Free Complaint - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE MARNAVI SpA, as agent for JILMAR SHIPPING S.A., Plaintiff, vs. DONALD P. KEEHAN, ARLENE KEEHAN, ADVANCED POLYMER SCIENCES, INC.; ADVANCED POLYMER COATINGS, LTD F/K/A ADVANCED POLYMER COATINGS LLC, Respondents. COMPLAINT C.A. No. _________________

Plaintiff, Marnavi SpA ("Marnavi", as agent for Jilmar Shipping, S.A. ("Jilmar"), by and through its undersigned attorneys, respectfully alleges as against Defendants, Advanced Polymer Sciences, Inc. ("APS"), Advanced Polymer Coatings, Ltd. f/k/a Advanced Polymer Coatings, LLC ("APC"), Donald J. Keehan ("Donald Keehan") and Arlene H. Keehan ("Arlene Keehan", and together with Donald Keehan, the "Keehans", and APS, APC and the Keehans collectively, the "Defendants"), alleges as follows: INTRODUCTION 1. The dispute began in 1997 when Marnavi arranged for APS to apply

special coatings to the inner hull of a ship called the M/T Joran (the "Joran"). APS botched the job and spent the next nine years fraudulently attempting to limit its liability and financial responsibility for the damage caused to the vessel. 2. Plaintiff brings this action in support of its related petition to enforce a

foreign arbitration award, against the defendants and their alter egos. The arbitration award arose from Defendants' breach of a contract with Plaintiff, as agent for Jilmar, the company that owned the vessel the Joran, to coat the cargo tanks of the Joran with an allegedly superior epoxy

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that protects mild steel cargo tanks from the corrosive effects of various acids and other toxic substances. The allegedly superior epoxy, Siloxirane, was invented by Defendant Donald Keehan and developed, manufactured and sold by his company, APS. 3. The Siloxirane didn't perform as promised. Although APS had certified

the Joran as able to carry the corrosive cargos, the Joran soon suffered serious damage to its mild steel cargo tanks, which had been installed by the Owners (as defined below) at great costs based on the representations that Siloxirane would enable them to carry the toxic liquids. 4. After the Owners commenced arbitration proceedings in December 2000

in London, England, seeking compensation for damages to the M/T Joran, the Defendants began a shell game in an attempt to insulate their assets from their many creditors, including the Owners. 5. Less than six months after the Arbitrator issued his first interim award on

the question of jurisdiction in July, 2002, APS entered into receivership proceedings in Ohio, where its principal business offices were located. At the same time, the Defendants alternatively created and changed the names of several Delaware, Ohio and foreign companies, many of which had the same business address, agents, shareholders and executives as APS. Defendants also transferred lines of business activity away from APS to these newly named and renamed companies. Without regard to corporate form or structure, and with overlapping management, the Defendants, in a breach of fiduciary duty to the creditors of the insolvent APS, transferred APS' real and personal property in a continuing, if not brilliant, "catch me if you can" scheme. 6. Plaintiff therefore seeks judgment against the Defendants and a finding

that all of the Keehans' related companies are alter egos of both the Keehans and APS.

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JURISDICTION AND VENUE 7. to 28 U.S.C. § 1332. 8. Plaintiff is a foreign corporation. Defendants APS and APC are This Court has jurisdiction over the subject matter of this action pursuant

companies formed under Delaware law and Defendants Donald J. Keehan and Arlene H. Keehan are residents of Ohio and/or Florida. 9. 10. The amount in controversy exceeds $75,000. Venue is proper in this Court pursuant to 28 U.S.C. § 1391. PARTIES 11. Plaintiff Marnavi is an Italian corporation with its principal offices in

Naples involved in the business of transporting foodstuffs and chemicals. 12. Jilmar (hereinafter with "Marnavi", the "Owners") is a corporation

organized under the laws of Panama, and was the owner of the shipping tanker the Joran. Marnavi is Jilmar's managing agent. 13. Upon information and belief, Defendant APS is a corporation organized

under the laws of Delaware. Its principal place of business was at all relevant times in Avon, Ohio. 14. As of the date of this Complaint, APS' Delaware registration status was

"Void", and its Ohio corporation status is listed as "Active". 15. Upon information and belief, Defendant APC is a limited liability

company organized under the laws of Delaware and a subsidiary of APS. Its principal place of business was at all relevant times in Avon, Ohio. 16. subsidiary of APS. 3 Upon information and belief APC was and/or is purported to be a

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17.

