SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 KSB
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
April 5, 2000
(Date of Report)
CNH Holdings Company
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0 17304 11-2867201
(Commission File Number) (IRS Employer Identification Number)
460 Ogden Street, Denver CO 80218
(Address of principal executive offices including zip code)
(303) 282 0083
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 1. Change in Control of Registrant: Not Applicable.
Item 2. Acquisition or Disposition of Assets: Not Applicable.
Item 3. Bankruptcy or Receivership: Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant: Not
Applicable.
Item 5. Other Events:
On April 5, 2000, Registrant filed suit in District Court, City and County of
Denver, State of Colorado as Plaintiff. The suit was filed against Messrs. Larry
V. Tate and Gerald W. Pybas and Southport Environmental and Development, Inc.
(SEDI) The complaint was filed against these defendants for the purpose of (1)
formally rescinding the acquisition of SEDI on June 15, 1998, due to, among
other things, the intentional, gross, willful and wanton misrepresentations of
the defendants in procuring the acquisition of SEDI by Registrant, (2)
recovering all shares of stock issued to Messrs. Tate and Pybas and (3)
recovering all damages incurred by Registrant during the tenure of these
gentlemen's stewardship of the corporation. The claims asserted include
securities fraud, corporate fraud, negligent misrepresentation, breach of
express and implied contract and unjust enrichment.
Item 6. Resignation of Registrant's Directors: Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits: Not
Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CNH HOLDINGS COMPANY
(Registrant)
By: /s/ Mark S. Pierce
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Mark S. Pierce, Chief Executive Officer
Date: April 5, 2000
Exhibit 1. Complaint (Denver District Court)
District Court, City and County of Denver, State of Colorado
Case No.:
CNH HOLDINGS COMPANY,
Plaintiff,
vs.
LARRY TATE
GERALD PYBAS,
SOUTHPORT ENVIRONMENTAL
AND DEVELOPMENT, INC., and
JOHN DOES 1 to 20,
Defendants
COMPLAINT
Plaintiff CNH Holdings Company, by and through counsel, Mark S. Pierce, Esq.,
alleges for its Complaint the following:
PRELIMINARY STATEMENT:
1. Defendants, personally or through the direction of their agents, have engaged
in acts, transactions, practices and courses of business which constitute
violations of Plaintiff's rights granted under the securities laws and
regulations of the United States of America and of the State of Colorado, as
well as violations of Plaintiffs' rights under the common law.
2. Plaintiff brings this action pursuant to Sections 21 and 27 of the Securities
Exchange Act of 1934, as amended (Exchange Act), [15 U.S.C. Section 78v and
Section 78aa], Section 11 51 101, et. seq., Colorado Revised Statutes, as
amended, and various common law principles.
3. Each of the Defendants has, directly or indirectly, made use of the means and
instrumentalities of interstate commerce and of the mails in connection with the
acts, practices, and courses of business herein complained of, a preponderance
of which have occurred within the State of Colorado, and which include devices,
schemes or artifices to defraud or manipulative or deceptive devices or
contrivances in contravention of Section 10(b) of the Exchange Act and Rule 10b
5 thereunder, Section 11 51 101, et. seq., Colorado Revised Statutes, as
amended, and various common law principles.
4. Jurisdiction lies in this Court pursuant to Section 27 of the Exchange Act,
and venue resides pursuant to the provisions of Rule 98(c) of the Colorado Rules
of Civil Procedure since (1) Plaintiff maintains its principal place of business
in the City and County of Denver, State of Colorado (2) a significant portion of
the actions complained of took place in the City and County of Denver, State of
Colorado, (3) the transfer agent for the securities of Plaintiff has received
and acted on the false and fraudulent instructions of Defendants regarding the
control of Plaintiff and of the books and records of the Plaintiff in the City
and County of Denver, and (4) the books and records at issue reside in the City
and County of Denver, State of Colorado.
5. This is an action for money damages and the recovery of shares of stock
pursuant to Section 10(b) of the Exchange Act and Rule 10b 5 thereunder, Section
11 51 101l, et. seq., Colorado Revised Statutes, as amended, and various common
law principles provided by
state law.
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PARTIES:
6. Plaintiff CNH Holdings Company (Plaintiff or, alternatively, CNHH) is a
Nevada corporation which maintains its principal executive and business offices
at 460 Ogden Street, Denver, Colorado 80218, and which previously maintained its
principal business operations during a substantial portion of the acts
complained of at either 1999 Broadway, Ste. 3235, Denver, Colorado 80202 or 1143
Auraria Parkway, Unit 403A, Denver, Colorado 80204.
