Good Morning HHSE Friends & Followers - In furtherance to the company's current actions with our Form 10 and S1 filings, the past few days have been focused on affirmative actions to address, dispute or otherwise discharge five "foreign" (sister-state) default judgments.
Counsel had previously advised that the company should provide detailed explanations of proposed actions to dispute these foreign defaults in the Form 10 and S1 documents. However, in response to an immediate attempt to enforce one of these actions, the company has now moved into full response mode in order to "stay" such enforcement activities. In the process of addressing this particular judgment, it was decided that the company will proceed ahead on making all of the additional filings for these four other foreign matters (even though, the process of making these forward steps on the remaining defaults is not urgently required and are not current obstacles to an expeditious filing of the company's Form 10 or S1 filings).
1). LEWIN (NY Default) - Filings have been made today in the Arkansas Courts - and additional pleadings will be made later this week in the New York courts - to set aside this foreign default. A copy of today's motion to the court in Arkansas from the Nixon & Alexander Law Firm is included below.
2). JSJ INVESTMENTS (Dallas) - The company is filing the motion for dismissal on the basis of proof of satisfaction.
3). DAISY WINTERS - SHUTTLEWOODS (Los Angeles) - Among other defenses being presented, the existence of an agreement to release the film's distribution rights in waiver of litigation is applicable and relevant.
4). UPTONE PICTURES (Los Angeles) - The performance on the existing settlement agreement is one of several affirmative defenses to setting aside this confusing second-lawsuit on the same matter, and Plaintiff's ill-gotten judgment.
5). HINDS-SHANKMAN (Los Angeles) - The requirement for full prepayment of legal fees, combined with never having received any bills from this firm (nor having the firm follow California Bar Association protocols requiring arbitration of billing disputes), are some of the defenses that are being presented in a motion to set-aside.
None of these five foreign default judgments are legitimate debts, and all were obtained through the Plaintiffs making material misrepresentations to their respective courts. Still, as the existence of a judgment - even if easily disputed and discharged - can be a blemish on the company's profile and misleading to unenlightened parties looking at HHSE. Accordingly, the decision was made to get rid of these distractions sooner-rather-than-later, so that the company's luster is bright and shiny for the incredible summer we have in store!
STAY TUNED!
(BELOW: Response-Pleading filed in Washington County, Arkansas Courts today - May 18 - regarding a Motion to Stay enforcement of a foreign default judgment).
IN
THE CIRCUIT COURT OF WASHINGTON COUNTY, ARKANSAS
CIVIL
DIVISION
BRUCE LEWIN PLAINTIFF
VS. CASE
NO.: 72CV-18-3357
HANNOVER HOUSE, INC.;
MEDALLION RELEASING,
INC.;
ERIC PARKINSON; and
D. FREDERICK SHEFTE DEFENDANTS
DEFENDANTS’
MOTION TO SET ASIDE FOREIGN DEFAULT JUDGMENT, OR IN THE ALTERNATIVE, TO MODIFY
THE JUDGMENT AND FOR STAY OF EXECUTION PENDING RULING ON SUCH MOTIONS
COME
NOW the Separate Defendants, Hannover House, Inc., Medallion Releasing, Inc.,
Eric Parkinson (collectively “Separate Defendants”), by and through their
attorneys, The Nixon & Alexander Law Firm, and for their Motion to Set
Aside this Foreign (Sister-State) Default Judgment or, in the Alternative, to
Modify the Judgment pursuant to Arkansas Rule of Civil Procedure 55, and to
State Execution pursuant to Ark. Code Ann § 16-66-301, state as
follows:
1.
Defendant Hannover House, Inc. is a
Wyoming corporation, with its principal
place
of business at 355 N. College Ave., Suite 4, Fayetteville, AR 72701. Hannover House, Inc. is
publicly-traded company with stock on the OTC Markets exchange, and
approximately 2,275 total shareholders. Defendant
Medallion Releasing, Inc. is an Arkansas corporation, and a wholly-owned
subsidiary of Defendant Hannover House, Inc., which conducts business from its
principal offices at 355 N. College Ave., Suite 4, Fayetteville, AR, 72701.
Individual Defendant Eric Parkinson is a resident of Washington County,
Arkansas.
2.
Plaintiff Bruce R. Lewin (“Lewin”) is a
resident of the state of New York,
residing
at 40 Channel Pond Court, Southampton, NY 11968. Defendants believe that
Plaintiff Lewin is a member of the New York State registered entity BRL IV,
LLC, with 185 E. 85th St., # 15E, New York, NY, 10028 as its address
for delivery of service.
