Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 1 of 72

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CARD CONNECT, LLC,

Plaintiff
v.

SHIFT4 PAYMENTS, LLC f/k/a
LIGHTSPEED PAYMENTS, LLC, et al.,

Defendants.

Civil Action No. 2:17-cv-3881

DECLARATION OF J. ANDRE FERRE

I, J. Andre Ferre, declare as follows:

1. I have been designated as the corporate representative for Defendant, Shift4

Payments, LLC (“Shift4”). I make this declaration in support of Shift4’s Supplemental Proposed
Findings of Fact and Conclusions of Law on Remand.

2. I am over the age of 18 and if called to testify I could and would testify to the

facts contained herein.

3. I have personal knowledge of the facts set forth herein.

I.  SHIFT4’S ACQUISITION OF ALPHAPRO AND FAILURE TO INTEGRATE
4. I make this declaration with the benefit of documents produced by Card Connect,

LLC (“CardConnect”), CardConnect’s public statements, and CardConnect prior deposition
testimony.

5. In the summer of 2014, Shift4 (then known as “LightSpeed Payments, LLC”)

acquired a “mom and pop operation” located in Massachusetts that had 12 employees doing direct
sales and managed by a man named Jim Bul শনREDACTED.

6.

REDACTED

Bul শনREDACTED
REDACTED
REDACTED
REDACTED
REDACTED

7.

REDACTED
 Bulis was one of the worst payments
executives I have ever dealt with.
8. Bulis consistently did deals that would REDACTED.
REDACTED
REDACTED
 Bulis’s business, AlphaPro, LLC, was REDACTED

 Bulis was never a key employee, his 18th month
employment contract REDACTED. AlphaPro never did what REDACTED
 Bulis was a disaster and one of the worst hires
I have ever made.

9. Shift4 did not acquire AlphaPro for any perceived value in AlphaPro’s merchant

portfolio.

10. Based upon the data produced from CardConnect it is evident that CardConnect

was aware that AlphaPro’s portfolio was not performing.

11. In the two years following Shift4 acquisition of AlphaPro, Shift4 worked to move

AlphaPro merchants to its own payment platforms, including 4Word and i4Go.

12. In the two years following the acquisition of AlphaPro, Shift4 terminated Bulis,

REDACTED

REDACTED

13. REDACTED

REDACTED
REDACTED

Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 3 of 72

14. As of September 2016, two full years after Shift4’s acquisition of AlphaPro,
CardConnect’s records demonstrate that it was only receiving approximately $90,000 in revenue
from that portfolio of merchants.

15. $90,000 in revenue is minuscule in the payment processing industry.
16. By September of 2016, Shift4’s own portfolio would have generated
approximately $53 million in revenue.

17. The AlphaPro residuals, in one month, represented approximately 0.0017% of
Shift4’s monthly revenues.

II. SHIFT4’S ACQUISITION OF 24 COMMERCE, MICROS, AND POSTEC AND FAILURE TO
INTEGRATE
18. During the same time frame that I worked to acquire AlphaPro, I also had my

“friends and family” working to acquire the payment portfolio of 24 Commerce, Inc. (“24
Commerce”).
19. In 2013, 24 Commerce was insolvent. I agreed to fund 24 Commerce for a
short time.
20. My “friends and family” created a company called Merchant Services, Ltd. (“MSL”)

which was used to acquire the payment portfolio of 24 Commerce.

21. The payment processors for 24 Commerce (First Data and Vantiv) would not
allow 24 Commerce or MSL to migrate the 24 Commerce portfolio because 24 Commerce was
insolvent and the accounts were coded improperly.
22. In July 2014, I met with executives at Vantiv to discuss the opportunity for
Shift4 to acquire the portfolio.

23. Vantiv would not allow Shift4 to acquire 24 Commerce’s portfolio, without the
payment applications/software underlying the transactions going through those payments.
24. REDACTED.

REDACTED
25. REDACTED.

REDACTED.
REDACTED.

Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 5 of 72

26. 24 Commerce, MSL, and Shift4 could not board these merchants on Vantiv,
First Data, or other processors REDACTED
REDACTED
REDACTED
.

27. Shift4 worked with MICROS Systems, Inc. (“MICROS”) between 2014 and
2016 to migrate the 24 Commerce merchants onto Shift4’s payment platforms. Shift4 did this
work because it acquired the merchants through MSL.

28. In my opinion, the majority of the work required to migrate these merchants to
Shift4 was completed by the Spring/Summer of 2016.

29. Shift4 worked with Postec, Inc. (“Postec”) between 2014 and 2016 to migrate the
Postec merchants that were processing transactions on CardConnect onto Shift4’s payment
platforms. Shift4 did this work because it acquired the merchants through a separate entity.
30. Despite this work, as of July 2016, CardConnect’s public filings demonstrate that

it was still receiving approximately $121,000 in revenue from the Postec portfolio of merchants.
31. $121,000 in revenue from the Postec portfolio is insignificant given that by this

time, Shift4’s own portfolio would have generated approximately $45.9 million in revenue.
32. The Postec residuals, in one month, represented approximately 0.0026% of

Shift4’s monthly revenues.

