Lewan Rossi interview of May, 2016

This recent Lewan interview and comments on it led me to look back at an older one:

Rossi makes offer on Swedish factory building – plus more updates

Last week, Andrea Rossi made a visit to Sweden, and apart from meeting with the team of professors in Uppsala, with me and other persons, he made a trip from Stockholm to the south of Sweden to have look at a 10,000 square meter factory building for sale. The day after, assisted by his Northern Europe partner and licensee Hydrofusion, Rossi made an offer on the building in the order of USD 3 to 5 million. Negotiations are now ongoing.

This was before the IH Answer in Rossi v. Darden revealed that Rossi claimed to IH, in 2012, that he had created a fake test for Hydro Fusion to get out of his agreement with them. One wonders how Hydro Fusion reacted when they found out, assuming they did. Be that as it may, it seems clear that Lewan reports what Rossi tells him as fact, without verification. To be sure, perhaps he did verify, but … it seems unlikely. Then Lewan does not follow up. What happened to this deal? When an actual offer is made, normally there is a deposit put up. Or was this a real offer, or just an idea?

There are many “updates” reported in this interview. What else was there and how does it all look now, with far more having become public?

Even buying a factory building is no proof that production will start. Critics, accusing Rossi for being a fraudster, will assume that it could be a way to attract investors, but I honestly wouldn’t expect a fraudster to make use of such expensive schemes. Especially not since it would be quite fine just getting away with 11.5M without further trouble.

This is a classic argument on Planet Rossi. “I wouldn’t expect.” “Fraudster” is not well defined. Lewan’s expectation is an ungrounded fantasy. If a fraudster is someone who induces people to do what he wants by misleading them, there is plenty of evidence that Rossi has done that (including that Hydro Fusion affair, regarding which Lewan has direct knowledge of).

IH obviously didn’t expect Rossi to sue them, he’d have to be crazy. Yes. He would. However, maybe he gained something, he is now claiming that his goal from the beginning was to get the License back, though that does not match his actual behavior. However, once we accept the idea that someone might be literally insane, it is not necessary that anything make sense. What can be seen here is that Lewan is creating conclusions out of nothing.

I would take this as a strong indication that the modular Quark X, supposedly big as a pen, producing heat, light and direct electricity at variable proportions at a total power of about 100W, based on the E-Cat LENR technology with hydrogen, lithium, aluminium and nickel in the fuel, is real. Rossi, however, said that there’s still R&D to be done to get the Quark X ready for production. He also said that the ‘X’ had no other meaning than being a substitute for a final name.

And some other mystery ingredient, apparently, the most closely-guarded secret. Quark-X is now allegedly a 20 watt device, and direct electricity isn’t being claimed any more, if I’m correct. This is 14 months later. Sure, Rossi had an excuse, but … why does everything depend on Rossi alone? Doesn’t he have partners? Ah, well, questions, questions. What’s here.

After my meeting with Rossi (first time for me since September 2012), I have a few other updates.

Claiming that everything he said could be proven with documents (or that he otherwise would be lying),

Rossi lies, that’s not in question. That doesn’t show that any given statement is a lie, but what do we know about what is claimed here?

Rossi told me regarding the one-year 1MW test that:

All the instruments for measurements were installed, under observation of IH and Rossi, by the ERV (Expert Responsible for Validation) Fabio Penon, who had been communicating also with Darden, receiving technical suggestions from him on this matter. All communications with the ERV were made with both Darden and Rossi in copy.

Later email communications between Penon and Rossi (but before this interview) were not cc’d to Darden and were destroyed by Rossi, apparently. Rossi apparently removed monitoring equipment installed by IH, but what he has said here may be more or less correct. Rossi was, in fact, in full control of the “test.” IH never agreed that this was the Guaranteed Performance Test, and it was clear that Rossi knew that the opportunity for the GPT had expired, though IH was willing to negotiate for further payments.

The flow meter was mounted according to all standard requirements, for example at the lowest point in the system.

As soon as the “test” was completed, Rossi removed the pipes so this claim could not be verified.

The MW plant was placed on blocks, 33 cm above the ground, to make sure that leaking water or any hidden connections would become visible.

That would be the Plant. However, the full system was mostly hidden in the “customer area,” and there are various ways that what happened in that area could seriously affect measurements.

The two IH representatives present at the test were Barry West and Fulvio Fabiani (who worked for Rossi from January 2012 until August 2013, when the MW plant was delivered to IH in North Carolina, after which he was paid by IH as an expert who would make the technology transition from Rossi to IH easier). West and Fabiani reported to JT Vaughn every day on the phone.

I’m not sure about “every day.” However, calling them “representatives” is a bit deceptive. Both were tasked with assisting Rossi. Fabiani was an old friend of Rossi’s wife, apparently, and when things broke down between IH and Rossi, Fabiani, he claimed, felt trapped in the middle. In the end, he did not turn over the raw data that did, in fact, belong to IH, thus possibly protecting Rossi. We know that he destroyed that data, by his admission, and he destroyed his emails.

Rossi always pointed to the “two men” IH had in Doral. They were utterly ineffective at monitoring what was going on, because West, in particular, was not allowed to challenge Rossi on anything. Fabiani apparently threatened to harm West if he did anything to harm the “test,” though it’s not clear that he was serious. Fabiani was definitely a Rossi man, not IH.

Three interim reports, about every three months, with basically the same results as in the final report, were provided by the ERV during the test.

They were. Glossed over is the fact that Penon only visited the test maybe once every three months, and depended entirely, as far as we know, on Rossi for data. Many of these details, though, remain unclear because of the destruction of data and emails.

During summer 2015, IH offered Rossi to back out from the test and cancel it, with a significant sum of money as compensation. Rossi’s counter offer was to give back the already paid 11.5M and cancel the license agreement, but IH didn’t accept.

If this actually happened, it is odd that IH would later accept the settlement, turning the License over for no compensation at all.

At this point, making this claim, Rossi was suing IH — and other defendants — for a lot of money. Later, Rossi says, now, in the new interview, that his whole purpose was to get the licence back. IH had put about $20 million into the affair, so $11.5 million would be short. But how about $10 million plus some residual rights? Not requiring all the things that Rossi didn’t want, only providing a conditional payment to IH if Rossi hit the market with real product?

This alleged offer, now, looks like much better than IH actually got. Because this would likely have been used as a basis for improving the IH settlement, I doubt that it ever happened like it’s being said here. Rossi does that, reframes events according to his own narrative and the impression he desires to create.

The unidentified customer (‘JM Products’) using the thermal energy from the MW plant, had its equipment at the official address—7861, 46th Street, Doral, Fl. The total surface of the premises was 1,000 square meters, of which the MW plant used 400 and the customer 600.

We now know that there was no customer other than Rossi wearing different hats, when he even bothered to change hats. This story, like all the others told before the truth came out, strongly implies an independent customer, not Rossi himself. His story changed once he was under penalty of perjury, with massive evidence that he’d been lying. Some of his testimony, still, pushed that legal edge.

The equipment of the customer measured 20 x 3 x 3 meters, and the process was running 24/7.
The thermal energy was transfered to the customer with heat exchangers and the heat that was not consumed was vented out as hot air through the roof.

The “heat exchanger” mentioned here, with the function described, would not be the heat exchanger Rossi later claimed. This report directly contradicts the later story. The heat was, in the later story, blown out the front windows of the mezzanine, not through the roof.

The “equipment” was a collection of tubes in which other, smaller tubes were placed, to be heated. As this was actually operated, with only small amounts of “product” being involved — maybe a few grams! — this did not require anything remotely close to a megawatt. Rossi was here maintaining the fiction of a “customer” which was only Rossi, with full control by Rossi.

The water heated by the MW plant was circulating in a closed loop, and since the return temperature was varying, due to different load in the process of the customer, Rossi insisted that the energy corresponding to heating the inflowing cooled water (at about 60˚C) to boiling temperature would not be taken into account for calculating the thermal power produced by the MW plant.

This was Rossi controlling the ERV report. An engineering evaluation would aim for accuracy, and if some margin is to be added to be “conservative,” this would be applied later, not just to one measure, or mathematically to all, based on estimated error. Rossi’s insistence caused the performance data to be, possibly, partially hidden. By the way, the metering pumps had a maximum operating temperature of 50˚C, another example of the equipment operating outside the rated range.

The ERV accepted. (This was conservative, decreasing the calculated thermal power. The main part of the calculated thermal power, however, derives from the water being evaporated when boiling).
He also insisted that an arbitrary chosen 10 percent should be subtracted in the power calculation, with no other reason than to be conservative. The ERV accepted.

To be sure, at this point, IH was following a policy of not confronting or criticizing anything that Rossi did.

IH never had access to the customer’s area. At the end of the test, an expert hired by IH, insisted that it was important to know where the water came from and where it was used. The ERV explained that this had no importance.

Demonstrating that the ERV was, to use the technical term, a blithering idiot. Sure, if everything works perfectly, it should be possible to measure generated power with the “customer loop” being hidden.

However, there are possible error and fraud modes that would operate in the “customer area.”

Supposedly, the “customer,” JMP, was to independently measure the delivered power. Instead, Johnson, the President of JMP — and Rossi’s lawyer and President of Leonardo Corporation — was given draft reports by Rossi to send to IH for delivered power. Rossi later claimed, when it became apparent that his earlier descriptions were inadequate, that he had built a heat exchanger — an additional one — to dissipate the megawatt. The operating conditions of that heat exchanger, i.e., air flow rate and air temperature rise, would have been an additional measure of power, it would have been of high interest. But if it existed, it was hidden. Why?

Rossi’s description of what was said by the “expert” may not be accurate. This is the set of questions.

Nothing there about what Rossi says. We don’t know that, at this point, Rossi had seen those questions. We may suspect that Penon gave the document to Rossi, but the emails were destroyed, and Penon was unavailable to be served, apparently hiding in the Dominican Republic to avoid being sued.

In fact, Penon blew off the expert’s questions, refusing to answer them. This is not how an independent expert would behave. Questions were asked verbally, and the expert (Murray) wasn’t satisfied and put the questions in writing. No answers.

The average flow of water was 36 cubic meters per day.

Data collection from a test like this would properly be as measured (actual flow meter readings), not some “average.” This is all part of what was weird about the Penon report. That’s covered in many other places.

At the end of the test, the ERV dismounted all the instruments by himself, in the presence of Rossi and IH, packed them and brought everything to DHL for transportation to the instrument manufacturers who would recalibrate the instruments and certify that they were not manipulated.

This is the kind of claim that sounds reasonable until it is examined closely. When a lawyer saw this claim (not an IH lawyer), he immediately said “spoliation.” That is, evidence was removed. To be sure, no evidence appeared in the case about the results of those recalibrations.

“Manipulation” — or error — need not be of the instrument itself, but how the instrument is installed or how it is read.

One of the mysteries of the Penon report is the rock-solid 0.0 bar pressure reported. Assuming that Penon actually meant “0.0 barg,” this is astonishing, given supposedly superheated output. With superheated output, it is very difficult to maintain temperature control (unlike saturated steam, that will be rock-solid at a given pressure.) Murray raised certain issues with Penon, but there are more. In any case, imagine that the pressure gauge was screwed into a blind hole. No pressure. Nothing wrong with the gauge. Then just a little steam could raise the pressure enough to explain the temperature readings; setting up such a system to operate at 0.0 bar, precisely, would be extremely difficult, and why would one go to the trouble?

After the test, IH wanted to remove the MW plant from the premises in Florida, but Rossi would not accept until the remaining $89M were paid according to the license agreement.

The Plant clearly belonged to IH, which, by the Term Sheet, had the right to remove it. Rossi’s action was not legally sustainable, under normal conditions.

Rossi’s and IH’s attorneys then agreed that both parties should lock the plant with their own padlocks (as opposed to the claim by Dewey Weaver—a person apparently connected to IH, but yet not clear in what way—that ‘IH decided to padlock the 1MW container after observing and documenting many disappointing actions and facts’).

Dewey was an investor in IH, involved from the beginning of the affair, and a contractor to them as well. His statement is not contradicted by what is said about attorneys on both sides. (Both can be true.) This is Lewan arguing with Weaver, but, of course, Lewan disallowed comment on this post.

It’s obvious why IH would want to padlock the container, it would be to prevent spoliation. It seems they did not contemplate that Rossi would remove all the piping. There is a story that Johnson asked IH about starting up the plant again (possibly an attempt to support the “customer” story), IH indicated that could be done, and then Johnson withdrew the request. After all, the piping had been removed (and, as well, if the later story is true, the heat exchanger as well. Both were necessary for operation of a megawatt plant!)

Rossi claimed that the Term Sheet prevented IH from having access to the “customer area,” which wasn’t true. That provision was in a draft, but was removed before that agreement was signed. Nevertheless, IH did not attempt to enter the “customer area.”

I should also add that I have been in contact with people with insight into the MW report, that hopefully will get public this summer as part of the lawsuit, and they told me that based on the contents, the only way for IH to claim a COP about 1 (that no heat was produced—COP, Coefficient of Performance, is Output Energy/Input Energy) would be to accuse Penon of having produced a fake report in collaboration with Rossi. Nothing in the report itself seems to give any opportunity for large mistakes, invalidating the claim of a high COP (as opposed to claims by people having talked about the report with persons connected to IH).

Jed Rothwell somehow obtained a copy of a preliminary report. Lewan is here reporting a complex judgment with no attribution covering the expertise of those judging, this was vague rumor. If the data in the report is taken as accurate — which appears unlikely from internal evidence — sure. High COP. Lewan is completely unspecific. Rothwell claims he got the preliminary data from someone who got it from Rossi. When the Murray questions to Penon came out, Rothwell said that he had nothing more to add (Rothwell had seen spreadsheet data, but Murray describes it.)

The Penon report was filed in the court documents. There is also data from Fabiani. It all looks odd, but I’m not going into more detail here.

As for hints on the ERV Penon being incompetent, based partly on the HotCat report from August 2012, I would like to point out:

Fabio Penon has a degree in Nuclear Engineering, from Bologna University, with rating 100 of 100 and honors.

Goes to show. (Nuclear engineering does not necessarily prepare one for low-temperature steam power measurement and possible artifacts.)

He worked for several years in the nuclear industry with thermo mechanics.
When the nuclear industry was put on hold in Italy, he turned to work as expert on product certification, collaborating with entities such as Bureau Veritas, Vertiquality and Det Norske Veritas.

The HotCat report from August 2012, signed by Penon, containing a few notable errors, was not written by Penon. Penon assisted at a test on August 7, 2012, repeating an experiment made on July 16, 2012. The report was written on the July test, and Penon was only confirming that similar results were obtained on the August test. Penon told me this in an interview in September, 2012. You could of course accuse Penon of not having studied the original report sufficiently before signing it, but the errors were not a result of Penon’s work.

Sure. That signature, however, demonstrates a level of professional incompetence. He signed a report without verifying it. I’d be happier if he simply made some mistakes! Here, Mats is finding excuses, and that’s what one does if one is attempting to create or support some picture, some overall impression.

Penon’s behavior as shown by the lawsuit wasn’t … inspiring.

Two further remarks regarding earlier E-Cat tests:

[not copied]

I have contacted several experts to get a third party evaluation of the Lugano test report and the contesting papers by Thomas Clarke and Bob Higgins. Until I receive these evaluations I only note that the original result is contested, but that no conclusive result is agreed upon. The isotopic shifts remain unexplained, unless you assume fraud.

That is probably necessary, though the real point is that the samples were not obtain neutrally.

Mats never came up with the third party evaluations. That could have been an actual service.

There is more, confirming that Clarke and Higgens were correct, at least in round outlines. IH made the Lugano reactors, and claims that they were never able to confirm the Lugano results, in spite of extensive efforts. (It is possible that they had some original results later considered artifact, and the report of an accidental control experiment, mentioned in the recent interview, may have been a Lugano-type reactor with similar optical calorimetry. That kind of work must be fully calibrated (i.e., with control experiments at full input power, the basic and most obvious Lugano error.)

As to the isotopic shifts, Rossi, during this visit that Lewan is reporting on, provided another sample of ash to Bo Hoistad. This showed the same isotopic shifts. It was apparently from the Doral plant, though that’s not clear. The “same isotopic shifts” could indicate that this was from the same sample. If it was actually from Doral, Doral had operated for a year, whereas Lugano only operated for a month. One would expect more dramatic shifts from a year of operation, if this is an effect from whatever reaction is generating power.

§

Now, all this makes me conclude that the E-Cat is most probably valid and that the 1MW test was indeed successful.

It appears that the phase of the Moon led Lewan to conclude this. There was a major investor who devoted $20 million and years of effort to confirm Rossi technology. The investor failed to do so, and walked away with a complete loss. In the face of that, the vagueness Lewan asserts pales to insignificance.

What remains to be explained is why IH in that case didn’t pay Rossi the final $89M and continued to partner with him to develop and market such a disruptive, world changing technology.

Indeed. Something is wrong with this picture. To discover it, Lewan would need to set aside his own complex emotional reactions, and actually become familiar with fact.

After looking at it for some time, I tend to be skeptic about the conspiracy hypothesis, involving large financial and political interests being threatened by such a technology, even though I find it remarkable that IH has involved APCO Worldwide and Jones Day.

Sifferkoll really goes off the deep end.

APCO and Jones Day are not at all mysterious if one looks at who these people are. Darden is a professional investment manager, handling billions of dollars in investments. It’s surprising that they would hire professionals? Why?

I then ask myself if it’s really possible that it all comes down to money. That IH/Cherokee, as has been suggested, has a track record of putting up companies based on emerging technologies or remediation projects, collecting public and private funding (or also this link), making the funds disappear and then closing down the companies with reasonable explanations for unsuccessful development of the technology or of the project.

That is a cherry=picked story of what Cherokee does, often asserted by Sifferkoll and repeated among Rossi supporters as if it were established fact.

Cherokee takes on risky projects, setting up LLCs for each project. They put about $25 million of Cherokee funds in them. Each project is independent. Each project then solicits its own investors, generally from “qualified investors,” people who can take on major risk — and also people who may need tax deductions, another factor.

Money does not “disappear.” Rather, a few projects fail. When they fail, which isn’t often, — i.e., most projects make money, quite a lot — a project may be shut down. In some cases, liabilities may exceed assets, though that is not common, and then a project might go through bankruptcy. Like any corporation. Some of these projects obtain loans and governmental funding. As with any such loan or grant to a corporation (or individual!), there can be losses. All this has been exaggerated in the lists of alleged Cherokee misbehaviors. I’ve looked at each one I’ve come across, reading the sources, documenting fact. It’s classic mudslinging.

If Cherokee were ripping off investors, there would be investors complaining. If officers were absconding with funds, there would be prosecutions (and one of the stories does involve such a prosecution. An LLC hired someone who apparently wasn’t trustworthy. It happens. None of this has anything to do with Industrial Heat. Industrial Heat investors are not complaining about Darden. This was all FUD to support a Rossi narrative of these people being crooks, but the case documents simply don’t show that.

But Mats hasn’t read the case documents, he’d rather just see what is written on blogs and make knee-jerk judgments.

Admittedly, this could be a defendable strategy in some cases where results could be obtained. Still, if the E-Cat is really working as claimed, why wouldn’t they then take the chance to build it into a prospering money machine? Taking care of the magic hen that lays golden eggs instead of roasting it after having collected the first egg, as some would put it. I cannot figure it out.

The difficulty is arising because assumptions are being made that are contradictory. IH never collected any eggs, not even the first! Rossi claimed “unjust enrichment,” but they never sold Rossi technology. He claims that they “collected $50 million” based on the technology, but that was empty claim (sometimes supported on Planet Rossi by misquoting what Woodford wrote when they learned about the problems.) Woodford did not invest in Rossi technology, but in the general IH LENR activity, this is completely clear.

IH shows, at this point, a dead loss, IHHI still has funds, apparently, but much of the asset value carried may be the Rossi License, which will be completely written off.

In Mercato veritas. Will anyone else invest after seeing what happened to IH?

Clearly, such an endeavour would require investing a lot of money and work, spending large parts, if not all of the funding IH collected while boasting about the successful MW test, and also taking a market risk that it might not play out as expected.

Mats is telling the Rossi story, regurgitated. IH did not “collect funding while boasting about the successful MW test.” They didn’t boast about the MW test. They occasionally expressed some optimism, mixed with some concerns, but major new investment didn’t exist until Woodford invested, and that was committed before the alleged 1 MW test began. Woodford did visit, and Rossi said this and that about it, and some believe Rossi, including, apparently, Mats. There was no new major fundraising after the original $20 million stock offering in 2013, as far as I’ve been able to find.

But wouldn’t it be worth it? Becoming remembered for introducing a technology that could change and literally save the planet, from the climate crisis and from fossil fuel pollution? Rather than being forever remembered as those who only saw the money, and didn’t want to get involved in the technology project? I just cannot understand.

There are many internal IH communications, communications with investors, and the like, in the case documents. They obviously did not “see only the money.” Rossi made that up, and Rossi seems to have believed that they only cared about money (hence he imagined that they’d be happy that he chose them over Hydro Fusion, even though that affair reeked).

These people had concluded that LENR was probably real, and that it was possible Rossi had real devices, and they poured money and hope into that for years, tolerating Rossi’s “difficult behavior,” because if they didn’t, they knew what Rossi would do, and then then would not be nearly as certain as they did, later, come to be.

It’s actually not difficult to understand, if Mats would just take off the blinders and start looking at what he already knows, if he lets go of his attachments.

He doesn’t need to take it from me. He could see all of this for himself.

But, with this interview, he cut himself off from learning what was actually going on:

§

Finally—I will continue having the comments on this blog closed. The main reason is that few new facts have been presented, whereas unmanageable amounts of opinions have been posted.

That’s a characteristic of community discussions in general. However, Mats had no imagination. The problem on his blog was a linear comment model with no hierarchy. It created completely unmanageable discussions. Further, Lewan didn’t have time for this (and had no patience for those who did). What he could have done was to engage someone to manage the site for him. To develop useful crowd-sourced information requires structure and study and work. To let him know when there was something worth looking at.

What Lewan did isolated him from people who actually understood the case, perhaps only a few of those commenting. Lewan loosely followed E-Cat World, but not LENR Forum (far more neutral, with some regular participants being good writers and scientifically knowledgeable, still a huge mess).

If one doesn’t have the time to follow full discussions with all the trolls and nut cases, and if the topic is important, one needs help. Choose that help well!

I would like to apologise if I have hinted at Thomas Clarke’s having an agenda with his impressive number of comments. I want to assume that Clarke is perfectly honest in the significant work he has laid down on analysing the Lugano report and on commenting what, according to him, is probable or not. But I would also like to note that producing for some periods up to 34 posts per day hints at a position which I’m not sure if it should be called balanced. This, combined with obvious spin from a few people, apparently having an agenda in criticising some individuals, adds to my decision to keep the comments closed.

Thus suppressing genuine discussion of what is posted on the blog. This idea that there is something wrong with “34 posts per day” is a common one among shallow thinkers. That isn’t the Clarke norm, but that was a very hot discussion in a very hot time. I would have invited Clarke to write posts, not merely to comment, because his engagement in the routine cycles of insults common on blogs would be a waste. I would suggest to Clarke that he leave defending himself to others. That’s an old internet principle: don’t defend yourself, defend each other.

Mats doesn’t know enough about the case and case record to have informed opinions, he is entirely dependent on what Rossi tells him and what he’s seen on E-Cat world. He claims “there is no proof,” but he has not actually examined the evidence, it’s all vague. He only reports what Rossi Says, plus some shallow and uninformed conclusions of his own.

To do more would be too much work, my guess.

However, please share the post if you think t’s relevant, and feel free to email me if you have facts that you think I should be aware of.

I have posted a comment on his new post, still awaiting moderation approval, and, since he requested this, I’ll email him a link to this page. Right now, something is broken on this site (coldfusioncommunity.net) and comments are not allowed on “pages” even though that was working at one time, and it’s all mysterious, but … any responses from him would be posted unless he requests otherwise.

How to drastically overvalue a company

To pull off this trick, the company must have both ordinary and preferred stock. From this page from the Journal of Accountancy:

To value a business having both common and preferred shares, CPAs should value the preferred shares first and deduct that value from the entire equity of the entity.

The trick? Ignore the difference between preferred stock and ordinary stock, and then use the price paid for preferred stock and multiply it by the total number of shares. Presto! Massive overvaluation, it can be! Continue reading “How to drastically overvalue a company”

OMG! Good news!

This LENR Forum development gives me hope for humanity. Arguments have been raging about the alleged flow limitation raised by Pace in his opening arguments on Day 3 of the trial, Rossi v. Darden.

This was based on the Smith Supplemental Report.

Planet Rossi has been loudly claiming that this was the height of stupidity, so bad that when Lukacs pointed it out to Pace and Bell, IH attorneys, before the evidentiary phase of the trial was to begin on Day 4, realized that their entire case was utterly hopeless and laid down and played dead.

Then Rossi went at it hammer and tongs in his Mats Lewan interview. Utter ridiculous stupidity!

There is some discussion of this issue on Pumped Up or Stupid Mistake.

Those folks on LENR forum decided to actually obtain one of these pumps and actually measure the flow rate. What? And give up all the fun of arguing endlessly and firmly proclaiming that the “other side” is not just wrong, but insanely-stupid-wrong and someone-must-be-paying-them?

Apparently, yes. Giving that up, we can hope. So I’m applauding, and commenting on this test idea and implications. Continue reading “OMG! Good news!”

Mats Lewan interview

This is a study of a post on Mats Lewan’s blog (linked under the date below), copied for purpose of analysis and critique. It included some good photos of Dr. Rossi, eliminated here because they are not necessary for this purpose. My comments are indented and italicized.

Corrections of errors and comment on arguments is welcome. Comment here is generally open; incivility in comment may result in comments being hidden or moved to an organizing page at the sole discretion of CFC administration (until a more open process is practical and available). If a comment is hidden, the content may be requested by the author. We do not generally delete content, at least not in the short-term.

Here’s The Settlement—Getting The License Back Was Rossi’s Top Priority

July 18, 2017 Uncategorized

Mats has not categorized his pages. It’s not an active blog, so it doesn’t matter.

In the settlement between Rossi and his US licensee IH, Rossi got the license back together with all E-Cat equipment and materials, while none of the parties will have to pay damages to the other.

Yes, if this is the settlement as agreed, and if there are not other agreements. IH is, in signing this, totally relinquishing all claims to Rossi’s IP. A fly in the ointment would be Ampenergo. AEG was a party to the IH/Rossi agreement, and modifications of that agreement without Ampenergo signature are not valid, and this new agreement modifies (basically revokes) that original agreement. Ampenergo is mentioned; Ampenergo rights (and responsibilities, if any) are not altered by this settlement agreement.

It was Ampenergo’s refusal to sign the Second Amendment that created a major legal problem for Rossi in claiming the $89 million payment was due. The provisions allowing this in the original agreement had, in fact, expired, so the Rossi claim depended on estoppel, the idea that IH had behaved as if bound by the Guaranteed Performance Test provisions; but Rossi was unable to find any clear evidence for this, in spite of extensive effort. The evidence that was found only showed that in a few internal communications, IH referred to a test in process according to an agreement, but the reference was vague and could have referred to the Term Sheet agreement and Penon’s involvement.

Getting the license back was his top priority all the time, Rossi explains in this interview.

Yes, he claims that. Mats does not seriously question it — or anything Rossi says. If that was his “top priority,” we went about it very strangely, creating an enormously complicated lawsuit at high expense. It has been claimed on the blogs that Rossi offered to settle with IH for a return of the License fee (probably $10 million); that is implausible and without evideniary support as far as anything I’ve been able to find. If that had been offered, it would be unlikely for IH to settle as they did with no refund of any kind. However, there are many strange features of this case’s history, so that isn’t proof of anything. Indeed, proof is elusive, but there is a great deal of evidence that Mats is ignoring.

Update. Frank Acland has pointed to a 2016 interview with Rossi. This is probably the source. This claim, unverified in part, has been repeated as if clear fact, on which various conclusions are then based.

During summer 2015, IH offered Rossi to back out from the test and cancel it, with a significant sum of money as compensation. Rossi’s counter offer was to give back the already paid 11.5M and cancel the license agreement, but IH didn’t accept.

