Evidence Record

AW Harris Awh 2024 48085 Doc. 121037472

2. Berleth Now Holds Funds in Excess of the Judgment Balance.

Type
document
Pages
12
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452
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DISTIL analysis

DISTIL Run
Profile
Standard
Version
1
Doc Type
Objections to Receiver's Report
Total Nodes
37
Node Legend
Entity (ENT)
Event (EVT)
Claim (CLM)
Anchor (ANC)
Omission (OMI)
Tension (TEN)
Tell (TEL)
Inference (INF)
Hypothesis (HYP)
Stage 1
Index
Orientation · No nodes
Document Classification
Objections to Receiver's Report Cyberlux Corporation and Mark D. Schmidt via Thompson Coburn LLP Post-judgment collection dispute, Texas receivership proceedings 2023-06 to 2025-06-12
payment_disputefee_challengeprior_sanctionsserial_receivership_concern
Analytical Frame
Debt overpayment claim, receiver fee challenge, procedural objections
Analytical Summary
Cyberlux Corporation and Mark D. Schmidt object to Receiver Robert Berleth's report and distribution order, claiming they overpaid the judgment by $2,336,612.02. They assert the actual outstanding balance is $747,027.73 after credits and offsets for extensive prior payments under the June 2023 settlement agreement, not the $3,083,639.75 Berleth received. The objectors challenge Berleth's fee request as lacking documentation and argue he performed work outside his statutory authority under Texas Civil Practice & Remedies Code § 31.002(b)(3) by attempting to coordinate collection for non-party creditors. They cite Berleth's prior Fifth Circuit sanctions in Matter of Preferred Ready-Mix and express concern about his integrity, requesting funds be deposited in the court registry. The objection also addresses a newly filed lawsuit by former employees Whiteley and Tucker seeking to extend the receivership, which Cyberlux characterizes as a coordinated effort to improperly maintain Berleth's appointment.
Key Points
  • Berleth confirmed receipt of $3,083,639.75 on June 11, 2025, which Cyberlux claims is an overpayment
  • Cyberlux asserts actual outstanding balance is $747,027.73 after extensive prior payments
  • Judgment creditor Atlantic Wave acknowledged in May 15, 2025 letter that minimum outstanding was $912,000 after credits
  • Berleth's fee request lacks required documentation of hours, complexity, or necessity of work performed
  • Objectors claim Berleth exceeded statutory authority by working for non-party creditors
  • Fifth Circuit previously sanctioned Berleth in Matter of Preferred Ready-Mix for exceeding authority
  • New lawsuit filed by Whiteley and Tucker seeks to extend receivership in coordinated effort
Stage 2
Core — Entities, Events, Claims
21 nodes
ENT-001
Entity
Cyberlux Corporation
Defendant/Judgment Debtor in receivership proceeding, party objecting to receiver's report
Page 1 — CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually, Defendant/Judgment Debtors.
ENT-002
Entity
Mark D. Schmidt
Individual defendant/judgment debtor, co-objector with Cyberlux Corporation
Page 1 — CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually, Defendant/Judgment Debtors.
ENT-003
Entity
Robert Berleth
Court-appointed receiver whose report and fee request are being challenged
Page 1 — On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.
ENT-004
Entity
Atlantic Wave Holdings, LLC
Plaintiff/Judgment-Creditor in sister-state judgment domestication action
Page 1 — ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC, Plaintiff/Judgment-Creditor
ENT-005
Entity
Secure Community, LLC
Co-plaintiff/Judgment-Creditor with Atlantic Wave Holdings
Page 1 — ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC, Plaintiff/Judgment-Creditor
ENT-006
Entity
Legalist
Entity that advanced the payment to Berleth under no court levy
Page 2 — Any amounts received by Berleth in excess of the actual amount due and owing must be returned to Legalist, who advanced the now-acknowledged payment to Berleth.
ENT-007
Entity
Neil Whiteley
Former Cyberlux employee who filed intervention petition on June 11, 2025
