Saturday, November 20, 2010


By: Rich Bergeron

David R. Herzog is the Liquidation Trustee for the Xyience, Inc. bankruptcy I am embroiled in out in Las Vegas, Nevada. He and I have had limited personal interaction by email and never met in person. Instead, Herzog left the meeting and conversing up to an assistant of sorts who takes care of all the details in complex cases like the Xyience saga.

Jon Backman (at left) is Herzog's counsel, and so far he's handled much of the grunt work for Herzog regarding the bankruptcy and several adversary cases filed against those who allegedly defrauded the company in past years.

I met with Backman myself this past February, and I shared a great deal of information and evidence with him. He used some of the paperwork I provided him to prosecute his cases against some of the perpetrators who swindled Xyience along the way. We worked well together while it lasted, and as we tried to hammer out a settlement, I provided a few more clues and some important insight. Over time, though, it appeared to me that Backman was stringing me along, promising to take action to help me only to fail to follow up on multiple occasions.

For instance, Backman agreed time and again that the company's initial $25 million case against me should be dismissed, starting with his first contact with me in December of 2009 (CLICK ON IMAGE BELOW TO SEE FULL SIZE):

It should have taken Backman just a few hours time to draw up a motion for dismissal, serve it, file it, and get a hearing. Instead, he apparently did nothing but ignore my case. After a while, I started to understand the reality of the situation and that this guy might not be the kind of champion lawyer he seems to want to pretend to be when he needs something.

I decided I would have to file first to get Backman and Herzog to take me seriously, as Backman insisted the maximum amount Herzog would settle for would be $5,000. Even when I agreed to that amount, though, Backman never showed me as much of a draft of any pleading. He also never provided a draft of any agreement that stipulated our terms or any written timeline for any realization of such a settlement. The communication was all only by email and by phone. Nothing with a signature. It is a prime example of flat out, pure legal delay. Backman and Herzog simply sat on this case like all the lawyers before them did.


Eventually, I broke off communication completely with Backman. I told him I was going to block all his email accounts, and I dropped off his radar for a while. Meanwhile I compiled the legal documents it would take to blow this case wide open. During my time formulating these crucial filings, I decided it would be a good time to give Mr. Backman one last opportunity to save face for his own sake and for the estate's benefit. I sent him an email message telling him a few hints about my plans to file new material and offering one last chance for a civil conversation if he wanted to call me. Not long after I sent the message, he called. We compromised yet again (The first settlement was supposed to pay out $5,000 to drop the estate from the counterclaim and the sanctions motion claims), and Backman made another new offer:

Thanks Rich. Have you filed your amended defamation claim? If so, would you email it to me?

Do you want to do a settlement as follows:

1. I pay you $5,000 for the Rule 9011;

2. I dismiss the claims against you;

3. You are allowed to pursue the remaining defamation claim against the company (which I would defend, and perhaps we could settle down the road).

If so, then I would recommend such a resolution to the trustee.


I accepted these terms, and I made it clear I wanted Backman to move on it as soon as he could. He sent the above email to me on November 4, 2010, and we continued being civil and trying to work things out for almost two more weeks until I began to realize more pressure needed to be applied to get Backman to do anything on my case. I knew I needed to file my latest pleadings and affidavits. So, I sent Backman and Herzog everything by email first, on November 15th, although I didn't have digital copies of the exhibits for the summary judgment motion and had to send those by snail mail.

Here's most of what went out to both Backman and Herzog that day:

Xyience Case Brief in Support of Summary Judgment By Rich Bergeron

Affidavit in Support of Summary Judgment in Bergeron vs. Xyience Bankruptcy Case

Designation of Evidence For Motion For Summary Judgment

Motion For Summary Judgment

Affidavit In Support of Motion to Amend Sanctions Motion in Bergeron vs. Xyience Bankruptcy case

Xyience Case Motion to Amend Rule 9011 Sanctions by Rich Bergeron

I expected at least some kind of backlash from Mr. Backman of course, as much of the pleading material involves descriptions of my frustration with this attorney's behavior in support of fellow attorneys I'm seeking sanctions against. Instead of getting an immediate missive from the man himself, though, I was fortunate enough to get an email meant for him from the guy he was supposed to be representing: Liquidation Trustee David R. Herzog. The intercepted communication, obviously sent to me by accident, apparently never even made it to Backman's inbox. Since it was unrelated to settlement negotiations it is both admissible in court and ripe for publication, so here it is:

Gee Jon, and here I thought you were pursuing all these claims. Oh sorry I forgot, your not nearly the atty that Rich Bergeron believes he is; oh yes he is a legend in his own mind. Here is my concern, how do we get rid of this frivilous garbage without you spending gobs of time. I'm sure he doesn't comply with local rules if they are anything like the Northern District. You always told me he was crackpot, these pleadings prove it.




