Posts by thinLine

As I mentioned elsewhere, I did believe in Rossi (I've been following since early 2011), but, after going through all the court documents, I have to say that my confidence that he's for real is mostly gone (do read on to see why I still have some hope). For anyone familiar with scams, things here read much like a scam - it's about the kinds of players involved, common operational/tactical manoeuvres, etc. I'm familiar with the way these typically play out after having a friend scammed. He later, to get some sense of revenge, baited and played along with another scammer to see how far things would go. Around that time I spent some time reading about scam baiting (this is a real "sport", see 419eater) and so got to see how a scam usually unfolds. With the court documents, you can get a better sense of how things evolved over time and having the exhibits for reference is essential to picking up more nuanced details.

So, I do see quite a few things that point the way of a scam, e.g. the way Rossi put pressure on the decision to go with the Doral site (or else the opportunity would be gone), fake-sounding names, cheezy business cards, implausible manufacturing space, etc.

At the same time, though, there are a some factors that don't really fit with the idea of Rossi being a typical scammer. More than six years is too long for this to be a common scam. Rossi has evidently put his health on the line here. He is the one who initiated legal proceedings (is there documentation of another scammer having done this?).

One possibility, as others have mentioned and which I agree could be the case here, is that Rossi is deluding himself and is honestly working in the hope of finally getting the technology right. The thing is that this explanation really doesn't square with the blatant signs of scam. The only way that you could have a genuine, hard-working person being able to overcome the ethical dilemma of creating the illusion of a real scam is if he was desperate or paranoid enough. Desperate he could very well be after sinking his savings into this at his age and paranoid we know he is from his behavior wrt Krivit and others, his postings, etc. (I'm not saying it's always undue paranoia, but it's undeniable). Given these considerations, I suppose it's pretty clear where things stand.

Quote from Bob

I think if an appropriate GPT was conducted and it showed the technology worked, they would have been glad to pay 89 million. And probably give Rossi bonuses to boot! But it did not turn out that way and they were not simply going to hand over 89 million for nothing.

I'm not so sure of that. Anyone smart in the affairs of business would seek to get out of an unfavorable contract, if at all possible, as long as the upside of doing so was greater than the downside. In this case, even if the GPT was deemed successful as far as showing the technology being able to supply energy at the agreed upon COP, conditions could have been perceived by IH as worth (due to the points I mentioned, for example: tech redundant, some essential IP withheld, etc) the legal hassle of breaking the contract.

Would you pay $89 million if the situation was as I described it and all you had to do was break a contract where a case could be made relatively easily that the other party had acted in bad faith (even if you knew that that wasn't the case)?

Quote from Bob

A probable problem with this logic is that the GPT contract does not require a customer, at least to my reading of it. IH states they had setup the test facility in NC and Rossi refused to run the test there. So the problem of there "not being a customer in the Doral" facility is not a problem of the GPT contract. It is a problem in that it shows possible fraud and bad faith in that if there were no customer, Rossi had made much assertion that there was. To the point of setting up a shell company, producing letter heads and possibly even a fake employee.

You have to ask yourself... Darden et. al are not newbies. They became wealthy by conducting business. In front of them is the biggest thing since steam power, worth billions. Do you think they really would have "Ho hum, we are not really interested so we are dragging our feet. Finding a customer is so hard". ? Does this seem likely or consistent with their history?

You're right, the contract does not spell out the existence of a customer as being needed for the test, but, as you said, the nature of the customer not being independent from Rossi would bring into question the goings-on in any legal dispute and paint Rossi in a bad light wrt him acting in good faith. That this is exactly what has happened, I don't think is debatable.

Your second point in the quote above is also very valid and, in fact, strengthens my premise: that IH knew very well the nature of these types of contracts and how, upon dispute, they could be gotten out of.

With the above in mind, it's not so hard to come up with a sequence of events that doesn't imply turtles all the way down, or one layer of complexity over another.

Darden et al hear of this Rossi thing and want to get into a closer relationship with Rossi through some kind of investment.