As of the date of this Complaint, APC's registration statuses were as

follows: "good standing" in Delaware and "Active" in Ohio. 18. Upon information and belief, Defendants Donald J. Keehan ("Keehan

Sr.") and Arlene H. Keehan ("Mrs. Keehan") jointly own several homes, and reside, in both Ohio and Florida. Their Ohio homes are or have been in Avon and Bay Village, Ohio. Their current Florida residence is in Fort Myers, Florida. 19. Upon information and belief, Keehan Sr. and Mrs. Keehan are husband

and wife and have six children. 20. Jr."). 21. the Defendants. 22. Upon information and belief, Guaranteed Advanced Tank Technologies, Keehan Jr. was and/or is involved in the management and operations of One of those children, Donald J. Keehan was born May 1961 ("Keehan

Inc. ("GATT") is a limited liability company organized under section 1705 of the Ohio Revised Code (the "Ohio Code") and a purported subsidiary of APS. 23. "Active" in Ohio. 24. Upon information and belief, Guaranteed Advanced Tank International, As of the date of this Complaint, GATT had a registration status of

Ltd. ("GATT Int'l") is a company organized under the laws of Barbados. 25. Bridgetown. 26. Upon information and belief, 951 Realty Ltd. ("951 Realty") is an Ohio GATT Int'l's principal place of business was at all relevant times in

limited liability company. Its principal place of business was at all relevant times in Avon, Ohio.

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27. "Active" in Ohio. 28.

As of the date of this Complaint, 951 Realty had a registration status of

Upon information and belief, Ascus Technologies Ltd ("Ascus") is an

Ohio limited liability company. Its principal place of business was at all relevant times in Avon, Ohio. 29. "Active". 30. Chemline (Europe) Ltd ("Chemline Europe") is a limited liability As of the date of this Complaint, Ascus had an Ohio registration status of

corporation organized under the United Kingdom Companies Act 1985. 31. Upon information and belief, Chemline Europe markets and distributes

Siloxirane in Europe, as did APS during 1997-2002. 32. 33. APC holds 50% of the shares of Chemline Europe. Advanced Polymer Coatings Mexico S.A. ("APC Mexico") is a company

organized under the laws of Mexico. 34. Upon information and belief, APC Mexico markets and distributes

Siloxirane in Mexico, a line of business which belonged to APS prior to 2002. 35. Upon information and belief, APC also does business in Turkey under the

name MarineLine Turkey. 36. Upon information and belief, MarineLine Turkey markets and distributes

Siloxirane in Turkey, a line of business which belonged to APS prior to 2002. 37. Upon information and belief, APC also does business in China under the

name and MarineLine China Ltd.

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38.

Upon information and belief, MarineLine China markets and distributes

Siloxirane in China, a line of business that belonged to APS prior to 2002. 39. Defendants, GATT, GATT Int'l, 951 Realty, Ascus, Chemline Europe,

Chemline Mexico, MarineLine Turkey and MarineLine China, Ltd, shall be collectively referred to as the "Keehan Companies". 40. Non-party Cantiere Naval SEC, Societa Esercizio Cantiere Group SpA

("Cantiere"), a shipyard engaged in the building of chemical tankers, is an Italian corporation with its principal office in Viareggio, Italy. 41. Non-party John M. Manos is an Ohio licensed attorney, who at all relevant

times acted as counsel for the Keehans, APS, APC and/or various other Keehan Companies ("Manos"). 42. 43. Manos is also President of Ascus. Upon information and belief, Non-party Denise Keehan is the Keehans'

daughter, and was former Vice-President of APS and a Vice-President and Director of GATT. FACTUAL BACKGROUND 44. Upon information and belief, Defendant Donald Keehan is the individual

responsible for the development of siloxirane coating ("Siloxirane"), a lining system for, inter alia, the cargo tanks of maritime chemical tankers. 45. Donald Keehan incorporated APS as a Delaware close corporation in 1986

to develop and exploit the Siloxirane technology. 46. Upon information and belief, Defendants and the Keehan Companies were

and/or are all involved in the manufacture and/or sale of Siloxirane.

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THE DEFENDANTS FRAUDULENTLY INDUCE THE OWNERS TO COAT THE JORAN WITH SILOXIRANE 47. products. 48. During the years 1996 and 1997, GATT and APS sought to have the The Joran is a 3,300 deadweight ton-tanker originally built to carry food

International Maritime Organization ("IMO") approve the use of Siloxirane as a suitable barrier against highly corrosive IMO II-III mineral acids stored in mild steel cargo tanks on seagoing vessels. 49. During late 1996 and early 1997, Cantiere, APS' exclusive agent in Italy,

stated that if Jilmar coated the Joran's storage tanks with Siloxirane it would qualify the Joran to carry dangerous chemical cargos in mild steel tanks under IMO rules for carrying such substances. 50. Cantiere provided Jilmar with APS sales literature which described

Siloxirane as more resistant than 98% of all other epoxy coatings and even more resistant than stainless steel. 51. In reliance on these representations, on or about July 28, 1997, Marnavi,

acting on behalf of Jilmar, and APS, GATT and Cantiere entered into an agreement (the "Agreement") providing that APS, GATT and Cantiere would supply and supervise the application of Siloxirane to the Joran's cargo tanks. 52. 53. APS-GATT had identical responsibilities under the Agreement. APS-GATT agreed (i) to record and read all data relating to a test tank and

the final tanks, (ii) to provide the Siloxirane coating, (iii) to overview the Siloxirane's application to the Joran's cargo tanks, and (iv) to cure of the tank surfaces.

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54.

