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Daddy Yankee Suit

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Case 1:11-cv-24142-PAS Document 1 Entered on FLSD Docket 11/16/2011 Page 1 of 40

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION

CASE NO.: ____________________________________ x FIVE FOR ENTERTAINMENT S.A., d/b/a FIVE : LIVE ENTERTAINMENT and DIEGO HERNAN : DE IRAOLA, : : Plaintiffs, : : COMPLAINT AND JURY DEMAND -against: : RAMON LUIS AYALA RODRIGUEZ a/k/a/ : DADDY YANKEE, EL CARTEL RECORDS INC, ICARO SERVICES INC., and EDGAR BALDIRI MARTINEZ, Defendants.

----------------------------------------------------------x Plaintiffs Five for Entertainment S.A. d/b/a Five Live Entertainment (“Five Live”) and Diego Hernán de Iraola (“De Iraola”) (collectively, “Plaintiffs”), by and through their attorneys, for their complaint against Defendants Ramón Luis Ayala Rodriguez a/k/a Daddy Yankee (“Daddy Yankee”), El Cartel Records, Inc. (“El Cartel”), Icaro Services Inc. d/b/a Icaro Booking Services (“Icaro”), and Edgar Baldiri Martinez (“Baldiri”) (collectively, “Defendants”), allege as follows: INTRODUCTION 1.

This is an action brought, in part, in contract for the Defendants’ failure to honor

certain contractual promises. As set forth in a written agreement, Defendant Daddy Yankee was to perform at no fewer than six concerts in Argentina in or about November 2010. As detailed below, Plaintiff Five Live paid Daddy Yankee’s representative approximately $800,000.00 for

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the rights to these concerts. However, just days before the first of the scheduled concerts, and after Plaintiff Five Live incurred more than a million dollars of expenses in promoting and producing these concerts, Daddy Yankee abruptly and without cause unilaterally cancelled the entire tour. Daddy Yankee has nonetheless wrongfully retained the entirety of the funds paid to him, and has failed to reimburse to Plaintiff Five Live the expenses Five Live incurred in reliance on the contract or otherwise compensate Five Live for the injuries suffered as a result of the breach. 2.

This action is also brought in tort for the Defendants’ systematic public relations

smear campaign consisting of both slanderous and libelous statements against Plaintiffs, in which Defendants wrongfully and publicly blamed Plaintiffs for Daddy Yankee’s last-minute cancellation of the tour. The public relations campaign included defamatory and actionable statements that were intended to and did harm Plaintiffs’ business and reputation, proximately causing economic harm to both Plaintiffs and severe emotional distress to Plaintiff De Iraola. PARTIES, JURISDICTION AND VENUE 3.

Plaintiff Five Live is a corporation organized under the laws of the Republic of

Argentina, with its principal place of business at Rivadavia 670, Neuquén, Neuquén, Argentina. Five Live produces shows and events in Argentina, with a particular focus on the production of concerts for well-known musical artists from South America, Europe and the United States. 4.

Plaintiff De Iraola is the president and majority shareholder of Five Live. De

Iraola is of Argentine nationality and is domiciled in Buenos Aires, Argentina. 5.

Upon information and belief, Defendant Daddy Yankee is a United States citizen

domiciled in Puerto Rico. Daddy Yankee is an internationally well-known, multiple Billboard and Grammy award-winning singer of Reggaeton music. With more than eight million albums

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sold, five No. 1 hits on Billboard's radio charts, and a blockbuster film, Daddy Yankee is the top-selling Latin urban artist of the decade according to Billboard Magazine (2010.) He is the founder and CEO of his own record label, has appeared in television shows, movies, and branding campaigns for various products, and has created his own lines of footwear and cologne. 6.

Upon information and belief, Defendant El Cartel is a corporation organized

under the laws of Puerto Rico, with its principal place of business at Ponce de Leon 1612, Suite 301, San Juan, Puerto Rico 00909. El Cartel is Daddy Yankee’s record label company. 7.

Upon information and belief, Defendant Icaro is a corporation organized under

the laws of the state of Florida, with its principal place of business at 1401 Sawgrass Corporate Parkway, Suite 118, Sunrise, Florida 33323. Icaro is a booking agent, providing publicity, marketing, and organization of concerts and events on behalf of a variety of musical artists. Icaro is Daddy Yankee’s booking agent. 8.

Upon information and belief, Defendant Baldiri is the president and registered

agent of Icaro. He is a Colombian citizen admitted to the United States for permanent residence and domiciled in the state of Florida, at 1401 Sawgrass Corporate Parkway, Suite 118, Sunrise, Florida 33323. 9.

This Court has subject matter jurisdiction over these claims pursuant to 28 U.S.C.

§ 1332, as there is complete diversity between the parties, and the amount in controversy exceeds $75,000.

10.

This Court has personal jurisdiction over Daddy Yankee pursuant to Fla. Stat. §§

48.193(1)(a) and (2). Upon information and belief, Daddy Yankee has systematically conducted business in the State of Florida through Icaro, a corporation formed under the laws of

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and with its principal place of business in the State of Florida and which has handled the booking of Daddy Yankee’s concerts and events, and entered into contracts—including the contracts at issue in this action—on his behalf, since at least 2009.

11.

Further, upon information and belief, Daddy Yankee also employs a Florida-

based company, Nevarez Communications, to perform his press and public relations work, a substantial amount of which is directed at the Florida market. Daddy Yankee has performed numerous concerts and publicity events in the State of Florida, and has advertised and sold his footwear and cologne products there, as well as recordings of his music. 12.

Similarly, this Court has personal jurisdiction over El Cartel pursuant to Fla. Stat.

§§ 48.193(1)(a) and (2) because, upon information and belief, it too systematically conducts business in the State of Florida, including on Daddy Yankee’s behalf through Icaro and otherwise. El Cartel worked with Icaro’s Florida-based personnel in connection with Daddy Yankee’s 2010 Argentina tour that was the subject matter of the contracts at issue in this dispute. 13.

This Court has personal jurisdiction over Icaro and Baldiri, as they are residents

of the State of Florida. 14.

Venue is proper in this Court pursuant to 28 U.S.C. § 1391(a)(2), as a substantial

portion of the events giving rise to this complaint took place in Florida. Among other things: (i) the underlying contract was drafted and emailed to Plaintiffs by Icaro from its office in Florida, and bears Icaro’s Florida address on the bottom of each page; (ii) Plaintiff Five Live transferred payments under the contract electronically to Icaro’s bank account in Florida; (iii) Defendants issued a communication announcing the cancellation of the shows contracted and paid for through Icaro’s Florida-based office, thereby repudiating and breaching the parties’

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contract; and (iv) Defendants published a number of defamatory and actionable oral and written statements at issue in this action through Icaro from its Florida office. Alternatively, venue is appropriate pursuant to 28 U.S.C. § 1391(a)(3). FACTS 1. Five Live and its Business Model 15.

Five Live is a company organized under the laws of Argentina since 2009. Until

recently, Five Live had been engaged in the production of music shows and other events such as sporting events, promotional activities and VIP meetings. Five Live was known for producing concerts and other events that included premium tickets with access to VIP lounges (that included entertainment), merchandising and occasional access to the artist/s. It had also developed a preeminent position in the show producing business in virtually every province in Argentina. 16.

