Case 3:19-Cv-01850 Document 1 Filed 11/19/19 Page 1 of 20

Case 3:19-cv-01850 Document 1 Filed 11/19/19 Page 1 of 20 UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x CANADA JETLINES LTD. and : CANADA JETLINES OPERATIONS LTD. : : Plaintiffs, : COMPLAINT : (Jury Trial Demanded) - against – : : DAVID NEELEMAN, DGN CORPORATION : and BREEZE AVIATION GROUP, INC., : : Defendants. : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x Plaintiffs Canada Jetlines Ltd. and Canada Jetlines Operations Ltd. (together, “Plaintiffs” or “Jetlines”), by their undersigned attorneys, allege as follows for their Complaint herein: 1. This is an action for tortious interference with business expectancy and violation of the Connecticut Unfair Trade Practices Act (CUTPA), C.G.S.A § 42-110a et seq. In July and August 2018, Defendants David Neeleman (“Neeleman”), DGN Corporation (“DGN”) and Breeze Aviation Group, Inc. (together, “Defendants”), embarked upon a predatory scheme to destroy the relationships between Jetlines, on one hand, and Jetlines’ CEO and a leading international investment bank (the “Bank”), on the other hand, with the purpose and ultimate effects of (i) causing the Bank to terminate its engagement to assist Jetlines in raising the new investment capital that was and is essential to Jetlines’ ability to commence operations as an ultra low-cost passenger air carrier (“ULCC”) in Canada, and (ii) causing related financial and operational damage to Jetlines. 2. During that time, Defendants deliberately induced Jetlines’ Chief Executive Officer, Lukas Johnson (“Johnson”), to participate in a series of secret communications and meetings that Neeleman knew to be in breach of Johnson’s contractual and fiduciary duties to Case 3:19-cv-01850 Document 1 Filed 11/19/19 Page 2 of 20 Jetlines, including but not limited to Johnson’s duties of loyalty, candor and full-time attention to his responsibilities as Jetlines’ CEO. 3. During those communications and meetings, which the participants kept secret from Jetlines through, among other things, a nondisclosure agreement that Defendants induced Johnsons to sign in late July 2018, Neeleman sought to lure Johnson away from Jetlines and otherwise to obtain his services and advice concerning Neeleman’s own new airline venture, code- named Moxy, which was owned and to be operated by Defendant Breeze Aviation Group, Inc. (“Moxy”). Neeleman is a founder and principal of Moxy. Neeleman knew that Jetlines was relying heavily on Johnson as its principal representative in its financing efforts with the Bank and that Johnson, as Jetlines’ CEO, would become indispensable to those efforts as they approached the imminent date upon which the Bank and Jetlines would begin their presentations to prospective investors. 4. Defendants conspired with Johnson to mislead Jetlines and the Bank into believing that Johnson was fully committed to Jetlines’ future and to seeing its financing effort and operational launch through to their conclusion, even as Defendants were working secretly with Johnson to engineer his departure at the point in time most likely to injure Jetlines. Neeleman’s overriding purpose in that deception was to derail Jetlines’ relationship with the Bank and thereby to delay and hinder Jetlines from obtaining new financing and commencing operations as a Canadian ULCC. In that, he succeeded. 5. Late in the evening of August 27, 2018, as Jetlines and the Bank were poised to launch their critical presentations to prospective investors, in which Johnson was to play a central role and which were structured to emphasize his standing in the industry and his importance as Jetlines’ CEO, Johnson stunned Jetlines by announcing without prior warning that he would be - 2 - Case 3:19-cv-01850 Document 1 Filed 11/19/19 Page 3 of 20 resigning in order to work for Neeleman’s new venture, Moxy. Almost immediately thereafter, and before Jetlines itself could respond to the event that Neeleman had secretly orchestrated over the course of at least the preceding month, Neeleman telephoned the Bank’s Managing Director in charge of the Jetlines project and announced that he, Neeleman, had hired away Jetlines’ CEO. Neeleman had no other legitimate purpose for making that call at that time. 6. As Neeleman maliciously intended, his surprise announcement caused the Bank immediately to suspend its efforts to procure new financing for Jetlines. The Bank advised Jetlines at the time that Johnson’s departure was a huge blow to the company, that the Bank was uncertain Jetlines could recover from it, and that the Bank would be unable even to consider marketing the company again for many months, if at all. Some three months after going “pens down” in this fashion, the Bank notified Jetlines in writing that its engagement was terminated, effective December 8, 2018. 