Music Download Lawsuit: John Deep Declaration

I, John A. Deep, the undersigned declare:

1. I am the plaintiff in the matter, Deep v. The Recording Industry, et al., Case No. 1:05-cv-205, which I filed as an adversary proceeding in the United States Bankruptcy Court of the Northern District of New York, on February 11, 2004. I am also named as a party to the matter In re Aimster Copyright Litigation, MDL No. 1425, transferred to the Northern District of Illinois on November 16, 2001. I am also the debtor-in-possession in the bankruptcy case In re John A. Deep, Case No. 02-11552, filed in the United States Bankruptcy Court of the Northern District of New York on March 11, 2002, and now closed. I make this declaration in support of my Motion for Order to Show Cause re Sanctions. Unless otherwise indicated, I know all of the following facts of my own personal knowledge and, if called and sworn as a witness, could and would competently testify thereto.

2. On November 15, 2000, David Boies wrote a letter to me on the letterhead of the law firm of Boies, Schiller and Flexner or “Boies-Schiller.”

3. Attached hereto as Exhibit 1 is a true and correct copy of a letter addressed to me, signed by David Boies and dated November 15, 2000.

4. The letter refers to the receipt of “Datamine’s 15% equity interest.” The letter concludes, “I look forward to working with you and your team.”

5. On December 13, 2000, David Boies flew to Albany, New York, to attend a meeting with me ...

20. Over the next several months, Trans World Entertainment, Robert Higgins and I did in fact work together, in a series of meetings at the Trans World Entertainment offices and during a trip to Chicago to consult with the firm Diamond Cluster, by sharing control and expenses in our common interest according to the terms that I had promised Robert Higgins I would consent to, through my meeting with Bill Duker.

21. However, during my work with Trans World Entertainment, I soon discovered that the payments that Trans World Entertainment’s vendors made to “special purpose” entities such as Media Logic far exceeded any measurable fair value that the vendors received in return. Instead, I learned, these excessive payments were an indirect or “off-balance sheet” source of available cash flow for Trans World Entertainment, and equaled Trans World Entertainment’s $70 million in profit in the year 2000.

22. I also learned that Trans World Entertainment’s music and movie vendors profited from the scheme by using the payments as kickbacks to coerce Trans World Entertainment to manipulate and inflate reporting of the vendors’ revenue and profit...

38. Attached hereto as Exhibit 5 is a true and correct copy of a Securities Purchase Agreement involving BuddyUSA Inc. and Trans World Entertainment Corp.
39. Attached hereto as Exhibit 6 is a true and correct copy of my signature to the same Securities Purchase Agreement involving BuddyUSA Inc. and Trans World Entertainment Corp.
40. Attached hereto as Exhibit 7 is a true and correct copy of the signature of John Sullivan, Chief Financial Officer of Trans World Entertainment Corp., to the same Securities Purchase Agreement.
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47. I expected that Boies-Schiller would represent my interests in the Trans World Entertainment – BuddyUSA transaction, and advise me of any conflicts of interest.
48. However, neither David Boies nor Boies-Schiller made any disclosure to me about Boies-Schiller’s role as lawyers representing Trans World Entertainment as a defendant in antitrust litigation.