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KEITH R.

HUMMEL (admitted pro hac vice)


1 [email protected]

2 JUSTIN C. CLARKE (admitted pro hac vice)


[email protected]
3 JONATHAN MOONEY (admitted pro hac vice)
[email protected]
4 CRAVATH, SWAINE & MOORE LLP
375 Ninth Avenue
5
New York, NY 10001
6 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
7
JOE H. TUFFAHA (Bar No. 253723)
8 [email protected]
PRASHANTH CHENNAKESAVAN (Bar No. 284022)
9
[email protected]
10 LTL ATTORNEYS LLP
300 South Grand Avenue, Suite 3950
11 Los Angeles, CA 90071-3426
Telephone: (213) 612-8900
12 Facsimile: (213) 612-3773

13 Attorneys for Defendant


and Cross-Complainant
14 Tenute Del Mondo, B.V.

15 SUPERIOR COURT OF THE STATE OF CALIFORNIA


16
COUNTY OF LOS ANGELES, CENTRAL DISTRICT
17
WILLIAM B. PITT, an individual, and Case No. 22STCV06081
18 MONDO BONGO, LLC, a California
limited liability company, [Hon. Lia Martin, Dept. 3]
19
DEFENDANT AND CROSS-
20 Plaintiffs, COMPLAINANT TENUTE DEL
MONDO, B.V.’S OPPOSITION TO
21 PLAINTIFFS AND CROSS-
DEFENDANTS WILLIAM B. PITT
22 vs.
AND MONDO BONGO, LLC’S
23 DEMURRER TO TENUTE DEL
ANGELINA JOLIE, an individual, and MONDO, B.V.’S CROSS-COMPLAINT
24 NOUVEL, LLC, a California limited
Filed concurrently with Request for
25 liability company, YURI SHEFLER, an
Judicial Notice, Declaration of Joe H.
individual, ALEXEY OLIYNIK, an
Tuffaha, and Opposition to Request for
26 individual, and TENUTE DEL MONDO
Judicial Notice
B.V., a Netherlands private limited
27 company,
Reservation No.: 814483696267
28

TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER


Judge: Hon. Lia Martin
1
Dept.: 3
2 Date: April 30, 2025
Defendants. Time: 9:00 A.M.
3 NOUVEL, LLC, a California limited
liability company, Action Filed: February 17, 2022
4
Trial Date: None set.
Cross-Complainant,
5

6 vs.

7 WILLIAM B. PITT, an individual,


MONDO BONGO, LLC, a California
8 limited liability company, MARC-
OLIVIER PERRIN, an individual, SAS
9 MIRAVAL PROVENCE, a French limited
liability company, SAS FAMILLES
10
PERRIN, a French limited liability
11 company, ROLAND VENTURINI, an
individual, GARY BRADBURY, an
12 individual, WARREN GRANT, an
individual, SAS PETRICHOR, a French
13 limited liability company, VINS ET
14 DOMAINES PERRIN SC, a French
company, SAS MIRAVAL STUDIOS, a
15 French limited liability company, SASU
LE DOMAINE, a French limited liability
16 company, SAS DISTILLERIES DE LA
RIVIERA, a French limited liability
17 company, and ROES 1-10.
18
Cross-Defendants.
19
TENUTE DEL MONDO, B.V., a
20 Netherlands private limited company
Cross-Complainant,
21
vs.
22
WILLIAM B. PITT, an individual,
23 MONDO BONGO, LLC, a California
limited liability company, and ROES 1-10,
24
Cross-Defendants.
25

26

27

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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
TABLE OF CONTENTS
1 Page
2 TABLE OF AUTHORITIES ............................................................................................................. ii

3 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................... 1

4 INTRODUCTION ............................................................................................................................. 1

5 FACTUAL BACKGROUND ............................................................................................................ 1

6 LEGAL STANDARD ....................................................................................................................... 3

7 ARGUMENT ..................................................................................................................................... 3

8 I. The Extraterritoriality Principle Does Not Bar Tenute’s Claim. ............................... 3


9 II. Tenute Adequately Pleads Cross-Defendants’ Violation of Penal Code
10 Section 496(a). ........................................................................................................... 6
11 A. Tenute Pleads that Cross-Defendants Embezzled Its Property...................... 6
12 B. Tenute Pleads the Requisite Criminal Intent to Steal. ................................... 9
13 C. Tenute Pleads Receipt, Concealment, or Withholding of Stolen
14 Property........................................................................................................ 12
15 III. Tenute Pleads Proximate Causation and Direct Harm. ........................................... 14
16 CONCLUSION................................................................................................................................ 15

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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER


TABLE OF AUTHORITIES
1 Page(s)
2 Cases

3 Bank of N.Y. Mellon v. Citibank, N.A., 8 Cal. App. 5th 935 (2017) .............................................. 3, 4

4 Chandavong v. Fresno Deputy Sheriff’s Ass’n, 599 F. Supp. 3d 1017 (E.D. Cal. 2022) .................. 9

5 Dryden v. Tri-Valley Growers, 65 Cal. App. 3d 990 (1977) ............................................................. 3

6 Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, 168 Cal. App. 4th 1111
(2008) ........................................................................................................................................... 9
7
Ferrick v. Santa Clara University, 231 Cal. App. 4th 1337 (2014) .................................................. 9
8
Formic Ventures LLC v. SomaLogic, Inc., No. 23-cv-02660, 2023 WL 6037899 (N.D. Cal.
9 Sept. 15, 2023) ........................................................................................................................... 11
10 GEC US 1 LLC v. Frontier Renewables, LLC, No. 16-cv-1276, 2016 WL 4677585 (N.D.
Cal. Sept. 7, 2016) ..................................................................................................................... 11
11
Hageseth v. Superior Ct., 150 Cal. App. 4th 1399 (2007) ................................................................ 5
12
MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018) .......................................................... 12
13
Monster Energy Co. v. Vital Pharmaceuticals, Inc., No. 18-cv-1882, 2019 WL 2619666
14 (C.D. Cal. May 20, 2019) .......................................................................................................... 12
15 Motivo Engineering, LLC v. Black Gold Farms, No. 2:22-cv-01447, 2023 WL 3150099
(C.D. Cal. Mar. 28, 2023) .......................................................................................................... 10
16
People v. Brown, 91 Cal. App. 4th 256 (2001).............................................................................. 4, 5
17
People v. Morante, 20 Cal. 4th 403 (1999) ....................................................................................... 4
18
People v. Renteria, 165 Cal. App. 4th 1108 (2008) .......................................................................... 3
19
People v. Selivanov, 5 Cal. App. 5th 726 (2016), as modified on denial of reh’g (Dec. 13,
20 2016) ............................................................................................................................................ 8
21 People v. Stewart, 16 Cal. 3d 133 (1976) ........................................................................................ 11

