Defendants’ Emergency Motion to Modify.
1. The Definition in 12, p. of the Order provides: "Defendant(s)" or "Judgment Debtor(s)", collectively and individually refers to the following Debtors: (referring to Cyberlux and "Mark D. Schmidt (individually)). This section refers to...
DISTIL analysis
- Court ruled on January 16, 2025 that receivership would apply only to Cyberlux Corporation, not Mark D. Schmidt individually
- Plaintiffs withdrew turnover claims against Schmidt and conceded no evidence was presented against him personally
- Defense objected to proposed order on April 5, 2025 but Court signed order including Schmidt on May 22, 2025
- Charles Schwab restricted Schmidt's personal accounts on June 2, 2025 based on the order
- Motion seeks reformation under Texas R. Civ. P. 329b(g) to align written order with oral ruling
Extracted text
10 pages · 17363 charactersCAUSE NO. 2024-48085
ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF and SECURE COMMUNITY, LLC,
§ Plaintiff/Judgment-Creditor
§
§
V.
CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually,
§ § § Defendant/Judgment Debtors.
§
§ § HARRIS COUNTY, TEXAS
§ 129TH JUDICIAL DISTRICT
DEFENDANTS' EMERGENCY MOTION TO MODIFY. CORRECT, OR REFORM ORDER APPOINTING RECEIVER TO EXCLUDE MARK D. SCHMIDT, HIS WIFE, AND THEIR PROPERTY FROM THE IMPOSITION OF THE RECEIVERSHIP PURSUANT TO THE COURT'S JANUARY 16, 2025 RULING
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COME Defendants Cyberlux Corporation ("Cyberlux") and Mark D. Schmidt, Individually (collectively "Defendants") and file this Emergency Motion to Modify, Correct, or Reform May 22, 2025 Order Appointing Receiver ("Receivership Order" or "Order") to Exclude Mark D. Schmidt, His Wife, and Their Property (collectively "Schmidt") from the imposition of the Order, pursuant to the Court's January 16, 2025 ruling, and would respectfully show the Court the following:
The Court has authority to grant a Motion to Modify, Correct, or Reform the Order Appointing Receiver. See TEX. R. CIV. P. 329b(g) ("Each such motion shall be in writing and signed by the party or his attorney and shall specify the respects in which the judgment should be modified, corrected, or reformed."). Here, the written order does not comport with the Court's ruling, as the parties agreed-and the Court ordered-that no receivership relief was to be rendered against Schmidt. See Cook v. Cook, 888 S.W.2d 130, 131 (Tex. App. 1994) ("If the written order
does not comport with the judgment rendered, the parties are entitled to have the order reformed to accurately reflect the action taken by the trial court. See TEX. R. CIV. P. 329b(g)."); See also Burrows v. Burrows, 1998 WL 35277038, at *3 (Tex. App .- Corpus Christi 1998, writ denied) (A judge's intent to sign the decree in the future goes to its entry and not to its rendition. See S & A Restaurant Corp. v. Leal, 892 S.W.2d 855, 858 (Tex. 1995) ("words used by the trial court must clearly indicate the intent to render judgment at the time the words are expressed").).
Failing to amend or modify the written order would constitute error because no evidence was adduced to support receivership relief against Schmidt, and because Plaintiffs expressly
bed not be subject to its forthcoming order. Simply put, the written Order must be corrected because it grants relief on an issue about which the Court received no evidence and was abandoned by Plaintiffs. Additionally, there are several grammatical phrasing errors in the Order that make the relief granted vague and ambiguous.
During the hearing on Plaintiffs' Application for Turnover and Receivership (the "Hearing"), Plaintiffs requested relief against Cyberlux, but withdrew their claims against Schmidt and conceded they provided no evidence against Schmidt. Accordingly, this Court ruled from the bench that turnover and receivership relief would be granted against Cyberlux, but not Schmidt. Notwithstanding that ruling and Plaintiffs' withdrawal of those claims, on April 1, 2025, counsel for Plaintiffs submitted a proposed Order Appointing Receiver that included turnover and receivership relief against Schmidt. Defendants promptly objected to inclusion of Schmidt in the proposed order, stating in part:
"Plaintiffs' Proposed Order greatly exceeds what is shown in the record and statutory authority. It defines 'Judgment Debtors' as the Defendants and then purports to appoint a receiver as to 'Debtor,' which is not defined, making the Proposed Order impermissibly ambiguous on its face, especially because this Court expressly declined to appoint a receiver as to Defendant Mark Schmidt."
(Cyberlux's Counsel's letter of April 5, 2025, attached as Exhibit 1).
Notwithstanding these objections, Plaintiffs' representations that they sought an order only against the company, and the Court's clear direction to exclude Schmidt from Plaintiffs' proposed order, Plaintiffs submitted an order that included Schmidt. The Court inadvertently signed Plaintiffs' proposed order on May 22, 2025, and that order is contrary to the Court's specific ruling at the hearing of January 16, 2025.
Dialogue between the Court and Plaintiffs' counsel during the Hearing expressly shows that Plaintiffs withdrew their request for a turnover order against Schmidt-and that the Court expressly excluded Schmidt from receivership and that Plaintiffs presented no evidence that would support such relief against Schmidt;
"THE COURT: So we talked a little bit about what specifically the turnover needs to apply to just so we don't have an issue on its face. In terms of -- she did raise a point regarding Mr. Schmidt. We didn't have anything on Mr. Schmidt; is that right?