Up until the events giving rise to this complaint, Five Live had succeeded in

positioning its brand in the entertainment business. It enjoyed a well-established track record of producing shows in Argentina for well-known artists from Latin America (e.g., Ricardo Arjona, Los Fabulosos Cadillacs, Gustavo Ceratti, Andrés Calamaro), Puerto Rico (Wisin & Yandel, Daddy Yankee), and Europe (Joaquín Sabina). 2. The 2009 Tour: Daddy Yankee’s First Visit to Argentina 17.

In 2009 Five Live produced two live performances by Daddy Yankee in

Argentina and supervised the production of various other shows by Daddy Yankee during that time (the “2009 Tour”).

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18.

Icaro was at the time of the 2009 Tour, and it continues to be without interruption

through this present date, Daddy Yankee’s and El Cartel’s agent for any and all matters relating to the booking of Daddy Yankee’s services and performances. 19.

At the conclusion of the 2009 Tour, Baldiri, on behalf of Icaro, which in turn was

acting as Daddy Yankee’s agent, advised Plaintiff De Iraola that they should work together to arrange a follow-up tour. On or about March 9, 2010, Baldiri reiterated to Plaintiff De Iraola his intention to work with Five Live on a second tour to Argentina and invited De Iraola to meet in Buenos Aires, Panama, Colombia, or any other location of De Iraola’s choice for this purpose. As Baldiri stated in a March 9, 2010 email communication to De Iraola, “If I return [to] Argentina I’m going with you.” 3. The 2010 “World Tour”. Five Live Produces a Six-Concert Tour For Daddy Yankee’s Second Visit To Argentina 20.

On or about June 8, 2010, Plaintiff Five Live, represented by Plaintiff De Iraola,

and El Cartel, through its agent Icaro, entered into an Artist Engagement Contract “for the services of Daddy Yankee” (the “Engagement Contract”). While the Engagement Contract was finalized on June 8, 2010, it is dated May 24, 2010, which reflected the date the Engagement Contract was drafted. A true and correct copy of the Engagement Contract is attached hereto as Exhibit 1. 21.

Under the Engagement Contract, El Cartel, on behalf of Daddy Yankee, in

exchange for valuable consideration, contractually committed to Plaintiff Five Live that Daddy Yankee would perform six shows at various venues in Argentina. Pursuant to the Engagement Contract, each show would consist of a live performance by Daddy Yankee of approximately one hour’s duration on the following dates and at the following venues: November 12, 2010. City of Buenos Aires. Argentinos Juniors soccer stadium;

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November 13, 2010. City of Tucumán. Atlético Tucumán soccer stadium; November 14, 2010. City of Córdoba. Orfeo Stadium; November 17, 2010. City of Rosario. Horse Racing stadium; November 19, 2010. City of Neuquén. Club Cipolleti soccer stadium; November 20, 2010. City of San Juan. “Fiesta del Sol” arena. 22.

The parties agreed that this 2010 tour would be marketed as the “Tour Mundial.”

Daddy Yankee had never before embarked on a tour involving that many shows in any single country. 23.

As explained below at paragraphs 58–60, the foregoing dates were subsequently

rescheduled due to the sudden death of Argentina’s former president, Nestor Kirchner, and ensuing logistical difficulties with some of the chosen venues. a. Contract Price and Payment Schedule 24.

The Engagement Contract provided that Five Live would pay to Icaro a total of

US$ 820,000 (eight hundred twenty thousand U.S. dollars) for all six performances. 25.

The Engagement Contract further stipulated that payment of the contract price

would be made in four installments of US$ 205,000 each in accordance with the following schedule: (i) a first deposit upon execution of the contract, (ii) a second deposit by July 30, 2010, (iii) a third deposit by September 30, 2010, and (iv) one final deposit by November 1, 2010. 26.

The parties agreed that the timing and amounts of the installment payments did

not need to conform to the dates set forth in the Engagement Contract. For example, in a transmittal email accompanying the draft of the Engagement Contract, Baldiri specifically advised Plaintiff De Iraola that he could make payments on a rolling basis without strict adherence to the terms set forth in the draft of the contract. Baldiri explained that he “put down

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the dates to help you [but] it doesn’t matter if you split them up and send it to me gradually.” Baldiri did, however, request an initial payment of US$ 205,000. 27.

Between June 10, 2010 and November 16, 2010, Plaintiff De Iraola made the

following payments by wire transfer and in cash for a total of US$ 796,895.00: Date Pmt. Was Credited On Icaro’s Account June 10, 2010 July 21, 2010 August 11, 2010 August 24, 2010 September 5, 2010 (*) September 29, 2010 October 06, 2010 October 21, 2010 October 21, 2010 October 22, 2010 October 28, 2010 November 10, 2010 November 16, 2010

Amount $90,000.00 $98,645.00 $14,850.00 $30,000.00 $100,000.00 $90,000.00 $39,600.00 $40,000.00 $50,000.00 $30,000.00 $100,000.00 $100,000.00 $13,800.00 $796,895.00

(*) Cash Payment

28.

At no time did Baldiri or any Defendant object to the amounts paid. To the

contrary, each of the payments was accepted and deposited by Baldiri, with the acquiescence of all Defendants. 29.

In addition, Plaintiffs were credited with payment of an additional amount in

recognition of the fact that Plaintiffs had been forced to spend additional funds to reschedule flights missed by Daddy Yankee and his crew during a September 2010 promotional tour (see ¶¶ 38–39 below.) Because Icaro had agreed that Plaintiffs were not responsible for these unexpected travel expenses, Plaintiffs, with Icaro’s consent, set off the additional amounts paid by Five Live against the remainder of the $820,000 contract price.

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b. Production Costs 30.

The Engagement Contract stipulated that Five Live would bear all costs

associated with production of the shows, including the cost of equipment, lighting, audio, and technical support. 31.

Five Live expended substantial sums in production costs in furtherance of the

Engagement Contract, in reliance on the contractual promises and pursuant to its contractual obligations. Some of the larger expense items included the cost of the necessary technical equipment and special effects, air transportation, and professional fees and related costs for a Production Manager, a Tour Manager and a Production Assistant. Five Live expended such sums, among others, to satisfy its contractual obligations and to ensure sell-out or near sell-out audiences at the concerts, which would, in turn, ensure a successful return on its investment. c. Logistics and Traveling Arrangements 32.

Under the Engagement Contract Five Live was required to arrange for and bear

all costs relating to air and ground transportation, food and five-star lodging for Daddy Yankee and more than thirty members of his staff for the 2010 Tour. 33.

As required, Plaintiff Five Live expended substantial sums on travel arrangements

and lodging for Daddy Yankee and his sizable staff for the 2010 Tour. In this regard, Five Live made down payments of well over $150,000 for airfare and lodging in anticipation of Defendants’ compliance with their contractual obligations. 34.

Costs became far greater than anticipated because of Plaintiffs’ inability to obtain

accurate information from Icaro in a timely manner and because of El Cartel’s breach of its contractual promises.

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35.

