Leon G. Cairns, Gerald A. Cairns, and Stanley K. Mabbott (the "plaintiffs" or the "Cairns Group") filed this action against Michael J. Gelmon, Lewis Gelmon, Cory Gelmon, and Alvin D. Gelmon (the "Individual defendants" or the "Gelmon Group"). The plaintiffs claim that the Gelmon Group wrongfully caused the Cairns Group to lose their equity in the corporate defendant Instant Vision, Inc. ("Instant Vision"), a Delaware corporation formed by the Gelmon Group.
The Complaint alleges five Counts: (i) breach of contract; (ii) unjust enrichment; (iii) breach of fiduciary duties; (iv) fraud; and (v) violation of 8 Del. C. § 242.1 The Gelmon Group has moved to dismiss the Complaint on the grounds of lack of personal jurisdiction and for failure to state a claim upon which relief can be granted. Defendant Cory Gelmon has moved separately for a dismissal as to himself on the ground of ineffective service of process, and Instant Vision has moved to dismiss as to it for failure to state a claim upon which relief can be granted. This is the Opinion of the Court on those motions, which are denied except with respect to Cory Gelmon.
The Cairns Group obtained from Morrison International, Inc.("Morrison") an exclusive license to develop in Canada a product known as "Instant Eyeglasses." Morrison then invited the Cairns Group to bid for the right to license the Instant Eyeglasses technology in the United States. To raise the necessary capital, the Cairns Group formed ajoint venture with the Gelmon Group and introduced the Gelmon Group to Morrison.
The Cairns Group and the Gelmon Group then entered into two letter agreements, the essential elements of which were that (i) the parties would form a corporation as a vehicle to acquire the United States license from Morrison, (ii) the parties would share equally in the equity of that corporation, and (iii) each group would have one director on the corporation's board of directors. On January 28, 1997, the Gelmon Group incorporated Instant Vision. It is claimed that contrary to their agreements, the Gelmon Group issued all of the shares to themselves and placed four of its members -- but only one member of the Cairns Group -- on Instant Vision's board of directors. On June 25, 1997, the Gelmon Group announced that it exclusively would handle the license transaction with Morrison, and also declared unilaterally its entitlement to a 10% finder's fee. The Gelmon Group also caused Instant Vision to amend its Certificate of Incorporation to increase its authorized common stock from 3000 to 10,000,000 shares, even though Leon Cairns, the director who represented the Cairns Group, was never informed of the charter amendment in advance of its approval. This action followed. After commencing this action, the plaintiffs served each member of the Gelmon Group under 10 Del. C. § 3104, Delaware's long-arm statute, and 10 Del. C. § 3114, Delaware's director-consent-to-service statute. The record reflects that no member of the Gelmon Group has ever been physically present, or ever conducted any business or performed any work relevant to the plaintiffs' claims in Delaware.
CONCLUSION
For the foregoing reasons, the Court denies the defendants' motions to dismiss, except that the claims against Cory Gelmon will be dismissed unless the plaintiffs are able to demonstrate, by the filing of appropriate proof within ten days of the date of this Opinion, that Mr. Gelmon was properly served in accordance with 10 Del. § 3104. IT IS SO ORDERED.
CEO Michael J. Gelmon Epicus Communications Group, Inc. EPCG REVOKED BY THE SEC Alberta Securities Commission - Cease Trade Order
CEO Michael J. Gelmon Focus Gold Corporation FGLF REVOKED BY THE SEC Alberta Securities Commission - Cease Trade Order
Safeguard Security Holdings, Inc. Michael J. Gelmon Chairman and President $0.0001; No Information, Skull & Crossbones
Solar Energy Initiatives, Inc Michael J. Gelmon CEO 0.0001 x .0002; Stop Sign Jan 16, 2014 Alberta Securities Commission - Cease Trade Order
Golden Patriot Corp Michael J. Gelmon President, Secretary, Treasurer, Director 0.0003; No Information, Skull & Crossbones Feb 20, 2014 Alberta Securities Commission - Cease Trade Order
Banyan Corp. Michael J. Gelmon President, Secretary, Treasurer, Director 0.0001; No Information, Skull & Crossbones Feb 20, 2014 Alberta Securities Commission - Cease Trade Order
Novation Holdings, Inc. f/k/a Allezoe Medical Holdings, Inc (ALZM) Michael J. Gelmon CEO Michael Choo, director Michael B. Holder, director No bid x 0.0001 Jan 15, 2014 Alberta Securities Commission - Cease Trade Order
In a previous article we took a brief look at current SNRY CEO Mr. Michael Gelmon’s track record with previous OTC companies where he mostly served as CEO, as well as the total failure those enterprises turned out to be. This list includes Banyan Corp. (OTCMKTS:BNYN), Protocall Technologies, Inc. (OTCMKTS:PCLI), PaperFree Medical Solutions, Inc. (OTCMKTS:PFMS). What those businesses have in common is also the bitter pill of toxic financing which eventually drove them to their current status of around $0.0001 per share, and in the Pink No Information tier.
SNRY‘s own filings contain the name of Asher Enterprises, Inc. – an infamous entity that provided heavily toxic financing for other OTC companies in the past. Combining that with the fact that SNRY recently assumed a fair additional amount of convertible debt from a restaurant business, and then approved a twofold increase of their own authorized shares, the situation leaves very little to the imagination of traders and gives little hope that this latest venture of Mr. Gelmon will be a success.
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