MR. VARGO [Counsel for Plaintiffs]: The turnover is just against the company. It's not against Mr. Schmidt.
THE COURT: Okay. So he's going to be removed?
MR. VARGO V.
.
THE COURT: So they're only seeking a turnover regarding the company. So in the amended order he'll be removed."
(Reporter's Record, January 16, 2025, p. 127, In. 3-16, Exhibit 2 (emphasis added)).1
See also Exhibit 3, Declaration of A. Pennetti, attesting to record attached as Exhibit 2.
Accordingly, Defendants respectfully request that the Court grant Defendants' Motion to Modify, Correct, or Reform the Order Appointing Receiver. Defendants respectfully show the Court that without this modification and correction, Schmidt would remain subject to the restriction and obligations of the Order Appointing Receiver and Mr. Schmidt's property, which he shares with his spouse, would remain in jeopardy, resulting in irreparable harm with no adequate remedy by appeal.
Defendants suggest the Court correct the Order Appointing Receiver by signing an amendment that states in substance:
"It is Ordered that any and all references to 'Debtor' or 'Debtors' in the Order Appointing Receiver signed on May 22, 2025, shall be construed and understood to refer only to Defendant Cyberlux Corporation and not to Mark D. Schmidt, individually, and that this Order expressly declines to impose a receiver or a turnover order as to Mark D. Schmidt."
Further, Exhibit A to the Order sets forth numerous disclosure requirements. Exhibit A to the Order requires production of records of "defendant" without identifying whether that applies to Cyberlux, Schmidt, or both. Many paragraphs of the 43 paragraphs in Exhibit A imply information must be supplied and/or documents must be produced whether held by a "defendant" a spouse, family member, or persons who have any "co" or joint interest. The language of the categories of documents set forth in Exhibit A indicate that documents from Schmidt might be required to be disclosed. These include the following:
See Order, at Exhibit A.
As stated above, Plaintiffs adduced zero evidence that the requirements of the Texas Turnover Statute were met with respect to Schmidt. During the hearing, Plaintiffs conceded that they adduced no such evidence and, further, that they did not seek turnover of or appointment of a receiver over, Schmidt's assets. Ex. A, p. 127, In. 3-16. The Court further indicated that Schmidt
would be removed from the Order. It appears that inadvertently did not occur. Id. Therefore, the Order must be corrected to comport with the Court's January 16, 2025 ruling.
Because the Order currently permits the Receiver to take custody of the assets of Schmidt, the Receiver is currently acting to obtain custody of Schmidt's assets. On June 292025, Charles Schwab & Co., Inc. ("Schwab") provided notice to Schmidt that Schmidt's accounts with Schwab, which may encompass his personal brokerage, securities, and related accounts, have been restricted.2 Thus, even though Atlantic Wave conceded it produced no evidence of turnover with respect to Schmidt, the parties agreed-and the Court ordered @that Schmidt would not be subject to the Turnover Order, the Turnover Order has caused Schwab to restrict Schmidt's accounts. The Turnover Order must be modified or corrected to remove Schmidt.
Wherefore, premises considered, Defendants respectfully request the Court grant the relief requested above and all other relief to which Defendants are entitled.
(signature on following page)
Respectfully submitted,
/s/ Alexander J. Pennetti Douglas S. Lang State Bar No. 11895500 Alexander J. Pennetti State Bar No. 24110208
Unofficial Comoface of Marilyn euro basket Cer
THOMPSON COBURN LLP 2100 Ross Avenue, Suite 3200 Dallas, Texas 75201 Tel Phone: (972) 629-7100 Fax: (97207629-7171 dlang@thompsoncoburn.com apennetti@thompsoncoburn.com
Attorneys for Defendants Cyberlux Corporation and Mark D. Schmidt
On June 2, 2025, the undersigned advised Mr. Berleth, the Receiver appointed by this Court, and Mr. Walton, counsel for Plaintiffs, of its intent to file this Motion. The undersigned did not receive a response.
/s/ Alexander J. Pennetti Alexander J. Pennetti
I certify that a true and correct copy of the foregoing instrument was served on all counsel pursuant to the Texas Rules of Civil Procedure on June 3, 2025.
/s/ Alexander J. Pennetti
Alexander J. Pennetti
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Linda Carranza on behalf of Alex Pennetti Bar No. 24110208 lcarranza@thompsoncoburn.com Envelope ID: 101577441 Filing Code Description: Motion to Modify Filing Description: Defendants' Emergency Motion to Correct, etc. the Order Appointing Receiver Status as of 6/4/2025 10:08 AM CST
Case Contacts
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David A.Walton
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Frankie Huff
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Tristian Harris
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Corinne Martin
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Hannah Fischer
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Greg Nieman
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Jemisha Gandhi
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Automated Certificate of eService
This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.
Linda Carranza on behalf of Alex Pennetti Bar No. 24110208 lcarranza@thompsoncoburn.com Envelope ID: 101577441 Filing Code Description: Motion to Modify Filing Description: Defendants' Emergency Motion to Correct, etc. the Order Appointing Receiver Status as of 6/4/2025 10:08 AM CST
Case Contacts
Jemisha Gandhi
jgandhi@bellnunnally.com
6/3/2025 4:56:37 PM
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Bernadette Martin
bernadette@gradycollectionlaw.com
6/3/2025 4:56:37 PM
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Jocelin A.Tapia
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Alex Pennetti
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Edward W.Gray, Jr.
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Katharine Clark
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David M.Keithly
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Paula Gentry
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Douglas S.Lang
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