For example, under the Engagement Contract Five Live was responsible for

making all necessary arrangements to obtain work permits and/or visas for Daddy Yankee and his personnel by “no later than three working days prior to July 1, 2010” under penalty of cancellation of the performances. But despite Five Live’s multiple requests, neither Icaro nor El Cartel provided Five Live with the requisite information (e.g., names, nationalities, passport information) until on or about November 12, 2010. As a consequence, Five Live had to forego cheaper airfares that had previously been available in favor of the more expensive airfares that often accompany last-minute travel. Likewise, Five Live had to pay to expedite the processing of visas given Defendants’ failure to provide this information in a timely manner. 36.

Also, the Engagement Contract provided that air transportation for Daddy Yankee

and his staff would include a private chartered airplane. Consistent with Five Live’s contractual obligations, De Iraola chartered a private jet to depart from Miami, pick up Daddy Yankee and part of his entourage in Puerto Rico and fly to Argentina and through the various cities where Daddy Yankee was scheduled to perform. However, on or about November 12, 2010, Ms. Mireddys Gonzalez, president of El Cartel and Daddy Yankee’s manager, advised Five Live that neither she nor Daddy Yankee would agree to travel on a private chartered jet and instructed Plaintiff De Iraola instead to purchase first-class tickets on LAN Airlines for Daddy Yankee and her. Five Live incurred all associated expenses. 37.

By November 16, 2010, Plaintiffs had completed the process of gathering all the

requisite information, had secured all necessary work visas at the Argentine consulate in Miami and had completed travel arrangements for Daddy Yankee, Ms. Gonzalez and all of their staff.

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d. The September 2010 Promotional Tour and Discussion of Additional Performances 38.

Pursuant to the Engagement Contract, Five Live was required to prepare a media

plan and arrange for a promotional tour at least one month prior to the commencement of the “World Tour.” Five Live expended still additional sums in preparing and executing the promotional tour in reliance on the Engagement Contract and in support of its contractual obligations. 39.

On or about September 4, 2010, Daddy Yankee and part of his entourage arrived

in Argentina to begin a promotional tour through various cities, where he made appearances at TV talk shows, radio stations and other marketing events previously arranged and financed by Five Live. 40.

During the promotional tour, local production companies other than Five Live

expressed interest in purchasing four additional shows. Upon information and belief, during the promotional tour, Baldiri instructed Daddy Yankee to advertise not only the six shows promised under the Engagement Contract with Five Live, but also the four additional shows being discussed with other production companies. 41.

In fact, Daddy Yankee thereafter made public statements promoting the four

shows in addition to the six shows that Five Live had contracted for, and describing the tour as a ten-show tour. 42.

At the conclusion of the promotional tour, Baldiri indicated in writing to Plaintiff

De Iraola that Icaro intended to negotiate and execute the necessary contracts for the four additional shows directly with the interested producers. 43.

However, neither Baldiri nor anyone else at Icaro or El Cartel ever followed

through by negotiating agreements with the local producers for the four additional shows that

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Daddy Yankee had just advertised during his promotional tour to Argentina as part of the “World Tour.” 44.

After two of the four producers who had expressed interest declined to proceed,

Baldiri advised Plaintiff De Iraola that Defendants expected Five Live to produce not only the six shows for which Five Live had contracted, but for the four additional shows Daddy Yankee had begun to promote as well. Baldiri further threatened that Daddy Yankee would cancel the tour completely in the event Five Live failed to produce the four additional shows. Reluctantly, Plaintiff De Iraola—to avoid cancellation of the six-show tour—“agreed” to take over responsibility for the production of the four additional shows and to engage in direct negotiations with two of the local producers who agreed to stay on. 4. The 2010 “World Tour” Expands from Six to Ten Concerts 45.

At the conclusion of the September 2010 promotional tour, production of the six

shows subject to the Engagement Contract was well underway. Five Live had launched a fullblown marketing campaign, and tickets for all six shows were already on sale. Five Live had secured and was in the process of securing contracts with all the venues where the six shows would take place and with vendors for related services, including technical equipment and chartered flights. Commencement of the tour was approximately sixty days away. 46.

In light of Baldiri’s demands, and given the extreme time pressures, Plaintiff De

Iraola immediately took steps to commence production of the four additional shows. Under extreme stress, he traveled extensively to the different venues, negotiated contracts with local producers and vendors, and commenced integration of the marketing and logistical efforts already underway for the initial six shows with those of the four additional ones. 47.

Plaintiffs expended substantial sums in this effort.

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48.

At the time that Plaintiffs De Iraola and Five Live engaged in these activities, they

did so in the absence of any new written contract. In fact, the parties had not even reached an agreement as to form or timing of payment of Daddy Yankee’s fee for the four additional shows. 49.

Baldiri and Plaintiff De Iraola did agree on the following dates and venues where

the four additional shows would take place: November 5, 2010. City of Bahía Blanca. Olimpic Stadium; November 10, 2010. City of Mendoza. Bustelo Auditorium; November 14, 2010. City of Comodoro Rivadavia. Huracán Stadium; November 21, 2010. City of Salta. Delmi Stadium. 50.

Around midnight on or about November 1, 2010—only four days prior to the date

originally scheduled for the first of the ten concerts—Baldiri emailed Plaintiff De Iraola a draft contract purporting to reduce to writing the parties’ agreement concerning the foregoing additional shows. 51.

The draft attached to Baldiri’s email communication had been created the day

prior. Its terms were virtually identical to those of the Engagement Contract. 52.

The draft agreement that Baldiri provided to Plaintiff De Iraola was backdated to

October 15, 2010. It provided four due dates for payment of the installments making up the $480,000 contract price, but three of these dates (October 15, 2010, October 25, 2010 and November 1, 2010) had already lapsed. The parties plainly understood that payment would be made prospectively, well beyond the backdated dates contained in the draft contract. 53.

Baldiri instructed Plaintiff De Iraola to sign it and email an electronic copy back

to him immediately.

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54.

Baldiri had engaged for some time in a systematic practice of threatening Plaintiff

De Iraola with cancellation of the entire tour despite the advanced stage of production for each of the ten shows, including nationwide marketing campaigns and ticket sales in various cities across the country. 55.

Under duress and lacking any real option, Plaintiff De Iraola proceeded as Baldiri

instructed and emailed to him a signed copy within the hour. 56.

Neither Baldiri nor anyone else at Icaro or El Cartel ever signed that draft or, for

that matter, any agreement to govern the four additional shows. The draft agreement, signed only by Plaintiff De Iraola, was therefore never made final, and was thus never enforceable as written. 5. President Kirchner’s Sudden Death Forces Rescheduling of Daddy Yankee’s 2010 “World Tour” 57.

On or about October 24, 2010, Plaintiff De Iraola traveled to Bogota, Colombia,

to meet with Baldiri at the latter’s request. De Iraola returned to Buenos Aires on or about October 28, 2010. During that time, Plaintiff De Iraola and Baldiri discussed a proposal by Baldiri to reallocate some of the payments made under the Engagement Contract and apply them to the four additional shows. They did not reach a consensus, as Plaintiff De Iraola did not accept the proposal. 58.

On or about October 27, 2010, Mr. Néstor Kirchner, Argentina’s former President

and spouse to the then-current president, Ms. Cristina F. de Kirchner, passed away unexpectedly. 59.

Among other repercussions of this event, weekend games for the national soccer

league were suspended. This in turn caused many of the proposed venues for Daddy Yankee’s shows to claim the respective stadiums for make-up games.

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60.

