justin knowingly incurred a debt
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`of over $6.4 million on behalf of an entity that had at most $10 in assets and no
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`expectation of receiving substantial assets in the future, and thus had no ability to make
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`interest payments on the debt when due or to repay the principal upon the date of
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 13 of 20
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`maturity.
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`58. On information and belief, Kimberly and Justin knew that the Transfers were
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`of substantially all of Mackie’s assets.
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`59. On information and belief, in light of the commercially unreasonable terms
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`of the Transfers and their knowing acceptance on behalf of the Resource Trust of a debt
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`that the Resource Trust had no ability to repay, Kimberly and Justin knew at all relevant
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`times that the purpose of the Transfers was to shield Mackie’s assets from a potential
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`judgment in Bartch I rather than for routine estate planning.
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`FIRST CLAIM FOR RELIEF
`(Fraudulent Transfer)
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`Against Mackie and Kimberly in their individual and representative capacities and Justin
`in his capacity as Trustee
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`Josh incorporates the allegations above.
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`60.
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`61. Under both the law of Colorado (where the relevant claim exists) and of
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`Maryland (where the Transfers occurred), the acts described above constitute actionable
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`fraudulent transfers.
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`62. Under the Colorado Uniform Fraudulent Transfer Act (“CUFTA”), C.R.S. §
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`38-8-101 et seq., any transfer made or obligation entered into by a debtor “with actual
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`intent to hinder, delay, or defraud” a present or future creditor is actionable. C.R.S. § 38-
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`8-105(1)(a). Under the Maryland Uniform Fraudulent Conveyance Act (“MUFCA”), MD
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`COML § 15-201 et seq., similarly, “[e]very conveyance made … with actual intent … to
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`hinder, delay, or defraud present or future creditors, is fraudulent as to both present and
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`future creditors.” MD COML § 15-207.
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 14 of 20
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`63. Mackie’s two transfers of 99% of his ownership interest in Trellis – 49.5%
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`to Kimberly, 49.5% to the Resource Trust – were “transfers” as defined in CUFTA and
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`“conveyances” as defined in MUFCA. C.R.S. § 38-8-102(13); MD COML § 15-201(c).
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`64. At all relevant times, Mackie was a “debtor” or owed a “debt” to Josh, as
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`those terms are defined by Colorado and Maryland Law. C.R.S. § 38-8-102(7); MD.
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`COML § 15-201(e).
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`65. At all relevant times, Josh was a “creditor” of Mackie as defined by Colorado
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`and Maryland law. C.R.S. § 38-8-102(5); MD COML § 15-201(d).
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`66.
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`The above-described Transfers were made with actual intent to hinder,
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`delay, or defraud Josh.
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`67. Both Colorado and Maryland law recognize various non-exclusive factors,
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`titled “badges of fraud,” that inform whether a debtor acted with “actual intent” to hinder,
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`delay, or defraud a creditor. Mackie’s intent may be inferred by the existence of multiple
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`badges of fraud, including but not limited to the following:
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`a. Mackie was sued prior to the Transfers and Josh’s claims against
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`Mackie were pending in the Bartch I action at the time Mackie conceived
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`of and effectuated the Transfers.
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`b. The Transfers were to insiders Kimberly and the Trusts. Kimberly is
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`Mackie’s wife and accepted half
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`the
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`transferred value
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`for no
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`consideration. The beneficiaries of the Resource Trust and Enterprises
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`Trust are Mackie, his wife, his children, and his parents. Mackie is the
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`Trustee of the Enterprises Trust, while Kimberly and Mackie’s brother
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`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 15 of 20
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`Justin are the Trustees of the Resource Trust.
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`c. Mackie concealed the Transfers from Josh.
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`d. Mackie retained control of the transferred assets. Although he owns only
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`1% of Trellis shares after the Transfers, Mackie controls 100% of
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`Trellis’s voting power. Mackie further controls the transferred assets
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`through his role as the Trustee of the Enterprises Trust and by installing
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`his wife and brother as Trustees of the Resource Trust.
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`e. The Transfers rendered Mackie “insolvent,” as that term is defined by
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`Colorado and Maryland law. C.R.S. § 38-8-103; MD COML § 15-202(a).
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`f. The Transfers were of substantially all of Mackie’s assets.
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`g. The transfers were made shortly after a material change in the status of
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`the Bartch I litigation, namely, the Court’s denial of Mackie and Trellis’s
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`Motion for Summary Judgment.
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`h. Mackie received comparably little consideration for the Transfers,
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`receiving nothing for the 50% of the transferred assets Mackie gave
`
`directly to Kimberly, and for the other 50% of the transferred assets,
`
`receiving a promissory note with a present value that is a fraction of the
`
`value Mackie gave up in the Transfers.
`
`i. Mackie reserved a benefit in the Transfers, receiving a right to reclaim
`
`the transferred property upon default of the Trusts’ payment obligations
`
`while at the same time having no expectation that the Trusts would
`
`satisfy those obligations.
`
`15
`
`
`
`

