$CMGO: market disappointed at settlement number
Post# of 107638
(Total Views: 398)
Posted On: 04/09/2019 9:18:30 AM
$CMGO: market disappointed at settlement number
"5. Legal Proceedings
We are subject to certain claims and litigation in the ordinary course of business. It is the opinion of management
that the outcome of such matters will not have a material adverse effect on our consolidated financial position,
results of operations or cash flows.
On September 23, 2014, XA, the Company’s wholly owned subsidiary, filed a lawsuit in the Supreme Court of
the State of New York, County of New York against Hudson Gray and its principals alleging wrongdoing by the
defendants in connection with soliciting XA’s clients and seeking against further contact with XA clients. The
Company conducted an internal investigation of actions taken by XA’s former employees, and discovered that
there were numerous instances of conversion of XA assets and funds, such as personal charges on company
credit cards, payments for cell phones for family members, reimbursement for personal travel and other expenses
which did not relate to XA in any way, and transactions between XA and parties owned by these former employees
who did not disclose their interests in them. In January 2019, the Company settled this lawsuit . The settlement
was for 2.75 million dollars. It is to be paid out over 30 months and is fully guaranteed by the main defendants.
In order for the settlement to take place the Company’s primary legal team and a litigation support company
agreed to take a significant discount from their $1.5 million that was owed to them. As a result, the Company will
receive slightly less than 2 million net. When it came to the decision to settle many factors were considered
including the cost of further litigation.
In October, 2014, Ronald Burkhardt, XA,s former Executive Chairman and former member of the Company’s
Board of Directors filed a lawsuit in the Supreme Court of the State of New York, County of New York, alleging
breach of his employment contract and seeking approximately $695,000 in damages. This lawsuit where a judgement was entered against the Company for approximately $775,000, was settled with Burhardt for $105,000.
https://backend.otcmarkets.com/otcapi/company...27/content
"5. Legal Proceedings
We are subject to certain claims and litigation in the ordinary course of business. It is the opinion of management
that the outcome of such matters will not have a material adverse effect on our consolidated financial position,
results of operations or cash flows.
On September 23, 2014, XA, the Company’s wholly owned subsidiary, filed a lawsuit in the Supreme Court of
the State of New York, County of New York against Hudson Gray and its principals alleging wrongdoing by the
defendants in connection with soliciting XA’s clients and seeking against further contact with XA clients. The
Company conducted an internal investigation of actions taken by XA’s former employees, and discovered that
there were numerous instances of conversion of XA assets and funds, such as personal charges on company
credit cards, payments for cell phones for family members, reimbursement for personal travel and other expenses
which did not relate to XA in any way, and transactions between XA and parties owned by these former employees
who did not disclose their interests in them. In January 2019, the Company settled this lawsuit . The settlement
was for 2.75 million dollars. It is to be paid out over 30 months and is fully guaranteed by the main defendants.
In order for the settlement to take place the Company’s primary legal team and a litigation support company
agreed to take a significant discount from their $1.5 million that was owed to them. As a result, the Company will
receive slightly less than 2 million net. When it came to the decision to settle many factors were considered
including the cost of further litigation.
In October, 2014, Ronald Burkhardt, XA,s former Executive Chairman and former member of the Company’s
Board of Directors filed a lawsuit in the Supreme Court of the State of New York, County of New York, alleging
breach of his employment contract and seeking approximately $695,000 in damages. This lawsuit where a judgement was entered against the Company for approximately $775,000, was settled with Burhardt for $105,000.
https://backend.otcmarkets.com/otcapi/company...27/content
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