Baldiri and De Iraola thereafter agreed to reschedule the “World Tour.” New

dates agreed upon were as follows: November 19, 2010. City of Córdoba; November 20, 2010. City of Tucumán; November 21, 2010. City of Salta; November 23, 2010. City of Rosario; November 25, 2010. City of San Juan; November 26, 2010. City of Mendoza; November 27, 2010. City of Neuquén; November 28, 2010. City of Bahía Blanca; December 3, 2010. City of Comodoro Rivadavia; December 4, 2010. City of Buenos Aires. 61.

On or about November 5, 2010, Icaro issued an official communication

announcing the rescheduled dates. 6. Daddy Yankee Decides to Cancel the 2010 “World Tour” Two Days Prior to His First Scheduled Appearance 62.

Plaintiff De Iraola continued to work on each and every aspect of the logistics

involved in rescheduling each of the ten shows. 63.

During that time Baldiri demanded payment in full of the price of the four

additional shows and intensified his threats to cancel the entire tour, including the six shows governed by the Engagement Contract and for which the contract price of $820,000.00 had already been paid. 64.

Plaintiff De Iraola explained to Baldiri that Five Live would pay the price for the

additional shows by wire to Icaro’s account upon arrival of Daddy Yankee and his crew to Argentina. De Iraola insisted on this because of Baldiri’s repeated threats to cancel the tour without a contractual basis to do so.

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65.

Plaintiff De Iraola began to show physical manifestations of the emotional

distress that Baldiri’s threats had caused him in light of the advanced stage of production for every one of the shows and the pace at which tickets were being sold. Plaintiff De Iraola suffered several incidents of high blood pressure, nosebleeds, bleeding in his eyes and sleep deprivation. 66.

Late in the evening on or about November 16, 2010—three days prior to the

rescheduled first show for the 2010 “World Tour”—Ms. Gonzalez, acting on behalf of El Cartel and Daddy Yankee, sent an email communication to Plaintiff De Iraola and to Baldiri indicating that she would order the cancellation of the tour absent prompt payment of the Artist’s fee for all ten scheduled performances. 67.

On or about November 17, 2010, Plaintiff De Iraola appealed to Ms. Gonzalez

and Baldiri, reiterating his assurances that the funds necessary for payment of the four additional shows were available and ready to be wired to Icaro’s account upon arrival of the Artist and his crew to Argentina. De Iraola even requested that Baldiri allow Ms. Daira Escobar, a production point person employed by Icaro, to travel to Buenos Aires to personally supervise along with Plaintiff De Iraola the electronic transfer of those funds to Icaro’s account even before Daddy Yankee and his crew traveled to Argentina. The funds would take approximately four days to credit in Icaro’s account and, given the time constraints, Ms. Escobar’s personal supervision of the transaction would provide sufficient assurances to Ms. Gonzalez and Baldiri in time for them to release Daddy Yankee’s crew and allow them to travel to Argentina. Ms. Gonzalez and Baldiri declined.

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68.

Early in the evening on or about November 17, 2010, Icaro issued an official

communication to the media announcing the cancellation of all ten of Daddy Yankee’s shows in Argentina. 69.

Neither Baldiri nor Ms. Gonzalez nor anyone else at Icaro nor El Cartel reached

out to Plaintiff De Iraola to communicate to him their decision to cancel the tour. Plaintiff De Iraola instead learned of the cancellation through the media, just like everyone else. 7. El Cartel, Icaro and Baldiri Engage in a Smear Campaign Against Five Live and Ad Hominem Attacks Against Mr. De Iraola 70.

On or about November 17, 2010, Daddy Yankee posted on his and Icaro’s

publicly available websites a press release singling out Plaintiffs De Iraola and Five Live as solely responsible for the cancellation of his Argentina tour. The communication stated, falsely, that Plaintiff De Iraola and his company, Five Live, had failed to pay 40% of “the contract.” This press release has been removed from Daddy Yankee’s web site. See www.daddyyankee.com/news/2010/11/17/por-incumplimiento-en-el-pago-total-de. Similarly, this press release is no longer accessible on Icaro’s web site. Nonetheless, a true and correct copy of the press release, as widely distributed by Icaro via electronic mail, is attached hereto with accompanying translation as Exhibit 2. 71.

The press release made the following false and defamatory statements about

Plaintiffs: (i) Plaintiff De Iraola, producer and party responsible for the concerts in Argentina, was in arrears and owed more than 40% of Daddy Yankee’s fee for the shows; (ii) Defendants had afforded Plaintiff De Iraola every opportunity to pay and offered him different alternative means of complying with his contractual obligations; (iii) Defendants’ goodwill and efforts had been in vain because on the day prior to the scheduled trip to Argentina, Plaintiffs were still in default, and (iv) Plaintiff Five Live, under the direction of Plaintiff De Iraola, had failed to

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adequately perform its contractual obligations under the governing contract. On information and belief, each of these statements was made with the knowledge, consent and approval of Defendants Baldiri, Icaro, El Cartel and Daddy Yankee. 72.

After initial publication on the websites, the press release’s false statements

foreseeably, and as intended, spread throughout the Internet, TV, radio, and other news media, including no fewer than 130 news media outlets, both in the form of direct quotations and in paraphrase. 73.

During the weeks that followed, Baldiri elaborated on the statements contained in

the press release and made new, yet more outrageous, false and defamatory statements to the media. 74.

For instance, Baldiri stated in a November 26, 2010 article that Plaintiff De Iraola

had falsified his signature and had stolen money. Baldiri further declared to the media that Daddy Yankee had been a victim of a fraud perpetrated by Plaintiff De Iraola. A true and correct copy of the press release can be found at http://www.reggaetonea.com/artistas/daddyyankee/estafan-a-daddy-yankee-con-gira-en-argentina.html, and is also attached hereto with accompanying translation as Exhibit 3. A week later, Baldiri reported to the media that local businessmen and producers had also been victims of a deception scheme mounted by Plaintiff De Iraola. See http://www.partedelshow.com.ar/noticia/daddy-yankee-ausente-por-falta-depago. 75.

In another article dated January 3, 2011, Baldiri stated that De Iraola had entered

into contracts on behalf of Five Live with local producers, when in fact he was not associated with Five Live and was not authorized to act on Five Live’s behalf. A true and correct copy of the press release can be found at http://www.sonicomusica.info/2011/01/daddy-yankee-sale-a-

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defenderse/ and is also attached hereto with accompanying translation as Exhibit 4. On information and belief, each of Baldiri’s statements was made with the knowledge, consent and approval of Defendants Icaro, El Cartel and Daddy Yankee. 76.

Baldiri also told local producers who had acquired rights to, or were otherwise

involved in producing, Daddy Yankee’s performances that Plaintiff De Iraola had perpetrated a fraud on them. Baldiri encouraged, and in fact caused them to join him in disparaging Plaintiff De Iraola and Five Live under pretenses of future contracts with Daddy Yankee. Baldiri even provided them with drafts of press releases that the local producers could release to the media. In one exchange, Baldiri complained to some of those local businessmen that they had not been aggressive enough with Plaintiff De Iraola in the media and exhorted them that “we need to hit [De Iraola] hard.” 77.

On information and belief, Baldiri acted at all relevant times on behalf of, and

with the approval, consent and participation of the other Defendants. 8. Five Live Sees Business Decline Precipitously. De Iraola Suffers Severe Emotional Distress and Is Referred to Psychiatric Treatment. 78.

