The smoke is still clearing from the long-awaited verdict in the Craig Wright Bitcoin creator trial in Miami. He stood to lose a large and damaging portion of his wealth and life’s work and, as the defendant in the Kleiman vs. Wright trial, can claim any successful defense as a win.
The plaintiffs did “win” on one relatively minor count. But even that could still be taken away from them. More on that below.
Dr. Wright and his inner circle had been publicly confident of a total victory, but to other observers the win surpassed what they expected. The evidence might be too confusing for a jury of ordinary people, they worried—or that this could lead them to decide the case on likeability and feelings, which carried potential danger. A deadlocked jury might compromise by sharing the money around without leaning too heavily toward one side, giving an ambiguous result that neither side could use for PR value.
In the end, the jury agreed that no partnership existed between Dr. Wright and his friend, the late Dave Kleiman. They found against the plaintiff on all counts, and thus awarded neither compensatory nor punitive damages. That was the main prize in this trial, and Dave Kleiman’s estate (represented by Ira Kleiman and untold others with a stake in the suit) gets nothing.
Why are the plaintiffs claiming a victory?
The plaintiff’s side, led by attorney Vel Freedman, and its supporters have attempted to spin their loss as some kind of victory. At the very least, they’ve tried to insinuate that the one count on which the jury decided against Dr. Wright—the matter of assets he was accused of improperly “converting” from the company W&K Info Defense Research LLC—was their win.
Kleiman v. Wright update: We are incredibly gratified the jury found Craig Wright has to pay our client, W&K, $100,000,000 for the bitcoin-related assets he stole. This is a great win for our client and for justice!
— Vel Freedman (@VelvelFreedman) December 6, 2021
Even if that matter were now settled (it’s not), $100 million for W&K and not Dave Kleiman’s estate would not be the big win the plaintiffs were looking for. The defense had made past settlement offers that far surpassed that figure, and had been rejected. The plaintiffs wanted billions of dollars, possibly hundreds of billions, and a result that completely discredited Dr. Wright’s reputation.
you are pathetic small man Vel…you lost and you will continue to lose. I was in multiple settlment rounds as a business advisor and you are lying. The last settlement numbers just a few weeks back was multiple billions and you talked Ira out of it on behalf of you real bosses.
— Calvin Ayre (@CalvinAyre) December 7, 2021
$100 million to the W&K entity was not that result. Not only would it be pocket change for a man claiming to have a 1+ million bitcoin fortune, it wasn’t even awarded to the Kleiman estate. Moreover, Dr. Wright’s reputation remains intact and, if anything, it has been solidified by demonstrating that an impartial jury of non-Bitcoiners found his testimony of being the creator of Bitcoin as Satoshi Nakamoto believable.
The damage this has done to the anti-Craig Wright army is massive. A settlement would have netted the plaintiffs a guaranteed large amount of money, possibly some intellectual property, and left Dr. Wright’s side of the story unproven by denying it a decisive jury result. Instead, Ira’s camp bet the farm on a court trial, and lost it.
The attempted social media spin on such a disastrous result looks both desperate and unprofessional, serving only to show the plaintiffs are taking their loss hard and lashing out at anything they can.
In the end, even that small and over-spun “victory” may not matter.
The curious and unresolved matter of W&K
What make it worse is the matter of who owns W&K, and who is authorized to act on that company’s behalf. That needs some clarifying, as it further tempers the plaintiffs’ artificial enthusiasm and casts serious doubt on who, if anyone, would receive a share of the $100 million the jury ordered.
It’s confusing because W&K Info Defense Research is listed as a plaintiff in the trial. Ira Kleiman is acting on W&K on his late brother’s behalf, and therefore W&K was Freedman’s client.
The jury found Dr. Wright had improperly “converted” W&K’s assets in Australia some years ago, and awarded the $100 million amount. However, what’s in dispute is whether Ira Kleiman even had the authority to represent W&K, hire counsel and launch legal action on the company’s behalf. If he didn’t, then it was Ira Kleiman who acted improperly, he could not have launched that part of the lawsuit, and the jury’s verdict on that matter is nullified.
Dr. Wright’s ex-wife Lynn Wright filed a petition under Florida’s probate law in July 2020, stating that Ira Kleiman had no authority to act on behalf of W&K Info Defense. W&K began in 2011 with Lynn Wright, Dave Kleiman and Craig Wright as shareholders. Testimony in the trial stated that Craig Wright transferred a further portion of the company to his wife’s name in 2011, as part of their divorce settlement. This would make her the sole living authority with a controlling interest in W&K.
Personal assets and company distributions might be inheritable but company officerships aren’t, so Dave’s death would have ended his (and his estate’s) involvement in management decisions on how to run the company.
But wait, there’s more: Lynn Wright may even have further claim for damages against Ira Kleiman. If (as suggested in testimony) he erased hard drives containing W&K company assets, he is likely to face another lawsuit, where Lynn Wright is the plaintiff and Ira Kleiman the defendant. Ira is already being sued by Ramona Ang in her capacity as trustee for destroying the Tulip Trust’s property which he admitted to doing in testimony he offered during the Kleiman v Wright case. A judgment against Ira Kleiman in either case would mean he not only bet the farm and lost, but could end up losing more than the farm.
Any potential additional Lynn Wright suit against Ira Kleiman would be a completely separate case. First, though, a court will decide if his case on behalf of W&K against Dr. Craig Wright was valid. There should be an update to the status of Lynn’s case against Ira Kleiman very soon now that the Kleiman v Wright case has concluded.
Ideally, this matter would have prevented the W&K portion of Ira Kleiman’s case from even happening and saved all parties a lot of time and money. But because Lynn Wright’s petition came (relatively) late in the game, the court ruled in December 2020 to postpone a judgment on it until the main part of the case was resolved. At the time, the trial date was expected to be far earlier than November 2021.
The main case is over now. While any dispute between Dr. Wright and Dave Kleiman’s estate is settled, the parties must now wind back the clock on the W&K Info Defense portion and battle it out. This time, Ira Kleiman and his team don’t have much advantage.
Like Wile E. Coyote in an ill-fated pursuit of the Roadrunner, the Kleiman v Wright plaintiffs might find themselves not only losing the battle, but not realizing they’ve run off a cliff and are trying to stand on thin air. But the law is not a cartoon, and Kleiman won’t have endless chances.
Check out all of the CoinGeek special reports on the Kleiman v Wright YouTube playlist.
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