3.
On October 15, 2018, the Supreme Court of
the state of New York, County of
New
York, entered a default and later a judgment (the “Judgment”) in favor of the
Plaintiff against the above-described Defendants jointly and severally.
Subsequently, the Judgment was registered in the Circuit Court of Washington
County, Arkansas as a foreign default judgment from a sister state, and the
case was assigned the above-described number.
4.
On April 28, 2021, Defendants Hannover
House, Inc., Medallion Releasing,
Inc.
and individual Eric Parkinson were served a notice that a motion for a Writ of
Execution in favor of Plaintiff had been filed in this court. Individual
Defendant D. Frederick Shefte was not listed on the Writ of Execution,
ostensibly due to a February, 2021 personal bankruptcy filing by Shefte, which
was motivated in part the result of excessive and past due medical bills.
5.
This Court should set aside or modify the
amount of the Default Judgment, on
the
following grounds:
First, Lewin procured the Default
Judgment through multiple fraudulent misrepresentations to the New York court.
Lewin represented to the court that Lewin had an “agreement” with Defendants,
wherein no such agreement exists; he represented that his complaint was a
breach of contract case, yet was not able to produce a contract with
Defendants; Lewin also claimed to the court that individual Defendants
Parkinson and Shefte had issued him a “personal” guarantee in support of the
non-existent agreement, even though Hannover House officers are expressly
forbidden under corporate by-laws and OTC Markets guidelines from ever issuing
any sort of personal guarantee; Lewin represented to the New York court that he
had personally provided $1.3-million dollars to the Defendants, even though the
supporting documentation in the New York case showed that Lewin did not provide
any personal funds, but that an entity named BRL IV, LLC had provided $350,000
to Defendant Hannover House, Inc. and approximately $950,000 in additional
funds in payment directly to third party vendors for marketing and distribution
services performed on the theatrical, home video and Netflix release of the
movie “Dancin’ It’s On” – a feature film which Defendants believe was produced with
investment capital provided by Lewin. The funds paid by BRL IV, LLC – which is
not a Plaintiff in the New York case – were for marketing and distribution services
provided by Defendant Hannover House, Inc. for the benefit of production
company East Side Story Films, LLC – which was also not a named party to the
New York Case. Although Defendant Hannover House, Inc. acknowledges the receipt
of $350,000 in fees on behalf of East Side Story Films, LLC, which were paid to
Hannover House by BRL IV, LLC, on behalf of East Side Story Films, LLC, there
is no agreement with any party for Hannover House to be obligated to return or
repay its earned fees. The only
agreement that exists with Defendant Hannover House regarding the movie
“Dancin’ It’s On” is with the production company, East Side Story Films, LLC of
Florida.
Second, Lewin obtained the default
judgment in New York due to the lack of timely responses by Defendant D.
Frederick Shefte, then President of Defendant Hannover House, under which job
duties he was assigned, authorized and instructed with the responsibility to
coordinate all necessary responses on behalf of all of the named Defendants.
Shefte’s negligence in responding in a timely manner to the New York court
issues is excusable and due primarily to his dire health condition during in
2018, which included at least four hospitalizations and a total of eighteen
weeks at the Washington Regional Medical Center and the Walker Heart Institute.
The New York court process was proceeding during the time frame that Shefte was
physically and mentally incapacitated due to severe cardio-pulmonary issues,
from which he ultimately survived but has not yet fully recovered. The lack of
responses by Defendants is excusable neglect due to Shefte’s severe health challenges,
and is grounds for the New York judgment to be set aside.
Third, Defendants have engaged
counsel in New York to move to set-aside the New York Judgment on various
grounds, including those stated above.
The attorney for the Defendants in the New York case is Raymond Ragues
(“Ragues”), with offices at 33 W 19th St 4th
floor, New York, NY 10011, tel. 917-921-1333.
Attorney Ragues believes that the motions he is filing on or
about Wednesday, May 19, 2021 in New York will result in a re-evaluation of the
merits of the default judgment, and that the New York court’s actions as
such will negate the applicability and appropriateness of enforcement actions
in Arkansas under the sister-state judgment precedents.
6.
This Court has full authority to set aside
or modify the Default Judgment. A
foreign
judgment registered in Arkansas “is subject to the same procedures, defenses,
and proceedings for reopening, vacating or staying as a judgment of a court in this
state.” Ark. Code Ann. § 16-66-602; Nationwide Ins. Enterprise
v. Ibanez, 368 Ark. 432, 246 S. W. 3d 883 (2007) (affirming Benton County
Circuit Court’s order granting motion to set aside or reduce foreign default
Judgment out of Washington state).
