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China Direct Prevails in New York Legal Action
COOPER CITY, FL -- (MARKET WIRE) -- July 21, 2006 -- China Direct Trading Corporation (OTCBB: CHDT) (China Direct), today announced Judge Richard M. Berman, U.S. District Judge for the Southern District of New York, ruled in favor of China Direct Trading Corp. yesterday, granting its Motion for Summary Judgment against Celeste Trust, Esquire Trade & Finance, Inc. and Investcor. The plaintiffs had sought their share of a $700,000 promissory note and 7,650,000 shares of stock in China Direct.
In March 2001, CBQ, Inc., the predecessor corporation for China Direct, purchased the assets of two wholly owned subsidiaries of Socrates Technologies, Inc., Technet and Networkland, and provided a $700,000 promissory note and 7,650,000 shares in escrow for eventual release to the purchasers. In a separate legal action in March 2001, the plaintiffs, and their other co-investors, settled with Socrates and agreed that the settlement would operate as a bar to any further claim on the assets of Socrates. In that action the plaintiffs accepted a payment of $1.5 million to settle their claim for their $3.5 million investment in Socrates.
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Citing the well-known legal doctrine of res judicata, Judge Berman held that the prior final judgment on the merits against Socrates prevented Celeste and its co-investors from making any further claim against the assets of CBQ or its successors in interest (China Direct). In other words, the court held that the investors in Socrates should not be allowed to have "two bites at the apple."
The conclusion of this action will allow China Direct to remove from its balance sheet any contingent liability related to this matter.
"We are delighted that this litigation has been concluded in our favor," said Howard Ullman, Chairman and CEO of China Direct. "And the company wishes to thank Bart S. Fisher, its prior majority shareholder, for bearing the costs to settle this matter."
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China Direct
Rich Schineller
Tel: +1-941-918-1913
SOURCE: China Direct Trading Corp.