From many examples in the lawsuit, we know that Rossi’s reports of conversations are subject to extensive distortion, even if there may be a core of reality. IH did offer money to Rossi, not as “compensation for cancelling a test,” but apparently assuring Rossi that money was not the problem, the problem was them not having been successful in making devices that would pass fully-independent testing, which was absolutely necessary for them. So this first part is framing, how a fact is presented. The second part is not verified. This has later been called a “public offer.” Such a public offer would have been a violation of the License Agreement. Rather, it was a claim made to Lewan, which became public because Lewan published it. A sincere public (or private) settlement offer would normally remain on the table (possibly modified somewhat due to legal expenses). Rossi, in fact, did not request return of the License in the lawsuit, and there was certainly no public offer. Had there been, and assuming that this is what Rossi actually wanted, it would have changed the entire complexion of the case. It might have settled early, saving both sides substantial expense, and netting IH more than $10 million for other LENR research.

But Rossi hated “other LENR research.” More money for it would be the last thing he wanted.

[Here’s the document defining the terms of the settlement (un-disclosed source)].

This copy is unsigned and undated. There is a copy that appeared on LENR-forum, without attribution, that shows Rossi’s signature and a date, July 14, 2017. The draft agreement does not require confidentiality as to itself, nor in general. What remains protected is the secret fuel formula and anything disclosed in Discovery and already covered by a Protective Order. Everything else is, on the fact, permitted.

“To us, the most important thing was to regain complete ownership of the IP and of all the rights that were conceded through the license. At this point, it had become very clear that a continued collaboration had become impossible because of the choices IH made and because of other reasons.

Collaboration actually broke down by July, 2015, when Rossi violated the Term Sheet, refusing entry to the Doral plant to the IH engineer, Murray. Rossi gives reasons in this interview that don’t make sense from a business perspective, but only from within his well-known paranoia.

The development, the finalization, and the distribution of the technology—any agreement regarding this would have been impossible,” Rossi told me during an interview via Skype on July 15.

The impossibility was entirely related to Rossi’s absolute intransigence about his ways of doing things. He made it impossible for IH to actually verify what was happening in Doral, made the “test” take total priority over showing IH how to make devices that would pass independent testing (small scale testing, the normal testing one would expect), and this made it impossible for IH to raise the $89 million payment. Even though the time for that had expired, IH indicated in communications that came out in the trial that they were willing to pay Rossi if they could make those working devices. One of their theories is that Rossi never disclosed what was needed, and that is quite consistent with his comments to Mats. He didn’t trust them, but the mistrust goes back further than he discloses.

IH had obtained a commitment for another $150 million from Woodford, so the plentiful Rossi claims that they objected because they couldn’t pay were simply more smokescreen. They could have paid if Rossi had shown what was needed.

The settlement was drafted on July 5, 2017, on the fourth day of the trial regarding a lawsuit that Rossi filed in Florida, mainly against his US based licensee Industrial Heat, IH, early in April 2016, for not having paid the final amount of USD 89M according to the license agreement, after one year of operation of a 1MW heat plant based on Rossi’s E-Cat technology, apparently successful according to a supposedly independent report made by nuclear engineer Fabio Penon.

We do not know when the settlement was drafted. What I saw in court was that the parties requested that the judge dismiss the suit with prejudice, with all parties bearing their own legal costs, with any details to be worked out with private agreement. The indications I had at the time was that this agreement did not yet exist. It is possible that some outline existed. The settlement agreement provides for a joint filing, which hasn’t happened yet.

The documents as they stood did not require that $89 million payment. Rossi used shaky legal theories to advance this. He would not have prevailed, my opinion, based on what I saw. I did not expect, however, that IH would relinquish all rights unless compensated; and a reason for doing that only occurred to me a few hours after seeing the agreement. Tax purposes. They had come to believe that the IP was worthless, but there would be a residual value due to a small probability of future value. If there is a formal release as binding legal settlement, they could then totally expense all the costs, being able to distribute this as a loss to their investors, which is part of how these risky LLCs operate. They create losses that are then fully deductible from income for their investors. Otherwise the investments might sit there for years, not deductible. So a more accurate description than “worthless” would be “not worth as much as the tax deductions.”

(IH would still have gathered a valuable intangible, “experience.” I was told that IH does not intend to abandon LENR, but a sane long-term approach would be to gather experience, learning to recognize what has true commercial potential and what does not. They would retrench and maintain “watchful waiting,” including readiness to act quickly when needed.)

The defense, on the other hand, accused Rossi of having produced false results in conspiracy with Penon and others.

According to whom? Mats is relying on Rossi’s account. This is a story about the lawsuit that doesn’t fairly present it. What IH did was to call the Doral test into question; this was actually a secondary defense, the primary one being that Doral simply was not a Guaranteed Performance Test, but rather a sale of power to a supposedly independent customer with an immediate and desperate need for steam, willing to pay for it, and the site serving as a demonstration for investors. No mention of “test.” Then, tacked onto this was measurement by Penon, but this was to be in addition to independent measurement by the “customer.” The customer was, we now now, entirely Rossi, and the invoice requests from the customer, signed by Johnson, were drafted by Rossi. There was no independent customer, this was all fraudulent inducement, and that all became totally clear in the evidence, and was emphasized in the opening statement. At trial, Rossi was going to lose, totally, on the $89 million claim.

The claims of fakery in the test results were secondary, not primary. It only became relevant if the GPT arguments were to fail. The underlying equity was that without the ability to reproduce results, IH could not possibly raise the $89 million; the Rossi counterargument in the case was that the Agreement did not require reproducibility. That is literally true and utterly misleading. Perhaps Mats should actually read some documents!

Eventually, however, none of these accusations could be confirmed by proof, which I will comment on below.

Mats is here stating as bald fact what is obviously a conclusion, his conclusion. He refers to “proof,” which is legally naive. The standard of factual judgment in a civil case, like this, is not “proof.” Proof is rare in the world. The standard is the “preponderance of evidence.” He has not actually specified the allegations but is already referring to them as if established. This is the kind of vagueness on which Rossi has long thrived. It is distressing to see in someone who was, at one time, a serious journalist.

Mats does not cover the evidence for fraudulent representation, he simply declares it out of existence. This is appalling.

“There were two clauses in the license agreement that were extremely dangerous to us—the right of first choice [if you plan to make any agreement outside of the licensee’s territory, you first have to offer the licensee the possibility to make an agreement for that new territory] and the rights also to all subsequent inventions. These clauses would have made any further development very complex.

Not really. This is simply Rossi paranoia and smokescreen. The term is “right of first refusal.” Before acting to make an extraterritorial agreement, Rossi would have had to offer the agreement on the same terms to IH. IH could then accept or refuse. This could not harm Rossi’s legitimate interests. However, Rossi often used alleged difficulties to excuse his refusals. He told IH that the presence of an independent engineering company experts at the Ferrara Validation Test in 2013 would “make problems” for him. What problems? One possibility is obvious. They might see through his friend Penon’s incompetence or collusion with Rossi. None of this is proof, but it all builds a coherent picture of how Rossi has operated.

“The perspective for the continued trial was that we could win or we could lose. You always have to examine these possibilities and investigate the consequences. A victory for us risked becoming a pyrrhic victory. Even though we were convinced of having a very strong case, eventually the jury would decide. And the problem was that in the case of a victory, the jury would probably say that it would be fair for Leonardo Corporation [Rossi’s company] to receive the claimed funds, but it would also be fair for IH to keep the license. For us to also get the license back was beyond the horizon.

Many people had pointed this out. Rossi did not actually ask for license cancellation in the Complaint nor in succeeding documents. If this was his primary goal, that’s rather odd. A license cancellation would probably be accompanied by a refund. It has been claimed that Rossi offered such a refund, but I’ve seen no confirmation of this. [see above, there is evidence, a Rossi comment to Mats Lewan in May, 2016, with no independent confirmation]. Refund for cancellation of license would have been an obvious settlement. It would have involved IH eating an additional $10 million or so of expenses, but surely better than a total loss of the entire $20 million investment. 

“So my lawyers asked me before the trial which my priorities were if the trial would lead to any transactions—those indispensable and those negotiable. My answer was that the indispensable condition was to get the license back because I didn’t want to collaborate with IH anymore. As for the financial aspects, I told them which my expectations were, from a lower level to a higher one.”

“My lawyers” is a bit vague. The one who apparently negotiated the settlement was Lukacs. Notice that the primary goal is emotional: “I didn’t want.” I think he’s telling the simple truth here, this is what he thought. Why didn’t he want to collaborate? Where did that come from? It’s found below. It was crazy paranoia, the classic Rossi story. The paranoia led to the major breakdown, by July, 2015.

Were you aware of the danger of the two clauses in the license agreement when you signed it?

Unless Rossi was later lying, always possible, he didn’t consult attorneys before accepting the License Agreement, nor after. There was no danger in the clause he mentioned. It was more or less standard. There was no occasion where this caused him any actual loss, it was all fear. The second clause is misrepresented by Rossi, somewhat. It is not “all subsequent inventions,” it is only inventions that would compete with the original E-cat technology. Again, the reason for that clause is obvious. Inventor has product A, sells it to investors, then comes out with B, which destroys the market for A. Not great for investors, eh? Rossi consistently has shown, since before 2011, that he does not understand the needs of investors.

“Yes, I had understood the risk but I was convinced that I was collaborating with a partner that I would never separate from. Let’s say that I got married without taking into account the difficulties if there would be a divorce.”

Sure. However, most agreements for $100 million involve a bit more sophistication. The settlement agreement looks like something drafted by a lawyer, and includes contingencies dealing with various failures to agree. Marriages where significant property is involved often include separate property agreements that protect the parties. There is no way that IH was going to suggest these protections to cover Rossi (and they were not going to include them to protect themselves, and this was all seen as necessary to deal successfully with Rossi, given Rossi’s character. Bring up such a possibility, for example some attempt to verify his measurements, very possible he’d explode and walk out the door. He’d done it many times.)

What would have happened with your new reactor version, the E-Cat QX (formerly known as Quark X), if you hadn’t got the license back?

This was all obvious, I wrote about this many times, with Rossi supporters screaming that it was biased. Now Rossi acknowledges it.

“It would have been very complicated because it’s an E-Cat—the theory base is the same and the patent protection is basically the same, even though revolutionary inventions have been added, but the license agreement expressed very clearly that all inventions, also subsequent and future ones, would become IH’s property. Together with the clause of first choice it would have become very complex. So it was absolutely necessary to eliminate the license.“

Very complex = “absolutely necessary to eliminate.” Not actually very complex! Quite simple. If Rossi improves the invention, they get that technology. Rossi makes more money, certainly not less. Yes, he’d be sharing profits. At this point, status quo, IH had paid only $10 million for that full benefit. Of course Rossi didn’t like that, but he had many opportunities to be paid much, much more. He turned away from them. They would have required that he actually fulfill the intention and letter of the Agreement, and he didn’t trust them, that is the long-term Rossi position. Mistrust. Mats knows Rossi well enough to recognize this.

To obtain another $89 million, all he’d have had to do was to get the signature of his friends at Ampenergo on the Second Amendment. There was no time limit on that. Then he’d have needed to get all parties to agree to the start of a test date. If they unreasonably dragged their feet, that would have made for a simple specific-performance demand, and lawsuit if necessary, a much less complex lawsuit, with far more basis (and easily resolved by going ahead with a test with reasonable precautions).

Alternatively, it appears that IH offered to waive the GPT requirement. All Rossi had to do was teach them how to make devices that actually passed careful, independent testing. Rossi either could not do that (one possibility) or did not want to do that (the other major possibility, consistent with the story he now tells Lewan.) Annesser, Rossi’s early and very pugnacious attorney, pointed out another possibility: they were incompetent boobs who could not follow instructions. However, if they were truly incompetent, find them competent advisors. Pay them if you have to. Guide them through the process step by step. And an absolute no-no: if an error or possible error is found in your measurement methods, don’t storm out claiming the Russians Did It. Fix the problem, nail it.

According to the settlement, the defendants shall return or destroy all documentation, return all reactor vessels including the 1MW E-Cat plant, also promising not to disclose the E-Cat fuel formula to anyone. How will you be able to control this?

It’s in the Settlement Agreement. Rossi’s answer is also fairly obvious.

“With the information that I have provided you can make a replication, and if we see other companies producing something analogous, even partly analogous, this means that our technology has been transferred. And we will protect our IP.”

Yes, this is more or less correct. However, something like a secret formula, which is the only secret aspect, could be found by someone else doing what Rossi claimed to do, running a thousand tests. That’s not very many, actually. There are techniques for running millions of tests, simultaneously. It’s only money. So why hasn’t this already been done? Well it’s being done, but not focusing on “Rossi technology,” for the most part. Why not? Because nobody with the resources believes that Rossi technology is real, for all the obvious reasons, very obvious, if one studies the case documents (which is a significant project by itself, I will be working to make it easier; I’ve already done this to a limited degree. It, itself, is a significant project, and it is not funded beyond my expenses — which are crowd-funded).

An early theory, which I considered possible, was that Rossi deliberately created the appearance of being a con artist, in order to allow easy dismisssal of his work by others who might otherwise seriously investigate with the goal of competing with him. )Mats supports this idea in An Impossible Invention. It was this argument that led me to conclude that the appearances did not prove that Rossi was what he appeared to be. So … what if this is still happening? Mats is ignoring obvious appearances, as if they don’t exist, he is not confronting them and asking difficult questions. Why not?

That, again, is obvious. Ask Rossi difficult questions, there goes your access! (An alternate explanation is that Lewan is simply not smart. I doubt this. He could understand if he wanted to.)

Talking about replication. In his deposition, Tom Darden [President of IH and of Cherokee Investment Partners] claimed that with the information you provided, they ‘were never able to build devices that successfully produced energy.’ What is your comment to that?

That is a decent question. The problem here is that Lewan doesn’t go deeper. Darden said this in a deposition (though I don’t have the exact quote in mind and Lewan does not bother with sourcing like this.) That means under oath, under penalty of perjury. Rossi responds with misdirection.

“During the discovery phase, emails from Darden were provided and made public, where Darden himself confirmed to have replicated our process successfully.

Well, by being vague, Rossi maintains appearances. Darden was enthusiastic and had some early results that appeared positive. We have seen this many times with LENR! Some of that disappears when examined more closely, the “unable to build” comment is about a fuller, later judgment. In Rossi case arguments, positions that changed over time were often collapsed, as if a person would have one, fixed view, from beginning to end. This would not have impressed a jury, it’s easy to understand.

We also have testimonials from persons who have assisted at such replications. Woodford [Investment Management] assisted at one of those replications, after which it invested USD 50M in Industrial Heat, even before the [one-year 1MW] test started in Doral [Miami], at a time when IH obviously had nothing but our IP in its portfolio.”

This is radically misleading. Woodford did not “assist” at an “IH replication,” as far as we know. Rossi is vague, but may be referring to the Doral test as a “Rossi replication.” This was totally managed by Rossi, featuring a faux Director of Engineering for the “customer” who was literally a puppet for Rossi, saying what Rossi told him to say. Maybe Rossi is talking about some other test, but, if so, I haven’t seen evidence for it in the documents. Woodford committed to invest in 2014, up to $200 million. IH had suggested that this go into IPH, the Dutch BV, where it would be exposed to Rossi claims. Woodford insisted that it go instead into a new UK limited liability company, IHHI, which became the owner of IH, but not obligated to pay IH debts; it could voluntarily do so. The first tranche, $50 million, cleared in May, 2015, and this money went into other technologies, not Rossi, and that totally pissed him off, though this was simply Woodford doing what they wanted to do with their money.

Woodford did not invest in Rossi technology, but that IH had a hedge to cover the possibility of Rossi success was likely attractive. They were not impressed by the Doral plant, apparently. I wouldn’t have been, beyond, OMG, what a complicated piece of machinery for a fraud! Maybe it’s real! I would not be impressed by steam pipe going through a wall into an inaccessible “customer area,” with the only sign of a megawatt being the claims of Rossi (or the “customer engineer” who was clueless), from instrumental readings. It’s hard to hide a megawatt! That is the only reason I could think of for a megawatt test. It’s a terrible way to gather reliability data, the way it was done.

“We also have testimonials.” That appears to be a claim without evidence, very common. It’s meaningless without specifics. Lewan does not ask for specifics. Notice that underneath Rossi’s claim is an implied claim that Darden and Vaughn and others perjured themselves. If there was a successful “replication” — which is itself misleading, because replicating results is not yet independent confirmation if the test methods are flawed — Woodford would know it and would then be a possible witness in a perjury prosecution. This is all misleading, implausible, but Mats swallows it whole, apparently. (It isn’t obvious in the early parts of the interview, but shows up in what Lewan states as fact without attribution to Rossi.)

In his deposition, Darden also claimed that you had said that JM Products [the ‘customer’ that used the thermal power produced by the E-Cat plant in Doral—more comments on that below] was a subsidiary of Johnson Matthey, that Johnson Matthey would have operated the plant of JM Products, and that after [a] brief period of positive operation Johnson Matthey would have announced that they were the customer. What’s your comment?

Lewan attributes this to a Darden claim, instead of what the IH attorneys did, referring to the primary evidence, a series of Rossi emails, as well as evidence from James Bass, and the OFAC declaration of Johnson. That sets up Rossi’s basic answer, an implication that Darden was lying and that there was “no evidence.” But there was plenty of evidence, conclusive evidence, overwhelmingly so. The representation that the “customer” would come out like that is in a Rossi email that is quite clear on the topic, quite enough to convince a jury in a civil case, and possibly enough to convince a jury in a perjury prosecution. By not understanding this, Lewan simply provides a soapbox for Rossi.

“Mr. Darden hasn’t been able to prove what he said under oath. Basically, he has sworn on things of which he has no evidence. I have never said or written that Johnson Matthey was the owner of JM Products, while in contrast I always said and wrote that Johnson Matthey was the producer of materials that I had use for in my work with JM.”

First of all, the history of the draft of the Term Sheet shows that IH believed that the customer was Johnson Matthey. The customer was allegedly a chemical company with a need for steam. IH obviously got the name of Johnson Matthey from somewhere! Here, Rossi has created a cover story that might explain it, i.e., he told them of his plans and IH misunderstood. However, this is utterly inconsistent with Rossi’s subsequent behavior. Instead of telling IH that it was a mistake, he told them that he “wasn’t supposed to mention their name.” In many documents, he referred to the customer as a distinct and independent entity, not merely himself planning to work with JM materials. When IH suggested they might visit JM in the U.K., Rossi demanded that they not do this, it would spook them. If he was merely buying materials from them, what would be the problem? And this goes on and on. This isn’t just one piece of evidence and it isn’t just Darden’s word against Rossi’s. Rather, the reality is that there is no contrary evidence in the evidentiary record to what Darden claimed, and there is massive support. Rossi obviously led IH to believe that the “real customer” — that is, the hidden owner of JM Chemical Products — look at the name! — was Johnson Matthey. He was lying from start to finish, and he is still lying, to Mats.

More accurately, it’s likely that Rossi believes his lies, that is part of how he is able to convince people, his obvious sincerity. Technically, then, they are not “lies,” but intention to mislead, which is the core (not “false statements”) is obvious. It exists somewhere in Rossi’s psyche, he is creating his own “reality,” and transmitting it to others, but the patterns are consistent. Mats is refusing to recognize what really, by now, should be obvious to him. Rossi is, at best, insane. Nice wig, though. Nice smile. Cordial. And very persistent, hard-working, etc.

When one creates a misunderstanding, the best construction I can find, and there is a clear opportunity to clear it up, and, instead, one papers it over with appearances, it becomes clear that the “misunderstanding” was intentional. (Rossi said there was nothing wrong with dealing with a new company, which was true, except … he had claimed originally that this was an existing company, ready to go, and hurry, they need to go soon, don’t miss the opportunity, when, in fact, and this is simply not in doubt, there was no independent customer, no existing process requiring steam, and all the funding and control was purely Rossi. IH obviously decided, even though it was starting to look shaky, to give Rossi the chance, and that fell apart by July, 2015, when Rossi blatantly violated the Term Sheet by excluding the IH engineer, and even if we imagine that Doral was a GPT, this was a gross violation of the orginal GPT intention. I think Rossi is telling the truth that he had decided he didn’t want to work with IH any more. Consider what he claimed to have done with Hydro Fusion. This could have been, quite simply, a more elaborate version of the same behavior. 

Some of Rossi’s supporters think all this is irrelevant, that what really matters is “did the Plant work?” The problem is that how Rossi set it all up makes conclusions about actual power generation depend entirely on trusting Rossi. The “independent ERV” was not quite so independent, and the actual management of operation and data collection was … Rossi. The test conditions were entirely controlled by Rossi, and then we find out about, say, other pumps in the system. One of the ways to fool a steam measurement system as existed in Doral would be through such hidden elements. And … the instruments were removed immediately at the end of the test, taken by Penon. All with excuses, of course, but an attorney saw that and immediately said, to me, “spoliation” (Not an IH attorney, and this was before IH claimed spoliation. This was before more examples of spoliation of the evidence appeared, the removal of the steam piping not allowing verification of the slope of that return pipe and the exact installation of the flow meter, which itself had multiple problems.)

The pressure gauge, critical to understanding the state of the alleged steam delivery, was being operated above the specified operating temperature, and the simplest explanation of the rock solid report of 0.0 bar pressure is that the gauge was broken (or simply blocked; removed from the system, it might operate perfectly), and it was removed by Penon. (0.0 bar in the Penon report was a blatant error, and this was generally translated to 0.0 barg, which is, at least possible! but then there are many other problems, all glossed over by Rossi’s facile explanations that don’t hold up under examination. In any given example, there may be an explanation, but this “test” was a mess. Penon was vastly overpaid.

Rossi often made the point that Penon, his friend, was a “nuclear engineer” as if that made a difference. Nuclear engineering is irrelevant to measuring steam, Jed Rothwell has often made the point: one needs an HVAC engineer who actually works with steam. While some nuclear plants use steam, the training of a nuclear engineer would not extensively prepare a person for this work, for there is no clear theory of operation for LENR devices, but measuring steam and generated heat are all well-known and with well-known possible errors, to steam engineers.

Darden also reported an episode when they provided a reactor that you operated successfully, after which they revealed that the reactor was empty, suggesting that there were systematic errors in the measurement method, also describing your violent reaction when they told you this. Can you comment?

This was, again, a good question. It’s a report, I think more than one person has referred to it, and, again, Rossi talks about “proof.” In court, Darden would testify, someone else would testify who may have been a witness, and Rossi would testify. The jury would consider how these match and how they differ. What does Rossi actually say here?

Mats actually makes the statement that Rossi operated the reactor. This is not a clear account matching what I recall. However, maybe. Mats does not attribute sources for his information, generally. He is, in effect, repeating rumors or creating them based on something he read somewhere, which may or many not have been accurate.

“Darden has said lots of things that he has never been able to prove. What he assures doesn’t exist. I always made experiments with reactors charged by me, or by me in collaboration with Darden. Never with reactors provided to me as a closed box, for obvious reasons.”

What obvious reasons? Rossi has diverted from the actual story, and talks about something else. I saw this many times in his pleadings. IH would assert an alleged fact, A. Rossi counsel would “dispute” the fact but then, for evidence, would provide irrelevancies that would all be about how A was to be interpreted, not the fact A itself. This managed to confuse the Judge, actually, which may have been the purpose. It is all clear from the record when one actually studies the pleadings and looks up the cited references. It’s not very visible if one just reads the pleadings themselves. To understand those documents actually takes a lot of work! Unless someone has organized them and analyzed them, making verification easy.

The actual story, at this point from my memory. IH was running tests of reactors, and had apparently created empty reactors. They had written a letter on the outside of the reactor, as I recall the story (eventually, I’ll look all this up). They were getting some strong results, high COP. Then they realized that they had been confused by an upside-down letter and what they thought was a fueled reactor was actually unfueled. Notice that Rossi’s answer completely avoids the actual reported situation, which involved a reactor that was unfueled, so even if Rossi was correct, and all the fueled reactors had been loaded by him (but Darden supposedly had the formula), IH may have made some unfueled versions and got one confused with the fueled ones.

So they called Rossi and demanded that he come to North Carolina immediately. He did, and they showed him the test. They then, together, cut open the unfueled reactor, and it was empty. The story I have in mind has Rossi getting angry, claiming “The Russians stole the fuel!” and storming out.

Was this story pure invention? It seems unlikely, but a jury would have decided, looking at the witnesses in testimony and under cross-examination, and possible corroboration. And, remember, all this was peripheral. The central issue, the contractual requirements, was actually very clear. Much of this would be relevant to the counterclaims, not the primary lawsuit.

What this shows to those interested in Rossi Reality would be how a lack of control experiments can be fatal to experimental studies. Rossi hated control experiments, had expressed his contempt for them in 2011. Lugano was most seriously damaged by the lack of a control experiment (a “dummy reactor”) at full input power, which would have immediately exposed, if it existed, error in temperature measurement. In fact, the IH mislabelling showed a naivete on their part as well. One would label controls either not at all (depending on later opening them up) or with a code unintelligible to the experimenters. Using a letter and knowing what the letter was supposed to mean would damage neutrality; ideally the difference is blind. (This is far, far from what Lugano did. The fueled and dummy experiments were treated differently and known. That’s relatively weak, but not uncommon in initial studies. Lugano was not designed to be conclusive.)

Let’s talk about JM, since how, why, and by whom the company was formed was one of the main topics to raise doubt about your motives with the one-year test. You already explained that you never said that Johnson Matthey was the owner. So who formed the company?

“I always said that the owner of JM was an [Italian] person who knew me since a very long time, and who was in contact with a British company and wanted to participate in the work with my technology.

He is still lying, here, that is, being deceptive. At best, Rossi isn’t at all careful. He “always said” this to whom? There is no sign that what he has said here is what he said to IH in 2014. “Italian” was supplied by Lewan?

Johnson, supporting the JM story, claimed that the owner was a “U.K entity.” Not Italian, and, in fact, the supposed owner (in name only, in fact, Rossi was entirely responsible for JM Products), Rossi may have indeed met again in Johnson’s office, he who became the sole beneficiary of Platinum America Trust, but that wasn’t a U.K. entity, it existed in a file cabinet in Johnson’s Florida office, only. That this was a long-time Rossi friend was concealed from IH, and covered up with the OFAC “U.K. entity” story. In his deposition, Johnson acknowledged that there wasn’t and had never been a “U.K. entity,” giving the excuse that they had planned to create one, but it was too expensive.

But why would they even bother; there is only one reason I can think of: to make it appear that it was Johnson Matthey. Once they had made that representation, and once IH had agreed to the Doral move, there was no longer any need to go to the trouble of creating a U.K. entity.

So I invented this proposal for him to be both a customer, buying the energy produced by the E-Cat plant, and collaborator, verifying the validity of my technology [both the E-Cat technology and the one used by JM Products]. This is what I always declared. And in my depositions, I also provided the name of the owner of JM. I also explained that the owner of JM didn’t achieve any agreement with the British society, and therefore went on by himself together with other partners.”

The depositions were, of course, after the lawsuit had been filed. Rossi did not lie about it then, except in one way: claiming that he had not told IH the customer was Johnson Matthey. He obviously led them (and others, such as James Bass), to believe that, then backed up and mixed up the story while maintaining the impression of an independent customer, still Johnson Matthey. What other partners? Rossi is continuing with his vagueness that is designed to confuse. Johnson presented the “U.K. entity” claim as a present fact, not some future possibility. But this is standard for Rossi: present a possibility as an already-realized fact. Johnson was a rubber-stamp for Rossi.

Rossi did invent the proposal. But look at how this was proposed to IH! The story he now tells is very, very different. Okay, the customer was to “buy the energy.” $1000 per day. Attractive proposal, to be sure, and he pointed out that the Plant only cost $200,000 to build. Amazing profit! Really, read that email. Here, I’m not spending much time looking up stuff, but compare this to what came out and what Rossi is now saying. 

(Rossi also claimed that the test didn’t happen in North Carolina because of IH failures. In that email, we can see that Rossi declined an opportunity to run a test under close IH supervision in North Carolina. He claimed that an independent customer in Florida would be much better!)

