Monday, November 12, 2007

EXCLUSIVE: LAWSUIT AGAINST ISRAEL BASEBALL LEAGUE FOUNDER ALLEGES SECURITIES FRAUD TIED TO IBL'S OPENING


The rumoured financial problems and improprieties clouding the future of the Israel Baseball League and its founder exploded to the surface today with the details of a federal lawsuit filed against Boston-based businessman Larry Baras.

The suit, filed in U.S. District Court in Massachusetts and obtained exclusively by Tabloid Baby, alleges fraud, securities fraud and breach of fiduciary duty on the part of the embattled founder and managing director of Israel's first Major League-style professional baseball league.

Baras has been in headlines in recent months due to allegations that he owes money to players and vendors involved in the league's first season, and to the frustration of many, has been silent on the question of whether the lBL will return for Season Two. He has yet to address serious questions abut the IBL's management in wake of the disturbing August 28th report on the first season by Our Man Elli In Israel.

In the lawsuit filed September 24th, Natalie Blacher of Dade County, Florida sued Lawrence S. Baras and SJR Foods, Inc., claiming that the founder of the Israel Baseball League duped her out of $275,000 that was supposed to go into a successful bagel company, but instead went to “his personal living expenses or expenses which should be charged to IBL.”

Blacher contends that she spent $275,000 to buy stock in Baras’ SJR Foods on Baras’ word that the company was generating $10 million per year, only to discover that the company was $1,500,000 in debt and that despite his claims, Baras was spending all his time—and possibly stockholders’ money-- on the IBL.

Unholey

The story begins in early 1998. Blacher says she was Senior Director of Produce Marketing for Burger King when Baras and his wife Robyn approached her to pitch BKC a product called the “Unholey Bagel”—“a bagel without a hole filled with cream cheese.” Burger King passed on the Unholey Bagel idea, but Bacher stayed in contact with the couple. After leaving Burger King later that year, she says she provided informal consulting services to them.

According to the lawsuit, in the summer of 1999, “Baras told Blacher he intended to raise substantial capital for the Company through a private placement of stock… Baras represented… that the Company was already generating revenues of approximately $10 million per year and that his plan was to increase revenues to $100 million within a couple of years.”

Blacher says she invested a total of $275,000 in the company, relying on Baras’ word that the “company was doing well. After years of frustration in getting financial statements from Baras, Blacher says she found out in November 2006 that “the company had a negative worth of almost $1,500,000.

Promises, Promises

The lawsuit elaborates: “In mid-2006, Blacher learned through a Google search that Baras had started a new venture, the Israel Baseball League (‘IBL’) and that it was receiving widespread press in major media, e.g. the New York Times, New York Daily News, Boston Globe and YouTube. In response to Blacher’s inquiry, Baras told her that his involvement with IBL was very limited.

“In late 2006 and early 2007, it became increasingly difficult for Blacher to communicate with Baras. Baras’ apparent preoccupation with the IBL, as opposed to the Company, caused Blacher to be very concerned. In February, 2007, she telephoned Baras and, again, complained about the lack of financial documentation and demanded financial statements as soon as possible. Baras promised her that he would.

“…from February through May 2007, contrary to his promise and fiduciary duties to Blacher and despite his verbal assurances, Baras failed to provide to provide Blacher with any financial statements or otherwise comply with her request for financial statements and the other material documentation regarding the Company’s business and financial condition.

24/7

"On April 26, 2007, in a video posted on the IBL website (www.IsraelBaseballLeague.com), Baras stated that he had been working ‘24/7’ on the IBL for the past two years…

“During the summer of 2007, Baras’ principal excuse for failure to provide the requested financial information was that he was busy with the IBL’s inaugural season.”

The suit alleges that “Baras has operated the Company and IBL from the same location" and "may have charged and may be continuing to charge the company substantial amounts which represent either his personal living expenses or expenses which should be charged to IBL.”

Blacher is seeking $275,000 plus 6% interest from the investment dates and attorneys' fees.

1 comment:

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