22 People v. Thomas, 53 Cal. 4th 1276 (2012), as modified on denial of reh’g (June 27, 2012) .......... 5

23 People v. Tufunga, 21 Cal. 4th 935 (1999) ...................................................................................... 11

24 People v. Whitney, 121 Cal. App. 2d 515 (1953) .............................................................................. 8

25 Pratt v. Higgins, No. 22-cv-04228, 2023 WL 4564551 (N.D. Cal. July 17, 2023) .................. 10, 14

26 Siry Inv., L.P. v. Farkhondehpour, 13 Cal. 5th 333 (2022) ...................................................... passim

27 State Dep’t of State Hosps. v. Superior Ct., 61 Cal. 4th 339 (2015) ............................................... 14

28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
Tim Cross, LLC v. Associated Adjusters Network, Inc., No. 8:23-cv-01806, 2023 WL
9005635 (C.D. Cal. Nov. 30, 2023) ........................................................................................... 10
1
Youngman v. Nevada Irrigation Dist., 70 Cal. 2d 240 (1969)........................................................... 3
2

3 Statutes

4 Penal Code § 27(a)(1) .................................................................................................................... 3, 4

5 Penal Code § 496 ............................................................................................................................... 4

6 Penal Code § 503 ............................................................................................................................... 6

7 Penal Code § 504 ............................................................................................................................... 8

8 Penal Code § 778a(a) ................................................................................................................. 3, 4, 6


9 Penal Code § 781 ............................................................................................................................... 3

10

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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 MEMORANDUM OF POINTS AND AUTHORITIES

2 INTRODUCTION

3 Tenute del Mondo B.V. alleges that Cross-Defendants Brad Pitt and Mondo Bongo, LLC

4 violated Section 496 of the Penal Code by illegally seizing control of Chateau Miraval, diverting

5 its assets to side business in which they hold a disproportionate ownership interest relative to

6 Tenute, and concealing their conduct from Tenute. Its allegations state a claim under Section 496.

7 Cross-Defendants principally argue the Court lacks jurisdiction because most of their

8 improper conduct occurred abroad. But that argument is foreclosed by Penal Code Sections
9 27(a)(1) and 778a(a), which establish jurisdiction when an element of a crime or a preparatory act

10 in the commission of a crime is committed in California. Tenute sufficiently alleges that Pitt, a

11 California resident, directed, in California, Chateau Miraval’s CEO to conceal embezzled assets.

12 Cross-Defendants also argue that Tenute does not plead a Section 496 violation. This
13 argument is based on the mistaken premise that the misappropriated property did not belong to

14 Tenute. Regardless, Tenute pleads that neither Pitt nor Chateau Miraval’s CEO had the authority

15 to divert property to side businesses or personal expenses. Tenute also pleads criminal intent

16 because Cross-Defendants deliberately concealed their misappropriation. And Cross-Defendants’

17 argument that the misappropriation was not concealed because Jolie and Tenute later found out

18 about it simply ignores Tenute’s allegation that the discovery occurred after the conduct occurred.

19 Finally, Cross-Defendants argue that Tenute’s damages are speculative. The Court has

20 already rejected this contention, which ignores Tenute’s allegations that it expected to receive

21 profits and loan repayments once Chateau Miraval became profitable.

22 FACTUAL BACKGROUND

23 In 2008, Pitt and Jolie purchased Chateau Miraval through their separate

24 investment companies, Mondo Bongo, LLC (“Mondo Bongo”) and Nouvel, LLC (“Nouvel”).

25 (Cross-Complaint ¶ 2.) The couple did not buy Chateau Miraval directly, but instead purchased

26 all the shares of Quimicum, Chateau Miraval’s parent company, thereby also acquiring Chateau

27 Miraval. (Id. ¶ 17.) Chateau Miraval was not profitable when Pitt and Jolie initially acquired it,

28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 so they invested in the business by causing Mondo Bongo and Nouvel, respectively, to make loans

2 to Chateau Miraval through Quimicum. (Id. ¶ 18.) Nouvel indirectly loaned Chateau Miraval

3 €20 million. (Id.) These contributions were structured as loans, not equity investments, so that

4 once Chateau Miraval became profitable the loans would be repaid to Nouvel and Mondo Bongo,

5 and ultimately to Jolie and Pitt, thereby accounting for any disproportionate contributions. (Id.

6 ¶ 63.) Through its operating subsidiary, Miraval Provence, Chateau Miraval developed into a

7 commercially successful and critically acclaimed winery. (Id. ¶¶ 20–21, 32.)

8 In 2016, Jolie filed for divorce. (Id. ¶ 24.) After that filing, Jolie noticed that
9 Chateau Miraval was spending large sums of money on projects that did not appear to have a

10 legitimate business purpose. (Id. ¶ 25.) She began to insist on receiving information about the

11 company’s finances and sought to exercise greater supervision over its business. (Id.) Pitt

12 rebuffed these requests, and ultimately shut Jolie out of their co-equally owned business. (Id.)

13 Jolie then sold her interest in Chateau Miraval to Tenute del Mondo B.V. (“Tenute”) and assigned

14 the loans to it. (Id. ¶ 46.)

