Receiver was terminated. Key findings from the Court:

Berleth’s authority was limited solely to collecting Atlantic Wave’s judgment against Cyberlux in Texas. The judgment was fully satisfied in June 2025 after Legalist wired approximately $3.08M covering the judgment, interest, costs, and fees. Berleth himself previously informed the Texas court that the judgment had been satisfied and sought termination of the receivership.
Berleth later attempted to expand the receivership into a broader/general receivership to manage competing creditor claims, but the Texas court denied that request. The Virginia federal court ruled that because the original purpose of the receivership was fulfilled, Berleth no longer has any legal claim or authority over the disputed funds. The Court terminated Berleth as a party to the case and denied his summary judgment motion as moot. At least that's part is over and we can get to the real litigation here !

The following case was years ago, and I'm not sure how Robert Berleth, the bum receiver, has been able to go on in his position without any dis-barring or arrest. He did a similar scam in a case in 2022, attached below, where he got a judgement against HIM for $40,000 for doing his job incorrectly.


MEMORANDUM OPINION
Trial was held on November 8, 2022. For the reasons so stated the Complaint for Turnover
and Related Relief is granted in part and denied in part.
PROCEDURAL BACKGROUND
The debtor, Preferred Ready Mix LLC, the plaintiff herein (“Ready-Mix”) brought suit
against Robert Berleth, (“Berleth”) a State Court receiver in this adversary under four counts,
Turnover, Stay Violation, Conversion and Disallowance of Claim. Prior to the filing of this
adversary proceeding the debtor was the owner/operator of concrete mixing trucks. The debtor is
a limited liability corporation, which is fifty percent owned by Robert Foran (“Foran”). Berleth
and Associates has been dismissed from this proceeding.
1

1 ECF No. 22
United States Bankruptcy Court
Southern District of Texas
ENTERED
November 09, 2022
Nathan Ochsner, Clerk
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 1 of 9
2 / 9
Foran had financial difficulty, and after a Texas state court suit styled Roesle v. Foran et
al, 19-DVC-267154, in Fort Bend County, 400th Judicial District Court, entered default judgment2
against Foran and Nolan Star Trucking, LLC, Berleth was appointed as receiver. The order
appointing receiver was first entered, as to Foran and Nolan Star Trucking on June 4, 2021,3
and
then on September 30, 2022, by an ex parte order supplement receivership4
also against Preferred
Ready-Mix, LLC.5
Pursuant to the ex parte order, Berleth seized, in part, the assets of Ready-Mix
on or about October 1, 2021.
On October 14, 2021, the debtor filed a Chapter 11 case.6
By October 21, 2022, Berleth
had actual notice of the bankruptcy filing.7
At this juncture, given proper notice by the debtor of
the filing and demand for possession of the seized assets by counsel, the Court would have
expected an orderly progression in this case. That is seized assets would have been turned over to
the debtor, and Berleth would have filed a claim for administrative expenses.8
This did not occur.
Ready-Mix, unfortunately, had very serious issues with its choice of counsel. Counsel who
filed the case for Ready-Mix was unresponsive, disappeared, and ordered to disgorge her retainer.
Ultimately, the Court was forced to issue an arrest warrant as her unresponsiveness accrued. She
was arrested and has filed personal bankruptcy to avoid the Court’s disgorgement order entered in
this case against her.
2 ECF No. 53-1
3 ECF No. 53-2
4 ECF No. 53-4
5 The Court issues no ruling as to the validity or appropriateness of this order. While raised at trial, it was not plead
and not relevant to the causes of action raised by the debtor/plaintiff.
6 Case No. 21-33369
7 Berleth admitted having notice by October 21, 2022 but the Court finds that he had actual notice on October 14,
2021, the same day as the filing of the Chapter 11 petition.
8 Pursuant to 11 USC § 542 and/or § 543.
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 2 of 9
3 / 9
This, unfortunately, led to a delay in turnover for which Berleth is not responsible.9
However, the debtor did make demand on November 10, 202210 and Berleth should be held liable
for any delay thereafter.
By two letters, one dated November 10, 2021, and one dated November 29, 2021, counsel
for the debtor requested return of trucks, equipment, tools and various other items. Berleth did not
comply with the November 10, 2021 demand. He thereafter caused further delay resulting in a
partial turnover of trucks on November 20, 2022, which was followed up with an additional
turnover on December 6, 2022. This adversary proceeding was thereafter filed on March 7, 2022.
FACTUAL FINDINGS AND CONCLUSIONS OF LAW
Berleth on October 1, 2021, seized six Peterbilt Mixer Trucks, a 2003 Ford Model F250,
compressor and tools on the Ford Truck, office supplies and office records from the debtor. While
demand for turnover was not made immediately after the filing of the Chapter 11 of the debtor due
to issues of counsel, demand was properly made by the debtor’s new counsel for return of these
items on November 10, 2021. Thereafter, emails11 indicate the response of Berleth12 to the debtor
and vindicate the debtor’s complaints against him.
13 Most of these responses are serious
9 The Court finds a ten-day delay for which Berleth is liable but only from November 10, 2021, to November 20,
2021. The remainder of the delay is directly attributable to the initial representation [and lack of action] of the debtor
by its initial counsel as described herein. The mixing trucks and Ford Truck sat unused between seizure and turnover
to the debtor, which was fifty days. Given their age and mileage (See pictures at ECF Nos. 53-5 – 53-11) it is not
unexpected that they would have mechanical difficulties that the debtor would have to repair. The trucks had
battery/tire issues [batteries discharged, and tires went flat] and in one instance due to nonuse the brakes pads fused
to the brake discs.
10 ECF No 54-3
11 ECF No. 53-17
12 “I really need my tow fee ($5,565), and I think I can get the tow guy to take his invoice as an administrative expense.
Can your guy do that, and we’ll get these tracks released this weekend.” “Please see attached invoice which will need
to be paid by certified funds prior to any release of the vehicles.” “… there are several serious issues with this case
that I would like to discuss with you, most importantly your authority to represent Preferred Ready-Mix, LLC.” “I’ll
do $2,500 with the rest of my expenses accepted as administrative expenses if he turns over the blue Mack daycab
he has previously been ordered to surrender.”
13 Berleth also claimed his delay in turnover was due to his going on vacation. As stated on the record, the Court does
not consider his vacation, apparently a cruise, in any way a viable excuse for any delay in turnover. As a claimed
“expert” receiver, he cannot simply disappear for ten days on vacation and not have associate counsel to which to turn
emergency matters, like the one in this case, to during his absence.
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 3 of 9
4 / 9
impediments to immediate turnover and are patently impermissible. Berleth had no authority to
condition turnover. He intentionally and improperly used the leverage of his possession of the
debtor’s major assets and made demands for payment against the debtor in order to thwart
immediate turnover. This is impermissible. Additionally, he [or his agents] collected estate assets
from the debtor in the form of a $2,500.00 payment without Court authority. This type of behavior
cannot be condoned and must be remedied by this Court.
Berleth’s failure to act to turn over assets, together with his demands, effectively held the
major assets of the debtor hostage. Berleth in his testimony indicated that he had followed the
rules in this bankruptcy case. The Court strongly disagrees. The Court finds that Berleth attempted
to use his position as a state court appointed receiver to thwart the provisions of 11 U.S.C. §§ 542
and 543.
Berleth provided an accounting to this Court in the underlying bankruptcy case on February
18, 2022.
14
The accounting is generous in Berleth’s view of the facts but confirms the turnovers
on November 20, 2021, and December 6, 2021.
The Court has applied the preponderance of the evidence standard to all claims of the
plaintiff, except as noted and placed the burden of proof on the plaintiff.
TURNOVER
Turnover is available to a trustee or debtor-in-possession. Section 542 of the Bankruptcy
Code generally requires a noncustodial entity who has possession, custody, or control of property
of the estate that the trustee may use, sell, or lease under Section 363 or may exempt under Section
522 to deliver to the trustee and account for the property or the value of such property. Section 543
generally requires a custodian with knowledge of the commencement of the case to deliver to the
14 Case No. 21-33369, ECF No. 100
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 4 of 9
5 / 9
trustee and account for such property of the estate and the proceeds of such property. The
provisions of Section 542(a) of the Bankruptcy Code, governing the turnover of tangible property,
are intended to be self-executing.
The debtor/plaintiff has by clear and convincing evidence met its burden as to the six
Peterbilt Mixer Trucks, the 2003 Ford Model F250 and the compressor. The Court can find that
as to this property prior to turnover (1) the property was in the possession, custody or control of
another entity; (2) the property could be used in accordance with the provisions of Section 363;
and (3) the property had more than inconsequential value to the debtor's estate. However, as to
the remainder of the property claimed by the debtor to be subject to turnover, the evidence is less
substantial [as later described] and fails to meet a burden of clear and convincing evidence or even
a lesser evidentiary standard of a preponderance of the evidence.
Turnover of the six Peterbilt Mixer Trucks, the 2003 Ford Model F250 and the compressor
has already occurred. The debtor seeks damages as a result of Berleth’s actions, including attorney
fees and costs. The court finds it may sanction a party for violation of sections 542 or 543 of the
Bankruptcy Code. The debtor did not call a witness for attorney’s fees, so no attorney fees are
awarded, but the Court grants damages of $500.00 per day, for each of the six Peterbilt Trucks and
the Ford Truck, for each of the ten days the vehicles were not turned over. Therefore, there is a
total damage award of $35,000.00 for the plaintiff and against Berleth.
AUTOMATIC STAY
A debtor may recover damages for violation of the automatic stay in the context of a third
party's exercising of control over property of the estate subject to a turnover proceeding or demand
pursuant to Section 362(a)(3) of the bankruptcy code. The burden of proof on damages is on the
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 5 of 9
6 / 9
plaintiff, and damages must be proven with reasonable certainty.15
Here, the plaintiff seeks
remedies for violation of 11 U.S.C. § 362, including any remedies under 11 U.S.C. 362(k). Berleth
argues that since the plaintiff is not an individual, it does not have standing to seek damages under
11 U.S.C. § 362(k).16
The Court does not find that persuasive, as the Fifth Circuit has noted that
a corporate debtor fell within the definition of an individual.17
Berleth admits, however, that the
Court does have the authority to find contempt for the failure to abide by a court order.
Here, the Court finds Berleth’s actions were with actual knowledge of the bankruptcy filing
and intentional, with the intent to deprive the debtor of his assets. Additionally, his actions were
not in good faith and in contravention of the provisions of the automatic stay. Furthermore, the
Court finds that Berleth did more than just passive retention of estate property, as demand was
made.18 Consequences for violations of the automatic stay can be severe. Parties that willfully
violate the automatic stay may be liable to debtors for actual damages, including costs, attorneys'
fees, and, in appropriate circumstances, punitive damages.19
Here, actual damages would be
duplicative of the damage award from violation of sections 543 and 542 of the Bankruptcy Code.
However, to the extent the prior award of damages is inappropriate, it is awarded here as actual
15 In re Garza, 605 B.R. 817(Bankr. S.D. Tex. 2019).
16 Brief, ECF No. 49, page 4.
17 In re Community Home Financial Services, Inc., 583 B.R. 1, (Bankr. S.D. Miss. 2018), citing St. Paul Fire & Marine
Ins. Co. V. Labuzan, 579 F.3d 533, 541 (5th Cir. 2009); Matter of Community Home Financial Services Corporation,
32 F.4th 472, 487 (5th Cir. 2022) (“we have previously held that both debtors and creditors have standing to sue under
§ 362(k)).
18 City of Chicago, Ill v. Fulton, 141 S.Ct. 585, 590-92 (2021) (holding that the passive retention of estate property,
absent a turnover order or demand, does not violate the automatic stay). Here, a demand for turnover was made by
plaintiff on November 10, 2021, and the property was not returned until November 20, 2021, and December 6, 2021.
The facts differ from the facts in City of Chicago as this adversary was filed, this Court held a trial, and procedural
safeguards were followed.
19 Section 362(h) provides: “An individual injured by any willful violation of a stay provided by this section shall
recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive
damages.”
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 6 of 9
7 / 9
damages on the same calculation noted above.20
Additionally, given the finding of bad faith and
intentional actions by Berleth, the Court awards punitive damages of $10,000.00. Accordingly,
total damages for violation of the automatic stay are awarded in the amount of $45,000.00 for the
plaintiff against Berleth.
CONVERSION
The Court finds that the plaintiff has failed in its burden of proof of conversion. There are
four elements to a conversion claim: (1) Plaintiff owned, had legal possession of, or was entitled
to possession of the property; (2) Defendant assumed and exercised dominion and control over the
property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with
plaintiff’s rights; (3) Plaintiff made a demand for the property; (4) Defendant refused to return the
property.21 The debtor’s evidence of ownership, its legal title, and possession of the tools it claims
were converted by Berleth is lacking. The debtor had no inventory of the tools it claims were
converted. Moreover, there was no specific list of tools reflected in the asset schedules filed in the
Chapter 11 case. The pleadings in the complaint as to the tools converted are without specificity.
The list of tools introduced into evidence is not credible.22
The list was prepared on the eve of
trial from dubious memory, making the list suspect, and the values even more so. Prepared at least
396 days after the seizure [October 1, 2021 to November 1, 2022] it simply is not credible enough
to meet the burden of proof required for a finding of ownership for conversion. Still further, the
pictures presented by Berleth of the tools that were in the Truck after its seizure23 placed more
20 In re Imperial Petroleum Recovery Corporation, 2021 WL 933989, at *9 (Bankr. S.D. Tex. Mar. 11, 2021)
(Generally damages for willful stay violations are limited to actual damages, and must be supported by sufficient
factual findings).
21 Apple Imports, Inc. v. Koole, 945 S.W.2d 895, 899 (1997).
22 ECF No. 54-14
23 ECF Nos. 53-5 – 53-11
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 7 of 9
8 / 9
doubt that these tools existed or that they were converted. Therefore, the plaintiff fails on this
claim.
DISALLOWANCE OF CLAIM
The administrative expense claim filed on February 18, 2022 by Berleth requesting
$7,000.00 is disallowed.24
Berleth’s application for an administrative claim requests compensation
under 11 U.S.C. § 503(b)(1)(A) as he claims that he incurred these expenses post-petition “in
exchange for the assets being returned so that the Debtor could continue to conduct business.” In
assessing whether an administrative expense should be awarded, the Fifth Circuit has held that a
§ 503(b)(1)(A) expense “must have been of benefit to the estate and its creditors.” First, and
importantly Berleth is guilty of demanding and receiving estate property for turnover without court
authority.25
This is sufficient cause to disallow his claim. However, his delay in turnover,
including the leverage of asset possession, and his improper demand for payment greatly inflated
any claims he may have held.
Therefore, Berleth’s claimed administrative expense was of no benefit to the estate and its
creditors. The claim is either wholly or mostly self-serving and inflated due to his improper actions
detailed in this order.
CONCLUSION
The Court grants judgment to the Plaintiff under three counts, Turnover, Stay Violation,
and Disallowance of Claim. The Court denies relief on the count of conversion.
THEREFORE, IT IS ORDERED that judgment is granted in favor of the plaintiff,
Preferred Ready-Mix LLC, in the amount of $45,000.00, comprised of actual damages in the
amount of $35,000.00, and punitive damages in the amount of $10,000.00.
24 Bankruptcy Case No. 21-33369, ECF No. 98
25 Emails indicate Berleth or his agents demanded greater sums but received $2500.
Case 22-03040 Document 60 Filed in TXSB on 11/09/22 Page 8 of 9
9 / 9
IT IS FURTHER ORDERED that Robert Berleth’s administrative claim in the amount
of $7,000.00 is disallowed.
All other relief is denied. This is a final order disposing of all other claims.
SIGNED 11/09/2022

