Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 1 of 5

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1 Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 1 of 5 Civil Action No.: CARL GENBERG, an individual In representative capacity on behalf of the Chapter 7 Trustees of Debtors Ceragenix Phannaceuticals, Inc. and Ceragenix Corporation, Plaintiff, vs. MARC REDLICH, ESQ., an individual Defendant. IN THE UNITED STATES DISTRICT COURT DISTRICT OF COLORADO COMPLAINT I. Nature of this Action 1. This is an action for legal malpractice brought by Carl Genberg in representative capacity on behalf ofthe Chapter 7 Trustees for Ceragenix Pharmaceuticals, Inc. and Ceragenix Corporation against Marc Redlich, Esq. II. Jurisdiction and Venue 2. This Court has subject matter jurisdiction over this controversy pursuant to 28 U.S.C as the citizenship ofthe Plaintiffs and the Defendant is diverse and the amount in controversy exceeds Seventy-Five Thousand Dollars exclusive of interest and costs. 3. Venue is proper in this district as Defendant was retained to render legal advice to companies located in Denver, Colorado and Defendant traveled to Denver, Colorado to conduct a substantial part of his investigation leading to the issuance of his legal opinion.

2 Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 2 of 5 III. The Parties 4. Carl Genberg is a resident and citizen of the State of Nevada and is the former Senior VP of Research and Development ofceragenix Pharmaceuticals, Inc. and Ceragenix Corporation (collectively "Ceragenix" and is a creditor of the Ceragenix entities. 5. Ceragenix Pharmaceuticals, Inc. is a Delaware corporation with its principal place of business located in Denver, Colorado. Ceragenix Pharmaceuticals, Inc. filed for Chapter 11 bankruptcy protection on June 2, 2010 and the case has been converted to a Chapter 7 proceeding pending in the U.S. Bankruptcy Court for the District of Colorado. Jeanne Jagow has been appointed as Chapter 7 Trustee for the Ceragenix Pharmaceuticals, Inc. At all times material, Ceragenix Pharmaceuticals, Inc. was a publicly traded company subject to the requirements of the Sarbanes Oxley Act of 2002 ("SOX". 6. Ceragenix Corporation, is a Colorado corporation (f/k/aj Osmotics Pharma, Inc. with its principal place of business in Denver, Colorado, and is the wholly owned subsidiary of Ceragenix Pharmaceuticals, Inc. Ceragenix Corporation also filed a Chapter 11 bankruptcy petition on June 2, 2010 and the case has been converted to a Chapter 7 proceeding pending before U.S. Bankruptcy Court for the District of Colorado. Glen Anstine has been appointed as Chapter 7 Trustee for the Ceragenix Corporation. At all times material, Ceragenix Corporation was a wholly owned subsidiary of a publicly traded company whose financial statements were consolidated for filing with the Securities and Exchange Commission. Ceragenix Corporation was also subject to the requirements of SOX. 7. Marc Redlich, Esq. is a Boston-based attorney admitted to practice law in the Commonwealth of Massachusetts and is a resident and citizen of Massachusetts. IV. Claim for Relief - Legal Malpractice 8. In or about March of2010, Ceragenix Pharmaceuticals, Inc. and Ceragenix Corporation retained the legal services of Defendant Redlich to conduct an investigation regarding allegations that the CEO of Ceragenix Pharmaceuticals, Inc. had engaged in violation of federal securities laws through improper disclosure of material non-public information and to investigate whether Ceragenix had grounds to terminate the employment of Carl Genberg based on alleged violation of fiduciary obligations related to Genberg's whistleblowing activities