Disrespect will get you nowhere.

You probably didn't realize you sent this to me as well.

This "crackpot" gave your counsel a lot of information and
documentation on Xyience. This information helped win your cases. Mr.
Backman still doesn't even seem to know what my case is all about,
though. Neither do you.

I'm glad you just gave me more evidence that he's defamed me as well.

Not too smucking fart for a guy who's supposed to be a REAL attorney.

Good Day,




Making threats to us does not resolve the situation. Bachman has made tremendous efforts in pursuing the litigation against the Fertitas and the other wrongdoers. Your disparaging remarks against him in your pleadings are reprehensible. What more can we do but vigorously pursue this litigation. I apologize to you for calling you a "crackpot" but let him have the peace to do his work undistracted by your litigation.

David Herzog



I don't want to bicker with you further, do what you think you need to do.



Rich ---

Apparently, David inadvertently sent the email to you when he meant to send it to me. Like I, he is quite distressed by what you have written in your motion to amend the sanction motion, and in the summary judgment counterclaim, both of which will distract my attention from critical matters in the Zyen/Fertitta case. I restrained my tongue because I know that getting into arguments with you about the damage you are doing to the case is pointless. But David was venting his frustration, thinking he was writing to me, but inadvertently sending it to you.

As for your comment that the remarks are slanderous, they are not because David did not publish them to anyone. They went solely to you.

David tells me that you and he exchanged further emails, but I have not seen them, so I can't comment. If you share them with me, then I will do so.



Rich ---

I do not care whether you believe me. I did not receive David's email until you sent it to me. In fact, even when David emailed me to tell me of his error, he did not send me the email he had sent to you. As for Rule 9011, it has nothing to do with an email between an attorney and his client.

That being said, I regret that the events of today have occurred because, as you know, I have attempted to move past fighting with you, and have just accepted that you are going to do what you do --- and say what you say --- regardless of what I say. I did not like either of your motions, but I'll deal with them. There really is nothing for us to discuss about them: you have attacked my integrity, but I am a big boy and can take it. You should do the same with David's email to you and just let it go.

We'll speak soon I'm sure.



Rich ---

I have to run to a meeting, but for the record, I never called you a crackpot. As I have told you, I believe that you are abusing the legal system with some of your pleadings, and I believe that, to some extent, because you are smart and hard-working, but severely misdirected, you can be dangerous. But I do not view you as a crackpot, and would not have used that term in describing you.

We'll speak soon.



Rich ---

I don't know what you are trying to pull, but there is zero chance that the Trustee would settle your Rule 9011 claims, but let you bring a Rule 9011 motion against us the day after we paid you. We'd have to be out of our minds to do that, because then we'd be paying you $5,000 for nothing. At this point, we have not filed anything in your case, so you have no basis to file a Rule 9011 motion against either of us. In fact, if you did so, then you'd be subject to severe sanctions. And I am not going to file a settlement motion, or anything else, until you have signed an agreement saying that you will not pursue Rule 9011 motions against David or me. That was always the deal, and you know it.

Bottom line, and no further discussion: If you insist on retaining the right to pursue a Rule 9011 motion against the Debtor, the Trust Estate, David or me, then there is no settlement --- period. This is not negotiable. And if you do not accept it by 5:00 p.m. my time this evening, then our discussions are at an end, and we will cease responding to your email or speaking with you any further.


And now, because Backman and Herzog never volunteered any pleadings or demonstrated any general effort to move this case in any real direction, they use this fact as a sword against me. They claim this means they are not subject to Rule 9011 Sanctions, but they neglect to consider how liable they are for general sanctions. The problem with their backwards logic is I know the law.

The sanctions motion is not strictly a Rule 9011 motion. The motion asks the court to initiate its own ability to sanction offending parties. The pleading asks the court to provide sweeping relief for those injured by the blatant abuses of process and incessant delays wrapped up in the case. Backman and Herzog perpetrated much of the most recent delay, and at this point there is no reason not to name them to the amended motion for sanctions if I am given a chance to amend that motion.