No. 01-25-0455 CV
IN THE COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS
CYBERLUX CORPORATION AND MARK D. SCHMIDT,
Relators/Appellants
v.
ATLANTIC WAVE HOLDINGS, LLC, AND SECURE COMMUNITY, LLC,
Respondents/Appellees
On Appeal from the 129th Judicial District Court of Harris County, Texas,
Trial Court Cause No. 2024-48085
RELATORS’ OBJECTIONS AND REPLY TO BERLETH’S RESPONSE
REGARDING EMERGENCY MOTION FOR TEMPORARY STAY
Douglas S. Lang
State Bar No. 11895500
Alexander J. Pennetti
State Bar No. 24110208
THOMPSON COBURN LLP
2100 Ross Avenue, Suite 3200
Dallas, Texas 75201
Tel Phone: (972) 629-7100
Fax: (972) 629-7171
dlang@thompsoncoburn.com
apennetti@thompsoncoburn.com
Attorneys for Relators and
Appellants Cyberlux Corporation
and Mark D. Schmidt
i
ACCEPTED01-25-00455-cvFIRST COURT OF APPEALSHOUSTON, TEXAS7/15/2025 5:05 PMDEBORAH M. YOUNGCLERK OF THE COURT FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 7/15/2025 5:05:27 PM DEBORAH M. YOUNG Clerk of The Court
TO THE HONORABLE COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS:
INTRODUCTION
Since Berleth has no standing to speak to this motion or Appellants’ Petition
for Writ of Mandamus and in the alternative Appeal on the Merits, the Court should
disregard his response. In any event, the glaring omissions in Berleth’s response
illustrate Berleth’s sleight of hand. Berleth is holding over $3 million in his trust
account, which is far more than what is required to satisfy the judgment and pay all
fees related to this case. Yet, despite never having authority to act for other creditors
or as a global receiver under his appointment as a receiver pursuant to Civ. Prac. &
Rem. Code § 31.002 (Section 31.002), Berleth—in violation of the Court’s stay—
continues to work in concert with a select group to dupe courts and legitimate
creditors across the country, so that Berleth can try and obtain nearly $6 million in
fees for his own benefit. This Court should take immediate action to stop Berleth’s
unlawful conduct and ignore his fanciful tale of how he is saving the day.
ARGUMENT
A. Berleth’s Response Should be Stricken or Disregarded Because Berleth
Has No Standing.
Berleth has no standing with respect to Relators’ pending appeal, mandamus,
or the Emergency Motion. See Wiley v. Sclafani, 943 S.W.2d 107, 110 (Tex. App.—
Houston [1st Dist.] 1997, no writ) (holding that a receiver, a “non-party” without
1
any “interest in privity with any party to the action,” lacked standing to appeal the
grant of summary judgment and the vacation of the receivership). Yet, in the face of
the obvious facts and law, Berleth is purporting to act as Cyberlux’s general receiver
to settle some claims of some creditors in an interpleader action filed by HII Mission
Technologies Corp. (“HII”) in the United States District Court for the Eastern
District of Virginia, Richmond Division, Civil Action No. 3:25-cv-00483
(“Interpleader Action”). Berleth has no authority to act in that action (or to contact
any third parties), yet he is attempting to create some out of thin air for his benefit.
Accordingly, his ultra vires communications with Cyberlux’s vendors have no
bearing on the fact that the May 22, 2025 Turnover Order must be terminated.
B. Berleth Has Already Intentionally Violated and Continues to Violate the
Stay Imposed by this Court.
As Cyberlux has advised this Court in Relators’Application for Sanctions and
Request for Order to Show Cause Re Contempt for Robert W. Berleth’s Intentional
Violation of Stay, (“Berleth Sanctions Application”), filed on July 7, 2025, Berleth
has thumbed his nose at this Court’s stay order. Within 48 hours after this Court
issued an order “staying enforcement, utilization, or the taking actions under the
authority of the [Turnover Order] by the Receiver or any other persons or entities []”
(“Stay Order”), Receiver, Robert Berleth of Berleth & Associates, PLLC
(“Berleth”), intentionally violated that Stay Order. See Berleth Sanctions
Application. Berleth’s unauthorized actions surrounding his proposed global
2
settlement agreement, which Berleth touts as if it were some magnanimous act—as
opposed to a tactic to wrongfully inflate a claim for Berleth’s fees—have continued
to this day. The stay should continue until this Court resolves the issues presented
by Relators’ Petition for Writ of Mandamus and Appeal on the Merits. Without this
Court’s enforcement of that stay, Berleth will continue to undermine and tortiously
interfere with Cyberlux’s relationship with its creditors and business partners.
Otherwise, Berleth—as he has done many times before—will continue ignoring the
limits of his authority and harassing and interfering with Cyberlux and its vendors,
causing irreparable injury to Cyberlux to bolster his exorbitant fee.
Further, after the Berleth Sanctions Application was filed, additional
violations have come to light. For instance, as discussed further below, Berleth filed
“Berleth’s Second Report” in the trial court, stating it is “impossible” to terminate
receivership.
1 Then, on July 14, 2025, Berleth again violated this Court’s Stay Order,
contacting counsel for Advanced Navigation Positioning Corporation (“ANPC”)
and asking ANPC’s counsel to execute, via Docusign, the global settlement
documents Berleth prepared.2
1 Exhibit A.
2 Exhibits B-C.
3
C. Berleth’s Verified Response Lacks Candor.
Berleth’s verified response says every statement in his response is true and
correct. However, in his response, Berleth omits critical details to create a false
narrative in an obvious attempt to mislead the Court. These glaring omissions in and
of themselves rise to the level of misrepresentations.
Berleth acknowledges that he was appointed pursuant to Section 31.002 for
the limited purpose of assisting in collection of a consent judgment (“Sister State
Judgment”). Response at 4. However, Berleth fails to candidly point out the clear
limits of his appointment which do not include by any means assembling a purported
global settlement of all claims of every non-party creditor of Cyberlux that he can
find. He also fails to advise this Court that whatever limited authority he had ended
when more than enough funds were received by Berleth to fully satisfy Appellees’
sister-state judgment. Pandozy v. Beaty, 254 S.W.3d 613, 617 (Tex. App.—
Texarkana 2008, no pet.) (once the judgment was paid, the turnover order lost its
teeth and was of no further force and effect); Bennett/Nguyen Joint Venture v.
Coghlan, No. 01-10-00575-CV, 2011 WL 2732435, at *1 (Tex. App.—Houston [1st
Dist.] July 14, 2011, no pet.). In fact, Berleth himself acknowledged receivership
should end on June 11, 2025 when he filed his “Final Report, Final Accounting,
Verified Motion for Disbursement of Funds, and Motion to Terminate Receivership”
4
(“First Report”).
3 It was only after Appellants objected to Berleth’s unsubstantiated
claim for more than $800,000 after three weeks of work that Berleth decided to
about-face and take a scorched earth path designed to destroy Cyberlux and obtain
a near $6 million windfall.4
Instead, Berleth merely casts rocks at Cyberlux while advising the Court he
has “devoted significant time and resources for months to resolve Cyberlux’s debts.”
Response at 8. That time, allegedly spent on a globalsettlement of some of the claims
of some of Cyberlux’s creditors, is not what the 129th District Court empowered
Berleth to do by the signing of the Turnover Order. By Berleth’s own earlier
explanation, the overpayment to Berleth’s bank account occurred within a few weeks
of his appointment. Instead of doing the right thing, Berleth went out to hunt for
additional opportunities to make a claim for additional fees. The Turnover Order did
not allow Berleth to take such actions. Nor could it.5
This receivership is long past ripe to be closed out. On June 11, 2025, in the
trial court, Berleth presented his First Report without any proof as to the validity of
the accounting for the judgment amount, Berleth’s fees claimed, Berleth’s expenses,
3 App. No. 1930 – 42.
4 On top of the more than $800,000 Berleth initially sought, he’s now purporting to act on behalf
of Cyberlux in HII’s Interpleader Action, hurriedly working to get signatures on his draft
settlement that calls for $4,900,000 to be paid to him, by Cyberlux.
5 Even an overbroad Turnover Order cannot expand to the limits Berleth desires because the trial
court’s ability to appoint a post-judgment receiver is statutorily limited by TCPRC 31.002 only
“to the extent required to satisfy the judgment.” TEX. CIV. PRAC. & REM. CODE § 31.002(b)(3).
5
and other expenses.6 Yet, Berleth stated that he had received the $3,083,639.75 and
that the amount was sufficient to satisfy Appellees’ Sister-State Judgment.7 So, it is
clear on the record, that the Section 31.002 receivership imposed by the court below
must be terminated and Berleth has not provided any legitimate reason for it to
continue. Berleth has falsely advised the trial court in his Berleth’s Second Report8
that receivership cannot be terminated because Berleth was named by HII in HII’s
Interpleader Action. The only reason that occurred is because Berleth has falsely
represented and continues to falsely represent to HII that he has authority to act as a
general receiver over Cyberlux in this action. Berleth’s claim that it is “impossible”
to terminate receivership is patently false – indeed, it is obvious that a receiver
cannot extend a receivership for his own benefit and through a scheme of
misconduct.
Even if Berleth had coordinated with HII before he received the more than $3
million to satisfy the judgment, he has a duty to disclose to HII the nature of his
appointment and his authority. However, it is clear he was never forthright with HII
because, if he had been, he would have been dismissed from the Interpleader Action.
Certainly, a Section 31.002 receivership cannot be extended for the purpose of
6 App. No. 1930 – 42.
7 App. No. 1933 (“The receivership has completed with no further remaining issues pending the
final distribution of funds as detailed above.”).
8 Exhibit 1.
6
facilitating a completely unauthorized global settlement with respect to claims that
are not the subject of the final judgment out of which the receivership arose. Put
differently, Berleth cannot extend this receivership to settle claims over which he
never had authority, are not agreed upon by Cyberlux and, which Berleth is using
to try and gift himself $4.9 million. Berleth has no authority to even begin doing
what he has done, let alone acting as the judge as to contested claims involving
Cyberlux.
The plain fact is, by engaging in purported settlement negotiations with some
of Cyberlux’s creditors for the distribution of an account receivable of Cyberlux,
Berleth has tortiously interfered with Cyberlux’s relationship with its creditors and
with HII.
Additionally, he fails to advise this Court that the purported settlement is
doomed to failure since it does not include all of Cyberlux’s creditors, most notably,
Legalist which, as a secured creditor, has a first lien security interest in the $25
million account receivable. Response at 11. It is obvious Berleth is attempting to act
as a “spoiler” so that he can obtain some sort of payoff to fade away.
At p. 12 of his response, Berleth attempts to convince this Court that his
voluntary actions to create the above global settlement are somehow authorized by
the Order appointing him as the Section 31.002 receiver in this case. He points to
7
paragraph 22 of that order as somehow giving him the unbridled authority for his
actions.
Even assuming for the sake of argument Berleth correctly interpreted
paragraph 22, paragraph 22—and the entire Turnover Order—is limited to the
express limitations of Section 31.002. Thus, the trial court could only give Berleth
authority to act to “pay the proceeds to the judgment creditor[s] to the extent required
to satisfy the judgment.” TEX. CIV. PRAC. & REM. CODE § 31.002. All of Berleth’s
actions and efforts to negotiate with third parties are void, and everything Berleth
has done to collect funds for Appellees after receiving $3,083,639.75 is also void.
Nevertheless, in the face of Cyberlux’s requested relief of terminating
Receivership, Berleth claims this Court must keep the Section 31.002 receivership
alive because he is assembling a settlement of some of Cyberlux’s creditors as part
of the HII Interpleader Action. Response at 9. However, contrary to what Berleth
has represented to this Court, he has absolutely no authority to create a purported
global settlement of some of Cyberlux’s creditors and collecting on those creditors’
behalf one of Cyberlux’s accounts receivable in the sum of approximately $25
million. In those efforts, Berleth has tortiously interfered with Cyberlux’s business,
its creditors, partners, and customers.
8
CONCLUSION
While Berleth has ignored this Court’s temporary stay order and blatantly
violated it already, it is imperative the stay remain in effect during the pendency of
this appeal and that the Court enforce that stay. Should Berleth refuse to comply with
a continuing stay in the future and flout this Court’s orders, this Court can certainly
address that when Relators, as they have already done, provide this Court with notice
of Berleth’s transgressions. Appellants respectfully ask the Court to grant
Appellants’ motion, continue the stay, and take all available actions necessary to
enforce Appellees’ and Berleth’s compliance with the stay.
Respectfully submitted,
/s/ Douglas S. Lang
Douglas S. Lang
State Bar No. 11895500
Alexander J. Pennetti
State Bar No. 24110208
THOMPSON COBURN LLP
2100 Ross Avenue, Suite 3200
Dallas, Texas 75201
Tel Phone: (972) 629-7100
Fax: (972) 629-7171
dlang@thompsoncoburn.com
apennetti@thompsoncoburn.com
Attorneys for Relators and
Appellants Cyberlux Corporation
and Mark D. Schmidt
9
CERTIFICATION OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing
instrument was served on the following counsel for real parties in interest on this the
9th day of July 2025.
Shawn M. Grady
SBN 24076411
shawn@gradycollectionlaw.com
LAW FIRM OF SHAWN M. GRADY, PLLC
2100 West Loop South, Ste. 805
Houston, Texas 77027
Phone (832) 692-4542
Fax (832) 565-1796
Travis B. Vargo
SBN 24047027
tvargo@vargolawfirm.com
VARGO LAW FIRM, P.C.
12012 Wickchester Ln., Ste. 670
Houston, Texas 77079
Phone (713) 524-2441
Fax (832) 779-8838
James Sadigh
SBN 24129140
jamessadigh@aol.com
JAMES K. SADIGH, ATTORNEY AT LAW
9777 Wilshire Blvd., Ste 400
Beverly Hills, CA 90212
Phone (310) 747-5919
10
Bruce C. Tough
SBN 20151500
service@toughlawfirm.net
TOUGH LAW FIRM, PLLC
819 Crossbridge Drive
Spring, Texas 77373
Phone (281) 681-0808
Fax (281) 681-0809
David A. Walton
Texas Bar No. 24042120
dwalton@bellnunnally.com
BELL NUNNALLY & MARTIN LLP
2323 Ross Avenue, Suite 1900
Dallas, Texas 75201
Tel. (214) 740-1445
Fax (214) 740-5745
Anita Kawaja
LAW OFFICE OF ANITA KAWAJA
PO Box 31400
Houston, TX. 77231
Anita@AnitaKawajaLaw.com
The Honorable Michael Gomez
Judge, 129th Judicial District Court
Harris County Civil Courthouse
201 Caroline St., 10th Floor
Houston, Texas 77002
/s/ Douglas S. Lang
Douglas S. Lang
11
EXHIBIT A
CAUSE NO. 2024-48085
ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT
and SECURE COMMUNITY, LLC., §
Plaintiffs, Judgment-Creditors, §
§
v. § 129TH JUDICIAL COURT
§
CYBERLUX CORPORATION and §
MARK D. SCHMIDT, individually, § IN AND FOR
Defendants, Judgment-Debtors. § HARRIS COUNTY, TEXAS
RECEIVER’S SECOND REPORT
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, Robert W. Berleth, of Berleth & Associates, PLLC, as
Receiver, appointed by this Honorable Court as Receiver hereinafter the “Order”
files this Receiver’s Second Report, and for good cause shows the following:
A. REPORT OF RECEIVER
1. Termination of the receivership is impossible at this time because the
Receiver is a party to active litigation pending in the United Stated District Court
for the Eastern District of Virginia under Civil Action No. 3:25-cv-00483-JAG,
styled HII Mission Technologies Corp. v. Cyberlux Corporation.
2. Furthermore, due to the actions of Cyberlux since the payment
received on June 11, 2025, the Receiver’s reasonable and necessary attorneys’ fees
have substantially increased since the filing of the First Report. Cyberlux has filed
two separate appeals with the First Court of Appeals under case numbers 01-25-
00454-CV and 01-25-00455-CV.
Page 1 of 5
3. Lastly, Cyberlux has objected to both the Receiver’s Motion to
Terminate and the Receiver’s Proposed Order in two separate objections. Further
evidentiary hearings are required.
4. Since June 11, 2025, due to a lockout by the landlord and Cyberlux’s