Page 7 — On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux.
ENT-008
Entity
Phillip Tucker
Former Cyberlux employee who filed intervention petition on June 11, 2025
Page 7 — On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux.
ENT-009
Entity
Will Welter
Managing Director of Atlantic Wave who submitted declaration to Southern District of California
Page 6 — On September 3, 2024, Atlantic Wave's Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the "Grand Total Owed') by Cyberlux to Judgment Creditors was $977,882.31.
EVT-001
Event
June 2023 Settlement Agreement
Settlement agreement executed between parties that forms the basis of the judgment
Page 5 — The Judgment arises from a June 2023 settlement agreement between the parties. Since that settlement agreement was executed in 2023, Cyberlux has made extensive payments towards the settlement agreement and, therefore, towards this judgment.
EVT-002
Event
Wire Payment Receipt June 11, 2025
Receiver Robert Berleth confirmed receipt of $3,083,639.75 wire payment
Page 1 — On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.
EVT-003
Event
Walton May 15, 2025 Letter
Atlantic Wave counsel acknowledged credits and offsets should be applied, stating minimum outstanding was $912,000
Page 1, 2 — Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied... Mr. Walton's letter dated May 15, 2025 letter correspondence to the Court, in which he stated: "The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets."
EVT-004
Event
Welter September 3, 2024 Declaration
Will Welter submitted declaration to Southern District of California stating total owed was $977,882.31
Page 6 — On September 3, 2024, Atlantic Wave's Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the "Grand Total Owed') by Cyberlux to Judgment Creditors was $977,882.31.
EVT-005
Event
Whiteley and Tucker Petition Filing June 11, 2025
Former employees filed intervention petition and TRO application at approximately 8:30 a.m.
Page 7 — On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux. Their Petition, styled as a Petition in Intervention, sought a Temporary Restraining Order.
EVT-006
Event
January 16, 2025 Hearing
Hearing at which Berleth stated he would reduce his fee if little work was required
Page 7 — when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required. He stated, in open Court: My fee is assigned by the Court. If I can solve it very quickly -- I had a case just a few weeks ago where I literally sent two letters; and the fee pro-posed at 25 percent would have been, like, $350,000. And I greatly's greatly reduced that. The court would have reduced it if I hadn't. January 16, 2025 Hearing Transcript, at p. 121.
EVT-007
Event
Matter of Preferred Ready-Mix Appeal
Fifth Circuit held Berleth exceeded his authority as receiver on December 31, 2024
Page 9 — While this matter was pending, the Fifth Circuit held that Berleth had exceeded his authority as Court-appointed receiver. Matter of Preferred Ready-Mix, L.L.C., No. 24-20158, 2024 WL 5252498, at *1 (5th Cir. Dec. 31, 2024). Berleth lost that appeal, which arose after the Southern District of Texas concluded that he had "effectively held the major assets of the debtor hostage."
CLM-001
Claim
Overpayment of $2,336,612.02
Cyberlux claims the $3,083,639.75 payment exceeds the actual outstanding balance of $747,027.73 by $2,336,612.02
Page 1, 5 — The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties' underlying settlement agreement... As of June 11, 2025@the total outstanding balance due on the judgment, after credits and offsets, is $747,027.73.
CLM-002
Claim
Hundreds of thousands in prior payments
Cyberlux asserts it has made hundreds of thousands in payments reducing the judgment balance
Page 2 — Cyberlux has made hundreds of thousands of payments on the judgment. Indeed, Judgment Creditors acknowledged this in Mr. Walton's letter dated May 15, 2025 letter correspondence to the Court
CLM-003
Claim
Berleth's report lacks required documentation
Objectors claim Berleth's final report contains no documentation supporting amounts, expenses, or time entries
