EB Holdings II, Inc., a Nevada corporation, reports the following information in connection with its EUR 600m PIK Loan Agreement:
On August 26, 2016, in Las Vegas, the GoldenTree Group filed a lawsuit in Nevada State Court making numerous, unfounded accusations against EB Holdings II, Inc., Howard M. Meyers, Albert P. Lospinoso, Eco-Bat Technologies Limited, Quexco Inc. and RSR Corporation.
On November 29, 2016, Eco-Bat Technologies Limited, Quexco Inc. and RSR Corporation were dismissed from the lawsuit.
Howard Meyers, President of EB Holdings II, Inc. stated, “The GoldenTree Group embarked on a course of action in Nevada and after filing the initial complaint, the GoldenTree Group continued as late as last week to file further lawsuits with the Nevada State Court which are, we believe, unsubstantiated and untruthful.”
Further Howard Meyers stated, “Clearly disappointed with decisions made by the presiding Judge in Nevada State Court and fearful of the scheduled trial date in April 2018 to adjudicate the collectability of EB Holdings II, Inc.’s debt, and after failing to reach agreement during extensive settlement negotiations over the past several months, the GoldenTree Group filed yesterday, May 18, 2017; an Involuntary Petition in Federal Bankruptcy Court against EB Holdings II, Inc. We are of the opinion this additional lawsuit seeks to forum shop and circumvent the State Court proceedings.”
“We believe the petitioning creditors in the Nevada case – GoldenTree, Kneiff Tower, Mount Kellett, Grace Bay, and Arvo – have taken to bankruptcy court to avoid the consequences of their own state court lawsuit in Las Vegas,” Meyers said. “Knowing they could not properly call a default under the credit agreement to which they are purportedly parties, these funds lodged meritless claims in their state court lawsuit in an effort to improperly accelerate the debt.”
Meyers continued, “Improper acceleration has consequences: the GoldenTree Group’s actions have resulted in defenses and counterclaims disputing the entire balance of the loan. Not only have these defenses and counterclaims withstood three separate dismissal motions, the Nevada State Court has determined that they raise genuine issues of material fact. We believe that in an attempt to avoid facing discovery, the funds have now commenced an improper involuntary chapter 11 case. EB Holdings II, Inc. will vigorously defend against the involuntary petition.”
The involuntary case or the state court litigation against EB Holdings, Inc. is not expected to have an operational impact on its operating subsidiary, Eco-Bat Technologies Limited. Meyers said, “The company remains singularly focused on serving its stakeholders across the globe.”