Member Info for Looed

I should have added that the new case FRC v YA includes a claim for monetary relief of over $1m in damages. The motion doesn't breakdown the damages but should the case move forward, the actual claim could be much higher than this initial figure once the company provide more evidence to court.

Dulwichman, in reply to your post of yesterday,

It is reasonable to ask, “why now”. To date, YA filings and motions have been mostly procedural and skirted around Texas requirements required for recognition, meaning FRC have been able to have each Motion denied because the law / procedure has been on FRC’s side. The “facts” behind the case don’t matter as they already fail procedurally.

On Friday there should be an FRC requested hearing to finally discuss the meat and bones of the YA Motion for Summary Judgement. Prior to any judgement, it is up to YA to prove the debt is real via its filings and that there is no doubt that a default judgement should be granted. At the same time the company / defendant now has the right to introduce evidence to undermine the claim against it and support its own defense. From the FRC filing –

“13. The purpose of a motion for summary judgment is to allow a court to promptly dispose of unmeritorious claims and/or defenses. In seeking traditional partial summary judgment pursuant to TEX. R. CIV. PROC. 166a(c), YAPN bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to summary judgment as a matter of law.”

At this point that “facts” come into play. The hearing is venue proper for FRC to enter evidence that calls into question the basis of the claims made by YA supporting Summary Judgement. If the court accepts there is more to the story than a clean-cut default judgement and that FRC has potentially raised a material fact, the court must (FRC claim) deny the motion.

It might also favor the company that YA have flooded the court with filings in support of a potentially frivolous, and potentially fraudulent, action.

YA have never filed the actual UK judgement with the court. They may have thought, or been advised, that a pro-forma abstract would be enough. But what if there is no judgement? It sounds almost too comical that a party would try such a blatant ploy but, after ZM, nothing should surprise us.

The new case – FRC v YA – likely seeks to prevent YA filing any more cases against the company and, if FRC prevail, saves $3.5m+ plus costs, and avoids (yet more) reputational damage.

Given that this new case challenges the allegations made in the current YA trial, shareholders should prepare for the hearings on Friday to be moved and the possibility that the cases will be combined in some way if the judge agrees that FRC arguments should be heard. I think this puts YA in a very difficult position on how to move forward if FRC allegations are correct. Might be a busy few days in the courts. So, possibly a delay though FRC seem eager to move it forward.

"8. YAPN’s claim that a debt was owed to it on June 24, 2021 when it sought a judgment against Frontera before the High Court of England & Wales was false and its presentation to the High Court constituted fraud on the High Court.

9. YAPN and Frontera Resources Corporation, prior to the filing of the High Court claim, agreed to exchange YAPN’s debt claims for equity in Frontera Resources Corporation, thereby extinguishing YAPN’s debt claims.

10. Thus at the time YAPN filed its claim in the English High Court on June 24, 2021, its debt had been extinguished by its agreement with Frontera to exchange its debt for equity in Frontera. See the Affidavit of Giorgi Kalandarishvili, Chief Financial Officer of Frontera, and the Affidavit of Steve C. Nicandros, Chairman of the Board of Directors of Frontera Resources Corporation and its Chief Executive Office at the time of the debt-for-equity exchange.

11. Contrary to its agreement with Frontera, and in breach of its agreement with Frontera, YAPN filed a false claim in the English Courts seeking recovery for the debt it had voluntarily extingished by its debt-for-equity swap. YAPN’s unethical conduct in defrauding the English Courts, and now seeking to defraud the Courts of the State of Texas by seeking judgment for a debt it had exchanged for equity is so egregious that it is repugnant to the public policy of Texas — conduct that also justifies non- recognition of its judgment."

Got it, thanks MadP

WHamBoy - The documents filed in YA v FRC do appear to be in reply to the YA motion that will be heard, hopefully, on Friday.

FRC v YA is a new case, related but individual that will have to go through all the standard court procedures and timetables. Strong case they intend to litigate or a more of a hat in the ring to apply pressure on Friday (or both).

They certainly kept these new allegations (as far as the courts are concerned) ready to go at a critical time.

Is it ever a dull moment?

It's an image file so I will try to copy later, having problems right now.

FRC claim one count of "fraudulent and misleading liens".

Nothing else filed so far.

