By Ray Downs
By Lindsay Toler
By Danny Wicentowski
By Lindsay Toler
By RFT Staff
By Lindsay Toler
By Allison Babka
By Lindsay Toler
Elbring tried to explain in a subsequent deposition. His Russian pal had once tussled with a Jewish landlord, dubbing him "the yevrei." Over time, the friends used it as shorthand for Kalishman as well.
Elbring, a lifelong Catholic, tells RFT that Kalishman himself cracked wise about his own Jewishness. He says that Kalishman once joked of being "the kind of Jew who still sits in his mom's seats at synagogue, because he didn't want to buy his own."
On another occasion, the partners mused that if Kalishman visited Russia, his family's wealth put him at risk for being kidnapped by the Russian mafia.
"We were joking around," Elbring recalls, "and Jim said, 'If you ever screw me over, I'll get the Jewish mafia on you' — which meant lawyers and accountants."
Regardless, there's no question that Elbring's vitriol toward his partner took a racial tone as SecureAxis began to unravel in late 2008.
On November 17, Elbring wrote to his Russian friend. "Right now I am fighting with the yobani yevrei [fucking Jew]."
On December 4, he wrote: "That yobani yevrei c*cksucker is making things difficult and threatening to sue me, etc. FUN!!"
The partners parted ways the following month. Kalishman knew nothing about the e-mails.
By early 2009, the Kalishmans feared Elbring would sneak off with the intellectual property and compete unfairly against SecureAxis. It was a type of legal claim they knew well. Tom Kalishman — Jim's older brother and investor in the company — had recently been sued for the same thing.
Tom had worked at Insituform in the '90s and filled his late father's seat on the board until 2005. The next year, he and two other executives struck out on their own with a similar company, SAK Construction.
Insituform sued them for misappropriating company info and breaking noncompete agreements. The defendants hit back in counterclaims, with Tom Kalishman accusing Insituform of malicious intent. The parties settled in 2007.
Kalishman's defense lawyer in that case had been Gary M. Smith of Lewis, Rice & Fingersh — a silk-stocking law firm on Washington Avenue whose 25th floor lobby affords a breathtaking view of downtown.
The Kalishman brothers retained Smith for their fight against Elbring in January 2009. There was only one small hitch.
While SecureAxis was disintegrating, and Elbring was toying with the notion of a new company, he'd sought legal advice from a college buddy, Chip Bodnar. They'd pledged the same fraternity at Saint Louis University; Bodnar practices law at Lewis Rice, just like Smith.
When Bodnar learned that his firm was about to sue Elbring, he asked Elbring to waive any conflict of interest. Elbring refused.
The next day, Bodnar called back. The first words out of his mouth, as Elbring remembers, were: "This is the hardest phone call I've ever had to make in my legal career."
The Lewis Rice ethics committee had concluded there was no conflict, Bodnar reported. But the firm, in Elbring's eyes, made its loyalty perfectly clear: They were dumping a small client to stand by a rich one.
Bodnar tried to allay Elbring's fears, assuring his old friend that Kalishman's lawyer, Smith, wouldn't pursue meritless litigation.
On February 18, 2009, Jim Kalishman and SecureAxis Software filed a lawsuit against Chris Elbring and his two programmers, claiming fraud, breach of contract and nine other counts.
In the suit, Kalishman complained of being tricked into investing by Elbring's "false representations" about the software. And despite some $2.75 million from the investment trust and family members, still "no marketable product exist[ed]."
Elbring's lawyer, Michael Quinlan, would later respond, "To read [the] petition, one would think that Kalishman was a simpleton hoodwinked by a snake oil salesman, rather than the multimillionaire, experienced, sophisticated businessman that he is."
By this time, in February 2009, Kalishman had carted off all the computers and equipment from the company's office in downtown Webster Groves. But Elbring still had some items at his house.
So Kalishman rushed to get a court order to force their return.
"Time is of the essence," he pleaded. "I have received inquiries from potential investors/buyers and customers who are interested in SecureAxis."
An interesting position, given he had just asserted his investment produced nothing "marketable."
Elbring consented to the restraining order, producing a box with flash drives, CDs and DVDs — some fourteen gigabytes of company data.
It's hard to tell from the testimony whether Elbring had made it difficult to navigate the files,or whether Kalishman simply wasn't tech savvy enough to do it. But attorney Gary Smith grilled Elbring in a May 6, 2009, deposition on what exactly he had — and had not — surrendered.
Smith: Did you return the VeriPlay software on April 27th, pursuant to the court's order?
Elbring: I returned everything that I had.
Smith: I'm asking you if you returned the VeriPlay software. Yes or no?
Elbring: As I said, I returned everything I had.
And so they volleyed back and forth eleven more times — same basic question, same basic answer.
At one point, Elbring said he complied to the best of his ability.
"I don't want these weasel words, 'to the best of my ability,'" the lawyer scolded.