New Litigation, Old Case

Here is some new litigation from an old case centering around the seed crushing plant in Montana that used to be owned by GreenShift.  Thanks to Nobody who updated me in the comments to AnimalMother's Post on I-Hub.  Here is all that is on Pacer as of now.  Since I was at Pacer I also checked the MDL case and the last update there was the 6 May filing I posted on the 8th.  This case does not come up under a GS CleanTech pacer search - so that's why I missed it till today. 

Here is a quick history from the 1Q just out:

On October 31, 2006, the Company guaranteed a secured note issued by a wholly owned subsidiary of the Company’s former subsidiary, GS AgriFuels Corporation, in the principal amount of $6,000,000 to Stillwater Asset-Backed Fund, LP. The balance due to Stillwater at March 31, 2011 and December 31, 2010 was $2,071,886. The operations of GS AgriFuels were discontinued during 2009. Viridis Capital, LLC subsequently acquired the stock of GS AgriFuels during 2010, and has agreed to indemnify the Company with respect to the foregoing amounts.


More importantly from page 21 of the same 1Q:

Effective December 31, 2010, Viridis Capital, LLC and the Company entered into an agreement pursuant to which Viridis acquired the stock of GS AgriFuels Corporation and GS Design, Inc., from the Company for $5,000. The terms of the agreement provided for the acknowledgment by the parties of the continuing first priority security interest of the Company’s senior lender on the stock and assets of each entity, and the continuing guarantees and obligations of both Viridis and the Company with respect to amounts due from the Company to its senior lender. In addition, Viridis and the Company entered into an addendum to the December 31, 2010 agreement, pursuant to which Viridis agreed to indemnify and hold the Company harmless from and against any and all claims that may be asserted against the Company involving the acquired entities.

So it looks like Mr Kreisler has personally taken on the burden of any litigation that GS Agrifuels is involved in - to protect the interests of the GreenShift investors . . .  not surprising in some parts . . .  but a difficult narrative to explain in other parts of the GreenShift community.
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1:11-cv-03259-LBS Max et al v. GS Agrifuels Corporation et al

Leonard B. Sand, presiding
Date filed: 05/13/2011
Date of last filing: 05/13/2011
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SUMMONS ISSUED as to Mark Angelo, Carbonics Capital Corporation, GS Agrifuels Corporation, GreenShift Corporation, John Does 1 through 100, Kevin Kreisler, Paul Miller, Troy Rillo, Thomas Scozzafava, Sustainable Systems, Inc., Sustainable Systems, LLC, Viridis Capital, LLC, Ya Global Investments (U.S.), LP, Ya Global Investments II (U.S.), LP, Ya Global Investments LP, Ya Global Investments SPV, LLC, Yorkville Advisors, LLC. (ama)
Magistrate Judge Debra C. Freeman is so designated. (ama)
Case Designated ECF. (ama)
RULE 7.1 CORPORATE DISCLOSURE STATEMENT. No Corporate Parent. Document filed by Amazing Milling, LLC, Michael Amspaugh, Howard "Nick" Chandler, Stephen Charter, Conway Private Equity Group LLC, Edward T. Holzheimer, Lifeline Produce, Ian O. Mausner, David W. Max, Dallas Neil, Kent Perelman, Susan Russell, Eric Scott, Jenny Scott, Clay Franklin Scrogham, Gary Scrogham, Linda Scrogham, Michael Skinner.(ama)
COMPLAINT against Mark Angelo, Carbonics Capital Corporation, GS Agrifuels Corporation, GreenShift Corporation, John Does 1 through 100, Kevin Kreisler, Paul Miller, Troy Rillo, Thomas Scozzafava, Sustainable Systems, Inc., Sustainable Systems, LLC, Viridis Capital, LLC, Ya Global Investments (U.S.), LP, Ya Global Investments II (U.S.), LP, Ya Global Investments LP, Ya Global Investments SPV, LLC, Yorkville Advisors, LLC. (Filing Fee $ 350.00, Receipt Number xxxx)Document filed by Stephen Charter, Conway Private Equity Group LLC, Susan Russell, Edward T. Holzheimer, David W. Max, Lifeline Produce, Ian O. Mausner, Jenny Scott, Amazing Milling, LLC, Gary Scrogham, Linda Scrogham, Michael Skinner, Eric Scott, Michael Amspaugh, Clay Franklin Scrogham, Howard "Nick" Chandler, Dallas Neil, Kent Perelman.(ama)

SkunK

Ps.  For the research hounds:

You can go back to the 2009 annual report for a history, pages 19 and 56.  The way I understand it (which may or may not be the way someone else understands it) is the crushing plant was bought from a group who did not have a clear title.  They only owned a right to purchase, which was about to expire.  So after it was purchased, without a clear title, the plant could not be used for collateral for expansion.  The plant could not be operated for profit in the state it was in - it needed to be expanded and modernized to achieve economies of scale.  It lingered on, tied up in litigation . . until it finally went teats up.  This litigation is echos of that.  Here is from the 2009 10K:

The Company’s GS AgriFuels subsidiary is party to the matter entitled GS AgriFuels Corporation v. Chaykin, et al. The action was filed in the Supreme Court of the State of New York, County of New York, on February 2, 2009. The Complaint seeks damages for defendants' fraudulent misrepresentations, tortious interference, breach of acquisition agreements and related claims relating to the sale by the defendants of the stock of Sustainable Systems, Inc. (“Culbertson”) to GS AgriFuels, and arising from the disclosure by the defendants that Culbertson owned its Culbertson, Montana oilseed crushing facility when in fact Culbertson merely held the right to purchase the Montana facility at the time of the acquisition by GS AgriFuels; the failure to disclose by the defendants that Culbertson’s right to purchase the Montana facility, as well as any investment made in the Montana facility, was subject to forfeiture within months of entering into the acquisition agreements with GS AgriFuels; and, the provision by the defendants of materially false financial statements. The defendants served a separate action entitled Max, et al. v. GS AgriFuels Corporation, et al. in the Montana Fourth Judicial District Court in response to GS AgriFuels’ New York complaint; this Montana complaint was dismissed in January 2010. The New York court granted GS AgriFuels’ March 2010 motion for summary judgment as to liability on GS AgriFuels’ fraud and breach of contract claims on April 8, 2010. During 2008 and 2009, three of the former shareholders of Culbertson, corresponding to about 60% of the former shareholders’ prior ownership interest in Culbertson, entered into settlement agreements pursuant to which has all parties have been released from all obligations under the relevant acquisition agreements and otherwise. Management is unable to characterize or evaluate the probability of any outcome at this time.