III. SHIFT4’S ACQUISITION OF SUCCESSFUL PORTFOLIOS FROM FUTURE POS, DOLLAR
ON THE WEB, AND PAYMENT SYSTEMS
33. In the Spring/Summer of 2016, Shift4 successfully acquired the portfolios and

software assets of Future POS, LLC (“Future POS”), Restaurant Data Concepts, Inc. d/b/a Dollar
On The Web (“DOTW”), and Payment Systems, Inc. d/b/a POS Partners (“POS Partners”).

34. These three payment portfolios have been fully integrated into Shift4’s payment

platforms.
35. Shift4 did not acquire Future POS, DOTW, or POS Partners to acquire the

portfolio of merchants that originated from CardConnect.
36. My focus at the time was Shift4’s portfolio, not an immaterial amount of

merchants originating out of REDACTED
37. Future POS, DOTW, and POS Partners were fully integrated into Shift4’s

company and technologies.

38. There were thousands of merchants and millions of transactions that had to be
moved.
39. REDACTED.

REDACTED.

Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 7 of 72

40. Acquiring these businesses was time consuming and laborious.
IV. AUGUST 19, 2016 MERGER BETWEEN CARDBRIDGE AND CARDCONNECT
41. Prior to August 19, 2016, Shift4 had no knowledge of an impending merger

between CardConnect and CardBri 

42. Shift4 had no communication with anyone at CardConnect about this merger.
43. I did not have any idea regarding, or interest in learning about, CardConnect’s

capitalization.
V. AGGRESSIVE POST-MERGER STATEMENTS
44. After the merger between CardConnect and CardBridge was complete, there
was an article published by Digital Transactions on August 22, 2016, which quoted Jeff Shanahan
aggressively “call[ing] out First Data independent sales organizations as ripe for the taking by
CardConnect.”
45. The actions of Shanahan seemed erratic and desperate.

46. The notion that CardConnect would be a successful acquirer of ISOs was
ludicrous given that its capitalization made them a target, as did their terrible technology which
was antiquated.
47. Shanahan’s statements to Digital Transactions were aggressive and did not

align with CardConnect’s financials at the time – as a source of capital CardConnect was
insignificant because it had just used the money to go public and was carrying $150 million in
debt.
48. Shanahan’s statements would not cause me any anxiety or stress.

49. I viewed Shanahan’s statements as a threat to compete for acquiring ISOs, which

is the business of independent sales organization and the payment space.
50. I did not view Shanahan’s statements as a threat to Shift4’s merchant portfolio.
51. Shanahan’s statements did not implicate any trade secrets.
52. Shanahan’s statements did not suggest that CardConnect was planning to
engage in the tortious conduct of soliciting Shift4 employees or customers.

VI. SHIFT4’S ACQUISITION OF MERCHANTS FROM INFONET
53. Shift4 acquired Infonet approximately a year after the merger between
CardConnect and CardBridge.

54. Shift4 began negotiating with REDACTED the owners of Infonet, in April 2017.

REDACTED.
55. I originally met REDACTED my “friends and family” before the merger
between CardConnect and CardBridge.
56. REDACTED.
REDACTED.

Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 9 of 72
REDACTED

57. Shift4 has a proprietary software platform that enables companies like Infonet REDACTED
REDACTED.

58. REDACTED

59. The hospitality industry is a very large space with thousands of potential
payment and software providers for restaurants to choose from.

60. I have no idea why REDACTED.

REDACTED
61. In or around January 2016, Shift4 decided to offer Harbortouch-branded point-
of-sale systems (“POS”) under the name Skytab.
62. The software run through Skytab is Shift4’s proprietary software.

63. Shift4 decided to compete by providing a POS system for “free” because other
players in this space were already offering free POS systems, like Toast.

64. Shift4 promoted its products and services by sending letters to potential
merchants, including those processing payments with CardConnect.

VII. ELECTRONIC MAIL COMMUNICATIONS
65. On August 2, 2016, I sent an email to Rick Smith and others with the subject line

“card connect new symbol.”
66. REDACTED.

REDACTED
67. REDACTED

REDACTED
REDACTED.

68. REDACTED

REDACTED
REDACTED
.
69. On August 15, 2016, Patrick Kintzley sent me an email with the subject line “Re:

Just Checking In.”
70. I met Kintzley when I was working with him to solve problems facing the 24

Commerce merchants. My understanding is that, at this time, Kintzley was no longer working for
CardConnect/24 Commerce.
REDACTED
 I did not request that Kintzley send me this
email.
71. On July 19, 2016, Rick Smith sent me an email with the subject line “Postec
Revenue/CardConnect.”
72. The contents of this email contain data regarding payments processed through

CardConnect via Postec.
73. At that time, Shift4 had a contract with REDACTED. to review data on Postec

merchants and this email was generated from those efforts.
74. REDACTED

Case 2:17-cv-03881-MAK Document 281-18 Filed 08/25/20 Page 11 of 72

REDACTED.
75. On July 15, 2016, Rick Smith sent me an email attaching an Excel file with the

subject line “Restaurant Data Concepts/CardConnect.”
76. The contents of this email contain data regarding payments processed through

CardConnect via Restaurant Data Concepts (i.e. Dollar On The Web).
77. At that time, Shift4 had a contract with REDACTED to review data on
merchants processing on Dollar On The Web.

REDACTED
.

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct.

Executed this 24th day of August, 2020, in Las Vegas, NV.

J. Andre Ferre