`

`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 16 of 20
`
`j. Mackie, working in concert with Kimberly and Justin, structured step
`
`three of the Transfers as purported sales to give the false appearance
`
`that Mackie took value back for his ownership interests in DOMD.
`
`68. Kimberly and Justin agreed by words, conduct, or both to carry out the
`
`Transactions and cooperated in carrying out the Transfers, including but not limited to by
`
`accepting the Transfers without providing equivalent value in return and for consideration
`
`they knew the Resource Trust would be unable to pay, by submitting fingerprints and
`
`detailed financial information to the Maryland Medical Cannabis Commission to secure
`
`regulatory approval for the Transfers, and by signing all necessary paperwork to accept
`
`the fraudulently transferred property.
`
`69.
`
`Josh is entitled to any and all remedies under CUFTA and/or MUFCA,
`
`including but not limited to an order voiding the fraudulent transfers.
`
`SECOND CLAIM FOR RELIEF
`(Constructive Fraudulent Transfer)
`
`Against Mackie and Kimberly in their individual and representative capacities and Justin
`in his capacity as Trustee
`
`70. Under Colorado and Maryland law, a transfer is constructively fraudulent if
`
`the transferor made the transfer without receiving reasonably equivalent value and/or fair
`
`consideration and the transferor reasonably should have believed he would incur debts
`
`beyond his ability to pay as they come due. C.R.S. § 38-8-105(1)(b)(II); MD COML § 15-
`
`204.
`
`71. Mackie made the Transfers without receiving reasonably equivalent value
`
`in exchange for them at a time when Mackie reasonably should have believed that he
`
`
`
`16
`
`

`

`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 17 of 20
`
`would incur debts that, after the Transfers, would be beyond his ability to pay as that
`
`liability became due. During discovery in Bartch I, Mackie acknowledged that the
`
`Transfers would render him unable to pay the likely judgment if Josh were to prevail.
`
`72. Kimberly and Justin agreed by words, conduct, or both to carry out the
`
`Transactions and cooperated in carrying out the Transfers, including but not limited to by
`
`accepting the Transfers without providing equivalent value in return and for consideration
`
`they knew the Resource Trust would be unable to pay, by submitting fingerprints and
`
`detailed financial information to the Maryland Medical Cannabis Commission to secure
`
`regulatory approval for the Transfers, and by signing all necessary paperwork to accept
`
`the fraudulently transferred property.
`
`73.
`
`Josh is entitled to any and all remedies under CUFTA and/or MUFCA,
`
`including but not limited to an order voiding the constructively fraudulent transfers.
`
`THIRD CLAIM FOR RELIEF
`(Conspiracy to Violate the Colorado Uniform Fraudulent Transfer Act and/or the
`Maryland Uniform Fraudulent Conveyance Act)
`
`Against Mackie and Kimberly in their individual and representative capacities and Justin
`in his capacity as Trustee
`
`
`
`74.
`
`Josh incorporates the allegations above.
`
`75. As set forth above, Mackie, Kimberly, and Justin reached a meeting of the
`
`minds by words, conduct, or both to carry out the above-described unlawful Transfers to
`
`hinder, delay, or defraud Josh in violation of the Colorado Uniform Fraudulent Transfers
`
`Act and/or the Maryland Uniform Fraudulent Conveyance Act.
`
`76. Mackie, Kimberly, and Justin each performed one or more overt acts –
`
`namely, the conception and execution of the above-described transactions – to
`
`
`
`17
`
`