There is also a 12 page reply from FRC that goes over all the arguments around recognition and enforcement. This nugget caught my eye -

21. Although this entire lawsuit concerns YAPN seeking recognition of a foreign- country judgment, YAPN has failed to supply this court with an admissible copy of the alleged judgment in question. The only “evidence” of the alleged judgment offered by YAPN is the Affidavit of Dean Nichols, attached as Exhibit A to YAPN’s motion for summary judgment.

22. YAPN’s “Exhibit A” cannot be considered by the Court as admissible evidence on entirely distinct hearsay grounds.

Oops!

Pt 2 of 2

11. Contrary to its agreement with Frontera, and in breach of its agreement with Frontera, YAPN filed a false claim in the English Courts seeking recovery for the debt it had voluntarily extingished by its debt-for-equity swap. YAPN’s unethical conduct in defrauding the English Courts, and now seeking to defraud the Courts of the State of Texas by seeking judgment for a debt it had exchanged for equity is so egregious that it is repugnant to the public policy of Texas — conduct that also justifies non- recognition of its judgment.

PRAYER

WHEREFORE, FRONTERA RESOURCES CORPORATION PRAYS:

That this Court:

1. Enter judgment that the “judgment” for which Plaintiff YA II PN, Ltd. seeks recognition be denied recognition;

2. Grant it any other relief, at law or in equity, to which it may be entitled.

Pt 1 of 2

(MadP, is Pt.7 onwards what you where referring to in your earlier post?)

Defendant Frontera Resources Corporation (“Frontera”) respectfully states:

GENERAL DENIAL

Frontera enters a general denial.

AFFIRMATIVE DEFENSES

Without waiver, Frontera states that all pleas and defenses are plead in the alternative to the extent any plea or defense conflicts with another.

3. Frontera denies that all conditions precedent to YA II PN, Ltd.’s (“YAPN”) alleged cause of action have occurred or been performed.

GROUNDS FOR NON-RECOGNITION

4. Pursuant to the standards for non-recognition of the judgment of a foreign nation, the “judgment” that YAPN seeks to have recognized does not meet those standards and may not be recognized.

5. The holder of an alleged final judgment issued by a foreign country — not a U.S State or Federal court — must always file an original suit, TEX. CIV. PRAC. & REM. CODE §36A.006(a), NCCUSL Cmt. 1; UNIF. FOREIGN-COUNTRY MONEYJUDGMENTS RECOGNITION ACT §6, Cmt. 1; RESTATEMENT (FOURTH) THE FOREIGN RELATIONS LAW OF THE UNITED STATES, §482(a); and obtain a final judgment that determines that the judgment issued by a valid, recognizable foreign country is entitled to recognition by the State of Texas. TEX. CIV. PRAC. & REM. CODE §36A.004, NCCUSL Cmt. 2; UNIF. FOREIGN-COUNTRY MONEY JUDGMENTS RECOGNITION ACT §4, Cmt. 2.

6. Recognition is neither mandatory nor automatic and the defendant is always entitled to an opportunity to defend the suit seeking recognition. TEX. CIV. PRAC. & REM. CODE §36A.006; Society of Lloyd’s v. Ashenden, 233 F.3d 473 (7th Cir. 2000).

7. YAPN’s judgment is the result of material fraud, which is sufficient unto itself to prevent recognition.

FIRST AMENDED ORIGINAL ANSWER YA II PN, LTD. V. FRONTERA RESOURCES CORPORATION AND PLEA FOR NON-RECOGNITION OF FRONTERA RESOURCES CORPORATION PAGE 1 OF 3

8. YAPN’s claim that a debt was owed to it on June 24, 2021 when it sought a judgment against Frontera before the High Court of England & Wales was false and its presentation to the High Court constituted fraud on the High Court.

9. YAPN and Frontera Resources Corporation, prior to the filing of the High Court claim, agreed to exchange YAPN’s debt claims for equity in Frontera Resources Corporation, thereby extinguishing YAPN’s debt claims.

10. Thus at the time YAPN filed its claim in the English High Court on June 24, 2021, its debt had been extinguished by its agreement with Frontera to exchange its debt for equity in Frontera. See the Affidavit of Giorgi Kalandarishvili, Chief Financial Officer of Frontera, and the Affidavit of Steve C. Nicandros, Chairman of the Board of Directors of Frontera Resources Corporation and its Chief Executive Office at the time of the debt-for-equity exchange.

Lifeishard - this case is primarily about due process. The company argues, and the courts seem to agree, that Texas has a specific set of checks and balances that must be followed if a foreign debt is to be recognized which then makes it enforceable and which to date, YA have failed to follow.

