Eaconomy files stipulated Auvoria Prime restraining order
In our recent Auvoria Prime review we touched on a lawsuit filed by Eaconomy against the company.
The day after our review was published, Eaconomy filed a Motion for a Temporary Restraining Order.
Eaconomy’s filed April 6th TRO motion sought to
restrain defendants Auvoria Prime and Sal Leto from using Eaconomy’s proprietary database to interfere with its contracts with distributors.
Auvoria Prime and Leto responded on April 9th, claiming Eaconomy’s motion was based on “false and unsupported assertions of fact”.
Leto (right) claims he didn’t control or manage Eaconomy’s affiliate database.
Mr. Leto never accessed the database or back office at any time.
Eaconomy’s contrary assertions, while apparently fundamental to its Application, are complete fabrications.
With respect to the Atlanta event Eaconomy claims Leto solicited its affiliates to join Auvoria Prime at, Leto claims nothing pertaining to Auvoria Prime was discussed until after the event.
After the event, Mr. Leto attended a private dinner with approximately 4 distributors with whom he had developed close personal relationships.
The dinner occurred just 2 days before Mr. Leto tendered his resignation to Eaconomy, and he accordingly used the opportunity to advise of his pending departure so his friends would hear the news directly from him.
In doing so, Mr. Leto
(i) did not solicit these distributors in any way (and to the contrary told them to remain with Eaconomy notwithstanding his imminent departure), and
(ii) requested non-disclosure agreements to ensure that the explanation he provided for his departure would not be conveyed to the broader community in any way that might negatively impact Eaconomy’s affairs.
Eaconomy’s contrary assertions are false and rest on hearsay and conjecture.
On April 10th the court issued an order requesting Eaconomy show case as to why their TRO motion shouldn’t be dismissed.
The court put forth that by waiting over a month since allegedly learning Leto was raiding the company, Eaconomy violated ‘Local Rule 231(b) based upon its undue delay in seeking emergency relief’.
Eaconomy filed their response on April 13th, revealing, among other things, Hassan Mahmoud (right) had contracted COVID-19.
First, the Court is under the impression that Plaintiff became aware of Mr. Leto’s wrongful solicitation on March 4, 2020, the date Mr. Leto sent out an improper response letter and video to the entire field of Independent Software Partners (“ISPs”).
However, while Mr. Leto’s letter/video was indeed sent to the field on March 4, 2020, Plaintiff did not see its content until days later.
The reason that Plaintiff did not see this beforehand was because Mr. Leto intentionally removed Plaintiff from the Telegram Portal where the content was posted, effectively precluding Plaintiff from having access to it.
Mr. Leto did this to prevent Plaintiff from being able to see what was being posted on the portal.
Second, after learning of the solicitation, and during the midst of preparing the TRO, Plaintiff’s president, Mr. Hassan Mahmoud, and his family became very ill.
According to their physician, Mr. Mahmoud and his family were believed to have contracted COVID-19.
As a result, Mr. Mahmoud priorities were directed to his and his family’s health. This type of delay is excusable.
Third, because Mr. Leto had successfully obtained NDAs from numerous ISPs, no one was willing to speak with Plaintiff out of fear they would be violating their agreement with Mr. Leto.
Indeed, Plaintiff is informed Mr. Leto was telling ISPs they could be sued if they decided to come forward because they agreed to the terms of the NDA.
Because of this, it made it extremely difficult to obtain the necessary declarations to support the TRO, thereby causing additional delay.
On April 16th the court scheduled a hearing on the TRO motion for April 17th.
On April 17th Eaconomy and Auvoria Prime informed the court they’d resolved the TRO issues via a mutual agreement.
As per a Stipulated Restraining Order filed on April 17th;
Defendants Auvoria Prime, LLC, and Sal Leto shall NOT, directly or in active concert with anyone else, knowingly recruit, sponsor or solicit any existing Eaconomy, LLC distributor (known as an ISP) or customer to join Auvoria Prime, LLC as a distributor or customer.
This prohibition shall not apply to
(i) a distributor’s personally sponsored downline at Eaconomy, or
(ii) ISPs who, without solicitation, seek to join Auvoria Prime, LLC.
Within 48 hours of entry of this Order, Auvoria Prime, LLC shall notify, in writing, each of its distributors of this prohibition by email.
This prohibition shall remain in effect until the case is dismissed or otherwise modified by court order.
Eaconomy stated in their original TRO motion that affiliates
“are now leaving the company in great numbers,” and if this continues, it will have “no business at all.”
Not really sure what impact an agreed TRO eleven days later will have but for now the company appears satisfied.
Stay tuned for updates as the case continues to play out in court.
Update 24th May 2020 – On May 19th Eaconomy filed a notice of voluntary dismissal pertaining to Kanoa Nartatez.
On May 20th the court dismissed Nartatez as a defendant.
Looking forward a scheduling conference has been scheduled for June 25th. I’ve scheduled our next case docket check for June 26th.