How was JMC/JMP to pay that $1000 per day? It’s totally obvious: Rossi paid all operating expenses of JMP. JMP had no independent income, Rossi would have paid the $1000 per day, if IH had ever actually issued the invoices. (they were not confident; I think it was a mistake. they would have invoiced “per your report.”) Rossi developed a story to justify moving payments around on paper: JMP would process materials and Leonardo Corporation, Rossi’s company, would buy them.

Yes, as I recall, the first element of the scheme to appear, though it was not public until disclosure was required in the lawsuit, was the formation of Platinum America Trust. So Rossi planned all this, there was no independent customer: like turtles, it was Rossi All The Way Down. So all of Rossi’s claims about the independent customer, to IH and to his public, over the years, were deceptive.

Pace’s theme in his Opening Statement on Day 3 was “fake [this], fake [that], and fake [the other thing]. Easy story for the jury to remember and to use to mentally file the evidence that would then be presented in the next phase of the trial. While this or that might be shown to have some factual basis, or to be wrong, the overall story was easy to understand and the evidence for deception was massive and overwhelming, and not dependent on Darden Says. That was just support!  (Sworn testimony is evidence.)

Rossi then explained that he had presented his attorney Henry Johnson, who would have the formal position as president for JM Products for administrative reasons, to Darden and JT Vaughn [vice president of IH], making clear that Johnson was his attorney.

Eventually, yes (though I don’t know that Rossi volunteered the information. IH claimed to have been surprised to find the Rossi attorney as the “JM” representative. However, the impression was carefully maintained that the Johnson and JMP were merely representing for public purpose a true owner, who would, Rossi claimed, be willing to reveal true identity after a few months of successful operation. By this time, the proposal stank, but …. IH apparently reasoned that surely an attorney would not participate in a fraud…. 

“I would then have directed JM’s operations from a technology perspective. I also sent an email in June 2014, provided as evidence, in which I informed Mr. Darden that I was going to be the director of JM’s plant.”

The language was there, but in context, did it mean what Rossi is now claiming?

One of the things I intend to do is create a chronological index to the documents. I haven’t checked, but Rossi may have said, I seem to recall, that he would be the director of the “Plant,” and in context, this could have meant the power Plant.

Rossi, in fact, entirely controlled JMP, making all decisions, and paying for everything. JMP did not have its own facility. The original name was JM Chemical Products, but they had trouble finding a rental, landlords being reluctant to rent to a “chemical company.” The response to that was typical of how some lawyers — and Rossi — think. Change the name, problem goes away! However, ultimately, Leonardo Corporation rented the warehouse, then subleased part of it to JMP.

So you invented the technology used by JM?

“Yes, I made all the technology, I invented their production plant, and I made the plant.”

It was all very obviously invented as an excuse. Rossi All The Way Down. Remember all the claims on JONP about an “independent customer”? That customer is now revealed as entirely the invention of Rossi. They were not, as claimed, an independent company with a process they needed steam for. The “independent company” was an idea in Rossi’s head, even though he used the third person for it. In mercato veritas, which to Rossi apparently means, create a dummy customer and create dummy sales, where you pay yourself, and hey, “the market has spoken.”

Can you describe the technology?

“We produced substances with a very high added value. To do this we had to achieve an extremely high pressure inside small reactors that were introduced in larger tubes. The concept was to provoke contractions in certain materials, using heat exchange with the hot steam [from the E-Cat plant] and a pressure of a few bars but concentrating the force from the pressure on a larger surface, a few cm2, on much, much smaller surfaces, increasing the pressure proportionally. And this process consumed heat.“

In mercato veritas. “High value” implies high sale value to arms-length customers. Did he actually sell any products? We don’t think so. Now, “this process consumed heat.” That’s not impossible. However, crucial: how much heat? A process does not “consume” heat, rather, some processes will store it as chemical energy, or possibly phase change. How much chemical? This would be the real question. What we know of the “product” was the raw material: Rossi originally asked for a bid on a kilogram of platinum sponge from Johnson Matthey. That was apparently the only actual contact with JM. The bid was a million dollars. (which is roughly reasonable.) Rossi apparently decided to buy some catalyzers and scavenge a few grams of platinum sponge from them. So we have a few grams of platinum sponge. If this was the most efficient energy storage process known, how much energy could be stored in a few grams? Later, Rossi claimed to buy some graphene. Again, how much energy? Let’s put it this way: these processes could have been run with less than a kilowatt of power. A megawatt was vast overkill.

“Very high value” is actually contradictory to the basic idea here, large amounts of product. Was Rossi producing a fabulous value of product every day? How much energy could a kilogram (a million dollars worth of palladium sponge, the original production material claim) “absorb”? 

How much of the heat from the E-Cat did this process consume?

“On average it consumed between 20 and 40 percent of the heat produced by the E-Cat plant. I had to learn from the experiment how much heat was necessary, because there were not any precedent analogous experiments to get data from.“

Not before and probably not yet. His “customer process” could not make a measureable dent in a megawatt under the conditions at Doral.

This is completely unreasonable, preposterous. This was all examined at length on the blogs. There is no way that this much energy could be stored in product (Rossi’s “consumed” implies violation of the laws of thermodynamics, but translating it to “stored”). It would require massive deliveries and removals of product. Storing that much energy, the product would be very, very dangerous. Etc. A non-dangerous endothermic reaction could have been melting ice, requiring a constant flow of ice deliveries.

So since it didn’t consume all of the heat from the E-Cat plant, you had to get rid of the excess heat in some way?

When this was raised on JONP, Rossi eventually settled on some combination of endothermy and ventilation. He did not mention “heat exchanger.” That was only raised this year, and nobody who had seen the plant suspected a heat exchanger, which would have been quite visible and very noisy. Rossi’s idea was a kludge, almost certainly yet another fantasy. He would have had to create it so it would be hidden, which is not what one would do if this was simply getting rid of the heat. Such a heat exchanger, operating, generating measureable temperature rise in a measurable amount of air, at least as to round estimates, would have been a great confirmation of Plant energy generation. And this is standard engineering. Why hide it?

“Yes, I didn’t have any experience of the process in the JM plant, so obviously I over-dimensioned everything to be sure to achieve the intended physical transformations. I didn’t know how much the plant would have consumed, so therefore I introduced a heat exchanger after the plant that could dissipate the eventual excess thermal energy, condensing the steam to water that could be sent back to the E-Cat plant. I designed the heat exchanger so that it could dissipate all the heat from the E-Cat plant, in the case of malfunctioning of the JM plant, since I didn’t want to stop the E-Cat plant, because I needed to make the famous 350 days of operation within 400 days [according to the license agreement].“

This makes no business sense. A cooling tower (Smith shows one) could have been purchased and easily installed, and then, later, sold when no longer needed. 

Problem is, this wasn’t made clear to IH, at all. Further, the GPT requirements did not actually require a continuous megawatt, they only required COP. All this would have been much more easily handled with a simple agreement with IH, and then if power wasn’t needed, shut down reactors (but leave at least one running at a COP of 6.0 minimum, or a few, if one wants to insist on that 350 day stuff)! If the plant cannot be controlled that way, it would surely be very dangerous! The heat exchanger and what it required was a system change, clearly not mentioned to IH at all. The only kind of process that could actually dissipate a major fraction of the power would be phase change (simple version: melt ice.) It was obvious ab initio that a major heat exchanger would be needed. This can be purchased off-the shelf, as rooftop cooling towers, cheaply. Why go to all the trouble to make one from scratch, and why put it in the mezzanine?

I think the answer is obvious: this heat exchanger only existed after-the-fact, in Rossi’s imagination. If it were in the obvious place, on the roof, it would have been visible, so it couldn’t be there! Perhaps there might have been some regulatory problem, but then this would reveal that Rossi, ah, fudges and hides. If he got fire department approval for his reactor assembly, it was based on power input, not actual  (or expected) generated power. Deception. Don’t leave home without it!

In fact, the entire idea of a megawatt test was insane. But that is what Rossi wanted and had declared in 2011.

So how much thermal power could the heat exchanger dissipate?

“One megawatt.“

This is controversial. Wong thought it could do the job. Others have said, no, but the idea of the heat exchanger was introduced late in the Discovery process, not early, so there was less consideration of it. Rossi could have put a standard cooling tower on the roof, no controversy. Or Rossi could have agreed with IH for a different GPT, IH was apparently quite amenable to that.

And you didn’t have any photos of the heat exchanger?

“No. I never take photos. I don’t need them. I never take pictures of my prototypes.”

Rossi always has reasons. This was not a “prototype,” it was allegedly a fully-functioning heat exchanger that had to be working every day of the test, and before the test, as soon as the reactor was in operation. It had to be there first. But nobody saw it or saw any sign of it. The jury would have loved this. Easy to understand. Murray, there at the end of the test, would have seen evidence. He was looking for evidence of how the warehouse was cooled. He didn’t see it, and then Rossi claims he dismantled it, after the “test,” making it impossible to actually start up the reactor again, if anyone wanted to do that. This was not a real chemical operation, and it had served its purpose, a faux “test” under full Rossi control, unlike the original GPT concept, which would have been under full IH control, at least full detailed observation.

This was the famous heat exchanger in the mezzanine of the premises in Doral where the one-year test was run. The heat exchanger was questioned by the defense in the lawsuit since there were no photos or other proof of its existence.

Not the only reason, and, again, “proof” is a strong word. There was actually no evidence at all of its existence other than Rossi Says. Okay, Engineer48 on E-Catworld.com claims that a photo of a tree outside the window showed heat damage. It sure would have damaged the tree! It would have killed it. I don’t see what E48 sees. Maybe if you squint, just right…. He also claims there were some scratches on the floor, that show …. what? Where did all the materials go? Rossi says he “repurposed them.” Where? This was a huge pile of stainless steel pipe. Did he have receipts? None were produced. Did he hire a crew to install and then remove them? Yes. Off the street, and no, no record, probably he paid them in cash.

You can always come up with some explanation…. But a jury will decide (and if we need it, we will decide) based, not on proof, which is rare outside of mathematics, but on the preponderance of the evidence, and to decide that, one needs to look at all the evidence, not just what one side or another claims.

That’s what we have now, a huge mass of evidence, that can’t be hidden. If someone wants to know, read the evidence, not merely me or Mats Lewan or Andrea Rossi or Engineer48 (who has a clear conflict of interest). Use all of us to consider arguments, but … you are the judge and jury for your own life decisions. If you are considering investing, and you depend on bloggers, ah, be really careful! If you are an inventor considering working with Industrial Heat, will you follow what Sifferkoll has written? Sanely, you will check it out yourself. Sifferkoll presents evidence, to be sure, but what does it mean? that’s up to you! Again, be careful, what Sifferkoll claims as proof of Cherokee (and thus IH) misbehavior is simply normal business practice that he doesn’t understand. So study it! Don’t just look at cherry-picked anecdotes, selected for ready — and misleading — appearances, by someone obviously convinced that Something is Terribly Wrong.

However, the plaintiffs’ expert witness Ph.D. Vincent Wong [Prof. of thermodynamics for engineers at the University of Florida] confirmed that Rossi’s description corresponded to a possible design for dissipating the necessary heat.

I agree, it might have worked. And it might not have. It’s marginal. Wong was shown a window being replaced, allegedly the window where the heat exchanger fans blew hot air out the front of the building. Only problem: this was about a year after the test ended and the heat exchanger was removed. So Rossi left the window out for a year? In Miami, with blowing rain being common? This would have caused interior damage. There are photographs from Google Street View in that period that appear to show reflections of the sky, i.e,. glass present. The noise from the heat exchanger would have been very, very noticeable. Nobody reported hearing or seeing it. These questions were not asked in most of the depositions, because they were taken too early. But they would have been asked at trial, you can bet on it.

Rossi was going to lose his primary case, that was obvious (and the case was obviously defective from the beginning, just from Rossi’s filings, and became far more clearly so as discovery proceeded). The question is what would have happened with the counterclaims. My sense is that IH would have prevailed on some counts, but monetary damages might have been relatively small. Recovering on the original payment of $10 million, very difficult, though they were certainly going to try. They could have ruined Johnson, but their own benefit from this might have been small. I do not know what considerations led them to accept the settlement we have seen. Nobody from IH is yet talking about it. I’m asking so eventually I may get some answers. Hopefully, I can get answers I can publish! I did just get the Day 4 transcript.

Rossi explained that it consisted of tubes and two fans blowing horizontally inside an isolated wooden construction attached to the windows where the heat was vented out. A large tube for the steam and a smaller tube for the returning water went through the small door to the mezzanine at the lower left corner.

Yes, that’s what he claimed. The door would have been open, I think. Those fans would have been quite noisy. This would all have been visible from outside the customer area. But because nobody suspected the existence of a heat exchanger (and when asked last year, Rossi did not mention it), searches were not more narrowly focused. Rossi confused this all and continues to confuse it.

Rossi explained a couple of things with regard to the heat exchanger.

A ‘circulator’ was used to stabilize the flow of steam and water through the whole system. Rossi wouldn’t comment on further data of the circulator since he said he was preparing a patent for this device.
This circulator had nothing to do with a pump of the model ‘Grundfos’ that was brought up by the defense’s expert witness Rick Smith who suggested that the Grundfos pump was used to make hot water flow through the system and that no steam was produced.

I advise against relying on Rossi for statements of what Smith claimed. What were raised were possibilities. I.e., “may have been used.” As an example, very strangely, the flow meter had a sending unit that would have allowed automated data collection. This wasn’t used. The basic unit was undersized, designed for higher flow than was used, not actually rated for accuracy at the relatively low flow in the system. However, the sender would have provided higher resolution, at least. There is a suggested fraud mode. (A “fraud mode” would involve deliberate deception, as distinct from error. The Defkalion flow meter artifact could have been error, maybe. A fraud mode, if it could be proven — which wasn’t claimed –, would prove fraudulent intent.) An obvious one: at night, run a pump that floods the system and winds up the flow meter. Indeed, if this is run at night, one could run it until the flow meter reads exactly what is desired, thus explaining the remarkably constant values, in spite of other operational variations in the system. “Explanations” are never proof — though sometimes they indicate the state of the explainer.

The real use for the Grundfos pump was instead to push the water through a by-pass with a filter about once a week to make it cleaner.

That’s plausible. However, this is all complexity added to the system that wasn’t covered by Penon.

Rossi also addressed the claim made by IH that producing one megawatt of heat inside the building where the test was run would have made it so hot that you couldn’t have stayed there. First, he noted that the sun on a sunny day radiates about 1 kW per m2 and that the building, having a roof of about 1,000 m2 normally would have received about 1 MW of heat from the sun, without making it too hot in the building, even though the roof was barely insulated.

That’s one of Rossi’s nutso arguments that can sound plausible if one is inclined to believe him. Solar irradiance does not generate much heat “inside the building.” The figure for Miami seems to run between 1000–2000 BTU per day. “Barely insulated” doesn’t cover the fact. Most heat will be reflected. The roof itself will get too hot to touch, and if the air in the building got that hot, it would be fatal, and a common example is an automobile, which, on a hot day, will quickly reach fatal temperatures. This doesn’t happen in an ordinary building, and why not? I created large protective structures in a desert, weather very hot, using nothing but one layer of paper. Very little “insulation,” but high reflectance. White newsprint paper, I got the rolls from a printer as roll ends. Shade. Really, this is obvious.

The figure of about 1 kW per square meter is about right; in fact, that is called “one sun.” However, the roof does not “receive” a kilowatt per square meter from the sun, because most of the energy is reflected. Insulation is only one factor, different from reflectance. What is absorbed will heat the roof, and then whatever insulation is there will slow heat transfer to the interior.

Furthermore, it had large openings with exhausts for venting air out of the building. Then the JM plant consumed on average 20 to 40 percent of the produced heat, and the rest was vented out with the heat exchanger.

The openings have been considered and modelled. Wong, in his deposition, acknowledged that without the heat exchanger, and a megawatt of power, the building would have become uninhabitable. Wong was evasive, encouraged to be so by Evans (a Rossi attorney at the time, later withdrew), but finally acknowledged the matter. See deposition pages 147-150.

(Wong starts out by asserting that the heat was probably being used to heat some industrial process, as if this would make a big difference. It would, if there was major product being moved. But such processes are normally not efficient, thus most of the heat is “waste heat,” and, indeed, large quantities of product would be required. Wong had no clue about this, as a practical reality. Wong was evasive, and why? He didn’t want to say something because it was what Murray had said. This shows that he was not simply providing expertise, but argument on a side. He knows the facility would become unbearably hot. He ends up acknowledging that the difference between his analysis and that of Murray is that Murray did not account for a heat exchanger, while Wong did. Obvious.

Rossi, with Mats, is beating a dead horse, he’s flat out wrong, but won’t admit it, because Rossi Never Gives Up. Mats knows Rossi’s character, but doesn’t confront or challenge it, knowing full well what would happen if he did.

Pump capacity

I then wanted to hear Rossi’s view on the discussion about the 24 smaller pumps feeding water into the E-Cat modules, which had become one of the defense’s major arguments against Rossi, and also one that attorney Christopher Pace raised at the beginning of the trial.

This is not an argument “against Rossi.” It’s just about asserted fact. The thinking is primitive. It is not a “major argument,” other than being quite simple to present and understand. It was, in fact, raised in the IH Opening statement, that is correct.

Update: This issue is covered on Pumped Up or Stupid Mistake, and then OMG! Good news!

“This is my favorite because now we’re going to have some fun. You need to see it from a ridiculous side because it’s so ridiculous that you can’t take it seriously.”

Rossi thinks he has a zinger here. And maybe he does. However, the matter is not so simple, and quite a few people have looked at this, and, in my mind, it’s not fully resolved. To fully resolve it someone needs to actually test one of these pumps; what is obvious is that the pump data sheets do not contemplate the conditions Rossi describes as actual usage.

[Update: there is now a project started by some LENR Forum people to actually measure the Prominent pump output. OMG! Actual experimental evidence! Will Lewan look at this? There are possible pitfalls, but … they can be avoided and, in fact, anyone could do this. Not even expensive. If any controversy remains, MFMP could do it, and MFMP does have a reputation for reporting their results, “exciting” or otherwise.]

Not mentioned by Rossi is that the pumps are metering pumps, not “workhorse pumps.” A metering pump is designed to deliver a controlled flow, with relative independence from pressure variations.

The argument, which was brought up in the Expert Report by engineer Rick A. Smith, was based on an observation that on the name plate of the pump it said ’32 l/h.’ In his report, Smith concluded that this was the maximum capacity of the pump, and multiplying 32×24 you get 768 l/h which, if evaporated, only consumes 482 kW—less than half of a megawatt.

It’s actually nominal capacity, not, technically, maximum. Or it is a “maximum setting,” again, not actually maximum flow. however, Rossi confuses this massively. If Smith erred, Smith erred, it happens all the time. Rossi commonly converts the alleged errors of others into proof of incredible stupidity. The basic argument as presented by Pace in the opening probably stands. We will find out. Then it’s further confused with the “recirculation pump,” which, of course, might be able to increase flow to what was claimed. It could make the flow whatever they want; problem is, it could also flood the system, possibly causing all the measurements to become meaningless.

The Expert Report. There are two expert reports by Smith. The second one was issued after inspecting the facility. Rossi is referring to the second, supplemental report. This is the cited page.

The issue is that just next to ’32 l/h’ it says ’02 bar’. The reason is that any pump’s capacity depends on the pressure it needs to overcome to pump the water, the same way as the flow of air you can blow out of your mouth depends on how open it is. Now, 2 bars correspond to the pressure under 20 meters of water, which is way beyond the pressure in the E-Cat plant, and the pumps’ capacity in the actual situation was therefore much larger because the pressure on the pumps was about 1/10 of bar.

Mats here loses attribution. Is this his own explanation, or is it Rossi’s? This is definitely Rossi’s argument, but is treated as fact by Lewan. If Lewan were retaining journalistic reserve, this would be very obvious to him, trained journalists simply don’t do this.

This is a misleading explanation. Mats is treating this pump as “any pump.” (Following Rossi; this is what has often happened, Rossi gives an explanation that seems plausible on first impression to some observer, and it is then presented by the observer to others as fact. Happened, very obviously, in the Lugano report.)

It is not just “any pump,” it is a metering pump, designed to deliver a measured “dose,” and it is correct that the rating on the label is not maximum flow, per se, but more likely maximum metering setting. Apparently at low pressure, these pumps may be inaccurate, probably due to leakage in the internal flow regulators. This leakage can even cause high variation from the “stated flow,” which is what the pump reads on its display. However, that high variation is probably not at maximum setting, but at much lower flow settings. It doesn’t seem plausible that at low pressure, as described, the flow error would be anywhere near as high as Rossi claims. However, the proof would be in experiment. It is possible that someone will obtain direct manufacturer information, the manuals are vague on the issue. Bottom line, these pumps were not intended to operate accurately at such low pressure.

[Great minds think alike. There is, as linked above, a project to measure the actual capacity of the pump.]

I have a beginning look at this in the post Pumped up or Stupid Mistake.

In a comment there, there is an estimate from published data on the pump of a possible 20% increase in rate at 0 bar. I do not consider any of this definitive, but the matter is, quite simply, not as Rossi presents it.

“Here comes the comic aspect. At the trial, you cannot bring documents that you haven’t produced during the discovery phase so I would have needed to explain to the jury, which was not composed of experts on the matter, that the capacity of a pump is a function of the pressure.

Technically correct but highly misleading in this example. Lots of Rossi “facts” are like that. Depending on design, and within operating specifications, metering pumps can be quite independent of pressure. Obviously, a pump is pressure-limited, but the limit would be the force that the pump can exert on the fluid, and below that limit, it could be quite insensitive. The general principle here, as applied to a metering pump, is just plain wrong, so Rossi is either ignorant or lying, and Mats seems to have accepted this deception as fact.

Again, experiment trumps theory, always. But Rossi was using theory here to explain, not actual experiment.

I would have had to explain that the flow rate of a pump is an integral, not a number, as any intelligent engineer knows. It would have been a little difficult, albeit possible.

If Rossi had been allowed by his attorneys to present this to the jury, IH attorneys would have torn him to shreds. The flow rate is an integral? That’s nuts! Total flow is the integral of the flow rate. Rate is the differential of the total flow. And anyone who knows the mathematics of physics knows this. In the jury pool there were members who had the math background. I know the strongest weren’t selected — for other reasons.

This is not all that complicated, if presented by attorneys or experts with skill. Smith, in fact, has high communication skills, this is obvious, reading his reports and deposition. And the little piece of supposed fact here is actually irrelevant, Rossi introducing techno-confusion. He has often done it on his blog. He is someone who thinks he’s smarter than he is, and adoring fans don’t help. None of this means he doesn’t have reactors that work, but it does mean that what Rossi Says is not reliable.

“But during his deposition, Smith, after having insulted me and Penon [the independent controller], several times, saying that we were fraudsters

I don’t recall Smith saying that. Maybe someone can point it out. This is the World According to Rossi. What the evidence in the case establishes is that Rossi presents information designed to mislead. That’s not possible to deny, reviewing the case documents. I recall no claim at all that Penon was a “fraudster.” The Penon data shows anomalies, something is off, apparently. Penon was fed data by Rossi. Rossi apparently destroyed the emails. Conclude what you like. The Penon report doesn’t present the raw flowmeter data, just daily difference (i.e., calculated), and very strangely constant, with a system facing many variations. The legal point is that the report cannot be trusted, not that it was fraud. Explaining the anomalies with clear evidence could be impossible because of the spoliation.

and how can you say that with 32 l/h and 24 pumps you produce a megawatt, and so on, then he said something like ‘now I will show you the brochure of the pump, 120 pages of technical data,’ as if he wanted to show how much of an expert he was.

This is all personal fluff, imagination of the motivation of another, a motivation not actually likely for Smith, who, from his comments, could care less, he DGAF what people thought of him. Rossi doesn’t give me enough evidence to find what he’s talking about, and it’s irrelevant.  Mentioning the pump manual (not “brochure,”) would be completely normal if asked how he knew something.

Then you need to know that I have used these pumps for years and know the brochure by heart. I opened the brochure and looked at the page where I knew that the capacity was specified, and it said ‘minimum capacity at 2 bars pressure, 32 l/h.’ But in his report, Smith had written maximum capacity.

We have looked at the manual. It’s here. There is also a brochure, here.

Smith did write “maximum capacity,” but he was also clear that he was translating “Dosierleistung.” When I look that up I find “dosing capacity.” Rossi is correct that this is not literally a maximum, though ‘capacity’ implies maximum. I read the specification as the maximum setting for the pump, the maximum “stated rate.” Remember, this is a dosing pump, not a workhorse where faster is better.

“When he said this I could have reacted, asking if he had read the brochure, open it and make him read. But we preferred to remain silent, letting them being convinced that it had passed as true, just like when you have an enemy and you let him run and get himself pierced by your bayonet. I showed it to my attorney who laughed under his mustache, and we would then have brought it out at the trial. We would have destroyed them.

Rossi also apparently deceived his attorneys. Or they knew and simply liked his money. 

Actually, if this is the error he claims, this would very likely have been realized and IH simply would not have presented this in the evidentiary phase, it wasn’t a crucial part of their case, merely something very simple that could be shown and understood. However, at this point, it looks like it may not have been an error.

Because half of Smith’s report talks about this and the other half about things that are related. But the problem is—we would have won, but they would have kept the license. That’s why my lawyers told me ‘you need to tell us clearly which is your priority—getting the money or the license because listen, you won’t have both.’ And I said the license because the license has an enormous value not only in economic terms but also in technological, philosophical, and existential terms.”

And personal terms, to Rossi, who always wants to be in full control. He doesn’t really trust anyone else.

But, what do you think—didn’t they ever realize that they were wrong?

Lewan appears to be assuming Rossi is correct and a skilled engineer is wrong. It’s definitely possible, though not particularly likely. Experts make mistakes. That’s obvious. Will Lewan check these things out? This is not really difficult. I’m a blogger, not exactly a journalist, but … I might check it out further. I prefer, generally, to delegate these things to my readership — and then I will check what they find. That makes far better use of my time and l love to involve community, it’s far more fun than doing everything myself — my older habit.

I think… I’m extremely puzzled by the fact that two engineers, Murray and Smith, are so naive not to realize making errors of this kind. I cannot make conclusions because I cannot start imagining things. I can only say that they probably all thought we were fools. I think that their problem, from the beginning to the end of this affair, was just that—they underestimated the person they had in front of them enormously. I believe that they thought they could write such things without my noticing it. It’s impossible that two good engineers with excellent careers, like Murray and Smith, really can have thought that something like that was true, because if a student at the first year of engineering school takes the exam in thermodynamics and tells his professor that a pump, of which the specifications says that its minimum capacity at 2 bars is 32 l/h, has a maximum capacity of 32 l/h, he would have been sent home immediately.”

Rossi often argues like this, makes up a hypothetical situation involving something he thinks is really stupid, with a hypothetical professor, then the imaginary professor confirms his idea.

What is the 32 l/h figure? It is a dosing capacity. Can the meter dose at a rate less than that? Of course, that’s the maximum stated rate, it’s a setting, apparently, unless I’m way off here. Rossi has actually worked with these pumps, which would ordinarily create a level of respect. However, Rossi isn’t ordinary, and there are certain errors that he has made for years, in spite of them being pointed out. He takes all critique as enmity and “clownery.” He doesn’t actually consider how it might be right. He doesn’t look deeper than his own set ideas.

Continuing this, what is the maximum flow? As I read the evidence, it is the maximum set rate plus possible error under the conditions given. So, yes, it can be higher. But not much higher, as Rossi claims below. Does Rossi claim to have actually measured this? Under what conditions?

And maybe he’s right. Even a stopped clock is right twice a day. His arguments, however, are not convincing to those who are careful.

Mats saw Rossi arguing against experts in that Hydro Fusion test, obviously convinced that he was right, and he has more recently made statements that show he has never understood the power measurement issue. (This was the test where Rossi later claimed to Industrial Heat that he had deliberately made the reactor fail, but not mentioning the measurement issue. So either Rossi was stuck on his own completely incorrect ideas, as appeared to Mats, or he was putting on an elaborate show to deceive Hydro Fusion — and Mats.) However it’s sliced, Rossi is often some combination of wrong and deceptive, and the deceptive part is beyond a shadow of doubt.

