Evidence Record

Exhibit 15

Marilyn Burgess - District Clerk Harris County Envelope No. 110345798

Type
exhibit
Court
EDVA
Case
HII v. Cyberlux interpleader
Docket
3:25-cv-00483
Pages
12
Lines
298
SHA-256
3f918fa1a881

DISTIL analysis

DISTIL Run
Profile
Standard
Version
1
Doc Type
litigation_response_motion
Total Nodes
36
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
litigation_response_motion defense_counsel_thompson_coburn post_judgment_enforcement_turnover_proceeding 2025-12-08_to_2026-01-22
mediation_noncompliancefee_amount_inconsistencycross_jurisdiction_discrepancy
Analytical Frame
procedural_objection_fee_dispute
Analytical Summary
Defense counsel Thompson Coburn LLP filed this response in Harris County District Court opposing plaintiffs Atlantic Wave Holdings and Secure Community's motion to distribute $857,734.19 in attorneys' fees from receivership funds. The defense argues plaintiffs failed to comply with the court's December 8, 2025 mediation order, ignored repeated scheduling attempts, and grossly overstated their Texas attorneys' fees. Central to the dispute is a documented inconsistency: plaintiffs told a Virginia court in October 2025 that their Texas fees totaled only $173,763.59, yet now claim over $857,000. Defense counsel asserts plaintiffs provided no documentary evidence supporting their fee demand and exceeded the statutory scope of recoverable turnover fees under Texas CPRC § 31.002. The response requests denial of distribution, mandatory mediation compliance, and production of unredacted billing statements.
Key Points
  • Plaintiffs seek distribution of $857,734.19 in attorneys' fees without providing documentary support
  • Plaintiffs represented to Virginia court in October 2025 that total Texas fees were only $173,763.59
  • Court ordered mediation by January 15, 2026; plaintiffs refused to schedule despite repeated defense attempts
  • Defense argues plaintiffs judicially estopped from contradicting prior Virginia fee representations
  • Receiver obtained $3,083,639.75 on June 11, 2025; fees after that date not recoverable under Texas law
  • Defense requests production of billing statements, mandatory mediation, and bar on fees exceeding $173,763.59
Stage 2
Core — Entities, Events, Claims
22 nodes
ENT-001
Entity
Atlantic Wave Holdings, LLC
Plaintiff and judgment creditor in turnover proceeding, seeking distribution of attorneys' fees from receivership funds
Page 2 — ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC, Plaintiffs/Judgment-Creditor
ENT-002
Entity
Secure Community, LLC
Co-plaintiff and judgment creditor seeking distribution of attorneys' fees
Page 2 — ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC, Plaintiffs/Judgment-Creditor
ENT-003
Entity
Cyberlux Corporation
Defendant and judgment debtor in turnover proceeding
Page 2 — CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually, Defendant/Judgment Debtors
ENT-004
Entity
Mark D. Schmidt
Individual defendant and judgment debtor in turnover proceeding
Page 2 — CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually, Defendant/Judgment Debtors
ENT-005
Entity
Thompson Coburn LLP
Law firm representing defendants Cyberlux Corporation and Mark D. Schmidt, seeking to withdraw as counsel
Page 4 — Thompson Coburn LLP's Motion to Withdraw
ENT-006
Entity
Robert W. Berleth
Court-appointed receiver who obtained $3,083,639.75 in June 2025
Page 3 — the Parties and Receiver Robert W. Berleth to conduct mediation
ENT-007
Entity
Hon. Russell Lloyd
Mediator agreed upon by parties but unable to schedule due to plaintiff noncompliance
Page 4 — Although the Parties and Receiver have agreed that Hon. Russell Lloyd is a suitable mediator for this matter
ENT-008
Entity
Circuit Court of Fairfax County, Virginia
Virginia court where plaintiffs represented their Texas attorneys' fees totaled $173,763.59
Page 2 — Plaintiffs informed the Circuit Court of Fairfax County, Virginia, only a few weeks ago that their Texas attorneys' fees totaled $173,763.59
ENT-009
Entity
Harris County District Court, 129th Judicial District
Texas court presiding over this turnover proceeding and fee dispute
Page 2 — IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS 129TH JUDICIAL DISTRICT
EVT-001
Event
December 8, 2025 Court Mediation Order
Court ordered parties and receiver to mediate all outstanding issues, including attorneys' fees, no later than January 15, 2026
Page 3 — On December 8, 2025, this Court ordered the Parties and Receiver Robert W. Berleth to conduct mediation of the remaining issues in this matter no later than January 15, 2026, which includes the amount of reasonable and necessary attorneys' fees
EVT-002
Event
Defense Attempts to Schedule Mediation (December-January)
