KBM a Toxic Lender Meets Resistance by Small Cap OTC Company In Federal District Court of New York Through Ellsworth Young LLP
April 13, 2016 2:38pm
LAS VEGAS, NV / ACCESSWIRE / April 13, 2016 / Hangover Joes Holding Corp. HJOE, a fully reporting publicly traded company, announced it has filed a response and answer and affirmative defenses to a law suit in the Eastern District of New York against KBM Worldwide, Inc. The case is currently contested by the defendants in Federal in the Eastern District of New York.
The company is represented by Ellsworth Young LLP (www.eyllp.com) a full service law firm specializing in "toxic debt remediation", with offices or affiliates in many states including, New York, California, Nevada, Arizona, Texas and Florida. Most of the "toxic lenders" as they are known in the industry are located in those states.
Ellsworth Young (EY) conducted investigations of the industry and hired top experts to support its claims that, in general, the practice of convertible debt financing violates both State Usury Laws, and the Securities and Exchange Act of 1933-34. As well, in most cases this is accomplished using false promises, unconscionable loan terms and penalties hidden or disguised fees, and in general are not healthy for the companies who borrow or their shareholders. The firm is seeking regulatory, legislative and judicial support of its positon's regarding this industry as it feels it is harmful to the investing community and the companies involved. Some of the lenders in the business are involved in employing stock bashing message boards and naked short sellers, using them to drive down the price of public companies shares, while benefitting the lenders with even richer returns.
Mathew Veal of HJOE, CFO stated, "we are one among many clients of EY that are seeking redress for the wrongs expressed in this case. Until such time as the regulators take notice of the activities of these toxic lenders, and seek to curb their practices, EY through the courts are one of the only bastions to resist the lenders efforts to undermine the value of our companies." This case is one of many involving the EY firm and its affiliates, against JMJ Financial, and Justin Keener, "The Keener Family of Companies", The "Asher or Cramer Family of Companies" (Vis Vires, KBM Worldwide, Asher Financial Inc.,) and Typenex and Chicago Ventures and "The Fife Family of Companies" and John Fife. All of the forgoing having officers and directors with either FINRA or SEC violations and fines, discipline or both. The EY firm has clients with potential claims against LG Capital, Adar Bays, Tangiers, among others in various courts around the country.
EY's OTC clients are generally in the technology and medical space including computer software, biotech and medical devices as well as minerals and mining. EY LLP has relationships developed through the years with law firms of the highest caliber looking for challenging business.
Here are some of the accomplishments these firms have experienced applying pressure to the industry to control well known toxic lenders:
One firm has recently persuaded a federal court to dismiss a predatory lenders action seeking a temporary restraining order to enforce the terms of their loan and order the OTC company stock transfer agent to immediately do a conversion. The Court even stated "However, contractual language declaring money damages inadequate in the event of a breach does not control the question whether preliminary injunctive relief is appropriate." Although, the Court may consider such language as a factor in the irreparable harm analysis, "the Court remains obliged to make an independent determination as to whether injunctive relief is appropriate." The court cited In re M.B. Int'l W.W.L., No. 12 CIV. 4945 (DLC), 2012 WL 3195761, at *12 (S.D.N.Y. Aug. 6, 2012); see also Ins. Co. of the State of Pennsylvania v. Lakeshore Toltest JV, LLC, No. 15 CIV. 1436 (ALC), 2015 WL 8488579, at *2 (S.D.N.Y. Nov. 30, 2015) (same); Firemen's Ins. Co. of Newark, New Jersey v. Keating, 753 F. Supp. 1146, 1154 (S.D.N.Y. 1990) ("[I]t is clear that the parties to a contract cannot, by including certain language in that contract, create a right to injunctive relief where it would otherwise be inappropriate."). Here, the Court finds that the Plaintiff has not demonstrated irreparable harm sufficient to justify a preliminary injunction. Thus, although the contractual language in the SPA providing for preliminary relief is relevant to the question of irreparable harm, it is not dispositive of the Court's analysis." In other words the law firm succeeded in having the court ignore specific language in the loan agreements to reach a favorable ruling for a client.
A Second Law Firm achieved- reduction in demand for profit by another toxic lender through litigation in by one of our affiliate law firms, from $520,000 to $90,000.
A Third Law Firm for another client was able to renegotiate 5 of its 7 toxic loans based on the threat and reputation of one of EY's referred law firms, and reduce its debt by $600,000, and not lose market cap by conversions by one of the notorious toxic lenders.
Statement under the Private Securities Litigation Reform Act:
With the exception of the historical information contained in this Release and the attached Shareholder Report, the matters described herein contain forward-looking statements that involve risk and uncertainties that may individually or mutually impact the matters herein described, including but not limited to: the ability of the Company to increase revenues in the future due to the developing and unpredictable markets for its products, the ability to achieve a positive cash flow, the ability to obtain orders for or install its products, the ability to obtain new customers and the ability to continue to commercialize its products, which could cause actual results or revenues to differ materially from those contemplated by these statements.
About Hangover Joes:
Hangover Joe's is the exclusive producer of "The Hangover" Recovery Shot, and one of the nation's top selling anti-hangover recover drink & hangover recovery shot. Hangover Joe's is the nations leading morning after Hangover Recovery Shot! Visit our website www.hangoverjoes.com, Twitter: @TheHangoverShot Instagram: HangoverJoescom Facebook: www.facebook.com/hangoverrecovery.
For Information on Hangover Joe's stock Symbol (HJOE) http://investorshangout.com/Hangover-Joes-Holding-Corporation-HJOE-57917/.
About Ellworth Young LLP
For further information go to website www.eyllp.com or call:
Public Information Officer
Ellsworth Young LLP
702-988-2300 x 701
or email at firstname.lastname@example.org
SOURCE: Hangover Joes Holding Corp.
Read more: http://www.benzinga.com/content/7836685/kbm-a-toxic-lender-meets-resistance-by-small-cap-otc-company-in-federal-district-cou#ixzz45jqeUTBZ