The period following the cancellation of the tour and ensuing smear campaign

was disastrous for both Five Live and De Iraola. The ruining of their reputations took its toll on them in every possible way. 79.

Five Live’s business stopped altogether. Business partners with whom Five Live

had formerly done business, and who had previously discussed entering into potential joint ventures and other projects, chose to avoid Five Live and De Iraola altogether. Ongoing negotiations immediately ceased. When De Iraola reached out to his previous business partners, he was met with silence.

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80.

Even those individuals who were sympathetic to De Iraola personally, and who

would otherwise have liked to do business with him, informed him that they simply could not risk becoming professionally involved with him or his company due to the reputational damage he had sustained. 81.

As for De Iraola personally, he began to experience repeated panic attacks for

which he sought treatment from the emergency room several times (including on the night of the cancellation of the tour). As mentioned in paragraph 65 above, he also began to suffer from high blood pressure due to stress, which caused him to experience nosebleeds, bleeding in his eyes and numbness in his limbs. De Iraola was admitted to the emergency room several times for these complaints. 82.

In the months following the cancellation, De Iraola lived almost entirely confined

to his home, due to debilitating anxiety and fear of public places and travel. He became increasingly depressed and suffered from extreme insomnia. 83.

He sought treatment from a psychiatrist, whom he saw twice a week and who

prescribed for him medication for his depression and anxiety. De Iraola remains under the care of a psychiatrist. 84.

Despite De Iraola’s best efforts to publicize the true facts and to counteract the

negative publicity created by Defendants, business has not resumed for Five Live. COUNT ONE Breach of Contract—Engagement Contract (Plaintiff Five Live Against Defendants Daddy Yankee and El Cartel) 85.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows:

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86.

On June 8, 2010, Plaintiff and Defendants entered into an Artist Engagement

Contract (the “Engagement Contract”), a valid and binding contract supported by valuable consideration. 87.

Pursuant to the Engagement Contract, Five Live, represented by Plaintiff De

Iraola, agreed to purchase Daddy Yankee’s performance services at a series of six concerts to be held in Argentina in November 2010. 88.

Plaintiff has fully (and, at a minimum, substantially) performed all of its

contractual obligations. 89.

In breach of the Engagement Contract, El Cartel and Daddy Yankee canceled the

entire tour, failing to perform at any of the scheduled concerts. 90.

Defendants’ breach of contract proximately caused injury to Plaintiff Five Live in

an amount not less than $75,000. 91.

In addition to the $820,000 contract price that Defendant Icaro has failed to

reimburse, Plaintiff Five Live also incurred over $1 million in out of pocket expenses in preparation for the concerts (for such items as equipment, lighting, audio, technical support, a private jet chartered for Daddy Yankee and plane tickets for Daddy Yankee’s entire staff of over 30 members), and then incurred still further expenses in the process of unwinding the concert arrangements and refunding tickets to customers. 92.

The last-minute cancellation of the contracted-for tour also caused reputational

harm to Plaintiff Five Live, thereby proximately causing a precipitous decline in business for Five Live.

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93.

Further, Five Live has suffered substantial damages in the form of lost profits,

which it would otherwise have earned from the sale of tickets to the shows and merchandise sold at the shows. 94.

Five Live is therefore entitled to a judgment in an amount to be determined at

trial, inclusive of pre- and post-judgment interest. 95.

Five Live is further entitled to punitive damages in an amount to be determined at

trial, together with pre-judgment and post-judgment interest, as Defendants’ failure to perform was willful and in bad faith. WHEREFORE, Plaintiff demands a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

COUNT TWO Breach of Contract—Second Contract (Plaintiff Five Live Against Defendants Daddy Yankee and El Cartel) 96.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 97.

On November 1, 2010, Baldiri emailed Plaintiff De Iraola an Artist Engagement

Contract (the “Second Contract”), which was backdated to October 15, 2010. While De Iraola signed and returned the Second Contract that same night, it was never executed by the Defendants and never became binding as written. 98.

A valid and binding contract supported by valuable consideration nonetheless was

formed between Plaintiff Five Live and Defendants Daddy Yankee and El Cartel by way of written and oral communications between Plaintiff De Iraola, acting on behalf of Plaintiff Five Live, and Baldiri, acting for Icaro on behalf of El Cartel and Daddy Yankee, and both parties’

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course of conduct, namely, Baldiri’s actions forcing Five Live to assume responsibility for the four additional shows, and Five Live’s substantial performance through extensive production efforts and expenditures. 99.

The November 1, 2010 draft reflects some general aspects of the parties’ oral

agreement, namely, Daddy Yankee’s undertaking to perform at four shows in addition to the six shows under the Engagement Contract at specified dates and venues in consideration for payment by Five Live of a total of $480,000 for all four shows. 100.

The November 1, 2010 draft does not, however, reflect the parties’ understanding

as to the form and timing of Five Live’s payment of the agreed-upon consideration. To the contrary, the fact that three of the four installments identified in the November 1, 2010 draft were backdated demonstrates that the draft did not reflect the parties’ full agreement and understanding. 101.

In fact, on or about November 10, 2011, Baldiri purportedly extended a loan to

Plaintiff De Iraola, acting on behalf of Five Live, of $100,000 to be applied to the $480,000 contract price. The parties agreed orally that the balance would be paid upon Daddy Yankee’s arrival in Argentina. 102.

Plaintiff Five Live has fully (and, at a minimum, substantially) performed all of

its contractual obligations. Specifically, Plaintiff Five Live performed under the Second Contract by making all necessary arrangements, bearing all production costs for the concerts, and ensuring that full payment would be made. 103.

Just two days before the first scheduled concert, Ms. Gonzalez and Baldiri

repudiated and breached the contract on behalf of Icaro and Daddy Yankee, announcing on Defendants’ behalf that Daddy Yankee would not travel to Argentina to perform at the

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concerts. They stated that Daddy Yankee would not perform because Plaintiffs had failed to make payment in full pursuant to the Second Contract, despite the parties’ agreement that such payment would be received in Argentina upon Daddy Yankee’s arrival. Plaintiffs were forced to cancel the concerts. 104.

As a result of Defendants’ breach of contract, Five Live has suffered damages.

As with the Engagement Contract, Plaintiff incurred significant out of pocket expenses in preparation for the concerts, and yet additional expenses in subsequently unwinding the concert arrangements and refunding the tickets to customers. Plaintiff has also suffered damages in the form of lost profits, which it would otherwise have earned from the sale of tickets to the shows and merchandise sold at the shows. 105.

Further, Defendants’ breach of contract and failure to appear for the scheduled

concerts has caused great reputational harm to Five Live, causing others in the industry to shun the company and thus eliminating business opportunities and engagements. 106.

Five Live is therefore entitled to a judgment in an amount to be determined at

trial, together with pre-judgment and post-judgment interest. 107.

Five Live is further entitled to punitive damages in an amount to be determined at

trial, together with pre-judgment and post-judgment interest, as Defendants’ failure to perform was willful and in bad faith. WHEREFORE, Plaintiff demands a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

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COUNT THREE Unjust Enrichment—In the Alternative to Breach of the Engagement Contract (Plaintiff Five Live Against Defendants Daddy Yankee and El Cartel) 108.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 109.

