Unanswered Questions for Industrial Heat - 89 Million at time of agreement ??

Quote from ultrasure

Industrial Heat has a few questions that need to be answered regarding the 100 million.

* with IH history of bankruptcy's ..

IH has no history of bankruptcy. This idea has been created by confusion between IH and Cherokee Investment Partners. Cherokee Investment Partners is a limited partnership with $2.2 billion in holdings. What they do is well described in sources. They put together limited partnerships to start up local and risky environmental cleanup projects. Typically Cherokee puts about $25 million of Cherokee money into these partnerships, but they attract other investment, perhaps local, and they also may solicit and obtain governmental support. Due to unexpected conditions, some of these fail, perhaps the market turned around, a cleanup ran into difficulties and went over budget, etc. When one of these fails, it will go bankrupt (which means that the assets will be sold and distributed to creditors first, then what remains, if anything, to the partners.) As with any limited partnership, unless there has been malfeasance, the limited partners losses are limited to their investments. So Cherokee could lose up to $25 million from such a failure. However, they succeed more often than they fail, it appears. They did not become a $2.2 billion corporation by creating limited partnerships that go bankrupt. Cherokee does not make a profit from these failures, some have had the idea that they "make the money disappear." That's invented. When one of these bankruptcies involves considerable other investment, there have been investigations. These have not found improprieties. But some investigative reporters have written lurid accounts, full of suspicion, and these are what have been cited by some with regard to this case.

Strictly speaking, Cherokee has also never gone into bankruptcy. They simply were major partners, perhaps founding partners, in a few partnerships that failed. The entire structure of corporate and limited partnership investment is based on limited liability. Anyone dealing with a limited partnership -- or corporation -- would know that if the corporation goes bankrupt, the officers and shareholders are not liable, except to the extent of any investment -- they can lose it. If one isn't willing accept this risk (which can be low, depending), don't deal with a corporation or partnership. But individuals can also declare bankuptcy.

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* due diligence on the eCat Test was Purposeful - maybe they had NO intention of completing the transaction.

So they deliberately invested $11.5 million -- and probably substantially more -- for what? The meaning here is unclear to me. This is apparently based on this, from Document 70-3:

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REQUEST NO. 47: Any and all documents pertaining to the due diligence performed by you and/or any of your investors, both actual and prospective, pertaining to the E-Cat and/or the ECat IP from January 1, 2012 through the present.

IH agreed to search for documents and to provide them.

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Subject to, and without waiving the foregoing General and Specific Objections, Industrial Heat will conduct a reasonable search for and produce non-privileged documents that address, discuss or reflect the due diligence performed by Industrial Heat or any of its actual or prospective investors as to the License Agreement or a subject thereof before entering the License Agreement, located as a result of the reasonable search.

IH was not ordered in the Magistrate ruling (Document 74) to do anything more than that.

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* IH had new business partners and new patents

there is massive fuzziness about this. IH is the LP that entered into the Agreement. IH is now a wholly-owned subsidiary of IH Holdings Internataional (HHI), which does have new partners, including two trusts that collectively invested $50 million US. These would be Woodford. IH was funded through a stock offering in 2013, initially subscribed at about $11.5 million, but allowed to raise $20 million.

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Defendant shall produce discovery responses by December 2016 .

The ruling gives various dates for responses. Rossi has just noted that his lawyers handed him 800 pages to review. He's been getting responses, my guess. If IH needs more time, they can ask for it, reasonable requests would almost certainly be granted.

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Request No. 1

Defendant agrees that it will provide documents evidencing the source of the $10 million payment.

This one is probably easy. I assume that they raised the money through an $11.5 million stock offering. My guess is that the initial $1.5 million to secure the Agreement came out of Darden's pocket, or maybe Darden and Vaughn, and then they were reimbursed from the stock offering that was the next year. I.e., they created IH and loaned it $1.5 million. They also bought stock in IH when the stock was issued (so they received stock for the $1.5 million, in effect).