Cantiere agreed to oversee the surface preparation and bore "full

responsibility" for ensuring that the Siloxirane coating complied with APS-GATT's technical specifications. 55. At great costs, the Owners removed and replaced the Joran's twelve

stainless steel tanks and replaced them with eight mild steel tanks to be coated with Siloxirane. 56. 57. 58. The Siloxirane coating did not perform as promised. The Siloxirane coating suffered from pinholes, cracks, and bubbling. The Siloxirane coating also damaged the cargo tanks and the fiberglass

linings attached to the coating on the bottom and lower portions of the tanks. 59. Notwithstanding these problems and the Defendants' knowledge of them,

on September 28, 1998, APS-GATT issued a certificate stating that they had supervised and approved the surface preparation of the cargo tanks and the application and curing of the Siloxirane and fiberglass coating. 60. APS-GATT further certified that the cargo tanks were suitable to transport

corrosive and toxic chemical cargos. 61. However, after the Joran carried several cargoes of sulfuric acid caustic

soda, the Owners learned on February 12, 1999 that the fiberglass of many of the cargo tanks in the Joran had cracked and lifted, and significant residues of toxic chemicals had leaked from the tanks. 62. 63. APS-GATT and Cantiere refused to repair the damage to the Joran. After unsuccessful attempts to repair the Siloxirane coating, the Owners

were forced to grit-blast all Siloxirane from the Joran's cargo tanks and then recoat them with a different surface coating .

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64.

To date Owners have suffered more than $5,702,157 in damages caused

by APS-GATT conduct. THE OWNERS OBTAIN AN ARBITRATION AWARD AGAINST APS AND GATT 65. Pursuant to the arbitration clause in the Agreement, the Owners

commenced Arbitration proceedings in London on December 18, 2001 (the "Arbitration Proceedings"). 66. GATT claimed that it had ceased doing business and therefore refused to

make submissions to the arbitral tribunal despite the tribunal's repeated invitations to do so. 67. In its submissions to the duly convened arbitral tribunal APS admitted that

the Siloxirane coating had failed. 68. APS alleged that it was not liable for any damages because all work on the

Joran had been carried out under a separate, oral agreement which had transferred all responsibility for the preparation and coating of the cargo tanks with Siloxirane to the Owners. 69. Squarely rejecting these arguments the Arbitrator issued interim decisions

finding that no oral agreement had been made, that he had jurisdiction to resolve the dispute and that, contrary to the representations of the Arbitration Defendants, the Siloxirane coating had not performed as promised. 70. The Arbitrator further found that all possible causes of the failure of the

Siloxirane coating, including the application of the coating, fiberglass and the heat curing, had been the responsibility of the Arbitration Defendants. 71. On November 11, 2005, the Arbitrator issued a final quantum award (the

"Arbitration Award") finding, APS, GATT and CNS jointly and severally liable and awarding Jilmar that the following:

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A. US $1,800,630.00 for the costs of conversion and recoating of the Joran's cargo tanks to carry corrosive and toxic cargoes, with interest thereon at the rate of 6.1 % per annum, from April 15, 1998; B. US $892,556.00 for the costs of conversion and recoating of the Joran's cargo tanks to carry corrosive and toxic cargoes, with interest thereon at the rate of 5.9% per annum, from November 12, 1998; C. Italian Lira 144,973,670 for the costs of subsequent repairs following failure of the coating provided and applied by APS, with interest thereon at the rate of 5.7% per annum, from July 10, 1999; D. DM 331,999.98, plus US $55,333.33 for damages equivalent to the loss of the hire of the Joran while she was undergoing repair, with interest thereon at the rate of 5.7% per annum, from July 10, 1999; E. The Contractors' and Owners' costs of the arbitration reference in full, including (i) the Arbitrator's fees; (ii) the Owners' attorneys fees and expenses; and (iii) the Owners' costs, with interest thereon at the rate of 6.5% per annum, from November 11, 2005; G. Interest on all of the above to be compounded at three monthly intervals, from the specified date above until the date of payment of the Arbitration Award. 72. As of the filing of this Complaint, damages computed under the

Arbitration Award total $5,702,157.00. 73. Award. 74. In order to enforce the Arbitration Award, Plaintiff commenced a related Neither APS, APC nor the Keehans have paid any of the Arbitration

action in this Court on June 25, 2008 against APS to domesticate the Arbitration Award and have it entered as a judgment. THE KEEHANS TRANSFER APS' ASSETS TO APC TO EVADE THEIR CREDITORS THROUGH A SERIES OF FRAUDULENT TRANSFERS APS is Declared Insolvent.

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75. Siloxirane coatings. 76.

As noted above, APS was engaged in the manufacture and sale of

APS' working capital was funded by lines of credit provided by Bank

One, N.A. ("Bank One"). 77. During 2000, Bank One loaned to APS in excess of $2,000,000 in

exchange for, inter alia, promissory notes on behalf of APS and in favor of Bank One. 78. guarantees. 79. The promissory notes contained cognovit provisions permitting Bank One These promissory notes were secured by the Keehans' personal

to enter judgment against both APS and the Keehans upon APS' default. 80. 81. APS subsequently defaulted on the promissory notes. As a result, on November 26, 2002, Bank One entered a confession of

judgment in the Court of Common Pleas, Lorrain County, Ohio, against APS and the Keehans in the amount of $2,037,137.98, plus costs (the "Bank One Judgment"). 82. In and around the time that the cognovit judgment was entered, APS had

been named as a defendant in several lawsuits in the Court of Common Pleas by diverse creditors. 83. Faced with liability to the Owners due for the damage to the Joran, the

Bank One debt and other its actual and contingent liabilities, APS was unable to pay its debts as they became due and/or the sum of APS' debts were greater than all of APS' assets, at a fair valuation. The Transfer of APS' Assets to APC.

