YOUNGSVILLE, La., Jan. 31, 2017 (GLOBE NEWSWIRE) -- RedHawk Holdings Corp. (OTCQB:IDNG) (“RedHawk” or the “Company”) announced today it has joined with Beechwood Properties, LLC (“Beechwood”) in a lawsuit (“Lawsuit”) filed in the United States District Court for the Eastern District of Louisiana (2:17-cv-00819) against Daniel J. Schreiber (“Schreiber”), a former Company executive, and the Schreiber Living Trust dated February 8, 1995 (collectively referred to herein as the “Defendants”). The Lawsuit alleges the Defendants acquired 57,064,608 shares of Company’s common stock through securities fraud under Sections 10B and 20 of the Exchange Act and Rule 10b-5, securities fraud under Sections 18 and 20 of the Exchange Act, fraud under Louisiana state law. Beechwood is suing the Defendants for damages resulting from their breach of contract, unjust enrichment and for Schreiber’s breach of his fiduciary duties to the shareholders of RedHawk. The Lawsuit seeks damages from the Defendants, among other things, the return to the Company of all of the shares of RedHawk Holdings Corp. owned or acquired, now or previously, directly or indirectly, by the Defendants, along with any proceeds from any sales thereof. If successful, the return of the shares to RedHawk would inure to the benefit of all of the shareholders.
Beechwood Properties, LLC is a real estate investment company owned by G. Darcy Klug, the Company’s Chairman of the Board, Chief Financial Officer and majority stockholder.
The Lawsuit alleges, among other things, that Schreiber and Paul A. Rachmuth (“Rachmuth”), fraudulently concealed from the Company and Beechwood, hidden deficiencies in the assets sold to RedHawk by American Medical Distributors, LLC (“AMD”) on March 31, 2014. Schreiber and Rachmuth received 57,064,608 and 19,021,536, respectively, shares of RedHawk common stock and Schreiber was appointed to the Company’s board of directors upon completion of the AMD transaction.
The Lawsuit further details how Schreiber deliberately concealed from RedHawk a 2010 civil injunction, fines and sanctions previously levied upon him by the Securities and Exchange Commission for his 2009 participation in an alleged $10.7 million bribery scheme. The Lawsuit describes how Schreiber also interfered with RedHawk’s ability to conduct routine business as a public company. In a letter dated November 5, 2015 from the Financial Industry Regulatory Authority (“FINRA”), the regulatory agency informed the Company that Schreiber’s material association with RedHawk raised concerns regarding the protection of investors and transparency in the marketplace.
About RedHawk Holdings Corp.
RedHawk Holdings Corp., formerly Independence Energy Corp., is a diversified holding company which, through its subsidiaries, is engaged in sales and distribution of medical devices, sales of branded generic pharmaceutical drugs, commercial real estate investment and leasing, sales of point of entry full-body security systems, and specialized financial services. Through its medical products business unit, the Company sells WoundClot Surgical - Advanced Bleeding Control, the Sharps and Needle Destruction Device, the Carotid Artery Digital Non-Contact Thermometer and Zonis®. Its real estate leasing revenues are generated from various commercial properties under long-term lease. Additionally, RedHawk’s real estate investment unit holds limited liability company interest in various commercial restoration projects in Hawaii. The Company’s financial service revenue is from brokerage services earned in connection with debt placement services. RedHawk Energy holds the exclusive U.S. manufacturing and distribution rights for the Centri Controlled Entry System, a unique, closed cabinet, nominal dose transmission full body x-ray scanner.
Cautionary Statement Regarding Forward Looking Statements
This release may contain forward-looking statements. Forward-looking statements are all statements other than statements of historical fact. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. The words “anticipate,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements.
Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should consider the various factors which may cause actual results to differ materially from any forward-looking statements including those listed in the “Risk Factors” section of our latest 10-K report. Further, the Company may make changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no obligation to update any forward-looking statements.