15 Pitt meanwhile assumed control over the business and misappropriated its assets.
16 (Id. ¶ 30.) First, though Chateau Miraval has received €45 million in dividends from Miraval

17 Provence, these profits were not distributed to Quimicum, as they should have been. (Id. ¶¶ 31,

18 55, 64.) Instead, Pitt has diverted Chateau Miraval’s funds to Miraval Studios, a side-business in

19 which he holds a outsized interest compared to Nouvel and Tenute. (Id. ¶¶ 39–41, 65–74.) To

20 date, Chateau Miraval has loaned Miraval Studios €750,000 at .2% interest, which is well below

21 the market rate, (id. ¶ 70); spent €162,000 on Miraval Studios’ “management fees”, (id. ¶ 71); and

22 is projected to spend another €3 million on construction for Miraval Studios, (id.).

23 Second, Pitt has caused Chateau Miraval’s board to “approve” expenditures with no

24 legitimate business purpose: €4,034,980 on construction at a nearby house that is owned by

25 Chateau Miraval, €1,106,658 on a swimming pool and €2,963,207 on “garment works”. (Id.

26 ¶ 34.) Because only Pitt enjoys a personal lease on the premises of the Chateau, these wasteful

27 renovations amount to charging personal expenses to the business. (Id.)

28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 LEGAL STANDARD

2 At the demurrer stage, “the allegations of the complaint must be liberally construed”.

3 Youngman v. Nevada Irrigation Dist., 70 Cal. 2d 240, 244–45 (1969) (quoting Cal. Code Civ.

4 Proc. § 452). The court “take[s] all properly pled facts as true, and draw[s] all reasonable

5 inferences in favor of the plaintiff.” Bank of N.Y. Mellon v. Citibank, N.A., 8 Cal. App. 5th 935,

6 943 (2017). The Court may also consider matters that are appropriate for judicial notice. Dryden

7 v. Tri-Valley Growers, 65 Cal. App. 3d 990, 997 (1977).

8 ARGUMENT
9 I. The Extraterritoriality Principle Does Not Bar Tenute’s Claim.

10 Cross-Defendants argue that Penal Code Section 496 does not apply

11 extraterritorially. (Demurrer at 10–15.) That is irrelevant because Tenute alleges that an element

12 of the offense occurred within California, which allows a California court to assert jurisdiction.

13 “Statutorily, California’s criminal jurisdiction extends to crimes committed in

14 whole or in part in the state.” People v. Renteria, 165 Cal. App. 4th 1108, 1116 (2008) (emphasis

15 added) (internal citation and quotations omitted). Penal Code Section 27(a)(1) provides: “The

16 following persons are liable to punishment under the laws of this state: All persons who commit,

17 in whole or in part, any crime within this state.” Penal Code Section 778a(a) provides:

18 “Whenever a person, with intent to commit a crime, does any act within this state in execution or

19 part execution of that intent, which culminates in the commission of a crime, either within or

20 without this state, the person is punishable for that crime in this state in the same manner as if the

21 crime had been committed entirely within this state.” See also Penal Code § 781. The California

22 Supreme Court has “interpreted section 778a to mean that California has territorial jurisdiction

23 over an offense if the defendant, with the requisite intent, does a preparatory act in California that

24 is more than a de minimus act toward the eventual completion of the offense.” Renteria, 165 Cal.

25 App. 4th at 1116 (internal citations and quotations omitted). “[S]ection 27, subdivision (a)(1),

26 affords our courts jurisdiction over crimes partially committed within this state, and section 778a,

27 subdivision (a), affords our courts jurisdiction over crimes committed outside the state if the

28 defendant formed the intent and committed ‘any act’ within this state in whole or partial execution
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 of that intent.” People v. Morante, 20 Cal. 4th 403, 434 (1999); see also People v. Brown, 91 Cal.

2 App. 4th 256, 263 (2001) (“[Sections 27(a)(1) and 778(a)] appear clearly to confer jurisdiction on

3 the courts of this state when at least some part of a crime is committed in California.”).

4 Section 496 of the Penal Code provides: “Every person who . . . conceals, sells,

5 withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the

6 property to be” “stolen” or “obtained in any manner constituting theft” is guilty of a criminal

7 offense. Tenute pleads that Pitt and Mondo Bongo concealed or aided in concealing the

8 embezzlement of property. (Cross-Compliant ¶¶ 67–74.) To show that California has jurisdiction


9 over the offense, Tenute need only plead that Cross-Defendants either (1) did so “in part . . .

10 within this state”, Penal Code § 27(a)(1); or (2) did “any act within this state” in execution of their

11 intent to do so, id. §778a(a). The Cross-Complaint satisfies both standards.

12 Concealing or Aiding in Concealing in Part within this State. Tenute alleges that

13 “Pitt and Mondo Bongo have misappropriated millions of dollars of Chateau Miraval funds that

14 should have been distributed to Tenute” to their side business, Miraval Studios, in which they hold

15 a 40% interest but in which Tenute has a mere 5% interest. (Cross-Compliant ¶ 66; see also id.