By the way, since you know these pumps, what capacity do they have at the actual pressure in the plant—about 0.2 bars?

“About 75 l/h.”

So he has it as double, but this is simply Rossi Says at this point. There is no other evidence that I’ve seen supporting his position. There is a statement in a brochure that these dosing pumps can, at atmospheric pressure, deliver two to three times the “stated rate.” That is interpreted by a Rossi supporter as the specified rate on the label, but that isn’t what it actually says. The real meaning is, in my opinion, not clear, but easily it could simply mean that you might have a setting of 1 l/h on the display, and an actual delivery rate two or three times that. Not necessarily at the full allowed setting, which appears to be 32 l/h.

The brochure linked above has this at the very beginning:

The gamma/L is a diaphragm-type, solenoid-driven, microprocessor based metering pump with maximum capacities to 8.4 gph (32.0 L/h) and maximum backpressures to 253 psig (17.5 bar).

So perhaps we might cut a little slack for Smith saying that the maximum capacity is 32 l/h, since the brochure actually states that. The manual does have a specification for “minimum capacity,” as Rossi claims, at 2 bar pressure. It’s a chart, not a sentence as implied, but close enough. It has this as 32 l/h at 2 bar, and 36.2 l/h at 1 bar. It is not unreasonable to extrapolate this to 0 bar (though certainly not reliable). That leads to a figure of 40.4 l/hr. However, I’m quite unclear on what “minimum capacity” means for a metering pump, because the “capacity” can obviously be lower if the pump is set lower. This kind of unclarity breeds error. Bottom line, what will one of these pumps actually deliver under the stated conditions? This is not at all difficult to measure with a bucket and a stopwatch, which is how these things are normally tested. In order to meet the 1500 kg/hour that is claimed from the flow meter, with 24 pumps, 62.5 kg/hr would be needed. A kilogram of water is close enough to a liter for these purposes.

The issue here is not the system flow rate, per se, it is whether or not the reactor pumps could deliver that flow rate. By introducing other pumps, it all gets more complicated. Had this been done openly, not a problem. But it wasn’t.

Going back in time—when did you first understand that things were not going well between you and IH?

“When I discovered that IH was making agreements with our competitors. At that point, I understood that they were trying to fill up their portfolio of intellectual property in view of litigation with us pending the huge payment they were going to have to pay. It was instinct—I had no proof, but eventually, the facts confirmed this instinctive doubt.”

He doesn’t respond with when it happened. In the timeline Chaiken constructed, the point was to show an alleged change in attitude on the part of IH. Supposedly when they got the $50 million from Woodford, IH didn’t need Rossi any more. There was no sign that IH was considering litigation with Rossi, he’s made that up. They wanted him to teach them how to make devices that worked. But they allowed him to run the Doral power sale and demonstration plant, and cooperated. The Woodford sale closed in May, 2015, after the Doral “test” had been running for about three months. In July, IH decided they needed to take a closer look, with an expert, so scheduled a visit with Vaughn and Murray, whom they had hired to manage engineering. Rossi refused to allow it, violating the Term Sheet which explicitly allowed such visits. Later, in a pleading, Rossi remarkably explained this as being because he believed Murray was a “spy.” But hadn’t Rossi already disclosed his secrets to IH? (or if there were new ones, related to new developments, i.e., Quark-X, wasn’t he obligated to disclose them?)

There was nothing about the License Agreement that didn’t allow IH to diversify. They actually were permitted to sublicense the Rossi technology, though there is no evidence that they actually disclosed it. This was all Rossi paranoia, here confirmed. Does Mats realize that?

This story has often been told by Rossi as Woodford investing because they were so impressed with the Doral plant. However, they had committed before they had seen that plant. Above, Rossi mentions a prior test that Woodford participated in. This isn’t public information, as far as I know. It may be true or not. But Woodford very clearly didn’t actually invest in Rossi technology, but in all the other stuff. That obviously enraged Rossi. He had created this, though, by being unresponsive to IH requests for assistance — if we assume that he actually had a real technology. Otherwise this is all smokescreen, fluff.

And later, on January 8, 2016, there was a meeting in Miami between you, Darden and the lawyers. What can you say about that meeting?

“Nothing, because it was a meeting between lawyers and covered by NDA.”

Implausible, though not impossible. A party may disclose their meeting with lawyers. The lawyers may not disclose it. But there might have been special conditions. We do know what conflict existed at that point, there are documents. Contrary to common Rossi claims, it simply is not true that IH did not complain “until it was time to pay.” They informed Rossi long before “time to pay,” according to his demand, that they did not consider Doral was the GPT, nor had they consented to Penon as ERV for a GPT there. Rossi actually filed the lawsuit a day prematurely, the payment was not yet late. But he did know they wouldn’t pay.

Now, there’s much more to comment, but leaving all this behind, what are your plans now?

And Rossi goes on to give his plans for starting “industrialization” of products. I’m not commenting on that. I prefer to comment where I have knowledge.

[…]

Finally—what happened to your hair?

Again, that’s Rossi’s private business. As I wrote in the blog about the trial, his wig looked normal and was attractive. It’s unfortunate that some have made light of it, making some remarks about “false hair” as if it means something about his character. That is aggressively and gratuitously rude, and it saddens me to see it.

When Rossi filed the lawsuit against IH I had to take a step back and look at all possible explanations. I was and have been open to the possibility that Rossi was involved in fraud and conspiracy. But during the discovery phase of the litigation, it became obvious that the defense couldn’t produce any convincing evidence for this hypothesis.

Mats, this is preposterous. What you have done is to set up a very narrow definition of “fraud.” Rossi engaged in fraudulent representation. The evidence is overwhelming, the situation is far from what you say, which is obviously not based on an actual examination of evidence, but on looking for something to leap out at you about fake data. There are problems with the data, none of which rise to the level of clear fraud. That’s not the core problem. The core is that what Rossi says cannot be trusted.

All technical arguments that were put forward were hollow and easily torn apart by people with engineering training.

You are focusing on technical arguments while you have a shallow knowledge of them. Your overall assessment is not based on your personal discussion with unbiased people who have no axe to grind, but on conversations in highly biased environments.

Yet, these arguments were continuously repeated by a number of people, possibly related to IH, at various forums.

There is only one person “related to IH” who has discussed this affair, and that is Dewey Weaver, who becomes a figure in the case, as an IH investor and contractor. Weaver is not among those with high engineering knowledge who have discussed the technical arguments. Weaver made highly personal arguments based on his personal and direct knowledge of Rossi and the people and the history of the relationship, not technical arguments.

Mats, it looks like you have swallowed Sifferkoll’s obviously paranoid conspiracy theory. Sifferkoll has claimed that various people have been paid to attack Rossi. There isn’t a shred of evidence of that; Sifferkooll puts together random shreds of connections, thinking, for example, that because Eric Walker was affiliated with the Baha’i faith, there is a “fundamentalist” religious conspiracy to suppress LENR (and he’s made the same argument about me, because I’m Muslim) and he’s also claimed that I’m paid to write against Rossi, when my limited funding, covering expenses, came from a source completely unrelated to Industrial Heat and Rossi, and came with no strings attached, it was actually granted for writing about Wikipedia process — and lately I’ve been crowd-funded, that’s how I went to Miami for the trial.

None of my sources have been related to Industrial Heat. This is all paranoia, very similar to Rossi himself.

Since there was no way to discuss them in a serious way I early decided to stay away from such discussions, also closing the comment feature on this blog, yet I admire a few individuals, mostly anonymous, who continued to fight for what they considered to be the truth in those discussions.

Foolish decision, allowing you to remain ignorant. Yes, the ordinary blogs can be a mess, but this one was created to set up coherent discussions, far deeper content. It takes little courage, Mats, to be an “anonymous fighter for truth,” because there is no responsibility.

You know that I’m a real and known person, we had personal history, and I’m responsible for what I write. I created Wikiversity resources years ago so that serious writing could be done, including serious discussions. What you are thinking of as “truth,” unfortunately, is mostly conspiracy theory. There are some anonymous writers who are dedicated to objective analysis, but …. you have not been paying attention, your activity has mostly — or entirely — been on E-Cat World, which is explicitly Planet Rossi, contrary opinion is often banned. I’ve been allowed to post there, to be sure, but that’s fairly unusual (Thanks, Frank!). The actual IH voice, even though he’s not official, at least the connection is real, Dewey Weaver, is apparently not free to comment there.

I am confident that if Rossi were really involved in fraud, evidence for that would have been found during the time—a year and a half—since IH claimed to have started to be suspicious about Rossi.

Mats, you have not considered most of the evidence of fraudulent representation. You have not done your own analyses, looking for the balance, the preponderance of evidence. You may be confident, but your confidence is rooted in ignorance, sorry to say. I’m truly disappointed, I did expect better of you.

Looking back and noting that no such evidence was found, while hollow arguments have been shouted out loud, I have very little doubt that the E-Cat technology is real and that the one-year test was a clear success of a world changing technology, producing 1 MW of heat without emissions, from small amounts of harmless fuel at a COP of about 80 for a whole year!

You have studied neither the evidence in the case — it is voluminous — nor the arguments, yet you dismiss them as hollow. Some arguments are, indeed, hollow. Which ones? You just presented some arguments from Rossi, some of which were hollow. You’ve lost it, Mats.

Noting this I have also started investigating the timing for relaunching the energy conference I proposed in 2016—the New Energy World Symposium, addressing the consequences of LENR based technologies for industry, society, and finance.

Now the fun can start!

Good luck. I won’t be there. LENR technology isn’t ready, we are still at the basic science level. That’s where I’ll be, in Texas, at Texas Tech where crucial heat/helium research is being done, and at ICCF-21, which was planned to be hosted by IH in North Carolina, but because of the lawsuit, they found it necessary to withdraw, and I’m in contact with possible organizers, I’m hoping that some support can be found.

Rossi is an enemy of LENR research, sucking the life out of it. His attitude about investment in alternatives betrays his real position, he is anti-science and anti-research, except for his own.

And you are helping promote this. If you decide to look deeper, start the conversation, you would be welcome.

§

Documents:

The document defining the terms of the settlement.

Information I have, so far, indicates that this is not yet fully signed.

Rossi’s notes addressing the Expert Report by Rick Smith.

Rossi’s notes regarding arguments raised by Joseph A. Murray.

§

Note: All comments to this post will need to be confirmed by me.

So far, all fawning praise. If that’s what you like, you are welcome to it. You had some experts, people with actual knowledge, commenting before. You insulted them.

I have commented on the Lewan post, citing this page. The comment was made at July 20, 2017 at 18:33 and is awaiting moderator approval. (I draw no conclusions from the delay. No additional comments have been accepted since then.)

Settlement Agreement?

Rossi has granted an interview to Mats Lewan. 

[I have written an extensive review of the interview on a page here. I’m saddened to find it necessary to write this.]

The interview includes a link to a “settlement agreement” between all parties to Rossi v. Darden, stating “undisclosed source.” The agreement is unsigned and undated, it’s a draft, then. I have made inquiries to determine if this is legitimate and accurate. But here is the settlement-agreement-draft.

In the Lewan interview, Rossi makes many statements that, from the clear evidence in the case, are, at the very least, misleading. Lewan’s summaries are, themselves, misleading. (Lewan has often shown that he didn’t understand the case, and is continuing that.) I will cover that interview in detail. There are two other documents hosted on the Lewan blog linked from the interview, they are Rossi handwritten notes, full of words like “stupidities” and “middle school math.” Classic Rossi.

Some of what Rossi ridicules is actually rather well-established. Rossi, for example, attacks the idea that the warehouse would have been deadly hot without a heat exchanger. What Rossi says there is utterly preposterous. From the interview:

Rossi also addressed the claim made by IH that producing one megawatt of heat inside the building where the test was run would have made it so hot that you couldn’t have stayed there. First, he noted that the sun on a sunny day radiates about 1 kW per m2 and that the building, having a roof of about 1,000 m2 normally would have received about 1 MW of heat from the sun, without making it too hot in the building, even though the roof was barely insulated. Furthermore, it had large openings with exhausts for venting air out of the building. Then the JM plant consumed on average 20 to 40 percent of the produced heat, and the rest was vented out with the heat exchanger.

Lewan shows no sign of any skepticism or critical reserve. That argument resembles what Rossi eventually said last year when questioned about the dissipation problem. What we know about the JM plant is that there was no product being moved in and out, and an endothermic reaction would require massive amounts of product to do what Rossi claims. Instead, there was at one point a few grams of platinum sponge and at another, a little graphene, nothing that could make a dent in that power. Some chemical process “consuming” so much power would become very dangerous (because of the stored chemical energy). Last year, Rossi did not mention a heat exchanger.

Rossi’s own expert, Wong, agreed that without a heat exchanger, the temperature inside would have been deadly.

Lewan has, at the end:

I am confident that if Rossi were really involved in fraud, evidence for that would have been found during the time—a year and a half—since IH claimed to have started to be suspicious about Rossi. Looking back and noting that no such evidence was found, while hollow arguments have been shouted out loud, I have very little doubt that the E-Cat technology is real and that the one-year test was a clear success of a world changing technology, producing 1 MW of heat without emissions, from small amounts of harmless fuel at a COP of about 80 for a whole year!

Now I know what I’d suspected, Lewan did not become familiar with the issues in the lawsuit and the evidence in the case. There is a focus in Lewan on alleged claims of fraudulent data. IH did question the data, but that is not the core of the case they presented, where evidence of fraud was completely clear: it was in “fraudulent representation” of the customer and other issues. The test was far, far from independent, the “customer” was Rossi all the way down, but he lied about it, and that became completely clear.

And then Rossi destroyed the evidence that could have been used to confirm or disconfirm the data. This was all clear.

As I mention, I have not confirmed the settlement agreement, but if what is shown is real, it would confirm that IH had become certain that Rossi technology was completely worthless. Otherwise they would simply have refused to come to a settlement, they would have left the conditions with the status quo after the dismissal. So starry-eyed optimism here requires ignoring the obvious: IH spent about $20 million to confirm the technology, and walked away empty-handed. The formula and IP, if they agreed to surrender all that for nothing, is worthless to them.

And nobody else has seen it so closely and so thoroughly.

Rossi had no chance of gaining the $89 million payout, because of the clear contractual situation, and even less chance (hey, less than zero? ah, don’t quibble!) of piercing the corporate veil and hitting up Darden and Vaughn personally — and Cherokee.

Lewan, you are ignoring the obvious in favor of starry-eyed optimism that trusts a man who has been shown, beyond doubt, to have lied to Hydro Fusion, to Industrial Heat, and to the public, again and again. Nice face, though.

Good luck with your Symposium. Be careful of putting down a big deposit. Maybe Hoistad et al will show their faces.

Meanwhile, I will continue to organize the documentation from the case to make it more accessible. I will collect analyses and generate study documents for genuine research.

Update: Stipulation of Dismissal and a possible hedge.

July 19, a joint stipulation of dismissal appeared. This does not refer to any settlement agreement. This is what was stated in court, July 5:

MR. LUKACS: Your Honor, on behalf of the Plaintiffs, I am pleased to announce that the parties have resolved this matter, the terms of which have been agreed to, will be memorialized in writing. The most significant term, of course, would immediately affect these proceedings in that the parties have agreed as part of the settlement to jointly dismiss this
case, and I mean all claims with prejudice. This includes claims against the Third-Party Defendants as well, with each party to bear its own fees and costs. We expect to have the final written document drafted within the next 24 to 48 hours. Thank you.
THE COURT: All right. Did you want the Court to retain jurisdiction to enforce it? Because if that’s the case, it needs to be filed publicly.
MR. PACE: Yes — no, no, Your Honor, we are not going
to ask the Court to retain jurisdiction.

The devil is in the details. While they state that the “terms” have been “agreed to,” the “final written document” was not yet drafted. We have seen a copy of a draft signed and dated by Rossi on July 14 (it showed up in a LENR-forum post by Ahlfors, with, as is usual for Ahlfors, no attribution.) So it is not impossible that something wasn’t completed, and it is not impossible that it will never be completed.

Rossi is claiming that he now has full access to the Doral Plant, i.e., the padlocks have been removed. The stipulation of dismissal was filed, though rather late for such a simple document. At this point, I think it likely that IH did, in fact, relinquish the License, thus giving up what I’d called their “hedge,” the safety catch. They were giving up on Rossi technology entirely, but … what if this was all a ploy by Rossi to eject them (as some have claimed)?

They spent about $20 million to find out if Rossi had a technology, but they still don’t know for sure if he has anything, because he may have deliberately set it all up to fail, in a more complex version of what he claimed to do with Hydro Fusion in 2012.

They may still have their hedge. Indeed, they paid for it, but not to Rossi, rather to Ampenergo (AEG). The draft Settlement Agreement explicitly excludes AEG and, technically, the License Agreement still stands as far as AEG rights are concerned, because Rossi and IH together could not amend it without AEG consent. The dismissal prohibits Rossi and IH from enforcing the License Agreement, and IH has relinquished their rights, but not AEG’s rights, and has not relinquished claims against AEG, and they had a separate agreement with AEG.

If IH truly considers the possibility of an October surprise from Rossi (followed by a mass impact on the market) as being zero, they might not bother, but it could be simple to agree with AEG to share licensing revenue if that ever becomes an issue. They don’t need the many billions of revenue that could arrive in that contingency, just enough to recover their investments in LENR so that those investments are protected.

They might have their hedge through AEG, which was cooperative with IH throughout the whole Rossi affair, and AEG is a shareholder in IH. It held a license for Rossi technology in the Americas, and IH already compensated AEG extensively.

I have not seen the Rossi/AEG license agreement. Unless there is some kicker there, at the very least I’d expect the license to revert to AEG.

 

 

RvD trial day 4: settled!

All claims and counterclaims withdrawn. Jury dismissed. Here is my account of what happened in court today. These notes are not much edited.

I arrived at 9:10 AM. There was the appearance of a hearing with something missing, two plaintiff attorneys (probably), one woman sitting on the defendant side, nobody saying anything. Altonaga  sitting on the bench, waiting.

Eventually a man walks in and sits down next to the woman. Altonaga has a brief exchange with him and sets a hearing for Friday and they leave.

In the Gallery: Lukacs, Bernstein, Nunez. De la Barra and Johnson walked in at 9:15.

Then Altonaga called Rossi v Darden and told the attorneys they could set up. Altonaga left the courtroom, then it was “all rise” at 9:20 and she came back. Darden walked in with Erika Handelson., Lomax and Pace.

Lukacs asked the Judge for fifteen minutes to confer with Pace. She said, “brief, please,”  as I recall. They went out together.

Chaiken and Lomax walked out. Rossi came in. Annesser came in at 9:25. Chaiken came back in, started setting up four display boards, for the timeline again. Bernstein walked in with a box of sticky tags to use as markers on the timeline, as before.

If that timeline is used during testimony, I’d think of objecting to it. It is a form of argument. But I don’t know precedent.

Rise for the jury at 9:30.

Lukacs and  Pace came in, Lukacs started to say something, and Altonaga shushed him, the jury was coming in. Lukacs and Pace walk back to the Judge and go into her chambers, and she joins them. She comes out and sends the jury out for 15 minutes.

Lukacs was whispering to Rossi and other counsel. The entire Rossi team walked out. (There are two attorney conference rooms off the courtroom entry way.) Bell and Pace walk out. Chaiken stood in extended friendly conversation with Lomax. Bernstein walked up and shook Lomax’s hand. They are smiling. Darden remained sitting, not interacting with anyone. Serious face. The 3rd party counsel remain seated. Chaiken and Lomax continue to whisper and smile. Chaiken walks out, Bell walks in for a moment. Then Nunez and Bernstein whisper. Nunez appears bemused.

Whatever is going on, it doesn’t look like Bad News. The timeline was better lined up this time. Bell walks in, whispers to Lomax, smiling. Lukacs comes in an calls on Nunex and de la Barra to come out.

This was high drama, while being very quiet. It’s obvious what is happening. They are discussing settlement, at least of some issues. They have made enough progress to pull in the 3rd party attorneys.

Erica and Lomax chat, Nunez walks in smiling. All return. Lukacks asks me to leave (apparently by name, because Pace asked “which Lomax, both are named Lomax.”) But I’d immediately risen to go, because I knew what was happening. This was to be a brief closed hearing. Pace said to me, “Ill talk with you later.” I sat on the comfortable foam cushions in the central area of the 12th floor, looking at the view, completely pleased. Sure, we want the truth, but at what cost? We already, speaking for the public, know enough to have a good sense of what happened, of the reality of this history, if anyone wants to know, the information is there. If people don’t want to know, even a jury decision won’t convince them. “Punishment” has low value.

I noticed that a man who had been there, off and on, was sitting outside also. I walked over to him and ask him his connection with the case. This was Darden’s son, also named Tom. We chatted about the case and the appearance that it was settling. Darden came out and I mentioned I’d like to talk with him or part of the IH team before I left Miami. He had me give my phone number to his son. Then the jury walked out, obviously dismissed.

Lukacs came out and I asked him if he could make any statement about  what is going on. “I’m not at liberty to say” Rossi walked out and I shook his hand and he warmly returned it. Pace chatted with me for a minute. He wanted to be very careful, but he said that the obvious was happening. He said that he would be releasing a statement later. My sense was that there were no conditions to the settlement, the complaint was dropped and likewise the countercomplaints. Over. Finished.

Darden was philosophical. He was, here, accepting a loss of about $20 million, but Darden, with Cherokee, certainly risks that level of investment commonly, and risk implies that sometimes one will lose. In fact, though, LENR won, because the bold move to invest about  $20 million in Rossi technology created a movement that raised, for that purpose, through IHHI, $50 million. Their goal was to find out about Rossi’s claims. Reasonably enough, they found out.

Until I see it officially announced, I cannot be 100% sure that Rossi v. Darden settled on day 4 of the trial, returning to status quo ante. I don’t know if the dismissal was with or without prejudice, by my sense is that it would be with prejudice. However, I’d assign a probability of full dismissal at 99.9%. Good enough for folk music.

Okay, it’s now in the docket as 332. The “case settled.” We have no official details other than that.  I expect to see a joint stipulation in short order that will give a little more detail. Probably ”

What does this mean?

It means a lot and it means less than many are saying. My report,  above, is being repeated with what is standard: it is interpreted favorably to existing opinions. There is good legal analysis on LENR Forum  by woodworker and Mike Dunford (both lawyers, IANAL). I wrote that Darden was pensive. I will emphasize that this was the appearance: both sides were ready to start with the evidentiary phase of the trial. Chaiken was setting up his timeline (which might have been shot down as argumentative, but the trial never got to that point). It was all business. Darden looked pensive.. He might look that way if he had mild indigestion, and this could be totally meaningless. Frankly, I wasn’t looking forward to what would come next: a series of useless evidences that even if completely true would be irrelevant except within a highly misleading context.

I.e., say, Rossi had proof!, proof, I tell you, that someone in Cherokee was happy about the Agreement with Rossi, in a private memo. Darden is the CEO of Cherokee, and IH’s business was consistent with the long-term goals of Cherokee, but Cherokee never starts risky ventures directly, it always does it through liability-limited companies, otherwise the entire $2.2 billion entity could be pulled down by a single error. Instead, CIP, with true Cherokee LLCs, invests maybe $25 million, which is what they have at risk. These LLCs are independent, attract their own investors, may take out loans, all normal business. Some — a few — ultimately fail,  but Cherokee never is itself at risk beyond their investment. That is absolutely necessary and normal for the kind of business they do.

So Chaiken would be taking a document out of context. He’d combine it with another alleged fact he had. Half of the original $1.5 million was paid from Cherokee. If Cherokee were the full owner, as Rossi claims to have believed, they wouldn’t have paid half, they would have paid the full amount. Rather, this was almost certainly a loan to Darden, personally guaranteed, and I’d bet he paid interest at the statutory rate. These guys are not stupid!  None of this would be legally adequate to overcome the standard Entire Agreement clause of the Agreement and the Statute of Frauds, all of which is intended to prevent legal disputes like this.

I am trained to create excitement and connection. I noticed my reaction to what was coming and deliberately dropped it. In that process, for a short time, my face may have shown something like an upset stomach.

Darden’s countenance did not telegraph that he thought they were going to lose, which is a claim being made on ECW.

The appearance was that Lukacs initiated the out-of-the-courtroom  discussion with Pace. That could be misleading. I have no strong evidence that Pace did not privately say something to Lukacs, with then Lukacs merely being the one to ask the Judge for delay in starting the presentation of evidence to the jury. That was initially delaying the jury entry. Altonaga wasn’t eager for delay, she asked Lukacs to be quick. It is very clear, though, that this was not pre-arranged. There was no sudden shift in mood, not immediately. Altonaga waited about 15 minutes, then told us to rise for the jury. Lukacs and Pace came back in and Lukacs addressed the court. His comment was not intelligible to me. Altonaga told him to wait, the jury was coming in. Then, when the jury was seated, Lukacs and Pace approached the bench,  then went back into the judge’s chambers, and she went there as well. She came back and sent the jury into a 15 minute recess. Then came much scurrying in and out of lawyers and parties. The courtroom was very quiet, if I was close to attorneys whispering, mostly I still couldn’t hear anything. But the mood brightened quite visibly and attorneys from opposing sides were smiling at each other, sharing what, I noted at the time,  did not “look like Bad News.” To anyone.

(Some have claimed that this was based on lawyers gleefully anticipating  being paid. See below about anti-lawyer bias. If what they wanted was more money, this wouldn’t be good news. If what they want is client benefit — which is what their ethical standards require — this was good news for everyone, assuming that there were no poison pills included. Good News compared to fighting to the bitter end. Far less stressful.)

When the 3p attorneys were called out, it had gone beyond obvious without anything being said. A settlement was being negotiated. From the context, I knew it had to be simple and decisive. Altonaga would not tolerate less, I’m sure. It would leave the parties free to negotiate anything they wanted that they could agree upon without legal coercion. It could not seriously damage any party, because they would otherwise prefer to finish what had been started — at great expense!. But it would almost certainly not involve any payment, meaning that all parties would bear their own expenses. As soon as significant compensation or other changes would enter the picture, it would get complicated. They could have asked the Judge to delay the trial a day so they could work out a more complex agreement. My sense of Alttonaga is that she would not have accepted that. So it had to be simple, something that both Rossi and IH could accept, and the 3p attorneys would accept (though I’m not sure they would have had the power to stop it.)

I doubt if there was any specific agreement regarding paying legal costs (other than something very simple like “parties to bear their own costs.”) I had a few words with IH counsel before this was complete. Somehow in that, I don’t remember who said it, I got that what was being proposed was total, mutual, dropping of legal claims, very simple, with everything else being subject to direct agreement of the parties outside of court (which would be, essentially, return to status quo ante). Lukacs was able to convince Rossi probably on the strength of his personal reputation and an assurance that there would be good-faith negotiations. (This is radically different from what Annesser had done in December 2015, when he threatened IH with suit for “anticipatory breach of contract.” Pugnacious, what some people think attorneys should be.)

As soon as Rossi wrapped his head around the possibility, I’m sure he’d feel an immediate sense of impending relief.

Lukacs and Pace returned and prepared to address the court. At that point, Lukacs asked that I be sent out, apparently by name (because of a question by Pace about “which Lomax”)?

Getting up to go (I did not wait until the Judge ordered me out, I knew she would grant the request to close the court), I was close to Pace and he said to me, “I’ll talk with you later.”

Outside, I eventually asked who the other man sitting out was, and he, (Darden’s son) told me. We talked about the case and the apparent settlement. There were mixed feelings. He — and I — were looking forward to resolution, and this was a bit like charging out into a battlefield, ready to fight, some believing the enemy was evil and had fangs, and someone blows the whistle and says, “Game over, shake hands and go home!” What? Shake hands with Satan?

Yes. Shake hands with that other human being, now, either work together to build a better future for all of us, or stand back and allow others to do  that. Don’t keep fighting, it is the fighting and hatred that is Satan’s work. This is all long-term ontology for me, and training.

At some point Darden came out and was talking with us. I said some things about the settlement and about IH future. He said, “Smart man.” Darden does not say a lot, is not chatty, but conveys confidence. If you don’t trust him, don’t invest with him! He’s not going to argue. If needed, he has others to do that for him, called lawyers. Try to go and tell Bill Gates he’s stupid for supporting LENR research. See if you can even get those words to his ears. He has experts to filter information flow. He is not Donald Trump, even though he’s richer. Heh! Sorry, Trump fans, but I think you could agree that Trump is not Gates. If not, my condolences, it takes all kinds.