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Request No. 2

In addition to providing documents proving that Defendant had access to $89 million at or before
the time the License Agreement was executed

This one is also probably easy. They probably didn't have access to that, other than an expectation of being able to raise it if it were needed. If they could build and test devices that worked, almost anyone connected with LENR would affirm that this should have been easy. Without independent tests to show investors, though, it would be almost impossible. Who would take the risk?

Defendant shall answer the following interrogatories:

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Q: Did you or did you not -- have access to $89 million -- as of February l5, 2016

If you had less than $89 million, then identify the amount of money you did have.

Rossi imagines this is relevant. The court allowed the question, but, again, the answer could be something like "$12.50." I.e., a lot less than serious money. From around May of 2015, the money was all in IHHI. It is possible they have some of the original investment left, so there could be a few milllion. They didn't have the money to pay Rossi, they would have to raise it, which is why Rossi's focus on his "test" instead of making sure that IH could validate the technology was utterly insane. It guaranteed non-payment.

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Request No. 6 -

Defendant shall provide Joe Murray's CV or resume, his dates of employment, and any employment agreements
regarding his compensation in regards to this case or in regards to E-cat technology.

Rossi appears to be fishing for evidence to claim that Murray was not actually "IH personnel," thus allowing Rossi to refuse the visit in July, 2015. This is so unlikely. Quoted here is not the entire ruling on this point. This is it:

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Request No. 6 - Defendant's objections are sustained in part; Defendant shall provide Joe Murray's CV or resume, his dates of employment, and any employment agreements regarding his compensation in regards to this case or in regards to E-cat technology. (Tr. 5 1 :9-2 1

The original question and response (70-2):

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REQUEST NO. 6: Industrial Heat, LLC’s entire employment file for Joseph Murray.

In addition to its General Objections, Industrial Heat objects to this Request on the grounds that it is overbroad and not reasonably calculated to lead to the discovery of admissible evidence. This Document Request is an attempted fishing expedition into the personnel files of an Industrial Heat employee, and as written is beyond the scope of (and hence not proportional to) the issues in this litigation as reflected in the Complaint, as narrowed by the Dismissal Order, and the 2nd Amended AACT. Subject to and without waiving the foregoing General and Specific Objections, Industrial Heat will conduct a reasonable search for and produce any resume or C.V. for Joseph Murray, located as a result of the reasonable search.

So the order somewhat extended what answer would be required, but stopped short of what was requested.

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Request N os. 8, 9 and 10 -

Defendant agrees to provide responsive documents sufficient to show the basis and amount of damages claimed.

This is pretty simple.

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REQUEST NO. 8: Any and all documents supporting or contending to support, the damages allegedly incurred by Industrial Heat, LLC. (sic) as alleged in Paragraph 99 of Industrial Heat, LLC’s Amended Counterclaim including, but not limited to, all documents evidencing the alleged “multi-million dollar payments made to a third party.”

This is likely a reference to payments made to Ampenergo, pursuant to the Agreement. Ampenergo was the U.S. licensee for Rossi, and had invested in Rossi, apparently, so the Agreement provided for compensation to them, under a separate agreement, as I recall. My guess has been that IH invested a total of about $20 million in the Rossi Affair, and they will show that and claim it as damages, I assume.

The order essentially upheld IH objections. They already agreed to provide the basic documents, and were objecting to "any and all," pointing out that this could lead to massive redundancy.

Request Nos. 9 and 10 are is essentially the same question, but referring to Paragraph 139 and 148 of the AACT. (Document 50), respectively.

It is common to enter into an agreement to pay something as a future contingency when one doesn't currently have the money, if one believes that by the time the payment comes due, one will be able to obtain the funds. This is not evidence of fraud, unless one represents that one already has the money, in which case there could be an issue. Cherokee probably doesn't have $89 million sitting around, but could probably raise it. But Cherokee was not, we think, an investor in IH, and it would be quite outside their business area. Maybe Darden could have pulled off a loan of some kind. But he wouldn't do that under the conditions that obtained by February, 2016.

