SOURCE: George Sharp

April 26, 2007 00:31 ET

Court Rules Victory Energy Corporation in Breach of Settlement Agreement

LOS ANGELES, CA -- (MARKET WIRE) -- April 26, 2007 -- Former Victory Capital Holdings Corp., now known as Victory Energy Corporation (OTCBB: VYEY) CEO George Sharp announced today that a California Superior Court Judge has found Victory Energy in material breach of a Settlement Agreement that the Company entered into with Mr. Sharp in settlement of a civil action he filed for Fraud, Negligent Misrepresentation, and Breach of Contract (California Superior Court Dockets: GIC840172 and 05CC10976).

Victory had previously filed a counter-suit against Mr. Sharp, but that action was dismissed by the Appellate Court under the California anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. At that time, the court had determined that it had not seen any evidence of contractual relationships or customers, in spite of several press releases by the Company announcing various acquisitions and other relationships.

Mr. Sharp sought the ruling because Victory had failed to continue to provide payments due to him under the Settlement Agreement. Victory's counsel, William K. Vogeler of Gruenbeck & Vogeler, filed an opposition to Sharp's motion which included an interpretation of the agreement that was clearly contrary to its intent. Mr. Vogeler also represented Victory's failed attempt at the counter-suit / SLAPP suit.

Mr. Sharp commented, "Although I felt that I had discounted the total award that would have been due as a potential result of my lawsuit and Victory's responsibility for my legal costs, I entered into the Settlement Agreement, in good faith in order to try and save the shareholders any further grief. Unfortunately, the shareholders will now ultimately bear the brunt of my attempts to collect on this judgment and the Company's decision to rededicate itself to spending money on legal fees rather than the satisfaction of the settlement."

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