Xian
Xian v. Sengupta CA1/1
Opinion
Opinion
Margulies, J.
I.
BACKGROUND1
A. Factual Background Sengupta started BeyondCore in 2004, while he was earning his master of business administration degree from Harvard University. At all relevant times, Sengupta was BeyondCore’s majority and controlling shareholder and chief executive officer (CEO). Sengupta made no monetary investment in the company, but his wife provided a convertible loan of $30,000 in 2004. Two years later, Sengupta moved BeyondCore’s location to California. Xian was a cofounder, employee, and early investor in BeyondCore. Xian invested $100,000 in BeyondCore in 2007 and received a convertible promissory note (2007 Note), allowing him to convert the note to BeyondCore shares beginning in 2012.2 As part of that transaction, Xian also received a
The facts are taken primarily from the allegations of the third
amended complaint. 2At the time he invested, BeyondCore was out of money and might have gone out of business were it not for Xian’s investment.
2 warrant as a companion instrument to the 2007 Note (Warrant). The Warrant entitled Xian to purchase 1,111 BeyondCore shares at the conversion price of the 2007 Note ($36 per share). In 2008, Xian invested a further…