7. CNH has a class of equity securities (i.e., its common stock) registered
under Section 12 of Exchange Act and is, therefore, required to file reports
under the provisions of Section 13 of the Exchange Act with the U.S. Securities
and Exchange Commission (SEC).
8. Defendant Larry Tate (Tate), on information and belief, is a Texas resident
with a principal business address of 1420 North Longview Street, Kilgore, Texas
75662.
9. Tate has physically transacted business in Colorado in regard of his
relationship with and demands of CNHH, including, among other things, his
purported services and position as an officer, director and significant
shareholder of CNHH.
10. Defendant Gerald Pybas (Pybas), on information and belief, is a Texas
resident with a principal business address of 1420 North Longview Street,
Kilgore, Texas 75662.
11. Pybas has physically transacted business in Colorado in regard of his
relationship with and demands of CNHH, including, among other things, his
purported services and position as an officer, director and significant
shareholder of CNHH.
12. Defendant Southport Environmental and Development, Inc. (SEDI), on
information and belief, is either a Nevada or a Texas corporation with a
principal business address of 1420 North Longview Street, Kilgore, Texas 75662.
13. SEDI has physically transacted business in Colorado in regard of its
relationship with and demands of CNHH, including, among other things, its
relationship with certain purported officers, directors, significant
shareholders, employees, contractors and agents of CNHH.
14. Defendants John Does 1 through 20 are transferees of the shares of common
stock of CNHH which Tate and Pybas acquired through the actions complained of,
none of whom are currently identifiable.
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ALLEGATIONS:
15. On June 15, 1998, CNHH entered into an agreement (the SEDI Contract) with
SEDI and the shareholders of SEDI, those being Tate and Pybas.
16. The negotiations leading to, and the original execution and delivery of, the
SEDI Contract took place in Denver, Colorado, at the principal business offices
of CNHH.
17. CNHH under the SEDI Contract agreed to acquire all of the outstanding
proprietary interest of SEDI in a share for share exchange.
18. CNHH subsequently acquired all of the outstanding shares of SEDI in exchange
for its issuance and delivery of 6,000,000 common shares to Tate and Pybas (the
SEDI CNHH Common Shares) and 200,000 shares of Class A: 10% Dividend Bearing
Convertible Preferred Stock to Tate and Pybas, among others (the SEDI CNHH
Preferred Shares).
19. Tate and Pybas, as a direct and proximate result of the execution and
delivery of the SEDI Contract, received all 6,000,000 SEDI CNHH Common Shares
and 186,000 of the SEDI CNHH Preferred Shares.
20. Tate and Pybas, as a direct and proximate result of the execution and
delivery of the SEDI Contract, were subsequently appointed to the board
governing CNHH.
21. Tate and Pybas, as a direct and proximate result of the execution and
delivery of the SEDI Contract, then appointed themselves as the principal
executive officers of CNHH.
22. The result of the SEDI Contract was that SEDI was subsequently acquired as a
wholly owned subisidiary of CNHH and Tate and Pybas acquired control of CNHH
through their positions as directors and executive officers of CNHH and their
ownership of approximately 80% of the outstanding common and approximately 80%
of theoutstanding preferred stock of CNHH at the time.
23. Section 2.01 of the SEDI Contract provides as follows:
2.01. Organization and Standing. SEDI is a corporation duly organized,
validly existing and in good standing under the laws of Texas, with all
corporate powers to own property and carry on its business as it is now being
conducted. Copies of the articles of incorporation of SEDI delivered to [CNHH]
herewith are complete and accurate as of the Closing Date. SEDI is qualified to
transact business as a foreign corporation and is in good standing in all
jurisdictions in which its principal properties are located or is not required
to be qualified as a foreign corporation to transact business in any other
jurisdiction.
24. The foregoing representation and warranty was knowingly and falsely made by
SEDI, Tate and Pybas.
25. SEDI, Tate and Pybas never delivered copies of the articles of incorporation
of SEDI to CNHH at closing, covenanting to do so subsequently, which covenant
was never fulfilled due to the continued efforts of SEDI, Tate and Pybas to
defraud CNHH.
<PAGE>
26. SEDI was formed subsequent to the execution and delivery of the SEDI
Contract and was not in existence at June 15, 1998.