On 16th Sept I posted –

“Another batch of filings by YA. This batch attempts to show the courts the repeated efforts of YA to get FRC to comply with their discovery. YA have filed an "Emergency Motion to Compel" discovery ahead of the trial set for 6th October. No counter filing by the company in response to this as yet.”

In total, approx. 10 motions and supporting exhibits were filed by YA in September in support of the Emergency Motion to Compel.

Back in July, a hearing was held on a YA Turnover Motion (another kind of enforcement ploy), and we already know that the company prevailed. In the September filings, YA had to make the following admission regarding the hearing on the Turnover Motion and it does read that FRC won all of its arguments on that day -

(In the following, YA is the “Plaintiff”, and “Abstract Judgement” just means YA filed a 1-page summary of the original UK judgement)

“On July 10, 2023, a hearing was held with the Court on a motion filed by Plaintiff wherein it sought a Turnover Order after an Abstract Judgment was issued. Plaintiff also sought Sanctions against Defendant for failing to respond to earlier propounded discovery, despite being compelled to do so by the Court. At the hearing, the Court determined that a Turnover Order was premature, and sanctions were not warranted because the Court had not yet recognized the UK Judgment, a condition precedent to the Plaintiff’s requested relief.”

We cannot rule out the possibility that the court might decide to recognize the debt. Balance that with the fact that YA’s case is (or was) almost entirely built around enforcement, YA’s dismal record of multiple failed motions, and the fact the court seems to clearly agree with the company regarding the need for recognition as a precursor to enforcement. I wonder how confident YA really are?

WHamBoy – I agree with tsbs1 that there is more chance of a Close Encounter of the Third Kind than an encounter of any kind with FRC if the dockets, dates and open litigation remain as they currently stand.

On the YA case, recent / emergency motions filed by YA remain open though they could be agreed / denied at any time. That said, sometimes motions like this remain open without any apparent resolution, at least on the public record.

YA remains on the docket for 6th October to hear FRC Motion for Trial on Merits and the YA Motion for Summary Judgement. It’s hard to follow as so many hearing requests, but it seems both these hearings are at the request of the company.

The FIC case is continued to October 2024.

To date, only the ZM case has gone to trial. All other cases have settled out of court.

As some might recall, The ZM case was saddled with two appeals. One of the appeals was an FRC motion to compel arbitration (as per a clause in ZM’s contract) to settle employment related disputes between ZM and the company.

In FRC filings in support of this appeal, the company stated “In fact, ZM’'s very right to become a shareholder in Frontera is dependent upon him being an employee of Frontera..(and the contract)…setting forth the terms on which ZM is entitled to purchase common stock in the Company..(and)..grants ZM the right to purchase shares of common stock of the Company.

And - "in light of the fact that ZM became a shareholder in Frontera only by virtue of his Employment Agreement,"

At another point they state “Appellee Zaza Mamulaishvili (“ZM”) was an employee and former minority shareholder of Frontera. ZM signed an Executive Employment Agreement dated December 1, 2008 with Frontera pursuant to which he was the Executive Vice President reporting to the Chief Executive Officer of Frontera. The Employment Agreement contains a broad arbitration provision.”

ZM’s employment contract and associated arbitration agreement was discussed in detail in the filings, and included the following –

“Paragraph 29 of the Agreement between FRC and Mr. Mamulaishvili stated as follows:

Entire Agreement. This Agreement, which contains the entire contractual understanding between the parties…regarding employment, consultation, agency, independent contractor status, or other rendering of services for compensation, or regarding stock options, restricted stock, compensation, insurance, benefits, prerequisites, confidentiality, non-competition, or intellectual property.”

Back in the main hearing (the “ZM case”) Judge Weems delivered their Final Judgement. Subsequently, FRC petitioned the Appeal Court to dismiss their motion to compel arbitration stating such a claim was now moot. FRC advised the Appeal Court that, amongst other things, Judge Weems ruled that ZM was in clear breach of his employment contract.

There has been no further mention, at least in the Texas cases, on the status of ZM and his shareholding. The company obviously see it purely as a consequence of his terms of employment, and, if that is the case, it would follow they would seek ways to nullify such holdings should the law allow.

We might never know if ZM bothered to attend arbitration (arbitration is private and confidential), though if he did, and based on the Final Judgement, I doubt he got see very little, if any, of his claim for $11m+.

The above is just one potential way the company might have dealt with ZM’s holding. Though based on court records, it is pure conjecture until we see more supporting evidence, but you can see it was very much on the company radar.

