IN THE UNITED STATES BANKRUPTCY COURT ) ) ) Chapter 13 ) ) ) ) ) ) ) ) ) ADVERSARY COMPLAINT Plaintiff, ) ) ) ) Adv. Proc. No.

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1 0 0 HERBERT BEIGEL & ASSOCIATES, LLC Herbert Beigel 0 N. ORACLE RD. SUITE 0 TUCSON, AZ SBN 0 PCC (fax Hbeigel@msn.com Attorney for Plaintiff IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA In re: Case No. 0-- PCT-SSC MOORE, Robert Lee Chapter Debtor. Adv. Proc. No. RICHARD C. BEALS, ADVERSARY COMPLAINT Plaintiff, vs. ROBERT L. MOORE, dba KACHINA INSULATION, Defendant. COMES NOW, plaintiff Richard C. Beals ( Beals, by his attorney, Herbert Beigel, and for his complaint against defendant, Robert L. Moore ( Moore, dba Kachina Insulation ( Kachina, and alleges as follows:. At all times relevant to this action, plaintiff was a resident of Pima County, Arizona. --

2 0 0. At all times relevant, Moore operated Kachina, which does business throughout the state of Arizona, including Pima County. Kachina is in the business of the contracting and sales of insulation to customers in Arizona, including Pima County.. Jurisdiction is founded on USC.. In or about 00, Beals and Moore entered into an oral agreement, pursuant to which Beals agreed to invest in a new business to be operated by Moore, to wit, Kachina. In consideration for Beal s investment, Moore agreed to give Beals a twenty percent equity interest in Kachina and a return on his investment of one percent of sales.. In addition, Moore agreed to provide Beals with a regular and complete accounting of the revenues and expenses of the business.. In addition, Beals agreed to utilize his credit to assist Moore in securing credit lines with suppliers.. Pursuant to the agreement described above, Beals invested approximately $0,000 in Kachina, including but not limited to funding the expansion of Kachina, which began doing business in Flagstaff, Arizona, to Tucson, Arizona.. The agreement also provided that Moore would be responsible for assuring that all trade and financial creditors of Kachina were paid in a timely manner, and that all federal and state tax obligations would me met.. Almost from the outset, Moore failed to provide Beals with the information required under the agreement, including but not limited to, reports of income and expenses, tax information, profits and losses, and the like. --

3 Moreover, Moore has failed to remit to Beals the one percent of sales required under the agreement, and he has failed and refused to document Beals entitlement to a twenty percent equity interest in Kachina.. In 00, Moore established the Tucson operation of Kachina, with the use of Beals investment. At the same time, Moore commenced an artifice and scheme to defraud Beals and to personally enrich himself at the expense of Kachina and Beals, by among other things, misappropriating federal and state withholding taxes, failing to inform Kachina s outside accountant of the Tucson operation, and instructing Kachina s accountant to neither discuss with nor disclose to Beals any financial information concerning Kachina.. Upon learning of Moore s scheme to defraud in 00, Beals made demand on Moore for all of the financial records of Kachina and further demanded that Moore comply with his obligations to taxing authorities. Moore has consistently refused to supply any information to Beals.. Upon information and belief, Kachina is in imminent danger of financial collapse, and there is a substantial risk that Moore will abscond with the assets and business of Kachina, including cash, accounts receivables, and tangible assets. COUNT ONE: BREACH OF CONTRACT. Plaintiff realleges paragraphs - of this Complaint.. Moore s conduct constitutes a breach of his agreement with Beals.. Beals has performed all of his obligations under the contract. --

4 0 COUNT TWO: BREACH OF FIDUCIARY OBLIGATION. Plaintiff realleges paragraphs - of this Complaint.. By virtue of the agreement between Moore and Beals, and Beals equity interest in Kachina, Moore, at all relevant times, owed fiduciary obligations to Beals, including regular and accurate reporting on all aspects of the business of Kachina. COUNT THREE: CONVERSION 0. Plaintiff realleges paragraphs - of this Complaint. 0. By virtue of the aforesaid conduct of Moore, Moore has wrongfully converted assets and money in which Beals has an interest to his own use and benefit.. Moore s conduct has been deliberate and wanton. WHEREFORE, plaintiff respectfully requests this Court to enter judgment for plaintiff and against defendant, as follows: A. A full accounting of Kachina; B. The appointment of a receiver to manage and supervise an orderly liquidation or transfer of the business of Kachina to plaintiff; C. Preliminary and injunctive relief preventing Moore from managing or disposing of the assets of Kachina; --

5 D. Compensatory damages in an amount sufficient to compensate plaintiff for defendant s breach of contract and fiduciary obligations; E. Punitive damages; F. Interest, costs, and attorneys fees; G. Such other relief as the Court deems appropriate. th DATED this 0 day of February, 00. HERBERT BEIGEL & ASSOCIATES, LLC 0 /s/herbert Beigel Herbert Beigel Attorney for Plaintiff 0 --