27. Tate and Pybas deliberately concealed the non-existence of SEDI from CNHH in
furtherance of their fraud on CNHH.
28. Section 2.05 of the SEDI Contract provides as follows:
2.05. Schedule of Assets. [SEDI] shall forthwith deliver to [CNHH] a
separate schedule of assets, specifically referring to this paragraph,
containing, as of the Closing Date, a true and complete: (a) legal description
of all real property owned by SEDI and any real property in which SEDI has a
leasehold interest, including working interests, (b) list of all capitalized
machinery, tools, and equipment of SEDI that sets forth any liens, claims,
encumbrances, charges, restrictions, covenants and conditions concerning the
listed items, (c) list of all machinery, tools, and equipment in which SEDI has
a leasehold interest, with a description of each interest, (d) list of all
patents, patent licenses, trademarks, trademark registrations, trade names,
copyrights and copyright registrations owned by SEDI, and (f) list of all
interests in subsidiaries and/or joint ventures, including, without limitation,
NSG.
29. The foregoing representation was knowingly and falsely made by SEDI, Tate
and Pybas.
30. Neither SEDI, nor Defendants Tate and Pybas, ever intended to deliver or in
fact ever delivered the required and material schedule of assets.
31. Section 2.06 of the SEDI Contract provides, in part, as follows:
2.09. Contractual Obligations. SEDI is not a party to or bound by any
written or oral: (f) purchase, supply or service contracts in excess of $10,000
each or in the aggregate of $100,000 for all such contracts other than in the
ordinary course of business, (g) deed of trust, mortgage, conditional sales
contract, security agreement, pledge agreement, trust receipt or any other
agreement subjecting any of the assets or properties of SEDI to a lien,
encumbrance or other restriction other than in the ordinary course of business,
(h) term contract continuing for a period of more than one year that is not
terminable at will without liability to SEDI or its successors other than in the
ordinary course of business, . . .
32. The foregoing representation and warranty was knowingly and falsely made by
SEDI, Tate and Pybas.
33. SEDI, Tate and Pybas did not disclose at closing or at any subsequent time
that they had entered into a contract with an entity owned and controlled by
Tate and Pybas for the purpose of operating such assets as were subseuquently
transferred to SEDI, the term of which exceeded one year and the amounts payable
under which exceeded $10,000 individually and $100,000 in the aggregate.
34. SEDI, Tate and Pybas did not disclose at closing or at any subsequent time
they they had placed liens against the assets subsequently transferred to SEDI
in other than the ordinary course of business.
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35. Paragraph 2.15 of the SED Contract provides as follows:
2.15. Full Disclosure. As of the Closing Date, SEDI and [Tate and Pybas]
have disclosed all events, conditions and facts materially affecting the
business and prospects of SEDI. [Tate and Pybas] have not witheld knowledge of
any event, condition or fact that they have reasonable grounds to know may
materially affect the business and prospects of SEDI. None of the
representations and warranties made by [Tate and Pybas] or SEDI in this
Agreement or in any other instrument furnished to [CNHH] contains any untrue
statement of a material fact, or fails to state a material fact.
36. The foregoing representation and warranty was knowingly and falsely made by
SEDI, Tate and Pybas.
37. SEDI, Tate and Pybas knew that the assets which they had represented that
SEDI owned were not in fact owned and that SEDI was not going to be able to
purchase or otherwise acquire the most material asset represented, that being a
Salt Dome.
CLAIMS FOR RELIEF:
FIRST CLAIM FOR RELIEF: (Exchange Act Section 10(b) and Rule 10b-5)
38. Paragraphs 1 through 37 are again alleged and are incorporated in this
paragraph.
39. Plaintiff, as a direct and proximate result of the efforts of SEDI, Tate and
Pybas, as purported officers, directors, shareholders and agents of SEDI,
entered into the SEDI Contract, due, in further part, to the material,
intentional, reckless and negligent misstatements of SEDI, Tate and Pybas
concerning the financial and operational condition of SEDI and these defendants'
undertakings to provide for the purchase of a salt dome.
40. Under the terms and conditions of the SEDI Contract, Plaintiff agreed to
purchase the shares of SEDI from Tate and Pybas, a significant portion of which
occurred in Denver, Colorado.