Page 3 — Berleth's "final report" is nothing of the kind. It is simply a list of amounts without any evidence to support those amounts. There is no calculation or support with respect to the amount due and owing on the sister-state judgment, no support for the various amounts of expenses he supposedly incurred, and no evidence at all with respect to time entries for work he allegedly did over the course of a period of less than three weeks.
CLM-004
Claim
Berleth exceeded statutory authority
Objectors claim Berleth worked for non-party creditors outside his § 31.002(b)(3) appointment scope
Page 4 — Berleth conceded at the June 9, 2025 hearing that much of his time spent was corralling third parties and creditors that are not parties to this judgment domestication action. As such, all of these acts by Berleth are outside the scope of his appointment under Texas Civil Practice & Remedies Code § 31.002(b)(3).
CLM-005
Claim
Berleth did not reduce fee despite promise
Cyberlux claims Berleth promised to reduce fees for quick resolution but has not done so despite little work performed
Page 7 — Notably, when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required... Berleth has made no effort to reduce his fee even though he has not sold a single asset.
Stage 3
In Situ — Quotations, Tells, Tensions, Questions
10 nodes
QUO-001
Quotation
Walton acknowledgment of credits
Atlantic Wave's counsel acknowledged minimum outstanding balance after credits
Page 2 — The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets.
QUO-002
Quotation
Berleth fee reduction statement
Berleth's statement at appointment hearing about reducing fees for quick resolutions
Page 7 — My fee is assigned by the Court. If I can solve it very quickly -- I had a case just a few weeks ago where I literally sent two letters; and the fee pro-posed at 25 percent would have been, like, $350,000. And I greatly's greatly reduced that. The court would have reduced it if I hadn't.
QUO-003
Quotation
Berleth TRO notification
Berleth's statement about TRO hearing to extend receivership for other creditors
Page 8 — When he confirmed receipt of the wire instruction, Berleth stated "there is a TRO at 2:00 to extend the receivership for other creditors."
TEN-001
Tension
Competing debt amount representations
Tension between multiple different representations of outstanding debt amount by judgment creditors
Page 6 — Mr. Walton's May 15, 2025 letter states that "at minimum, $912,000, after accounting for any prior payments, credits, or offsets." On September 3, 2024, Atlantic Wave's Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the "Grand Total Owed') by Cyberlux to Judgment Creditors was $977,882.31.
TEN-002
Tension
Berleth fee promise vs. actual demand
Contradiction between Berleth's stated willingness to reduce fees for quick work and his current demand for over $800k
Page 6, 7 — Notably, when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required... Curiously, Berleth demands over $800k for less than three weeks of being appointed. He has conducted little to no work related to collecting this judgment.
TEN-003
Tension
Turnover Order percentage dispute
Tension between 25% referenced in Turnover Order and 33% Berleth now claims
Page 7 — Further, the Turnover Order references, at most, 25% of what Berleth obtains, not the 33% he now unilaterally claims.
QST-001
Question
What is the actual outstanding judgment amount?
Central dispute over whether outstanding balance is $747,027.73 (Cyberlux), $912,000 (Walton May 2025), $977,882.31 (Welter Sept 2024), or $3,083,639.75 (Berleth)
Page 5 — As of June 11, 2025@the total outstanding balance due on the judgment, after credits and offsets, is $747,027.73. The Judgment Creditors-not Cyberlux-bear the burden to show that a different amount, rather than $747,027.73, is outstanding on the judgment.
QST-002
Question
What work did Berleth perform justifying fees?
No documentation provided establishing hours, complexity, or necessity of work Berleth performed over less than three weeks
