SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 18, 1995
Utah Resources International, Inc.
(Exact name of registrant as specified in its charter)
Utah 0-9791 87-0273519
(State of incorporation) (Commission File No.) (IRS Employer Id. No.)
297 W. Hilton Drive, Suite #4
St. George, Utah 84770
(Address of principal executive offices including zip code)
Issuer's telephone number (801) 628-8080
(Not Applicable)
(Former name or former address, if changed since last report)
Item 5. Other Events
On July 18, 1995, Anne and Victoria Morgan, shareholders of the
Company and the adult daughters of John H. Morgan, Jr. and Daisy
Morgan, directors and shareholders of the Company, filed a lawsuit
against R. Dee Erickson, E. Jay Sheen, Lyle D. Hurd, Utah Resources
International, Inc. (the "Company" or "URI"), MidWest Railroad
Construction and Maintenance Corporation, a Wyoming corporation, Robert
D. Wolff and Judith Wolff, in the United States District Court for the
Central District of Utah, Case Number 2:95CV 661J. Messrs. Erickson,
Sheen and Hurd are directors of the Company, MidWest is a company
recently acquired by Utah Resources International, and Mr. and Mrs.
Wolff were the shareholders and Mr. Wolff was the founder and President
of MidWest.
The complaint of Anne and Victoria Morgan alleges: (1) violations of
the proxy solicitation rules under Section 14 of the Securities
Exchange Act of 1934, through failure to disclose the alleged plans and
schemes of Messrs. Erickson, Sheen and Hurd to seize control of and
loot URI through the MidWest acquisition and transactions occurring
simultaneously therewith. The complaint alleges the plaintiffs are
entitled to mandatory injunctive relief undoing the re-election of
Messrs. Erickson, Hurd and Sheen in January of 1995, declaring
amendments to the Company's Articles of Incorporation relating to
indemnification and limitation on the liability of officers and
directors null and void, requiring new proxy materials be circulated
and another shareholders meeting be held to consider and act on the
election of directors, all of the indemnification provisions previously
approved, and all of the transactions associated with the MidWest
acquisition, including the fees, payments, compensation and benefit
packages paid Messrs. Wolff, Erickson, Sheen and Hurd; (2) violations
of Sections 13, 18 and 10(b) of the Securities Exchange Act of 1934,
through failure to disclose the same alleged plans and schemes, as well
as the MidWest acquisition transactions; (3) breach of fiduciary duty
by Messrs. Erickson, Sheen and Hurd, in connection with the MidWest
acquisition transaction and collateral transactions, for firing Mr.
Morgan as the Company's chief executive officer, and for failing to
properly communicate with shareholders; (4) breach of professional
duties by Mr. Sheen acting as counsel for URI; (5) fraud; (6) negligent
misrepresentation; (7) constructive fraud; (8) wasting and looting of
corporate assets; (9) conversion and self-dealing; (10) negligence,
corporate mismanagement, violation of duty of care; (11) breach of duty
of loyalty; (12) collusive tort; (13) conflicting interest and
unauthorized transaction, all relating to the MidWest acquisition and
contemporaneous transactions; (14) declaration that the transaction is
ultra vires, null and void, based on the allegation that the Company
was dissolved at the time of the closing of the MidWest acquisition,
and that the actions were not subsequently ratified or should not be
allowed to be ratified. The plaintiffs allege they are entitled to an
order voiding the MidWest acquisition and that they are entitled to
injunctive relief restoring the "status quo;" and, (15) for an
accounting and recoupment and return of property against all defendants.
The complaint seeks: (1) unspecified damages; (2) rescission; (3)
mandatory and prohibitive injunctive relief; (4) declaratory relief
that the MidWest acquisition and share exchange is ultra vires, null
and void, and for injunctive relief prohibiting or terminating the
transaction; (5) punitive damages; and, (6) interest and attorneys' fees.
No response to the action is due until August 18, 1995. Management
believes the suit to be without merit and expects to vigorously defend
the action. The directors and officers of URI who are defendants are
seeking indemnification and advancement of litigation costs from the
Company, pursuant to existing indemnification provisions of the
Company's Articles of Incorporation and Bylaws. In addition, it is
presently anticipated that the defense of Mr. and Mrs. Wolff and
MidWest Railroad will be financed by URI in accordance with the
indemnification provisions of the Plan of Share Exchange among those
parties.
Since management of the Company believes the suit by Anne and Victoria
Morgan to have been orchestrated by Mr. Morgan, in partial response to
the lawsuit, on July 21, 1995, the Company filed a Motion to Enforce
the Settlement Agreement against John and Daisy Morgan, previously
reached with the Morgans in the Muth shareholders' derivative lawsuit.
The action seeks to require the Morgans to refrain from pursuing the
litigation to undo the MidWest Share Exchange and the re-election of
Messrs. Erickson, Sheen and Hurd, and to vote the shares they
beneficially own in accordance with the requirements of the Settlement
Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: August 2, 1995
Utah Resources International, Inc.
By R. Dee Erickson (SIGNATURE)
Chairman of the Board
