TCA RESOLUTION STATUS / UPDATE - As disclosed recently, the attorneys for HHSE filed a motion to set-aside the TCA judgment against HHSE (and related parties), due to obvious errors and demonstrably false statements in their filing for a judgment - as well as the undisputed, mathematical evidence that HHSE has actually - significantly - overpaid TCA well past the amounts that TCA is legally allowed to collect (including maximum, legal default interest rates). As of Friday, Jan. 29, TCA's attorney's had not filed a response to the HHSE motion. While HHSE's attorneys are confident in the Company's position, until the default is formally "set-aside" or vacated, HHSE will still be encumbered from obtaining traditional corporate credit lines.
To be clear:
a). TCA has acknowledged in writing the receipt of all of the HHSE payments;
b). The amount of the acknowledged payments made by HHSE (or on HHSE's behalf) to TCA is $396,896.00;
c). The total amount of loan proceeds that HHSE received from TCA in May of 2013 was $245,000;
d). If HHSE decides to concede on the point that TCA is actually entitled to receive an additional $55,000 in "origination" fees and costs (and therefore, the "starting amount" for the calculation of interest would be $300,000 instead of $245,000) - then HHSE has STILL OVERPAID TCA by $28,439.65, which assumes 18% (maximum legal interest) as of January, 2014 (which conforms to the TCA Auditors letter received by HHSE).
e). If the court decides that TCA is entitled to receive an additional $100,000 as an "Investment Advisory Fee" for advisory services never performed - and that this terminology is not merely an attempt to circumvent the maximum legal usury rates - then HHSE has STILL overpaid TCA by virtue of issuing 10-mm shares in June (2013) which were valued at $123,000. However, HHSE Attorneys feel that the case law for inventing different "terms" for nonexistent services are "interest by another name" and will likely not be deemed enforcable (or payable).
f). HHSE has requested that TCA return the 10-mm shares that were issued in June (2013) as "collateral" or "payment" for the "Investment Advisory Fee" to TCA. However, TCA has not returned the shares, and had been previously attempting to force payment from HHSE in cash or this issue. HHSE believes that TCA is unable to return the shares because (at TCA's request), the stock certificate was issued to Caledonian Bank, Cayman Islands, and that subsequent to the S.E.C. filing enforcement actions against them, Caledonian Bank filed for bankruptcy. Therefore, it seems likely that the 10-mm HHSE share certificate is not accessible to TCA - which under law would constitute constructive payment for the "Investment Advisory Fee" disregarding whether or not TCA is legally entitled to charge fees to a loan for services never performed.
g). If the Court rules that TCA is NOT entitled to an additional $100,000 in interest (under the disguise of "Investment Advisory Fees"), then TCA will need to return the shares (likely NOT possible) or pay back to HHSE the value of the shares as of date of issuance. If the court rules against the validity of this "fee" then then entire amount will have been illegal "usurious" interest, which is subject to statutory 200% penalties. So HHSE would be entitled to get paid back DOUBLE the total amount of usurious interest paid.
h). TCA will likely adopt the position that they are entitled to receive the $100,000 for "Investment Advisory Fees" because Hannover House signed the document with this provision. They may also try to cite as "services" provided that they repeatedly demanded that HHSE dump low-priced shares to a specific "toxic debt conversion" company that met "TCA's approval," and that this demand (to pay them back through a horrible methodology) constituted "advice" to the Company. However, there is also an issue of fiduciary conflict if they are both the senior creditor AND separately being compensated for "Investment Advisory" services, especially if the advice is self-serving to the detriment of the Company. TCA will not want the court to rule that this fee is simply "interest by another name," but it's very difficult to envision any form of winning argument for TCA. The case law against predatory lenders has dealt with all of these "tricks" to try and circumvent the maximum legal interest rate laws.
i). ALL COLLECTION ENFORCEMENT ACTIONS and TCA attempts to execute on the Judgment in Arkansas have been HALTED, due to the preponderance of evidence that HHSE has overpaid TCA.