Well, since I live thousands of miles away from the venue I won't actually see anyone in court, but I will seek a hearing and ask to appear by telephone. At that point there should be another item on the docket describing the events I've shared here. All the attorneys I've faced thus far in my budding pro-se career in law have demonstrated an extreme lack of integrity when backed into a corner. So many lawyers and people who can afford to hire them seem to live on that timeless threat, "I'll see you in court." Most of us who can't afford to engage a lawyer or don't have enough time or energy to become one end up forced to negotiate or backpedal or compromise our own integrity to deal with people who drop this threat on others with impunity.

I couldn't afford any type of legal assistance, and I wasted a lot of time trying to find it when I felt overwhelmed by this case in the early days. I did it myself, and so far that's been the best decision I've made. I don't think I'm the best lawyer on the planet or anywhere close to it. I don't think I'm a better lawyer than Jon Backman or most lawyers in practice in this country.

If I had to give my honest opinion of how good a lawyer I really am, I'd have to say I suck at it. But, then again, I don't want to be a lawyer anyway. I never did want to be one. I was forced to.

The real issue is not what kind of lawyer I am, but what kind of person I am. I'm honest, and painfully so. Some might say this high level of integrity means I could never be a proficient lawyer. Again, I don't mind, because I don't want to be an attorney anyway.

As my own legal representative, I have no attorney/client privilege. I have virtually no chance of being in front of the same judge again on another case. I won't have to face the opposing lawyer in another case, either. I don't have to make deals or play nice or rack up huge fees to fatten my paycheck. The pay is virtually non-existent and highly dependent on a favorable outcome(which has taken me longer than three years to get anywhere close to), but the work is meaningful and the victims are worth fighting for. More than anything the work I do requires a sincere and earnest sacrifice of my time for the benefit of the greater good. I have to be selfless by very nature just to keep doing it without reward or much in the way of sustainable funding. There's no guarantees, no quick fixes, and no great hope of full recovery at this rate. Yet, someone has to step up and try to do this work, anyway, and I don't see anyone else in line waiting to do it for me.

The initial shareholders of this company were swindled out of their investments. Many of them lost college funds, family trusts, and retirement savings as a result. The Fertittas promised to keep the company viable by taking their chief lien position with the help of a "private investment group." Instead, they killed the company, with help from their friends and associates. I took up the story a long time ago and tracked these transgressions from day one up to the present. I watched it all happen and warned others that it would happen before it did. I did an ominous amount of work for a microscopic amount of money. When you are in that position there is simply no time for greed or corruption to kick in if the effort is to remain true and sincere. You have to always focus on the long term, the goal to take back what was stolen from all those shareholders and their families.

I've done about as good as anyone could expect of an amateur lawyer. I've come to learn a great deal about the way the legal system works and doesn't work. I've seen how the system breaks down those who aren't willing to conform to its strict guidelines and rules. You have to be willing to get a little antiquated with your format and writing style if you want to be a halfway decent attorney, and I've spent more than a few all-nighters figuring that out the hard way. Today I'm better off because I kept trying, and I have a more compelling life story as a result of this struggle, but the journey has still been painful. The fight that rages on is still stressful and agonizing. The work never seems to get any easier.

Nobody in it for the wrong reasons could ever get this far, and one day Mr. Herzog and Mr. Backman might figure that out. They can underestimate me and dismiss my efforts as confused and misdirected all they want right now, but the truth will speak for itself in the long run. I didn't do this for fame and fortune. I don't have a greedy bone in my body.

I don't work for free to stroke my ego. I don't keep plugging away for hours on end with this work thinking it's a get rich quick scheme. I don't do this because it's my job. I do it because I am proud of it, I believe in it, and nobody else is in any position to do it the right way and with the right intentions in mind. My motives are pure and my conscience is clear.

I can't pretend to know what thoughts are going through the minds of Backman and Herzog at the moment or what their actual motivations and driving factors are. However, I do know that--no matter how much better than me they think they are at lawyering--their apparent character flaws will not be washed away by technicalities and nuances of process. I will expose these flaws here and everywhere else I think it's relevant to do so, and not just because I can or I think it makes me look better in comparison. I'll do it because it needs to be done, and it's simply the right thing to do.

No comments: