On November 5, Telestrata, LLC brought a derivative shareholder action and direct action against NetTALK.com, Inc., a publicly traded telecommunication company, and NetTALK’s directors and officers, alleging that the individual defendants unlawfully took control of the company to the detriment of shareholders and its authorized directors. Telestrata and NetTALK entered an agreement in February 2014 under which Telestrata would restructure $500,000 of NetTalk’s existing debt, lend an additional $4 million, grant Telestrata 48.88 percent ownership of the company, and issue a warrant for a grant of stock equal to an additional 20 percent stake in the company. The companies also agreed that Telestrata member Samer Bishay would become president of NetTALK with authority to bind the company to contractual or financing arrangements, limiting the authority of NetTALK’s CEO, Takis Kyriakides. According to the complaint, NetTALK erroneously issued Telestrata shares equal to 48.88 percent pre-closing, rather than after issuance, and failed to disclose, among other things, that it executed new employment agreements benefiting executives shortly before closing. The complaint further alleges that Kyriakides and NetTALK’s CFO entered into a number of financing transactions without Bishay’s approval, attempted to thwart Telestrata’s security interest in company property, and failed to inform Bishay of the significant financial matters. Upon discovery of the alleged improprieties, disinterested board members suspended Kyriakides and NetTALK’s CFO and attempted to eject them from NetTALK’s corporate offices, but were prevented from entering the premises by Kyriakides and other executives. Telestrata seeks an injunction and has asserted claims for breach of contract, breach of fiduciary duty, fraud in the inducement and conspiracy.
Telestrata LLC v. NetTALK.com Inc., et al., No. 1:14-cv-24137 (S.D. Fla. Nov. 5, 2014).