Trophy Resources (TRSI)

 

On April 9, 2001, we were named as a defendant in a lawsuit styled Wellington, LLC vs. Hyperdynamics Corporation et al. Civil Action# 18811-NC, The Court of Chancery of Delaware.

 

The Plaintiff claims that we did not carry out conversion of Series A preferred stock to common stock. On August 9, 2002 Plaintiff, Defendant, and their respective counsels executed an "Agreement for Transfer of Claims in Delaware Action to Georgia. Subsequently, the lawsuit was moved in its entirety to Atlanta, Georgia to be litigated under the lawsuit discussed below. Under the agreement, the Plaintiff in the Delaware action, Wellington, LLC. would become the Defendant in Atlanta. During the fiscal year ended June 30, 2004, the Court of Chancery of Delaware dismissed the Delaware case.

 

On November 5, 2001, we filed a lawsuit styled Hyperdynamics Corporation, Plaintiff, v. J.P. Carey Securities, Inc., J.P. Carey Asset Management LLC, Joseph C. Canouse, John C. Canouse, James P. Canouse, Jeffrey Canouse, Southridge Capital Management LLC, Stephen Hicks a/k/a Steve Hicks, Thomson Kernaghan & Co., Limited, Mark Valentine, Talya Davies, Cache Capital (USA), L.P., Carpe Diem, Carpe Diem LTD., Wellington, LLC, Minglewood Capital, LLC, Falcon Securities, LTD, Navigator Management LTD., David Sims, and Citco Trustees (Cayman) Limited, Defendants; and Wellington LLC, Counterclaim/Third-Party Plaintiff, v. Hyperdynamics Corporation, a Delaware corporation, Kent Watts, Michael Watts, Robert Hill, Harry J. Briers, DJX, Ltd., a Belize corporation, and Does 1-10, Counterclaim/Third-Party Defendants, Civil Action File No. 2001CV44988, In The Superior Court of Fulton County, State of Georgia.

 

We filed our First Amended Complaint against Defendants on September 12, 2002 in which we presented thirteen counts for Causes of Action against defendants including "Violations of Georgia Racketeer Influenced and Corrupt Organizations" (RICO) Act (O.C.G.A. SS 16-14-1, ET SEO).

 

We believe that more than one of the Defendants worked together to create the appearance of providing initial long term financing ($3,000,000) and additional financing commitments (up to additional $5,000,000), all from reputable sources, while the Defendants' real plan was to manipulate our stock through contractually prohibited short selling and multiple breaches of the contractually agreed to selling covenants.

 

We are subject to counterclaims in this Georgia litigation. The counterclaimants allege that Hyperdynamics and its Officers and Directors breached their fiduciary duties to shareholders and committed other tortuous acts. We intend to continue to vigorously pursue damages and defend all counterclaims. Discovery is being primarily focused on jurisdictional issues at this time. During the litigation we have made numerous claims of discovery abuse resulting in certain defendants and defense attorneys involved being sanctioned by the court. They have filed for sanctions against us as well. The court dismissed all non-Georgia defendants. We have filed a notice of appeal of that ruling. 

 

The Georgia Court of Appeals rejected our appeal of the trial court's order dismissing the non-Georgia defendants because it was not a "final order," though it was in effect as to the dismissed defendants. The Court of Appeals' action returned the case to the trial court where a Motion for Reconsideration was filed due to a dramatic change in the law of personal jurisdiction in Georgia. (See Innovative Clinical & Consulting v. First National Bank of Ames, 279 Ga. 672 (2005).) That Motion is still pending and all activity in the case is halted until the trial court rules.

 

 

 

 

On April
9, 2001, we were named as a defendant in a lawsuit styled Wellington, LLC vs.
Hyperdynamics Corporation et al. Civil Action# 18811-NC, The Court of Chancery
of Delaware.

 

The
Plaintiff claims that we did not carry out conversion of Series A preferred
stock to common stock. On August 9, 2002 Plaintiff, Defendant, and their
respective counsels executed an "Agreement for Transfer of Claims in Delaware
Action to Georgia. Subsequently, the lawsuit was moved in its entirety to
Atlanta, Georgia to be litigated under the lawsuit discussed below. Under the
agreement, the Plaintiff in the Delaware action, Wellington, LLC. would become
the Defendant in Atlanta. During the fiscal year ended June 30, 2004, the Court
of Chancery of Delaware dismissed the Delaware case.

 

On
November 5, 2001, we filed a lawsuit styled Hyperdynamics Corporation,
Plaintiff, v. J.P. Carey Securities, Inc., J.P. Carey Asset Management LLC,
Joseph C. Canouse, John C. Canouse, James P. Canouse, Jeffrey Canouse,
Southridge Capital Management LLC, Stephen Hicks a/k/a Steve Hicks, Thomson
Kernaghan & Co., Limited, Mark Valentine, Talya Davies, Cache Capital (USA),
L.P., Carpe Diem, Carpe Diem LTD., Wellington, LLC, Minglewood Capital, LLC,
Falcon Securities, LTD, Navigator Management LTD., David Sims, and Citco
Trustees (Cayman) Limited, Defendants; and Wellington LLC,
Counterclaim/Third-Party Plaintiff, v. Hyperdynamics Corporation, a Delaware
corporation, Kent Watts, Michael Watts, Robert Hill, Harry J. Briers, DJX, Ltd.,
a Belize corporation, and Does 1-10, Counterclaim/Third-Party Defendants, Civil
Action File No. 2001CV44988, In The Superior Court of Fulton County, State of
Georgia.

 

We filed
our First Amended Complaint against Defendants on September 12, 2002 in which we
presented thirteen counts for Causes of Action against defendants including
"Violations of Georgia Racketeer Influenced and Corrupt Organizations" (RICO)
Act (O.C.G.A. SS 16-14-1, ET SEO).

 

We
believe that more than one of the Defendants worked together to create the
appearance of providing initial long term financing ($3,000,000) and additional
financing commitments (up to additional $5,000,000), all from reputable sources,
while the Defendants' real plan was to manipulate our stock through
contractually prohibited short selling and multiple breaches of the
contractually agreed to selling covenants.

 

We are
subject to counterclaims in this Georgia litigation. The counterclaimants allege
that Hyperdynamics and its Officers and Directors breached their fiduciary
duties to shareholders and committed other tortuous acts. We intend to continue
to vigorously pursue damages and defend all counterclaims. Discovery is being
primarily focused on jurisdictional issues at this time. During the litigation
we have made numerous claims of discovery abuse resulting in certain defendants
and defense attorneys involved being sanctioned by the court. They have filed
for sanctions against us as well. The court dismissed all non-Georgia
defendants. We have filed a notice of appeal of that ruling. 

 

The
Georgia Court of Appeals rejected our appeal of the trial court's order
dismissing the non-Georgia defendants because it was not a "final order," though
it was in effect as to the dismissed defendants. The Court of Appeals' action
returned the case to the trial court where a Motion for Reconsideration was
filed due to a dramatic change in the law of personal jurisdiction in Georgia.
(See Innovative Clinical &
Consulting v. First National Bank of Ames, 279 Ga. 672 (2005).) That
Motion is still pending and all activity in the case is halted until the trial
court rules.