It is unclear to whom the question is asked about funds available in February. As stated, the question seems to refer to IH, and, as I mention, that's not where the money is, probably. IHHI owns IH and had whatever was not yet invested of the $50 million, but this was not an asset of IH. Rossi is going to get a mouthful of hair on this one, I expect. At this point, the major asset of IH would be ownership of the IP holding company, IPHBV, I think it's called, principal asset, and maybe the only asset, the License. What's that worth? It could be auctioned off. Planet Rossi seems to think it's worth more than $100 million. Well? Is it?

Quote from Rends

All the 'companies':

Cherokee Investment Partners
Industrial Heat LLC
IPHBV Holdings Ltd
IH HOLDINGS INTERNATIONAL LIMITED

have no other 'owners'; they are officially completely under control of Tom Darden and John Mazzarino

This is legally naive. These are limited liability share companies. They have directors. The Directors of a company do not "own" it. They do exercise ad hoc control. However, they are legally restrained in what they can do, and are legally obligated to act in the interests of the shareholders. Directors may also be shareholders, and so can have both ownership (full or partial) and defacto control.

Rends links to official documents on his web site. However, the source is public information for IHHI (the big banana), and it owns Industrial Heat as sole owner, and a full record, to date, is found at
https://beta.companieshouse.go…y/09553031/filing-history

A recent document is a financial report for 2015. Rends pointed to his copy of that.

The 24 May 2016 Annual Return shows the total number of shares in each class, and all shareholders, and what shares they own. Woodford is known to have invested $50 million in May, 2015, and is therefore behind the two trusts that own $50 million US worth of Class A shares.

The Annual Return details voting rights. Ordinary Shares and Series A shares have one vote per share. Series B shares have no voting rights. Series A shares have priority for distributions on winding up.

The Financial Report shows how the company is operating. It's losing money, expensing all research investments (instead of assigning them a value). It expects to continue to lose money, depending on new investment to continue operations. In short, they expect to lose everything currently invested, though some investments may be considered to have a value. They expect to be able to raise more capital through share sales.

From the Annual Return, the total number of shares is as follows:
Ordinary: paid up value, $0.01 per share, 22,746,271 shares, total paid up value. $227,462.71.
Series A: paid up value, $45.049996 per share, 1109878 shares, total paid up value, $49,999.999.50. These are obviously owned by Woodford trusts.
Series B: paid up value, $0.01 per share, 2057465 shares, total paid up value, $20,574.65. Owned by "IH Nominee." In other words, "we aren't telling you" (and this is explained, it is possibly a subsidiary.).

total voting shares: 23,856,149. Controlling interest: 11,928,075 shares.

Major shareholders (with voting shares): shown with this is a signatory for the shareholder from prior documents. This is not necessarily the owner, it could merely be an agent or director, but it would show a level of control.

Brickhaven II, LLC, 4,538,792 shares, Darden.
Atwood Partners, Ltd, 2,063,330 shares, Mazzarino.
Hamilton Group, LLC, 4,804,403 shares, Darden.
JPIH Holdings, LLC, 6,146,525 shares, unintelligible signature.

No other shareholder owns more than 636,000 voting shares; collectively, the smaller shareholders own 6,303,099 shares.

Some officers of the smaller shareholders also represent other shareholders. For example:
Atwood IH, LLC, 449,561 shares, Mazzarino.
Hargett Advisers, 500,000 shares, Mazzarino.

So Darden and Mazzarino hold or represent, together, 12,356,086 shares. That is a majority, though small, so, collectively, they have a controlling interest. However, in each case, they may represent many investors who could remove them from the position of authority if the investors are not pleased with their performance. That is, they have control, but it is not necessarily unrestrained control.