Page 4 — Here, Berleth submitted nothing more than an amount for his fee and expenses. He provided no documentation to support his work. Without documentation supporting his work, including but not limited to hours spent, a description of the complexity and necessity of the work, Berleth cannot be awarded the fee he demands.
QST-003
Question
How much work was for non-party creditors?
Unclear what portion of Berleth's time was spent on work outside his statutory authority coordinating third-party creditors
Page 4 — Berleth conceded at the June 9, 2025 hearing that much of his time spent was corralling third parties and creditors that are not parties to this judgment domestication action.
QST-004
Question
Was Whiteley/Tucker filing coordinated with Berleth?
Question of whether new employee lawsuit was coordinated effort to maintain receivership
Page 8 — When he confirmed receipt of the wire instruction, Berleth stated "there is a TRO at 2:00 to extend the receivership for other creditors." Neither Berleth nor counsel for the party(ies) seeking the TRO (presumably, Whiteley and Tucker) gave notice of the supposed TRO to Cyberlux's counsel. It is obvious this is a coordinated effort to improperly keep the receivership open.
Stage 4
Interpretive — Inferences, Omissions, Patterns
6 nodes
INF-001
Inference
Pattern of escalating debt representations
Judgment creditors' representations of debt amount have varied significantly and generally increased over time, suggesting uncertainty about actual amount owed
Page 6 — Mr. Walton's May 15, 2025 letter states that "at minimum, $912,000, after accounting for any prior payments, credits, or offsets." On September 3, 2024, Atlantic Wave's Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the "Grand Total Owed') by Cyberlux to Judgment Creditors was $977,882.31.
INF-002
Inference
Berleth's financial interest in receivership continuation
Berleth has financial incentive to maintain receivership and coordinate additional creditors to generate more fees
Page 3, 9 — Berleth spent much more time focusing on his marketing efforts to create new work beyond the sole subject of this case, Plaintiffs' sister-state judgment, in which he marketed himself as the individual who should, alone, be in charge of coordinating the collection of all potential claims against Cyberlux... Berleth's actions from the date of his appointment to present raise grave concerns about his integrity and ability to act as a court-appointed neutral
INF-003
Inference
Serial receivership strategy
Evidence suggests coordinated strategy to create continuous receiverships through new creditor actions
Page 8, 9 — Berleth cannot eviscerate notions of due process for his own personal gain (i.e., a "serial receivership" through which Berleth will seek more excessive fees)... The Court takes judicial notice that the termination of this receivership will animate the next serialreceivership, in cause no. 2025-41073, styled Tucker v. Cyberlux Corporation
OMI-001
Omission
No payment ledger from judgment creditors
Judgment creditors have not provided documentation to refute Cyberlux's payment ledger showing $747,027.73 balance
Page 2 — Judgment Creditors bear the burden to prove this is the incorrect amount due, and they have provided no such documentation to refute that amount.
OMI-002
Omission
No time records or fee documentation from Berleth
Berleth provided no time entries, complexity analysis, or documentation supporting fee request
Page 3 — There is no calculation or support with respect to the amount due and owing on the sister-state judgment, no support for the various amounts of expenses he supposedly incurred, and no evidence at all with respect to time entries for work he allegedly did over the course of a period of less than three weeks.
OMI-003
Omission
No notice of TRO hearing to Cyberlux
Neither Berleth nor counsel for Whiteley/Tucker gave notice of TRO hearing to Cyberlux's counsel
Page 8 — Neither Berleth nor counsel for the party(ies) seeking the TRO (presumably, Whiteley and Tucker) gave notice of the supposed TRO to Cyberlux's counsel.

