UPDATE - Bad News Good News
Post# of 9165
(Total Views: 236)
Posted On: 08/31/2025 11:28:31 PM
Shareholder Update
I want to provide you with an important update regarding the legal action I filed in Delaware.
The Court has dismissed my case on the ground that the claims were derivative in nature. A derivative action is one in which the alleged harm affects all shareholders equally, rather than an individual shareholder. For example, when Faro and Barnhiser claimed personal ownership of the company’s patents after running NanoLogix into the ground, that harm impacted every shareholder, not just me.
Normally, to bring a derivative action, the law requires that the company’s officers and board of directors first be notified of the claims and given an opportunity to address them. Since NanoLogix is a void Delaware corporation with no active board, I believed I could not comply with that requirement and therefore filed personally. I also noted that a void Delaware corporation cannot itself participate in litigation, act as a plaintiff or defendant, or even retain counsel.
Although the Court dismissed the case, it is important to emphasize that this decision was only about the procedural question of whether the claims were derivative. The dismissal had nothing to do with the merits of the claims themselves—including the core allegation that Faro and Barnhiser asserted personal ownership of patents that, according to numerous press releases and company materials, were represented as belonging to NanoLogix.
The good news is that the Judge appeared to recognize the seriousness of the issues and the harm caused to shareholders. He specifically left the door open for reinstatement of the action if I retain legal counsel. Even more striking, he went so far as to suggest that “counsel should give consideration to seeking to have a receiver appointed for the purpose of pursuing the corporation’s putative claims against the allegedly faithless fiduciaries.”
In my layperson’s view—and in the opinion of several attorneys I have consulted—it is highly unusual for a Judge to provide such pointed guidance after dismissing a case. The Court also remarked that, if the matter is reinstated, the defendants “should reconsider some of the defenses they argued.” Both comments underscore that the Court takes the allegations of fiduciary breaches by Faro and Barnhiser very seriously.
I will keep you informed as developments continue, including my efforts to retain counsel to pursue reinstatement and potential remedies on behalf of all shareholders.
I want to provide you with an important update regarding the legal action I filed in Delaware.
The Court has dismissed my case on the ground that the claims were derivative in nature. A derivative action is one in which the alleged harm affects all shareholders equally, rather than an individual shareholder. For example, when Faro and Barnhiser claimed personal ownership of the company’s patents after running NanoLogix into the ground, that harm impacted every shareholder, not just me.
Normally, to bring a derivative action, the law requires that the company’s officers and board of directors first be notified of the claims and given an opportunity to address them. Since NanoLogix is a void Delaware corporation with no active board, I believed I could not comply with that requirement and therefore filed personally. I also noted that a void Delaware corporation cannot itself participate in litigation, act as a plaintiff or defendant, or even retain counsel.
Although the Court dismissed the case, it is important to emphasize that this decision was only about the procedural question of whether the claims were derivative. The dismissal had nothing to do with the merits of the claims themselves—including the core allegation that Faro and Barnhiser asserted personal ownership of patents that, according to numerous press releases and company materials, were represented as belonging to NanoLogix.
The good news is that the Judge appeared to recognize the seriousness of the issues and the harm caused to shareholders. He specifically left the door open for reinstatement of the action if I retain legal counsel. Even more striking, he went so far as to suggest that “counsel should give consideration to seeking to have a receiver appointed for the purpose of pursuing the corporation’s putative claims against the allegedly faithless fiduciaries.”
In my layperson’s view—and in the opinion of several attorneys I have consulted—it is highly unusual for a Judge to provide such pointed guidance after dismissing a case. The Court also remarked that, if the matter is reinstated, the defendants “should reconsider some of the defenses they argued.” Both comments underscore that the Court takes the allegations of fiduciary breaches by Faro and Barnhiser very seriously.
I will keep you informed as developments continue, including my efforts to retain counsel to pursue reinstatement and potential remedies on behalf of all shareholders.
(2)
(0)