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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of Earliest Event Reported):
November 4, 2021
REDHAWK HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Nevada |
000-54323 |
20-3866475 |
(State or other jurisdiction of
incorporation) |
(Commission File Number) |
(Employer Identification No.) |
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100 Petroleum Drive, Suite 200,
Lafayette,
Louisiana
70508
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(Address of principal executive
offices) (Zip Code) |
Registrant’s telephone number, including area
code: (337)
269-5933
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
None.
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
On January 31, 2017, the Company and Beechwood Properties LLC filed
suit against Daniel J. Schreiber (“Mr. Schreiber”) and the Daniel
J. Schreiber Living Trust – Dtd 2/08/95 (“Schreiber Trust”) in the
United States District Court for the Eastern District of Louisiana
(the “Louisiana Court”) under Civil Action No. 2:2017cv819-B(3)
(the “Litigation”).
Mr. Schreiber and the Schreiber Trust answered and filed a
counter-claim against the Company and Beechwood and made additional
claims against Mr. G. Darcy Klug (“Mr. Klug”), the Chief Executive
Officer and a director of the Company, and sole owner of Beechwood,
in the Lawsuit.
On March 22, 2019, the parties to the Litigation entered into a
Settlement Agreement and General Release (“Settlement Agreement”)
to resolve all issues arising out of the subject matter of the
Litigation.
In consideration of the mutual promises, covenants and conditions
contained in the Settlement Agreement, the parties agreed that (i)
Mr. Schreiber and the Schreiber Trust would transfer all Company
stock they then owned (52,377,108 common shares) to the Company and
(ii) the Company would (a) make to Mr. Schreiber and the Schreiber
Trust a cash payment of Two Hundred Fifty Thousand dollars
($250,000) and (b) issue two Promissory Notes, each in the
principal amount of Two Hundred Thousand dollars ($200,000), one of
which was due and payable on or before September 6, 2020 (“Note 1”)
and the other was due and payable on or before September 5, 2021
(“Note 2”). As a result of this Settlement Agreement, the Company
recorded a loss of $471,880 in the year ended June 30, 2019.
Each Promissory Note was non-interest bearing, however each (i)
included a $15,000 late penalty if the principal amount was not
repaid by the due date and (ii) would bear interest at a rate of
18% per annum, from the issue date, if the principal was not repaid
by the 30th date after the due date.
On October 11, 2019, the Schreiber Trust filed a Motion to Enforce
Settlement Agreement (the “Motion”) with the Louisiana Court
alleging that the Company failed to comply with certain of its
obligations under the Settlement Agreement. The Motion sought to,
among other things, accelerate payment of the amounts owed to
Schreiber under the Settlement Agreement and collect additional
amounts in interest and attorneys’ fees.
On July 17, 2020, the Louisiana Court granted Schreiber’s Motion
and ordered the Company to pay to the Schreiber Trust $519,495.78
(“Judgment”) representing (i) the principal amount due on Note 1
($200,000); (ii) the principal amount due on Note 2 ($200,000);
(iii) pre-judgment interest of 18% simple interest on certain
outstanding debt charged back to the date of the Settlement
Agreement; (iv) $40,000.00 of attorneys’ fees (10% of the amounts
due); and (v) post-judgment interest from the date of the Judgment
as well as costs. The Company appealed the Louisiana Court’s ruling
to the United States 5th Circuit Court of Appeals (the “Court of
Appeals”).
Payment of the principal amount of Note 1 was tendered by the
Company to Schreiber on August 13, 2020. Notwithstanding the appeal
to the Court of Appeals, the Company tendered the early repayment
of the principal amount of Note 2 to Schreiber on August 24,
2020.
On September 4, 2020, the Company filed a Consent Motion to Approve
Supersedeas Bond and Stay of Execution of Judgment Pending Appeal
(“Motion to Approve”). On September 8, 2020, the Louisiana Court
granted the Motion to Approve and the posting of a supersedeas bond
(“Bond”) by the Company in the amount of $143,491 representing (i)
the remaining, unsatisfied amount of the Judgment; plus (ii)
post-Judgment interest of $80; plus, (iii) 20% of the combined
amount ($23,915).
On November 12, 2020, the Court of Appeals issued a decision
vacating the Judgment and remanding the case to the district
court.
As the Judgment was vacated on December 17, 2020, the Louisiana
Court entered an order releasing the Bond and returning the
aforementioned funds to the Company.
The Louisiana Court also ordered the Company to file a Sur-Reply
Brief. The Louisiana Court had previously denied the Company’s
motion for leave to file a sur-reply brief, after Schreiber had
presented new arguments and evidence for the first time in his
Reply Brief. When the Louisiana Court ruled in Schreiber’s favor
based solely on these new materials, the Court of Appeals reversed,
ruling its denial was an abuse of discretion. This order of the
Louisiana Court was consistent with the ruling of the Court of
Appeals.
The Louisiana Court also sua sponte ordered that Schreiber
be allowed to file a response to the Company’s Sur-Reply. Schreiber
had not requested or moved to be allowed to file a response.
Regardless, the parties each timely filed their respective
pleadings in accordance with the order. Both parties argued in
favor of their position and claimed to be entitled to an award of
the reasonable attorneys’ fees and costs they incurred in
connection with this litigation should the Louisiana Court rule in
their favor. As of March 31, 2021, the unsatisfied amount of the
Judgment ($119,496) was shown as a “Settlement liability” on the
consolidated balance sheet.
On September 23, 2021, the Louisiana Court granted the Schreiber’s
Motion to Enforce the Settlement Agreement. It ordered the Company
to pay Schreiber the amount of $101,490.27, representing its
calculation of contractual interest in the amount of 18% of the
outstanding principal of Note 1 and Note 2 until paid, plus certain
reasonable attorneys’ fees and costs incurred. Schreiber has since
filed a motion for attorneys’ fees and costs seeking an additional
$81,189.64 in attorneys’ fees. The Company has filed an opposition
to that motion, which is still pending.
The Company believes the Louisiana Court’s ruling was in error. On
October 15, 2021, the Company filed a Motion for Reconsideration
asking the Louisiana Court to reconsider its ruling. On November 4,
2021, the Company filed a consent motion to stay the Louisiana
Court’s judgment pending resolution of that motion and, should that
motion be denied and the Company be unable to reach an amicable
settlement with the plaintiff, pending appeal, based on the Company
posting a supersedeas bond in the amount of $121,804.44.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, hereunto duly authorized.
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REDHAWK HOLDINGS
CORP. |
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Date:
November 10, 2021 |
By: |
/s/ G. Darcy Klug |
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G. Darcy Klug |
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Chief Financial
Officer |
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