When the jury walked out we knew that it was over. There was no way  that Altonaga was going to allow any delay in the trial, she was already fried and wanted to clear her docket ASAP. If they wanted to dicker over terms, fine. Let them dicker, out of court, but not delay the trial.

Then Pace came out and came up to me. Man of his word. We talked a little. Lukacs came out and I asked if he could comment. That is when he said he was not at liberty to comment  Now, here is where I can see a strong difference between Pace and Lukacs. Lukacs was blunt, pure business. I knew that what he was saying was probably legally necessary. I did not resent it, and, in fact, I smiled and thanked him. He was not smiling. He was like a surgeon who had just extracted a life-threatening tumor in an operation painful to the patient, who is totally focused on  being a doctor and dealing with the physical. I see Lukacs as highly professional, but not necessarily a people person. Whatever people skill he has — and they must be considerable in some ways — he wasn’t using them with me. Just saying. He did nothing wrong.

Pace essentially told me the same thing, but in a way that would normally generate positive feelings. He showed by his affect that he was friendly and would like to tell me what was happening, but he said that he needed to wait to be sure, “as a caution.” At some point Lomax told me that he was intending to provide me the daily court transcripts. I asked him to send them to me anyway, please. And he said he would. This would be a neutral contribution that he and Jones Day could provide my work. I was planning to also ask Rossi counsel for that.

When the jury walked out, it was completely obvious that the case was over, even though Altonaga did not have a marshal tell those outside that they could come back in. I went back in, and the courtroom was almost empty. Rossi’s counsel had all walked out carrying boxes of stuff.

Now, on LENR Forum, to some degree, in comments here, to some degree, and more on e-catworld.com, there are those creating fantasies of what the “settlement” was, and then, generally, declaring a huge victory for Rossi, assuming that the License cancellation would stand (neglecting that this unilateral action had been ignored by IH and correcting this had not been a dismissed claim of theirs. Why waste legal time and money over a nullity? It’s moot unless IH attempts to rely on the License, which is very unlikely, unless Rossi actually does hit the market, then it could be worth billions, so … worth even huge legal expenses, and with a slam-dunk case (which we have seen, even slam-dunks sometimes don’t go through the basket, but people at this level are constantly playing the odds as they read them. Relatively disempowered people look for certainties and even prefer to pretend them, and the dysfunction behind this is common and training to overcome that is rare. There is very little genuine certainty in life, but some of us are afraid of that and attempt to deny it.)

Mary Yugo actually made a decent comment on why this is. “She,” however, is probably operating with the instinctive responses being “wrong.” Rather, they are, as pointed out, functional in emergencies but then can disempower us if maintained beyond emergency conditions. In my training, the emergency response is called an “amygdala hijack,” and it is quite visible and recognizable, and also easily handled, but not by declaring it “wrong,” which then sets up an internal power struggle, and the amygdala is designed to always win this struggle, it literally hijacks the entire structure of the mind. Rather, the amygdala is a primitive machine, but it understands language and is programmable. Actually doing this, programming the amygdala, can look like a miracle. When the amygdala is active, the entire and vast associative engine of the cerebral cortex is turned to the service of the emergency response. It will find “proof” that it is “right,” and may go to extreme lengths to preserve identity, faced with what it sees as a challenge. The simplest solutions can be practically invisible, because of this activity.  In a word, reactivity can make us stupid.

To accept what I think was the actual “settlement,” something very simple was necessary,  that Rossi had in his power, in theory, even before he filed the suit in April, 2016. Rossi had to give up his attachment to “being right.” He had to let go. There is a predictable result from this, I’ve seen it hundreds of times: an enormous relief and a transformative increase in joy and power. You can see this in JONP. Someone has also reported that Rossi is “Happy, happy.” (An unattributed rumor passed on by someone who is sometimes accurate, on LF.) From that, conclusions are being drawn that Rossi must have gotten what he wanted.

While we cannot at this time know if there were any stated conditions, they were not, I’m sure, stated in court and would not be legally binding. The most I expect was actually agreed in court was the withdrawal of the claims and counterclaims, the dismissal of the case, with prejudice. If you were worried for a year that you might not only not get what you wanted, but might end up essentially screwed, bankrupt, and then it all goes away, because you are willing to let go of what was driving it, being very happy would be normal. Even if you aren’t getting what you wanted.  Manic attachment to declared purpose is not a formula for happiness, it’s the opposite. Even if one “wins,” sometimes. Happiness, genuine happiness, comes from a realm that is not the realm of right and wrong, good and bad, but that is simply present to life. Rossi can now enjoy playing tennis with his wife. And his wig looked nice. Life is good. His work is fun.

Planet Rossi has expressed some amazement that I didn’t attack or lash out at Rossi. That is because they largely bought a world-view that I was a paid FUD-er. Some of them still repeat that charge as if it was proven and admitted. But it has been continually denied, ever since the issue was first raised, and all this means is that people will often believe what makes them feel most secure. I do not allow my security to depend on fact and conditions. It depends on trust in reality, only,  independent of conditions. That, again, is training, though it is also connected with what I’ve been studying since my twenties. I recommend, highly, declaring and standing for a full and complete trust in reality itself. It’s not necessarily easy, even though it is obviously necessary for true security. I’m going to die. That’s not bad news! I might be wrong about this or that, various ideas about reality, but what I trust is not my ideas, but reality itself.

I am also human and become afraid, but when I remember the commitment, the fear vanishes.

My impressions of the settlement are informed, I was a few feet away when it happened, and talked with some of the players. That impression includes that there might be additional voluntary agreements.  There are some simple ones that might either have been negotiated, involving claims in the lawsuit that a good mediator may have been able to turn quickly into agreement. Most likely, though, any complications would have prevented full and complete agreement in the short time available.

The fact of withdrawal of claims cannot be used to show anything that was not already obvious from the known evidence and I see no way to assume what was in any binding agreements, other than an assumption that if these were seen as harmful to any side, the settlement would have failed.

I intend to continue organization of case evidence, including presenting opinion, but “attacking” Rossi has never been my agenda, rather, it has been to share evidence and my sense of implications. There are those in the various communities involved who are still fighting the war. They will continue to make themselves unhappy and will not contribute to the future of LENR. They will not help Rossi nor IH. IH never wanted this fight. Dewey Weaver’s opinion — and I like Dewey — was never more than his informed opinion plus his own personal reactions.

When I wrote the first draft of this page, I mentioned expanding it “when I got home” That meant when I was back at the apartment where I am staying. I intend to continue organizing the case material when I am back in Northampton, probably next week.

Update, July 20, 2017

I have the Day 4 transcript.

It generally confirms my impressions. There are two minor differences:

When Lukacs asked to speak with defense counsel, it was not just Pace, it was also Bell. I’m not surprised, but apparently I didn’t notice it at the time. Why Bell? Probably for the same reason as was behind Lukacs making the request. A less involved attorney, less committed to the fray. I had some brief, pleasant conversation with Bell. Very nice guy. Same with Pace, by the way.

Then there is this interchange, when Altonaga had sent the jury out for a recess because of the request by Lukacs and Pace.

(A recess was taken from 9:30 a.m. to 9:55 a.m.)
MR. LUKACS: Sir, would you mind excusing yourself?
GALLERY SPECTATOR: Yes.
MR. LUKACS: I was just asking him to leave for a
moment.

I think the recorder missed something. This wasn’t me, this was probably Tom Darden, the son. Just before this, Lukacs asked for Mr. Lomax to leave, by name. Pace said “There are two Lomaxes.” I did not reply, I just left, because, obviously, Lukacs was referring to me.

 

RvD trial day 3 (Jury selection and Opening Statements)

Official Transcript of Day 3.

Two cases, sentencing hearings, were heard by Altonaga before turning to Rossi v Darden:

  • An elderly defendant had pled guilty to possession of child pornography. “I was curious,” he said in his statement. He had, however, downloaded multiple files from a Tor directory. Altonaga read the filenames and described the videos. Sex between adults and prepubescent children. The man had previously been convicted of sexual conduct with minors, was registered as a sex offender, was on probation. Curiosity killed the cat. Sex addict, I’ve seen and known many. We had a President who was a sex addict, willing to risk his entire career because an intern offered him some candy. Addictions can kill you. Altonaga sentenced him to 20 years. She read the descriptions of the videos without showing any emotion. He will almost certainly die in prison, and his life would be at risk there from other prisoners.
  • A relatively young man, perhaps  approaching  middle age, pled guilty to distributing marijuana. He had been a mule, transporting, as I recall, roughly 500 kg from Canada 0ver a period  of time. There was a plea agreement. Probation. The man turned around, looking at someone in the gallery, and flashed a smile, which I read, perhaps unfairly, as “I got away with it!” For his sake, I would hope that this didn’t translate to “I can do it again.” On the other hand, this is a mostly victimless crime — my opinion, though I have extensive knowledge of the topic.

So then RvD jury selection began again. This time, almost the entire Gallery was devoted to  additional prospective juror seating. Others were allowed one row, six rows for possible jurors, and one empty row in between, to buffer the jurors from the public.

They started with sixty candidates, but one was excused before being brought in. In reading the list of witnesses, I noticed that Rossi was read with the honorific, “Doctor,” but the actual PhD (his expert witness Wong) was not. Nor were Bo Hoistad or Levi, who may have equivalent degrees.

The  Judge explained the burden of proof for decision in a civil case as “preponderance of the evidence,” there is no prejudice for the defense as in criminal cases. However, with an “affirmative defense,” the defense has the burden of proof that the defense applies.

The case overview was read by the Judge.

The prospective jurors were told that the trial  was to end the week of July 24.

One of the questions asked of the jury: “Have you ever been reprimanded by a third party for doing something your boss told you to do?”

There was a lunch break from 12:30 to 1:30.

With the panel still out of the room, the way that boiling down the jury occurred was that the judge made some recommendations to excuse certain jurors, and then the parties objected or didn’t. Almost entirely, or entirely, I’m not sure, they didn’t. This was very fast and I didn’t understand the language at first. I tried to keep track of jurors “struck,” but I think I missed the first ones. What I recorded, probably, was the ones struck on unprompted motion by the parties. That was 32.

The lawyer would say the juror number and something like strike for cause,” or just plain “strike.” if the latter, it was discretionary, and each party had only so many discretionary dismissals. Rossi and IH used them all. I’m not sure if the 3rd party lawyers used any. When this was all done, they were down to 13 jurors. There was no objection and Altonaga mentioned that if necessary, they could deal with the possible extra juror later. (The federal rules have 6-12 jurors, but apparently it is possible to have more if the parties consent, and if it is necessary to dismiss a juror later, they would still have 12.)

The last thing anyone wants is another mistrial. If that was going to happen, the morning of the second day was much better than later!

Then the jurors were brought in and the names of those chosen were read, and the rest were allowed to leave (with the same joke about locking down the courthouse. — it is probably also what they would do. Altonaga did not repeat her joke about “who is enjoying being here?”)

So, then, opening statements.

Plaintiff (Rossi, delivered by Chaiken again)

Quotations here are generally from the Law360 article, which was good coverage of the arguments presented. My comments are then in italics.

Chaiken told the jury that Cherokee boasted about the technology.

My recollection is that this was an internal memo, where distinction may have been lost between Cherokee qua Cherokee and Darden and Vaughn and the new LLC. The point would be that Cherokee considered itself the active party, supporting the Rossi narrative.

When it came time to pay, they refused.

This, again is familiar story. This doesn’t match the evidence, i.e., as to timing. IH protested that Doral was not the GPT and Penon not the ERV (for a GPT) no later than December of 2015, after Rossi had excluded the IH engineer, Murray, and the demand for payment was not issued by Rossi until toward the end of March, 2016. Annesser threatened IH with suit for anticipatory breach in December. It was not some sudden surprise, as implied.

Chaiken quoted a “Leader in LENR,” praising Rossi and the  technology. Then at the end of those quotations  he revealed that the “leader” was Darden.

As if Darden being initially enthusiastic proves anything about what happened later. It is quite clear that Darden was enthusiastic, but if one reads the statements to investors there were also caveats and concerns. Chaiken is presenting cherry-picked pieces of the story, which may well be normal for attorneys, but … this factoid demonstrates nothing of relevance, as far as I can  see, other than what is obvious: Darden hoped for success. In order to maintain the full Rossi narrative though, Chaiken will need to show that Darden was lying to his own investors, which  is about  the most personally dangerous thing for an investment manager to do. Doing that, one can end up bankrupt and even in jail.

Chaiken claimed that if Rossi had known that IH wasn’t fully owned and backed by Cherokee, he would not have agreed.

As Pace will point out in his opening, the License Agreement contained an Entire Agreement clause, makin it a clear matter of written agreement that was no dependence on prior representations (oral or drafts or whatever). As well, Rossi had the better part of a year to change his mind with no loss (and even some gain, i.e., perhaps interest on $1.5 million. All he had to do was cancel by returning the $1.5 million.)

Chaiken created a “timeline,” this day (unlike Wednesday).  It was a set of charts with a horizontal line with years labelled, set up on a  series of easels. Three, I think. The lines did not line up and the charts were tilted.

Small thing, it might seem. However, my communications training would suggest avoiding that, it looked messy, and it got worse when Chaiken wrote on the chart. These things create subtle impressions.

Then, Chaiken wrote on the chart.

His writing was small and messy and mostly unreadable. It was surprisingly unprofessional. Chaiken is not the most experienced lawyer on the Rossi team, I’d bet that this would be Lukacs, but Lukacs is new to the case. Nevertheless, Chaiken does have substantial experience. He speaks in bursts, it was quite noticeable. The effect on me was that I didn’t trust what he was saying,  but I know too much, I know many of the half-truths and misrepresentations already,  so it is difficult for me to  assess the effect on the jury. I’ll be watching for clues.

As I write this, I’m sitting in an apartment with a view of the Miami skyline to the west from a point a few blocks north of the Court. There are fireworks. Yay freedom!

As Chaiken described some  bit of evidence, he would place a marker on the chart for when this was said. It took me some time to figure out what he was doing. My guess is that some jurors would be similarly confused.

He placed almost all the markers above the line, as “positive.”And then he claimed that in May, 2015, Darden changed his tune. What happened in May, 2015? “IH sold 4% of the company for $50 million, to Woodford Fund.

In fact, none of the company was sold, this is a misleading representation. It is in the Statement of the case this way:

“Second, in the alternative to their claim for breach of the License Agreement, Plaintiffs claim that Industrial Heat and IPH were unjustly enriched by certain benefits provided to them by Plaintiffs. Specifically, Plaintiffs claim that Industrial Heat and IPH successfully sold 4% of their
company in return for $50 million as a result of Dr. Rossi’s efforts in continuing to provide consulting services to Industrial Heat and IPH.”

There is no evidence that the Woodford investment was a result of Rossi’s continued activity, but was apparently in spite of it. When I get a chance, I’ll link to the Ampenergo Notes. The investment was planned in 2014. Woodford did visit the Plant in February, as the “test” was beginning. I’d have wanted to see it too. I would not have been impressed by an alleged 1 MW plant with the alleged steam disappearing through a hole in a wall, invisible, with no major radiant heat.

Second, 4% of IH was not sold. From whom was it bought? Who was allegedly enriched? What actually happened was that Woodford wanted to invest, but did not want to invest in the planned master LLC, IPH International, Bv. Why not? Almost certainly to avoid placing their investment at risk from Rossi behavior. IPH was on the hook for the License Agreement contingent liability, if that existed. (That is why IPH has been sued.) Instead, IH itself was sold, in toto, to IH Holdings International, Ltd., through a stock swap. So the original investors became investors in IHHI. They did not receive payments. Then Woodfford was allowed to buy preferred stock, at about $45 per share, this stock, if I understand it correctly, has the same voting power as shares worth 4500 times less.

This was a device for allowing Woodford to make a major investment, supporting the goals of IHHI (which is about research and development in LENR, definitely not quick profit), while allowing operational control to remain in the hands of Darden and other major investors. Obviously, Woodford trusted Darden and friends. This wasn’t an arms-length sale establishing a value of the company. IHHI has spent much or most of that investment, and Woodford, per Ampenergo  and IH deposition, was prepared to invest another $150 million if needed (and may still be so prepared). So if they  were convinced it was appropriate, IHHI could have paid Rossi his $89 million and had money left over for commercialization.

Nobody was “unjustly enriched.” IH was, perhaps, rewarded for taking a bold and very risky step, buying the License from Rossi.  That made the entire field of LENR research safer for investment, though still very risky. Rossi is angry, obviously, because he didn’t and couldn’t get any of this money without doing what he either couldn’t or chose not to do, teach IH how to make devices that would pass fully independent testing.

“They wasted no time telling investors and potential investors that E-Cat actually works and that they were in possession of the technology,” Chaiken said.

At one point, in an investment memorandum, International Heat [sic, Industrial Heat] said the future success of the company was dependent on one key individual: Rossi, according to Chaiken.

This is all fundamentally irrelevant to these case. It establishes, if accurate, that someone was enthusiastic about the Rossi investment. (Who is not specified in this report, and the Chaiken opening is quite vague as to who did or said what. “They” is not specific. However, this is just an opening statement and can be vague. The goal is to plant ideas in the minds of the jury, that they then may stick facts they learn on.)

“They’re telling their investors they’ve got LeBron James on their team and if they’re going to the NBA Finals, they’re going to ride him all the way there,” he said.

There is no doubt that Darden was optimistic. Had he not been optimistic, behaving consistently with that, Rossi’s long-term behavior was well-known. He’d have pulled the plug.

But International Heat changed its tune in May 2015, he said, when it successfully sold 4 percent of the company for $50 million. After that investment, Chaiken said the narrative changed, and the company began to say that Rossi was unreliable and that the test results of his E-Cat technology were unreliable.

That was a highly selective reading of the record.

The evidence that has been revealed to the public shows that Darden had always, with investors, maintained caveats, and questions about the various tests, such as the Validation Test,  and that Rossi had refused efforts by IH to gain more independent support for claimed results. IH simply did not use these to pull the plug on Rossi, continuing to hope that he would reveal what was needed to make devices that worked. Depositions show that if there was even a 1% chance that the reactors actually worked, with a transferable technology, they were willing to continue.

Chaiken is not about to mention the obvious turning point. By May, 2016, IH was realizing that they didn’t know what was actually happening in Doral. At the beginning of July ,then, Vaughn informed Rossi that he would be visiting with the new IH Director of Engineering. Rossi refused to allow it, giving no particular reason. This was a violation of the Term Sheet, and if this had actually been the GPT, would be a major offense, not allowing IH to observe the test with their own experts. (Rossi also prohibited independent experts from observing the Validation Test, claiming it would cause him “big problems.” Indeed.) At that point, all possibility of cooperation vanished. Rossi was shutting IH out. Johnson, in December, backed up Rossi, and so did Annesser.

Of course they changed their tune!

Defendants (Darden et al)

Christopher Pace of Jones Day … told jurors a different story, one in which his clients were deliberately lied to regarding the performance of the E-Cat.

That’s an easy take-away, but not the emphasis of Pace. Rather, he talked about, for  example, a “fake customer,” and various examples of fakery shown in the evidence.

… That [GPT] performance test allegedly took place in a warehouse in Doral, Florida, but Pace told jurors the whole thing was a sham.
He said his clients let Rossi take the equipment from North Carolina, where the defendants are located, to Florida because Rossi said he had found a customer that wanted to use the E-Cat and could test it in a real-world scenario. Rossi told them the customer, JM Products, was an affiliate of Johnson Matthey, a U.K.-based multinational chemical company.

This gets really interesting. Rossi denies, under oath, that he told IH that about JM. Rossi has claimed that Darden has perjured himself, yet the documentary shows that IH believed that JM (notice the initials!) was the real customer. Rossi did not deny that to them, but affirmed that “their customer” was JMP, a newly formed corporation, formed by Johnson, all the while claiming that maybe the owners, after some successful operation, would allow their names to be revealed. And “I wasn’t supposed to mention their name.” This was outright lying while attempting to set up plausible deniability, and the jury will see this easily in the evidence. No knowledge of nuclear physics or steam engineering needed, just ordinary common sense.

James Bass, in correspondence with Rossi, clearly thought the real customer was JM. And Johnson admits that his certification that the owner of  JMP was a “U.K. entity” was false, but a plan, and they decided not to create the “U.K. entity” because it was too expensive.  However, why would they even want to create a U.K. entity? It is totally obvious: to justify that declaration that allowed the appearance to continue that JMC/JMP was owned by JM, a U.K. entity. Rossi will claim that IH knew that the “customer” was the Florida corporation, but who was the owner? The real party in interest. They had no way of knowing  the reality other than what Rossi told them,  and he was lying. There was no public record of the ownership. Rossi also demanded that IH not ask JM about the affair, it might spook them. This is all plain in the record.

Pace told jurors that his clients tried to gain access to JM Products’ warehouse but were blocked and told that the company was engaged in a secretive manufacturing process. When International Heat finally got an engineer into the warehouse, they found clear problems, he said.

The Law360 reporter is quite good. However, what I notice is nuances that she would not be aware of. IH did not attempt to gain access to the JMP customer area, where “secrets” would allegedly be, but to their own Plant, when  that access had been guaranteed by the Term Sheet, the agreement between IH, Rossi, and JMC (later JMP). There were problems visible when Murray finally had access. He  raised the issues with Penon, verbally, and then in writing later. Penon did not respond in writing. As I recall his deposition, he claimed that this was because he had already answered the questions verbally. This was radically unprofessional. We still don’t know what his answers were. It is not that the questions were necessarily sound. Murray ight have made mistakes. But this is not how a responsible engineer would behave. Not if the goal is convincing a company  to pay $89 million for test performance. Rather, if the goal is to satisfy a technical requirement for a signoff, he signed off, and too bad if they  don’t believe him. That is why IH sued Penon, but couldn’t find him to serve process. Chaiken claimed he would be at the trial to testify. We will see.

The amount of water that Rossi claimed the E-Cat machines were turning into steam each day — about 9,000 gallons — was impossible, because at most, the pumps available there could pump only 5,000 gallons of water per day, Pace said.

This is a complex issue. The Penon report claims that outlet pipe pressure was at atmospheric, and this pressure would propagate back to the individual reactors.  The pumps used have a particular rating. In a post yesterday on e-cat world, Engineer 48 — who has claimed to be in direct negotiation with Rossi about reactor installations — claimed that the pump rating used by IH in the opening was based on rated flow against a particular back-pressure, if the back  pressure  were lower, more water could be pumped.

My understanding is that these were metering pumps,  designed to insert a measured flow. As Penon claims very constant water flow,  this would be likely to be how flow was controlled. There was also a pump in the customer area, apparently, a whole can of worms that could have been used to create certain appearances. IH will need to establish fact here, and that is what all the opening statements are doing, proposing fact that they will attempt to evidence during that phase of the trial, and proposing interpretations for the jury to keep in mind. This, again, is easy to understand.

The actual flow meter used was removed by Penon at the end of the test, but  it appears that IH has tested identical flow meters, and, as installed, they  can fail to accurately report flow under some conditions as may have existed, but this became difficult to clearly verify due to the removals by Rossi. (Others have pointed out possible  failure modes, and flow meter failure has featured in prior LENR disasters, i.e., apparently successful tests that were not.)
IH’s expert witness,  Smith, has opined that the system was flooded, and equipment that would have prevented that or detected it was removed by Rossi, it is alleged, before the beginning of the test. My sense of the test setup is that partial flooding, at least, would actually be likely. Consider the condition of a failed reactor (and apparently, by the  end of the test, most reactors had failed): Constant flow of water in, but no boiling, say a heating element burned out, or the electrical input was inadequate to boil the water, what would  happen? The reactor would fill with water, and then this water would flow in the outlet pipe. Penon’s protocol declared that what was done in the customer area need not be examined, thus demonstrating his practical incompetence.  It matters, because there were various frauds (or accidental errors) that could be introduced in the customer area, and for $89 million, one would want redundant measures.

International Heat had also called Florida Power & Light to check on the electricity records for the warehouse and found discrepancies with what Rossi was reporting, according to Pace.

I’m skeptical about this, and so will be the Jury, I think. There are details to examine. I think that what was recorded by Penon was actually recorded by Fabiani,  there is evidence for that. What should have been recorded would be accumulated power usage, the meter reading, not daily usage, which would then be calculated. With that, an error in recording would then be corrected by the next day’s reading.

(The Penon report also has a problem in this way with water flow. The flow meter was not a proper meter for the expected flow, it was too insensitive, operating below minimum rated flow. However, there should still be variation in daily readings, but Penon shows none. What should have been reported as raw data was actual meter readings, not a calculated difference.)

Florida P&L will report, on bills, actual meter readings. Power usage is then calculated. So error in one day, if that is what happened, should be corrected by the next day.

Fabiani, by the way, was on notice from IH that if he did not disclose full data and information to IH, he would be what he feared, “involved” in the lawsuit. In spite of that, he acknowledged destroying the raw data, and his emails with Rossi and Penon.

The FPL discrepancy is a mystery, and that comes out in depositions. It’s reason to suspect something, but proves nothing and is not even strong circumstantial evidence. IH would be advised to keep the case as simple as possible. Do not present mysteries to the jury, present clear fact and clear conclusions.

He said the defendants acknowledged to investors that Rossi was a risk because of previous failed business ventures and a reputation for being difficult, but they gave him latitude because they felt that he had a remarkable technology that produced clean energy cheaply. Pace argued that it is Rossi who should refund the $11 million paid out by the defendants because of the lies he told them.

More accurately, they felt there was some possibility that Rossi ight have a “remarkable technology,” and they wanted to “crush the test,” to find out, not merely to depend on relatively weak inference as from, say, his past.

“Those E-Cat boxes weren’t filled with magic,” he told jurors. “They were simply filled with lies.”

That is pure polemic, designed to create an impression, and it was skillfully delivered, my opinion. Pace’s manner is not “slick lawyer.”

This is not a “fact.” It’s a sound bite,  and the jury will be looking to see if Pace can back this up with clear evidence. Nothing that Pace asserted was new. Anyone can read the case documents and find the evidence, but if anyone has questions, they may be asked here. I might even be able to pass on some questions for any party or attorney.  I will be careful and polite if I do. There is a cordial atmosphere in the trial, and there is, so far, plenty of room for more spectators or reporters.

3rd Party Defendants Johnson, JMP, and Bass (de la Barra)

Both lawyers (de la Barra and Nunez) pointed out that lawyer statements are not evidence (which the Judge had told the  jury already). I will here give the statements of the case, which is close enough to what they said.

They were largely boring, sounding like excuses, not actual defenses.

JM Products, Johnson and Bass Defense to Count IV:

FDUTPA JM Products, Johnson, and Bass deny Industrial Heat and IPH’s claim that they were engaged in a scheme to deceive Third-Party Plaintiffs. JM Products, Johnson, and Bass (i) did not participate in, and are not parties to, the License Agreement or other agreements between Plaintiffs and Defendants, (ii) do not have any interest in the outcome of the testing of the 1 MW Plant, (iii) and were not responsible for the operation or measurement of the 1 MW Plant. Furthermore, Bass did not play any role in Industrial Heat and IPH’s decision to move the 1MW Plant to Florida.

Claim (I) is false as to Johnson, because Johnson, for JMP, did participate in the Term Sheet, an agreement between the parties. Claim (ii) is possibly misleading. Johnson was (is?) President of Leonardo Corporation, and if Rossi obtains an $89 million payment, he’d be likely to benefit. There is also a problem with Claim (iii) because the Term Sheet required JMC/JMP to measure the power delivered to them. So JMP was responsible. Not Johnson personally, but he issued the invoice requests, drafted by Rossi. Johnson appears to be on the  hook for some substantial expenses. Bass, much less so. Bass participated in maintaining the illusion of an independent customer, and basically lied as instructed by Rossi. That’s how the evidence appears to me at this time. It is not clear what losses were suffered by IH as a result of Bass’s behavior. Perhaps without that, they might have pulled the plug sooner.  I think not. I think the Bass deception was without major consequence, it was basically Rossi foolishness. Bass may not end up with serious damage. I feel sorry for him.