Extracted text

12 pages · 20143 characters

AW Harris Awh 2024 48085 Doc. 121037472 — Formatted Extract

Type: document
Filing Header

By: Shanelle Taylor Filed: 6/12/2025 8:41 AM

CAUSE NO. 2024-48085

ATLANTIC WAVE HOLDINGS, LLC COURT OF and SECURE COMMUNITY, LLC,

§ IN THE DISTRICT

§ §

§

Plaintiff/Judgment-Creditor

§

§ § HARRIS COUNTY,

v. TEXAS

§

CYBERLUX CORPORATION and §

MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors.

Janina Hogy Quiere of Marlyfta BussumDistrict Clark

§ 129TH JUDICIAL DISTRICT

CYBERLUX CORPORATION AND MARK D. SCHMIDT'S OBJECTIONS TO RECEIVER'S REPORT AND ORDER TO DISTRIBUTE FUNDS

COME NOW, Cyberlux Corporation and Mark D. Schmidt ("Cyberlux"), and file their Objections Berleth's Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows:

1. Berleth Confirmed Receipt of the Wire Payment.

On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.

2. Berleth Now Holds Funds in Excess of the Judgment Balance.

The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties' underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his

1
Exhibit A.

error, Berleth continues to intentionally use the total overstated amount in the Turnover Order to try and recover a windfall.2

Cyberlux has made hundreds of thousands of payments on the judgment. Indeed, Judgment Creditors acknowledged this in Mr. Walton's letter dated May 15, 2025 letter correspondence to the Court, in which he stated:

"The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets."3

Unofficial Sony office of Marian Burgess District Clero,

Mr. Walton is wrong. Cyberlux's payments under the judgment to date have reduced the total payoff to $747,027.73.4 Judgment Creditors bear the burden to prove this is the incorrect amount due, and they have provided no such documentation to refute that amount. See Cadle Co. v. Int'l Bank of Commerce, No. 04-06-00456-CV, 2007 WL 752260, at *2 (Tex. App .- San Antonio Mar. 14, 2007, pet. denied). Credits and offsets must be applied to determine the amount of the sister-state judgment that is actually due and owing and before Berleth's fee is determined. Any amounts received by Berleth in excess of the actual amount due and owing must be returned to Legalist, who advanced the now-acknowledged payment to Berleth.

2
Berleth's position is that the Turnover Order permits him to recover a 33% fee if he recovers the total judgment. Berleth cannot collect the total judgment because of the significant payments Cyberlux made on the judgment before Berleth's appointment.
3
Exhibit B.
4
Declaration of Schmidt with Payoff Ledger, attached as Exhibit C and C-1.
3. Berleth's Report is Deficient and the Court May Not Approve Berleth's Fee Without Documentation.
a. Berleth's Report Contains No Documentation.

Berleth's "final report" is nothing of the kind. It is simply a list of amounts without any evidence to support those amounts. There is no calculation or support with respect to the amount due and owing on the sister-state judgment, no support for the various amounts of expenses he supposedly incurred, and no evidence at all with respect to time entries for work he allegedly did over the course of a period of less than three weeks. This latter aspect is concerning because Berleth spent much more time focusing on his marketing efforts to create new work beyond the sole subject of this case, Plaintiffs' sister-state judgment, in which he marketed himself as the individual who should, alone, be in charge of coordinating the collection of all potential claims against Cyberlux. The latter deficiency makes his fee request meritless.

"There must be some evidence in the record to establish the reasonableness of the fee at the time a fee is awarded " Moyer v. Moyer, 183 S.W.3d 48, 57 (Tex. App .- Austin 2005, no pet.); Congleton v. Shoemaker, Nos. 09-11-00453-CV, 09-11-00654-CV, 2012 WL 1249406, at *5 (Tex App .- Beaumont Apr. 12, 2012, pet. denied) (mem. op.).

A receiver cannot simply make a request for fees to obtain approval. Klinek v. LuxeYard, Inc.672 S.W.3d 830, 842 (Tex. App .- Houston [14th Dist.] 2023, no pet.) ("Luxe Yard presented no other evidence on the relevant factors ... the record contains no evidence establishing what percentage or amount constitutes a fair, reasonable, or necessary receiver's fee, such as the complexity and difficulty of the work the receiver performed, the time spent, the diligence or thoroughness displayed, or the results accomplished.").

Here, Berleth submitted nothing more than an amount for his fee and expenses. He provided no documentation to support his work. Without documentation supporting his work, including but not limited to hours spent, a description of the complexity and necessity of the work, Berleth cannot be awarded the fee he demands. The "wish list" of Berleth should be rejected out of hand, and it goes without saying this is also true for the ~$83k in accrued expenses that Berleth claims mounted in less than three weeks.

Like with his own fees, Berleth must provide documentation to support the claims for post-judgment attorneys' fees for the Bell Nunnally firm and the Vargo Law Firm. Berleth has not submitted invoices supporting the reasonableness and necessity of these fees. They cannot be awarded without those firms (or Berleth) providing documentation to support the requests, and, even if the Court were to give Berleth a second chance, Cyberlux must have the opportunity to object.5 In any event, the Court cannot award fees of the Caudle Law Firm, which Berleth states are from CL22-3882-4, without taking into account

b. Even with Documentation, Berleth Cannot Recover Compensation or Expenses for Work Performed that is Unrelated to Collecting This Judgment.