failure to pay their own employees, there are no known “daily operations” for the
Receiver to disturb or interfere with.
5. On June 18, 2025, Defendants Cyberlux Corporation and Mark D.
Schmidt (“Cyberlux” or “Defendants”) filed Defendants’ Notice of Appeal to the
First or the Fourteenth Court of Appeals.
6. Since the June 30, 2025, Order from the First Court of Appeal the
Receiver continued his actions of not disturbing the daily operations and did not
taking any actions as Receiver against Cyberlux or Mark D. Schmidt.
7. From inception of the receivership, the Receiver has sought to settle
this and other litigations, giving proper credence to the other creditors of Cyberlux.
8. To stay or abate this receivership, thus giving Cyberlux
direct access to the Corpus of the ~$25 million pending payment, would
be a grave injustice to the other Creditors of Cyberlux.
9. On June 24, 2025, HII Mission Technologies Corp. filed an
interpleader action in the United Stated District Court for the Eastern District of
Virginia under Civil Action No. 3:25-cv-00483-JAG (“Federal Interpleader
Action”). See Exhibit 1. The Receiver is personally named as an Interpleader
Defendant/Claimant in the Federal Interpleader Action.
Page 2 of 5
10. The Receiver has retained counsel in Virginia. More importantly, the
Receiver continues to diligently seek, and is nearing a complete agreement
between all the parties to the Federal Interpleader Action.
11. The Receiver has drafted an agreed order and settlement. The
proposed agreed order would dispose of ~21 legal actions across the nation, at both
the state and federal level, and satisfy all known creditors of Cyberlux. The
proposed agreed order would specifically satisfy the underlying Virginia State
Court judgment upon which this receivership is based. If the proposed order is
entered by the Eastern District of Virginia, the Receiver will immediately advise
this Court of the order, and renew his Motion to Terminate the Receivership.
PRAYER
12. WHEREFORE, Receiver prays that:
a. The Receivership be retained; and,
b. Such other and further relief which Receiver is justly entitled.
Respectfully submitted by:
BERLETH & ASSOCIATES
Robert W. Berleth
Texas Bar # 24091860
SDOT #: 3062288
rberleth@berlethlaw.com
9950 Cypresswood, Suite 200
Houston, Texas 77070
Tele: 713-588-6900
Fax: 713-481-0894
APPOINTED RECEIVER
Page 3 of 5
VERIFICATION
STATE OF TEXAS §
§
COUNTY OF HARRIS §
BEFORE ME, the undersigned authority on this day personally appeared
Robert Berleth, who, being by me duly sworn upon oath deposed and stated as
follows:
“My name is Robert Berleth. I am the appointed Receiver in the abovestyled case and I have personal knowledge of the facts contained and asserted
herein. The facts contained herein are true and correct and I am fully authorized
to make this affidavit.”
Robert Berleth
APPOINTED RECEIVER
SWORN TO AND SUBSCRIBED before me by Robert Berleth on Friday, July 11,
2025, to certify which, witness my hand and seal of office.
__________________________
Notary Public in and for the
State of Texas
Printed Name: Sheli Marie Davis
My Commission Expires: April 25, 2029
Page 4 of 5
CERTIFICATE OF SERVICE
I hereby certify that on Friday, July 11, 2025, a true and correct copy of the
above and foregoing was forwarded to all counsel of record via certified mail,
return receipt requested, regular mail, e-mail and/or facsimile. Electronic records
were also forwarded in accordance with local rules through the E-file or CM/ECF
system.
Counsel for Creditor Via Texas E-file
Atlantic Wave Holdings, LLC
Shawn M. Grady
SBN 24076411
shawn@gradycollectionlaw.com
2100 West Loop South, Ste. 805
Houston, Texas 77027
Counsel for Debtor, Via Texas E-file
Cyberlux Corporation
Alexander J. Pennetti
State Bar No. 24110208
THOMPSON COBURN LLP
2100 Ross Avenue, Suite 3200
Dallas, Texas 75201
Respectfully submitted by:
BERLETH & ASSOCIATES
Robert Berleth
Texas Bar # 24091860
SDOT #: 3062288
E-mail: rberleth@berlethlaw.com
Tristian Harris
Texas Bar # 24134449
E-mail: tharris@berlethlaw.com
9950 Cypresswood Dr. Suite 200
Tele: 713-588-6900
APPOINTED RECEIVER
Page 5 of 5
Receiver’s
Exhibit 1
Interpleader Complaint
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 1 of 18 PageID# 258
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
HII MISSION TECHNOLOGIES CORP.,
Interpleader Plaintiff,
v. Civil Action No.: _______________
CYBERLUX CORPORATION,
Serve: CT Corporation System, Registered Agent
160 Mine Lake Ct., Suite 200
Raleigh, NC 27615
ATLANTIC WAVE HOLDINGS, LLC,
Serve: Ryan A. Brown, PLLC, Registered Agent
1739 Clarendon Blvd.,
Arlington, VA 22209
SECURE COMMUNITY, LLC,
Serve: Ryan A. Brown, PLLC, Registered Agent
1739 Clarendon Blvd.,
Arlington, VA 22209
LEGALIST SPV III, LP,
Serve: Corporation Service Company, Registered Agent
251 Little Falls Drive
Wilmington, DE 19808
THIN AIR GEAR, LLC,
Serve: Eastbiz.com, Inc., Registered Agent
5348 Vegas Drive,
Las Vegas, NV 89108
AEROTEK, INC.,
Serve: Corporation Service Company, Registered Agent
100 Shockoe Slip, Fl. 2,
Richmond VA 23219
ARG GROUP, LLC,
Serve: Rama Potturu, Registered Agent
2783 W. Monterey Pl.,
Chandler, AZ 85224
3:25cv483
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 2 of 18 PageID# 259
RB CAPITAL PARTNERS INC.
Serve: Thomas Joseph Beener, Registered Agent
5143 Shore Drive,
Carlsbad, CA 92008
UNITED STATES OF AMERICA
Serve: Erik S. Siebert, Interim U.S. Attorney for the Eastern District of Virginia
919 E. Main St
Suite 1900
Richmond, VA 23219
THIRD GENERATION DEVELOPMENT, L.P.
Serve: Third Generation Development GP, LLC, Registered Agent
21625 Rhodes Road
Spring, TX 77388
MONTAGUE CAPITAL PARTNERS, LLC
Serve: Denis Kalenja, Registered Agent
101 Glen Lennox Dr., Suite 300
Chapel Hill, NC 27517
ADVANCED NAVIGATION AND POSITIONING CORPORATION
Serve: Jeff Mains, Registered Agent
489 N. 8th St., Suite 203
Hood River, OR 97031
PHILLIP R. TUCKER
Serve: 6222 Darby Way,
Spring, TX 77389
NEILL WHITELEY
Serve: 105 Canvas Back Dr.,
Montgomery, TX 77316,
and
ROBERT W. BERLETH, solely in his capacity as Receiver for Cyberlux Corporation
Serve: Robert W. Berleth
Berleth & Associates
9950 Cypresswood Dr., Suite 200
Houston, TX 77070
Interpleader Defendants/Claimants.
2
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 3 of 18 PageID# 260
COMPLAINT FOR INTERPLEADER
The Plaintiff, HII Mission Technologies Corp, (“HII”), by counsel, for its Complaint for
Interpleader pursuant to 28 U.S.C. § 1335, states as follows:
Introduction
1. This is an action to interplead funds that are or may be owed to Cyberlux by HII.
HII interpleads the funds because the Creditor Defendants (as defined below) have each claimed
or may claim a right and/or interest in the funds, including a dispute by the Creditor Defendants
as to the priority of said rights, claims, and/or interests.
2. Due to competing claims to the funds, HII may be subject to multiple or conflicting
liabilities and/or proceedings to recover the funds and is not in a position to determine the proper
recipient, beneficiary or beneficiaries of those proceeds. HII seeks interpleader relief to avoid
conflicting and multiple liabilities, claims, and proceedings by the various Creditor Defendants
with respect to the funds.
Parties
3. HII is a Delaware corporation with its principal place of business in McLean,
Virginia.
4. Upon information and belief, Defendant Cyberlux Corporation (“Cyberlux”) is a
Nevada stock corporation with its principal place of business in Durham County, North Carolina.
5. Upon information and belief, Defendant Atlantic Wave Holdings, LLC (“Atlantic
Wave”) is a Virginia limited liability company with its principal place of business in Richmond,
Virginia.
6. Upon information and belief, Defendant Secure Community, LLC (“Secure”) is a
Virginia limited liability company with its principal place of business in Richmond, Virginia.
3
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 4 of 18 PageID# 261
7. Upon information and belief, Defendant Legalist SPV III, LP (“Legalist”) is a
Delaware limited partnership with its principal place of business in San Francisco, California.
8. Upon information and belief, Defendant Thin Air Gear, LLC (“Thin Air”) is a
Nevada limited liability company with its principal place of business in Colorado Springs,
Colorado.
9. Upon information and belief, Defendant Aerotek, Inc. (“Aerotek”) is a Maryland
stock corporation authorized to do business in Virginia, with its principal place of business in
Hanover, Maryland, and its Virginia registered agent in Richmond, Virginia.
10. Upon information and belief, Defendant ARG Group, LLC (“ARG Group”) is an
Arizona limited liability company with its principal place of business in Chandler, Arizona.
11. Upon information and belief, Defendant RB Capital Partners, Inc. (“RB Capital”)
is a California corporation with its principal place of business in La Jolla, California.
12. The United States of America (“United States”) is named as a party defendant
pursuant to 28 U.S.C. § 2410 as it may claim an interest in the Disputed Funds (as defined below)
by virtue of federal tax liens asserted by the Internal Revenue Service (“IRS”) against Cyberlux’s
property interests.
13. Upon information and belief, Defendant Third Generation Development, L.P.
(“Third Generation”) is a Texas limited partnership with its principal place of business in Spring,
Texas.
14. Upon information and belief, Defendant Montague Capital Partners, LLC
(“Montague”) is a North Carolina limited liability company with its principal place of business in
Chapel Hill, North Carolina.
4
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 5 of 18 PageID# 262
15. Upon information and belief, Defendant Advanced Navigation and Positioning
Corporation (“ANPC”) is a Delaware corporation with its principal place of business in Hood
River, Oregon.
16. Upon information and belief, Defendant Phillip R. Tucker (“Tucker”) is a natural
person and an adult citizen of Texas.
17. Upon information and belief, Defendant Neill Whiteley (“Whiteley”) is a natural
person and an adult citizen of Texas.
18. Upon information and belief, Defendant Robert W. Berleth, solely in his capacity
as receiver for Cyberlux (the “Receiver”), is a natural person and an adult citizen of Texas
appointed by the 129th Judicial District Court for Harris County, Texas (the “Texas Court”) as
receiver of Cyberlux pursuant to Tex. Prac. & Rem. Code § 31.002 with respect to collection of a
domesticated judgment in favor of Atlantic Wave.
19. Except for Cyberlux, all Defendants shall be referred to herein collectively as
“Creditor Defendants.”
Jurisdiction and Venue
20. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1335 because
HII seeks to interplead money in an amount of at least $500, two or more Creditor Defendants are
of diverse citizenship, and HII intends to deposit the Disputed Funds (as defined below) into the
Registry of this Court.
21. This Court has jurisdiction over the Creditor Defendants and Cyberlux pursuant to
28 U.S.C § 2361.
22. This Court has jurisdiction over the United States pursuant to 28 U.S.C. §
2410(a)(5).
5
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 6 of 18 PageID# 263
23. Venue is appropriate in this District pursuant to 28 U.S.C. § 1397 because one or
more of the Creditor Defendants (including Aerotek, Atlantic Wave, and Secure) reside in this
District within the meaning of 28 U.S.C. § 1391(c)(2). In addition, under Section 24 of the
Subcontract (defined below), Cyberlux agreed that “any action arising out of or relating to this
Subcontract shall be brought exclusively in any state or Federal court in Virginia.”
24. Venue is also appropriate in this Division pursuant to Local Civil Rule 3(C) because
one or more of the Creditor Defendants (including Aerotek, Atlantic Wave, and Secure) reside in
this Division within the meaning of 28 U.S.C. § 1391(c)(2).
Factual Background
25. Effective August 29, 2023, HII’s predecessor in interest and Cyberlux entered into
Subcontract No. P000043846 (the “Subcontract”).
26. The Subcontract is a firm fixed price contract for work by Cyberlux to support HII’s
work under Prime Contract No. GS00Q14OADU109; Task/Delivery Order No. 47QFCA22F0039
and Technical Direction Letter 1-023 (the “Prime Contract”) supporting the Department of the
Navy and the General Services Administration (“GSA”), Federal Systems Integration and
Management Center, which is part of the GSA Federal Acquisition Service, Office of Assisted
Acquisition Services (collectively, the “Government”).
27. The period of performance for the Subcontract was to be from August 29, 2023
through July 24, 2024.
28. On May 13, 2024, the contracting officer for the Prime Contract terminated for
convenience the portion of the Prime Contract scope of work relevant to the Subcontract.
29. On May 17, 2024, HII terminated for convenience the Subcontract, in accordance
with the Subcontract’s applicable terms and conditions.
6
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 7 of 18 PageID# 264
30. Section 32.1 of the Subcontract, among other things, provides that HII’s “sole
obligation to [Cyberlux] in the event of a termination for convenience shall be to pay [Cyberlux]
a percentage of the Subcontract price corresponding with the percentage of the terminated work
actually performed prior to the notice of termination, plus [Cyberlux’s] reasonable expenses
incurred as a direct result of the termination.”
31. HII and Cyberlux executed Modification No. 4 to Subcontract No. P000043846 to
Effectuate a Termination Settlement (“Mod. 4”), effective February 26, 2025, which governs the
parties respective duties and obligations on and after that effective date.
32. Mod. 4 requires Cyberlux to make shipment and delivery of certain inventory in
accordance with the direction of the Government, among other obligations of Cyberlux.
33. In Mod. 4, Cyberlux and HII also agreed upon amounts payable to Cyberlux under
the Subcontract in connection with the termination for convenience of the Subcontract and prior
stop work orders.
34. On May 28, 2025, HII received a partial payment from the Government in the
amount of $2,757,254.39 related to termination and stop work costs under Mod. 4.
35. On or about May 30, 2025, to the best of HII’s knowledge and belief, Cyberlux
completed shipment of the inventory to be shipped to the Government under Mod. 4.
36. Under the terms of Mod. 4, HII is not required to make any payment to Cyberlux
with respect to any invoice unless and until HII receives payment from the Government for such
invoice.
37. In addition, under the terms of Mod. 4, HII is not required to make any payment to
Cyberlux unless and until HII receives from Cyberlux releases from Cyberlux’s creditors in the
form specified at Attachment B to Mod. 4.
7
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 8 of 18 PageID# 265
38. Specifically, § 5 of Mod. 4 provides in relevant part:
e. HII will promptly notify Cyberlux after HII receives payment from the
Government with respect to any Cyberlux invoice. For avoidance of doubt, in no
case shall HII be required to pay Cyberlux for an invoice unless and until HII first
receives payment from the Government for such invoice.
f. Within 2 business days after receiving HII’s first notification in Section 5(e),
Cyberlux shall provide (i) a certified statement of amounts it then owes to Legalist,
Atlantic Wave Holdings, Secure Community, and Thin Air Gear, and any other
creditors of Cyberlux identified by HII, and (ii) a completed and signed version of
Attachment B to this Agreement from each such creditor. HII shall have the right
to identify additional Cyberlux creditors and to require the same information,
including a completed and signed version of Attachment B, for any such additional
Cyberlux creditors.
g. HII will pay to Cyberlux amounts properly due under Cyberlux’s invoice no later
than 5 business days after receiving payment from the Government, provided that
the conditions in Section 5(f) have been satisfied. If a creditor refuses to provide
consent or to hold HII harmless for making payment to Cyberlux, HII may
choose in its sole discretion to: (i) withhold such payment (or a reasonable portion
thereof, to be determined in HII’s sole discretion) unless and until that condition is
satisfied, (ii) make payment to Cyberlux notwithstanding that condition has not
been satisfied, or (iii) interplead the funds otherwise payable to Cyberlux (or a
reasonable portion thereof, to be determined in HII’s sole discretion), in which
case HII will be deemed to have satisfied its payment obligations with respect to
the interpleaded funds.
(emphasis added).
