DALLAS, Feb. 08, 2019 (GLOBE NEWSWIRE) -- Rocky Mountain High Brands, Inc. (OTCQB: RMHB), a fully reporting lifestyle brand management company specializing in high-quality health and wellness products, announced today that on February 4, 2019, the District Court for Dallas County, Texas (the “Court”) entered a Default Judgment against Lily Li (“Li”) and LSW Holdings, LLC (“LSW”) in the case entitled Rocky Mountain High Brands, Inc. f/k/a/ Republic of Texas Brands, Inc. v. Joe Radcliffe, et al; Case Number DC-18-13491. This case is a continuation of our litigation originally filed against the Company’s former Chairman, Jerry Grisaffi (“Grisaffi”), and various other defendants.
As previously disclosed, the Company’s District Court litigation against Grisaffi resulted in a monetary judgment against him in the amount of $3.5 million, and a declaratory judgment that, among other things, voided the issuance of 1,000,000 shares of Series A Preferred Stock issued to Grisaffi voided his employment agreement dated April 1, 2013 as being rejected and unenforceable when the Bankruptcy Court signed the Order Confirming Debtor’s Amended Plan Of Reorganization and voided the issuance of various promissory notes and shares of common stock and that Grisaffi take nothing as to claims he asserted against Rocky Mountain. Following the entry of judgment against Grisaffi, the Court severed the litigation against defendants Joe Radcliffe, LSW, Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting, LLC. The claims against Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison and BB Winks, LLC have been settled and dismissed. The litigation against the remaining defendants has continued under Case Number DC-18-13491.
Previously, on October 26, 2018, the Court granted the Company’s Motion for Summary Judgment and issued a Summary Judgment Order against LSW, holding that the 1,000,000 Series A Preferred shares in Rocky Mountain High Brands, Inc. issued to Jerry Grisaffi and later sold by him to LSW were void ab initio, and any potential rights thereunder were terminated as of July 11, 2014, when the Bankruptcy Court signed the Order Confirming Debtor’s Amended Plan Of Reorganization. Also, on October 26, 2018, the Court granted a take nothing judgment against LSW on counterclaim Counts 1, 2 and 3. Later, on November 26, 2018, the Court entered an Order of Sanctions against Li and LSW. In the Order of Sanctions, and in response to Li and LSW’s repeated refusals to make proper discovery in the case, the Court struck the pleadings of these parties and ruled that Rocky Mountain High Brands was entitled to take a default judgment against them.
On February 4, 2019, the Court entered its Default Judgment against Li and LSW. In the Default Judgment, the Court ruled as follows:
- The Employment Agreement with Grisaffi dated April 1, 2013 was void ab initio and unenforceable, and that all stock or other instruments issued on the basis or authority of that Employment Agreement were also void ab initio and of no force and effect;
- The Series A Preferred Shares in Rocky Mountain High Brands issued to Grisaffi and later sold by Grisaffi to LSW Holdings were void ab initio and any potential rights or remedies thereunder were terminated on July 11, 2014 pursuant to the Order Confirming Debtor’s Amended Plan of Reorganization.
- Grisaffi’s issuance and transfer to himself of the 1,000,000 Series A Preferred Shares, and his subsequent transfer of those shares to LSW, were fraudulent transfers and are voided and set aside;
- Grissafi breached his fiduciary duties to Rocky Mountain High Brands by, among other things: (i), purporting to sell the Series A Preferred Shares to LSW, (ii) causing the issuance of 11,000,000 shares of common stock to Epic Group One, LLC, and 10,000,000 shares of common stock to Li for no consideration, and (iii) causing the issuance of 113,688,625 shares to the Radcliffe Group at deeply discounted prices;
- LSW and Li knowingly participated in Grisaffi’s breaches of fiduciary duty and are therefore jointly and severally liable for all damages and equitable relief arising from such breaches;
- The issuance of 10,000,000 shares of common stock to Li was not authorized by the Board of Directors and was both void ab initio and a fraudulent conveyance;
- Rocky Mountain High Brands is entitled to recover all damages proximately resulting from the improper issuance of the 10,000,000 shares of common stock to Li;
- Li did not perform and materially breached her agreement to raise money for Rocky Mountain High Brands;
- The 10,000,000 shares of purported common stock issued to Li belongs to Rocky Mountain High Brands and Li has no further rights or remedies arising out of or related to the 10,000,000 shares.
- By virtue of their actions described above, Li and LSW have unjustly enriched themselves at Rocky Mountain High Brands’ expense, and Rocky Mountain High Brands is entitled to full restitution of all its losses and damages;
- LSW and Li engaged in a civil conspiracy with Grisaffi to commit the wrongs against Rocky Mountain High Brands described above, and Rocky Mountain High Brands is entitled to recover from them actual, consequential, and special damages resulting from such wrongs, including their knowing participation in Grisaffi’s breaches of fiduciary duty, breaches of contract, receipt of fraudulent conveyances, and unjust enrichments.
- The torts against Rocky Mountain High Brands committed by LSW and Li were aggravated by fraud and malice, and Rocky Mountain High Brands is therefore entitled to exemplary damages.
- LSW and Li shall take nothing by their counterclaims; and
- Rocky Mountain High Brands is entitled to court costs and reasonable attorney’s fees from LSW and Li.
The amount of damages to be awarded to Rocky Mountain High Brands and against LSW and Li will be determined in a trial currently scheduled for June 3, 2019. The Company is continuing to pursue its claims against the other defendants in the case.
The Company filed a Form 8-K on February 8, 2019. To view the file, click on the link below:
https://www.sec.gov/Archives/edgar/data/1670869/000166357719000058/mainbody.htm
About Rocky Mountain High Brands:
ROCKY MOUNTAIN HIGH BRANDS, INC., (RMHB) is a publicly-traded, lifestyle brand management company that markets “good for you” products to health-conscious consumers.
We are committed to empowering, motivating and inspiring healthy lifestyle habits that create a positive impact on everyday people. We reach those people with our brand messages and change people’s lives with our products. Our products inspire people to choose wellness and healthy lifestyles.
Our mission is to help people live more productive and healthier lives.
The Company currently markets a naturally flavored hemp-infused functional beverage under the name Rocky Mountain High. RMHB also bottles and distributes a naturally high alkaline spring water under the name Eagle Spirit Spring Water. In March 2018, the Company launched its HEMPd product line, which currently consists of CBD-infused topicals and nutraceuticals. The Company introduced a line of HEMPd CBD-infused functional beverages in the fourth quarter. The Company acquired FitWhey, a unique water-based protein drink that is naturally sweetened, flavored and colored that combines the highest quality whey protein isolate with caffeine. RMHB continues to be innovative through R&D and bringing new products to market.
Our vision is to create and sell “good for you” products that touch people in fun, unique and relevant ways.
For interested investors, our stock symbol is RMHB.
For corporate information, please visit: RockyMountainHighBrands.com
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Safe Harbor Act: This release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involves risks and uncertainties including, but not limited to, the impact of competitive products, the ability to meet customer demand, the ability to manage growth, acquisitions of technology, equipment, or human resources, the effect of economic business conditions and the ability to attract and retain skilled personnel. The Company is not obligated to revise or update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
Contact:
Michael Welch, President and Chief Executive Officer
michael@rockymountainhighbrands.com
Investor Relations:
David Seeberger, Vice President and General Counsel
Phone: (972) 833-1585
Fax: (214) 593-5617
david@rockymountainhighbrands.com