`

`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 18 of 20
`
`accomplish their unlawful goals.
`
`77. Defendants’ actions have caused Josh damage in an amount to be
`
`determined at trial.
`
`78. Additionally, all Defendants have profited from their participation in the
`
`conspiracy to hinder, delay, and defraud Josh. Mackie has profited individually by erecting
`
`barriers to the satisfaction of the judgment in Bartch I and as a beneficiary of the
`
`Enterprises Trust, and has profited in his capacity as Trustee of the Enterprises Trust by
`
`the Enterprises Trust’s receipt of valuable equity in DOMD in exchange for a promissory
`
`note the Enterprises Trust has neither the intention nor the ability to repay. Kimberly has
`
`profited individually by her receipt of one of the Notes, with a present value of
`
`approximately $2.86 million, for no consideration and as a beneficiary of the Resource
`
`Trust. Kimberly and Justin, in their capacities as Trustees of the Resource Trust, have
`
`profited by the Resource Trust’s receipt of valuable equity in DOMD in exchange for a
`
`promissory note that the Resource Trust has neither the intention nor the ability to repay.
`
`79. All co-conspirators acted with the wrongful intent to hinder, delay, and
`
`defraud Josh, and each is jointly and severally liable for any equitable relief ordered or
`
`damages awarded as to one.
`
`WHEREFORE, Josh requests judgment in his favor as follows:
`
`a. Avoidance of the Transfers to the extent necessary to satisfy Josh’s
`
`claims;
`
`b. An attachment or other provisional remedy against the assets
`
`transferred;
`
`
`
`18
`
`

`

`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 19 of 20
`
`c. Any enhanced Judgment for one and one-half the value of the assets
`
`transferred or for one and one-half the amount necessary to satisfy
`
`Josh’s claims, whichever is less, jointly and severally against Mackie
`
`and Kimberly in their individual and representative capacities and Justin
`
`in his capacity as Trustee of the Resource Trust;
`
`d. Injunctive relief prohibiting the further disposition by Mackie, Kimberly,
`
`and/or Justin of assets already transferred or of other property;
`
`e. Awarding Josh his reasonable attorneys’ fees as permitted by applicable
`
`law;
`
`f. A judgment of compensatory damages in an amount to be determined
`
`at trial for any loss suffered by Josh, whether at law or in equity, including
`
`any enhanced damages contemplated by C.R.S. § 38-8-108 or
`
`otherwise contemplated by Colorado or Maryland law;
`
`g. An award of prejudgment and postjudgment interest as provided for by
`
`applicable law; and
`
`h. Awarding any other relief the Court deems just and appropriate.
`
`
`September 8, 2022
`
`
`
`
`
`s/Jonathan A. Helfgott
`
`Jonathan A. Helfgott
`LAHTI HELFGOTT LLC
`1624 Market Street, Suite 202
`Denver, CO 80202
`(303) 376-6160
`jhelfgott@lhlitigation.com
`
`Paul H. Schwartz
`Daniel M. Jozwiak
`
`19
`
`
`
`

`

`Case 1:22-cv-02320-PAB Document 1 Filed 09/08/22 USDC Colorado Page 20 of 20
`
`SHOEMAKER GHISELLI + SCHWARTZ LLC
`1811 Pearl Street
`Boulder, Colorado 80302
`(303) 530-3452
`pschwartz@sgslitigation.com
`djozwiak@sgslitigation.com
`
`Attorneys for Plaintiff David Joshua Bartch
`
`
`
`20
`
`

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