Top Shelf Brands Holdings Corp. (DKTS)

[loanranger]

"...the parties have stipulated to the following facts...
b. The Outstanding Shares described below [i.e., the disputed, supposedly "fraudulent" shares] were and are duly authorized, validly issued, fully paid and non-assessable."

Obviously that is a quote from the Order Approving Settlement signed by the Circuit Court Judge on September 16, 2014.

The Outstanding Shares as described also provided voting control to the holders of those shares from the time that they were acquired through the date of the settlement (plus however long it took to exchange them for the Exchange Shares, assuming that that has happened).

Obviously then, the voting control of the Company was not in the hands of Alonzo Pierce on November 25, 2013, the date that appears at the top of the Statement of Consent that incorporates the Certificate of Designation of the Preferred E shares that was subsequently filed with Nevada.

Was Pierce's issuance of the Preferred E shares a proper action under those circumstances?

When the Preferred A shares were issued and designated, that Designation as amended included a section with the heading "VI. Protective Provisions".
An excerpt:
"So long as shares of Series A Preferred Stock are outstanding, the corporation shall not, without first obtaining the prior approval (by vote or written consent, as provided by the NVGCL) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock:

a) Alter or change the rights, preferences or privileges of the Series A Preferred Stock or any capital stock of the Corporation so as to affect adversely the Series A Preferred Stock."


OBVIOUSLY the voting rights that Pierce gave himself when he structured and filed the Designation of the Preferred E shares violated the above covenant.
Based on the Series A designation the Series A holders were allowed to vote to approve the Series E issuance.


https://www.scribd.com/doc/243840874/TEMN-Settlement-Order
https://www.scribd.com/doc/239589577/2010-1-4-Amendment-to-Cert-of-Designation-of-Series-A
https://www.scribd.com/doc/231872684/TEMN-Resolution-for-Series-E-Preferred