This all seems relatively standard governance for a venture capital or research investment company. If an investor doesn't trust Darden, they would be way-silly to invest with them. Obviously, Woodford has trusted Darden, providing major investment without requiring control.

Quote from Rends

...and both, the IPHBV Holdings Ltd and the IH HOLDINGS INTERNATIONAL LIMITED probably do not even have employees others than the directors:

thenewfire.files.wordpress.com…d_financial_statement.pdf
thenewfire.files.wordpress.com…v_holdings_ltd_report.pdf

... but very interesting financial statements!

Indeed. Explicitly, they don't have employees. They do have professionals working on their behalf. IH almost certainly has employees and/or contractors. Legally, some kinds of work must be employment, cannot be contracted directly with the person. Reading the financial statement for IHHI lays out how they are operating.

In 2015, from the unaudited report filed November 7, 2016, for the period ending December 31, 2015, they are reporting a loss of $17,255,000, leaving them with capital of $41,476,000. Remember, they are expensing all investments in research, not capitalizing it. Any IP rights gained would not be valued in this, other than explicitly purchased rights.

The final statement in that unaudited report:

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In the opinion of the directors, there is no single controlling party

That is legally significant. There might be control collectively with Darden and Mazzarino, but consider this: Johnson of JM Products, Inc, represented that neither he nor Rossi or anyone related to them were owners of JMP. That someone signs for a company does not evidence ownership, as such. It might even be simply an employee or service professional, all that matters is that the person is authorized to sign by the owners. The owners may revoke that if they choose.

As to defacto control, has it ever been anything other than obvious that Darden is driving this bus?

One more point. Rossi has claimed that the Chinese invested maybe $100 million as a result of their being fantastically impressed by his charade, ah, excuse me, stunningly obvious successful demo, they didn't mind the pipe into the wall at all and fell all over themselves with joy and cash.

If the Chinese did invest -- which would be unsurprising, though not for the reason that Rossi imagines, rather in spite of it, same as Woodford -- it wasn't put into IHHI. I would expect that a Chinese company would be formed, with some operating agreement with IHHI. It's a bit like IHHI itself. With major British money, they created a British holding company, making it easily accessible to Woodford if any legal process is needed. So Chinese money would largely stay in China, where the Chinese can control it if needed.

Quote from Rends

The court is trying to prove who is behind Industrial Heat LLC by identifying the responsible persons and the best prove is to check where the money is coming from, in this case most probably from Cherokee Investment Partners and responsible for the payment are Tom Darden, Founder and CEO and John Mazzarino Founder and Managing Principal (those who are also founder and owners of the oversea companies and holdings).

Rends has shown, more than once, that he doesn't understand U.S. legal process. In the U.S., courts do not generally investigate; rather the proceedings are adversarial, and the courts mediate it, judging process only. In a judicial trial, the judge will also assess fact; in a jury trial, that is done by a jury.

So the court is not "trying to prove" anything. Rather, Rossi, in this case, is fishing for evidence that he doesn't already have, it appears (or he'd have alleged it with the Complaint, almost certainly.) Yes, Rossi wants to know where the money came from, because he believes that is relevant. However, Darden et al are experts, this is what they do, manage LLCs. Cherokee was not and is not in the business of providing venture capital to inventors. However, Darden (primarily) and Mazzaroni (secondarily) were interested in LENR for the possible environmental benefits, and environmental remediation is the motivation behind Cherokee. And they have done very well with Cherokee, doing well by doing good, in spite of the noise about bankrurptices. Win a few, lose a few. They have obviously won more than they lost. (They do not make money from bankrupting the companies they start. They lose, as much as their entire investment, typically $25 million.)

What was the source of money for the payments made to Rossi? Legally, this is of almost no relevance, but because it is not impossible there is some relevance, the court has required some of the questions to be answered,. I see the IH objections as mostly being sustained, Rossi went too far. IH is not going to provide a list of "all investors in Cherokee." It's none of Rossi's frikkin' business.

