HYDROGEN ENERGY ANNOUNCES THE FILING OF LAWSUIT; KDF, KPERS,
PACHOLDER ASSOCIATES AND HOLLINGSWORTH NAMED AS DEFENDENTS
KANSAS CITY, Dec. 16 /PRNewswire/ -- The Hydrogen Energy Corporation, Olathe, Kansas, (OTC) announced today the filing of a lawsuit in District Court of Andrews County, Texas, against Kansas Public Employees Retirement System (KPERS), its largest shareholder and creditor. The suit seeks a declaratory judgment and injunctive relief from threatened foreclosure and asserts claims of tortious interference, fraud, misrepresentation and breach of fiduciary duty among others.
The suit claiming $50,000,000 actual plus punitive damages asserts among other claims that KPERS, KDF, (a Kansas partnership through which KPERS made the loans in question and acquired stock of the company), and Pacholder Associates, Inc., (KPERS fund manager), tortiously interfered with the business of the company when they failed to provide a timely release of an alleged lien on certain oil & gas properties owned by the Company and located in Andrews County, Texas, in connection with an attempted sale by the company of the properties. The company had pledged full payment from the proceeds of the sale, including penalty and interest, of a certain promissory note payable to KPERS which Pacholder claims is secured by the properties. In September, the company was unable to close the sale, the first step in an attempt to restructure, because of KDF's refusal to provide a timely release. The suit also seeks declaratory judgment that the subject properties are not incumbered by, and are not security for, the promissory note and debenture payable to KPERS.
In a prepared statement, Donald Clark and Wayne Floyd, both vice presidents of the company, stated they have been negotiating with Pacholder Associates, Inc., since September in an attempt to restructure debt owned KPERS by the company. On Dec. 5, Pacholder issued its final "non-negotiable" proposal on behalf of KPERS and threatened to begin foreclosure proceedings on Monday, Dec. 9, if its proposal was not accepted. Clark stated the terms of the proposal were unfair to the company and threatened its very existence by not allowing the company to completely manage its own business. "We believe the claims of the lawsuit are meritorius and promise to pursue prosecution vigorously," Clark said.
The lawuit was filed on behalf of the company by the law firm Akin, Gump, Hauer & Feld of Austin, Texas.
/CONTACT: Wayne Floyd, 915-686-0521, for Hydrogen Energy/ CO: Hydrogen Energy Corporation ST: Kansas IN: OIL SU:
KD -- NY101 -- 2760 12/16/91 18:44 EST