Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Professional Traders Fund, LLC v. Prairie Oil & Gas

October 29, 2007; as amended November 7, 2007

PROFESSIONAL TRADERS FUND, LLC, PLAINTIFF,
v.
PRAIRIE OIL & GAS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

MEMORANDUM OPINION

This matter is before the Court on plaintiff's motion to enforce a settlement.

Facts

The Settlement and the Consent Judgment

On February 9, 2006, plaintiff sued defendant Prairie Oil & Gas, Inc. ("Prairie") for nonpayment of a promissory note and the remaining defendants for failing to deliver 10,899,999 shares of Prairie common stock collateral pledged pursuant to a certain pledge agreement in the proper form. On October 26, 2006, the parties entered into a Stipulation of Settlement and Consent to Enter Judgment (the "Settlement Stipulation") that was "so ordered" by the Court on October 30, 2006.

The principal terms of the Settlement Stipulation were that

* The parties consented to the entry of a consent judgment in the form attached to the Settlement Stipulation as Exhibit A.

* Notwithstanding the foregoing, if by November 3, 2006, the individual defendants transferred to plaintiff 9,999,999 shares of Prairie common stock previously issued to them and pledged to plaintiff, and if defendant Empire Stock Transfer, Inc. ("Empire") reissued to plaintiff 900,000 shares then held in the name of Diversified Equities, Inc. ("Diversified"), then a consent judgment would be entered only against Prairie in the form annexed as Exhibit B and plaintiff would waive its damage claims against the individual defendants.

* The defendants other than Empire "represent[ed] and warrant[ed] that, in accordance with [a] . . . certain side letter agreement . . . , Prairie has not engaged in any transaction from [September 21, 2005] to [October 26, 2006] that would have had the effect of diluting [plaintiff's] interest as a holder of pledged shares in Prairie . . . ." They "further represent[ed] and warrant[ed] that the 9,999,999 shares and 900,000 shares transferred pursuant to [the Settlement] Stipulation [would] come[] from shares previously issued to [the individual defendants and Diversified], and will not have a dilutive effect on the company's common stockholders."

The parties submitted and the Court on October 30, 2006 signed a consent judgment, apparently in the form of Exhibit A to the Settlement Stipulation. In brief, it awarded plaintiff a monetary recovery against Prairie and decrees of specific performance against the individual defendants and Empire compelling the delivery by the individuals of the 9,999,999 shares and the reissuance by Empire of the 900,000 shares to plaintiff. The judgment included a clause that stated that:

"The Court shall retain jurisdiction over this action only for the purpose of enforcing this Judgment on Consent."

The Dispute

Plaintiff evidently believed that the 10,899,999 shares to which it became entitled by virtue of the Settlement Stipulation and Consent Judgment would give it a majority of the common stock of Prairie. This belief apparently was founded on the conjunction of Prairie's 2005 financial statements, which showed that 21,247,009 common shares were outstanding at year end, and the representation and warranty in the Settlement Stipulation. In fact, however, plaintiff learned upon the issuance of Prairie's 2006 financial statements that Prairie on October 10, 2006 cancelled 1,730,000 "founders' shares" and that it then issued 9,999,999 "settlement shares" on October 31, 2006. In consequence, the total shares outstanding on December 31, 2006 was 29,517,008, of which plaintiff's holding amounted to only 36.9 percent. Plaintiff claims that the October 2006 transactions breached the warranty contained in the Settlement Stipulation and seeks an ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.