41. Through the efforts of Tate and Pybas, as purported officers, directors,
shareholders and agents of SEDI, and relying on the express representations of
SEDI, Tate and Pybas concerning the financial and operational condition of SEDI,
as well as their individual undertakings to provide the required and necessary
purchase of a salt dome, Plaintiff negotiated, executed and delivered the SEDI
Contract from its offices in Denver, Colorado, and subsequently acquired the
outstanding shares of SEDI from Tate and Pybas and issued the SEDI CNHH Common
Stock and the SEDI CHNN Preferred Stock to Tate and Pybas in exchange, which
exchange was predicated on the material, intentional, reckless and negligent
misstatements of SEDI, Tate and Pybas concerning the financial and operational
condition of SEDI and their individual undertakings to provide for the purchase
of a salt dome.
42. Plaintiff, through its own efforts and despite the material misstatements
and omissions of these defendants, subsequently learned that the financial and
operational condition of SEDI was not what had been represented and warranted to
it before its execution and delivery of the SEDI Contract and that these
defendants never had any intent to purchase a salt dome.
43. Plaintiff, through its own efforts and despite the material misstatements
and omissions of these defendants, subsequently learned that SEDI, Tate and
Pybas did not have the represented financial wherewithal to provide for the
purchase of a salt dome.
WHEREFORE, Plaintiff prays for judgment in its favor and against SEDI, Tate and
Pybas, jointly and severally, for recission of the SEDI Contract, for the return
of the SEDI CNHH Common Stock and the return of the SEDI CNHH Preferred Stock
and for punitive and compensatory damages and pre judgment interest, for
incidental and consequential damages, for costs and reasonable attorneys' fees,
and for such other and further relief as this Court deems just and proper.
<PAGE>
SECOND CLAIM FOR RELIEF: (Section 11 51 101, et. seq., Colorado Revised
Statutes, as amended)
44. Paragraphs 1 through 43 are again alleged and are incorporated in this
paragraph.
45. In soliciting the execution and delivery of the SEDI Contract and the
exchange of securities thereunder by Plaintiff, SEDI, Tate and Pybas made
material misstatements and committed material omissions.
46. As a direct and proximate result of the material misstatements and omissions
of SEDI, Tate and Pybas, Plaintiff has suffered damages.
WHEREFORE, Plaintiff prays for judgment in its favor and against SEDI, Tate and
Pybas, jointly and severally, for recission of the SEDI Contract and for the
return of the SEDI CNHH Common and Preferred Stock, and for punitive and
compensatory damages in an amount to be determined at trial and prejudgment
interest, for incidental and consequential damages, for costs and reasonable
attorneys' fees, and for such other and further relief as this Court deems just
and proper.
THIRD CLAIM FOR RELIEF: (Common Law Fraud and Deceit)
47. Paragraphs 1 through 46 are again alleged and are incorporated in this
paragraph.
48. SEDI, Tate and Pybas had duties to Plaintiff requiring full and complete
disclosure of all material information concerning the subject matter of the SEDI
Contract and of all subsequent and attendant matters, and requiring fair dealing
and good faith with regard to Plaintiff.
49. SEDI, Tate and Pybas made misstatements of material fact, concealed material
facts from Plaintiff, failed to disclose material facts to Plaintiff and dealt
with Plaintiff without fair dealing and in bad faith.
50. The misstatements, concealments, failures to disclose, dishonest dealings
and bad faith actions of SEDI, Tate and Pybas were made and undertaken by them
with the intent of creating a false impression of the actual facts in the mind
of Plaintiff.
51. The misstatements, concealments, failures to disclose, dishonest dealings
and bad faith actions of SEDI, Tate and Pybas were made with the intent to
affect Plaintiff's actions, and these defendants knew that by their own unclear
or deceptive words, conduct and concealment they created a false impression of
the actual facts in the mind of Plaintiff.
52. The misrepresentations and omissions of SEDI, Tate and Pybas were willful
and wanton, and were with reckless disregard for the rights of Plaintiff.
<PAGE>
53. SEDI, Tate and Pybas knew that Plaintiff was not in a position to discover
the truth for itself and that Plaintiff acted in reliance on the misstatements,
concealments and failures to disclose of SEDI, Tate and Pybas, and Plaintiff's
reliance was reasonable and justified.
54. Plaintiff was damaged as a result of its reliance, and as a direct,
proximate and foreseeable result of the actions of SEDI, Tate and Pybas,
Plaintiff has sustained injuries and damage.
55. The actions of SEDI, Tate and Pybas were inflicted by wanton or reckless
disregard for the rights and feelings of Plaintiff, entitling Plaintiff to
exemplary damages.
