New email out from the LWP Action Group about Friday's Court Case. Certainly doesn't sound like Ziggy is vigorously defending the case.
LWP Technologies returns to the Supreme Court on Friday 21 July over the failed Graphenera Joint Venture with Viktor Volkov.
LWP instigated the court case over what it deemed a breach of the Shareholders Agreement in that Volkov has additional patents lodged that were in breach of the Agreement. LWP was seeking an injunction and cancellation of the 30 million shares issued to Volkov as part of the agreement, a declaration that the Shareholders Agreement is a legally binding document, compensation of the $774,000 LWP spent on the joint venture as well as costs and damages. It was mid August when the concerns about additional patents were raised. This followed two rounds of due diligence looking specifically into patent issues with LWP announcing to the ASX that they had found no items of concern in the technology. The exact table of patents that was used in the breach notification was posted on Social Media website HotCopper as early as 10 July following a basic IP Australia patent search. How come shareholders could find this information out easily, but two rounds of searches by a patent attorney couldn’t?
Volkov’s lawyer raised concerns over the binding nature of the Shareholders Agreement as it was signed by Siegfried Konig and Sean Corbin as Graphenera directors at a time when the sole director of Graphenera was Mr Brian Moller of Hopgood Ganim lawyers. This is confirmed by Sean Corbin subsequently being unable to open a bank account under Graphenera due to him not being a director. In addition, other key conditions precedent to the Shareholders Agreement were not fulfilled by LWP. On 5 September, Mr Moller backdated a Change of Director notice for Sean Corbin and Siegfried Konig to 26 May – before the Shareholders Agreement was signed.
Submission on Costs – LWP
LWP switched lawyers from Hopgood Ganim to Lynch Andrews halfway through this case for reasons unknown.
The submission on costs from Lynch Andrews of behalf of LWP sought to adjourn the proceedings with costs reserved. They raised three issues: whether the Shareholders Agreement was valid, whether it was terminated and whether the block of 30 million shares issued to Volkov had already been sold.
Submission on Costs – Volkov
Volkov’s submission on costs points out that key information affecting the application are omitted from Siegfried Konig’s affidavit – namely that the Shareholders Agreement had already been terminated and that Konig and Corbin were not directors of Graphenera at the time of signing of the agreement.
Case Adjourned
The application by LWP Technologies was adjourned on 3 February, 2017 with LWP ordered to submit a statement of claim by 3 March, 2017. This statement of claim was never submitted.
Cost Application
Both sides have now submitted subsequent affidavit’s in conjunction with Volkov applying for the original case to be dismissed as well as LWP paying costs and incidentals. These documents reveal further gaping holes in LWP’s case.
LWP breached the Court order by failing to submit a Statement of Claims as requested by the judge. Volkov’s lawyer was advised that Lynch Andrews were no longer representing LWP and that LWP was to be acting in person.
Siegfried Konig’s affidavit makes no mention of the concerns raised in the initial court appearance – the validity of the Shareholders Agreement, key information being omitted from his original Affidavit and the back dating of key documentation by Mr Brian Moller. LWP announced to the ASX on 18 July that it intended to “vigorously defend the application” however documentation lodged to date points to the opposite. With no lawyer representing them and making no mention of any of the concerns raised last time, a favourable decision appears unlikely.
Siegfried Konig, along with the other LWP directors, formed the view that Volkov did not have the financial capacity to meet any judgement or other financial obligations that may have arisen so it ceased to provide instruction to its legal representatives. Looking at LWP Technologies recent cash flow reports, perhaps it is not Volkov who does not have the financial capacity to meet any judgement or other financial obligations which may result from this court appearance.
LWP Price at posting:
0.1¢ Sentiment: None Disclosure: Not Held