Berleth conceded at the June 9, 2025 hearing that much of his time spent was corralling third parties and creditors that are not parties to this judgment domestication action. As such, all of these acts by Berleth are outside the scope of his appointment under Texas Civil Practice & Remedies Code § 31.002(b)(3).6 Berleth was not appointed under

5
Cyberlux does not dispute that the Bell Nunnally firm is owed $21,677.50, representing an attorneys' fees award rendered by the Southern District of Texas.
6
Turnover Order, at 18 ("A Receiver is necessary in this case pursuant to the Texas Turnover Statute . . . ).

the General Receivership Statute,7 as a bankruptcy trustee, or to act as a rehabilitative receiver. Thus, Berleth's authority under 31.002 is limited to satisfying a judgment for judgment creditor(s), and only the judgment creditor(s) that are parties to the action.8 That said, Berleth cannot recover any of the fees or expenses that represent efforts Berleth undertook to join other creditors or perform work for parties that are not judgment debtors. In fact, Berleth cannot even recover amounts representing time spent on Atlantic Wave's pending claims for damages.9 Allowing Berleth to recover any of these fees would be akin to allowing a law firm to charge one client for doing work for a different client.

4. The Outstanding Total Payoff Amount is $747,027.73.

The Judgment arises from a June 2023 settlement agreement between the parties. Since that settlement agreement was executed in 2023, Cyberlux has made extensive payments towards the settlement agreement and, therefore, towards this judgment. Cyberlux maintains a payment ledger that tracks payments made pursuant to the settlement agreement.10 As of June 11, 2025@the total outstanding balance due on the judgment, after credits and offsets, is $747,027.73. The Judgment Creditors-not Cyberlux-bear the burden to show that a different amount, rather than $747,027.73, is outstanding on the judgment.

7
Texas Civil Practice and Remedies Code section 64.001(a)(2).
8
A trial court's authority to appoint a receiver is limited to appointing a receiver "with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment." TEX. CIV. PRAC. & REM. CODE. § 31.002(b)(3).
9
Some of these claims are already the subject of pending litigation in Virginia.
10
Exhibit C.

Judgment Creditors have made representations to courts across the country about the balance due. As discussed herein, Mr. Walton's May 15, 2025 letter states that "at minimum, $912,000, after accounting for any prior payments, credits, or offsets."11 On September 3, 2024, Atlantic Wave's Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the "Grand Total Owed') by Cyberlux to Judgment Creditors was $977,882.31.12 Indeed, Mr. Welter's declaration states:

31.
As of August 2024, the outstanding amounts due under the Settlement Agreement are as follows:

o Atlantic Wave Holdings, LLC and Secure Community, LLC (AWH/SC):

Principal: $430,295.59, Interest Due: $95,000.62^ Total Owed: $525,296.21

15
16

o StrikePoint, LLC: Principal: $372,669.40, Interest Due: $79,916.69,

Total Owed: $452,586.09

o Grand Total Owed: $977-882.31

Exhibit D.
5. Berleth Previously Agreed to Reduce His Fee.

Curiously, Berleth demands over $800k for less than three weeks of being appointed. He has conducted little to no work related to collecting this judgment. Because the time and effort spent on his creditor round-up crusades fall outside the scope of his appointment under section 31.002, he cannot recover those fees.

11
Exhibit B.
12
Declaration of W. Welter, at 6:

Atlantic Wave Holdings, LLC and Secure Community, LLC (AWH/SC):

- Principal: $430,295.59, Interest Due: $95,000.62, Total Owed: $525,296.21 StrikePoint, LLC:

- Principal: $372,669.40, Interest Due: $79,916.69, Total Owed: $452,586.09 Grand Total Owed: $977,882.31.

Notably, when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required. He stated, in open Court:

My fee is assigned by the Court. If I can solve it very quickly -- I had a case just a few weeks ago where I literally sent two letters; and the fee pro-posed at 25 percent would have been, like, $350,000. And I greatly's greatly reduced that. The court would have reduced it if I hadn't.

January 16, 2025 Hearing Transcript, at p. 121.

Berleth has made no effort to reduce his fee even though he has not sold a single asset. Instead, he "supervised" (i.e., left a staff member to watch) the U.S. Government, HII, and Cyberlux conduct a final inspection and complete delivery on the Cyberlux subcontract. Since then, Berleth has gone on a crusade to round up third-party creditors while waiting for a cash payment from HII on Cyberlux's subcontract.