Defense counsel made repeated attempts to schedule mediation on December 16, 2025, December 30, 2025, and January 6, 2026; plaintiffs' counsel did not respond
Page 3 — On December 16, 2025, Defendants' counsel emailed Plaintiffs' counsel and counsel for the Receiver regarding their availability for mediation. Plaintiffs' counsel and Receiver's counsel did not respond. On December 30, 2025, Defendants' counsel followed up with Plaintiffs' counsel and Receiver's counsel regarding their availability for mediation. Plaintiffs' counsel and Receiver's counsel did not respond. On January 6, 2026, Defendants' counsel followed up
EVT-003
Event
January 9, 2026 Teleconference
Defense and receiver's counsel held teleconference; receiver's counsel stated receiver would not participate in mediation until motion to withdraw was decided
Page 3 — Defendants' counsel and Receiver's counsel held a teleconference on January 9, 2026. During that call, Receiver's counsel indicated he and Receiver would not participate in mediation until Thompson Coburn LLP's Motion to Withdraw was decided.
EVT-004
Event
June 11, 2025 Receiver Obtains Funds
Receiver obtained $3,083,639.75 from turnover proceeding
Page 10 — There is no dispute that the Receiver obtained $3,083,639.75 on or about June 11, 2025.
EVT-005
Event
October 2025 Virginia Court Hearing
Plaintiffs submitted chart to Virginia court showing Texas attorneys' fees totaled $173,763.59 as part of total claim for $749,014.03
Page 7 — Indeed, at a hearing on a motion for disbursement of funds in Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, Case No. CL-2025-3413, Plaintiffs attempted to recover $749,014.03, which Plaintiffs claimed represented the total amount of fees and costs incurred by all their attorneys in Texas, California, and Virginia (including fee and sanctions award from the underlying judgment). Exhibit C is a chart that Plaintiffs submitted, in which Plaintiffs identified that their Texas attorneys' fees totaled $173,763.59
EVT-006
Event
December 5, 2025 Mediation Session
Parties participated in 12-hour mediation limited to parties only (excluding receiver), but did not reach settlement
Page 4 — Plaintiffs and Defendants participated in mediation on that date for 12 hours, but the parties did not reach a settlement.
EVT-007
Event
Filing of Response - January 22, 2026
Defendants filed response to plaintiffs' Second Amended Motion for Distribution of Funds and Motion to Abate
Page 2 — Filed: 1/22/2026 10:39 AM
CLM-001
Claim
Plaintiffs Seek $857,734.19 in Attorneys' Fees
Plaintiffs claim entitlement to at least $857,734.19 in reasonable attorneys' fees and costs in Texas enforcement proceeding and other related Texas proceedings
Page 6 — Their Second Amended Motion for Distribution of Funds now claims that Plaintiffs 'are owed at least $857,734.19 in reasonable attorneys' fees and cost [sic] in this Texas enforcement proceeding and the other related proceedings in Texas.'
CLM-002
Claim
Defense: Plaintiffs Failed to Comply with Mediation Order
Defendants claim plaintiffs failed to comply with court's order to mediate attorneys' fees issue by January 15, 2026
Page 2 — Plaintiffs' Second Amended Motion for Distribution of Funds ('Motion') should be denied because (1) Plaintiffs failed to comply with this Court's order to mediate the issue of attorneys' fees, which is the only issue set out in their Second Amended Motion for Distribution of Funds
CLM-003
Claim
Defense: No Documentary Evidence Provided
Defendants assert plaintiffs have not provided any documentary evidence to support the $857,734.19 fee demand to either defendants or the court
Page 2 — Plaintiffs have not provided any evidence to support the $857,734.19 attorneys' fees and costs they seek to recover. Plaintiffs cannot recover any of their attorneys' fees without documentary evidence of those fees, which Plaintiffs have not provided to either Defendants or this Court.
CLM-004
Claim
Defense: Virginia Representation Shows $173,763.59
Defendants claim plaintiffs told Virginia court only weeks ago that Texas attorneys' fees totaled only $173,763.59, contradicting current $857,734.19 demand
Page 2 — By Plaintiffs' own admission, this figure is a gross overstatement of the fees Plaintiffs' actually incurred in this matter. Plaintiffs informed the Circuit Court of Fairfax County, Virginia, only a few weeks ago that their Texas attorneys' fees totaled $173,763.59.
CLM-005
Claim
Defense: Fees Limited to Turnover Pursuit
Defendants assert Texas law limits plaintiffs' recovery to attorneys' fees incurred in pursuit of turnover relief only, not other matters
Page 2, 3 — under no circumstance may Plaintiffs recover their attorneys' fees for other Texas matters or matters pending in other jurisdictions. Texas Civil Practice & Remedies Code § 31.002(e) limits Plaintiffs' recovery of attorneys' fees to the attorneys' fees incurred in the pursuit of turnover relief