39. Under § 7 of Mod. 4, Cyberlux agrees “to indemnify and to hold HII . . . harmless
from and against any and all damages, expenses, liabilities, and losses (including without
limitation attorneys’ fees and other out-of-pocket expenses, internal charges, judgments, taxes, and
amounts paid or to be paid in settlement) incurred or suffered by [HII] in connection with any . . .
threatened, pending or completed inquiry, claim, action, suit, or proceeding arising out of or
relating to . . . Cyberlux’s liabilities to its creditors, even if Cyberlux disputes such liabilities[.]”
40. As of this filing, Cyberlux has completed some, but not all of its obligations and
conditions precedent to payment under Mod. 4.
8
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 9 of 18 PageID# 266
41. HII is in receipt of only one executed Attachment B creditor release from Thin Air.
42. If Cyberlux successfully completes all of its obligations under the Subcontract and
Mod. 4 or HII otherwise waives them, then HII is indebted to Cyberlux, after recoupment and
setoff of amounts which Cyberlux then owes to HII pursuant to § 7 of Mod. 4 and otherwise (as
described below), in the amount of $2,486,557.29 (the “Disputed Funds”).
43. Since execution of Mod. 4 in February of 2025, HII has incurred $270,697.10 in
attorneys’ fees and related costs arising out of or relating to proceedings and other matters
involving actions by Cyberlux’s creditors, including:
a. Continued engagement of government contracts counsel to analyze and manage
Prime Contract and Subcontract issues arising out of and relating to Cyberlux’s
liabilities to its creditors;
b. Engagement of Virginia counsel to review and respond to, among other creditor
process and correspondence, a garnishment summons served on HII by Atlantic
Wave in the Circuit Court of Fairfax; and
c. Engagement of Texas counsel to review and address, among other things, a
subpoena delivered to HII by the Receiver for Cyberlux appointed to assist with
collecting Atlantic Wave’s judgment in Texas.
44. The Disputed Funds represent the amount that would otherwise be payable to
Cyberlux by HII after setting off and recouping the amount owed by Cyberlux in attorneys’ fees
and costs pursuant to § 7 of Mod. 4. As of the date of this filing, that amount is $270,697.10 and
will likely increase..
45. HII anticipates submitting an additional invoice(s) to the Government in connection
with the completed shipment by Cyberlux and Mod. 4.
9
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 10 of 18 PageID# 267
46. HII anticipates that additional funds (in the approximate amount of
$23,012,113.64) may be received by HII that would be payable to Cyberlux upon satisfaction of
the conditions precedent of Mod. 4 and completion of Cyberlux’s obligations under the
Subcontract and Mod. 4 (or if HII otherwise waives such obligations).
47. If and when such additional amounts become potentially payable to Cyberlux, HII
intends to supplement this filing to seek interpleader of the additional funds, after recoupment and
setoff of amounts which Cyberlux then owes to HII pursuant to § 7 of Mod. 4 and otherwise, which
continue to accrue.
Adverse Claimants
48. Multiple Creditor Defendants claim an interest in the Disputed Funds.
49. HII takes no position as to whom any amounts otherwise payable by HII to
Cyberlux should be directed.
50. HII takes no position on the priority of the liens, claims or interests held by or
asserted to be held by the Creditor Defendants in the Disputed Funds.
Legalist
51. By letter dated April 5, 2024 from Legalist (attached hereto as Exhibit 1), HII was
informed that Cyberlux had granted a security interest in and assigned to Legalist its accounts
receivable from HII, pursuant to an Instrument of Assignment.
52. As a result, Legalist directed HII to pay to Legalist all “amounts ordinarily payable
to [Cyberlux] under the [Subcontract.]”
53. Thus, Legalist has asserted that it has a perfected security interest in, or ownership
of, any amounts payable from HII to Cyberlux, including the Disputed Funds.
10
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 11 of 18 PageID# 268
54. On or about July 12, 2024, Cyberlux executed and delivered to HII a letter
agreement in which Cyberlux “acknowledge[d] and expressly consent[ed] to HII Mission
Technologies Corp. (‘HII’) paying to Legalist . . . all amounts that otherwise become due and
owing to Cyberlux under [the Subcontract] after the date of execution of this Exhibit . . . until such
time HII receives written notice from Cyberlux or Legalist to cease such payments to Legalist, in
lieu of payment to Cyberlux under the Subcontract[.]”A true and correct copy of the July 12, 2024
letter is attached as Exhibit 2.
55. To date, HII has made no payments to Legalist because no amounts have been
payable to Cyberlux pursuant to Mod. 4 since April 5, 2024.
56. The outstanding balance of the debt secured by Legalist’s asserted security interest,
if any, is unknown to HII. However, by letter dated May 30, 2025 (attached as Exhibit 3) Cyberlux
has stated that it was indebted to Legalist in the amount of $7,762,932.96 as of April 30, 2025.
Atlantic Wave and Secure Community
57. On March 11, 2025, HII was served with a garnishment summons by Atlantic Wave
and Secure (the “Garnishment Summons”) in case number CL25-3413 in the Circuit Court of
Fairfax County, Virginia, seeking to garnish “[a]ny monies owed to” Cyberlux based on a
judgment entered in favor of Atlantic Wave and Secure and against Cyberlux and Mark Schmidt
by the Circuit Court of the City of Richmond on June 28, 2023.
58. A true and correct copy of the Garnishment Summons is attached as Exhibit 4.
59. According to the Garnishment Summons, the total judgment balance due to
Cyberlux was $1,444,543.11 as of March 7, 2025.
60. In addition to the judgment, the Atlantic Wave and Secure have asserted they also
have a UCC security interest in Cyberlux’s accounts receivable, and that such security interest (i)
11
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 12 of 18 PageID# 269
has priority over Legalist’s asserted security interest, and (ii) secures indebtedness by Cyberlux in
excess of the amount sought on the Garnishment Summons, up to approximately $6,000,000. See
April 24, 2025 Letter attached as Exhibit 5 and May 19, 2025 email chain attached as Exhibit 6.
61. In addition to obtaining issuance of the Garnishment Summons in Fairfax Circuit
Court, Atlantic Wave has also domesticated its judgment against Cyberlux in the Texas Court,
commencing Cause No. 2024-48085.
62. On or about May 22, 2025, the Texas Court, entered an order appointing the
Receiver for Cyberlux to collect the Atlantic Wave judgment pursuant to Tex. Prac. & Rem. Code
§ 31.002 (authorizing appointment of receiver “with the authority to take possession of the
nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required
to satisfy the judgment”).
63. A true and correct copy of the order appointing the Receiver is attached as Exhibit
7.
Other Creditors of Cyberlux Who Have Claimed An Interest in the Disputed Funds
64. In addition to the above referenced lien creditors of Cyberlux, several other
creditors of Cyberlux have written HII asserting an interest in the Disputed Funds.
65. By letter dated April 25, 2025 (attached as Exhibit 8), Thin Air asserted it is “an
interested stakeholder in any funds due to Cyberlux in an effort to compensate their subcontractors
for the products produced.”
66. By letter dated April 25, 2025 (attached as Exhibit 9), Aerotek asserted it is “an
interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has not
satisfied debts due and owed to Aerotek, in whole or in part, under a valid and enforceable
judgment, writ of garnishment, or lien,” based on a North Carolina judgment.
12
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67. By letter dated April 28, 2025 (attached as Exhibit 10), ARG Group asserted it is
“an interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has
not satisfied debts due and owed to ARG, in whole or in part, under a valid and enforceable
contract[.]”
68. While HII takes no position as to whether or to what extent any of these creditors
has an interest in Cyberlux’s account receivables, these purported creditors of Cyberlux have
claimed an interest in the amounts which may become payable to Cyberlux by HII.
Interest of the United States in the Disputed Funds
69. On October 10, 2023, the IRS filed with the Secretary of State of North Carolina a
Notice of Federal Tax Lien against Cyberlux, with such notice prepared and signed in Baltimore,
Maryland, on September 28, 2023, by T. McCrimmon, Acting Manager. A true copy of the
October 10, 2023 Notice of Federal Tax Lien is attached hereto as Exhibit 11.
70. On October 26, 2023, the IRS filed with the Secretary of State of North Carolina a
Notice of Federal Tax Lien against Cyberlux, with such notice prepared and signed in Baltimore,
Maryland, on October 16, 2023, by T. McCrimmon, Acting Manager. A true copy of the October
26, 2023 Notice of Federal Tax Lien is attached hereto as Exhibit 12.
71. On April 30, 2024, the IRS filed with the Secretary of State of North Carolina a
Notice of Federal Tax Lien against Cyberlux, with such notice prepared and signed in Baltimore,
Maryland, on April 16, 2024, by T. McCrimmon, Acting Manager. A true copy of the April 30,
2024 Notice of Federal Tax Lien is attached hereto as Exhibit 13.
72. All the above Notices of Federal Tax Liens (the “Notices”) were filed against
Cyberlux, listing its residence as 800 Park Offices Drive, Suite 3209, Durham, North Carolina
27709. The total sum listed on the Notices is approximately $582,800.38.
13
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Other Potential Claimants and Creditors of Cyberlux
73. RB Capital has an action pending against Cyberlux in the United States District
Court for the Southern District of California as Case No. 3:24-cv-01434, and Cyberlux has
estimated that it owes or will owe RB Capital approximately $4,100,000. See Ex. 3.
74. By letter dated June 4, 2025 (attached as Exhibit 14), the Receiver identified
several other creditors of Cyberlux who are owed obligations but do not have a final judgment:
a. On information and belief, Third Generation may claim an interest in the
Disputed Funds based on alleged amounts owed to it by Cyberlux for the lease of a Spring,
Texas warehouse.
b. On information and belief, Montague may claim an interest in the Disputed
Funds based on alleged amounts owed to it by Cyberlux under several contracts.
c. On information and belief, ANPC may claim an interest in the Disputed Funds
based on alleged amounts owed to it by Cyberlux pursuant to a purchase agreement.
d. On information and belief, Tucker may claim an interest in the Disputed Funds
based on alleged amounts owed to him by Cyberlux in connection with the purchase of his
interest in Catalyst Machineworks, LLC (“Catalyst”) and employment of Tucker by
Cyberlux.
e. On information and belief, Whiteley may claim an interest in the Disputed
Funds based on alleged amounts owed to him by Cyberlux in connection with the purchase
of his interest in Catalyst and employment of Whiteley by Cyberlux.
14
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 15 of 18 PageID# 272
COUNT I – INTERPLEADER TO DEPOSIT
DISPUTED FUNDS INTO THE REGISTRY OF THE COURT
75. HII incorporates by reference the allegations of the preceding paragraphs as if fully
set forth herein.
76. Based on the existence of competing claims to the Disputed Funds and Virginia
Code § 8.9A-406, HII is at risk of multiple competing claims against it to recover the Disputed
Funds and cannot adequately determine to whom payment of the Disputed Funds should be
directed.
77. HII files this interpleader action so that the Creditor Defendants and Cyberlux can
assert their rights, claims and interests in the Disputed Funds in a single forum and take such action
as each deems proper, and so that HII is not exposed to multiple or inconsistent proceedings and
competing claims to the Disputed Funds.
78. If Cyberlux completes all of its obligations under the Subcontract and Mod. 4 or if
HII otherwise waives such requirements upon release of HII through this action, the Disputed
Funds would become due and owing to Cyberlux. However, due to the competing creditor claims
described above, HII cannot determine without peril the payee of the Disputed Funds.
79. Upon deposit of the Disputed Funds into the Court pursuant to this interpleader
action, HII will have no beneficial interest in the Disputed Funds, as HII will have discharged its
obligations, if any, under the Subcontract and Mod. 4 with respect to those Disputed Funds.
80. HII otherwise claims no beneficial interest in the Disputed Funds, and HII is instead
a mere stakeholder.
81. HII is uncertain as to priority, payment, and the validity of the claims to the
Disputed Funds and lacks sufficient present knowledge, information, and belief to make such
determination.
15
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 16 of 18 PageID# 273
82. As such, HII seeks to interplead the Disputed Funds into the Court for
disbursements to the Creditor Defendants and/or Cyberlux, based on the Court’s adjudication of
the varying interests and priorities of such parties.
83. HII is ready, willing, and able to deposit the Disputed Funds into the Registry of
the Court upon issuance of an order authorizing the deposit of said funds.
84. Pursuant to 28 U.S.C. § 2361, HII is entitled to an order enjoining Cyberlux and
the Creditor Defendants, and anyone acting directly or indirectly on their behalf, from commencing
or maintaining any action in any state or federal court against HII for the recovery of any claim, in
whole or in part, against the Disputed Funds.
85. HII should be discharged as a disinterested stakeholder and should recover its
reasonable attorneys’ fees and costs for the services rendered in prosecuting this interpleader
action.
PRAYER FOR RELIEF
WHEREFORE, HII Mission Technologies Corp., by counsel, respectfully requests that the
Court enter an order:
A. Authorizing HII to deposit the Disputed Funds ($2,486,557.29) into the Registry of
the Court in full and final satisfaction of HII’s obligations to Cyberlux under the Subcontract and
Mod. 4 with respect to such funds, with such Disputed Funds to be disbursed upon the Court’s
subsequent adjudication of which of the Creditor Defendants and/or Cyberlux are rightfully
entitled to the Disputed Funds, and in which amount and priority;
B. Declaring and ordering that upon HII’s deposit of the Disputed Funds with the
Clerk of Court, in accordance with the Court’s order, that HII shall be wholly and completely
discharged and released from any and all liability to Cyberlux, the Creditor Defendants, and any
16
Case 3:25-cv-00483-JAG Document 1 Filed 06/24/25 Page 17 of 18 PageID# 274
other parties later joined to this action, and each of the agents, employees, affiliates, parents,
subsidiaries, successors, predecessors, and assigns of the foregoing, related to or arising from the
Disputed Funds;
C. Declaring that HII, including its agents, parent, affiliates, employees,
representatives, trustees, predecessors, successors and assigns, shall be released, discharged, and
exculpated from and against any and all liabilities, claims, security interests, liens, writs, trusts,
suits, debts, judgments, dues, sums and/or causes of action, whether at law or in equity, related to
or arising from the Disputed Funds;
D. Permanently restraining and enjoining Cyberlux, the Creditor Defendants, and each
of their privies, agents, or affiliates from instituting and/or prosecuting a suit, civil action or civil
proceeding in any state, federal or other court of competent jurisdiction against HII asserting any
claims arising from or related to the Disputed Funds, to the fullest extent of law, including under
28 U.S.C. § 2361;
E. Awarding HII out of the funds to be deposited into the Registry of this Court, an
amount to be determined as reimbursement for the costs, attorneys’ fees, and other expenses that
HII is compelled to expend in the prosecution of this interpleader action pursuant to § 7 of Mod. 4
and/or the Court’s equitable and inherent power, see, e.g., Sun Life Assurance Co. v. Bew, 530 F.
Supp. 2d 773, 775 (E.D. Va. 2007);
F. Dismissing HII with prejudice from this action and discharging HII from any and
all further liability with respect to, affecting, or in any way arising out of the Disputed Funds with
an express finding of finality pursuant to Fed. R. Civ. P. 54(b); and
G. Awarding HII such other and further relief in its favor as the Court deems equitable
and just.


