Victoria Williams vs. Bidz.com, Inc., David Zinberg, ET AL
According to the suit, Victoria Williams son, Michael Henderson, "was a shareholder, director, Executive Vice-President - Operations and General Manager of Bidz." Victoria Williams stated that on the day Michael Henderson died of an apparent drug overdose, she went to her son's apartment. "While there, she discovered that his personal papers and records, laptop computer and palm pilot were missing." She "alleges that these items may have been stolen and/or destroyed at or about the time of his death by persons currently unknown in order to convert and/or conceal his ownership interest in Bidz." Victoria Williams "never found his Bidz share certificate(s) or any other documents relating to Bidz in his apartment."
Victoria Williams Suit
Bidz.com actually listed Michael Henderson and David Zinberg both as 50% co-owners of the company in a confidential private placement memorandum from April of 1999. This is despite the fact that David Zinberg knew Michael Henderson was a convicted felon according to his own declaration in the suit.
Bidz.com Shareholder List on Page 92 of Yelena Simonyan Suit
Declaration of David Zinberg in Williams Suit
Yelena Simonyan vs. David Zinberg, Michael Merzlak, ET AL
According to the suit, Yelena Simonyan is a Russian immigrant "who cares and lives with her elderly mother." She and her mother used $20,000 from a residential mortgage on their home to loan to David Zinberg and Michael Merzlak (the promissory note is Exhibit D of the suit). Despite having to borrow the money for her small initial loan, Yelena Simonyan alleged she subsequently invested $1,155,000 in pawn shops owned by David Zinberg. A Shareholders' Agreement included in the suit lists her as Chief Operating Officer, Secretary and 25% owner of Union Pawn Brokers, Inc. (predecessor to Bidz.com). In addition, Yelena Simonyan "believed in good faith that she acquired ownership interest in two other pawn shops owned by Zinberg" of 12.5% apiece.
Yelena Simonyan Suit
Yelena Simonyan eventually "realized that Zinberg had lied as to all his past representations, and in fact, he had no intention of repaying her for all the monies which she had previously given to him, in good faith, for the ownership interest" in the pawn shops. She alleges that David Zinberg "attempted to force her to sign paperwork to relinquish any and all ownership interest in Union in order to keep the chain of title clean since Zinberg wanted to take Union and all Lenders public by organizing his pawn shops into an on-line Web site called Bidz.com."
Yelena Simonyan Suit
Yelena Simonyan eventually won a judgment of $700,000 and 37,500 shares of Bidz.com common stock against David Zinberg, Bidz.com and other parties.
Yelena Simonyan Judgment
Perhaps the most startling aspect of the suit is Yelena Simonyan's attempt to describe David Zinberg's reputation in the Russian Community:
The underlying matter herein is quite complex, involving factors which are peculiar to the Russian community. Zinberg has a well established and prominent reputation among the Russian emigres...Zinbers's status is one who is accorded great respect and deference within the "ghetto-like" mentality of the Russian immigrant community.
