Qtrax CEO Tells The Truth Or At Least The Courts Do

By Wayne Rosso on Aug 24, 2009 with Comments 9

Qtrax CEO Allan Klepfisz has recently taken to the blogosphere with some very unusual long and rambling posts. Reading them is very much akin to root canal surgery. They reek of a noxious Shakespearian mix of narcissism and messiah complex.

However in his latest missive, besides announcing that Qtrax will launch in China the end of October (another of many launch dates over the last 7 years), he actually tells the truth about some issues.

Firstly, without naming names, he attacks a journalist from CNet as well as his “source”. It’s pretty clear that he feels that the source is me, since I have written critically about Qtrax in the past, as has TMV.

He writes “There is a disgruntled gentleman who tried his hand at what we are doing & failed. And astonishingly, widely blames me. Well, he has been talking to the journalist behind these riveting stories and he, the “source”, has plenty to say. All of it negative. Much of it twisted. Some of it libelous. At least the journalist left out some of the more libelous stuff”.

Well, I’m here to tell you that he is absolutely right when he says that I am twisted. I was beaten as a child and clearly have severe anger issues that I’ve been working on in therapy for years but finally gave up on. So that’s true.

As far as having tried and failed, only once by the way, before—well that’s true, but as I’ve detailed previously our funding with Virgin fell through at Mashboxx due to no fault of our business model or ours. It was a total bizarre act of God. But since there is no God, at least in the music business, he may have a point. I certainly don’t blame Mr. Klepfisz for any of my failures. Judging from his recent writings, he has his hands full with his own.

As far as libel goes, I don’t think that I ever said anything that wasn’t in the public record. Anybody can find these lawsuits, judgments and bounced checks. Furthermore, if something is true it’s not libelous. I mean you’d think that I made him write all those rubber checks! But enough of that.

Mr. Klepfisz, after previously dismissing the $1.8 million bounced check to Oracle in an earlier post as “a tiff”, went on to talk about a couple of his other outstanding legal issues.

“We have a somewhat dated lawsuit going on with a Company called Millenium. They provided services for our servers before our aborted launch at Midem. We paid them some. And frankly struggled doing it, at the time. I can’t say more than that most of our suppliers have been wonderful. There are sometimes, exceptions. The legal system can decide if this is one. And then there’s Las Vegas Wall Street Group. A quite recent loan that it is claimed, is overdue. And there is a consent to a judgment signed by me. The facts will soon emerge about that also. Oh & just in case, it is deemed to also be newsworthy at some time in the future, there are a couple of outstanding lawsuits with toxic PIPES. As I’ve advised before, Google that term please”, he writes.

Well, he was right about the last part at least. There is more news. It seems as though a lawsuit from Alpha Capital and Osher Capital for over $500,000 of unpaid loans was filed against Qtrax and Brilliant Technologies some time ago. It was evidently settled and Alpha/Osher were given checks amounting to that sum. The checks bounced. The plaintiffs filed again, this time in NY State Court. So according to the filing dated July 22 of this year, here’s what’s happened (excised directly from the complaint):

“This Court on May 1, 2009 awarded judgment to Alpha Capital against Brilliant Technologies Corporation and LTD Network, Inc. in the amount of $468,921.64 and to Osher against Brilliant Technologies Corporation (“BTC”) and LTD Network, Inc. (“LTD”) in the amount of $85,558.24

In connection with Plaintiffs’ attempts to enforce the judgments, BTC and LTD, in or about the end of May 2009, requested Plaintiffs to forbear in their attempts to collect on the judgments until June 22,2009 by which time BTC and LTD would pay the judgments in full.
Plaintiffs agreed to forbear until June 22 in exchange for, among other things: i) the agreement by Klepfisz, who is the chief executive officer and a shareholder of BTC and LTD, to personally guarantee payment of the sum of $500,487.24, which was the amount of the judgment outstanding as of June 22,2009; and ii) the agreement by Qtrax (a subsidiary of BTC), by Allan Klepfisz, its president and chief executive officer, to pay $500,487.24, in the event BTC and
LTD did not satisfy the judgments by June 22. A copy of the agreements by which Klepfisz guaranteed the payment and Qtrax agreed to pay that amount are annexed hereto as Exhibit B.

BTC and LTD failed to pay the judgments by June 22. They requested further extensions of the forbearance period first to June 29 and then to July 9. The last extension was granted on condition that BTC and LTD wire the sum of $50,000 into my special account on or before July 1. Wallace Neel, the attorney for BTC and LTD, claiming that Klepfisz was on a plane and, therefore, could not authorize the wire (Exhibit C), delivered a $50,000 check to my
office on July 1 which was returned for insufficient funds.

BTC and LTD have failed to pay the $500,487.24 during the forbearance period. Klepfisz and Qtrax, in accordance with their agreements, therefore, are responsible to pay such amount to Alpha Capital and Osher”.

So you can’t say he didn’t warn everybody!

So Qtrax supporters, you’re right. Anybody would be jealous of Allan Klepfisz and would love to be in his position. I, for one, am extremely envious that I can’t be him. There sure are plenty of lawyers out there who love him as well. God bless you, Allan Klepfisz.

Other readers also read:

Qtrax Update: More Lawsuits & Judgements, No Portability Launch…

Qtrax: Retraction

Qtrax Relaunching? What About all the Lawsuits it is Facing? TMV Drills Down on Qtrax

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Tags: Allan Klepfisz • Alpha Capital • CNet • Mashboxx • Qtrax

About the Author: Wayne provides biting, hard edged, entertaining, humorous, sometime satiric but always provocative commentary on current events and trends in the music industry.