THIS IS CRAZY THAT THEY PREDICTED THAT THIS IS EXACTLY WHAT ROBERT BERLETH WOULD TRY TO DO A YEAR AGO... he must go to jail. He WILL!

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
HII MISSION TECHNOLOGIES CORP.
Interpleader Plaintiff,
v.
CYBERLUX CORPORATION, et. al.
Defendants.
)
)
)
)
)
)
)
)
)
)
Case No.: 3:25-cv-00483
MEMORANDUM IN SUPPORT OF CYBERLUX CORPORATION'S
MOTION FOR SUMMARY JUDGMENT REGARDING THE DISPUTED FUNDS
I. INTRODUCTION
Defendant Cyberlux Corporation (Cyberlux) respectfully submits this memorandum in
support of its motion for summary judgment regarding the Disputed Funds. Cyberlux recognizes
that it occupies an unusual posture in this proceeding, a debtor moving for summary judgment in
an interpleader action. But Cyberlux's position is not unusual when viewed in the proper light.
Cyberlux is not merely a passive debtor awaiting distribution. It is the party that invested more
than $4 million of its own capital to perform a government defense contract, the party whose
accounts receivable constitute the very res before this Court, and a party with a direct and
cognizable entitlement to the Disputed Funds.
Had HII Mission Technologies Corp. (HII) simply paid Cyberlux in the ordinary course
upon completion of its contractual obligations, as the Subcontract and Modification No. 4
contemplated, Cyberlux would have managed its creditor obligations itself, paid its secured
creditors, satisfied its debts, and continued operating its defense technology business without the
intervention of this Court. Instead, HII elected to interplead approximately $23,736,937.56 into
this Court, stripping Cyberlux of its ability to manage its financial obligations and exposing it to
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 1 of 19 PageID# 4155
2
the compounding harm of accumulating interest, fees, and penalties that grow with each passing
month.
Cyberlux files this brief to bring before the Court three central propositions. First, the Court
should exercise its equitable authority to limit the interest that secured creditors may claim against
the Disputed Funds to the amounts accrued as of the filing and service of the interpleader action
on or about June 24, 2025. The interpleader froze Cyberlux's ability to pay its debts; the creditors
should not be permitted to profit from that freeze through the relentless accumulation of interest
against a finite res that Cyberlux can no longer access. Second, because the Disputed Funds
originated exclusively from a United States Government defense contract for the manufacture and
deployment of unmanned aerial systems, only those creditors whose claims bear a direct nexus to
that contract performance should be entitled to participate in the distribution. Claims arising
outside the scope of that government contract work should not deplete a res generated by, and
intended for, defense manufacturing purposes. Third, Cyberlux is entitled to recover from the
Disputed Funds its initial capital investment of at least $4 million, funds Cyberlux expended in
direct performance of the HII Subcontract, and should not be punished because HII chose to
interplead rather than pay in the ordinary course.
II. STATEMENT OF UNDISPUTED MATERIAL FACTS
1. HII and Cyberlux entered into Subcontract No. P000043846 in August 2023, subsequently
modified by Modification No. 4, effective February 26, 2025 (Mod. 4). Under the Subcontract,
Cyberlux was to design, manufacture, and deliver unmanned aerial systems (drones) and related
defense technologies to support United States Department of Defense operations.
2. HII received a total of $25,769,369.03 from the United States Government in connection
with the terminated Subcontract.
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 2 of 19 PageID# 4156
3
3. HII interpleaded $23,736,937.56 into this Court pursuant to 28 U.S.C. § 1335. The
interpleader action was filed on or about June 24, 2025.1
4. Cyberlux invested more than $4 million of its own capital in direct performance of its
obligations under the HII Subcontract, with the expectation that it would be paid in the ordinary
course upon completion of its obligations.
5. The following parties have asserted claims against the Disputed Funds, with total secured
claims of approximately $24,280,797.01, which exceeds the available fund:
• Legalist SPV III, LP: $13,650,513.94 total ($10,996,543.10 principal; $2,653,970.84
interest), with a priority date of April 1, 2024, and approximately $1,999,676.16 in fees
and interest accrued since the interpleader was filed.
• WeShield / Roman Investments / MAS USA / Sinensky (collectively, the Assure
Global Claimants): $5,007,138.41 total ($3,739,461.10 principal; $1,267,677.31 interest),
with a priority date of October 23, 2025, representing a 43% increase over the original
Cyberlux settlement amount.
• ANPC: $3,087,878.86 total ($2,830,050.00 principal; $257,828.86 interest), with a priority
date of December 30, 2024 (equitable) or September 24, 2025 (lien).
• TAG (Thin Air Gear): $1,385,489.46 total ($450,000 principal; $935,489.46 interest),
with a priority date of August 29, 2025, based on treble damages agreed to by the Texas
Receiver.
• United States (IRS): $1,149,776.34, with priority dates spanning 2011-2024.
6. Atlantic Wave Holdings, LLC and Secure Community, LLC assert claims of approximately
1 The First Amended Interpleader Complaint was filed and served on or about August 4, 2025.
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 3 of 19 PageID# 4157
4
$6,025,000 but have already received or positioned themselves to receive substantial recoveries
through a Fairfax County garnishment order ($1,444,543.11) and a Texas receivership
($3,083,639.75).
7. Fairwinds Technologies asserts a claim of $2,348,542 but holds no secured interest in the
Disputed Funds.
8. Cyberlux is a U.S.-based defense technology company that designs, manufactures, and
deploys mission-critical technologies, including unmanned aerial systems, tactical
communications platforms, and advanced defense solutions for the Department of Defense and
allied partners. Cyberlux has an order backlog of approximately $17 million and a pending U.S.
CECOM order for $8.8 million that it cannot fulfill due to the capital restrictions caused by the
interpleader.
9. Since the interpleader was filed, Cyberlux has been unable to secure capital through
traditional financing, has been forced into predatory payday-loan financing at interest rates
approaching 100%, has lost critical government orders, and its share price has declined by
approximately 52%.
III. LEGAL STANDARD
Summary judgment is appropriate when there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). In the second stage
of an interpleader action, the Court adjudicates the competing claims to the interpleaded fund. At
this stage, any party with a cognizable interest in the fund, including the debtor whose receivables
constitute the res, may move for summary judgment on its entitlement and the relative priority of
competing claims. See generally Commerce Funding Corp. v. Southern Financial Bank, 80 F.
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 4 of 19 PageID# 4158
5
Supp. 2d 582, (E.D. Va. 1999); Sun Life Assurance Co. v. Bew, 530 F. Supp. 2d 773 (E.D. Va.
2007).
Once funds are deposited into the registry of the Court, the Court exercises broad equitable
discretion over the distribution of the interpleaded res. See generally Sanders v. Armour Fertilizer
Works, 292 U.S. 190 (1934). This equitable authority extends to limiting the accrual of interest
against the fund, determining priority among competing claimants, and fashioning an appropriate
distribution that accounts for the nature and origin of the funds. The Court's equitable power is at
its apex in interpleader proceedings, where the very purpose of the action is to prevent inequitable
results. See generally State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523 (1967).
IV. ARGUMENT
A. Cyberlux Has a Direct Entitlement to the Disputed Funds
Cyberlux is not a bystander in this proceeding. The Disputed Funds are derived entirely
from Cyberlux's performance of a government defense contract. The $23,736,937.56 interpleaded
by HII represents payments HII received from the United States Government for work that
Cyberlux performed, specifically, the design, manufacture, and delivery of unmanned aerial
systems and related defense technologies. Cyberlux invested more than $4 million of its own
capital in performing this contract, and those funds would have been recovered through ordinary
payment had HII not elected to interplead.
Cyberlux's entitlement is therefore not derivative or speculative. It is the primary
entitlement: these funds exist because Cyberlux performed. Under the Subcontract and Mod. 4,
HII was required to pay Cyberlux upon receipt of payment from the Government. HII concedes it
received $25,769,369.03 from the Government. Cyberlux is the beneficial owner of the funds in
every practical and equitable sense, and the creditors asserting claims against the res are, at bottom,
asserting claims against money earned by Cyberlux's labor and investment.
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 5 of 19 PageID# 4159
6
The Court should recognize Cyberlux's claim to recover at minimum $4,786,814.62
representing its direct capital investment in contract performance, reduced by Cyberlux's
willingness to compromise to $2,450,000 in the interest of achieving a global resolution. This
recovery is essential not only as a matter of equity but as a matter of practical necessity: Cyberlux
requires this capital to execute its existing $26 million backlog pipeline, which will generate
approximately $17 million in cash flow that Cyberlux can use to satisfy its remaining unsecured
creditors in the ordinary course of business.
B. The Court Should Limit Interest Accrual to the Date of the Interpleader Filing
The single most consequential equitable issue before this Court is whether secured
creditors should be permitted to continue accruing interest, fees, and penalties against the Disputed
Funds after those funds were interpleaded and removed from Cyberlux's control. Cyberlux
respectfully submits that they should not.
1. The Equitable Basis for Limiting Interest.
Once funds are withheld and threatened to be deposited into the registry of the Court
through the mechanism of filing an interpleader action, the debtor loses all ability to use, invest,
or apply those funds to reduce its obligations. The interpleader, in effect, freezes the debtor's
financial position while simultaneously allowing creditors' claims to continue growing. This
creates an inherently inequitable dynamic: Cyberlux is deprived of the very funds it needs to pay
its creditors, yet those same creditors are permitted to charge ever-increasing interest on debts that
Cyberlux cannot satisfy precisely because the funds are being held by HII who petitioned and
ultimately succeeded in locking those funds in this Court's registry.
The Court's equitable authority to limit interest in interpleader proceedings is well
established. Courts have long recognized that when a fund is interpleaded, the equitable
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 6 of 19 PageID# 4160
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considerations shift. The debtor has surrendered control of the funds; the creditors' risk of nonpayment is substantially mitigated by the existence of the Court-supervised fund; and the continued
accrual of interest against a finite res serves only to diminish the pool available for equitable
distribution, to the detriment of all parties, including the debtor.
2. The Interest Accumulation Since August 2025 Has Been Staggering.
The record demonstrates the magnitude of the problem. Since the interpleader was filed on
or about June 24, 2025, Legalist alone has accrued over $1,999,676.16 in additional fees and
interest. The Assure Global Claimants (WeShield, Roman Investments, MAS USA, and Sinensky)
have increased their claimed amount by approximately 43% over the original settlement amount.
Thin Air Gear's claimed interest of $935,489.46 on a $450,000 principal, more than double the
underlying debt, is based on treble damages agreed to by a Texas Receiver whose authority and
legitimacy are in serious question. In total, the interest and fees claimed since the interpleader was
filed amount to millions of dollars that, if allowed, will consume the fund and leave Cyberlux with
nothing.
3. Cyberlux Should Not Be Punished for HII's Decision to Interplead.
Critically, HII's decision to file the interpleader was not Cyberlux's choice. HII chose to
interplead rather than pay Cyberlux in the ordinary course. Had HII honored its contractual
obligations, Cyberlux would have received payment, satisfied its secured creditors, and managed
its remaining obligations through its business operations. Instead, Cyberlux has been deprived of
access to its own earnings for approximately twenty months, during which time its creditors' claims
have ballooned, its financing options have collapsed, and its business operations have been
severely impaired.
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8
The record makes clear what drove HII to interplead rather than pay Cyberlux: the
aggressive, multi-jurisdictional collection campaign waged by Atlantic Wave Holdings, LLC.
HII's own Complaint details how Atlantic Wave systematically weaponized the courts to seize
Cyberlux's receivables before they could be paid in the ordinary course. On March 11, 2025,
Atlantic Wave served HII with a Garnishment Summons in the Circuit Court of Fairfax County
(Case No. CL25-3413), seeking to garnish any monies owed to Cyberlux based on a June 28, 2023
Richmond Circuit Court judgment. The total balance claimed on the Garnishment Summons was
$1,444,543.11 as of March 7, 2025. On July 18, 2025, the Fairfax Circuit Court held a hearing on
the Garnishment Summons and Atlantic Wave's Motion for Entry of an Order of Payment, and on
July 22, 2025, the Fairfax Circuit Court entered an order directing HII to interplead $1,444,543.11
into the Fairfax Circuit Court within 30 days.
But Atlantic Wave was not content with the Virginia garnishment. It simultaneously
pursued a second front in Texas, domesticating its judgment in the 129th Judicial District Court
for Harris County and commencing Cause No. 2024-48085. On May 22, 2025, the Texas court
appointed Robert W. Berleth as a limited Receiver for Cyberlux with authority to collect on the
general debt, pursuant to Tex. Prac. & Rem. Code § 31.002. The Receiver came into possession
of $3,083,639.75, which amount was intended to satisfy the same judgment Atlantic Wave was
simultaneously seeking to enforce through the Virginia garnishment. Atlantic Wave was thus
pursuing the same judgment in two states at the same time, seeking full recovery from each.
On July 17, 2025, the Receiver sent a formal levy demand letter directly to HII, demanding
that HII immediately seize and forward to the Receiver's offices any funds held for the benefit of
or payable to Cyberlux, even though the Texas Court of Appeals had already stayed the
receivership order. Faced with Atlantic Wave's competing garnishment in Virginia, a receiver in
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 8 of 19 PageID# 4162
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Texas claiming the same funds, a levy demand from the Receiver, and additional creditor claims
from Legalist, the IRS, ANPC, and others, HII concluded it could not determine without peril the
payee of the Disputed Funds. HII therefore filed this interpleader action. While Cyberlux does not
excuse HII's decision to interplead rather than pay in the ordinary course, the record demonstrates
that Atlantic Wave's relentless, multi-forum collection efforts were the proximate cause of HII's
decision. It was Atlantic Wave's conduct, not Cyberlux's, that created the conflicting claims and
competing proceedings that HII cited as the basis for interpleader. Between the execution of Mod.
4 in February 2025 and July 27, 2025, HII incurred $398,945.21 in attorneys' fees arising from
creditor-related proceedings, including the engagement of Virginia counsel to respond to the
Fairfax garnishment and the engagement of Texas counsel to address subpoenas from the Receiver.
The equitable implications are significant. Atlantic Wave's aggressive tactics triggered the
very interpleader that now freezes Cyberlux's funds and allows all creditors' interest to compound.
Atlantic Wave nor the Receiver should be permitted to benefit from the consequences of their own
destructive behavior by claiming an ever-growing share of the Disputed Funds. To the contrary,
the Court should recognize that Atlantic Wave's conduct and the Receiver’s actions beyond the
bounds of the Texas Receivership authority, is the kind of vexatious, multi-forum litigation
strategy that interpleader is designed to arrest, not reward.
Allowing creditors to continue accruing interest against the Disputed Funds after the
interpleader filing would, in effect, reward the creditors for the delay that Atlantic Wave's
aggressive collection campaign caused and punish Cyberlux for circumstances entirely beyond its
control. Equity does not countenance such a result. The Court should exercise its discretion to fix
the interest accrual date at July 24, 2025, the date the interpleader action was filed and served, and
limit each creditor's recovery to principal plus interest accrued through that date.
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4. Proposed Interest Reductions.
Cyberlux proposes the following interest reductions, which represent a reasonable exercise
of the Court's equitable authority:
• Legalist: Reduction of $1,000,000 in post-interpleader interest and fees.
• Assure Global Claimants (WeShield / Roman / MAS / Sinensky): Reduction of
$600,000 in post-interpleader interest.
• TAG (Thin Air Gear): Reduction of $600,000, reflecting the elimination of treble
damages improperly agreed to by the Texas Receiver.
• United States (IRS): Reduction of $250,000 for purposes of parity with other creditors'
interest reductions.
These reductions total $2,450,000, which Cyberlux requests be returned to Cyberlux as
operating capital to fund its existing defense contract backlog and generate the cash flow necessary
to satisfy unsecured creditors in the ordinary course of business.
C. The Government Contract Origin of the Funds Requires a Nexus-Based
Distribution
The Disputed Funds are not general corporate assets. They are payments derived from a
United States Government defense contract, Subcontract No. P000043846, under which Cyberlux
manufactured and delivered unmanned aerial systems for Department of Defense operations. This
origin matters for purposes of both priority and entitlement.
1. The Nature of Government Contract Funds.
Government contract payments are subject to a distinct regulatory framework, including
the Federal Acquisition Regulation (FAR) and the Assignment of Claims Act, 41 U.S.C. § 6305.
These provisions reflect a strong federal policy that government contract funds should be used for
the purpose for which they were appropriated, in this case, the development and production of
Case 3:25-cv-00483-JAG Document 188 Filed 04/15/26 Page 10 of 19 PageID# 4164
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defense technologies. The Assignment of Claims Act narrowly limits the circumstances under
which government contract receivables may be assigned, recognizing that the Government has a
direct interest in ensuring that contract funds flow to the performing contractor and are used to
support ongoing contract performance.
2. Only Claims with Nexus to the Government Contract Should Share the Res.
Because the Disputed Funds were generated by Cyberlux's performance of a government
defense contract, equity requires that the distribution prioritize creditors whose claims arise
directly from or are connected to that contract performance. Creditors who provided financing,
materials, labor, or services in support of Cyberlux's performance of the HII Subcontract have a
direct nexus to the res and a legitimate equitable claim to share in the distribution. By contrast,
creditors whose claims arise from unrelated transactions, general commercial disputes, unsecured
lending arrangements, or judgments having nothing to do with the drone manufacturing program,
should not be permitted to deplete a fund that was generated by, and intended for, defense contract
purposes.
This is not merely a matter of equity; it is a matter of federal policy. Allowing claimants
with no connection to the government contract to strip the Disputed Funds would undermine the
very purpose for which those funds were paid, to support the domestic defense industrial base and
the production of mission-critical systems for American servicemembers.
3. Cyberlux Should Be Permitted to Manage Non-Nexus Debts
in the Ordinary Course.
For claims that do not bear a nexus to the government contract, Cyberlux should be
permitted to satisfy those obligations through its ordinary business operations rather than from the
Disputed Funds. Cyberlux has an order backlog of approximately $26 million and a pending
pipeline that will generate approximately $17 million in cash flow. If Cyberlux is permitted to
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retain a portion of the Disputed Funds as operating capital, it can execute on this backlog and
generate the revenue necessary to pay its non-nexus creditors in an orderly fashion. Draining the
res to satisfy every claimant, regardless of the claim's connection to the underlying contract, would
destroy Cyberlux's ability to operate, fulfill pending government orders, and satisfy any creditor
at all.
D. Analysis of Each Creditor's Claim, Priority, and Entitlement
In accordance with the Court's Order (ECF No. 145), Cyberlux addresses each claimant's
position, priority, and entitlement to the Disputed Funds as follows:
1. Legalist SPV III, LP.
Legalist claims a perfected security interest in Cyberlux's accounts receivable from HII
pursuant to an Instrument of Assignment and supporting agreements, with a priority date of April
1, 2024. Cyberlux acknowledges that Legalist holds the only facially perfected, secured claim to
the specific res. However, Legalist's total claim of $13,650,513.94 includes $2,653,970.84 in
interest, of which approximately $1,999,676.16 has accrued since the interpleader was filed.
Legalist provided financing to Cyberlux in connection with its operations, and to the extent that
financing supported Cyberlux's performance of the HII Subcontract, Legalist's claim bears a nexus
to the res. Nevertheless, the post-interpleader interest accrual is excessive and should be limited.
Cyberlux proposes that Legalist's recovery be reduced by $1,000,000 in post-interpleader interest,
resulting in an adjusted claim of approximately $12,650,513.94.
2. WeShield / Roman Investments / MAS USA / Michael Sinensky (the Assure
Global Claimants).
The Assure Global Claimants assert a combined claim of $5,007,138.41, consisting of
$3,739,461.10 in principal and $1,267,677.31 in interest, with a priority date of October 23, 2025.
Notably, this represents a 43% increase over the original settlement amount negotiated with
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Cyberlux. The Court should scrutinize whether these claimants' underlying transactions bear a
sufficient nexus to the government contract to warrant participation in the distribution. Moreover,
the interest claimed is disproportionate to the underlying obligations and has been inflated by the
delay caused by the interpleader. Cyberlux proposes a $600,000 reduction in claimed interest,
resulting in an adjusted claim of approximately $4,407,138.41.
3. ANPC (Advanced Navigation and Positioning Corporation).
ANPC asserts a claim of $3,087,878.86, consisting of $2,830,050.00 in principal and
$257,828.86 in interest, with a priority date of December 30, 2024 (equitable lien) or September
24, 2025 (perfected lien). ANPC's interest claim consists primarily of attorney's fees. ANPC claims
an equitable lien under North Carolina law based on a judgment it domesticated in Virginia. To
the extent ANPC's underlying claim arises from services or products related to Cyberlux's defense
technology operations, it may bear a nexus to the res. The Court should examine whether ANPC's
claimed equitable lien is properly perfected and whether the attorney's fees component is
reasonable.
4. TAG (Thin Air Gear).
Thin Air Gear's claim presents one of the most troubling examples of interest inflation in
this proceeding. TAG asserts a total claim of $1,385,489.46, of which $450,000 represents the
principal amount and $935,489.46 represents claimed interest, more than double the underlying
debt. This inflated interest figure is based on treble damages that were agreed to by the Texas
Receiver, Robert Berleth, whose authority over Cyberlux's assets is contested and whose actions
have been subject to appellate review. The treble damages were not the product of arm's-length
negotiation by Cyberlux but rather were imposed through a receivership process that Cyberlux
disputes. The Court should decline to honor treble damages agreed to by a receiver of questionable
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14
authority and should limit TAG's recovery to its principal amount of $450,000 plus reasonable,
non-trebled interest accrued through the date of the interpleader filing.
5. United States (Internal Revenue Service).
The IRS asserts federal tax lien claims totaling $1,149,776.34 based on three tax lien
notices filed in North Carolina spanning 2011-2024. Federal tax liens attach to all property and
rights to property of the taxpayer under 26 U.S.C. § 6321. While Cyberlux acknowledges the
priority that federal tax liens may enjoy under the Federal Tax Lien Act, the IRS liens at issue are
blanket liens against Cyberlux's property generally and were not specifically perfected against the
HII receivables. The IRS claim does not bear a direct nexus to the government contract work.
Nevertheless, in the interest of achieving parity among creditors, Cyberlux proposes a modest
$250,000 interest reduction.
6. Atlantic Wave Holdings, LLC and Secure Community, LLC.
Atlantic Wave and Secure Community should be excluded entirely from any distribution
of the Disputed Funds.
Atlantic Wave's asserted claim of approximately $6,025,000 is, in reality, an attempt at
double or triple recovery on the same underlying judgment. Atlantic Wave has already received or
positioned itself to receive substantial payments: $1,444,543.11 through a Fairfax County
garnishment order, and $3,083,639.75 through a Texas receivership. The combined recoveries
already exceed the original judgment amount. Allowing Atlantic Wave to recover again from the
Disputed Funds would constitute precisely the kind of duplicative, inequitable windfall that the
interpleader process is designed to prevent.
Moreover, Atlantic Wave's claim to the $6 million judgment is presently being adjudicated
in the Virginia Court of Appeals, and Cyberlux disputes that Atlantic Wave is entitled to any
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15
amount from the Disputed Funds. Atlantic Wave's claim bears no nexus to the government
contract, it arises from a separate commercial dispute entirely unrelated to Cyberlux's drone
manufacturing program. Its inclusion in the distribution would artificially inflate the deficit,
prejudice legitimate creditors, and distort the equitable allocation.
Secure Community's claim is derivative of Atlantic Wave's position and fails for the same
reasons. Secure Community has no independent, perfected claim to the Disputed Funds.
7. Fairwinds Technologies.
Fairwinds Technologies asserts a claim of $2,348,542, but holds no secured interest in the
Disputed Funds. As an unsecured creditor, Fairwinds should not share in the distribution of the
res. Cyberlux proposes to address Fairwinds' claim through a payment plan in the ordinary course
of business, outside the scope of this interpleader proceeding.
8. ARG (Intervenor).
ARG filed a motion to intervene but does not have an adjudicated claim against Cyberlux.
Without an adjudicated, secured interest in the specific res, ARG should not participate in the
distribution. As with other unsecured or unadjudicated claims, Cyberlux should be permitted to
address ARG's claim, if any, in the ordinary course.
E. Proposed Order of Priority
Based on the foregoing analysis, Cyberlux respectfully submits that the Court should
establish the following order of priority for distribution of the Disputed Funds:
First Priority: Cyberlux Corporation, recovery of $2,450,000 representing its direct
capital investment in contract performance and the aggregate interest reductions from other
creditors' claims, to be used as operating capital to execute its defense contract backlog and
generate cash flow for payment of unsecured creditors.
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16
Second Priority: Legalist SPV III, LP, as the only creditor with a facially perfected,
secured interest in the specific res, with an adjusted claim of approximately $12,650,513.94 (after
$1,000,000 interest reduction).
Third Priority: Assure Global Claimants (WeShield / Roman / MAS / Sinensky), with an
adjusted claim of approximately $4,407,138.41 (after $600,000 interest reduction).
Fourth Priority: ANPC, $3,087,878.86, subject to verification of the claimed equitable
lien.
Fifth Priority: TAG (Thin Air Gear), limited to principal plus reasonable interest accrued
through August 4, 2025, with treble damages disallowed, resulting in a significantly reduced claim
(estimated adjusted claim of approximately $785,489.46 after $600,000 reduction).
Sixth Priority: United States (IRS), $899,776.34 (after $250,000 reduction).
Excluded: Atlantic Wave Holdings, LLC; Secure Community, LLC; Fairwinds
Technologies; ARG; and the Texas Receiver, Robert Berleth.
F. The Effect of Government Contracting Statutes and Regulations
The Court's Order directs the parties to address the effect of government contracting
statutes or regulations on priority, entitlement, or payment due. This issue is central to Cyberlux's
position.
The Disputed Funds originated from a government defense contract under which Cyberlux
manufactured unmanned aerial systems for the United States Department of Defense. The
Assignment of Claims Act, 41 U.S.C. § 6305, strictly limits the assignment of claims against the
United States and reflects a strong federal policy that government contract funds should flow to
the performing contractor. While the Assignment of Claims Act permits certain assignments to
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financing institutions under specific conditions, it does not contemplate or authorize the wholesale
seizure of government contract funds by parties unrelated to the contract performance.
Furthermore, Cyberlux holds rated orders under the Defense Priorities and Allocations
System (DPAS), including DX-rated and DO-rated orders from General Dynamics Mission
Systems, BAE Systems, and allied foreign customers. The DPAS program, established under the
Defense Production Act of 1950, 50 U.S.C. § 4501 et seq., imposes obligations on contractors to
fulfill rated orders as the highest manufacturing priority. A distribution of the Disputed Funds that
leaves Cyberlux without the resources to fulfill these rated orders would directly contravene
federal defense procurement policy and undermine national security interests.
The Court should give significant weight to the government contract origin of these funds
and the federal policies that attach to them. This weighs in favor of both limiting the claims of
creditors whose debts are unrelated to the government contract and ensuring that Cyberlux retains
sufficient capital to continue performing its defense obligations.
V. CONCLUSION
This interpleader proceeding was not of Cyberlux's making. HII chose to interplead funds
that Cyberlux earned through its performance of a government defense contract, and that decision
has had cascading consequences, accumulating interest, lost contracts, collapsed financing, and
severe operational impairment. Cyberlux should not be made to bear the full cost of HII's unilateral
decision.
The Court should exercise its broad equitable discretion to: (1) limit all creditors' interest
accrual to the date the interpleader action was filed and served, on or about June 24, 2025 or no
later than August 4, 2025; (2) exclude from distribution those claimants whose claims bear no
nexus to the government contract or who are seeking duplicative recovery; (3) disallow the treble
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18
damages imposed by the Texas Receiver on the Thin Air Gear claim; (4) grant Cyberlux recovery
of $2,450,000 from the Disputed Funds to fund its defense contract backlog and enable it to satisfy
unsecured creditors in the ordinary course; and (5) establish a priority of distribution that reflects
the equitable realities of this case and the federal policies governing government contract funds.
An outcome that strips Cyberlux of all remaining resources will not create more value, it
will simply redistribute loss while increasing costs and delay. It will impair a functioning defense
technology company, jeopardize pending government orders, and ultimately reduce recoveries for
all creditors. By contrast, a measured, equitable distribution allows Cyberlux to meet its
obligations in part now, while preserving its ability to meet additional obligations in the future and
to continue supporting national defense priorities.
WHEREFORE, Defendant Cyberlux Corporation respectfully requests that this Court
grant its Motion for Summary Judgment and enter an Order: (a) limiting interest accrual on all
claims to the date of the interpleader filing; (b) excluding Atlantic Wave, Secure Community,
Fairwinds Technologies, ARG, and the Texas Receiver from the distribution of the Disputed
Funds; (c) recognizing Cyberlux's entitlement to recover $2,450,000 from the Disputed Funds; (d)
establishing the priority of distribution set forth herein; and (e) granting such other and further
relief as the Court deems just and equitable.
CERTIFICATION OF COUNSEL REGARDING VERIFICATION OF CITATIONS
Pursuant to the Court's Order, the undersigned counsel, Jimmy F. Robinson, Jr., Esq., hereby
certifies that he has personally verified every citation to authority contained in this submission,
including every quotation attributed to authority, and that all such citations and quotations are
accurate and correctly stated.

