CAVU Resources Inc (CAVR)

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More on lawsuit with Surge....

2. On June 8, 2010, Surge entered into a compromise and settlement agreement with Mandalay Energy Resources, LLC. (“Mandalay”) regarding the equipment lease entered into between Surge and Mandalay, see below.



History: On December 8, 2009, Surge acquired from Mandalay a 75% working interest (until payout) in four, and up to ten, existing oil and gas wells which had been drilled, and were producing previously, on a 40-acre lease in Pawnee County, Oklahoma for $300,000 under a purchase and equipment lease agreement with Mandalay. The terms of the agreement provided for the $300,000 to be paid directly to Cavu Resources, Inc. under a turnkey contract to be used for rework and new equipment on the four oil and gas wells on the lease. The rework and equipment costs was to be repaid to Surge in monthly installments of 75% of net income received from the oil and gas purchaser each month up to a total of $40,000 per month until a total of $354,000 is paid in full. After payout, Surge was to retain a 25% working interest in the property.


After work commenced on the lease, the former and current landowners of the property disputed Mandalay’s rights to operate the lease, had filed a lawsuit disputing Mandalay’s lease rights, and prevented work from continuing on the lease. Mandalay is disputing those claims.


The compromise and settlement agreement provides that Mandalay will pay to Surge $354,000 plus Surge’s reasonable attorney’s fees and assign to Surge all of Mandalay’s contract, tort and other claims against CAVU Resources, Inc. and Elton and Everett Carruth and/or W Energy, Plaintiffs in the lawsuit against Mandalay and others. Surge is not a party to this lawsuit.


Read more: http://www.faqs.org/sec-filings/100610/Surge-Global-Energy-Inc_8-K/#ixzz0r1yjmG15