Opinion ID: 783603
Heading Depth: 4
Heading Rank: 2

Heading: The Osicom Private Placement

Text: 29 The second opportunity to which Phansalkar introduced AW in 1999 was an opportunity to complete two projects for Osicom. AW undertook: (1) to lead a $7.5 million private placement of newly-issued shares of Osicom common stock, and (2) to identify and recruit independent directors and managers for Osicom and its affiliates. AW created FIBR Holdings, LLC (FIBR) to pool funds for the private placement, and completed the transaction in December 1999. As a result, AW earned $300,000 in cash fees and a carried interest of 20 percent of FIBR's ultimate profit. FIBR received the right to designate one member to the Osicom Board of Directors; it designated Phansalkar. 30 As an Osicom director, Phansalkar received options to purchase 35,000 Osicom shares (the 35,000 Osicom Options) and $3,000 in directors' fees (the Osicom Directors' Fees). He received the 35,000 Osicom Options on January 6, 2000 and the Osicom Directors' Fees for meetings attended in the spring of 2000. Just as the district court had found with regard to the Zip Options and Zip Shares, the district court found that Phansalkar received the 35,000 Osicom Options and the Osicom Directors' Fees as a representative of AW, and that Phansalkar failed to disclose those Options and Fees to AW. See Phansalkar II, at -58, 2001 WL 1524479 at -19. Again, the court found that AW did not establish that Phansalkar intentionally concealed this compensation. See id. at , 2001 WL 1524479 at .