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
HII MISSION TECHNOLOGIES CORP., §
Interpleader Plaintiff, §
v. §
§ Civil Action No. 3:25-cv-483
§
CYBERLUX CORP., et al., §
Interpleader Defendants/Claimants. §
INTERPLEADER DEFENDANT’S, ROBERT W. BERLETH, AS RECEIVER,
MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
Interpleader Defendant/Claimant, Robert W. Berleth, as Receiver (the “Receiver”), by
counsel, pursuant to Fed. R. Civ. P. 56 and Local Civil Rule 56, submits this Memorandum of Law
in Support of his Motion for Summary Judgment.
INTRODUCTION
Despite the existence of an authorized state receivership action that pre-dates this litigation,
on June 24, 2025, Plaintiff HII Mission Technologies Corp. (“HII”) filed its Complaint for
Interpleader (the “Complaint”) pursuant to 28 U.S.C. § 1335, requesting that this Court allow HII
to interplead certain funds into this Court’s Registry that are, or may be, owed to Cyberlux, but are
subject to multiple claims. After HII amended the Complaint on August 4, 2025, the present
interpleader defendants consist of the following parties: (1) Cyberlux Corporation (“Cyberlux”)1;
(2) Atlantic Wave Holdings, LLC (“Atlantic Wave”)2; (3) Secure Community, LLC (“Secure
Community”); (4) Legalist SPV III, LP (“Legalist”); (5) United States of America (“USA”); (6)
1 Mark D. Schmidt (“Schmidt”) is CEO for Cyberlux.
2 Schmidt has also served as an officer for Atlantic Wave. Attached as Exhibit A is a May 11,
2021 Statement of Principal Office Change signed by Mark Schmidt as President. The Court can
take judicial notice of the publicly filed documents on Virginia’s State Corporation Commission
website from Atlantic Wave’s May 11, 2021 filing, wherein Schmidt signs the filing as President
of Atlantic Wave. See infra n.8.
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Advanced Navigation and Positioning Corporation (“ANPC”); (7) the Receiver; (8) Assure Global
LLC d/b/a WeShield (“WeShield”); (9) Roman Investments PR LLC (“Roman Investments”);
(10) MAS USA MGT LLC (“MAS”); (11) Michael Sinensky (“Mr. Sinensky” and together with
WeShield, MAS, and Roman Investments, the “Sinensky Creditors”); (12) Fairwinds
Technologies LLC (“Fairwinds”); (13) Thin Air Gear, LLC (“TAG”); and (14) ARG Group, LLC
(“ARG”) (together, the “Interpleader Defendants”). With the exception of the Sinesky Creditors,
Fairwinds, TAG, and ARG who filed motions to intervene, these are parties selected by HII to be
a part of this action.3 But, there are a number of other creditors of Cyberlux who likely claim an
interest in the funds at issue, but may not have notice of this interpleader action.
The Receiver’s interest arises from the Texas court’s appointment of him as the Receiver
and then also from his efforts to ensure that there were funds available in the first instance. Indeed,
without the Receiver, no creditor would be able to make a claim to the interpleaded funds HII
owed to Cyberlux totaling $25,769,369.03 (the “Corpus”).4 The Receiver was instrumental in
ensuring that the Corpus was due and owed to Cyberlux, through the Receiver, for satisfaction of
Cyberlux’s requirements pursuant to the agreement between HII and Cyberlux. In fact, none of the
funds would be available to any creditor, but for the Receiver’s efforts. See Berleth Decl. attached
as Exhibit B. These efforts began in earnest on January 16, 2025, when the 129th District Court
for Harris County, Texas (the “Texas Court”), Cause No. 2024-48085, established the
3 Notably, HII included TAG and ARG, among others, in their initial Complaint for Interpleader,
but did not include TAG, ARG, and certain others in its Amended Complaint for Interpleader.
4 The Corpus constitutes the amount that was due to Cyberlux under its subcontract with HII,
which in turn, held a prime contract with the United States Government to support, among others,
the Department of the Navy. The Corpus has since been reduced following a Garnishment
proceeding in Fairfax Cir. Ct. and the payment of HII’s legal fees. The Corpus and amount
deposited into this Court’s Registry, in an interest-bearing account, is $23,736,937.56.
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receivership for Cyberlux,5 the Judgment Debtor, and appointed the Receiver via an oral order (the
“Receivership”). Immediately upon establishing the Receivership, Cyberlux began its attempts to
subvert the Receivership and filed not one, but two, Notices of Removal following appointment
of the Receiver. The first removal occurred on February 12, 2025, with the Federal Court
remanding the action back to the Texas Court on March 27, 2025. Yet, despite the remand order,
Cyberlux filed its second Notice of Removal on April 11, 2025, which resulted in another remand
order dated May 14, 2025. Then, Cyberlux filed an appeal, challenging the Receiver and the
Receivership. The appeal also failed. Overall, as the Receiver sought to gain control of the assets
in order to fulfill his duties and obligations, Cyberlux made every attempt to ensure it obtained
control of the Corpus, which likely would lead to no creditor receiving any payment.
Because the underlying facts are not in dispute, only the proper distribution of the Corpus
remains to be determined. Here, following the Receiver’s actions in securing the available funds
for distribution, the Receiver maintains an interest in ensuring that all amounts due and owed to
Cyberlux are appropriately distributed to Cyberlux’s creditors or, alternatively, to the Receiver for
payment of Cyberlux’s debts, but not to Cyberlux directly. Thus, the Receiver is entitled to the
Corpus, or at a minimum his portion of the Corpus, in the amount of $5,934,234.39, or 25% of the
remaining Corpus6, and summary judgment should be granted to him.
LEGAL STANDARD
Pursuant to Federal Rule 56(a), “[t]he court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” In assessing whether a movant is entitled to summary judgment, “[a] genuine
5 The Receiver was also appointed as the Receiver over Schmidt, individually.
6 Twenty-five percent of the entire Corpus that was recovered amounts to $6,442,342.25.
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issue concerning a material fact only arises when the evidence, viewed in the light most favorable
to the non-moving party, is sufficient to allow a reasonable trier of fact to return a verdict in that
party’s favor. Rhoades v. United States Army Corps of Engineers, No. 3:22-CV-728-HEH, 2023
WL 3981271, at *3 (E.D. Va. June 13, 2023) (citing JKC Holding Co. LLC v. Washington Sports
Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001)).
A simple allegation of a dispute of fact is not enough to defeat a summary judgment motion;
rather, “[o]nly disputes over facts which might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or
unnecessary will not be counted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “The
mere existence of some alleged factual dispute between the parties … will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that there be no genuine
issue of material fact.” Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir. 2001) (emphasis in
original) (citing Anderson, 477 U.S. at 247–48). When the record here is viewed consistent with
this standard, summary judgment in favor of the Receiver is appropriate.
STATEMENT OF UNDISPUTED FACTS
Pursuant to Local Civil Rule 56(B), the Receiver lists the following material facts that the
Receiver contends there is no genuine issue:
Cyberlux Contract and Payment of Corpus
1. In September 2014, the United States awarded HII a federal contract, Prime
Contract No. GS00Q14OADU109; Task/Delivery Order No. 47QFCA22F00039 and Technical
Direction Letter 1-023 (the “Prime Contract”), supporting the Department of Navy and the
General Services Administration, the Federal Systems Integration and Management Center. 1st
Am. Compl. ¶ 18; Berleth Decl. ¶ 6.
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2. On August 29, 2023, Cyberlux, a defense contractor selling unmanned aerial
vehicles, entered into Subcontract No. P000043846 (the “Subcontract”). 1st Am. Compl. ¶ 17;
Berleth Decl. ¶ 7.
3. On May 13, 2024, the Prime Contract was terminated for convenience (a “T4C”),
which then caused HII to terminate the Subcontract for convenience as well on May 17, 2024. 1st
Am. Compl. ¶¶ 20–21; Berleth Decl. ¶ 8.
4. Consistent with 48 FAR 52.249-2, which requires the prime contractor to settle
with subcontractors after a T4C, HII and Cyberlux executed Modification No. 4 to Subcontract
No. P000043846 to Effectuate a Termination Settlement, effective February 26, 2025 (“Mod. 4”).
1st Am. Compl. ¶ 23; Berleth Decl. ¶ 9.
5. Among other provisions, Mod. 4 required Cyberlux to make shipment and delivery
of certain inventory in accordance with the direction of the Government. 1st Am. Compl. ¶ 24;
Berleth Decl. ¶ 9.
6. On May 28, 2025, HII received a partial payment from the Government in the
amount of $2,757,254.39 related to termination and stop work costs under Mod. 4, under which
HII and Cyberlux also agreed on the amounts payable to Cyberlux under the Subcontract in
connection with the T4C of the Subcontract and prior stop work orders. 1st Am. Compl. ¶ 25–26;
Berleth Decl. ¶ 14.
7. On or about May 30, 2025, Cyberlux, through the Receiver’s direct efforts,
completed shipment of the inventory to be shipped to the Government under Mod. 4. 1st Am.
Compl. ¶ 27; Berleth Decl. ¶ 15.
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8. On July 3, 2025, HII submitted an additional invoice to the Government in
connection with the completed shipment by Cyberlux and Mod. 4. 1st Am. Compl. ¶ 28; Berleth
Decl. ¶ 16.
9. On July 15, 2025, HII received final payment from the Government on the Prime
Contract in relation to Cyberlux in the amount of $23,012,114.64. 1st Am. Compl. ¶ 29; Berleth
Decl. ¶ 17.
10. As a result, HII received a total of $25,769,369.03, which, subject to setoff and
recoupment under § 7 of Mod. 4, may otherwise be or become payable to Cyberlux under the
Subcontract. 1st Am. Compl. ¶ 30; Berleth Decl. ¶ 13.
Appointment of Receiver
11. On or around August 24, 2022, Atlantic Wave and Secure Community sued
Cyberlux and Schmidt, individually in Virginia for breach of contract. Berleth Decl. ¶ 10.
12. The suit resulted in an agreed final judgment in the principal amount of $1,572,500
(the “Virginia Final Judgment”). Berleth Decl. ¶ 10.
13. On July 7, 2024, pursuant to the Uniform Enforcement of Foreign Judgment Act,
Atlantic Wave filed a Petition to Enforce a Foreign Judgment, domesticating the Virginia Final
Judgment against Cyberlux and Schmidt in the Texas Court. Berleth Decl. ¶ 10.
14. On January 16, 2025, the Texas Court established the Receivership. Berleth Decl.
¶ 10.
15. On May 22, 2025, following various unsuccessful attempts by Cyberlux to undercut
the Receivership (including two unsuccessful efforts to remove the case to the Southern District
of Texas), the Texas Court reduced its oral order to a written Order Appointing Receiver (the
“Order”) (Exhibit C). Berleth Decl. ¶ 11.
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16. As a member of both NAFER7 and TATR8, Mr. Berleth is an experienced and
respected receiver in state and federal courts. Berleth Decl. ¶ 3-4.
17. On May 23, 2025, the Receiver took physical possession of the Cyberlux
manufacturing facility located at 21631 Rhodes Road, Spring, Texas 77388, and changed the locks
to the building, took precursory inventory, and secured the entire premises. Berleth Decl. ¶ 12.
18. Working with the parties, the Receiver coordinated the final shipments of
Government property over the next several weeks, with the final truck departing the manufacturing
facility on May 30, 2025. Berleth Decl. ¶ 13.
19. The Receiver coordinated with HII and confirmed the total payment of
$25,769,369.03 from HII. Berleth Decl. ¶ 13.
20. Consistent with the Order, on July 17, 2025, the Receiver requested that HII seize
and forward to him any funds held by HII, which funds are non-exempt assets. Berleth Decl. ¶ 19.
21. On July 22, 2025, and August 15, 2025, the Circuit Court for Fairfax County
ordered the payment of $1,444,543.11 into that court’s registry, which was then paid to Atlantic
Wave. [D.N. 150.]
22. HII incurred costs and attorneys’ fees in connection with this matter totaling
$587,888.36, which was recouped from the Corpus. [D.N. 150.]
23. The Corpus, not inclusive of interest earned, available for distribution totals
$23,736.937.56. [D.N. 153.]
24. The Receiver has the ability to properly disburse the funds in accordance with the
Order and anticipated subsequent orders from the Texas Court, which would give all creditors an
7 National Association of Federal Equity Receivers.
8 Texas Association of Turnover Receivers.
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opportunity to be heard and submit their claims in a timely and orderly fashion to a court of proper
jurisdiction. Berleth Decl. ¶ 21.
25. During the Receivership, the Receiver has been contacted by no fewer than a dozen
other creditors of Cyberlux, several of whom have existing outstanding judicial awards, and many
others of whom have either pending litigation or contractual obligations with Cyberlux for
payment, including employee back pay. Berleth Decl. ¶ 22.
26. To date the Receiver is aware of at least $70 million in debt Cyberlux owes to
various creditors. Despite Cyberlux’s contention otherwise in their public quarterly reports,9 the
only known substantial asset of Cyberlux to pay multiple creditors is the Corpus. Berleth Decl. ¶
23.
ARGUMENT
“The Texas ‘turnover’ statute allows judgment creditors to reach assets of a judgment
debtor that are otherwise difficult to attach or levy on by ordinary legal process.” Gillet v. ZUPT,
LLC, 523 S.W.3d 749, 754 (Tex. Ct. App. 2017); see also Order ¶ 7 (“The appointment of a
Receiver to locate, marshal, and administer assets is justified because the Court believes that non-
exempt assets exist which Judge Creditors are justified in believing Debtor will hide.”). “Turnover
is obviously an aid to judgment creditors in obtaining satisfaction on debts.” Sloan v. Douglass,
713 S.W.2d 436, 441 (Tex. Ct. App. 1986). To meet the initial burden to establish entitlement to
the turnover, three elements must be met: “(1) the existence of an underlying judgment, (2) that
9 The Court can take judicial notice of Cyberlux’s quarterly reports filed publicly with the
Securities and Exchange Commission under Federal Rule of Evidence 201. See Zak v. Chelsea
Therapeutics Int’l, Ltd., 780 F.3d 597, 607 (4th Cir. 2015) (noting “courts at any stage of a
proceeding may ‘judicially notice a fact that is not subject to reasonable dispute”); In re PEC Sols.,
Inc. Sec. Litig., 418 F.3d 379, 390 n.10 (4th Cir. 2005) (taking judicial notice of SEC filings); Bank
of Am., N.A. v. Kissi, No. PWG-12-3266, 2015 WL 1210281, at *9 (D. Md. Mar. 16, 2015) (taking
judicial notice of party’s 10-Q at summary judgment stage).
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the underlying judgment remains unpaid, and (3) that the judgment debtor owns nonexempt
property.” Custom Coils, Inc. v. Nash, No. 12-25-00164-CV, 2026 WL 308270, at *4 (Tex. Ct.
App. Feb. 4, 2026). Those elements were met, and the Texas Court appointed the Receiver. Order
¶ 6. The turnover statute is deemed to be remedial in nature and is construed liberally to enable
collection by the judgment creditor. See Haden v. David J. Sacks, P.C., 332 S.W.3d 523, 530 (Tex.
Ct. App. 2009) (“Because the statute is procedural and thus remedial in nature, we must adopt a
construction that, in the absence of an express legislative prohibition to the contrary, will enable
collection by the judgment creditor, here the law firm, against the judgment debtor, here Haden
and the company.”); see also Order ¶ 8 (holding that a Receiver is necessary “with the power and
authority to take possession of all leviable property of the Debtors”). The Receiver is entitled to
take possession of Cyberlux’s non-exempt property, which primarily, if not exclusively includes,
the Corpus.
1. The Receivership in Texas is Still in Effect.
The Order remains the operative order that the Receiver is abiding by with respect to the
Receivership in place in Texas. Cyberlux is a judgment debtor- as it relates to Atlantic Wave and
numerous other creditors. The Order provides the Receiver with unique powers and demands
certain actions, including the exclusive possession and custody of Cyberlux’s property and
delivery of same to the Receiver, among other powers. See Order ¶ 10 (“Pursuant to this order, the
Receiver will have a judicial lien on all non-exempt assets of the Debtor and on all non-exempt
community assets of Debtor regardless of whether the Receiver takes actual possession.”). In
securing assets, third parties are ordered to deliver property to the Receiver within ten working
days of Receiver’s demand. Order ¶ 19(a). Included in the Order is the possession of certain
property including, but not limited to, Cyberlux’s financial accounts, account receivables,
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negotiable instruments, contract rights, and other property, while remaining assured that the first
receivership, the Order, controls. Order ¶¶ 14, 23, 25. The Receiver made demand on HII for the
Corpus and, similarly, moved this Court for an order requiring HII deposit the Corpus into this
Court’s Registry in July, 2025. HII did not remit the Corpus to the Receiver, and the Court denied
the Receiver’s motion. The Receiver attempted to work within the confines of the Order to obtain
the Corpus for distribution to creditors. Nevertheless, the Order pre-dates the instant litigation and
this Court should give deference and authority to the underlying Texas Court’s Order—particularly
when it remains operative and permits the Receiver the authority to marshal Cyberlux’s resources
and assets. See generally Order.
2. This Court Should Expand the Receivership.
While the February 20, 2026, Amended (Joint) Motion to Supplement Receivership,
seeking to expand the Receiver’s authority was denied, the Texas Court did not terminate the
Receivership or the Order. Notably, the Texas Court indicated that the issues arising from seeking
permission to satisfy several judgments “are best addressed and considered in the Virginia
Interpleader case.”10 [D.N. 161, Ex. A.] The Order provides not only the authority for the Receiver
