SOURCE: Western Securities

October 13, 2008 17:41 ET

Special Receiver of Eternal Technologies Group Files Motion to Take Control of 40% of the Shares as Reported by Western Securities

Receiver Asks Court to Increase $10,000.00 per Day Contempt Fine Request With Escalating Fine to Force ETLT to Comply With Court's Order

HOUSTON, TX--(Marketwire - October 13, 2008) - Western Securities reports that Peter E. Pratt, the Court appointed Receiver and Special Master of the assets of Eternal Technologies Group, Inc., has filed Motion in the United States District Court to Compel the Transfer Agent to issue all authorized but unissued shares of ETLTQ to the Receiver. The Motion is for the Authority to vote the shares of stock and sell the stock to satisfy the judgment of the court. OTC Stock Transfer, Inc. of Sale Lake City, Utah is the Transfer Agent.

The Motion filed by the Receiver and Special Master of ETLTQ's assets stated the following to support his Motion:

   1.  "As established by the consolidated condensed balance sheet of
       Eternal Technology Group, Inc., effective June 30, 2008, ETLTQ has
       previously authorized for issuance of 95,000,000 shares of ETLTQ
       stock. Approximately 55,689,634 shares of stock have been issued,
       leaving approximately 39,310,366 shares of stock available for
       issuance. In addition, ETLTQ holds 1,509,703 shares of treasury
       stock that are available for issuance."

   2.  "Pursuant to 8.403 of the Texas Business and Commerce Code the
       Receiver has properly registered the Receivership's adverse claim
       with OTC Stock Transfer, Inc., as against ETLTQ's 39,310,366 shares
       of authorized but unissued stock and demanded that OTC Stock
       Transfer, Inc. not register any transfer of ETLTQ's 39,310,366
       shares of authorized but unissued stock or ETLTQ's 1,509,703
       shares of treasury stock."

   3.  "The Receiver requests that the Court order OTC Stock Transfer, Inc.
       make a written accounting to the Receiver of all authorized but
       unissued shares of ETLTQ stock in its possession, all ETLTQ treasury
       stock in its possession, and all funds belong to ETLTQ in its
       possession, issue share certificates of all authorized but unissued
       shares of ETLTQ stock and treasury stock to the Receivership Estate
       of Eternal Technologies Group, Include, and then turn over all such
       share certificates to the Receiver. The Receiver further requests
       that he be authorized to sell all such stock as necessary to pay
       the Judgment underlying this Receivership and to return any
       remaining shares of ETLTQ stock by tendering them into the registry
       of the Court."

   4.  "Pursuant to Art. 2.29 G. of the Texas Business Corporation Act,
       shares of stock held or under control of a Receiver may be voted
       by such Receiver without the transfer thereof into his name if
       authority to do so be contained in an appropriate order of the
       court by which such Receiver was appointed."

The Receiver, appointed on the Turnover Order issued by United States District Judge Vanessa D. Gilmore on September 23, 2008, is to collect on the unsatisfied Judgment Western Securities Corporation has against Eternal Technologies Group rendered in the U.S. District Court of the Southern District of Texas, Civil Action Number H-O5-02504 on October 31, 2007.

The Receiver's previous pending Motion to hold Eternal Technologies Group in Contempt of Court stated: "The total amount due the Receiver to satisfy the underlying Judgment is in the present sum of $961,000.00 and is increasing daily due to the accrual of post-judgment interest and Receiver's fees."

In the Receiver's First Interim Report to the Court on October 9, 2008, the Receiver concluded: "As was stated in the Motion for Contempt, if ETLT wants to do business in this country then it must obey the law of this country. The Court's loud and clear order to ETLT was to turn over its stock holdings to the Receiver. ETLT is fairly emboldened by the fact that all of its assets are in China and it disingenuously claims poverty in the United States to avoid paying the Judgment or posting a supersedias bond, which it could do in a second. ETLT has almost $28,000,000.00 in cash and $60,000,000.00 in other assets including the stock holdings that it can use to pay the Judgment but it refuses to do so.

"All of the officers and assets of ETLT are in China. The only recourse would seem to be a fine to force ETLT comply with the Turnover Order. Such fine will need to be reported to the SEC in order to warn potential investors that the company is in violation of the Order. The Motion for Contempt asks the Court to fine ETLT $10,000.00 per day until it complies with the Turnover Order. Given ETLT's considerable assets I do not believe that this amount is sufficient to force ETLT to comply with the Turnover Order. Given ETLT's considerable assets I do not believe that this amount is sufficient to force ETLT to comply with the Court's order. Some sort of escalating fine would be appropriate."

Contact Information

  • Contact:
    Western Securities Corporation
    (504) 333-9098