7.
Under Arkansas law, a court may set aside
a default judgment previously
entered
if the judgment is based on fraud [intrinsic or extrinsic], misrepresentation,
or other misconduct of an adverse party, or if there is any other reason
justifying relief from the operation of the judgment. See Ark. R. Civ. P. 55
(c) (3) and (4).
8.
A default judgment will be set aside where
a defendant is lulled into a false
sense
of security through fraud or misrepresentation on the part of the plaintiff. See
McAllester v. Koban, 214 Ark. 14, 19, 214 S.W. 23d 500, 503 (1948).
Defendants were told by David Winters, director of the film “Dancin’ It’s On”
and manager of East Side Story Films, LLC that he was working with Lewin to
placate his concerns that the critical response to “Dancin’ It’s On” was poorly
received and that the film’s release would not be profitable. Defendants were
lulled into a false belief as stated by David Winters that the Lewin case in
New York was to be withdrawn, which proved later to have not been an accurate assessment.
David Winters was the signatory on behalf of East Side Story Films, LLC for the
film releasing agreement with Defendant Hannover House. During 2018, while
Shefte was hospitalized and the Lewin case was proceeding without Defendant’s
knowledge, Winters was communicating with Defendant Parkinson regarding a
variety of new projects, including a multi-title distribution pact, and a new
holiday feature film entitled “Nicholas Jingle” to star Johnny Depp and
Angelina Jolie (both actors had previously worked with director David Winters
in the past). Accordingly, Defendants were lulled into believing that Winter’s
pledge to get the Lewin case withdrawn was both sincere and accurate.
9.
Toward its objective of obtaining the
Default Judgment in New York, Plaintiff
Lewin
represented to the court that:
a. An agreement
existed between the Plaintiff and Defendants (which is untrue);
b. That Plaintiff
funded the release of the film “Dancin’ It’s On” (which is untrue as all of the
release funding occurred through the entity BRL IV, LLC, which was not a party to
the New York case);
c. That “no monies had been received” even
though all theatres were instructed by Defendant Hannover House to remit all
payments directly to BRL IV, LLC at their registered address in New York City;
d. That Defendants Parkinson and Shefte had
issued “personal guarantees” despite the corporate prohibition on such an
action. In making these
misrepresentations, Lewin abused the judicial process and is attempting to
utilize the authority of this Court and the resources of Washington County to
collect a debt that is not owed.
10.
This Court should order a hearing on
damages to review the actual contract
between
Hannover House and East Side Story Films, LLC, as well as evidence of payments made
by theatres and other parties and charges, and to rule on the proper status of
the judgment. Pending hearing, this Court should stay execution of the
judgment.
11.
The stay of execution is necessary because
Plaintiff’s local attorney, J. Brian
Ferguson,
is attempting to take the physical assets of the Defendants, including all
furniture, fixtures, computers and work equipment that Hannover House uses in
its daily operations. Plaintiff’s local counsel is also attempting to enforce
the writ against Defendant Parkinson in a manner which greatly exceeds the authority
of a judgment creditor under New York and Arkansas law, which has expressed and
specific exceptions for personal possessions, furnishings, work tools
(including computers and cell phones) and limitations on what sort of vehicle
can legally be attached under New York judgment enforcement laws. Any such
execution at this time would cause the Defendants irreparable harm. On the
other hand, Plaintiff Lewin will suffer no prejudice as the result of a modest
stay to permit an orderly resolution of the issues and to avoid a gross
injustice.
WHEREFORE, Separate Defendants respectfully
request that this Court grant their Motion to Set Aside Default Judgment, or in
the alternative, to Modify the Judgment, and to stay execution of the judgment
pending further orders of this Court.
Respectfully
submitted,
________________________________
Stacy
E. Alexander, ABA # 06259
David
G. Nixon, ABA #88048
The
Nixon & Alexander Law Firm
4100
Wagon Wheel Rd.
Springdale,
AR 72762
stacy@nixonlaw.com
david@nixonlaw.com
CERTIFICATE OF SERVICE
I
hereby certify that I have on May 17, 2021, sent via electronic email, a true
and correct copy of the foregoing document, addressed to:
J.
Brian Ferguson, Esq.
brian@ozarkfunds.com
_________________________________
Stacy
E. Alexander
'