Not long after, the agreement is drawn up and, $10 million is paid after a 24h perfunctory validation and IH gets the formula to the secret sauce.

Here is where Darden's team's savvy comes into play. The way the agreement has been laid out, IH has nothing to lose. If Rossi plays nice and reveals all, IH pays out $89 million more and gets the deal of the millennium. If not, i.e. if the secret sauce isn't all that is needed to successfully run the plant or, if Rossi develops something along the way that would make the low heat eCat redundant, the contract made out such that it can be easily gotten out of on the basis of Rossi acting in bad faith. In any case, the mere existence of the contract is enough to assure Darden of additional investments, as has been shown.

Over the time of the Guaranteed Performance test Rossi in fact is cagey about the IP he reveals to IH (maybe because he sees them nosing around possible competitors, sees them as being too aggressive wrt claiming IP that shouldn't belong to them, or because he has second thoughts and thinks he gave things away for too little, for example).

At the end, Rossi claims GPT is valid and that he is owed $89 million more. IH, on the other hand, is not satisfied with the level of IP disclosure from Rossi, nor with the QuarkX tech making what they agreed to pay for probably worthless. Having already benefited from the agreement with Rossi and knowing that the agreement can easily be disputed legally, decide it's in their interest to do just that.

This all isn't very complicated, doesn't require much from the participants other than to act like typical parties in such agreements, i.e. just looking out for their own interests. Neither side should be accused of having bad intentions. Things played out in a reasonably predictable way, given the circumstances. IH benefited, Rossi benefited (of course he would like more out of the agreement, but with the money he did get from IH he was able to further his work on the QuarkX).

If it's not clear from what I've written up until now, I do believe that Rossi does have something real.

After reading way too many posts on the Rossi-IH suit (on the vortex, here, e-Cat World, etc.), a thought occurred to me:

Let's put aside (for now at least) the debate as to the reality of an industrial process and assume that there was something using up the heat and wasting any excess.

Instead, I'll go over what I recall Rossi mentioning wrt this test.

IIRC, IH was not really putting any effort into finding a customer so that the test could proceed and, upon a successful run, the outstanding fee would be paid to Rossi.

Rossi, wanting to complete the contract and see the full sum in his pocket, was anxious to move ahead with the test. In his business dealings he had come into contact with a possible consumer of energy on the scale needed here - e.g. Axil's definition of who this might be could be one possibility, but even if not, in my version of how things played out (and how Axil has it, too), it would be someone that Rossi had some sort of association with.

He then proposes this person/business/process as the customer for the test to IH and they, thinking ahead, readily (or at least with not much fuss) agree.

Partway through the test, IH starts playing out their hand and begins making noises about smelling something fishy.

Rossi, senses that the test will be declared a failure based on the growing discontent he sees coming from IH and, right at the end, sues IH with the claims that everyone is familiar with by now.

In these claims, the contract that had been drawn up between IH, Rossi and the customer was made public, along with the assertion that IH had failed to live up to their part of the contract upon successful completion of the test.

IH, in turn, responded to these claims with their own, where one of the main points was that "there was no customer", therefore the contract was not fulfilled as written and, therefore, no completion fee needed to be paid.

OK, well, I guess IH knows their legal loopholes and really, there was no "customer".

What if, when Rossi approached IH, they knew that any future lawsuit disputing the validity of the contract as worded would find the "customer" to be unsuitable (due to their relationship with Rossi) and, therefore, would result in that contract being declared void due to that role of the contract not being met.

It does not matter if Rossi says IH agreed to this party playing the customer role - under any reasonably close legal scrutiny the contract could fail just on the basis that this consumer of heat was not independent enough from Rossi to qualify as a real "customer". IH would just state that they were not aware of the extent of the relationship existing between Rossi and the "customer" and that, in view of this relationship, the party named in the customer role of the contract could obviously not be that. In fact IH, did just that.

This is contract law and all it takes for the whole agreement to not be binding is a simple failure to meet strict definitions of the various roles. Maybe Rossi simply didn't have the best legal advice wrt this particular aspect of the contract.