Further, the Turnover Order references, at most, 25% of what Berleth obtains, not the 33% he now unilaterally claims. Here, he did little, if anything, to recover on Plaintiffs' sister-state judgment. In fact, Berleth did not apparently levy upon any assets. Instead, Legalist, under no court levy, advanced funds to overpay the amount listed in the Turnover Order.

6. Berleth is Trying to Use a Newly Filed Lawsuit, Obviously Prompted by Berleth, to Start Over With a New Receivership Not Involving These Plaintiffs' Claims, Despite that the Court Already Rejected this Attempt.

On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux. Their Petition, styled as a Petition in Intervention, sought a Temporary Restraining Order. The Petition asserts, among other things, that Whiteley and Tucker should be able to recover their alleged damages from the receivership. At the June 11 hearing, counsel for Whiteley and Tucker suggested that

Cyberlux could not stay or dissolve this action because of Whiteley and Tucker's newly- filed claims. The Court rejected this argument.

When he confirmed receipt of the wire instruction, Berleth stated "there is a TRO at 2:00 to extend the receivership for other creditors."13 Neither Berleth nor counsel for the party(ies) seeking the TRO (presumably, Whiteley and Tucker) gave notice of the supposed TRO to Cyberlux's counsel. It is obvious this is a coordinated effort to improperly keep the receivership open.

In his Report, Berleth seems to suggest that the TRO@was granted. Berleth's Report

Tucker v. Cyberlux, in the 129th District Court that will take effect upon the termination of this receivership." Cyberlux has not received a copy of this supposed ex parte TRO. Nevertheless, Berleth's Order, at paragraph 6, includes:

The Court takes judicial notice that the termination of this receivership will animate the next serialreceivership, in cause no. 2025-41073, styled Tucker v. Cyberlux Corporation, in the 129th Judicial District Court of Harris County, Texas Cyberlux will remain under receivership without interruption pending further orders in that case.

Receiver's Proposed Order to Distribute Funds and Terminate Receivership, at 16.

This provision is untenable for several reasons and, as the Court already ruled, a newly filed petition and TRO application cannot override Cyberlux's ability to satisfy the judgment. Moreover, Berleth is attempting to convert a new lawsuit into a post-judgment proceeding without giving Cyberlux an opportunity to respond. Berleth cannot eviscerate notions of due process for his own personal gain (i.e., a "serial receivership" through which

13
Exhibit A.

Berleth will seek more excessive fees). Again, as this Court already held, Berleth's limited role was to seek to satisfy an already-existing sister-state judgment. The sister-state judgment has been satisfied, so Berleth's role must be terminated.

7. Berleth's Current Conduct and Past Sanctions Illustrate that the Court Should Direct Berleth to Pay Funds to the Court's Registry for the Protection of the Parties and Counsel Involved.

Berleth's actions from the date of his appointment to present raise grave concerns about his integrity and ability to act as a court-appointed neutral While this matter was pending, the Fifth Circuit held that Berleth had exceeded his authority as Court-appointed receiver. Matter of Preferred Ready-Mix, L.L.C., No. 24-20158, 2024 WL 5252498, at *1 (5th Cir. Dec. 31, 2024). Berleth lost that appeal, which arose after the Southern District of Texas concluded that he had "effectively held the major assets of the debtor hostage." If Berleth is willing to withhold tools and dump trucks (which he apparently did in Preferred Ready-Mix), there should be grave concerns that he will withhold the cash paid to his trust account. The Court should direct Berleth to deposit the entire wire payment to the Court's registry for the benefit and protection of all interested.

CONCLUSION

Judgment Debtors have satisfied the entire judgment due to the overpayment made to Berleth. Berleth's Report is deficient and cannot form the basis of an award of the fees sought by Berleth. The judgment amount is incorrect and must be corrected. The Court should dissolve the Receivership and mark the judgment satisfied. Then, the Court should set forth deadlines by which the documentation must be provided, allowing Cyberlux time to review and object to the documentation. Any order of the Court should require Berleth

to notify all parties that the Receivership is dissolved. Cyberlux prays for all further relief to which it is entitled.