Five Live conferred a substantial benefit on Defendants Daddy Yankee and El

Cartel by paying them the contract price of $820,000.00, pursuant to the Engagement Contract. 110.

Defendants Daddy Yankee and El Cartel expressly requested that Five Live pay

this money, and were well aware that Five Live was doing so with the expectation that Daddy Yankee would perform at the six concerts listed in the Engagement Contract. 111.

Defendants Daddy Yankee and El Cartel accepted and retained the payments

made to them by Five Live. 112.

Defendants Daddy Yankee and El Cartel have not reimbursed Five Live for these

payments. 113.

Given that Defendants Daddy Yankee and El Cartel requested that Five Live

make these payments, and then at the very last moment, cancelled the concerts for which Five Live had paid, it would be inequitable for Defendants Daddy Yankee and El Cartel to retain the benefit conferred on them by Five Live. 114.

Five Live is therefore entitled to a judgment in the amount of $820,000.00,

together with pre-judgment and post-judgment interest. WHEREFORE, Plaintiff demands a judgment of $820,000.00, together with prejudgment and post-judgment interest.

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COUNT FOUR Quantum Meruit—In the Alternative to Breach of the Second Contract (Plaintiff Five Live Against Defendants Daddy Yankee and El Cartel) 115.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 116.

Five Live conferred a substantial benefit on Defendants by organizing and

assuming the production costs for four concerts in addition to the six concerts for which Five Live contracted in the Engagement Contract. 117.

Defendants expressly requested that Five Live undertake this work, and were well

aware that Five Live was doing so with the expectation that Daddy Yankee would perform at the four concerts. 118.

Defendants knowingly and voluntarily accepted and retained the benefits

conferred on them by Five Live, and, indeed, actively pressured Plaintiffs to perform the work and make the necessary expenditures so that Daddy Yankee could perform at these concerts. 119.

Defendants have not reimbursed Five Live for any of the expenses they incurred

or for the value of the work Five Live performed in arranging the four additional concerts. Given that Defendants themselves requested that Five Live incur these expenses and perform this work, and then at the very last moment, cancelled the concerts for which the work was performed, it would be inequitable for Defendants to retain the benefit conferred on them by Five Live. 120.

Five Live is therefore entitled to a judgment in an amount to be determined at

trial, together with pre-judgment and post-judgment interest. WHEREFORE, Plaintiff demands a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

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COUNT FIVE Defamation (Plaintiffs Five Live and De Iraola Against Daddy Yankee, El Cartel, Icaro and Baldiri) 121.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 122.

Prior to November 17, 2010, Plaintiffs Five Live and De Iraola enjoyed strong,

favorable reputations, both overall and specifically in the production industry. Five Live had invested heavily in positioning its brand, and had grown exponentially in the previous years, accruing an impressive track record of successful high-profile show productions. 123.

On or about November 17, 2010, Defendants Daddy Yankee, El Cartel, Icaro and

Baldiri published a written press release on Daddy Yankee’s and Icaro’s publicly available websites, wrongly naming Plaintiffs De Iraola and Five Live as the parties solely responsible for the eleventh-hour cancellation of Daddy Yankee’s Argentina tour. The press release referred to Plaintiffs by name throughout. 124.

The press release was conspicuous to any and all persons visiting the websites

containing the press release and, as intended, quickly spread throughout the Internet, TV, radio, and other news media. 125.

Baldiri subsequently made new and yet more outrageous false and defamatory

written and oral statements about Plaintiff De Iraola and Five Live to the media, including without limitation to those statements referenced in paragraphs 70–77 above. Baldiri further instigated, and effectively caused, local businessmen and producers to make similar defamatory statements to the media in exchange for promises of future business. On information and belief, Baldiri acted on behalf and with the approval, consent and participation of the other Defendants.

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126.

To this day, a Google search of either Plaintiff De Iraola or Plaintiff Five Live

will yield numerous articles that portray them as culprits in a scandal that defrauded Daddy Yankee and his fans. 127.

The statements contained in the press release and subsequent news articles

regarding the Plaintiffs are false. 128.

Defendants Daddy Yankee, El Cartel, Icaro and Baldiri’s publication of these

statements to others was an unprivileged publication. 129.

Defendants Daddy Yankee, El Cartel, Icaro and Baldiri had no reasonable factual

basis to make these statements, and made these statements intentionally, deliberately, knowing them to be false, with reckless disregard as to the statements’ truth or falsity, and with malice. 130.

Defendants Daddy Yankee, El Cartel, Icaro and Baldiri made these defamatory

statements irrespective of the special harm publication of such statements would cause and did cause. 131.

Plaintiffs have suffered damages as a direct and proximate result of Defendants’

defamatory statements. The cited and similar defamatory statements by Defendants have proximately caused the ruination of Plaintiffs’ previously excellent reputations, and have further proximately caused Plaintiffs’ business to virtually disappear. 132.

Defendants’ fault in publishing these defamatory statements amounts to at least

negligence on their part. 133.

As a result of Defendants’ defamatory statements, Plaintiffs have been shunned

by many individuals and entities with whom they had previously done business, have lost sales and business opportunities, and have experienced difficulty in obtaining credit. Companies that would otherwise be interested in doing business with Plaintiffs have elected not to do so

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specifically because of their concerns over the negative statements in the media. For example, a leading international firm with operations in multiple cities across North and South America, Europe, South Africa, Asia and Australia and which is engaged in the provision of resources and services for the concert touring, corporate events, trade shows, special events, theater, television and film industries had expressed interest in entering a joint venture with Plaintiffs, but has stated more recently that it cannot and will not do so until Plaintiffs “clear their name.” 134.

While Five Live had expected to earn approximately $2 million annually prior to

Defendants’ public relations campaign against Plaintiffs, Five Live’s business has virtually disappeared as a direct and proximate result of Defendants’ defamatory statements. 135.

Further, Plaintiff De Iraola has suffered substantial humiliation and emotional

distress as a result of the defamatory statements, as set forth in more detail below at paragraphs 150–160, incorporated herein by reference. 136.

Plaintiffs are therefore entitled to a judgment in an amount to be determined at

trial, together with pre-judgment and post-judgment interest. 137.

Because Defendants willfully and intentionally made the defamatory statements

with malice toward Plaintiffs, Plaintiffs are also entitled to a judgment inclusive of punitive damages in an amount to be determined at trial, together with pre-judgment and post-judgment interest. WHEREFORE, Plaintiffs demand a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

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COUNT SIX Injurious Falsehood (Plaintiffs Five Live and De Iraola Against Daddy Yankee, El Cartel, Icaro and Baldiri) 138.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 139.

Plaintiff De Iraola, as president and majority shareholder of Five Live, has a

property interest in Five Live’s commercial success. 140.

Plaintiff Five Live had commercial relationships and interests in tangible future

business opportunities. 141.

As described above, Defendants made statements in a press release and in other

media including Internet, TV and radio. 142.

These statements are such that they would be (and in fact were) understood as

disparaging to Plaintiff De Iraola and his business, Plaintiff Five Live. 143.

By publication of the press release on Daddy Yankee’s and Icaro’s publicly

available websites, and by making statements in other public fora such as TV, radio and Internet news articles, Defendants Daddy Yankee, El Cartel, Icaro and Baldiri published, communicated, and disseminated the statements to third parties. 144.