16 ¶¶ 40–41, 68.) For example, Chateau Miraval’s CEO, Venturini, informed Pitt’s business

17 manager, Grant, that Chateau Miraval would spend over €2 million on Miraval Studios and hide

18 the spending from Tenute’s predecessor-in-interest, Jolie. (Id. ¶ 68.) Pitt concealed or aided in

19 the concealing of the embezzlement in part because he sent a message to Venturini directing him

20 to “no longer send AJ reports as she is trying to shop her shares”. (Id. ¶ 68.) Cross-Defendants

21 argue that “[t]here is no basis on which to infer that Pitt sent this particular message from

22 California”. (Demurrer at 14.) But Tenute alleges that Pitt “is a resident of, and/or committed the

23 acts alleged herein in California”. (Cross-Complaint ¶ 12 (emphasis added).) And it is unlikely

24 that, as Cross-Defendants suggest (Demurrer at 14), Pitt was present at Chateau Miraval, where

25 Venturini is CEO (Cross-Complaint ¶ 40), and messaged him rather than speaking face to face. At

26 the demurrer stage, where the Court “draw[s] all reasonable inferences in favor of the plaintiff”,

27 Tenute’s allegations are sufficient to allege that Pitt concealed or aided in concealing acts of

28 embezzlement that occurred, in part, in California. Bank of N.Y. Mellon, 8 Cal. App. 5th at 943.
-4-
TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Preparatory Act. Tenute pleads that Pitt committed a preparatory act related to

2 concealing or aiding in concealing embezzlement in California. Under California law, a crime

3 may be prosecuted “where only preparatory acts have occurred and where those preparatory acts

4 were not themselves elements of the offense”. People v. Thomas, 53 Cal. 4th 1276, 1284 (2012),

5 as modified on denial of reh’g (June 27, 2012) (simplified). Pitt’s message to Venturini was at

6 least a preparatory act in concealing or aiding in the concealment of embezzlement.

7 Cross-Defendants argue that Tenute pleads only extraterritorial conduct because its

8 allegations are “based on the underlying alleged embezzlement in France”, the information
9 concealed “was in France” and Tenute was harmed abroad. (Demurrer at 13.) These arguments

10 miss the mark. “The fact that other parts of the crime were committed elsewhere is immaterial, as

11 there is no constitutional or other reason that prevents a state from punishing, as an offense against

12 the penal laws of such state, a crime when only a portion of the acts constituting the crime are

13 committed within the state.” Hageseth v. Superior Ct., 150 Cal. App. 4th 1399, 1418 (2007)

14 (simplified); Brown, 91 Cal. App. 4th at 266 (“[I]t is necessary only that in this state there be non

15 de minimis preparatory acts done with the intent of completing the crime”).

16 Cross-Defendants then argue that the “messages Tenute cites fail to show that Pitt
17 concealed Château Miraval’s funds”, contending that “Pitt’s June 28 message is not an order or

18 directive on its face” and that “[i]f these messages show any concealment at all, it was by

19 Venturini, not Pitt, and it took place in France”. (Demurrer at 14.) This argument fails because it

20 ignore Tenute’s allegations that Pitt acts as Venturini’s boss and directs his actions. (Cross-

21 Complaint ¶¶ 29, 36) (describing how Venturini is “entirely beholden to Pitt” and when

22 challenged about “his authorization of spending on expenses for the sole benefit of Pitt”, he

23 “repeatedly responded in substance, ‘What am I to do? He’s my boss’”). The message sent by

24 Pitt (“I believe we should no longer send [Jolie] reports as she is trying to shop her shares”), read

25 in the light most favorable to Tenute, is an instruction by Pitt to Venturini to conceal information

26 from Jolie concerning asset transfers to Pitt’s side business.

27 Cross-Defendants argue that “there is no reason to believe that the Legislature

28 intended § 496 to apply to extraterritorial embezzlement based solely on domestic concealment”.


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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 (Demurrer at 14.) But their citations are to Sections 497, 798 and 27(a)(2) of the Penal Code.

2 Those legislative provisions are inapposite because they address jurisdiction when all the elements

3 of embezzlement occur outside of California and then the stolen property is brought into

4 California. Here, Tenute alleges that Pitt committed an element of a Section 496 offense—

5 concealing or aiding in the concealment of embezzlement—in California.

6 As shown below (Section II.A), Cross-Defendants’ argument that Chateau Miraval,

7 not Jolie or Tenute, owned the embezzled property fails because it ignores Tenute’s allegations.

8 Finally, Cross-Defendants argue that applying Section 496 here “threatens to flout
9 the principle that a State cannot punish a defendant for conduct that may have been lawful where it

10 occurred” because Tenute has not shown that “the alleged conduct” was unlawful in France.

11 (Demurrer at 15 (internal citation omitted).) But Penal Code Section 778a(a) provides that when a

12 person does “any act within this state” in execution of their intent to commit a crime, “the person

13 is punishable for that crime in this state in the same manner as if the crime had been committed

14 entirely within this state”. (Emphasis added.) Therefore, whether the alleged conduct is also a

15 crime in France is irrelevant as long as an act in execution of the crime is committed in California.

16 II. Tenute Adequately Pleads Cross-Defendants’ Violation of Penal Code Section 496(a).

17 Tenute has alleged that Cross-Defendants’ conduct closely parallels the conduct in

18 Siry Investment, L.P. v. Farkhondehpour, 13 Cal. 5th 333 (2022) (Cross-Complaint ¶¶ 61–76),

19 which the California Supreme Court has held gives rise to a Section 496 claim. Siry, 13 Cal. 5th

20 at 361. Therefore, Cross-Defendants’ arguments in support of their contention that Tenute fails to

21 plead a violation under Section 496(a) each fail.

22 A. Tenute Pleads that Cross-Defendants Embezzled Its Property.

23 “Embezzlement is the fraudulent appropriation of property by a person to whom it

24 has been intrusted.” Penal Code § 503. Cross-Defendants contend Tenute does not plead the

25 crime because it “fails to allege that Pitt used Château Miraval’s assets in any manner that Château

26 Miraval did not authorize”. (Demurrer at 16.) This argument ignores critical allegations.

27 First, Tenute alleges that its own property was embezzled. (Cross-Complaint ¶ 65

28 (Cross-Defendants “deprived Tenute of the profits and loan repayments to which it is entitled”).)
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Tenute alleges that when Jolie, its predecessor in interest, and Pitt invested in Chateau Miraval,

2 they did so in the form of loans “so that once Chateau Miraval became profitable the loans could

3 be repaid to Nouvel and Mondo Bongo, and ultimately to Jolie and Pitt”. (Id. ¶¶ 18–19.) Tenute

4 alleges that “Tenute is entitled to repayment of the loans, which matured on December 31, 2023”.