Respectfully submitted,

/s/ Alexander J. Pennetti Douglas S. Lang State Bar No. 11895500 Alexander J. Pennetti State Bar No. 24110208

Unofficial Copy Office of Marilyn Burgess Disso

THOMPSON COBURN LLP 2100 Ross Avenue, Suite 3200 Dallas, Texas 75201 Tel Phone: (972) 629-7100 Fax: (972) 629-7171 dlang@thompsoncoburn.com apennetti@thompsoncoburn.com

Attorneys for Defendants Cyberlux Corporation and Mark D. Schmidt

CERTIFICATE OF SERVICE

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 11, 2025.

/s/ Alexander J. Pennetti

Alexander J. Pennetti

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.

Laurie DeBardeleben on behalf of Alex Pennetti Bar No. 24110208 ldebardeleben@thompsoncoburn.com Envelope ID: 101925092

Filing Code Description: No Fee Documents Filing Description: Cyberluxs Objections to Receivers Motion to Terminate Status as of 6/12/2025 9:04 AM CST

Associated Case Party: Robert Berleth

Name

BarNumber

Email

TimestampSubmitted

Status

Robert W.Berleth

rberleth@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

Case Contacts

Name

BarNumber

Email

TimestampSubmitted

Status

Robert W.Berleth

rberleth@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

David A.Walton

dwalton@bellnunnally.com VanVan Buren District Clerk

6/12/2025 8:41:44 AM

SENT

LaDonna Arey

LArey@bellnunnally.com de

6/12/2025 8:41:44 AM

SENT

Sandra Meiners

smeiners@thompsoncoburn.com Costante

6/12/2025 8:41:44 AM

SENT

Travis Vargo

tvargo@vargolawfirm.com

6/12/2025 8:41:44 AM

SENT

Laurie DeBardeleben

Idebardeleben@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Roxanna Lock

rlock@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Shawn Grady Uncial

shawn@gradycollectionlaw.com

6/12/2025 8:41:44 AM

SENT

Paula Gentry

pgentry@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Records Department

Records@bellnunnally.com

6/12/2025 8:41:44 AM

SENT

Micah Jackson

mjackson@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

Sheli Davis

sdavis@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

Lena Brasher

lbrasher@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Frankie Huff

fhuff@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Hannah Petrea

hpetrea@bellnunnally.com

6/12/2025 8:41:44 AM

SENT

Michael Poynter

mpoynter@vargolawfirm.com

6/12/2025 8:41:44 AM

SENT

Daniel AArdmore

ardmorelawfirm@gmail.com

6/12/2025 8:41:44 AM

SENT

Tristian Harris

tharris@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

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.

Laurie DeBardeleben on behalf of Alex Pennetti Bar No. 24110208 ldebardeleben@thompsoncoburn.com Envelope ID: 101925092

Filing Code Description: No Fee Documents Filing Description: Cyberluxs Objections to Receivers Motion to Terminate Status as of 6/12/2025 9:04 AM CST

Case Contacts

Tristian Harris

tharris@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

Bernadette Martin

bernadette@gradycollectionlaw.com

6/12/2025 8:41:44 AM

SENT

Bernadette Martin

bernadette@gradycollectionlaw.com

6/12/2025 8:41:44 AM

SENT

Shawn Grady

shawn@gradycollectionlaw.com

6/12/2025 8:41:44 AM

SENT

Jeff Brown

jbrown@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Douglas S.Lang

dlang@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Katharine Clark

kclark@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Edward W.Gray, Jr.

EGray@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Alex Pennetti

apennetti@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Corinne Martin

cmartin@berlethlaw.com

6/12/2025 8:41:44 AM

SENT

Hannah Fischer

hfischer@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

Greg Nieman

gnieman@bellnunnally.com

6/12/2025 8:41:44 AM

SENT

Jemisha Gandhi

jgandhi@bellnunnally.com

6/12/2025 8:41:44 AM

SENT

David M.Keithly

dkeithly@mortensontaggart.com

6/12/2025 8:41:44 AM

SENT

Jocelin A.Tapia

jtapia@thompsoncoburn.com

6/12/2025 8:41:44 AM

SENT

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