There were two payments of primary interest. Rossi was paid $1.5 million for the "1 MW E-Cat Plant," and then $10 million for the IP, and then a promise to pay $89 million under a contingency.

I have no clear idea where the original $1.5 million came from, but my guess is "out of Darden's pocket, as a loan to Industrial Heat." Or there may have been some sharing in that. I very much doubt that this money came from Cherokee, because Darden would be laying himself open for a lawsuit if he did that. But given his position with Cherokee, it is not impossible that he borrowed the money from Cherokee, being personally responsible for it. I'd frown on that, but it would not necessarily be illegal, and if he paid it back, particularly with interest, not much of a problem.

The source of the $10 million is obvious: there was a share sale just before the transaction, raising a convenient sum: $11.5 million, immediately. So whoever put up the $1.5 million was repaid, I assume (posibly with stock), plus the $10 million went into escrow to pay Rossi. I would guess that shareholders in IH later became shareholders in IHHI through a stock swap, showing on the IHHI books as purchases with certain values. Those were probably revenue-neutral transactions, with IH investors already having been distributed deductible losses, again my guess. The share sale allowed up to $20 million total, so that would likely be how IH obtained operating funds.

In 2015, IHHI gained the $50 million Woodford investment, and apparently an additional $8 million approximately from new share sales. (that's not completely clear to me).

Rossi's idea that he was dealing with Cherokee Investment Partners, with the Agreement, was way stupid, if he actually believed it. He obviously did not consult an attorney, then! He is claiming that Darden and Vaughn deceived him, based on alleged verbal representations, asserted four years later. With the Agreement being explicit that it superseded all verbal representations, and even confirmed, totally, a year later, with the First Amendment. I see no way that this argument could prevail, it would do violence to countless contracts.

Again, maybe Rossi will come up with a Wabbit. Maybe Darden and/or Vaughn wrote some stupid email, and Rossi will, legally, get a copy of anything related. This can happen. Indeed, that's why Rossi is now combing through thousands of pages of documents that he demanded. (It's hilarious to see some blaming IH for generating all these documents! Rossi demanded them!)

However, I don't expect it.

Meanwhile there is Discovery going on in the other direction. Pointed questions are being asked of Rossi, Johnson, Fabiani, and Bass, questions to be answered under penalty of perjury. We only know about the Rossi questions because Rossi went to the Magistrate over IH objections. Mostly Rossi lost, the gains were small. (But he had the right to request review.)

Remember, at this point, pretty much the only way that someone could go to prison for activities around this case would be if they lie under oath. Sometimes people think, "They will never know," so sometimes people lie under oath, and then discover that people may come to know things that they would never expect! Very bad idea. "It's the cover-up, stupid!"

Quote from Rends

All the 'companies':

Cherokee Investment Partners
Industrial Heat LLC
IPHBV Holdings Ltd
IH HOLDINGS INTERNATIONAL LIMITED

have no other 'owners'; they are officially completely under control of Tom Darden and John Mazzarino

LLCs and corporations are owned by the shareholders, but operational control is subject to the elected directors. I have not done careful research on Cherokee, but Cherokee is a $2.2 billion holding company, in the business of creating limited partnerships that then undertake environmental remediation projects. There was an SEC ruling that established a fine against Cherokee Investment Partners, that provides some details. (A certain SEC rule changed, and Cherokee violated the rule. This was, in fact, likely a simple error, and the SEC did not throw the book at them.)

https://www.sec.gov/litigation/admin/2015/ia-4258.pdf

Cherokee Investment Partners ownership is not detailed. They are, however, "investment advisors" and they manage equity funds, which have numerous investors, as the SEC ruling describes. Reviewing the Cherokee Partners Web site, it is not impossible that there are only two owners of CIP, Darden and Vaughn. All the investors involved in the held and managed funds are investors in those funds, not CIP
So Rends lists four companies. Cherokee may indeed be owned by Darden and Massarino, they are the "principals." This is a bit like the owners of a law practice, this is an investment practice, and fund manager. They can own the practice, but manage the funds on behalf of the investors, to whom they have a fiduciary duty. They can't just do whatever they please. Sometimes even if it seems reasonable. Read that SEC order!