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84.

Faced with the obvious liability to Owners and these mounting debts to

banks, trade creditors and judgment creditors, the Keehans hatched and brilliantly executed a scheme to transfer all of APS' assets to APC and other Keehan Companies in order to evade their creditors. 85. This scheme was affected by continuing the operation of APS under the

name of another Keehan-controlled entity, APC, which was and is the mere alter ego of APS, Donald Keehan and Arlene Keehan. 86. On October 20, 1997, less than three months after APS commenced the

botched work on the Joran, the Keehans formed APC LLC, a Delaware limited liability company. 87. On or about January 28, 1998, less than six months after APS commenced

the botched work on the Joran, Denise Keehan, the Keehans' daughter and former Vice-President of APS, filed an application with the Ohio Secretary of State to permit APC Ltd. to do business in Ohio as a foreign corporation. 88. The Keehans stated in the application that APC Ltd.'s corporate purpose

would be ­ "Sales and Manufacture of Industrial Coating Products", the same corporate purpose as the insolvent APS. 89. APC Ltd. stated in its application that it intended to commence business as

soon as possible, i.e., upon approval of the application. 90. In or around the time Owners initiated the Arbitration Proceedings, APC

purported to purchase substantially all of the assets of APS. 91. Thereafter, APC began utilizing the manufacturing assets of APS.

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92.

Keehan Sr. and Mrs. Keehan, as officers and/or directors of APS, were

aware of the dispute with Owners and approved the sale of APS assets to APC and consented on behalf of APS to the use of APS assets by APC. 93. consideration. 94. On November 26, 2002, the very same day that Bank One filed its On information and belief such sale or use was for less than adequate

complaint and cognovits judgment against APS, the Keehans filed a certificate with the Delaware Secretary of State that changed the name of APC LLC to APC Ltd. 95. On September 22, 2003, the Keehans filed a certificate purporting to

dissolve APC LLC in Ohio, effective as of November 22, 2002, or the day before Bank One filed its cognovit judgment against APS. APC Purchases APS' Assets. 96. Upon Bank One's motion, the Court of Common Pleas appointed Thomas

A. St. Marie as receiver for APS (the "Receiver") on January 1, 2003. 97. The Receiver subsequently inspected the assets located at 951 Jaycox

Road, Avon, Ohio the address at which APS conducted business. 98. The Receiver reported to the Court of Common Pleas that APC Ltd. had

claimed ownership in some of the property located at 951 Jaycox Road. 99. On or about January 28, 2003, Manos advised the Receiver in writing that

APS was "not a going concern"; that APS was "aware that Don Keehan was filing for patents in his own name" despite his employment by APS and that Mrs. Keehan, on behalf of APS "either gave away or agreed not to assert any interest in the invention of Don Keehan."

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100.

In the same Manos letter referred to in ¶ 99, Manos confirmed APS' 2001

asset sale to APC and APC's use of APS' manufacturing assets. 101. At a status conference on October 24, 2003, APC Ltd. offered to purchase

all of the remaining and tangible assets of APS for $500,000. 102. $100,000. 103. On February 6, 2004, the Court of Common Pleas approved the sale of the The Keehans also offered to purchase all of APS' intangible assets for

assets of APS to APC and the Keehans for those amounts, such sums to be held in trust by the receiver for payment of the Bank One debt. The Keehans Transfer Their Interest in APS' Manufacturing Facilities of to Another LLC to Evade Their Creditors 104. Less than four months after Owners commenced the Arbitration

Proceedings, on March 28, 2002, the Keehans formed a limited liability company, 951 Realty Ltd. ("951 Realty"), and thereafter transferred their interests in APS/APC's manufacturing facilities at 951 Jaycox Road to 951 Realty. 105. APC currently leases the 951 Jaycox Road property from 951 Realty, of

which the Keehans are managing members. The Keehans Form Other LLCs in Their Continuing Scheme to Evade Creditors 106. Less than three months after Owners commenced the Arbitration

Proceedings, on February 15, 2002, the Defendants formed Acscus Technologies, Ltd. ("Acscus"). The stated purpose of the company was the research, development and marketing of advanced material composite structures. 107. Manos, attorney for the Keehans and APS, and agent for service of

process of APC, was listed as a majority member and agent for service of process of Acscus.

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108. 109.