Fabiani and USQL Defense to Count IV: FDUPTA

Fabiani and United States Quantum Leap, LLC (“USQL”) deny that they are liable to Industrial Heat and IPH for a violation of Florida’s Deceptive and Unfair Trade Practices Acts.
Fabiani and USQL assert in defense of the claim that they had no involvement in manipulating Industrial Heat and IPH into sending the E-Cat plant to Florida. Fabiani and USQL further assert in their defense that while the E-Cat plant was in Florida they did not engage in any deceptive or otherwise improper acts against Industrial Heat and IPH.

I have seen no clear evidence that Fabiani was involved in the “scheme.” It will be difficult to show that he was part of the plan, it is not clear what he knew about the “customer.”

Fabiani and USQL Defense to Count V: Breach of Contract

Fabiani and USQL deny that they failed to perform in accordance with the duties imposed by the Technical Consulting Agreement entered into with Industrial Heat. Fabiani and USQL assert that they properly performed all material terms as required under the contract with Industrial Heat. Fabiani and USQL also assert that they turned over all or substantially all data collected during the 1MW plant’s operation in Doral and any data not provided was excused by Industrial Heat’s failure to make full payment as required under the contract.

This, however, is clear in the other direction. “Substantially all” is not “all,”  and there was a breach of contract. Fabiani promised to turn over all the data, then didn’t. Murray offered to give him his final check if he turned over the data he had. It was not necessary for Fabiani to do more work, just turn over the raw files. Instead, Fabiani erased them. That data belonged to IH, as work product. As well, Fabiani apparently destroyed his email records. That might cause him to be found to be a participant in the “scheme” by helping to cover up aspects. Very Bad Idea. Nonpayment is no excuse for destroying a client’s property.

Now, it’s late and trial begins again tomorrow.

 

 

 

RvD trial day 2 (Mistrial)

See Mistrial.

Official Transcript

It had been mentioned before recessing for the day that three jurors were asking to be excused.

Before RvD began again, I watched a sentencing hearing for a woman who had pled guilty to a Medicare fraud offense. The defendant had health issues; however this was not her first offense, she did not clearly take responsibility in her statement, it was superficial. One would think that her attorney would have coached her … but many people don’t take coaching well. It takes practice to learn anything. Folks, start now, don’t wait. It can get more difficult as we get older.

Altonaga gave her the minimum sentence under the aggravated offense guidelines, almost three years, as I recall. She did recommend that the Bureau of Prisons place her in a medical facility.

Then the RvD trail opened, with results covered on the Mistrial post. Two more jurors requested to be excused. Even if one request were rejected, the jury size would be down to the minimum, and if anything happened to cause the loss of another juror in five weeks of trial, there would then be a mistral wasting a lot more time. Better to take the pill now than later. All the attorneys and Altonaga agreed. Mistrial. Jury selection to start again Friday.

RvD trial day 1

June 28, 2017

Official Transcript

Jury selection was scheduled to begin at 12:30. I arrived about 11:30. As viewed by the Judge:

On the left side, Rossi, Bernstein, Chaiken, Lukacs, Annesser.

On the right, Pace, Bell, Maugans, Darden, Vaughn, and behind them, Lomax, Mastrucci, Handleson

Along the right wall:

Nunez (Fabiani travelling)

de la Barra, Johnson, Bass

There were three people in the Gallery with cell phones. I was told they are interns working for Altonaga. Other than those and myself, the Gallery is generally empty. I’d sat down to the left (ref. judge), and was asked to move to the other side, since they would be using the left side for prospective jurors. I was also asked to remove my hat. Ouch! I knew that, simply forgot.

Altonaga came in and said two jurors had been excused for cause. Then she had all rise as the rest of the panel was admitted. (This is a display of respect for the triers of fact, it was repeated whenever jurors came in or left.)

Altonaga often smiled. She asked the jurors some general questions, answered by raising hands, then asked “How many of you are happy to be here?” Silence, and no hands. Then the entire courtroom laughed.

The attorneys and parties were introduced. Fabiani is to be back next week.

Jurors were asked if they had heard of any of the parties or  “cold fusion” or “low energy nuclear reactions” or had seen the CBS 60 Minutes program, “Cold Fusion is Hot Again.” One had heard of cold fusion.

Altonaga explained this would be a five week trial, but the Court would not meet on Monday and Tuesday of next week for the July 4 holiday.

The names of witnesses were read and jurors asked if they knew any of them. If I got them all, these were the names.

Listed by the plaintiff:

  1. Darden
  2. Vaughn
  3. Mazzarino
  4. Dameron
  5. West
  6. Wendy Carter
  7. Ampenergo (Cassarino)
  8. Childress (Boeing)
  9. Rossi
  10. Bass
  11. Fabiani
  12. Weaver
  13. Wong
  14. Penon
  15. Levi
  16. Hoistad
  17. Pace
  18. Di Giovanni

Defendants

  1. Smith
  2. Fogelman
  3. Commonwealth of Florida (Health Dept)
  4. Murray

Then Lukacs and Pace asked general and then specific jurors questions. The judge would say, “While you have the mike…” (a hand-held microphone was being passed around) and then ask some other questions. Pace seemed a bit discombobulated, going to the podium, he left his papers and pen back at the table, he frequently apologized for this or that. (This was in contrast to Lukacs, who was crisp.)

My notes say 18 jurors were stricken. It must have been more than that. 10 jurors were selected. Altonaga told the panel that if they were not selected, they were to report back to the jury pool room. She said that if any selected juror left, the marshals would lock down the courthouse and “get you before you leave!” Again, laughter.

Then, after the excused jurors left, and after jury instructions, the trial began with opening statements from Rossi (Chaiken) and IH (Pace).

From my sketchy notes, and with my comments in indented italics

Chaiken:

Dr. Andrea Rossi is the inventor of an amazing technology. Industrial Heat marketed this technology, but when it came time to pay, they did not do so. What was supposed to be worth $2 billion was now worth zero.

Marketed? IH never attempted to sell the technology to anyone. Rossi is claiming “unjust enrichment,” but the only basis for that claim is the Woodford investment, which was not a sale, it was joint investment, not in Rossi technology, but in other LENR technology or research.

Rossi obtained his PhD in Italy.

It was not a PhD, at least that is the information I have. It does entitle him to be known as “Dottore.” This is misleading as presented in the U.S.

Chaiken quoted a “leader in LENR technology,” about Rossi’s work. That was Darden, early on.

Darden was not a leader in the field, merely someone who wanted to support LENR, and who was willing to invest and gather investment. He was not specifically qualified to assess the technology.

Chaiken mentions the report of “members of the committee that awards the Nobel Prize.”

There was, apparently, only one on that committee: the late Sven Kullander. It is unclear to me what report is being mentioned, with Kullander as author. Rossi has claimed he is under consideration for a Nobel Prize, but there is no prize for the kind of work he has done.

Chaiken talks in bursts. I am considering the possible significance of that.

In May, 2015, IH sold 4% of the company for $50 million, based on showing investors the Doral Plant.

This is misleading. IH was sold to IH Holdings International, Ltd. for penny stock, which all IH shareholders (apparently) were issued. So IH became a wholly-owned subsidiary of IHHI, which then issued preferred stock to Woodford Fund, with a par value of about  $45 per share compared to $0.01 per share for ordinary stock, the kind held by Darden, Vaughn, Mazzarino, etc. I’m not completely clear on all details, but this is clear from evidence in the trial record and on the UK government web site with corporate information for IHHI. I do not know the total direct investment of IH in Rossi, $11.5 million is often mentioned, but  that is only the sum of direct payments under the License Agreement to Rossi.  A $20 million stock issue was originally authorized, so  my speculation is that they spent about  that, which seems plausible, given their roughly $5 million payments to Ampenergo (AEG) as compensation for AEG allowing transfer of the License for the territory.

The Rossi License is held by IP Holdings (IPH) Bv, entirely owned by IH. The original plan was to make that the overall holding Company. IH was assigned the license with the consent of the parties (see the First Amendment), and became liable for payments, in addition to IH. However, apparently Woodford insisted that the UK company be formed. So it was done. As I understand it, the preferred stock has the same voting power as ordinary stock. So Woodford contributed massive capital for further LENR investments, while allowing control to continue with the original investors. However, preferred stock, while it is subsidiary to debt, is first in line for distributions of profits, if any, or for distribution on liquidation after payment of debts. IHHI does not have any  liability to Rossi, that is with  IH and IPH. So if Rossi were to win a judgment, the Woodford investment cannot be touched However, IHHI may choose to pay the ongoing expenses of IH (such as legal expenses), or IHHI could stand aside and let the chips fall where they may.

This transaction did not “value” IH at $1.25 billion as implied. It established no particular value for IH or IHHI, other than as a vehicle for making investments in LENR technology and research. If any of those investments lead to commercializable technology,  that could then be “marketed,” probably through sale of sublicenses. There have apparently been no such sales.

To establish that Doral was the GPT, Penon was quoted as saying in the communications with Darden that the proposed test procedure was “pursuant” to the License Agreement, but also called Doral a “demonstration,” as well as calling himself the ERV and referring to the length of the “demonstration.”

I would greatly prefer to see a transcript than to rely on my sketchy and incomplete notes. I am working on obtaining access to the daily transcripts that are emailed to the attorneys. There may be access at a public terminal in the court.  Even if I could bring my phone into the courthouse, I could not photograph this display, nor record myself reading it. These are all prohibited activities in the courthouse.

That Penon had called himself the ERV was known. One of the documents exchanged was an exhibit to a Rossi appeal to the Magistrate (pdf page 26). This document does not contain the language Chaiken used, so it must be some other document in the exchange. On the face, since Doral was set up as a sale of power and a demonstration, the Penon protocol does not establish IH consent to the start of the GPT, as required by the defunct Second Amendment, which required the written consent of all parties. It is, at best, a vague implication. This was also not an email between IH and Rossi and is like other hints found in previously private IH correspondence. IH did think of Doral as some kind of test, in addition to a demonstration for possible investors.

There is no evidence, however, of actual investment resulting primarily from a visit to Doral. Woodford did visit at the beginning of Doral operation. The only known major investment was the Woodford investment, which had been planned since 2014, see the AEG written notes of conversations. The Woodford investment appears to have been structured to avoid dependence on or risk involving Rossi, and that investment was used to pursue  non-Rossi alternatives.

Annesser & Chaiken have a tough row to hoe, full of rocks. By cherry-picking the evidence (which is readily expected from attorneys), they may claim the path to truth is clear. I know too much to agree. Will the jury?

Some have thought that Rossi cannot introduce new evidence at trial. While that is technically true, “new evidence” does not mean “evidence that has not  been publically disclosed.” Rather, there was evidence mentioned in the Chaiken opening that was not previously public, AFAIK, but it is very likely in the documents listed in disclosures, many of which merely were listed by Bates numbers, only meaningful to the parties. There is a vast number of these, and this strategy will conceal content from the public and not put IH on notice on what specific material from those documents will be used. Unlike IH, Rossi also did not provide a document presenting and analyzing the evidence from depositions, stating they were prevented by “technical difficulties,” and would present the  document physically to the Court. (see the bottom of pdf page 1 of D.E. 325)

A some point in the proceedings the Statement of the Case was read by the Judge, which contains an outline, more or less, of what the parties stated as Opening. I did not take any notes on the IH Opening Statement, probably because the claims presented were quite familiar to me, there were no surprises. I intend to analyze the Statement document in detail, and there is some small analysis coming for Day 3.

This entire day became moot on Day 2, as too many jurors were lost, so a mistrial was declared and everything started over on Day 3.

Mistrial!

10 jurors were selected yesterday. First 3 of them requested to be excused, that was known yesterday. Pace agonized over allowing this. On the one hand … and on the other…

Pace suggested interviewing them (I.e., as in the original selection.) Altonaga said she had no questions, it was all written and clear.

Then Altonaga announced there were two more. At this point, all the lawyers agreed: mistrial.

Lawyers in court at 9 AM, Friday the 30th, to go over juror questions. Selection begins at 10 AM. If that finishes, opening statements, deja vu all over again. More when I get home, I’m sitting outside the courthouse.


I have a few minutes before leaving for the Court. Reading the LENR Forum discussions,  a few clarifications and brief comments.

The trial actually started with 10 jurors seated on the 28th. The Judge read the case summary (see the docket), then Rossi and IH presented opening arguments (Chaiken and Pace respectively). So there was a bit more than an hour in actual trial.  Then, before adjourning, the Judge noted requests from jurors to be excused due to conflicts, said that this would be addressed in the morning at 10 AM. There was some hesitancy on IH’s part to accepting the requests. Pace was really unsure, huddled with Darden. Then the Judge said there were two more requests,  and all the attorneys agreed on a mistrial. I had a chat with one of the lawyers, who pointed to the real problem: jurors were not prescreened for “five week trial.” So a lot of time was wasted interviewing jurors who weren’t ready to serve. We’ll see what happens today.

Chaiken said that jurors will see evidence from Penon. That might be the video deposition.

Practice makes perfect. Chaiken and Pace get to present their opening statements to a new jury. The jury will again be cautioned that lawyer claims are not evidence. When I get a transcript I may be handing out some Pants on Fire awards.

Shanahan’s remarks are totally off-topic, but Jed is right: Shanahan is fringe,  and keeps himself there by not actually seeking communication and agreement, merely claiming he has been unfairly rejected. Ironic, eh? I’ve been pointing out the irony for years, and have many times offered to assist Shanahan in settling issues. Yes, “random CCS” was an error. There are errors aplenty on all sides. So? There are places where a full and complete discussion can take place. I created one on Wikiversity. Shanahan ignored it. On Wikipedia, Shanahan kept attempting to put information in the Cold fusion article that did not meet Wikipedia guidelines. It was not just “CFers” who removed it, it was ordinary Wikipedia editors. An article on CF calorimetry with his ideas was deleted by JzG, a very much anti-CF administrator. I rescued it for work and  review. My reward? Shanahan supported my ban.

There is something special about actually meeting Rossi and the others. This is no longer dealing in abstractions, these are real human beings.

The document referred to as the Cassarino (Ampenergo) deposition is actually a much longer document containing all the depositions IH is planning to introduce, with annotations showing attorney objections, etc. Rossi, because of “technical difficulties,” planned to present that in person to  the Court.

Many writers (on all sides) are cherry-picking the evidence. One example is IHFB’s continued insistence that Woodford considered the Rossi technology “core” for their investment; in fact, the statement in an email has a clearer interpretation: Lamacraft was commiserating with Darden or  Vaughn (I forget which) over the disappointment, because Rossi was core to the original investment. Not the Woodford investment.

Again and again, it is asserted that IH used the Doral test to recruit investors. There was only one major investment after Doral began, and that was Woodford, and it is quite apparent that Woodford insisted on this being an investment into a UK limited liability company, which would then own Industrial Heat. Not in IPH, which had a contractual relationship with Rossi (and which was the original idea). IH did not actually use Doral to raise money, but Lamacraft wanted to see Doral, I’m sure. The Ampenergo notes (I have covered them in detail) show that Lamacraft was not particularly impressed.

And I must leave now. I have no internet access while I am in the Court, until I retrieve my phone from security and walk outside, and they would not be pleased by retrieving it for a few minutes…. I may still apply for a press pass, but until I have one …. I have limited facilities here.

 

The study of Rossi v Darden provides an endless supply of flabber.

The Quark-X is powered by quantum accelerated coherent collapse (quacc) of  Meshe Gas with itself. E-cats are fueled with liberal applications of Flabber Gas and Rossi Grease. Rossi v. Darden provides  a limitless supply of flabber, enough to serve the needs of sarcastic writers far into the future.

Every time I look at Rossi’s blog, or at the case documents, there is no shortage of material, the question is always where to begin.

Mike Dunford of The Fogbow was flooded with flabber, reading the License Agreement. I am told that Fogbow is flooded with lawyers. I’ll agree, it seems that way, but … it takes all kinds. In any case, Mike reported that he had to read the Agreement more than once, because he wasn’t believing what he was reading. It couldn’t be that stupid.

Of course, Mike has not been following Rossi. It could be that stupid, and routinely is. So, then,  the koan: if Rossi has the reverse Midas touch, that whatever he touches turns to shit, why did Industrial Heat, which has a long history of engaging with risky ventures, and which certainly would afford counsel and indeed, had in-house counsel handling IP issues, go ahead and agree, and pay Rossi $1.5 million for the Plant and $10 million, based on a very shaky “Validation Test”?

That is a koan for advanced students. The answer I came up with is counter-intuitive, but few of us would have the intuition needed to cope with Darden’s primary business, Cherokee Limited Partners, an LLC that creates many LLCs, each one taking on some risky project. If these projects fail, they will lose up to $25 million or so of Cherokee Funding.

Normal thinking Is that if a risky business fails, the investment was a mistake. However, nothing ventured, nothing gained. The business of Cherokee would not be in avoiding risk, as such, but  in estimating, perhaps quantifying it, and comparing that to possible gains. CIP projects might fail more often than not (though I don’t think they do), but if CIP invests in projects with sufficient possibility of success multiplied by the probability of success, it cannot be said that an investment was an error, merely because it failed.

If Darden et al’s sense of possibility and risk is, in general, more likely to be right than wrong, in mercato veritias. If they are losing money on every  transaction, but trying to make up for it with volume, they would not be running a $2.2 billion investment fund, apparently successfully.

In 2011 and 2012, Rossi enjoyed massive publicity in the LENR world. He was commonly discussed on the private CMNS list My sense of the majority opinion was that it was possible he had something, but his rejection of sound scientific approach (“I don’t need controls, because I already know what a control will do: nothing”) was very visible. The errors of Kullander and Essent were obvious. But those errors did not prove that Rossi had nothing, only that their conclusions were flawed. And that Rossi was “eccentric.”

It appears that by 2012 Darden et al had decided to enter the field of LENR research and development. It appears that their first investment was a modest one, in Brillouin Energy. However, all other LENR working groups  were working with modest levels of power, at best. Clear XP at a watt is often considered a significant result.

Who would want to invest in technology that is so far from commercial feasibility, when Rossi was claiming many kilowatts? They decided that they needed to know the truth of Rossi’s  claims, and they needed to know either way, because the uncertainty was causing harm to the field. There is an IH deposition where they stated that if there was any possibility of a reality underneath Rossi’s bluster and even obvious deception, if this was as low as 1%, it would be worth continuing. In 2011-2012, I would have estimated the possibility of Rossi Reality (i.e., a real LENR effect, generating  significant power, as would be known  with conclusive tests), at perhaps 10%. (90% he was mistaken or creating fake demonstrations.)

Given that functioning LENR at the power levels claimed (say 10 KW per reactor, at a COP of 6) could be worth a trillion dollars, a 1% chance of success could be worth $10 billion (but investors would’t cut close to those values, unless the buy-in is truly cheap.) They were obviously willing to risk about $20 million. I would assume that they knew it would be difficult to recover that investment if Rossi were insane or even a deliberate fraud, unless actionable fraud could be shown, and if Rossi had let matters stand as they stood before the fraudulent Guaranteed Performance Test, he might have gotten away with it all.

It didn’t work out that way. That Rossi took IH to court has to stand as a major mystery in this case. I explain it with insanity,  which more or less means “it doesn’t make sense.”

However, I have called the IH investment “brilliant.”  That’s because it created desirable results. Confining desirable results to commercial success with the Rossi technology will miss that they wanted to find out, and to find out they needed independent testing, fully under their own supervision, and validated by others. To do that they needed to buy the IP. So I assume that they had already decided to accept the Validation Test, no  matter how much it stank.

Rossi wrote the Agreement. It’s bonkers in many ways. It gets even worse to  see how Rossi interpreted it and the Second Amendment. IH could see this, I’m sure, it was immediately obvious when I saw the Agreement, and more than one lawyer has opined in this direction. Mike saw this, from the Agreement, section 16.18.

Any controversy or claim arising out of or relating to this agreement, or breach of it, shall be settled exclusively by the Court of Miami, Florida, USA.

Rossi did not have a lawyer draft the agreement. As Mike points out, this is a $100 million agreement, secured with an immediate $1.5 million payment. In case anyone doesn’t notice, there is no “Court of Miami.” This usage is common on Planet Rossi. Given that the specified court does not exist, for it would necessarily be referring to  a specific court, this was a major flaw. However, the entire thrust of this provision is something that no ethical lawyer would recommend. IH certainly had fallen into a “controversy,” but lawsuits are a last resort. Before then, instead of jumping into Court to settle the issues, the parties will attempt to settle the issues, by negotiation. Instead of attempting negotiation, before the end of the “test,” where IH raised their lack of agreement to GPT and ERV — which is very well supported, possibly enough for summary judgment — Annesser threated to sue them immediately for anticipatory breach. Pugncious in the extreme. Lawyers like this create losing situations for their clients … but more legal fees.

However, it is possible that Annesser was just following orders. The lawyer had a fool for a client.

Another little tidbit from Rossi’s blog:

Yrka
June 23, 2017 at 9:39 PM

Dear Mr. Andrea Rossi.
I wish you success in court.
You will win! Serious interference in your work will be eliminated.
Advise where you can follow the course of judicial supervision.
Yuriy Isaev
engineer
Russia, Tyumen

Andrea Rossi
June 23, 2017 at 10:46 PM

Yrka:
Thank you for your sustain.
I think the official pacemaker is the source for information on internet, but I am not sure.
Warm Regards,
A.R.

There is common opinion that Rossi is many of those who comment on his blog. For some of these, evidence is reasonably clear. However, in this case, the question may be sincere. Rossi’s answer, again, shows his lack of clue. There is at least one follower of Rossi who has acknowledged the  value of this blog, and especially of the Docket page here.

The “official source” is PACER. See our introduction to the docket page. “pacermaker” or “pacemaker” is a complete error We have also seen “the pacermaker of the Miami Court.” Or variations. PACER is the document retrieval system of the U.S. Federal court system. It happens that the United States Federal District Court for the Southern District of Florida is currently located in Miami.

Pacermonitor is a site that sells access, and that, for a short period of time, shows the Docket entries. They charge roughly  twice what PACER charges (Pacer is being sued over the fees being illegally high, at ten cents per page, with no limit for some documents, like the docket itself, they charge to show a subscriber the index to the documents.)

So if the questioner is sincere, Rossi misled his supporter. Someone with a conspiratorial mind might think that he doesn’t want his supporters reading the actual documents. Some have bailed after reading them.

Rossi also says that the trial begins June 26, tomorrow. Maybe. The information I have is that it begins Wednesday June 28. I will be talking with the Court tomorrow,  and, obviously, I will be checking. Rossi also treats “one month” as a fixed length of time. He’s naïve. However, it may not matter.

i have confirmed, this morning (Monday) with Altonaga’s office. 12:30 PM Wednesday, June 28 starts jury selection. I knew this last week (I.e., I had information, and I was told it was public.) So why didn’t Rossi know it?

 

How does estoppel work if all parties do not agree?

On LENR Forum, oldguy wrote:

And how would estoppel work if there are three parties that were to agree to any changes. It is unclear that Ampenegro gave any indication of approval of any changes to the agreement.

An essential legal fact in Rossi v. Darden. There is no doubt that Ampenergo (AEG) deliberately rejected the Second Amendment. This is so clear that it’s a bit of a tragedy that the Judge did not take this on board and rule for Summary Judgment on what depends on this Amendment (like the entire initial Rossi case). However, that’s not the question here.

The Agreement was quite explicit about full agreement of the parties to amend it, and Ampenergo was a party. Payments were due to AEG per the separate agreement between IH and AEG. As a very interested party, then, AEG would have had standing to sue IH for failure to pay the $89 million, if they believed it was due. It appears from the record that they did not believe that, and, unlike Rossi, they are not greedy and insane. They obviously trusted IH, and do not believe that this trust was violated.

Rossi wrote in an email to Cassarino (AEG) that the Second Amendment was “cancelled.” That was Rossi-speak, commonly imprecise. It failed, it was a draft that was never completed. It could have been completed at any time, it did not have a time limit in it. It did contain two signatures out of the four required: a signature for IH, and of Rossi, who neglected to sign for Leonardo Corporation. That latter defect would have been of little consequence because, with everything else in place, a party will be estopped from asserting some minor technical error, and given who Rossi was with respect to Leonardo, Lenardo would not have later been able to successfully claim, “No we never signed it. Go after Mr. Rossi personally.”

(Notice how Annesser and Chaiken have argued quite the reverse with respect to Cherokee. The Agreement did not contemplate a relationship with Cherokee, and was obviously created as an Industrial Heat agreement to avoid that. Darden was not about to approve an agreement with a contingent liability of $100 million, which is about four times the standard Cherokee investment in a project, and this project was far outside of normal Cherokee investment. Investors could have sued them. The agreement contained an integration clause, but that didn’t stop Annesser from asserting the legally impossible, and it worked, because their pleadings had asserted or implied that Cherokee was a sole owner of Industrial Heat, which was never true, it was only true that officers of Cherokee were involved.

It was also possibly true that Darden and Vaughn assured Rossi that if the payments became due, they would be able to raise the money. After all, look at Cherokee! Rossi tends to interpret everything as what he wants it to mean, but any attorney would have told him that, no, read the Agreement. There is no Cherokee guarantee unless you have it in writing. Oral representations (which can easily be misunderstood or misremembered) are not valid for actions to take place more than a year into the future, and an integration clause makes them explicitly invalid from the start.

We also know that the Second Amendment was a draft only, because the date was never filled in, and there is the matter of the “Six Cylinder Unit,” obviously an idea from 2013.

So, what the Second Amendment draft shows, however is that IH was willing to set aside the fixed timing of the original License agreement. To use technical language, that agreement was really dumb ab initio, the problem was easily anticipated. My assumption is that Rossi wrote this; regardless the stupidity is moot. The timing failed. At that point there was no liability of IH to pay the $89 million.

However, because there was obviously a (proposed) agreement between Rossi and IH, and because IH and Rossi were free to make separate agreements (and did, vide the Term Sheet with JMC), and if the conduct of the parties shows that they behaved as if the Second Amendment were valid, it is possible that IH would be estopped from claiming that there was no agreement. This is the legal theory Annesser is operating on.

The evidence of such an agreement is very thin. Key question: what were the terms of this unwritten agreement? When would the Guaranteed Performance Test begin? The Second Amendment was explicit that it would begin as agreed upon in writing by all the parties. If we are going to reduce the Amendment to a separate agreement between IH and Rossi, no such written agreement has been found. It appears to me that Rossi decided to create a GPT, but to avoid asking IH to agree. What he did was to set up some of the conditions of a GPT: an installation that would monitor the operation of the Plant, as supervised by a person who was previously the Engineer Responsible for Validation, and it would last, as a test, for 350-400 days. To encourage IH to agree to this, Rossi lied about the “customer,” repeatedly and plainly, it is not deniable. He avoided any confrontation over “GPT,” but blames IH for not objecting to a “GPT” to what he did not claim until much later.

He attempts to convert a lack of objection, when the issue was not ever raised, into an agreement to accept.

Rossi has diligently searched for and has found evidence that IH knew that a test was under way, and apparently called it a 350 day test in one email. This was not an email sent to Rossi, and he could not have relied upon it. The existence of correspondence between Darden and Penon over a test protocol shows that Darden knew that there was a test aspect to Doral. But a “test aspect” does not equal “GPT.” The conditions of a GPT were never anything other than explicit, and a major one was agreement of the parties as to start date (which would allow them to effectively object to any aspect of a proposed GPT that was not satisfactory to them.) IH would have reasonably believed that they were adequately protected.

I don’t know that anyone anticipated just how insane Rossi was. The steps IH took to protect themselves appear to be reasonable within ordinary business practice, even dealing with frauds. In my study of the evidence, it appears to me that Rossi has perjured himself, directly contradicting clear documentary evidence. That’s insane. It is a puzzle that Annesser and Chaiken have allowed this, and may speak volumes about what those two attorneys are up to.

So, in theory Rossi and IH could have separately agreed on an equivalent to a GPT. If so, AEG would have rights, pursuant to the original Agreement, if a payment to Rossi were of the nature of royalties or licensing fees (and it is easily arguable that, if this was the equivalent of a GPT payment, that AEG would have a right to payment.)