WHamBoy - we don't know the status of ZM's shareholding so anything is possible!

Theprodigy / NJames - please excuse a very quick reply. I think the original debt was around $928K plus interest so I think SN has cleared it all, or the bulk of it. The agreement says it "discharges all claims against SN and Mourant" and SN did appear to be liable for the lot given the terms of the original agreement. Which, if true, then begs the question what are the claims to be made against ZM?

This case was stuck in legal limbo until SN and Mourant jointly petitioned the courts (back in 2021 I think) to find a way to move the case forward. Once the deal is signed off by the court, SN will now have clean hands with regard to this and ZM will presumably soon face a court case somewhere.

Yes TSBS1 and this deal is, I think, the first time we have seen the details of a deal made public. I assume this deal went public because SN was able to fulfill the first condition of the deal and make payment by 1st September. As MontiBurns pointed out, there is a tidy sum to be paid between now and Feb 2024. Relatively small compared to sums involved in the other cases, but a $1m+ is still a million plus.

MontiBurns also suggests the possibility that this litigation might be primarily to protect the SN (and the BoD) name. Yes, that is a distinct possibility, but we also can see long term and sustained efforts to repair and restore relations with the GOGC and the GG. They didn't need to spend $1.2m+ on lobbying in order to defeat ZM, deal with Hope etc, they didn't need to ask the GOGC for extensions, show proof of funds etc. While success still isn't guaranteed, they do appear to be fighting for some form of return to operations on top of clearing their names and reputations. Also, I expect SN has made sure his personal assets are kept well out of reach of these types of litigation.

I see a lot of posts were folks say "sell the asset", presumably so they can finally move on and forget this drama ever existed. I think a sale is just one option on a spectrum of possibilities (shareholders are screwed and out in the cold / no deal in Georgia, but lets look elsewhere and start afresh / new deal in Georgia, but continue as a private company / stay private, but potential for dividend / stay private, potential for a divi, but also have a share sale mechanism / offload the thing one way or another / relist / etc) and people need to keep an open mind as to what "news" might be.

We have gone from 7 Federal cases down to 1, and at least 8 county cases down to 3 (2 if you exclude Yellow Jersey). Let's hope this quick pace continues once YA II is dealt with on / before 6th October and assuming that goes in our favor.

MickTheGambler – I think it is very reasonable to expect we will hear something assuming YA II is quickly dealt with one way or another on or around 6th October, and the parties publicly resolve FIC v SN.

The company understand they cannot hide behind ever-diminishing litigation forever. We have to hope that if the company is true to its word that it wants to continue operations in Georgia and there is a new / revised PSC lined up and ready to go.

The significant remaining cases are -

FIC v SN – joint motion to continue to 2024 (a Hope related case)

YA II v FRC – YA throwing everything they can at it, and while it is possible something might stick, their track record, to date, isn’t great. As stated, in court 6th October.

FRCC bankruptcy hearing in NYC. This progress of this case will likely be determined by the outcome of FIC v SN. No schedule for this case and no action since early 2022.

Thanks Lifeishard / WhamBoy – Yes, another case finally off the books.

Yes it is good to see that another case has settled out of court. The origins of Mourant v SN, ZM are in a signed document entered into the courts in Cayman that both SN & ZM would be personally “jointly and severally” liable for the debt plus costs. In other words, if one party failed to pay, the other party had to settle the debt in full. Mourant would get their money regardless.

It has taken 3 years to bring this to conclusion and you can see some of the original arguments used that are currently playing out in YA v FRC (recognition of a foreign debt, etc.).

Based on the more recent filings, you can see that M.O. and SN have been cooperating and SN has never, as far as I can see, denied the validity of the monies owed.

If you read the judgement, you can see that this deal must have completed some time ago, maybe the same time as the FRC v Mourant Federal case settled in June, for example a payment was due to Mourant on 1st September 2023.

WhamBoy – I think there are two possible advantages to this settlement. Obviously, SN honors his obligations and settles a debt. Secondly, it further reduces the risk of ongoing reputational damage to SN as the company looks to life after litigation. SN, like him or not, is very much part of the DNA of the company and he needs to have clean hands if the company is to move forward.

Another batch of filings by YA. This batch attempt to show the courts the repeated efforts of YA to get FRC to comply with their discovery. YA have filed an "Emergency Motion to Compel" discovery ahead of the trial set for 6th October. No counter filing by the company in response to this as yet.