Then there are IH and IPHBV. IH filed a statement in Rossi v. Darden. In part:

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1. Parent Companies:
a. The parent company of IH is IH Holdings International Limited.
b. The parent company of IPH is IPHBV Holdings Limited.
c. There is no parent company of Cherokee.

It appears that IHHI, as a result of transactions in 2015, became the sole owner of IH, and IPHBV was represented to Rossi as a wholly owned subsidiary of IH. In the document shown by Rends, IPHBV is shown as a wholly owned subsidiary of IHHI (which did not exist when Rossi was told about sole ownership.). IPHBV is apparently an intellectual property holding company. It owns the Rossi License, and that may be about it, but it is possible that they will use it for other license ownerships, but ... advisedly, not until Rossi v. Darden is resolved. As matters stand, the only assets at risk from Rossi vs. Darden, assuming his attempt to pierce the corporate veil fails (which is nearly certain) are those directly held by IH (which may be very little) and the License, held by IPHBV.

By a small margin, as I show in another post, Darden and Mazzarino collectively own a majority of the voting shares of IHHI. That, however, does not give them carte blanche. They must manage that company for the benefit of all the shareholders, or they become vulnerable to shareholder lawsuit -- and sometimes regulatory action, as shown with the SEC fine levied against them. (Even though they fully cooperated, and did not deliberately violate any rules, apparently, they were fined $100,000. To be sure, that is practically small change for them ... but if they seriously violated the law, it could get much uglier.)

It seems that some infer a dark conspiracy behind all this. What I see is a relatively modest usage of limited liability companies to gather funds and invest in LENR, including basic research. What they say they are doing. This wasn't a get-rich-quick-scheme. They had the long term in mind, from the beginning. They had become reasonably familiar with the field. (Woodford also claims to have done "due diligence.") They were aware of the risks, which they accepted.

Quote from LENR Calender

From what I understand, IH and Cherokee are meant to be two independent entities.

Yes. That is obvious from the Agreement and the conduct of IH. "Independent" does not mean "totally independent with no relationship," it means "legally independent," and, in particular, independent with respect to liabilities. Liabilities of IH would not be liabilities of Cherokee, and vice-versa, unless this were explicitly accepted. A verbal acceptance for something to be performed more than a year in the future, would not be enough. Period. "Statute of Frauds." Suppose Cherokee were an investor in IH. Even then, if IH went bankrupt, Cherokee would lose only their investment, creditors could not go after Cherokee. This is the entire concept of "limited liability." If you invest in some company, you are not personally liable. An ordinary partnership, if you are a general partner, you are fully liable, personally, for all the debts of the partnership. If your partner flies to Vegas and "invests" the partnership funds in slot machine efforts, leaving the partnership holding the bag for a pile of debts, too bad. You can sue your partner, but ... if the partner is broke, tough luck, you owe those debts.

But if you own shares in an LLC, you are not liable. Officers may or may not be liable, but to be liable, they must act with self-dealing or the like. Ah, how much money did Darden and Vaughn walk off with? Looks to me like they invested millions, and have received nothing back but shares.

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I was wondering: if it was shown that IH used some of Cherokee's resources, such as:

- employee time
- office space
- IT resources,

would that have any implications on that independence and on the Rossi v IH case?

Unless this "investment" were major, it probably has little or no effect, though we certainly see Planet Rossi making claims that it proves something or other.