3 Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 3 of 5 9. In or about March 19,2010, Defendant Redlich completed his investigation and reported to Ceragenix that Genberg had "willfully violated his fiduciary obligations" thereby giving the Ceragenix companies purported grounds to tenninate Genberg for 'just cause" under the tenns of his written employment agreement with Ceragenix Corporation. 10. Based on Defendant Redlich's report, Ceragenix Phannaceuticals, Inc. tenninated Genberg's employment with Ceragenix Corporation effective March 29, 2010 citing "willful violation of fiduciary obligation" as the basis for his tennination for alleged 'just cause." 11. Defendant Redlich owed a duty of care to Ceragenix Phannaceuticals, Inc. and Ceragenix Corporation to use reasonable care in conducting his investigation and rendering his legal opinions. 12. Defendant Redlich was negligent in perfonning these duties, as he failed to carry out a reasonable investigation of the underlying facts and failed to even consider the application ofthe whistleblower protection provisions of SOX to the applicable facts regarding Genberg's activities. 13. Ceragenix Phannaceuticals, Inc. and Ceragenix Corporation reasonably relied on Defendant Redlich's investigation and his legal conclusion in making their decision to terminate Genberg's employment for 'just cause." 14. Defendant Redlich was aware that Ceragenix would rely on his investigation and legal opinion and that based on his legal opinion that a likely outcome was Ceragenix's termination of Genberg's employment for 'just cause." 15. Following Genberg's termination from employment, Genberg has filed suit against Ceragenix Pharmaceuticals, Inc., Ceragenix Corporation and members ofthe Board of Directors ofceragenix Pharmaceuticals, Inc. asserting claims for violation of whistleblower protection provision of SOX, 18 U.S.C. 1514A, and for violation of Colorado's Wage Claim Act, C.R.S et seq. and for other related state law claims for damages in excess of One Million Dollars. This action is pending in federal district court for the District of Colorado and assigned to Judge Wiley Daniel (Civil Action No. l1-cv wyd-meh 16. As a direct and proximate result of Defendant Redlich's legal malpractice, Ceragenix Pharmaceuticals, Inc. and Ceragenix Corporation are liable to Genberg for substantial damages in excess of One Million Dollars

4 Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 4 of Had Defendant Redlich conducted a reasonable investigation of the facts and considered the application of governing law (18 U.S.c. 1514A to the facts, he would have concluded that Genberg's actions were not a "willful breach of fiduciary obligation" but rather was "protected activity" under both the Ceragenix Code of Business Conduct and 18 U.S.C. 1514A, and that there was no legal basis for Ceragenix to tenninate Genberg's employment for "willful breach of fiduciary obligation." 18. Genberg, through his counsel, has requested the Chapter 7 Trustees for Ceragenix Phannaceuticals, Inc. and Ceragenix Corporation assert this claim oflegal malpractice against Defendant Redlich but the Trustees have declined to do so. 19. A hearing is scheduled in the bankruptcy court proceedings on June 12,2012 to detennine whether Genberg is authorized to pursue this action on behalf of the Chapter 7 Trustees. 20. In the event that Genberg is granted leave to act on behalf ofthe Chapter 7 Trustees, the real parties in interest will be substituted pursuant to Rule 17(a(3 of the Federal Rules of Civil Procedure. 21. Genberg is filing this action to preserve the viability of the claim within the applicable statute oflimitations which, under applicable bankruptcy law, expires on June 2, WHEREFORE, Plaintiff hereby requests that this Honorable Court enter judgment for damages in favor of Ceragenix Pharmaceuticals, Inc. and Ceragenix Corporation and against Defendant Marc Redlich, Esq. in such amount as is proven at trial together with such further relief, legal or equitable as this Court may deem just and proper. -4-

5 Case 1:12-cv DME Document 1 Filed 06/01/12 USDC Colorado Page 5 of 5 DATED: June 1,2012 GARLIN DRISCOLL LLC By: lsi Kenneth R. Morrisl Kenneth R. Morris, #36169 Garlin Driscoll LLC 245 Century Circle, Suite 101 Louisville, CO Tel: ( Fax: ( kmorris@garlindriscoll.com Attorneys for Plaintiff Carl Genberg in representative capacity on behalf of the Chapter 7 Trustees for Ceragenix Pharmaceuticals, Inc. and Ceragenix Corporation - 5-