to marshal Cyberlux’s assets, but provides that “[t]he first receivership order signed controls. . . .
The assets are in the control of the court for the first receivership.” Order, ¶ 23. The first
receivership is the Receivership. Because there can be no serial receiverships, “[t]he Receiver may
obtain permission from this and other courts to satisfy several judgments against the same debtor.”
10 The Receiver, with his knowledge of Cyberlux, the Corpus, and the various parties asserting a
claim to the Corpus, as an agent of the Texas Court is in the best position to help resolve those
claims. The Order permits this in either this matter, the Virginia Interpleader case, or the matter in
Texas. This is particularly true when not all of Cyberlux’s creditors are parties to the Virginia
Interpleader case.
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Order, ¶ 23 (citing Barrera v. State, 130 S.W.3d 253 (Tex. Ct. App. 2004)).11 This Court, therefore,
pursuant to Paragraph 23 of the Order, may expand the Receiver’s authority, order the Corpus
delivered to the Receiver, and cause the Receiver to effectuate payment to creditors (as the
Receiver has attempted to do since being appointed and since HII initiated the Virginia Interpleader
action in June 2025).
Because the Order permits this Court to satisfy several judgments, the interpleader action
allows all interests to be remedied. Interpleader is not an extraordinary device and “the Supreme
Court has emphasized that interpleader is ‘remedial and to be liberally construed,’” and its purpose
is “to ‘remedy the problems posed by multiple claimants to a single fund.’” AmGuard Ins.
Company v. SG Patel and Sons II LLC, 999 F.3d 238, 247 (4th Cir. 2021) (quoting State Farm
Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533 (1967)); see also Texas v. Florida, 306 U.S. 398,
405–07 (1939) (defining interpleader’s purpose over centuries as “avoidance of the risk of loss
ensuing from the demands in separate suits of rival claimants to the same debt or legal duty”).
Given the connectedness between the Receivership, marshaling and ensuring Cyberlux’s assets
were available, the Receiver’s goal in satisfying Cyberlux’s debts, and the Interpleader, the
Receiver, similarly, is working to satisfy multiple claims to the Corpus.
As part of the Receiver’s obligations, the Order permitted the Receiver to, among other
things, “locate, marshal, and administer assets.” See Order ¶ 7. Included in the Order is the explicit
11 Even if, however, the Receivership were to be terminated or otherwise end, there are two
additional filings in Harris County, Texas seeking receiverships over Cyberlux—both of which
would appoint Berleth as the receiver over Cyberlux to address the multitudes of other creditors.
The cases are Clayton Services, Inc. v. Cyberlux Corporation, et. al, Cause No. 202617258, 165th
District Court of Harris County, Texas, and Voortman v. Cyberlux Corporation, et. al, Cause No.
202618441, 152nd District Court of Harris County, Texas. Neither case has progressed to the point
where the District Courts have made the appointment of a receiver. Therefore, while the
Receivership is currently still pending and the Receiver has authority pursuant to the Order,
notwithstanding his role in obtaining the Corpus, Cyberlux is set to continue to be under a
receivership in order to repay its debts.
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acknowledgement that “[t]he unique power of a Receivership derives from the doctrine of custodia
legis. Once a turnover order containing an appointment of a Receiver is signed, all of the judgment
debtor’s [Cyberlux] nonexempt property becomes property in custodia legis, or ‘in the custody of
the law.’” Order ¶ 9 (citing First S. Props., Inc. v. Vallone, 533 S.E.2d 339, 343 (Tex. 1976)).
More specifically, “[d]uring the pendency of a Receivership, the Receiver has exclusive possession
and custody of the judgment debtor’s property to which the Receivership relates.” Id. In First
Southern Properties, Inc., the court holds “[n]o one has authority, even under a prior deed of trust
or execution, to sell property held in custodia legis by a duly appointed receiver, unless the sale is
authorized by the court in which the receivership is pending.” Id. at 341 (citations omitted).
Here, the Receiver’s efforts resulted in the Corpus being available to Cyberlux’s creditors
in the first instance, as the Receiver’s Declaration makes plain. The Receiver was instrumental in
ensuring that the Corpus was due and owed to Cyberlux for satisfaction of Cyberlux’s
requirements pursuant to the agreement between HII and Cyberlux. Accordingly, the Receiver’s
interest is clear and he is entitled to summary judgment for his fees and costs (25% of the remaining
Corpus) in marshalling the Corpus as an available remedy to Atlantic Wave and the other creditors.
However, it remains clear that he is further entitled to summary judgment for the additional
authority and direction from this Court to use the Corpus to satisfy Cyberlux’s debts, or at a
minimum, satisfy the outstanding judgment subject to the Receivership.
3. The Receiver is Entitled to his Fee.
In addition, the Receiver is entitled to his fees and costs from the Corpus with respect to
the Receivership and the entitlement of funds from the Corpus following his direct involvement in
ensuring the Corpus, in its entirety, was available for the Receiver or this Court to determine how
Cyberlux’s legitimate creditors would be paid. The turnover statute authorizes recovery of
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reasonable costs in a turnover proceeding. Tex. Civ. Prac. & Rem. Code § 31.002(e). A receiver’s
fees are considered court costs, and a trial court may award reasonable receiver’s fees. Vaccaro v.
Raymond James & Assocs., 655 S.W.3d 485, 490 (Tex. Ct. App. 2022). “Whether a receiver’s fee
is reasonable is determined by the value of the receiver’s services, including the receiver’s results.”
Klinek v. LuxeYard, Inc., 672 S.W.3d 830, 841 (Tex. Ct. App. 2023). The Order provides that the
Receiver’s fees and expenses “are considered costs of the court” and entitles the Receiver to a fee
of “25% of all sales of assets that come into his actual, constructive, or legal possession, and all
recoveries and credits against the judgment.” Order ¶ 53. The Receiver could be entitled to 33%
of “collected funds should the Receiver collect the full amount of the judgment.” Id. In Klinek,
like this case, “[t]he plain language of the order indicates that at the time the order was signed, the
court made a final determination that a twenty-five percent fee would be reasonable.” 672 S.W.3d
at 842. Importantly, there is a distinction between a receiver’s fee and attorneys’ fees. While the
Receiver is a licensed attorney, the Receiver is acting as a Receiver through counsel in this case
and not as an attorney. In determining the Receiver’s fees, and ultimate claim against the Corpus,
the Court should look to the factors in Bergeron v. Sessions, 561 S.W.3d 551 (Tex. Ct. App. 1997).
In Bergeron, the Court set forth that “[a] receiver’s compensation is to be determined by the value
of his services.” Id. at 554. The factors in determining value include, “the complexity and difficulty
of the work,” “the time spent,” “the diligence and thoroughness displayed,” and “the results
accomplished.” Id. at 554–55. As this Court can see, the matters involving Cyberlux are complex,
required significant time, and have resulted in the Corpus being available to the Receiver and
Cyberlux’s various creditors. The Receiver was effective in ensuring the Corpus’ availability.
Because there would be no money for distribution at all but for the Receiver, and he meets the
Bergeron factors, the Receiver is entitled to his fee in accordance with the Order. Therefore, the
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Receiver is entitled to summary judgment for his fees, in the amount of 25% of the remaining
Corpus, or $5,934,234.39.
4. Priorities.
The Interpleader Defendants each claim an interest in the Corpus:
a. Cyberlux claim is unknown, though presumed to be the entire Corpus;
b. Atlantic Wave and Secure Community claim $6,025,603.42, not inclusive
of interest (per Interrogatory Answer);
c. Legalist claims $13,204,742.88 (per Interrogatory Answer);
d. USA claims $1,149,776.34, not inclusive of interest (per Interrogatory
Answer);
e. ANPC claims $3,087,878.86 (per Interrogatory Answer);
f. WeShield claims $3,905,541.64 (per Interrogatory Answer);
g. Roman Investments claims $576,436.03 (per Interrogatory Answer);
h. MAS claims $215,062.95 (per Interrogatory Answer);
i. Mr. Sinensky claims $310,097.79 (per Interrogatory Answer);
j. Fairwinds claims $2,348,542.00 (per Interrogatory Answer);
k. TAG claims $1,385,489.46 (per Interrogatory Answer);
l. ARG claims $14,118,618.61 (per Complaint in Intervention of the ARG
Group, LLC [D.N. 155]); and
m. The Receiver claims $5,934,234.39 as his fee pursuant to the Order.
In total, the Interpleader Defendants (not including the Receiver), which do not encompass
all of Cyberlux’s creditors, claim at least $46,327,789.98. Including the Receiver, the claims in
this Interpleader Action, total $52,262,024.37. However, not all of the claims asserted by certain
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Interpleader Defendants are valid, and certain claims have higher priority, such as the claim by the
United States Government for Cyberlux’s tax liability, as well as Legalist’s secured claim for
amounts that pre-date the Receivership. Similarly, because the Receiver acts like a trustee in a
bankruptcy, his fees and costs are administrative expenses and have priority. See 11 U.S.C. § 507;
see e.g. Va. Code § 55.1-324 (detailing how trustee under deed of trust shall first discharge the
expenses of executing the trust, including a reasonable commission to the trustee). In a bankruptcy
proceeding, “[a]dministrative expense claims . . . are entitled to payment as a second priority under
the distribution scheme provided in the Bankruptcy Code.” In re Health Diagnostic Laboratory,
Inc., 557 B.R. 885, 893 (Bankr. E.D.Va. 2016). “Courts generally agree that ‘an administrative
expense has two defining characteristics: (1) the expense and right to payment arise after the filing
of bankruptcy, and (2) the consideration supporting the right to payment provides some benefit to
the estate.’” Id. (quoting CIT Commc’n Fin. Corp. v. Midway Airlines Corp. (In re Midway Airlines
Corp.), 406 F.3d 229, 237 (4th Cir. 2005)). Here, the Receiver’s right to payment arises from the
Order, which is a post-judgment order, and the consideration for the Receiver’s fee is his role in
securing the Corpus. In fact, in Paragraph 53, the Order provides that “[t]he Receiver’s fees and
expenses are considered costs of court.” Vaccaro v. Raymond James & Assocs., 655 S.W.3d 485,
490 (Tex. Ct. App. 2022). See Hill v. Hill, 460 S.W.3d 751, 760 n.6 (Tex. Ct. App. 2015) (in case
involving § 64.001 receiver, noting that receiver’s fees are entitled to priority over other creditors
(citing Jordan v. Burbach, 330 S.W.2d 249, 252 (Tex. Ct. App. 1959)). Ultimately, the Corpus is
sufficient to provide payment to Legalist and its secured claim that pre-dates the Receivership, to
the United States Government for tax payments, and to the Receiver for his fee. Should the Court
not grant summary judgment providing the Corpus to the Receiver for distribution to Cyberlux’s
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creditors, the Receiver proposes the following with respect to the distribution and validity of
claims:
a. USA for the full amount: $1,149,776.34.
i. This would leave approximately $22,587,161.22 of the Corpus.
b. Legalist’s secured claim for the amount owed as of May 22, 202512:
$7,313,627.17.
i. This would leave approximately $15,273,534.05 of the Corpus.
c. The Receiver’s fees, as administrative fee with priority over unsecured
creditors pursuant to the Order and substantially similar to 11 U.S.C. §
507(a)(2): 25% of the Corpus or $5,934,234.39.
i. This would leave approximately $9,339,299.66 of the Corpus.
However, should the Court order the entire Corpus, or the amount
remaining after payments to the USA and Legalist’s claim as of May
22, 2025 (approximately $15,273,534.05), the Receiver will take a
pro-rata portion in connection with the claims set forth in (d) and (e)
below.13
d. Unsecured, current party, non-insider claims. All legitimate and should be
paid pro-rata:
12 May 22, 2025 is the date the Order was signed establishing the Receivership. Any action taken
after this date would have required authority from the Receiver. Nevertheless, given Legalist and
Cyberlux still have a business relationship and Cyberlux continues to make public disclosures in
connection with obligations to the Securities and Exchange Commission, such quarterly reports
indicate that Legalist and the other insider creditors should not have any issue collecting from
Cyberlux.
13 The Receiver, similarly, will report to either this Court, or the Texas Court, as this Court directs,
for recommendations of distributions for creditors, including the Receiver’s fees, with an
opportunity for each creditor to object.
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(1) ANPC: $2,926,814.39.
(2) Thin Air Gear, LLC: $1,385,489.46.
(3) Fairwinds Technologies: $2,348,542.00.
(4) ARG Group (agreed reduction to commission on actual sales, not
contracted amount): $4,200,000.00.
(5) Catalyst Machineworks, LLC (Phillip Tucker and Neill Whiteley):
$2,676,378.58.
e. Unsecured, non-party14 creditors, non-insider claims. Should these non-
parties intervene, the claims are legitimate, as they represent claims for
services related to the Subcontract or services to Cyberlux and should be
paid pro-rata with paragraph 4 creditors:
(1) Aerotek, Inc.: $235,411.27
(2) Clayton Services: $786,155.07
(3) Northwind Axis Advisory: $36,691.95
(4) Marlin Leasing Corp: $36,009.40
(5) 3rd Gen. Development: $342,478.34
The remaining claims represent Legalist’s remaining balance of $5,891,115.71, which is
money lent and interest earned following the Receivership, as well as a number of insiders or
invalid claims, as the agreements made with Cyberlux were done outside the Receiver’s
knowledge or approval, and without authority by Cyberlux pursuant to the Order. While in
Receivership, a number of parties entered into agreements, or caused judgments and security
agreements to be entered. Similarly, certain Interpleader Defendants are “insiders” as defined by
14 The Receiver expects certain of these non-parties to file a Motion to Intervene.
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the bankruptcy code. “The bankruptcy code defines insider, in pertinent part, as an ‘affiliate, or
insider of an affiliate as if such affiliate were the debtor.’ 11 U.S.C.A. § 101(31)(E). An affiliate,
in turn, is an ‘entity that directly or indirectly owns, controls, or holds with power to vote, 20
percent or more of the outstanding voting securities of the debtor.’ 11 U.S.C.A. § 101(2)(A).”
Butler v. David Shaw, Inc., 72 F.3d 437, 441 (4th Cir. 1996). And, as the Fourth Circuit states in
Dornier, “n many cases, an insider will be the only party willing to make a loan to a struggling
business, and recharacterization should not be used to discourage good-faith loans.” In re: Dornier
Aviation (North America), Inc., 453 F.3d 225, 234 (4th Cir. 2006). Here, many of the claimants
have an interest in Cyberlux, or alternatively, Cyberlux and/or Schmidt have an interest in them.
For example, Schmidt was President of Atlantic Wave until at least September 2021, and likely
maintains, or maintained, an ownership in Atlantic Wave.
Lastly, given the amount of claims and priority of certain Interpleader Defendants, namely
the Receiver, the United States, and a portion of Legalist’s claim, Cyberlux’s entitlement to any
of the Corpus falls to the last position.
5. The Receiver’s Position.
As set forth above, in the Order, and the Receiver’s time with Cyberlux and the various
creditors, the Receiver is entitled to not only his fee, but is also in the best position to handle the
Corpus. The Order pre-dates the instant litigation and permits this Court, or any court, the authority
to expand the Receivership and allow the Receiver to satisfy the claims of creditors. The Receiver
has caused the Corpus to be available, and despite constant litigation across the country, has
stopped Cyberlux from getting its hands on the Corpus. Through all Cyberlux’s filings and
attempts to obtain the Corpus and rid the Receiver, the Receiver has worked diligently for the
creditors to ensure the Corpus’ availability. For over fifteen (15) months, the Receiver has gained
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detailed knowledge regarding Cyberlux and its creditors, legitimate and otherwise. As a matter of
law, the Order provides the means and parameters for the Receiver to distribute the Corpus. The
Receiver is prepared to take the Corpus and ensure the legitimate creditors receive their share.
However, the Order and the actions taken by the Receiver to allow the Corpus to be available
provide the Receiver a priority claim for his fees and costs, akin to a bankruptcy trustee.
CONCLUSION
The record in the instant action, and status of the Receiver under Texas law, demonstrates
that the Receiver has priority to receive the Corpus for distribution to creditors pursuant to the
receivership, or, at a minimum, his share of the Corpus for fees and costs in the amount of
$5,934,234.39. For the reasons set forth herein, and during any oral argument, the Receiver is
entitled to summary judgment.
Dated: April 15, 2026 ROBERT W. BERLETH, as RECEIVER
/s/ Robert N. Drewry
Vernon E. Inge, Jr. (Va. Bar No. 32699)
Robert N. Drewry (Va. Bar No. 91282)
Whiteford, Taylor & Preston, L.L.P.
Two James Center
1021 East Cary Street, Suite 2001
Richmond, Virginia 23219
Telephone: 804.977.3301
Facsimile: 804.977.3291
E-Mail: vinge@whitefordlaw.com
rdrewry@whitefordlaw.com
Counsel for the Appointed Receiver,
Robert Berleth, as Receiver for Cyberlux Corp.
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CERTIFICATE OF SERVICE
I hereby certify that on April 15, 2026, the foregoing was electronically filed with the Clerk
of Court using the CM/ECF System, which will then send the document and notification of such
filing (NEF) to all counsel of record.
/s/ Robert N. Drewry