5 (Id. ¶ 63.) Tenute further alleges that after Chateau Miraval became profitable, “Pitt diverted

6 those profits, which should have been paid out as dividends and loan repayments, to his side

7 businesses”. (Id. ¶ 31.) That suffices to allege that Tenute’s property was stolen. See Siry, 13

8 Cal. 5th at 340, 361 (allowing plaintiff to recover where defendants “underpa[id] plaintiff its cash
9 distributions” by diverting them because the “diverted partnership funds[] belong[ed] to

10 plaintiff”). Tenute did not authorize these uses of its property. To the contrary, Tenute’s

11 predecessor-in-interest, Jolie, “challenge[d] [the] authorization of spending on expenses for the

12 sole benefit of Pitt”. (Cross-Complaint ¶ 36.)

13 Second, Tenute alleges that when Jolie’s representatives questioned Chateau


14 Miraval’s CEO, Venturini, about his approval of Chateau Miraval’s spending on expenses for the

15 sole benefit of Pitt, Venturini “responded in substance ‘What am I to do? He’s my boss’”. (Id.)

16 This allegation, read in a light most favorable to Tenute, amounts to an implicit admission that

17 Venturini knew he was misappropriating property by approving such expenditures. Venturini had

18 no choice but to follow the orders of Pitt—the man who pays and directs him. (Id. ¶ 29.)

19 Third, Cross-Defendants’ argument that Chateau Miraval’s spending for Pitt’s sole

20 benefit was “authorized” overlooks a key fact—that Pitt and Venturini intentionally concealed that

21 spending from a co-equal owner, Jolie. (Id. ¶ 68.) If the spending for Pitt’s sole benefit had been

22 duly authorized, Pitt and Venturini would not have needed to conceal it.

23 Cross-Defendants also argue that “Pitt had significant authority to use Château

24 Miraval’s assets”, which purportedly “undercuts any claim that Pitt exceeded his authority”.

25 (Demurrer at 16.) Even if true, “significant authority” would not give Pitt authority to misuse

26 funds. More fundamentally, this argument ignores the allegations in the Cross-Complaint that

27 Cross-Defendants exercised only “de facto control of Chateau Miraval”, that Pitt “unlawfully

28 seized control of Chateau Miraval” (Cross-Complaint ¶ 67 (emphasis added)), and that “Mondo
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Bongo LLC, does, without a mandate . . . de facto run” Chateau Miraval, (id. ¶ 26 (second

2 emphasis added)). Tenute does not allege that Pitt had any legal authority to manage Chateau

3 Miraval. Cross-Defendants’ reliance on People v. Whitney, 121 Cal. App. 2d 515, 521 (1953) is

4 thus misplaced. The “broad powers” given to the defendant in Whitney included a power of

5 attorney over the property at issue, and the property owner knew about and did not object to the

6 defendant’s spending. 121 Cal. App. 2d at 521. In contrast, here, Pitt lacked legal authority over

7 the property and Tenute’s predecessor-in-interest, Jolie, expressly objected to the misuse of

8 Chateau Miraval’s funds, which should have been distributed as dividends or loan repayments.
9 (Cross-Complaint ¶¶ 26, 31, 35.)

10 Cross-Defendants argue that the misappropriation of Chateau Miraval’s funds was


11 authorized because Chateau Miraval’s CEO, Roland Venturini, played a role, and because Chateau

12 Miraval purportedly benefitted from the spending. (Demurrer at 16–17.) These arguments lack

13 merit because the basis for Tenute’s claim is the misappropriation of Tenute’s property. In any

14 case, Tenute alleges that the renovations undertaken with Venturini’s approval had “no legitimate

15 business justification”. (Cross-Complaint ¶ 72.) That is sufficient to allege that Pitt and Venturini

16 fraudulently misappropriated property, because as a director and CEO of Chateau Miraval,

17 Venturini had no authority to spend Chateau Miraval’s funds on projects that lacked a legitimate

18 business purpose. (See Tuffaha Decl. Ex. 2, French Commercial Code Article L225-35 (directors

19 must act in the interest of the corporation).) “The intent essential to embezzlement is the intent to

20 fraudulently appropriate the property to a use and purpose other than that for which it was

21 entrusted . . .”. People v. Selivanov, 5 Cal. App. 5th 726, 750 (2016), as modified on denial of

22 reh’g (Dec. 13, 2016); see also Penal Code § 504. Indeed, in Siry, the general partner had

23 misappropriated partnership funds. The California Supreme Court held that the defendants had

24 “obtained the diverted funds in a manner constituting theft”—despite the general partner’s

25 apparent authorization of that diversion. 13 Cal. 5th at 340, 361 (simplified).

26 As to the personal expenses, the argument that “the renovations plainly benefited

27 Château Miraval” is undercut by Tenute’s allegation that the renovations lacked a legitimate

28 business purpose. (Cross-Complaint ¶ 72.) Similarly, that Pitt has a lease with Chateau Miraval,
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 (Demurrer at 17), does not refute that he effectively charged personal expenses to the business by

2 causing it to incur capital expenses that benefited him alone. (Cross-Complaint ¶ 34.)

3 Cross-Defendants repeatedly cite Ferrick v. Santa Clara University, 231 Cal. App.

4 4th 1337 (2014), to argue Venturini’s authorization of the spending defeats an embezzlement

5 claim. (Demurrer at 16–17.) Ferrick is inapposite because its complaint made no allegations that

6 “[defendant] lacked authority to use SCU’s credit card for the purpose of buying furnishings and

7 decor for the SCU-owned loft or that the expenditure of $11,000 exceeded his authority”. 231

8 Cal. App. 4th at 1348. In contrast, Tenute alleges that profits from Miraval Provence “should
9 have been paid out as dividends and loan repayments” (Cross-Complaint ¶¶ 31, 63), but were

10 instead used on projects which have no legitimate business justification, (id. ¶ 72), so Venturini

11 exceeded his authority. (See Tuffaha Decl. Ex. 2, French Commercial Code Article L225-35.)