7. Neeleman’s intentional interference with Jetlines’ relationships with Johnson and the Bank has caused substantial damage to Jetlines. Among other things, Jetlines’ reputation in the airline and financial industries, and with prospective investors, was injured; Jetlines’ ability to obtain crucial financing commence flight operations and earn related revenues was delayed; Jetlines’ lease agreement for certain aircraft was terminated, causing it to lose USD $2.2 million in non-refundable deposits; and the amount of financing available to Jetlines was significantly reduced. I. JURISDICTION AND VENUE. 8. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §1332(a)(2) and (a)(1). There is complete diversity of citizenship between the parties. The amount in controversy exceeds $75,000 USD. 9. Plaintiffs are citizens of Canada, having both been incorporated in British Columbia - 3 - Case 3:19-cv-01850 Document 1 Filed 11/19/19 Page 4 of 20 and having their principal place of business in Vancouver, British Columbia, Canada. 10. Upon information and belief, Defendant Neeleman is a citizen of the State of Connecticut. Plaintiffs’ causes of action arise from tortious acts Neeleman committed in Connecticut. 11. Upon information and belief, Defendant Moxy is a corporation organized and existing under the laws of Delaware and having its principal place of business in Connecticut. Plaintiff’s claims against Moxy arise from tortious acts it committed in Connecticut. 12. Upon information and belief, Defendant DGN is a corporation organized and existing under the laws of the State of Utah and having its principal place of business in the State of Connecticut. 13. Venue is proper in this judicial district pursuant to 28 U.S.C. §1391(b)(1) and (2), because Defendants are residents of the State of Connecticut, and a substantial part of the events or omissions giving rise to Plaintiffs’ claims against Defendants occurred in Connecticut. II. BACKGROUND REGARDING JETLINES, THE BANK, JOHNSON. A. Jetlines 14. Plaintiff Canada Jetlines Ltd. was incorporated under the laws of British Columbia, Canada, and continued as a Canadian Federal corporation pursuant to the Canada Business Corporations Act effective February 27, 2017. Its shares are publicly traded on the Canadian TSX Venture Exchange under the symbol JET. Jetlines’ principal business is the start-up of a ULCC scheduled airline service in Canada, through its wholly-owned subsidiary, Plaintiff Jetlines Canada Operations Ltd., which was incorporated under the laws of British Columbia, Canada. 15. Jetlines’ business plan calls for it to provide greater service and lower fares among a network of routes to be established between regional airports within Canada and to select destinations in the US, Mexico and the Caribbean. - 4 - Case 3:19-cv-01850 Document 1 Filed 11/19/19 Page 5 of 20 16. Toward that end, on or about June 22, 2018, Jetlines signed definitive lease agreements with AerCap for two Airbus A320 aircraft. Delivery of those initial aircraft was scheduled to occur in March and April 2019, and Jetlines commencement of flight operations in Canada was expected to commence before the end of June 2019. Jetlines planned to acquire additional aircraft thereafter, toward a fleet eventually numbering 50 or more. However, Jetlines’ launch of airline operations was and remains subject to completion of a financing to raise funds necessary to commence the build-out of the airline with aircraft, personnel, training, inventory, deposits, sales and administrative systems and other launch activities. 17. The raising of new funds was and is necessary not only for build-out purposes, but to obtain the necessary Canadian governmental licenses to operate an airline. Those are, first, an Air Operating Certificate (“AOC”) from Transport Canada, and second, a large-aircraft “705 license” from the Canadian Transport Agency. Both require that Jetlines have secured tens of millions of dollars in financing, beyond that which Jetlines possessed in June 2018 or possesses now. 18. Failure to obtain new financing in a timely manner, arising from Defendants’ malicious inducement of Johnson’s resignation, has delayed Jetlines’ ability to execute its build- out strategy, obtain necessary licenses, commence operations, and earn related revenues. B. Jetlines’ Engagement of the Bank and Early Financing Activities. 19. By letter agreement dated January 5, 2018 (the “Financing Agreement”), Jetlines engaged the Bank as its exclusive agent to arrange a private placement of Jetlines’ equity or equity- linked securities compliant with US and Canadian securities laws. The Bank is a highly regarded international investment bank

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