However, there is a lack of evidence that there was such an agreement, only some vague noises or hints. This was not a GPT as contemplated. In the contemplated GPT, IH would have physical control of the reactor. It is not clear if Rossi would have any right to touch it, but if his being kept away from the reactor could have arguably caused it to fail or to not function after a failure (or at all), he could have argued, fairly, that he should have the right; IH would then have, I assume, provided for tightly managed “interference.” Really, to be careful, Rossi would have not touched the controls, but would have instructed someone from IH what to do (and this is how the Lugano test might have been accomplished to keep it relatively independent).

It would have been insane for IH to agree to what Rossi actually set up as a “GPT.” What evidence exists shows that IH was reluctant to directly challenge Rossi, preferring to follow a long-term strategy, a necessity ab initio, of “give Rossi what he wants.” Without that strategy, there would have been no continued agreement, it would have failed in 2013, if not earlier. IH would not have answered the critical questions that they had: whether or not, in spite of all the obvious appearances, Rossi actually had, underneath the blatant bluster and deceptions, something real.

They did not find out with complete certainty, that could be impossible (unless we learn more than we presently know). Even if Rossi totally faked the GPT, he might have had something previously, Storms has opined that Rossi had something, and lost it, which, given the history of LENR, has to be considered possible. He kept trying to improve it! This is not science, it is rather primitive engineering. Given something as poorly understood as LENR, one would properly hold on to positive results until they were thoroughly documented and examine, not keep working to “improve” them before knowing in detail their reliability (measured!) and such matters as ash (if the heat is as Rossi claims, there should be abundant ash, increasing quantitatively with accumulated energy release).

(That error, though, is common in the history of LENR.)

However, IH created enough evidence by the interaction to know, and for the world to know, that Rossi is utterly untrustworthy, that he has fooled scientists into issuing reports that are blatantly in error — and that cannot be published under peer review. Given that Rossi’s claims were entirely outside the envelope of what existed before, there is no reason to believe him, and to have high skepticism of any test where he was present and at all active. We know without doubt that Rossi has faked tests. IH took a risky path, seeking to develop deeper knowledge, deeper than simply repeating fact or innuendo about Rossi’s past. They gained that knowledge, and it is now available to the world, regardless of the outcome of Rossi v. Darden. No sane investor will touch Rossi with a ten-foot pole, not because of any alleged IH campaign to denigrate Rossi, but because of his own very obvious actions. It was actually obvious from his Complaint: his attempt to pierce the corporate veil would put off any investor using corporate forms for liability protection, his inclusion of Cherokee as a defendant, the major activity of Darden and Vaughn and their cash cow, and his willingness to file a blatantly deceptive Complain and to tenaciously defend the indefensible in it, and his claim of fraud based only on an alleged failure to pay and Rossi suspicion, all would mean that an investor would be risking more, perhaps much more, than actual payments, starting with high legal fees to defend against and insane and highly persistent inventor.

There is more in the crazy results from the “ERV,” the claim in them of steady power of 750 or 1000 KW, without any evidence of necessary heat exchange (and Rossi’s public deceptions about this, until he finally claimed a “second floor heat exhanger”). If I saw that a jury was convinced by this, I would still think it ridiculously unlikely, given all the known facts.)

Of course, I have not yet seen the presentations in a trial. Nobody has. Lawyers will point out that everything could shift, which is true. But we have seen the better part of a year of diligent efforts to discover and present evidence for the Rossi case, with the best result, from a Rossi point of view, being that the contrary wasn’t considered proven yet. Rossi will have to prove his claims to the satisfaction of a jury to prevail on any point. The motion re spoliation failed, but a jury could still decide spoliation, and one of the first words I heard from an attorney about this cases was one word: “spoliation.” This was about the removal of the test instrumentation by Penon.

I can see many possible Jones Day errors, such as not vigorously objecting immediately to that spoliation, such as not requiring Rossi to keep all evidence in place (like the piping or anything else necessary for reactor operation) — or to allow full documentation by IH if anything relevant was to be removed, and, in the pleadings, failing to lean on the absence of the written agreement required by the Second Amendment. They barely mentioned it. That was a much stronger and clearer argument than the matter of signatures and “Six Cylinder Unit,” which can easily smell like technicalities, readily estopped. Written agreement was fundamental.

If it is said enough, does it become true?

Certain ideas are repeated over and over, in spite of obvious correction. One particularly egregious example is what Paul Lamacraft of Woodford allegedly wrote when Industrial Heat gave him a preliminary copy of their press release in March, 2016, at a point where Rossi was claiming to his public that there was no problem with IH. This is commonly misquoted in a way that allows an interpretation that is weak or impossible with the original Lamacraft comment, pursuing a Rossi theme, and this began with Rossi making the claim in court, with that misquotation. This is so bad that a misquotation ends up as “agreed” by the parties. Essentially, a subtle difference can sometimes be overlooked.

On LENR Forum, SSC wrote:

oldguy wrote:

It makes perfect sense – They (Peter and Henry) traveled around the US visiting most of the researchers supported by IH. It would be hard to say they could not visit Rossi. Your assertion that Darden used Doral as a showcase is not correct. I think the “showcase” was elsewhere (possibly the work by Cooper and that by Miley).

You keep on discounting all the other work and the visit on the same US trip by the Woodford group to all the other places. Rossi (I think) was the last place the visited on the way back to the UK.

You assume way to much.

You are assuming too much when you say that the showcase was the work of Cooper and Miley. Everyone knows that the most famous name in the LENR world has long been that of Rossi and it was Woodford (or rather McLaughlin, if I remember the name well) to say that Rossi was their core business. So it is far more likely that Darden has focused above all on the Doral plant to attract investment.

As is common on LF, this is all unsourced. There were two visits by Lamacraft to Doral, one in February, at the beginning of the “test,” and before there was any preliminary Penon report, and one in August, after Rossi had rejected the Murray visit and IH was definitely on edge, and shortly to explicitly deny that Doral was the GPT and Penon the ERV.

Oldguy often writes as if he has inside knowledge. I am not aware of evidence on the “Woodford” visits to other researchers or inventors. However, Oldguy might well have some kind of private knowledge — or I have missed the evidence. However, SSC then cited something he “remembers” which is misleading. This has been brought up many times by IH Fanboy, as alleged “truth,” always with misquotation, so here is, once again, the reality:

In reply to J.T. Vaughn, Paul Lamacraft wrote:

This is clearly very disappointing, given that Rossi’s technology was a core element of the initial investment.

Rossi, having obtained this email in Discovery, presents it as evidence to support a claim, but reinterprets it (by adding an “explanation” in brackets — which explanation then, if Lamacraft had actually stated that, would be proving his point. This is an example of what I found in reviewing the Rossi arguments: the manufacture of evidence through creative interpretation. He wrote this:

On March 4, 2016, Woodford Funds explained that “Rossi’s
technology was a core element of the initial [$50 million] investment.”

Was Lamacraft referring to their $50 million? It would be strange, in context. “Explained” is supplied by Annesser; this is actually Lamacraft commiserating with Vaughn, a principal at the company that actually made the “initial investment,” in 2012-2013. It would be odd for Lamacraft to refer to their own investment in IHHI — which didn’t go to Rossi at all — as “the initial investment.” If he meant what Annesser is claiming, he would have referred to “our investment.” That investment was apparently, from the Ampenergo notes, committed in 2014, before the Doral test began — and what was committed was up to $200 million, also covered by the Darden deposition, as I recall. That IH owned a Leonardo license, would be important for reasons I have explained many times. However, Woodford did not invest in “Rossi technology” as such, that’s obvious, they invested in LENR research, so oldguy is essentially correct. Rossi has distorted reality to make him and his technology the center of the LENR universe.

Yes, Woodford would want to see the Doral plant for themselves. However, Rossi’s claim is that Darden and Vaugh touted the Rossi technology in order to induce Woodford to invest. It’s actually not his business, this is all part of a Rossi smokescreen to create some sort of appearance of impropriety, whereas IH did not actually receive any money from Woodford, directly. Woodford invested in IHHI, insulating their investment from all things Rossi. IHHI can decide to pay IH expenses, or can let IH fall into the gutter. It’s a choice. They own it.

Rossi, in his Motion for Partial Summary Judgment, has:

55. In May of 2015, during the course of the GPT, Defendant IH closed on a $50 million investment by non-party Woodford Investment Funds. See Composite Ex. 3 at 170:9-14, 204:25-205:5; 206:6-207:6; IH-00021986 (4/21/2015 IH memo from Darden to P. Lamacraft); IH-00080193
(5/15/2015 email chain between Darden and J. Spear, S. Hartanto, P. Lamacraft, N. Woodford, and S. Saha); IH-00099714 (3/4/2016 email chain between P. Lamacraft and Vaughn); IH-00112920 (11/2/2015 IH Business Development memo), appended hereto as Composite Ex. 34.

56. Woodford Investment Funds later claimed that “Rossi’s technology was a core element of [this] investment.” See IH-00099714 (3/4/2016 email chain between P. Lamacraft and Vaughn), appended hereto as Ex. 35.

It is true, apparently, that the Woodford investment “closed” during the Doral test. But that it was based on the Doral test is quite unlikely, given the timing and known facts. Woodford committed about $200 million in total funding, in 2014, as shown by the Ampenergo notes. The initial payment was to be “$25-50 million.” Lamacraft visited the Doral plant in February, 2015, as the Doral test was just beginning, there would have been no report from Penon. The investment apparently “closed” in May, 2015, i.e., that is when the $50 million shows up in IH Holdings International, Ltd, the company set up, at Woodford request, to receive it.

This quotation in ¶ 56 of the Lamacraft statement is again misrepresented, to make it appear to refer to the $50 million. In the other quotation Rossi counsel did at least have the full quote and only added an interpretation. Here, they eliminate the word “initial,” replacing it with “this].”

In the Joint Pretrial Stipulation, this is listed as agreed fact, though it is incorrect. The brackets have been dropped.

89. In May 2015, IH closed on a $50 million investment by non-party Woodford Investment Funds (“Woodford”). Woodford claimed that “Rossi’s technology was a core element of this investment.”

It is possible that IH attorneys did not notice the shift.

In fact, what Woodford thought is not really relevant to Rossi v. Darden: this was a casual comment in response to the coming IH press release (not any kind of official Woodford statement; it was private email, a personal note).

The context here presents the conclusion that “this investment” — which is not what Lamacraft actually wrote — was the $50 million. If Woodford actually thought that (I cannot consider it impossible, though that is not consistent with continued IH and IHHI behavior after May, 2016), it still has no legal relevance. If IH used the fact of the “Rossi investment” for some kind of gain — in this case to raise money for other research — this would not be unjust enrichment, it would merely be a consequence of their very risky investment.

How not to address summary judgment

My free subscription to Law360 expired, so I can’t easily read the whole article there. However, it reminds me to examine the Altonaga decision, which at the time struck me as woefully uninformed.

My guess is that Altonaga did not read and consider the evidence and arguments, but, instead, simply took the word of one (or both) parties that the alleged facts were “disputed.” She was overwhelmed by verbiage, claiming “dispute,” where the underlying facts were not, in fact, disputed. Rather, the disputes actually alleged were over possible interpretations or implications of the facts, and by taking a dispute as being “factual,” she was left with nothing to judge. Continue reading “How not to address summary judgment”

Unspecified “they” is always a figment of our imagination

T is for Them :: U is for Us

Joshg is one of the most coherent writers identifiable as Planet Rossi.

On LENR Forum, he wrote:

JedRothwell wrote:

I had high hopes that I.H. would fund research. I think they would have, but they have been derailed by the lawsuit. They fired the technical staff. They may be funding a few studies, but I doubt they will contribute significant amounts of money.

So that R&D center they opened up near Raleigh headed by Antonio La Gatta is just a figment of our imagination?

This is common on Planet Rossi: “they” is fuzzy and amorphous. Genuine questions:

  • Is there an “R&D center” opened “near Raleigh”?
  • If so, who opened it?
  • What does this have to do with Industrial Heat and their plans?

First of all, see this LENR Forum report, posted by Alain Coetmeur, in May, 2016. The company in question is HMRI R&D, Inc. The Registered Agent is Paul T. Winter, very likely this CPA. This is largely meaningless, CPAs often serve as registered agents with very little involvement in the actual business. The business office shown is 13000 Weston Parkway, Cary, NC 27513, which appears to be a 57,000 sq. foot office building, that was for sale and for lease in 2015. Other companies have the same address, so HMRI — or their accountant — may only have a small — or larger — office.

The creation filing, August 12, 2015, shows an “incorporator,” who is merely an attorney, Byron B. Kirkland with a Raleigh address, and then two initial Directors: Antonio La Gatta and John T. Vaughn, with the same address shown as is shown for the Registered Agent. These are the persons of interest.

Antonio La Gatta. La Gatta was working with R&D at TSEM, a sponsor of ICCF-19 in Padua in 2015. His sister is a manager of that company. She told the interviewer this, in May, 2015: “my brother Antonio will travel to the US to direct the new US operational units in Texas, in collaboration with MIT, Texas Tech University, Indusrial Heat [sic].”

This was a plan in May. While there may be a correct substance to it, it’s a confused rumor. “Collaboration” with MIT is meaningless. MIT is not involved with LENR. Peter Hagelstein, a professor of electrical engineering there, is. “Operational units” of what? TSEM? Perhaps HMRI is a “unit” of TSEM? As to Texas Tech, again, this would likely be a reference to the Duncan et al group there, which was announced at ICCF-19.

While a connection between Texas Tech and HMRI is certainly not impossible — they were looking for additional labs to work on the heat/helium project, beyond themselves and ENEA (Violante) in Italy — I have no information about such a connection. Industrial Heat is not connected to the Texas Tech project, which was independently funded.

However, Vaughn is an initial director. This is JT Vaughn, an officer of and investor in Industrial Heat — and a defendant in Rossi v. Darden. This news, however, does not establish that Industrial Heat “opened up a research center near Raleigh.” Cary is indeed close to Raleigh, about twelve miles. What is HMRI R&D up to?

There is some information in the Murray deposition, for which we have the full transcript. IH had a research operation, investigating various LENR approaches, and Murray reports on some of that. He testifies:

·1· · · · Q.· · Of all the systems you tested in Industrial
·2· ·Heat, were there any that you were able to validate and
·3· ·verify?
·4· · · · A.· · No.

This is thoroughly discouraging, for many. However, this, or most of this, may have been seeking to find a way for Plan A: rapid commercialization. Plan B was my name for retrenching, going back to the most basic science and nailing it. For Plan B, small results can still be very significant, even more so of the “small results” show correlations. Heat/helium is the quintessential Plan B project, because there are many supporting reports, and the vast bulk of the evidence confirms the correlation first reported by Miles in 1991. This has practically nothing to do with NiH research, which, if NiH effects are real and not artifact, would surely have some different ash. Murray goes on:

15· ·[…] And in many cases the heat that they were
16· ·producing, the excess heat, the anomalous heat was very
17· ·small.· They, they had amounts that were very small.
18· ·And so any small errors in their sensor systems or small
19· ·errors in their assumptions would mask that level.
20· · · · · · · So we went through and carefully analyzed
21· ·their data, and in a few cases we actually reproduced
22· ·their experiments.· We had two groups that in the
23· ·validation verification phase we came up with what I
24· ·would describe as nebulous results.· They weren’t
25· ·positive, but we certainly just couldn’t say here is a
·1· ·major problem that has to be overcome before we could
·2· ·legitimately verify and validate it.· And so in those
·3· ·cases we worked very closely with the inventors and
·4· ·organizations to help them do independent reproduction
·5· ·in our lab.
·6· · · · Q.· · Okay.· And those were successful
·7· ·reproductions?
·8· · · · A.· · No.· Ultimately, the reproductions, yeah, we
·9· ·didn’t find anything that had excess or anomalous heat.
[…]
15· · · · A.· · The first one was Dr. Mizuno in Japan.· That
16· ·was a plasma-based system.· And the second one, which
17· ·was very much at arms length, I did not have privy or
18· ·access to this one, was HMRI.· It was a, it was only a
19· ·partial investment into it.· And so I was kind of, me
20· ·and the rest of the engineering team were kept at arms
21· ·length.· We weren’t allowed to have access to all of
22· ·their data, so I just got summary reports and briefings
23· ·on some of the things they had done.
24· · · · Q.· · I thought you were able to reproduce their
25· ·experiments in your lab.
·1· · · · A.· · So, yeah.· No, we, what we did was, based on
·2· ·the limited knowledge we had of their system, we
·3· ·reproduced an electrolytic cell that to the best of our
·4· ·ability looked like what we had understood they were
·5· ·doing.· And we could not achieve the same results that
·6· ·they were giving us at this kind of arms length.

There is a little more description of the HMRI relationship:

25· […] Likewise with HMRI, the way the contract was
·1· ·structured, we were kind of at arms length, so we only
·2· ·got a little bit of information, and the information we
·3· ·were able to receive, we structured some experiments to
·4· ·understand it.· That was actually very late.· That was
·5· ·probably June of 2016.

There is more about HMRI, some misc findings, on Misc Mash. There is an indication that I could not confirm that an HMRI “proprietary process” was being “moved overseas.”

Back to Joshg’s claim, essentially that “IH” established HMRI “near Raleigh.” From what we have, HMRI is independent and the collaboration expected (from La Gatta’s sister) was arms-length, and limited. While there was likely some IH investment in HMRI, it was limited and it cannot be reasonably said that this Cary lab shows IH’s continued commitment to LENR research.

On Planet Rossi, though, extremely limited information is interpreted and extended and reports as fact, and then others repeat it and it becomes “well-known,” like the alleged $200 million investment by the Chinese, and then the question becomes “where did that money go,” rather than the question that would reasonably precede it, did it exist at all?

A brilliant example of all this arose on LENR Forum, it’s mentioned on the Misc Mash page.  March 2, 2016, David Nygren wrote:

Now we need to dig deeper! It is valued to over 1bn dollars?

IH HOLDINGS INTERNATIONAL LIMITED
https://beta.companieshouse.gov.uk/company/09553031/filing-history

This is not my field so please help. For you who are good at counting, do these tasks!
23M shares * $ 45 = weather over $ 1bn??

Here we have 20 companies listed (59 page / 8 Jun 2015)
https://beta.companieshouse.gov.uk/company/09553031/filing-history/MzEyMzczNDg0OGFkaXF6a2N4/document?format=pdf&download=0

Indeed, not his field. However, he does not show where the $45 came from. He links a listing of companies on a signature page for an authorization to issue Series A shares, i.e., ordinary shares, valued at $0.01 each, some for cash and some for other consideration. The total value to be alloted, I read as $11,098.78 plus $25.907.15, total $37,005.93. A tad short of $1 billion, eh?

Barty asked David what this meant. The blind leading the blind.

AlainCo provided some correct information (the $50 million investment by Woodford a few days later), but did not actually correct the Nygren error. AlainCo noted the use of different classes of shares that can allow company founders to retain control even when receiving a large investment. AlainCo’s other post on this, Mar 3, was much better but still confusing and inaccurate.

June 30, 2016, I came across the discussion, researched it, and corrected it, giving sources for everything. The Woodford investment has been incorrectly reported by news sources that apparently did not look at the original documents. Woodford invested exactly $50 million US. To be precise, Series A shares (not the original Series A, apparently, later called “ordinary shares”) were preferred shares, issued at $45.049996 per share, and two Woodford trusts bought 1,109,878 shares, which works out to $49,999,999.50. My guess is that they actually paid $50 million, so inquiring minds want to know where the extra fifty cents went.

sifferkoll immediately exploded:

are you playing stupid again Abd? I said $1bn valuation, which roughly means Woodford bought 5% of IH with $50M.

Later, I remembered the $1 billion error was sifferkoll’s, probably because of this post. My guess is that Siffer had written this on his blog — I’m not researching that now — and that Nygren had picked it up from there. Maybe. What Siffer is showing is a total lack of understanding as to how a company is valued, and what that means. Had Woodford purchased ordinary stock for $45 per share, this would have made some sense, though it would still not have created a billion dollars for Darden to somehow “disappear.” But Woodford did not do that.

My point here is that LENR Forum and those who write for it have no habit of correcting errors. We can see people coming up with false information years later, because they read it in a post, perhaps, in this case, a post by the Founder of LENR Forum. There is a reservoir of held ideas about IH and this case, based on what was stated back then based on assumptions from shallow research. “Toilet paper stock,” mentioned by Sifferkoll, is a common idea. “Shell corporations.” (But the only genuine shell corporation here is JM Products, Inc.)

Siffer wrote “Darden simply pocketed the money and made it dissappear [sic].” But what money? A billion dollars? In fact, Woodford invested $50 million and, while IH Holdings International doesn’t broadcast much detail, much of the money still exists, as cash or other holdings of IHHI (including some valuation for the Rossi License). Siffer has in mind a billion dollars that he made up, that never existed. And then there is the alleged $200 million from the Chinese, that apparently also never existed, or if it existed, it had little or nothing to do with Industrial Heat, it was Chinese money, invested in a Chinese project with very little connection with LENR, if any.

Derricut on investment flabber

Simon Derricut, as a comment here, wrote:

(and I comment).

One thing about the money that is being talked about is that every year IH (and all the other players) will need to produce accounts and pay taxes. That means that people who do some digging will find out the truth or otherwise of all the rumours. There are legal implications for lying about the money.

Indeed. Darden and Vaughn have high experience with Cherokee, making risky investments, where some fail, and would be thoroughly aware of the possible pitfalls of failure to fully disclose risk to investors, and knowing that fraud would likely fail to escape detection. In the attempts by Planet Rossi to show that Darden and Vaughn are crooks, examples are dredged out of Cherokee history; but, when examined closely, none of these have held up as evidence of fraud or deceptive behavior; the fact that reporters have strongly implied fraud and that investigations have been started is used by Planet Rossi as if it were proof, but the lack of conclusions is actually evidence of the opposite. The worst thing found, so far, was an accounting error, an understandable one, arcane, where a particular expense was, by securities regulations, not to be charged to investors, whereas IH did make that charge. No wrongdoing was found, only error.

Similarly, if IH did get Rossi’s IP to actually run, and later try to sell it without acknowledging (and paying) Rossi, then he will have legal redress. They can’t “steal” the IP and get away with it.

Right. Again, Planet Rossi must imagine that somehow the IP would be hidden, disguised. I can only imagine that as possible if the IP were not actually patentable. Further, to pull off this scam, IH would be risking billions in legitimate profits, all to … what? Take some secret payments under the table from some other company, perhaps Brillouin, where they have only a relatively small and old investment? They would be risking that some whistle-blower would reveal their perfidy. Rossi tried hard to find evidence along these lines and apparently failed, though we may not have seen everything.

The point about VCs (Venture Capitalists) is that they are gamblers. Where most investors want to get a certain return on investment, VCs estimate the risks of losing their money and calculate whether the possible gains outweigh the risks so that, on balance, they gain more money than they lose, but it is known that since the investments are high-risk then a certain proportion will in fact fail and they’ll lose their money on those ones. In fact, if not enough projects fail then the VCs are not earning their money, since they ask a high percentage of the profits of those that succeed. No-one would take a low-risk project to a VC, after all – it costs too much.

This accords with my understanding. VCs are gamblers, but in a game where they can act to play odds that, overall, favor them. This all is dependent upon their ability to estimate those odds. Typically, there are not betting the farm on a single project, but engage in many projects, distributing risk, increasing the potential gain, or hedging it.

(That is, they might bet on exclusive possibilities. This is the simple answer to why IH was not immediately offering to return the License. After all, what if Rossi actually has something? What are the odds of this? And … what would Rossi be offering in return? He seems to have imagined that he could just unilaterally cancel the License “for nonpayment,” but the Agreement was certainly not written that way, this was just another Rossifiction. IH has a License until and unless they give it up or a Court takes it away — which is unlikely unless their investment is returned, at least the original investment.)

Analysing the risks correctly requires that the truth be told by the receivers of the VC backing. At least the truth as far as they know it. IH of course knew that Rossi tended to not tell the truth, which raised the risks somewhat, but the payback if Rossi had actually had some real technology was sky-high and a 1% probability of that was deemed to be worth the risk. Dewey states that 1% probability as their cut-off point.

They will, if sophisticated, include the possibility of lies in their estimations. Humans lie.

1% is actually conservative, if the loss can be sustained. I estimate the value of a practical LENR technology, something like what Rossi was claiming, at about a trillion dollars. So 1% would, in theory, be worth about $10 billion. However, straight game-theory play is not how humans actually operate. We want better. We also have alternatives, other ways to invest, and may seek maximization among choices, not merely some absolute average return from one.

I think that all of the above should be pretty self-evident to most people who have been watching, and that most of these points have been made at various times. Everyone (IH, Woodford etc.) should have been aware of the risks of backing Rossi. There’s also an obvious risk in backing LENR in general, since the main scientific consensus is still that it is a measurement error.

Yes. The risk involved with LENR, however, may depend on time-horizon. Short-term returns in LENR are very unlikely. Longer-term profit is much more likely, even probable. But “longer-term” might be in excess of twenty years. I assume that IH and Woodford were quite aware of risk, and quite aware of the extensive criticism of Rossi. They certainly knew about Krivit, and we see McLaughlin taking Krivit (mispelled) into consideration in February, 2015. I would assume they had read everything Krivit had written. Krivit, however, is a yellow journalist, and draws firm conclusions from evidence that is less than conclusive. And WTF does a certain unfortunate figure’s child molestation prosecution have to do with Andrea Rossi? Is Rossi responsible for every reprehensible action taken or allegedly taken by everyone who supported him?

Krivit wrote about the obvious, so I’d assume that IH knew all this, likewise Woodford. This was all extensively discussed in the CMNS community, which was mostly very skeptical of Rossi.

Still, the big profits go to the people who correctly bet that some fringe science can be turned into a technology. Of course, the profits can be even bigger if you can get the government to put the initial research money in and you then utilise that research, but that’s another story….

Right. So part of an IH strategy might be to encourage and support governmental and other non-business investment in research. That is where APCO might shine. I see a sane long-term IH approach as being an observer, ready to act quickly if the opportunity arises, but not routinely spending a large budget. Probably maintaining a lab but only engaging substantial staff for specific and vetted projects.

As I see it, IH began with a fairly low estimation of achieving success, and during the Doral test that estimation went down (below 1%) because of the way Rossi ran his operation, stopping any verification of his process. It seems unlikely that Tom Darden would have kept such estimations secret from Woodford or anyone else who intended to invest, since that would open him to being sued for fraud by such investors. Since we haven’t seen Woodford suing Tom Darden, it stands to sense that they must have been happy, and are still happy, with his honesty in telling them what he knew of the risks.

For reasons that others have stated, we cannot conclude from the absence of a lawsuit that Woodford is happy with IH. However, there is no sign that they are unhappy, so far. There is no sign that they have attempted to withdraw their investment. I’m sure they are unhappy about so much being spent on lawyers, but it is possible that this, or some of it, might come back from Rossi and Johnson. I don’t expect Bass and Fabiani to be big sources of recovery. Sad cases, in my opinion. I doubt criminal indictments would stand there, but … if one through carelessness aids a civil fraud, one can be held liable, and this could be “joint and severable” liability, where the total liability can be collected from each.

Though we’re not privy to what went on between IH and Woodford, that lack of any legal proceedings implies strongly that there is no problem with that relationship and that Woodford are happy with the information they received from IH. They may be annoyed with Rossi, though.

Though we may not be able to trust what people say, what they do is a reliable indicator.

The operative word is “indicator.” So often in internet discussions, indications are taken and presented as proof.

More on the investment flabber

On LENR Forum, Eric Walker mentioned a post by joshg. While the link was incorrect, I did some searching for joshg (LF), and Josh G (ECW). I found comments I had overlooked.

joshg, himself, overlooks timing. It’s easy to do this when one is defending a thesis, looking for proof. One will come across some evidence that seems to prove the thesis, but events have been collapsed, and what happened later, in fact, can be asserted as a cause of what happened earlier.

4/21/2017, joshg wrote 

I have frequently been challenged to substantiate my claim that Darden et al. basically defrauded investors by using the 1MW test to raise $50 million from Woodford (plus some kind of joint research endeavor with the Chinese plus who knows what else).

Josh is not promoting the $200 or $121 million Chinese investment in IH meme. However, was the 1 MW test “used” to raise the $50 million?