WHEREFORE, Plaintiff prays for judgement in its favor and against SEDI, Tate and
Pybas, jointly and severally, for compensatory and punitive damages in an amount
to be determined at trial, for prejudgment interest there, costs and reasonable
attorney's fees, and for such other and further relief as this Court deems just
and proper.
FOURTH CLAIM FOR RELIEF: (Negligent Misrepresentation)
56. Paragraphs 1 through 55 are again alleged and are incorporated in this
paragraph.
57. SEDI, Tate and Pybas, at all times relevant hereto, had a pecuniary
interest, direct or indirect, in each and every one of the actions and
transactions relevant to this action and described in this complaint.
58. SEDI, Tate and Pybas made various representations, statements, misstatements
and omissions to state material information to Plaintiff on which Plaintiff
acted in reasonable reliance.
59. SEDI, Tate and Pybas had a duty to Plaintiff to exercise reasonable care or
competence in obtaining and communicating information to and for the use of
Plaintiff and others in connection with the subject matter of this complaint,
and SEDI, Tate and Pybas negligently, recklessly and/or intentionally failed to
fulfil their duty to Plaintiff.
60. As a direct, foreseeable and proximate result of actions of SEDI, Tate and
Pybas alleged in this complaint, Plaintiff has sustained injuries, losses and
damages.
WHEREFORE, Plaintiff prays for judgment in its favor and against SEDI, Tate and
Pybas, jointly and severally, for punitive and compensatory damages in an amount
to be determined at trial, for prejudgment interest thereon, costs and
reasonable attorneys' fees, and for such other and further relief as this Court
deems just and proper.
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FIFTH CLAIM FOR RELIEF: (Breach of Contract)
61. Paragraphs 1 through 60 are again alleged and are incorporated in this
paragraph.
62. SEDI, Tate and Pybas executed and delivered the SEDI Contract.
63. The SEDI Contract contained various representations, warranties and
covenants.
64. These defendants misrepresented certain representations and warranties and
failed to fulfill certain of the covenants set forth in the SEDI Contract.
65. All conditions precedent to this claim have either been performed or have
occurred; therefore, SEDI, Tate and Pybas are currently liable to Plaintiff for
breach of the SEDI Contract.
WHEREFORE, Plaintiff prays for judgment in its favor and against defendants
SEDI, Tate and Pybas, jointly and severally, for compensatory damages in an
amount to be determined at trial, for prejudgment interest, costs and reasonable
attorneys' fees, and for such other and further relief as this Court deems just
and proper.
SIXTH CLAIM FOR RELIEF: (Breach of Implied Contract)
66. Paragraphs 1 through 65 are again alleged and are incorporated in this
paragraph.
67. Plaintiff delivered the SEDI CNHH Common and Preferred Stock to and for the
benefit of all of the defendants pursuant to the requests of SEDI, Tate and
Pybas.
68. Plaintiff did so without a specific agreement as to value, but with the
reasonable expectation that Plaintiff would receive consideration for the
securities delivery.
69. The defendants requested or accepted the benefits of these securities
expecting to pay for them or under such circumstances that they knew, or as
reasonable persons should have known, that Plaintiff expected to receive value
for the securities delivered.
<PAGE>
WHEREFORE, Plaintiff prays for judgment in its favor and against all defendants,
jointly and severally, for compensatory damages in an amount to be determined at
trial, for pre judgment interest, costs and reasonable attorneys' fees, and for
such other and further relief as this Court deems just and proper.
SEVENTH CLAIM FOR RELIEF: (Unjust Enrichment)
70. Paragraphs 1 through 69 are again alleged and are incorporated in this
paragraph.
71. Plaintiff delivered the SEDI CNHH Common and Preferred Stock to and for the
benefit of all of the defendants.
72. To allow the defendants to retain the securities delivered to them and to
not repay Plaintiff therefor would constitute an unjust enrichment.
73. All conditions precedent to this claim have either been performed or have
occurred, and Plaintiff is entitled to recover from all defendants the benefit
conferred.
WHEREFORE, Plaintiff prays for judgment in its favor and against all defendants,
jointly and severally, for compensatory and punitive damages in an amount to be
determined at trial, for prejudgment interest, costs and reasonable attorneys'
fees, and for such other and further relief as this Court deems just and proper.
Dated this 5th day of April, 2000.
Respectfully submitted:
/s/ Mark S. Pierce
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Mark S. Pierce, Reg. No. 13416
Address: 460 Ogden St., Denver CO 80218
Telephone: 303.282.0083