12 B. Tenute Pleads the Requisite Criminal Intent to Steal.


13 Cross-Defendants argue that Tenute has failed to plead the requisite criminal intent
14 to steal because Tenute purportedly “fails to allege that Pitt acted with anything other than a good-

15 faith belief” (Demurrer at 18), and purportedly “fails to allege Pitt’s intent to deprive Château

16 Miraval permanently of its property” (id. at 19). These after-the-fact attempts to justify the Cross-

17 Defendants’ misbehavior once again ignore the allegations of the Cross-Complaint.

18 Good faith. The good faith defense is an issue of fact not susceptible to resolution

19 on demurrer. Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, 168 Cal. App. 4th

20 1111, 1123 (2008) (“A defense of good faith is necessarily factual in nature.”); Chandavong v.

21 Fresno Deputy Sheriff’s Ass’n, 599 F. Supp. 3d 1017, 1024 (E.D. Cal. 2022) (“Because the good

22 faith defense is an affirmative defense, the FDSA must plead and prove it. It is not a sufficient

23 basis for dismissal in this case.”).

24 Nevertheless, Tenute’s allegations show that Pitt did not act in good faith. Tenute

25 pleads that after Pitt “unlawfully seized control of Chateau Miraval” (Cross-Complaint ¶ 67), he

26 shut Jolie, Tenute’s processor-in-interest, “out of the business, and deprived her of information

27 about Chateau Miraval’s finances” (id. ¶ 25). Pitt and Venturini then “intentionally concealed”

28 from Jolie over two million euros of construction costs for Miraval Studios—an entity in which
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Tenute has a mere 5% stake compared to Pitt’s 40% interest. (Id. ¶ 68.) Specifically, Pitt

2 supported Venturini in concealing these expenses by messaging Venturini that he should “no

3 longer send AJ reports”. (Id.) These allegations of a cover-up by Cross-Defendants demonstrate

4 that Pitt did not act in good faith, but with the deliberate calculation required to show criminal

5 intent. Pratt v. Higgins, No. 22-cv-04228, 2023 WL 4564551, at *9 (N.D. Cal. July 17, 2023)

6 (“Plaintiff plausibly alleges theft of funds and assets from a joint venture in a deliberate and

7 calculated manner that supports an inference of the required intent under § 496.”)

8 Cross-Defendants argue that Pitt’s prior oversight of Chateau Miraval and his use
9 of Chateau Miraval’s property in a manner consistent with past practice undercuts Tenute’s

10 embezzlement claim. (Demurrer at 18.) Not so. Tenute also alleges that after Jolie filed for

11 divorce, Cross-Defendants “unlawfully seized control” over the business, concealed information

12 about Chateau Miraval from Jolie, and begin diverting its assets to themselves. (Cross-Complaint

13 ¶ 25–29, 67.) That conduct far exceeded mere oversight and was decidedly inconsistent with past

14 practice.

15 In an attempt to recast this dispute as “ordinary business litigation” (Demurrer at


16 19), Cross-Defendants rely on Tim Cross, LLC v. Associated Adjusters Network, Inc., No. 8:23-cv-

17 01806, 2023 WL 9005635 (C.D. Cal. Nov. 30, 2023) and Motivo Engineering, LLC v. Black Gold

18 Farms, No. 2:22-cv-01447, 2023 WL 3150099 (C.D. Cal. Mar. 28, 2023). However, both of these

19 cases deal with honestly held but mistaken interpretations regarding rights to payment under a

20 contract, which are factually distinguishable from Tenute’s claims. In Tim Cross, the plaintiff

21 alleged that the defendant had misappropriated funds that were governed by a contract which

22 expressly granted the defendant the right to deduct the funds. 2023 WL 9005635, at *5. In

23 Motivo, the plaintiff “merely allege[d] in a conclusory manner that ‘Defendants defrauded Motivo,

24 committing theft’” while simultaneously alleging that the defendant “authorized a cost overrun

25 ‘based on the parties’ contract’”. 2023 WL 3150099, at *9. But Tenute alleges that Cross-

26 Defendants “have diverted Chateau Miraval’s profits to their own purposes and have used Chateau

27

28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Miraval’s assets to fund and develop their own side businesses” (Cross-Complaint ¶ 61), and

2 “intentionally concealed” their conduct (id. ¶ 68). 1 Those allegations show criminal intent.

3 Cross-Defendants also cite Formic Ventures LLC v. SomaLogic, Inc., No. 23-cv-

4 02660, 2023 WL 6037899, at *1 (N.D. Cal. Sept. 15, 2023) and GEC US 1 LLC v. Frontier

5 Renewables, LLC, No. 16-cv-1276, 2016 WL 4677585, at *9 (N.D. Cal. Sept. 7, 2016), but those

6 cases are not analogous. In Formic Ventures, the court held that “the plaintiffs’ intent argument

7 boils down to the notion that the plain language of the contract is so clear that this noncompliance

8 must have been intentional theft”. 2023 WL 6037899, at *1. Tenute makes no allegations
9 regarding contractual interpretation. Rather, Tenute alleges that Pitt engaged in deliberate,

10 calculated efforts to steal Chateau Miraval’s profits and to conceal that conduct so the business’

11 other owner would not find out. (Cross-Complaint ¶ 68.) And in GEC US 1, the allegations

12 established only that the defendants had misunderstood their ownership rights. 2016 WL

13 4677585, at *9. Here, Tenute alleges not misunderstanding, but that Pitt intentionally diverted

14 Chateau Miraval’s profits to himself and his side-businesses and concealed this conduct from the

15 business’ co-owner. (Cross-Complaint ¶ 74.)