There were many many documents for summary judgement posted today. I looked specifically at: Memorandum in Support re174 MOTION for Summary Judgment filed by Robert W. Berleth.(Drewry, Robert) and Memorandum in Support re172 MOTION for Summary Judgment filed by Legalist SPV III, LP.(Bascom, Christopher).


DOCUMENT 1: FACTUAL SUMMARY

Across the two filings, the receiver, Robert Berleth, presents two very different scopes of work tied to two very different pools of money. In the earlier Texas receivership, he describes a contained recovery effort, stating that “the Receiver has recovered from the Debtor $3,083,639.75” and, based on that amount, seeks compensation of “$765,113.62 as the Receiver’s Fee to be taxed as a cost of court,” further noting that “the receiver collected the full amount of the judgment, and is thus entitled to his presumptive fee of 33%,” along with expenses of “$83,341.22” . That framework is straightforward: he collected a defined sum and applied a percentage fee to that recovery. However, in the later Virginia interpleader filing, the scale changes significantly. The funds at issue are described as “$25,769,369.03 (the ‘Corpus’)” and later reduced to “$23,736,937.56,” and the receiver now claims that “the Receiver is entitled to the Corpus, or at a minimum his portion of the Corpus, in the amount of $5,934,234.39, or 25%” . To justify this, he asserts that “none of the funds would be available to any creditor, but for the Receiver’s efforts,” pointing to actions such as coordinating shipments, where “the Receiver coordinated the final shipments… with the final truck departing… May 30, 2025,” and confirming payments, noting that “The Receiver coordinated with HII and confirmed the total payment of $25,769,369.03” . He relies on the underlying Texas order to argue that “The Receiver’s fees and expenses are considered costs of the court” and that it “entitles the Receiver to a fee of 25% of all… recoveries,” while also positioning himself ahead of other claimants by asserting that “the Receiver acts like a trustee in a bankruptcy” and that “his fees and costs are administrative expenses and have priority” . At the same time, the filing acknowledges that other parties claim substantial amounts, stating that “the Interpleader Defendants… claim at least $46,327,789.98” and that total claims reach “$52,262,024.37,” far exceeding the available funds, meaning the receiver’s requested share would come out of a limited pool that many creditors are competing over .

DOCUMENT 2: WHY THIS IS WEAK AND PROBLEMATIC

The receiver’s position is weak because it relies on a noticeable shift in how he defines his entitlement, moving from a grounded, traditional recovery-based fee in the Texas case to a much broader and more aggressive claim in the Virginia case without a clear legal bridge between the two. In the Texas filing, his compensation is tied directly to what he actually obtained, where he explicitly states he “recovered… $3,083,639.75” and bases his percentage fee on that concrete amount , but in the later filing he applies the same percentage logic to the entire $23 million corpus, even though the record shows he did not actually take possession of or distribute those funds, which instead ended up in a court-controlled interpleader after his demand for them was not granted . His justification hinges heavily on the statement that “none of the funds would be available… but for the Receiver’s efforts,” yet the funds themselves arose from a federal contract, a termination settlement, and payments already owed under those agreements, meaning his role appears more administrative and facilitative rather than the direct cause of the full value, making that “but-for” claim an overreach. At the same time, the fee he seeks, nearly $6 million, appears disproportionate when compared to the types of activities he describes, such as coordinating shipments, securing a facility, and communicating with parties, which courts typically evaluate against reasonableness and proportionality rather than awarding a large percentage windfall. His argument that he should be paid first by analogizing himself to a bankruptcy trustee is also not particularly strong, since this is not a bankruptcy proceeding and priority is not automatically granted in the same way, especially where doing so would significantly reduce recovery for creditors who collectively claim over $46 million against a pool of roughly $23 million . Perhaps most importantly, the inconsistency between his earlier and later positions creates a credibility issue, as he initially treated his role as tied to a discrete recovery and is now expanding that role to encompass a much larger fund once it became available, which can be viewed as opportunistic rather than a consistent interpretation of his authority. Finally, because the funds are being handled through interpleader, the court, not the receiver, is ultimately responsible for determining distribution, which further weakens his attempt to claim compensation as though he were the one administering and allocating the entire corpus, making the overall position vulnerable both legally and equitably.

You guys... I have some insight, but I would have to pay/create an account to be able to access things any further. Can anyone please try to look into these more? Available on PACER Monitor. Thank you.
https://www.pacermonitor.com/public/case/58703132/HII_Mission_Technologies_Corp_v_Cyberlux_Corporation_et_al

I agree, the receivership has been all about... the receiver. I really hope that he gets some type of dismissal in May, and maybe some type of punishment or fine for his handling of the entire case. Classic example of corruption and fraud that has been lingering in the Texas courts (fort bend specificially?) for over a decade with his position.

Been going through the filings and I have a serious question about the receiver here.

At this point, the receivership seems to be:

Blocking financing
Hurting operations
Delaying revenue/orders
And now there’s a big dispute over his fees

I get the CEO made mistakes, but is the receiver now dragging this out and making it worse?

A few quick questions:

Has anyone looked into this receiver’s history or past cases?
Is there any way to challenge his fees or actions?
Is there anything shareholders can actually do to push for an investigation into him if something feels off?
Where’s the best place to track filings/hearings in real time?

Feels like nothing moves until this is resolved, but it’s hard to tell what’s really going on without full transparency.

Any insight appreciated.

This receiver is Robert Berleth. I’ve been looking into this guy, and it seems like whichever case he goes to, so much trouble follows. I have a friend of mine whose life is basically ruined because of his scammy, crummy ways. He’s been corrupting these processes for many years and thinks he’s entitled to big bucks when his job is literally to steal other’s money. I think he might be facing a investigation for all his recent actions soon?