As set forth above, these statements were false.

145.

At the time Defendants Daddy Yankee, El Cartel, Icaro and Baldiri made and

published the statements, they knew the statements were false or demonstrated a reckless disregard for the truth or falsity of the statements. 146.

Defendants Daddy Yankee, El Cartel, Icaro and Baldiri intentionally and

maliciously published these statements, and thereby intentionally interfered with Plaintiff De Iraola’s and Plaintiff Five Live’s economic relations and property interests.

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147.

As a direct and proximate result of Defendants’ publication of the statements,

Plaintiffs De Iraola’s and Five Live’s property rights have been disparaged and slandered. Since the publication of the press release and other media statements, Five Live’s revenues have dropped from over $2,000,000 between the date of its incorporation in 2009 and June 2010, to virtually zero. This loss of business coincides directly with, and is the proximate result of, the publication of the defamatory statements, and no other explanation for that dramatic drop in business exists. Plaintiffs have suffered foreseeable damage to their business interests from Defendants’ disparagement reflecting upon their character and the manner in which they conduct their business. Defendants’ statements were a substantial factor in these losses. 148.

Plaintiffs are therefore entitled to a judgment in an amount to be determined at

trial, together with pre-judgment and post-judgment interest. WHEREFORE, Plaintiffs demand a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

COUNT SEVEN Intentional Infliction of Emotional Distress (Plaintiff De Iraola Against Defendants El Cartel, Icaro and Baldiri) 149.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows: 150.

From the very beginning of Plaintiff De Iraola’s dealings with Baldiri relating to

Daddy Yankee’s November 2010 tour, Baldiri behaved in an abusive way to Iraola, frequently threatening to cancel the tour if his extra-contractual demands were not satisfied. 151.

As Plaintiffs continued to pay Icaro and El Cartel in support of Five Live’s

contractual obligations, and as Plaintiffs invested yet additional sums toward preparation for the concerts, Defendants understood that they gained even more leverage on Plaintiffs because

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Plaintiffs became more reliant on the concerts to realize their investment. Indeed, if the concerts were cancelled, Plaintiffs would not only lose the substantial sums already invested and forego any economic expectation that may have arisen from production of such a massive undertaking, but Plaintiffs would also face a significant reputational loss due to the advanced stage of marketing, production and ticket sales and numerous claims by vendors and local producers. 152.

After the entire tour was postponed due to Kirchner’s death, Baldiri took

advantage of the delay to pressure Plaintiffs for yet more payments. Baldiri continued to threaten cancellation of the entire tour. 153.

As a result of Defendants’ repeated threats and bad faith conduct, Plaintiff De

Iraola began to suffer from high blood pressure and from extreme anxiety. 154.

Upon cancellation of the tour on November 17, 2010, Baldiri launched the above-

described smear campaign. On information and belief, this public relations campaign against Plaintiffs was launched on behalf and with the approval, consent and participation of the other Defendants. 155.

In this smear campaign, Baldiri issued press releases and media statements

attributing the cancellation of the concerts to Five Live and to De Iraola personally, stating falsely that De Iraola had behaved fraudulently and acted in default of his contractual obligations. 156.

Baldiri also lured various Argentine businessmen and producers into spreading in

the local media Baldiri’s knowingly false and reckless allegations of fraud and theft against Plaintiff De Iraola and his company, Five Live, in exchange for promises of future business.

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157.

The sum total of Baldiri’s intentional and outrageous behavior—months of threats

and extortion, followed by the eleventh-hour cancellation of a massive concert tour, capped with a systematic public smear campaign targeting De Iraola’s business and his professional reputation—has caused De Iraola very severe emotional distress. 158.

Defendants’ wrongful conduct proximately caused De Iraola to suffer extreme

distress, as well as high blood pressure, nosebleeds, bleeding in his eyes and numbness in his limbs. Plaintiff De Iraola was admitted to the emergency room on several occasions due to these problems in this time period. 159.

At the time of the cancellation, De Iraola also began to experience recurrent panic

attacks, which have led him to seek and obtain treatment in the emergency room as well as regular treatment and medication from a psychiatrist. 160.

De Iraola has also experienced extreme insomnia and depression as a result of his

emotional distress. Following the cancellation, he spent several months confined to his home. He remains under the care of a psychiatrist and is taking medication for his anxiety and sleep deprivation. 161.

Plaintiff De Iraola is therefore entitled to a judgment in an amount to be

determined at trial, together with pre-judgment and post-judgment interest. WHEREFORE, Plaintiff demands a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

COUNT EIGHT Violation of Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (Plaintiff Five Live Against All Defendants) 162.

Plaintiffs incorporate by reference paragraphs 1 through 84 as if fully set forth

herein, and further state as follows:

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163.

Five Live contracted in the Engagement Contract to purchase the right to promote

and sell tickets to a series of six Daddy Yankee concerts in Argentina. Five Live agreed to the purchase price of $820,000 on the basis of Defendants’ explicit representation that (1) Daddy Yankee would travel to Argentina and perform at these concerts; and (2) if Daddy Yankee, for reasons attributable to him, did not so perform, that Five Live would receive a refund of the purchase price. 164.

As described above, Defendants failed to act in good faith. To the contrary,

Defendants used their leverage to extort extra-contractual concessions under duress, repeatedly threatening Five Live that its failure to comply with Defendants’ whims would prompt Defendants to cancel the entire 2010 Tour. 165.

Consistent with their pattern of abusive conduct, Defendants essentially ordered

Five Live to assume responsibility—and all of the associated costs— of four more concerts in addition to the first six. Defendants did so knowing that Five Live would have no choice but to agree, as Five Live had already invested so much into the project and would lose everything if Defendants followed through on their threats to cancel. 166.

Further, Defendants caused Five Live to incur unnecessary expenses by providing

incomplete traveling lists, resulting in costly changes to flight arrangements. Ms. Gonzalez decided at the very last moment that she and Daddy Yankee would refuse to travel in the private jet reserved for them per the Engagement Contract, and instead demanded that Five Live purchase first-class tickets on a commercial airline for them. 167.

Then, after months of threats, and with full knowledge that they had caused Five

Live to incur enormous expenses in preparation for a ten-concert tour, and that cancellation of the tour would mean the loss of Five Live’s entire investment and the destruction of its

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reputation going forward, Defendants unilaterally and publicly declared—just two days before the first concert—that Daddy Yankee would not travel to Argentina to perform at the concerts, based on the spurious reason that Five Live had failed to pay “40% of the contract.” They also failed to refund any of Five Live’s money. 168.

Defendants’ unjustifiable cancellation of the concerts on the penultimate eve of

the tour, especially in light of their exploitation of Five Live’s vulnerability, their continual harassment of Five Live and their knowledge of the disastrous consequences that cancellation would have, constitutes oppressive, unscrupulous and substantially injurious conduct. 169.

Further, Defendants’ public campaign against Five Live, including their deliberate

making of slanderous and libelous statements alleging that Five Live and its principal, Plaintiff De Iraola, engaged in immoral and even criminal conduct, together with their manipulation of industry producers to lure them into disseminating the false information and to “hit [De Iraola] hard,” likewise constitute oppressive, unscrupulous and substantially injurious conduct. 170.

Defendants’ conduct constitutes an “unfair act[] or practice[] in the conduct of

any trade or commerce,” in violation of FDUTPA. 171.

