Robert Manning and Responsible Debt Relief Institute Named in Software Suit

A tipster (send in your tips here) sent in a recent suit by the Cole Group, Inc and Robert Manning, Newtonian Finances, Debtorwise Foundation, and Responsible Debt Relief Institute. Frankly, the suit is a bit of a shocker.

The Manning approach to helping credit counseling groups work out a satisfactory way to determine the most effective way to resolve debt problems has been billed as the way of the future.

RDR also serves as a clearing house for matching appropriate debt repayment programs based on household repayment capability. The RDR Institute works closely with commercial banks, credit unions, consumer credit counseling service organizations, partial payment debt resolution companies and bankruptcy practitioners to provide the most appropriate debt resolutions services based on consumer repayment capability. – Source

According to the suit filed on California on November 30, 2011, the Cole Group, which is Sevan Aslanyan and Fred Esguerra (source) the claim is that allegedly Manning and his entities and profiting from the use of the Cole Group software outside of their agreement.

The suit alleges and states:

Prior to June 2007, Cole Group, Inc (CGI) sought Manning’s assistance in developing a debt relief program (the “Program”) for consumers who were facing devastating financial circumstances. In the regard, CGI sought to create a web services-based data management system whereby lenders, counselors, and individual consumers could conduct a preliminary, online assessment of the affordability of mortgage/home and other debt modification. CGI requested that Manning assist it in developing what would [be] a proprietary algorithm/software for the exclusive use of CGI and its customers/affiliates.

On or about June 27, 2007, CGI, on the one side, and Manning and Newtonian, on the other side, entered in to a written agreement entitled “COMPENSATION AGREEMENT FOR DEVELOPMENT AND CALIBRATION OF The Responsible Debt Relief ‘Filtering’ Algorithm/Protocol” (hereafter the “Licensing Agreement”) wherein and whereby the parties agreed to the following things, among others:

  • Newtonian would develop a software program referred to as the “Responsible Debt Relief ‘Filtering’ Algorithm/Protocol” (the “Software”);
  • CGI would have an exclusive license for the use, sale, marketing of the Software;
  • Newtonian wou and ld pro refinement of the Software;
  • CGI would pay Newtonian $35,000 for the development, use and testing of the Software (the “Development Fee”);
  • Newtonian and Manning would continue to consult with CGI and its software developers in CGI’s creation of a proprietary program that permitted CGI to preform a routine analysis for CGI’s potential clients in conjunction with the “Responsible Debt Relief” program (the “Program”);
  • Manning would permit CGI to refer to the Software as his intellectual property in discussions with third parties and that Manning would participate in giving formal presentations regarding the Software as requested by CGI;
  • Commencing on September 15, 2008, CGI would pay Manning and Newtonian the sum of $1,500 per month to “examine any potential ‘calibration’ issues with the ‘filtering’ algorithm/protocol that would incorporate such information as chaining macro-economic conditions, state specific household budget limitations, new individual/client data, and other emerging consumer debt trends such as adjustable rate home mortgages” (the “Additional Fee”);
  • CGI would have the right to purchase the Software “and all related computer interface software” in certain circumstances for the sum of $75,000.

Within the last two years, CGI learned that Newtonian and Manning were each and all, doing the following things:

  • Using the Software for their own personal gain without CGI’s permission and in direct violation of the Licensing Agreement;
  • Authorizing third parties, including Debtorwise and RDRI, to use the Software without CGI’s permission and in direct violation of the Licensing Agreement;
  • Marketing the Software to the public and others as Manning’s and/or RDRI’s intellectual property and giving presentations regarding the Software without CGI’s permission, knowledge or request.

CGI claims, in the suit, it is the exclusive licensee under the Licensing Agreement with respect t the Software and no other person or entity, including the Defendants, have the right to use the Software without CGI’s permission.

CGI is seeking damages of at least $2,250,000 and an immediate injunction prohibiting Defendants from using the Software. – Source


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