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: March 10, 1998.
Foxmoor Industries, Ltd.
(Exact Name of Registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation)
000-11333 84-0862501
(Commission File Number) (IRS Identification No.)
15225 Thrift Avenue, Suite 205,
White Rock, B.C. Canada V4B 2K9
(Address of Principal Executive Office) (Postal Code)
604-538-2221
(Registrant's telephone number including area code)
3801 E. Florida Avenue, Suite 105, Denver, Colorado 80210
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On February 24, 1998, the Company filed suit in the District Court for the
City and County of Denver, Colorado, against John M. Hanson & Company, P.C., its
former auditors, and two former directors, H. James Nerlin and Norvell S. Rose.
The suit seeks monetary damages from the former independent accountants of the
Company for breach of contract, breach of a covenant of good faith and fair
dealing and professional negligence in connection with the preparation of the
Company's financial statements for many years, including fiscal years 1992
through 1996. The suit is also seeking monetary damages from former directors
who are alleged to have breached their fiduciary duty to the Company by failing
to act in the best interest of the Company, by acting in bad faith, by failing
to ensure that the independent auditors hired by the Company were competent, by
failing to prevent the president of the Company from utilizing Company funds for
personal purposes and by failing to assure that the Company's financial
statements accurately reflected the true nature of the Company's transactions
with the former president.
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Prior to filing the suit, the Company retained an independent accounting
firm to review the Company's books and records and financial statements for the
period from 1992 through June 30, 1997. The allegations in the complaint are
based largely on the findings of the independent accounting firm as reported to
management of the Company. These findings conclude that throughout this period
the amount of cash and the value and collectibility of receivables were
materially overstated and that the amounts due from the former president of the
Company were materially understated. In addition, it appears that many of the
business activities of the Company during this period were not arm's length
transactions, but were with parties related to the former president of the
Company.
As a result of the absence of cash from the Company and the
uncollectibility of a substantial portion of the Company's receivables, the
Company has ceased active business operations. Management has been and is in the
process of collecting receivables and recovering as much of the Company's assets
as possible and has been settling accounts with the Company's creditors. If the
Company is unable to recover any substantial amounts in the litigation described
above, it will be forced to seek protection under federal bankruptcy laws and to
liquidate.
As a result of the past irregularities in the Company's books and records,
the Company does not have the financial resources to cause audited financial
statements to be prepared at this time.
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.
FOXMOOR INDUSTRIES, LTD.
Date: March 10, 1998 By: /s/ Paul Eagland
Paul Eagland, President