Plaintiff Five Live has suffered actual damages as a direct and proximate result of

Defendants’ unlawful conduct. 172.

Five Live paid the $820,000 purchase price in full, by making $796,895 in direct

payments and by application of a credit to make up the remainder of the purchase price, as described in paragraph 29 above. 173.

Because Defendants cancelled the concerts, Plaintiff Five Live effectively

purchased a product that was entirely worthless—namely, the right to promote and sell tickets to concerts that in fact could not take place.

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174.

Five Live has also suffered damages in the form of the expenses it incurred in

preparation for the concerts, in lost profits, and in expenses incurred in the aftermath of the cancellation. Five Live purchased the right to promote and sell tickets and merchandise at the concerts with the reasonable expectation that it would be able to earn a profit on the sale of such tickets and merchandise. Because of Defendants’ unjustified cancellation of the concerts, the money Five Live spent to prepare for the concerts has been entirely wasted, Five Live has not been able to earn a profit by selling tickets and merchandise, and Five Live has been forced to incur even further expenses in the course of refunding tickets to customers and unwinding the concert arrangements. 175.

Plaintiffs are therefore entitled to a judgment in an amount of actual damages to

be determined at trial, but in no event less than $820,000, together with pre-judgment and postjudgment interest and attorney's fees and court costs. WHEREFORE, Plaintiffs demand a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest and attorney's fees and court costs.

COUNT NINE Civil Conspiracy to Defame (Plaintiffs De Iraola and Five Live Against All Defendants) 176.

Plaintiffs incorporate by reference paragraphs 1 through 84 and paragraphs 121

through 137 as if fully set forth herein, and further state as follows: 177.

Upon agreement amongst themselves, Defendants Daddy Yankee, El Cartel,

Icaro, and Baldiri, and others unknown, conspired to defame and cause injury to Plaintiffs Five Live and De Iraola. 178.

The combination of Defendants Daddy Yankee, El Cartel, Icaro, and Baldiri

resulted in false and defamatory statements being made against Plaintiffs De Iraola and Five Live, which include but are not limited to statements that Plaintiffs had failed to comply with

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their contractual obligations, that De Iraola had falsified Baldiri’s signature and stolen money, that De Iraola had acted on Five Live’s behalf without having authority to do so, and that Plaintiffs were entirely responsible for Daddy Yankee’s failure to perform at the concerts. 179.

Defendants made or caused to be made, among others, the following defamatory

statements: (i) Plaintiff De Iraola had falsified Baldiri’s signature and had stolen money; (ii) Daddy Yankee had been a victim of a fraud perpetrated by Plaintiff De Iraola; and (iii) De Iraola had entered into contracts on behalf of Five Live with local producers even though he allegedly was not affiliated with Five Live and was not authorized to act on Five Live’s behalf; (iv) Plaintiff De Iraola owed and refused to pay more than 40% of Daddy Yankee’s fee for the shows; (v) Defendants had afforded Plaintiff De Iraola every opportunity to pay and offered him different alternative means of complying with his contractual obligations; (vi) Defendants’ goodwill and efforts had been in vain because on the day prior to the scheduled trip to Argentina, Plaintiffs were still in default; and, (vii) Plaintiff Five Live, under the direction of Plaintiff De Iraola, had failed to adequately perform its contractual obligations under the governing contract. 180.

Defendants also caused local producers, with the promise of future contracts, to

join them in disparaging Plaintiff De Iraola and Five Live. Baldiri even provided them with drafts of press releases that the local producers could release to the media. 181.

Defendants Daddy Yankee, El Cartel, and Icaro committed at least one overt act

in pursuance of the conspiracy to defame and cause injury to Plaintiffs Five Live and De Iraola, including, among others, the publication of false and disparaging statements wrongly accusing Plaintiffs of immoral and criminal acts in pursuit of their business interests.

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182.

Defendants Daddy Yankee, El Cartel, Baldiri and Icaro each had a personal stake

in the conspiracy to defame De Iraola and Five Live separate from that of any single corporate entity. 183.

The combination of Daddy Yankee, El Cartel, Icaro, and Baldiri in their

defamatory statements about De Iraola and Five Live amounts to a “black listing” of De Iraola and Five Live in the entertainment industry so as to permanently deprive De Iraola and Five Live of a means of earning a livelihood. 184.

Plaintiff De Iraola has been damaged as a direct and proximate result of the acts

done by Daddy Yankee, El Cartel, Icaro, and Baldiri in the furtherance of the conspiracy. 185.

Plaintiff Five Live has been damaged as a direct and proximate result of the acts

done by Daddy Yankee, El Cartel, Icaro, and Baldiri in the furtherance of the conspiracy. 186.

Defendants Daddy Yankee, El Cartel, Icaro, and Baldiri are jointly and severally

liable for the damages they have caused Plaintiffs Five Live and De Iraola as a direct and proximate result of their civil conspiracy to defame De Iraola. 187.

Plaintiffs Five Live and De Iraola are therefore entitled to a judgment in an

amount to be determined at trial, together with pre-judgment and post-judgment interest. 188.

Plaintiffs Five Live and De Iraola are further entitled to punitive damages in an

amount to be determined at trial, together with pre-judgment and post-judgment interest, as a consequence of their civil conspiracies. WHEREFORE, Plaintiffs demand a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and post-judgment interest.

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Case 1:11-cv-24142-PAS Document 1 Entered on FLSD Docket 11/16/2011 Page 39 of 40

JURY DEMAND Pursuant to Federal Rule of Civil Procedure 38, Plaintiffs hereby demand a trial by jury of these claims.

PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray as follows: A. On the first cause of action, for a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and postjudgment interest; B. On the second cause of action, for a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and postjudgment interest; C. On the third cause of action, for a judgment of $820,000.00, together with pre-judgment and post-judgment interest; D. On the fourth cause of action, for a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest; E. On the fifth cause of action, for a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and postjudgment interest; F. On the sixth cause of action, for a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest; G. On the seventh cause of action, for a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest; H. On the eighth cause of action, for a judgment in an amount to be determined at trial, together with pre-judgment and post-judgment interest and attorney's fees and court costs; I. On the ninth cause of action, for a judgment comprising compensatory and punitive damages in an amount to be determined at trial, together with pre-judgment and postjudgment interest. J. For such other and further relief as the Court deems just and proper.

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Case 1:11-cv-24142-PAS Document 1 Entered on FLSD Docket 11/16/2011 Page 40 of 40

Dated: November 16, 2011

Respectfully submitted, ASSOULINE & BERLOWE, P.A. 3250 Mary Street, Suite 308 Miami, Florida 33133 Telephone: (305) 567-5576 Facsimile: (305) 567-9343 By:

/s/ Peter E. Berlowe Peter E. Berlowe (FBN 143650) Daniel E. Vielleville (FBN 940496)

WINSTON & STRAWN LLP Eric W. Bloom* Tomás Leonard* Margaret Ciavarella* 1700 K Street N.W. Washington, D.C. 20006-3817 Tel: (202) 282-5000 Fax: (202) 282-5100 [email protected] [email protected] [email protected] *Motions for Pro Hac Vice to be filed this week Attorneys for Plaintiffs Five for Entertainment, S.A., d/b/a Five Live Entertainment, and Diego Hernán de Iraola

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