Continue reading “More on the investment flabber”

The Troll’s Playbook

The Secret Playbook of Internet Trolls. ‘Disrupt, Misdirect and Control Internet Discussions’

It’s ironic — or is it? — that Planet Rossi routinely accuses the “Ventriloquist of Raleigh” of spreading FUD, of paying people to attack Rossi. At the same time, IH Fanboy claims that those who claim others are lying are likely to be liars themselves. Many are eager to find fault with others, to toss any garbage they can find or invent, and this does happen on all “sides,” — but Planet Rossi is organized around Rossi Thought, as expressed for years on his blog, JONP.

A common troll tactic is having a series of Favorite Topics, arguments, sometimes based on something resembling a fact or which can be claimed to be fact, that are then raised to avoid discussing something else, such as any losing issue. Ele did that with the claim that IH had raised $250 million (as if this proved Rossi Reality, if it were true) and I covered it on

… and that second post goes into some detail on origins of the “$250 million” story.

Eric Walker, on LENR Forum, confronted ele over this (as previously mentioned). ele came back:

ele wrote:

Cite and quote the court document that has this number and I’ll move your post back to the Rossi v. Darden thread. Eric

Ele normally does not provide accurate citations, has no academic habits (which is like Rossi, who has not worked in academia for a very long time). What ele quotes here was not written by ele, but was a comment added by Eric Walker when he moved the off-topic comment to the Playground. Before going on with the ele response, here was that original ele post, what Walker moved:

oldguy wrote:

250M exists only in “Rossi says”.

No. is written in the documents of the trial. This figure was cited many times here and no one from IH have never negated it.

Darden’s visits to Doral with investors are alo [sic] documented.

Cite and quote the court document that has this number and I’ll move your post back to the Rossi v. Darden thread. Eric

I’ve looked and have not been able to find one. But there are thousands of documents and some of them have hundreds of pages. However, I have found what appears to be the original claims. It was very likely Rossi Says.

ele responds with what does not address Eric’s challenge. He claimed a court document, that’s what Eric dinged him for, not for the $250 million itself. He then provided some “evidence” for large numbers, but not $250 million. Not the court document number that anyone can check.

Basic troll rule: make claims difficult to verify. Waste the time of those who might disagree with you, burn them out with repetition. This is not mere disagreement, people may disagree and then collaborate in finding reality. Trolls are about provoking upset, which can include irritating others through repetitive, unresponsive claims. While insulting them as having nothing, as ele did in this sequence, even though those others were simply stating what is obvious from court documents and community discussions.

I would assume that Eric would want to see the original post edited to make it potentially useful. Not another post adding “more evidence,” never checking or confirming the original claim.

This is like the repeated claims of Dirt in Cherokee history. These claims have been tracked down and analyzed many times, there is very, very little there, essentially nothing surprising for a company that works as Cherokee works — which is legal. Evidence is cited that, if one actually follows it (most people don’t follow evidence, take the time to read court documents, etc), shows Cherokee as a victim of fraud, not a perpetrator of it. But the fraud was an officer in a Cherokee company! So it looks bad. This would be like condemning Cherokee for fraud because they engaged with Rossi. In fact, the trolls do that. They should have known better, and, obviously, they only wanted to impress investors to extract money from their pockets. Yet the documents don’t show that, not at all. IH only dealt with investors who knew and were willing to assume the risk. Woodford has a different class of investors, to be sure, but Woodford has only a small percentage of those funds invested in LENR, through IHHI, not IH, and, while Rossi’s alleged technology is part of the full IHHI portfolio, the Woodford money didn’t go there, which probably pissed him off no end.

IH did visit Doral with investors and others. However, we know from the Ampenergo memo that Woodford, in particular, was not terribly impressed, at least according to Vaughn, speaking privately with Ampenergo well before the Doral test was over, and with no reason to lie to him. The timing of investments and the documents we have on them do not support the Rossi claim that investors tossed in funds based on being impressed by Doral. Definitely not Woodford, that investment was planned before Doral started up. Another visitor was Pike, who may have Chinese connections, but Pike was already an investor (a fairly large one).

ele went on:

Dear Eric,
The big amount of money raised from Darden is also a public information.
Just as an example please have a look to this page: Donbot.com

It is rather easy to notice that this is not a court document. It is rather easy to notice that the page doesn’t source most of the information. However, it was taken without credit from another page that does give more sources, on Hydrofusion.com, the web site of Rossi’s licensee for a few countries.

One of the sources is a Huffington post article, Interview With Andrea Rossi, LENR Energy Pioneer, October 6. 2015. Full of errors — and Rossi lies, including Stuff and Nonsense about the “customer,” the monitoring systems in Doral, etc.

Quote
WIM, or Woodford Investment Management, had said earlier in the year that they had invested in Industrial Heat. At the
beginning of October, they revealed that they had performed due diligence for 2.5 years, and their investment came to $50
million USD. [….]

While this is not precisely correct, it’s true in round outline. Woodford did not invest in IH. They invested in IHHI, which bought all outstanding IH stock, exchanging it for IHHI stock. Woodford received “preferred stock,” which doesn’t give operational control (Woodford doesn’t have voting power commensurate with the value of their investment) but which does have certain other special rights. It is reasonable to claim that Darden raised this funding; Woodford apparently trusts Darden. This money, however, did not come because of the visit by Woodford reps to Doral. There were actually two visits, one very early in the “test,” and the other after relations had actually broken down, after Rossi refused to allow the IH engineer, Murray, to visit the Plant. Woodford did not invest because of these visits; they were apparently not impressed. A plant with a steam outlet running through a wall into an inaccessible area, and no visible signs of generating a megawatt, but only the say-so of the inventor or the puppet Bass — now there is a legitimate usage of “puppet” — would not impress any intelligent observer. Unless they like seeing all those blue boxes, Rossi did, indeed, put on a show!

But this isn’t the point. Where’s the beef? The other $200 million or so?

Tom Darden, CEO of Industrial Heat, signed a cooperation agreement with a newly created strategic financial center in
Beijing. The “Technology Ministry of Science and Innovation Park” will participate in technology transfer with 20 companies
from the U.S. This sparked rumors that the E-Cat technology recently patented in the U.S. would somehow become the sole
property of the Chinese government. However, these ideas were assuaged, and China invested the equivalent of $121 million USD in LENR technology.

This is copied from Hydrofusion. I’ve added a link that was there. The link is to Google translate for a document on that Park. While Darden is CEO of Industrial Heat, he is also CEO of Cherokee Investment Partners, and many organizations are (or were) involved with that Chinese project. There is no sign that LENR is a major part of it, though it’s certainly not impossible, and Darden may have spoken about LENR in China.

Where were the “rumors” “sparked”? I can think of one likely place, where Hydrofusion might get their information. There was this, about the Park. I followed the link to the article in Chinese. No cheese down that tunnel.

It is clear, though, that Darden was in China representing Cherokee and possibly Research Triangle Park, not Industrial Heat.

And then this E-Cat world article cites Hydrofusion for the $121 million figure. While ECW, following Hydrofusion, speculated that the $121 million was for LENR, the research Park would be a huge project, with probably billions involved. And the plot thickens. From that ECW article:

Alain asked Andrea Rossi if he knew about this on the Journal of Nuclear Physics today, and Rossi responded, “yes, I saw it, it has been reproduced from other publications”. Alain asked if AR was involved in this deal, and he responded, “no, it is an action IH made in his Territory, for which has been licensed from Leonardo Corporation”

Notice that Rossi assumed it was about LENR and the E-Cat.

ele claims that “This figure [$250 million] was cited many times here and no one from IH have never negated it.” Of course, he has just responded to Dewey Weaver, the only person blogging on these issues known to be from Industrial Heat — as a contractor for them and investor, apparently from the beginning, who would know about such transactions as an insider — who had just denied it. If ele is not lying, ele is not seeing what is immediately in front of him.

Trolls, when they make mistakes, almost never go back to correct them….

Frank Acland went on:

It’s still a bit vague as to what exactly is being financed, but Industrial Heat does have an E-Cat license for China. Perhaps they are going to be manufacturing E-Cats in China in this Science and Innovation Park that has been established, or since IH is supporting other LENR groups, funds could be used for supporting non-E-Cat LENR technologies.

Still, it this number of accurate, it shows a significant commitment from the Chinese to support the development of LENR.

Like much speculation on E-Cat World, there is practically no basis for this. Someone might, I suppose, have asked Hydrofusion where they got that information. Did they? AlainCo asked Rossi, not Hydrofusion, but Rossi only had second-hand information.

There is no evidence I’ve seen anywhere that IH received substantial funding from China. The agreement signed, from the Chinese sources, was for technology cooperation in establishing a research center in China, there is no clue of any major investment in (or involvement by) Industrial Heat.

The Darden visit to China was in September, 2013. IH had just received the 1 MW Plant. It is highly unlikely they would have been heavily promoting anything at that point.

So that is not a “Rossi Says”.
Here :
https://translate.google.com/t…spx%3Fid%3D845&edit-text=
is the photo of Darden in China…..

Darden visited China, proving … proving what?

That there are “documents of the trial” is “ele Says,” which certainly sounds like Rossi Says. Now, Rossi has seen IH discovery, that we, as the public, have not seen. To reveal this, though, ele would have to out himself. More likely, Rossi, like others, picks up rumors and repeats them as fact, particularly when they serve his purposes. The general purpose here would be to provide “evidence” that the IH people (a whole series of them) are liars, since they claim they could not confirm the technology, but they “sold” it to so many investors for so much money.

Of course, in September, 2013, IH had not had time to confirm the technology, other than by relying on the Validation Test and Penon’s analysis. Rossi Says is commonly clueless about time, when things happened.

Eric didn’t buy it.

Well, let’s look at the (surely misleading) numbers you quote. Nominally from Woodford we have 50 million, and nominally from the Chinese we have 121 million. That’s 50 million + 121 million = 171 million dollars. You’re short by 79 million to get to your 250 million that you’ve mentioned on several occasions.

Normal people will concede points to trolls. Eric, here, is not accepting the $121 million figure, but is only pointing out that the original claim of $250 million is off by a third, even if that figure is accepted.

Now let us recall the article that clarified that only 20 or so million from Woodford had been disbursed to IH.

I noticed the problem here and so did ele, of course. “The article” is vague, and what is reported is possible an interpretation, by someone unspecified. What I know of is the IHHI financial information. It does not specify what is “disbursed to IH.”

Go to Companies House.

07 Nov 2016 Total exemption full accounts made up to 31 December 2015

I can read and interpret this such that, as of the end of December, 2015, the first year of IHHI operation (the Woodford investment was in May, 2015), IHHI had spent roughly $17 million in the year, and had current (short-term) liabilities of about $3 million. They had cash beyond those short-term liabilities of almost $14 million, but they had “investments” valued at almost $28 million. Without knowing what those investments are, saying that only $20 million was disbursed could be very misleading. That might, for example, include the value of IPH, i.e., mostly of the Rossi license. The total investment in IH was about $20 million, raised from the original group of investors, apparently. (That was the stock issue authorized when they raised the $11.5 million in 2013). So, with the Woodford $50 million, of a total of $70 million raised, it appears that it has been spent on Rossi and other operations, so far, leaving roughly $14 million. We could probably come up with what they have spent on Rossi, I think that’s a court document. Millions of dollars went to Ampenergo, all part of the cost of the original Agreement.

And let us recall that the Chinese number was probably a commitment and does not appear to have been intended to be directed to IH.

Speculation but reasonable. The stories cited as sources in the old discussions of the China connection do not show any investment in IH, at all. This was, first of all, Cherokee participation, not IH. (Confusing Cherokee with IH is a Planet Rossi trope, it’s very common, and there are news stories that also confuse the two.) Then this was all about a technology park in China paralleling Research Triangle Park in North Carolina. Not about LENR. That was Planet Rossi speculation, making the kinds of assumptions often made in that community.

There is no source for the $121 million, which is an awfully specific number to stand as a vague rumor.

We are now far shorter [short of] the 250 million. Please stop repeating that IH raised 250 million as though it were a fact unless you can substantiate it. Or, if you do repeat it as though it were a fact, your post will probably go into the bargain bin.

Clearance Items. Far superior to arbitrary (or judgmental) deletion.

ele came back again.

Eric Walker wrote:

That’s 50 million + 121 million = 171 million dollars.

This is not just few money. I remember also other figures in the docs and I will search the exact document….. but ok lets take 171 for now

In other words, “I was wrong but I win anyway, because $171 million is a lot of money! Therefore Darden is a lying crook! That I lied is not important. So what if I lie? I’m just a troll, you don’t know who I am, and I can disappear anytime I like, like randombit0.

Eric Walker wrote:

Now let us recall the article that clarified that only 20 or so million from Woodford had been disbursed to IH.

Please cite the aricle yourself. You have not.

Above I cite a source. I think, though, that Eric had something else in mind, that IH spent about $20 million on the Rossi affair. That wasn’t from Woodford, though some of the last expenses may have been supported with Woodford money, through IHHI, which is sole owner of IH.

Eric Walker wrote:

And let us recall that the Chinese number was probably a commitment and does not appear to have been intended to be directed to IH.

Are you sure ? The only internet articles I found with this figures are related to Darden visit. Remember that IH holds the rights for China.

This was all Planet Rossi, making assumptions, i.e., Darden = Industrial Heat = Cherokee. The articles actually talk only about Cherokee and Raleigh and Research Triangle Park there. No mention of Industrial Heat. Somewhere, though, there is an indication that Darden may have mentioned LENR. The timing of the Darden visit to China is an issue here. It was September, 2013, when IH had only the month before received the Plant, certainly did not have time to test it.

Yes. IH holds the E-cat rights for China, which shows what? They were nowhere near starting up manufacture. You can’t make millions if you can’t make one. Cherokee doesn’t hold the rights, never invested in Industrial Heat. Rossi was never clear about who and what he was dealing with.

Eric Walker wrote:

Or, if you do repeat it as though it were a fact, your post will probably go into the bargain bin.

As you see I’m not repeating.

I feel, but of course I can be wrong, that there is a double standard here. People from IH can openly offend and insult other while I’m just trying to reconstruct how much money IH has rosen.

Raised. Liar.

He is trying to prove something, not to learn or “reconstruct.” There are, so far, no sources for either the $200 million or $121 million figure, other than a report from Hydrofusion that seems to have inspired a flock of reports. That report is itself vague and implies previous discussion, talking about “rumor” The story has “the equivalent of $121 million,” implying that this was not a US dollar investment, and many have opined that if China were to invest, it would not be in a U.S. company like Industrial Heat or IHHI (which denominates investments in USD).

We know how much money IH has raised: $11.5 million in 2013 with a stock offering, with that issue allowing up to $20 million, and since they needed more money, I assume they did raise it, probably up to the limit. Then Woodford invested $50 million in IHHI, and there may have been some smaller investments, I don’t recall the numbers. So we are looking at total investment, not counting promised future investments, of roughly $70 million. There is no sign of anything else. It certainly isn’t in IH Holdings International, Ltd.

No, ele was claiming that Dewey Weaver, who would actually know, was lying, by claiming that this $250 million figure was well-known and then, nutty as it was, pointing as proof to a way-crazy web site, donbot.com, without bothering to look for actual sources.

And then there was this unfortunate post:

Rends wrote:

The main question remains, had IH the full sum of money in order to meet the obligations of the license agreement at any time available?. The answer is no!

Speculation as to how they could have raised money is superfluous, because they have signed a contract with the knowledge that they can possibly not raise the sum and so they could not be interested seeing Rossi successfully running a long term test – because they did not have that $89 million at no time!

Rends, quite simply, has not been following the documents (and has shown that he doesn’t understand what he does read). Woodford gave $50 million to IHHI to support LENR research, and committed another $150 million. If it were needed, they had found the money. No, they never had it sitting in the bank, but companies almost never do. Money sitting in a bank is wasted. They didn’t have the $10 million for the IP payment either, until a few days before. But they knew how they could get it.

I signed a contract to buy a house, to pay the better part of a half million dollars for it. I didn’t have the money — but I secured the agreement with $1000. This is totally routine! For a house, I could obtain a mortgage, and did. It is paying large sums for nothing, or something of highly speculative value, that’s difficult, but Darden has high experience at risky investments. The companies he has started through Cherokee, investing about $25 million of Cherokee funds, have often raised hundreds of millions of dollars, it appears, with investments and loans and grants.

See the Ampenergo memo for information about the Woodford commitment, but there are other documents in the record. The idea that IH didn’t have the money, and therefore defrauded Rossi when they signed the Agreement, is a standard Planet Rossi trope. Rossi himself apparently believes it. His attorneys tried hard to claim that.

I transcribed the entire memo.

this is from the first page of it, dated October 3, 2014:

Woodford > first deal / public deal
$25-50 M (up to $200 M) (or more if they need to buy out Rossi)
Dutch entity > will become parent
Dutch entity > currently a subsidiary of IH. IH’s IP has been transferred to Dutch entity

So an initial Woodford investment was planned by October 2014. The plan then was to make IPH (“Dutch entity”) the parent. Instead, Woodford wanted IHHI to be formed in the U.K. (see page 7 of the memo).

The Ampenergo memo is devastating to many Planet Rossi tropes. Cassarino was (and, I’m told, remains) a friend of Rossi, from way back. Ampenergo had invested in Rossi. Ampenergo is also an investor in IHHI; owned equity in IH; this in lieu of some of what IH owed Ampenergo for their release of the License to them.

Any questions?

Mysteries abound when eyes don’t see

When we fail to observe the world carefully, and without strong prior belief, many mysteries appear, and often questions that support prior belief, i.e., argument from mystery, argument from lack of imagination, or, often, very restricted imagination.

When we have knowledge, these questions often vanish because possible answers become obvious, and where these possible answers have high organizational function, we may choose to accept them, at least until we have even more knowledge (i.e., evidence combined with a broad sense of possibilities).

On LENR Forum, SSC wrote (links added)

THHuxleynew wrote:

SSC seems just to be incapable of imagining uncertainty – and then fits his rationalisation around his lack of imagination. In this case that IH could be confused by Rossi’s setups, and the other independent tests, working when their own – done with much weaker technical resources, we know, Dameron, did not. So I have some sympathy with SSC – lack of imagination is no crime.

Error in general is not a crime, except when it is…. The problem is an imagination that follows established tracks, and particularly, here a track laid down by Rossi, as a major theory behind his lawsuit, but that ignores obvious other possibilities, including some well-established by evidence, rather than the kind of imputation that SSC uses here (which Annesser and Chaiken also use, it’s quite visible in the Murray deposition.)

Dear TTH, it may be that I am lacking in imagination, but in any case I would not speak of “uncertainty” talking about IH…. Please read PLAINTIFFS’ REPLY IN SUPPORT OF THEIR MOTION FOR PARTIAL SUMMARY JUDGMENT (doc 254), where you can find these words:

“Notably, Defendants could not point to a single document in which they notified Plaintiffs of their alleged inability to replicate the technology, whether as a result of their incompetence, faulty equipment, inferior materials, or outright lies. See SOF ¶¶ 31, 33. “

This is citing Rossi’s pleading and the Rossi declaration as evidence, and the claim is presented in a narrowed way that might easily be overlooked. There are two general kinds of evidence in the case: documentary evidence and testimony under oath. Documentary evidence will be subject to interpretation, the claim is often that it “speaks for itself,” but here Rossi is referring to what the documents do not say. Maybe. We’d have to look at all of them to verify this. Meanwhile, the public record contains evidence that IH showed Rossi — in person, not by an email and formally — that their tests were not confirming his claims, and that Rossi was irate.

SSC is writing from what he believes, which is ultimately based on Rossi Says, and what he quotes here shows it. That is not admissible evidence. The question asked assumes a context that was missing, open communication. It ignores timing. It ignores what is completely plain on review of the record: IH strategy for communication with Rossi, it was designed and controlled to “not piss him off.” This is so obvious that Annesser uses it to ask Murray why the visit to the plant by Murray was proposed for July 2015, if it was expected that it would upset Rossi.

It obviously did upset Rossi, so much so that he violated the Term Sheet to deny the visit (by generically denying the right to visit of anyone not already agreed, until the “tests under way were complete,” I think is how he put it, as if Rossi had that right. It was the IH Plant and they had a clear right to visit it at any time.

Rossi counsel is attempting to have it both ways: IH should have told Rossi, in writing, and that they did not has some implied meaning, and then that IH was provocative by scheduling the Murray visit. (As if “provocative” has some legal significance here. Annesser and Chaiken seem to be, to some extent, grandstanding for Planet Rossi.)

(IH had no legal obligation until and unless Rossi himself put in writing that the Doral test was the GPT, and that idea is also missing from the documentary record, as to the contractually required prior consent in writing, and probably did not happen until later in 2015. In fairly short order, IH formally challenged the GPT interpretation, but we can see evidence that IH still hoped to negotiate something with Rossi, some test or way of moving forward that could satisfy the parties.)

There are e-mails and documents where you can read that IH has initially obtained good results from its E-Cat tests.

There are documents that can be read that way. However, I strongly suggest reading the Murray deposition, the whole thing (423 pages!). IH largely abandoned its efforts with Rossi by the middle of 2015, focusing on other technologies. It appears that they allowed the Doral test as a last-ditch opportunity for Rossi to perform in some way. There are many other comments in depositions on this. SSC, like Rossi, focuses on a possible fact: no written notice, but ignores all the rest. That Rossi Partial Motion for Summary Judgment failed. Does SSC know why? He is here citing argument that was not accepted by the court, the only part of this that is admissible testimony is Rossi Says, in the form of the Affidavit cited.

After Rossi had sued them, they began to say that they had never seen excess heat. But this complaint never came officially to Rossi. If at one point they really realized they were not able to replicate the reactor, why did not they even send an email to Rossi to tell him about it?

Nor did the Rossi intention to consider Doral the GPT ever come “officially” to IH. Until that intention was registered in writing, it did not create an enforceable obligation. If IH had decided to push and shove, they would have needed to formally notify Rossi of their inability to make devices that worked reliably, when thoroughly tested. (This is not the same as “never seeing excess heat,” unless we are careful about what “seeing” is. Operating reactors do not in themselves display “excess heat.” It must be inferred from measurements, and what is truly bizarre in the history of Rossi Results is that on occasion the results were directly contrary to plain and simple sensory evidence. Instead, error-prone measurements were used and attempts to confirm them (i.e., with control experiments and independent measures) were resisted strongly.

I decided to look at the material quoted by SSC in detail. I had started to look at the Rossi Motion for Partial Summary Judgment, but had originally abandoned it because the exhibit numbering was highly confusing (which was also noted by Industrial Heat in their Opposition.)

So I did a study, published at RvD: Rossi Partial Motion for Summary Judgement – Replication

It takes about a day to do one of these.

This is what I’ve seen about Planet Rossi. It does not appear that those who comment like SSC have read much of the case. The question of why IH would not inform Rossi in writing of their failure to replicate has a very obvious answer, and it’s answered in the documents (because Annesser asks it in depositions!).

Reading the case takes a lot of time. There are many hundreds of often-confusing documents. But if one wants to have an informed opinion, there is no substitute for becoming informed. What I see on Planet Rossi is the repetition of certain simple memes, often repeated.

I also see this from Rossi himself, which should not be surprising.

If anyone wants to move from imagination and fantasy to reality, and on the questions and claims made by SSC, I’d suggest reading, in particular, this, and this. Or read the whole section on replication in the Rossi Partial Motion for Summary Judgement: those links refer to paragraphs in it, as quoted on the Study page. Read the evidences, don’t just read Rossi’s claims based on them — or my comments or IH objections. Read sworn testimony and attested documents, actual evidence that can be introduced at trial.

And notice how, sometimes, pleadings distort the evidence, in ways that are easy to see. Sometimes they actually lie, it’s that blatant. However, it is not unlawful to lie in a pleading, pleadings are not sworn testimony. It’s a crime to lie in a deposition or in the attestations that are sometimes provided. Notice that the witness in a deposition is sworn. The lawyers aren’t.

If life is a vote, I’ll say that the Eyes Have It.

Update

SSC wrote some more:

Darden has raised funds from investors, so it’s fair to suppose he has spoken well of the E-Cat with them. You may also not give too much credit to document 254, but it is a text presented to the judge and can hardly contain easily disprovable things. In that document you can read this:

“There is no written evidence that, prior to Defendants’ receipt of $50 million in investment funds, Defendants ever told Plaintiffs that they believed Plaintiffs had violated the License Agreement or that the 350-day test taking place in Florida was not the GPT. See SOF ¶ 60”

This lack of understanding of legal process is common on Planet Rossi. (It’s common in general, but here it is used as part of a syllogism, one that can easily be shown as a fallacy by simple counterexample). If SSC reads what is linked from above, he will fund abundant claims made in DE 254 that are not supported by the evidence cited or that are even contradictory to the evidence.

One way to explain DE 254 is that this was Rossi’s last chance to lie in his Motion for Partial Summary Judgment, it would not be contradicted by IH. So he repeated stuff from before, ignoring contrary evidence and response. Just saying it over again. If his goal was to fire up his base, it worked. I don’t think SSC is Rossi, the English is too good. Though it could be an English-speaking puppet.

What is not true: the claim that the Defendants received $50 million. They did not. The $50 million was received by an independent U.K corporation that is not a defendant in Rossi v. Darden, but the distinction — which is legally quite clear — is suppressed in Rossi claims because he is playing on emotions. Here there is an attempt to connect the $50 million with the GPT issue, as if it is somehow relevant. Unfair!!!

What is not true: that IH never told this about the GPT to Rossi. They obviously did, from evidence presented. However, the question is not whether, but when. It was certainly before the end of the test, but IH would not say that to Rossi, for all the obvious reasons, until and unless Rossi claimed the reverse. We don’t know when Rossi first claimed that Doral was the GPT, but there is no evidence of it being mentioned when the move was planned to Florida, and no mention, as far as I’ve seen, until IH and Rossi started communicating through lawyers, and that was clearly before the end of the “test,” easily by about the beginning of December, 2015.

Why would anyone tell him it was not the GPT if he didn’t claim it, and if the context was that Rossi knew the Second Amendment had failed, and the time had expired? IH knew that Rossi knew — because Cassarino forwarded the Rossi mail about it to IH.

What it would have taken to start up a new GPT would have been a written agreement. IH was willing to sign one, the original Second Amendment. That Amendment failed because it required Ampenergo sign-off and Ampenergo refused. But IH could certainly have signed a new Agreement, and would have had no trouble with Ampenergo if AEG rights were respected. So why didn’t Rossi propose that, instead of proposing this cockamamie faux customer? I find the answer to that question distressingly clear. Rossi is crazy, and demands control, doesn’t deal straightforwardly in cooperative enterprises; instead he lies and manipulates. It is crazy rather than merely controlling and selfish, because he is headed for a serious fall, and my guess is that he also dominates his attorneys. They sound like him, except for better English.

As to violations of the License Agreement, and setting aside the various minor alleged violations, SSC would probably be referring to the claim that Rossi may not have disclosed all the necessary IP for replication. We have testimony that IH people complained to Rossi, concerned that they could not replicate. They certainly would not have sued him for failure to disclose unless they first formally claimed the failure, perhaps demanding specific performance. They were not ready to do that, so they didn’t.

Failure to disclose is simply one of the IH stated possibilities: failure to disclose necessaries, or false claims of performance. Annesser is insistent that there are other “logical possibilities.” Maybe the Russians put Darden in a trance so that he couldn’t function to make the fuel properly. After all, if they could steal the fuel from a sealed reactor, why not stealing his mind? Logically possible, hypothetically. Really, we couldn’t make this up.

Read those pleadings and, if you care about Rossi, or about simple honesty and straightforward argument, weep.

Back to the investment, the original IH investment was in 2013 and probably the $20 million issue was completed in fairly short order. The large investment in IHHI came in May, 2015, and was not invested in Rossi technology, i.e., it was not spent, apparently, on attempting to develop E-Cats, more than a little. What of it has been spent already was allocated to diversifying, exploring other LENR possibilities. So what does this have to do with “praising the E-Cat”?

The Woodford rep statement about the Rossi technology as being “core,” besides being often misquoted (including in pleadings and even in a joint stipulation as agreed), is probably, then, a misinterpretation, with the meaning being imputed to make it into something it wasn’t, which has been very common in this case.