16 Intent to deprive the owner permanently. Cross-Defendants assert that Tenute fails

17 to plead Pitt’s intent permanently to deprive Chateau Miraval of property. (Demurrer at 19.) But

18 this argument again ignores Tenute’s allegations that it owns the misappropriated funds, not

19 Chateau Miraval. See supra, Section II.A.

20 In any case, Cross-Defendants’ argument that Chateau Miraval “continued to own”

21 the funds that should have been distributed to Tenute because it owns constructions made for Pitt’s

22 benefit and holds a 10% stake in Miraval Studios is incorrect. (Demurrer at 19.) Tenute is owed

23 money, not improvements or a tiny stake in another company. Nor is the right to have Miraval

24 Studios “repay its loan with interest” (id.), fungible with cash dividends. Cross-Defendants’

25 argument that Chateau Miraval “was allocated a majority of projected profits from Miraval

26
1
Cross-Defendants cite People v. Tufunga, 21 Cal. 4th 935 (1999), and People v. Stewart, 16 Cal. 3d 133 (1976),
27
to argue that a good faith belief defeats an embezzlement claim. (Demurrer at 18–19.) Both cases were decided at the
post-conviction phase. The fact remains that the good faith defense is not appropriate for resolution at demurrer.
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Studios” (id.), similarly fails because an allocation of projected future profits is not equivalent to a

2 present cash distribution. In any case, this argument is based on a document that merely depicts

3 “observations” of a “hypothetical return on investment” (Cherlow Decl., Ex. C at 1), so it

4 improperly seeks to introduce a fact dispute at the pleading stage.

5 MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018) is distinguishable

6 because the defendant retained the plaintiff’s electronic documents for use in a litigation before

7 returning copies of them, id. at 185, while Cross-Defendants permanently spent funds that should

8 have been distributed to Tenute. Monster Energy Co. v. Vital Pharmaceuticals, Inc., No. 18-cv-
9 1882, 2019 WL 2619666 (C.D. Cal. May 20, 2019) is likewise distinguishable because the

10 plaintiffs did not allege “a property interest which could properly be the subject of a theft” and the

11 court found it “absurd[]” to apply § 496, which concerns personal property, to real property. 2019

12 WL 2619666 at *14. But Tenute has plausibly alleged Pitt’s intent to permanently “deprive[]

13 Tenute of the profits and loan repayments to which it is entitled”. (Cross-Complaint ¶ 65.)

14 C. Tenute Pleads Receipt, Concealment, or Withholding of Stolen Property.


15 Cross-Defendants contend that Tenute does not plead receipt, concealment, or
16 withholding of stolen property. Cross-Defendants are incorrect as to each argument.

17 Receipt. Cross-Defendants assert that Pitt did not receive stolen property because

18 Chateau Miraval’s funds were used to renovate the estate. (Demurrer at 20.) But Tenute pleads

19 adequately that Cross-Defendant Pitt received the funds spent on renovations to Chateau Miraval.

20 Tenute alleges that Cross-Defendants “directed” the spending on projects from which only Pitt

21 received benefits because only he has a residential lease on the premises and is exclusively able to

22 enjoy these recreational projects. (Cross-Complaint at ¶ 72.) Tenute further alleges that these

23 projects lack a legitimate business justification and are ultimately personal expenses which Pitt has

24 caused the joint venture to finance. (Id.) These allegations are sufficient to establish receipt.

25 Cross-Defendants’ attempt to distinguish Tenute’s allegations from those alleged in

26 Siry fails because the improperly diverted funds at issue in Siry were partially used to renovate the

27 partnership’s namesake investment property. (See Tuffaha Decl. Ex. 1 at ¶¶ 5, 32 (“The purpose

28 of the 241 Partnership was to own and operate an investment commercial property located at 241
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 E. 5th Street, Los Angeles, California 90013. . . . Defendants . . . improperly used the rental

2 income diverted to DTLA from the 241 Partnership to fund improvements to the commercial

3 property located at 241 E. 5th Street, Los Angeles, California 90013.”).)

4 Concealment and withholding. Cross-Defendants argue that Tenute’s allegation

5 that Pitt aided in concealing the embezzlement from Jolie are undercut by its allegation that Jolie

6 objected to these expenses. (Demurrer at 20.) That is incorrect. Tenute alleges that Jolie objected

7 only after she found out about the expenses after they had been incurred. (Cross-Complaint ¶ 35–

8 36.) As to the profits diverted to Miraval Studios, Tenute alleges that it only learned the extent of
9 Pitt’s malfeasance through documents produced in this litigation. (Id. ¶¶ 67–68.) Contrary to

10 Cross-Defendants’ argument, (Demurrer at 21), the relevant financial statements were not

11 published until after Pitt’s misappropriation. (See Tuffaha Decl. ¶ 6 & Ex. 4 at 33.) Similarly,

12 Stoli “praised the investments and Pitt’s vision for Miraval Studios” (Demurrer at 20) only before

13 Tenute learned that Pitt had diverted funds improperly to the side venture. (Cross-Complaint

14 ¶¶ 67–68; Tuffaha Decl. ¶ 6 & Ex. 4 at 33.)

15 Cross-Defendants also contend that Chateau Miraval’s purported knowledge of the

16 misuse of funds undercuts the “conceal[ment] . . . from the owner” element of § 496(a).

17 (Demurrer at 21.) This argument fails because Tenute alleges at length that the misuse was

18 concealed from itself, the owner, not from Chateau Miraval. (Cross-Complaint ¶¶ 35, 36, 67–71.)

19 In Siry, the California Supreme Court held that the diverted partnership funds were concealed

20 from the limited partner, not the partnership. Siry Inv., 13 Cal. 5th at 340, 361 (allowing plaintiff

21 to recover where defendants “diverted partnership funds[] belonging to plaintiff”). In Siry, the

22 general partner itself orchestrated the theft, id. at 340, but the California Supreme Court

23 nevertheless allowed the claim because the diverted funds had been concealed from the limited

24 partner plaintiff, id. at 361. Cross-Defendants argue that Tenute has not pointed to any contractual

25 provision requiring Chateau Miraval to pay out dividends. (Demurrer at 21.) But the Supreme

26 Court did not require that a participant in a business venture plead a contractual entitlement to the

27 stolen property, only, for example, the “fraudulent diversion of a partnership’s cash distributions”

28 or that the “net effect of [defendants’] actions” results in “underpay[ing] plaintiff its cash
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 distributions.” Siry Inv., 13 Cal. 5th at 339–40. In any case, the French Commercial Code

2 provides that each year, the general meeting determines the portion of distributable profits to pay

3 out as dividends. (Tuffaha Decl. Ex. 3, Article L232-12.) And if that were not enough, Tenute

4 pleads that its loans to Chateau Miraval have matured. (Cross-Complaint ¶ 18.) These allegations

5 provide a more than adequate basis for Tenute’s entitlement to dividends and loan repayments.