Manos was and is also President of Acscus. On May 15, 2002, Manos filed a certificate of name change with the Ohio

Secretary of State altering the spelling from "Acscus Technologies Ltd" to "Ascus Technologies Ltd." APC Experiences Rapid Sales Growth. 110. 111. company. 112. Indeed, in recent press releases on its website APC proclaims: APC markets Siloxirane as its own proprietary technology. APC publicizes on its website that it is rapidly expanding and successful

(a) From 1994 through 2002, an average of four ships a year were coated with Siloxirane; (b) The numbers of ships coated with Siloxirane doubled in 2003, 2004 and 2005; (c) As of June 26, 2007, 121 ships had contracted to receive the Siloxirane coating and 101 ships had already been contracted for 2008; (d) APC has entered into a contract with A.P. Moller-Maersk, the world's largest ship owner, to coat nine tanker ships with Siloxirane; and (e) APC has made big strides into the Korean shipbuilding market, having signed contracts with Samho Shipping, StoltSinochem, Tesma Singapore Pte., Eitzen Chemical, Sekwang Shipping Co., Ltd. and Daelim H&I Co. Ltd. 113. At various times since 2002, APC has listed at least two dozen Fortune

500 companies as customers. 114. Siloxirane. To date, according to APC at least 250 ships have been coated with

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115.

APC has also expanded APS' business to include customers in Europe,

Mexico, Turkey and China. 116. According to APC's website advertisement, APC's historical business as

successor and alter ego to APS has been expanding continuously since 1994 and in recent years, with seemingly exponential sales growth. Notwithstanding this success, the Keehans and APC as APS' successor and alter ego have thus far been able to insulate themselves from their historical creditors and unjustly escape their liability for their debts. 117. The entire Keehan Companies empire is built upon assets that belonged to

APS that were deliberately stripped so as to deprive Plaintiff and others of their ability to be repaid. THE KEEHANS PURCHASE A HOMESTEAD MANSION IN FLORIDA 118. In order to further insulate their assets from creditors, the Keehans

purchased properties in Florida, a homestead state, during the time of APS' insolvency. 119. Upon information and belief, on May 9, 2005, the Keehans sold their first

residence in Fort Myers, Florida. 120. Upon information and belief, on May 18, 2005, the Keehans purchased a

new residence at 18990 Knoll Landing Drive, Fort Myers, Florida, for $1,720,000 (the "Knoll Landing Property") 121. As of June 25, 2008, the real estate website Zillow.com did not include the

purchase price in its estimate of the Knoll Landing Property's current value because it considers the price to be an "anomaly." 122. Zillow states on its website that among the reasons that it may concludes

that property data is an anomaly include the following:

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[U]nusual document or transaction types, sales between possibly related parties, unusually high or low transaction prices, or other data irregularities that might indicate the transaction is not a fullvalue, arms-length transaction. THE KEEHAN COMPANIES ARE ALL ALTER-EGOS OF ONE ANOTHER AND OF THE KEEHANS 123. Upon information and belief, and at all times relevant to this complaint,

the Keehans have operated the Defendants and the other Keehan Companies as a single corporate enterprise, without regards to corporate formalities, as evidenced by the following: (a) APS, APC LLC, APC Ltd, GATT, all engaged in same business, the

manufacture and sale and application of Siloxirane protective lining systems; (b) APS, APC LLC, APC Ltd and GATT all share the same business address,

951 Jaycox Road, Avon, Ohio 44011; (c) APS, APC LLC and APC Ltd. all share the same telephone number -

(440) 937-6128 - and fax number - (440) 937-5046; (d) the Keehan Companies are all beneficially owned by the Keehans; in

particular, Arlene Keehan is the sole shareholder of APS; (e) (f) (g) Realty; (h) Defendant 951 Realty is the holding company for the property where APC Arlene Keehan is also president of both APS and GATT; Donald Keehan is the owner and agent of 951 Realty; Donald Keehan and Arlene Keehan are the managing members of 951

currently manufactures Siloxirane; (i) APS; the Keehans daughter, Denise, was/is Vice-President and a Director of

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(j) six children; (k)

the membership interests of APC are divided among the Keehans and their

each of the Keehans' six children has at one time or another worked for the

Keehan-related entities; (l) GATT and Ascus; (m) Manos, in his capacity as agent for APC LLC and GATT, lists the same John Manos is the agent for service of process for APC LLC, APC Ltd,

address for APS, APC and GATT - 951 Jaycox Road, Avon, Ohio, 44011; (n) Manos, in his capacity as agent for APC Ltd and Ascus, lists his address as

739 East 140 Street, Cleveland, Ohio, which is the same address as Manos' Cleveland law firm; and (o) Manos, the Keehans' long-time attorney, has also represented APS, APC

LLC, APC Ltd and GATT, sometimes concurrently, as both plaintiffs and/or defendants, in several lawsuits in state and federal courts. 124. In entering into the Agreement with Owners, the Keehans treated APS and

GATT as a single entity. 125. APS and GATT were defined as a single, inseparable identity; they had

identical obligations under the contract, and Arlene Keehan signed on behalf of both APS and GATT. 126. Since the purported transfer of assets to APC from APS, APC has

registered at least three trademarks for Siloxirane related products ChairLine®, MarineLine®, PowerLine®, each of which is utilized in lines of business belonging to APS.

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127.