What it actually shows is that the main business of Darden was (and is) Cherokee, that's where he worked, and Vaughn also was a kind of "manager" for them. (Not a fund manager, as such, probably not authorized to commit the partnership, which is why there is that distinction made in the IH pleading that were so strongly ridiculed. The CIP web site still calls Vaughn a "manager," but that means something else.)

So they held meetings at Cherokee's office. If I were setting up some business deal with an attorney, say, on her own initiative and her own responsibility, and we met at the law firm where she was employed, I would think nothing of it and would not imagine for a moment that the law firm was committed, unless an authorized officer -- or someone purporting to be such -- signed on the dotted line. And if the lawyer then copied the forms we filled out, using the office copier, it would not increase any impression. If the computer server and even a company email address were used, likewise.

By filing Rossi v. Darden as he did, under the conditions he set up, Rossi has ensured that, to gain any corporate investment in the future, he will have to have absolute proof of commercial viability, nothing vague, and the bar will be high. No sane corporate or corporate officer will want to touch an agreement with him with a 10-foot-pole. Even something that looks risk-free will be highly suspect. This was obvious to me as soon as I read the Rossi Complaint. That conclusion does not depend on any information from Industrial Heat. Did Annesser warn him? I suspect that, assuming ordinary competence on Annesser's part, that Rossi basically lied to Annesser, and rushed the filing. I suspect that Silver, the principal at Annesser's original law firm, when she learned more, bailed.

Quote from oldguy

I find it interesting the one of the major share holders of the holding company is Ampenergo

Yes. That has been noticed. IH also apparently paid Ampenergo millions of dollars to cover the agreement between Ampenergo and Rossi. Perhaps Ampenergo elected to put some of that into stock. I have seen no sign of any hostility between Ampenergo and Industrial Heat. One of Rossi's interrogatories (70.3) has:

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REQUEST NO. 8: Any and all documents reflecting and/or pertaining to the relationship between IH and the persons/entities listed below including, but not limited to, agreements, contracts, subcontracts, K-1’s, W-2’s, W-9’s, personnel files, cancelled checks, loans, payments made to such individuals or entities, payments received from such individuals or entities, and payments made to other persons or entities for services performed by the below-named individuals or entities:

a. Fulvio Fabiani
b. Barry West
c. Joseph “Joe” Murray
d. Thomas Darden
e. John “JT” Vaughn
f. Andrea Rossi
g. T. Barker Dameron
h. Joseph “Joe” Pike
i. Daniel Pike
j. Robert Godes
k. IPH International, B.V.
l. IPH Management, B.V.
m. IPHBV Holdings International, Ltd.
n. IH Holdings International, Ltd.
o. JPIH Holding, LLC.
p. AmpEnergo, Inc.
q. CF Woodford Equity Income
r. Woodford Patient Capital Trust, PLC

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IH objected, but agreed to this:

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Subject to and without waiving the foregoing General and Specific Objections, Industrial Heat will conduct a reasonable search for and produce any contractual agreements between Industrial Heat and Andrea Rossi, IPH International, B.V., Thomas Darden, John “JT” Vaughn, Fulvio Fabiani or AmpEnergo, Inc., located as a result of the reasonable search.

It appears that the IH objections were allowed. Rossi was going after IHHI, among other things. JPIH Holding, LLC, is apparently a major investor in IHHI. Many investors want confidentiality.

Quote from Jack Cole

It occurs to me that the fishing expedition may not just be for legal reasons. AR may be trying to suss out any secrets to a working LENR system that IH may be privy to, so he can turn around and claim they stole it from him!

Well, it's possible. If IH suspects that any piece of information they are obligated to provide might be used in that way, they will mark it Attorney Eyes Only.

Quote from Rends

...here are (Dec 31 2015) no US$ 89 Million, so where should it come from?

This was already covered in what I wrote, and has been explained many times. And if Rends reads the documents he linked to, in entirety instead of just looking for one number,he would understand.