6 Finally, Cross-Defendants argue that Siry’s holding should only be applied in rare

7 circumstances, and in support of this flawed contention, point to post-Siry Section 496 cases

8 dismissed at the pleading stage. (Demurrer at 21.) These cases are distinguishable because none
9 deals with asset diversion among participants in a business venture, which is the factual scenario

10 that triggers Siry’s applicability. Siry Inv., 13 Cal. 5th at 361 (“The unambiguous relevant

11 language covers fraudulent diversion of partnership funds.”). Siry was not a one-off, as Cross-

12 Defendants contend. See Pratt, 2023 WL 4564551, at *9 (“District courts have applied Siry’s

13 pleading standard in civil theft cases.”).

14 III. Tenute Pleads Proximate Causation and Direct Harm.

15 Cross-Defendants erroneously argue that “Tenute fails to plead that the alleged

16 diversion of Château Miraval’s assets proximately caused it non-speculative injury”. (Demurrer at

17 22.)

18 First, causation is generally not decided at the pleading stage. State Dep’t of State

19 Hosps. v. Superior Ct., 61 Cal. 4th 339, 353 (2015) (“Ordinarily, proximate cause is a question of

20 fact which cannot be decided as a matter of law from the allegations of a complaint”).

21 Second, Cross-Defendants argue that “Tenute does not allege that the entity it

22 owns, Nouvel, is any less valuable because of the alleged misconduct” and that Tenute “admits

23 that the ‘enormously profitable’ business Nouvel owns through Quimicum—Château Miraval—

24 has grown in value under Pitt’s oversight.” (Demurrer at 22.) This argument misstates Tenute’s

25 allegations, which are based not on Nouvel’s value, but on Cross-Defendants’ diversion of funds

26 that should have been used to pay dividends and make loan repayments to Tenute to a business in

27 which Tenute holds a lesser interest. (Cross-Complaint ¶ 71 (alleging that “funds that should have

28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 been distributed to Tenute or used to repay Tenute’s loans have instead been diverted to a business

2 entity in which Pitt and Mondo Bongo hold a significantly greater interest than Tenute.”).)

3 Third, Cross-Defendants argue that Tenute’s allegations regarding Cross-

4 Defendants’ misappropriation of Chateau Miraval’s profits and withholding of Tenute’s

5 shareholder loans are “potential”, “hypothetical”, and “speculative”, rather than “existing or

6 certain”. (Demurrer at 22.) This Court has already rejected that argument. (See Tuffaha Decl. Ex.

7 6, March 18, 2024 Ruling of Judge L. Martin on Cross-Defendants’ William B. Pitt and Mondo

8 Bongo’s Demurrer to Nouvel’s FACC at 7–9 (“Nouvel reasonably expected the millions of dollars
9 it loaned to Chateau Miraval through Quimicum to be repaid after Chateau Miraval’s wine

10 business became profitable. Instead, Pitt and his coconspirators have diverted the wine business’

11 profits to their own purposes. . . . Nouvel has sufficiently alleged each of these elements. . . . At

12 the pleading stage, no further specificity is required.”) (emphasis added).)

13 Regardless, Tenute pleads that Pitt and Jolie contributed to Chateau Miraval
14 “exclusively for the purpose of supporting Chateau Miraval to become a profitable business” and

15 expected to receive the profits “once Chateau Miraval became profitable”. (Cross-Complaint ¶ 4.)

16 Cross-Defendants’ argument that it would be speculative to presume Chateau Miraval would have

17 paid dividends instead of reinvesting (Demurrer at 22), asks the Court impermissibly to adopt facts

18 in conflict with the Cross-Complaint. Cross-Defendants also argue that Tenute does not allege

19 that “the loan on which it primarily relies on for its damages claim [] would not be repaid if

20 Tenute were to request as much”. (Id.) That is incorrect. Tenute alleges its loans matured on

21 December 31, 2023. (Cross-Complaint ¶ 18.) Tenute should have been repaid then.

22 CONCLUSION

23 Cross-Defendants’ demurrer should be overruled for the reasons set forth above. In the

24 alternative, Tenute respectfully requests leave to amend.

25

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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
Dated: December 16, 2024
1
Respectfully submitted,
2
By: /s/ Prashanth Chennakesavan
3

4 CRAVATH, SWAINE & MOORE LLP


Keith R. Hummel (admitted pro hac vice)
5 (N.Y. Bar No. 2430668)
Justin C. Clarke (admitted pro hac vice)
6 (N.Y. Bar No. 5076096)
Jonathan Mooney (admitted pro hac vice)
7
(N.Y. Bar No. 5648191)
8 Two Manhattan West
375 Ninth Avenue
9 New York, NY 10001
Telephone: (212) 474-1000
10 Facsimile: (212) 474-3700
11
LTL ATTORNEYS LLP
12 Joe Tuffaha (Bar No. 253723)
[email protected]
13 Prashanth Chennakesavan
(Bar No. 284022)
14 [email protected]
LTL ATTORNEYS LLP
15
300 South Grand Avenue, Suite 3950
16 Los Angeles, CA 90071
Telephone: (213) 612-8900
17 Facsimile: (213) 612-3773
18 Attorneys for Defendant and Cross-Complainant
19 TENUTE DEL MONDO, B.V.

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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER

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