Although APS' registration status in its state of incorporation, Delaware,

is currently listed as "Void", it is "Active" in Ohio and APS is currently listed in websites for and yellowpages.com, superpages.com and switchboard.com as located at 951 Jaycox Road, Tel. (440) 937-6218. 128. In addition, clicking on the company link provided by those websites -

http://www.yellowpages.com/name/Avon-OH/advanced-polymer - leads one to APC's website. WASTE OF ASSETS AND TRANSFERS OF ASSETS 129. Upon information and belief, Donald Keehan developed the technology

which underlies the original patent for Siloxirane while employed by APS. 130. The Keehan Companies utilize and rely upon Siloxirane technology

pursuant to agreements and/or informal understandings among them. 131. The website of the United States Office of Patent and Trademarks shows

that Siloxirane patent numbers 5,026,816 and 5,169,012 expired in 2003 and 2005, respectively, due to the Defendants' failure to pay registration fees. 132. Had the registration fees been paid, the patents would have been valid

until 2011 and 2012, respectively. 133. Failure to pay registration fees constituted a waste of corporate assets and

deprived creditors of Defendants, including Owners, of potential realizable value. 134. According to filings made at the World Trade Office, in or around 2004

and while the Arbitration Proceeding were still pending against APS and GATT or 2005 GATT Int'l transferred two patents owned by GATT Int'l, numbers 6,167,827 and 6,267,069 and which concern composite tanks for storing and/or transporting liquid organic and inorganic chemicals, to Ascus, who is also indentified as co-inventor of the tanks.

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135.

Transfer of such patents deprived Keehan Companies creditors, including

Plaintiffs, of potential realizable value. CLAIM I Declaratory Relief - Alter Ego - All Defendants 136. Plaintiff repeats and realleges the allegations contained in Paragraphs 1

through 135 as though fully set forth herein. 137. 138. The Keehans operated the Keehan Companies as a single economic entity. The primary business purpose of all of the Keehan Companies was the

manufacture and sale of Siloxirane and related products and services. 139. The Keehan Companies had substantially overlapping, if not functionally

identical, management. 140. The Keehan Companies had substantially similar operations, used the

same equipment and had the same customers. 141. Companies. 142. The Keehans used the network of Keehan Companies to defraud their The Keehans were beneficial owners of substantially all of the Keehan

legitimate creditors, including Owners. 143. It would be unfair and unjust to permit the Keehans to abuse the corporate

form for the personal benefit and to the benefit of the legitimate creditors of the Keehans and the Keehan Companies. 144. Plaintiff is therefore entitled to a declaration that the Keehan Companies

are the alter egos of one another and also of the Keehans themselves.

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CLAIM II Declaratory Relief ­ De Facto Merger ­ APS, APC 145. Plaintiff repeats and realleges the allegations contained in Paragraphs 1

through 144 as though fully set forth herein. 146. 147. 148. During 2001-2004 APS transferred substantially all of its assets to APC. After the transfer, APC continued the business enterprise of APS. After the transfer, APC continued to develop, register and exploit

technology developed by APS. 149. After the transfer, there was a continuity of management, personnel,

physical location, assets, and general business operations between APS and APC. 150. There was a continuity of ownership among the two companies in that the

Keehans were the beneficial owners of both APS and APC. 151. After the transfers, APS effectively ceased its ordinary business

operations, but never filed for bankruptcy nor ever underwent a corporate dissolution. 152. obligations. 153. Thus, Plaintiff is entitled to a declaration that the transfer of assets from After the transfer APC effectively assumed APS' operations and

APS to APC resulted in a de facto merger of the two companies, pursuant to which APC assumed the liabilities of APS. CLAIM III Declaratory Relief ­ Mere Continuation ­ APS, APC 154. Plaintiff repeats and realleges the allegations contained in Paragraphs 1

through 153 as though fully set forth herein.

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155. 156.

The Keehans are the beneficial owners of APS and APC. After the transfer of substantially all of APS' assets to APC, the latter

continued APS' business enterprise, as evidenced by the fact that the APC continued to sell and manufacture the same or similar Siloxirane products and related services as APS. 157. numbers as APS. 158. 159. Both APS and APC were managed by the Keehans. APC took over APS' business operation and continued to target marine APC also and used the same address, personnel, telephone and fax

application of Siloxirane. 160. Finally, APC has assumed the obligations ordinarily necessary for the

uninterrupted continuation of normal business operations of APS. 161. 162. APC is the same legal entity as APS, but operating under a different name. Therefore, Plaintiff is entitled to a declaration that APC is the mere

continuation of, and successor in interest to, APS and, thus, is responsible for APS' liabilities. CLAIM IV Waste and Breach of Fiduciary Duty ­ Donald Keehan and Arlene Keehan 163. Plaintiff repeats and realleges the allegations contained in Paragraphs 1

through 162 as though fully set forth herein. 164. As the directors, officers and/or shareholders of the Keehan Companies,

the Keehans had a duty to preserve the assets of the Keehan Companies for the benefit of the Debtors' creditors, including Plaintiff. 165. Instead of preserving the assets of the Keehan Companies, the Keehans

deliberately engaged in a campaign of wasting corporate assets, including but not limited to