It would come from new investment, which could easily be obtained if IH had an independently verifiable commercial technology. They obtained $50 million on the mere promise to use it for research. If there were a commercial technology, it would be much easier. In fact, one place they could obtain it would be Andrea Rossi. They could give him up to $50 million and then sell him IH stock for $39 million, -- he might become a majority shareholder in IH (not in IHHI) so Rossi would have had another $11 million in cash to play with immediately, plus I suspect further agreements would have been involved. And they would have seed money for commercial development.

They did not need to have the $89 million until it was due, and it would not be due until a year after the test began by written agreement as was provided and agreed. So they would certainly have time to raise it! And they still could, if Rossi would agree to a genuine GPT under realistic conditions and it passed. Even better, if he actually showed them to make working devices, that they could then test themselves. They could then raise boatloads of money, they have the credibility, they have proven that. No GPT needed. Waived. Rossi made himself spend a year in that warehouse, they didn't.

In 2012, I met with an Italian businessman at SRI. He represented massive corporate interests. He said there was plenty of money for worthwhile LENR projects. Where are they? He was probably talking about imminent commercial possibilities. Not general blue-sky research, which is largely what IH is engaged in now (since 2015 or before). There is also, now, plenty of money for pure research, that's been proven. Not billions of dollars, not yet, but it could easily push $100 million. Rossi completely shot himself in the foot by filing Rossi v. Darden. Doing that before he has a commercial product ready for sale, that doesn't require 24/7 Rossi Grease?

Perhaps he can crowd-fund it. After all, there is "the silent majority" mentioned on his blog, eager to support him. Okay, how about a little silent majority cash? He could provide premiums. What is an autograph of Andrea Rossi worth? How about a vial of ash from the historic Doral installation? He'd have to get IH permission for that, though. IH could also run crowd-funding for cold fusion research, offering vials of that fuel, for a mere $1000 donation.

Maybe his lawyers will talk some sense into him. What is not going to help is the peanut gallery, cheering his totally stupid paranoia. With friends like that, who needs enemies?

So Rossi has demanded information that is largely public record. If he uses that information, IH will then be able to explain the real situation, and it's highly plausible and easily shown to a jury. That idea, that "they never intended to pay" is pure and obvious Rossi paranoia, and juries will read that easily. It would be almost impossible to prove to the satisfaction of a jury, even if true, unless Rossi comes up with a Wabbit. Maybe Darden and Vaughn wrote each other emails about how they fooled that stupid idiot Rossi. If so, all bets are off. Rossi is fishing for this kind of evidence, in his requests for production. However, we are not seeing the other side. All communications between Rossi and Johnson and Penon and Fabiani will have been requested. We already know that Rossi has written emails that were essentially incriminating as to willingness to defraud.

When I saw that Hydro Fusion email, I understood what IH was doing. Holding their nose and going ahead with a plan to spend $11.5 million to "crush the tests." To find out for sure if his devices work, even if he was paranoid and sneaky. They knew from that email that he could not be trusted. But they went ahead and pretended to trust him. That is, by the way, an exception to the general rule about authenticity. Pretending to trust someone -- while taking due precautions -- is a way to find out if trust is possible. Sometimes it actually works out!

Rossi has said that the accounts in An Impossible Invention are true. The story of the Hydro Fusion test is there. The story is quite different from what Rossi told IH. What actually happened seems fairly obvious to me; the Lewan account is probably true, and then the IH story was probably cover, intended to make them think everything was okay and, of course, he would really rather deal with them. I.e., in his mind, with Cherokee, a $2 billion company. I think Rossi really did believe he had an agreement with Cherokee, in spite of what was in front of his face. He is like some of his followers: he believes what he wants to believe, and it blinds him to present reality.

Or, of course, he is a highly skilled con artist, faking everything. Take your pick, and place your bets. Wanna buy Hydro Fusion stock?

@Abd Ul-Rahman Lomax: I really envy you for your talent to say as little as possible with a plethora of words.