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patents associated with the Siloxirane technology, and composite tanks, so as to defraud the creditors of the Keehan Companies. 166. The Keehan Companies' waste of assets included, but was not limited to,

allowing control over technology to pass to related entities without adequate consideration, allowing valuable patents to expire due to simple failure to pay registration fees, the transfer of patents to other Keehan Companies to evade creditors, and use of mortgage proceeds on Keehan Companies to purchase homestead property in Florida in an attempts to render themselves "judgment proof". 167. The consideration received for the above transactions was so

disproportionately small as to lie beyond the range at which reasonable officers, directors or shareholders would be willing to trade. 168. It would have been futile for Plaintiff, a known creditor of the Debtor, to

have made a demand on the Keehans to bring actions against the very companies of which they were officers, directors and shareholders, and which they used to defraud their creditors. 169. The Keehans' wasting of Keehan Company assets has harmed Plaintiff by

precluding the satisfaction of the amounts due Plaintiff under the Agreement and/or pursuant to the Arbitration Award. 170. at trial. CLAIM V Fraudulent Transfer ­ The Keehans and Keehan Companies 171. Plaintiff repeats and realleges the allegations contained in Paragraphs 1 As a result, Plaintiff is entitled to damages in an amount to be determined

through 170 as though fully set forth herein.

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172.

The Keehans and the Keehan Companies, singly and as alter egos of one

another, transferred assets to insiders of the Keehans and the Keehan Companies and undertook obligations such as mortgages with the actual intent to hinder, delay and defraud Plaintiff. 173. The Keehan Companies singly and as alter egos did not receive reasonably

equivalent value in exchange for the transfers or obligations. 174. The Defendants and Keehan Companies singly and as alter egos of each

other intended to incur, or believed or reasonably should have believed that they would incur debts beyond their ability to pay as they became due and/or the Keehan companies were insolvent at the time of the transfers or became insolvent as a result of the transfers. 175. The Defendants and the Keehan Companies singly and as alter ego of each

other intended to hinder or delay Owners' ability to satisfy the debt due to them by transferring assets from APS to APC and the subsequent use of APS assets by APC and the other Keehan Companies. 176. The failure to renew patent registration and subsequent use by other

Keehan Companies constituted a transfer of assets by APS and/or the Keehans. 177. The transfer of patents by GATT and subsequent use by other Keehan

companies constituted a transfer of assets by GATT and/or the Keehans. 178. At all times Keehan Sr. and Mrs. Keehan retained control of the

transferred technology and other transferred assets. 179. Despite the fact Keehan Companies were in fact insolvent or rendered

insolvent by these transfers, neither the Keehans nor the Keehan Companies revealed these transfers to Owners.

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180.

At the time of each transfer the Arbitration Proceedings were pending or

an award had been entered against one or more Keehan Companies. 181. Substantial additional debts were incurred by APS after commencement of

the Arbitration Proceedings. 182. All of the transfers by APS to APC and the other Keehan Companies have

harmed Plaintiff and were intended by Defendants to hinder or delay Owners' recovery of their debt by preventing the satisfaction of the amounts due Plaintiff under the Agreement and/or pursuant to the Arbitration Award. 183. All such transfers constitute fraudulent transfers within the meaning of

§ 1304, Delaware Statute. 184. at trial. WHEREFORE, Petitioner Marnavi, as agent for Jilmar, respectfully requests that this Court enter a Judgment: I. As to Counts I, II and III declare that the Defendants and the other Keehan As a result, Plaintiff is entitled to damages in an amount to be determined

Companies are alter egos of APS and/or the Keehans and are liable for the debts of APS; II. As to Count IV awarding damages jointly and severally against all

Defendants, including the Keehan Companies as their alter egos in an amount to be determined at trial, but not less than $5,702,157.00; III. As to Count V, award damages jointly and severally against all

Defendants, including the Keehan Companies as their alter egos for an amount to be determined at trial, but not less than $5,702,157.00;

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IV.

As to all counts awarding, jointly and severally against all Defendants and

the Keehan Companies prejudgment, interest on all of the above items; V. As to all Counts awarding, jointly and severally against all Defendants,

including the Keehan Companies as their alter egos, interest at the federal judgment rate as set forth in 18 U.S.C. § 3612(f)(2) from the date of judgment by this Court payment in full of the judgment; VI. As to Count V awarding jointly and severally against all Defendants

including the Keehan Companies as their alter egos, costs, including attorneys' fees, in this proceeding; and VII. As to all Counts, awarding such other and further relief as the Court may

deem to be just and proper.

Dated: June 25, 2008

DUANE MORRIS LLP

/s/ Frederick B. Rosner Frederick B. Rosner (DE # 3995) Matt Neiderman (DE # 4018) 1100 North Market Street Suite 1200 Wilmington, DE 19081-1246 (302) 657-4900 - and -

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OF COUNSEL:

SALANS Claude D. Montgomery, Esq. Paul C. Gunther, Esq. 620 Fifth Avenue Rockefeller Center New York, New York 10020 212-632-5500 Attorneys for Marnavi, SpA as agent for Jilmar Shipping S.A.

27

JS 44 (Rev. 3/99)

Case 1:08-cv-00389-SLR CIVIL COVER SHEET Document 1-2 Filed 06/25/2008

Page 1 of 1

The JS-44 civil cover sheet and information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)

I. (a) PLAINTIFFS Marnavi, SpA, as agent for Jilmar Shipping, S.A.

DEFENDANTS Advanced Polymer Sciences, Inc., Advanced Polymer Coatings, Ltd. f/k/a Advanced Polymer Coatings, LLC, Donald J. Keehan and Arlene H. Keehan

(b)

County of Residence of First Listed Plaintiff Italy (EXCEPT IN U.S. PLAINTIFF CASES)

County of Residence of First Listed Defendant (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE LAND INVOLVED.

(c)

Attorney's (Firm Name, Address, and Telephone Number)

Attorneys (If Known)

Frederick Rosner, Esq., (I.D. #3995) Duane Morris LLP 1100 North Market Street, Suite 1200, Wilm., DE 19801 (302) 657-4900
(Place an "X" in One Box Only)

Unknown

II. BASIS OF JURISDICTION
1 U.S. Government Plaintiff 2 U.S. Government Defendant 3 4

III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an "X" in One Box for Plaintiff
(For Diversity Cases Only) PTF DEF Citizen of This State 1 1 Citizen of Another State Citizen or Subject of a Foreign Country 2 3 2 3
and One Box for Defendant)

Federal Question (U.S. Government Not a Party) Diversity (Indicate Citizenship of Parties in Item III)

Incorporated or Principal Place of Business in This State Incorporated and Principal Place of Business in Another State Foreign Nation

PTF DEF 4 4 5 6 5 6

IV. NATURE OF SUIT
CONTRACT
110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excl. Veterans) 153 Recovery of Overpayment of Veteran's Benefits 160 Stockholders' Suits 190 Other Contract 195 Contract Product Liability

(Place an "X" in One Box Only)
TORTS
PERSONAL INJURY PERSONAL INJURY

FORFEITURE/PENALTY
362 Personal Injury­­ Med. Malpractice 365 Personal Injury­­ Product Liability 368 Asbestos Personal Injury Product Liability 610 Agriculture 620 Other Food & Drug 625 Drug Related Seizure of Property 21 USC 881 630 Liquor Laws 640 R.R. & Truck 650 Airline Regs. 660 Occupational Safety/Health 690 Other

BANKRUPTCY
422 Appeal 28 USC 158 423 Withdrawal 28 USC 157

OTHER STATUTES
400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce/ICC/Rates/etc. 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 810 Selective Service 850 Securities/Commodities/ Exchange 875 Customer Challenge 12 USC 3410 891 Agricultural Acts 892 Economic Stabilization Act 893 Environmental Matters 894 Energy Allocation Act 895 Freedom of Information Act 900 Appeal of Fee Determination Under Equal Access to Justice Act 950 Constitutionality of State Statutes 8890 Other Statutory Actions

310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers' Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury

PROPERTY RIGHTS
820 Copyrights 830 Patent 840 Trademark

PERSONAL PROPERTY

370 Other Fraud 371 Truth in Lending 380 Other Personal Property Damage 385 Property Damage Product Liability

LABOR
710 Fair Labor Standards Act 720 Labor/Mgmt. Relations 730 Labor/Mgmt. Reporting & Disclosure Act 740 Railway Labor Act 790 Other Labor Litigation 791 Empl. Ret. Inc. Security Act

SOCIAL SECURITY
861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g))

REAL PROPERTY
210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property

CIVIL RIGHTS
441 Voting 442 Employment 443 Housing/ Accommodations 444 Welfare 440 Other Civil Rights

PRISONER PETITIONS
510 Motions to Vacate Sentence Habeas Corpus: 530 General 535 Death Penalty 540 Mandamus & Other 550 Civil Rights 555 Prison Conditions

FEDERAL TAX SUITS
870 Taxes (U.S. Plaintiff or Defendant) 871 IRS­Third party 26 USC 7609

V. ORIGIN
1 Original Proceeding Removed from 2 State Court

(PLACE AN "X" IN ONE BOX ONLY)

3 Remanded from Appellate Court

4

Reinstated or Reopened

5

Transferred from another district (specify)

6 Multidistrict Litigation

Appeal to District 7 Judge from Magistrate Judgment

VI. CAUSE OF ACTION VII. REQUESTED IN COMPLAINT:

(Cite the U.S. Civil Statute under which you are filing and write brief statement of cause. (Do not cite jurisdictional statutes unless diversity.) 28 U.S.C. § 1332

Action in support of its related petition to enforce a foreign arbitration award, against the defendants and their alter egos. CHECK IF THIS IS A CLASS ACTION UNDER F.R.C.P. 23 (See Instructions):
JUDGE

DEMAND

$5,702,157.00

CHECK YES only if demanded in complaint: No JURY DEMAND: Yes
DOCKET NUMBER

VIII. RELATED CASE(S) IF ANY
DATE: June

Pending

Pending (Marnavi v. Advanced Polymer Coatings)

25, 2008

SIGNATURE OF ATTORNEY OF RECORD:

/s/ Frederick B. Rosner (Del. No. 3995)

FOR OFFICE USE ONLY

RECEIPT # ___________

AMOUNT ______________________

APPLYING IFP ______________________

JUDGE ___________________

MAG. JUDGE _________________