CLM-006
Claim
Defense: No Fees Recoverable After June 11, 2025
Defendants claim plaintiffs cannot recover attorneys' fees incurred after June 11, 2025, when receiver obtained funds
Page 10 — There is no dispute that the Receiver obtained $3,083,639.75 on or about June 11, 2025. Plaintiffs cannot recover attorneys' fees incurred after that date.
Stage 3
In Situ — Quotations, Tells, Tensions, Questions
9 nodes
TEN-001
Tension
393% Fee Inflation Between Jurisdictions
Sharp discrepancy between plaintiffs' October 2025 Virginia court representation of $173,763.59 in Texas fees and January 2026 Texas court claim of $857,734.19
Page 2, 6 — Plaintiffs informed the Circuit Court of Fairfax County, Virginia, only a few weeks ago that their Texas attorneys' fees totaled $173,763.59. Their Second Amended Motion for Distribution of Funds now claims that Plaintiffs 'are owed at least $857,734.19 in reasonable attorneys' fees'
TEN-002
Tension
Mediation Order vs. Distribution Motion Timing
Plaintiffs filed motion for distribution of funds eight days after court ordered mediation of fee issues, effectively bypassing the mediation requirement
Page 6 — Eight days after this Court issued its order to mediate from the bench after all Parties and the Receiver agreed to mediate all remaining issues (including the issue of whether-and how much-attorneys' fees Plaintiffs may recover), Plaintiffs filed their Motion for Distribution of Funds.
TEN-003
Tension
Receiver Refusal vs. Court Mandate
Receiver's counsel refused to participate in court-ordered mediation until unrelated motion to withdraw was decided, despite mandatory nature of court order
Page 3, 4 — During that call, Receiver's counsel indicated he and Receiver would not participate in mediation until Thompson Coburn LLP's Motion to Withdraw was decided. Defendants' counsel responded that: (1) compliance with the Court's mediation order was mandatory; (2) the motions to withdraw had no bearing on the Court's mediation order
QST-001
Question
What fees were actually incurred in turnover pursuit?
What portion of the claimed $857,734.19 represents fees actually incurred in pursuit of turnover relief versus other litigation activities or other jurisdictions?
Page 2, 9 — Texas Civil Practice & Remedies Code § 31.002(e) limits Plaintiffs' recovery of attorneys' fees to the attorneys' fees incurred in the pursuit of turnover relief. When a party seeks to recover attorneys' fees under § 31.002(e), the party must prove that the fees were incurred for turnover relief.
QST-002
Question
What explains the $684,000 fee increase?
What specific legal work accounts for the increase from $173,763.59 (October Virginia representation) to $857,734.19 (January Texas claim)?
Page 2, 6 — Plaintiffs informed the Circuit Court of Fairfax County, Virginia, only a few weeks ago that their Texas attorneys' fees totaled $173,763.59. Their Second Amended Motion for Distribution of Funds now claims that Plaintiffs 'are owed at least $857,734.19 in reasonable attorneys' fees'
QST-003
Question
Were fees already paid in Virginia?
Did plaintiffs already receive payment for their Texas attorneys' fees as part of the Virginia court's distribution of the total claim amount?
Page 8 — There is no proper purpose for Plaintiffs' reversal; they are simply trying to obtain relief in this Court that was already rejected by the Circuit Court of Fairfax County. Plaintiffs' Motion should be denied because Plaintiffs already obtained payment representing the outstanding balance on their total claim, including attorneys' fees.
QUO-001
Quotation
Plaintiffs' Demand to Avoid Mediation
Plaintiffs argued in motion for expedited hearing that court's mediation order 'really does not need to include [Plaintiffs] at this point'
Page 5 — Plaintiffs argued that they do not need to attend mediation. Plaintiffs' Motion for Expedited Hearing, at 2 (stating that the Court's order 'really does not need to include [Plaintiffs] at this point . .. ').
QUO-002
Quotation
Defense on Mandatory Mediation Compliance
Defense counsel told receiver's counsel that compliance with court's mediation order was mandatory and motions to withdraw had no bearing on the order
Page 3, 4 — Defendants' counsel responded that: (1) compliance with the Court's mediation order was mandatory; (2) the motions to withdraw had no bearing on the Court's mediation order; (3) Thompson Coburn LLP remained counsel of record for Defendants until the Court grants the firm's request to withdraw
QUO-003
Quotation
Plaintiffs' Counsel Insistence on Unavailable Date
Plaintiffs' counsel asserted defense 'must, as attorneys, follow the Court's Order' and stated 'see [Defense counsel] at mediation on the 12th' despite mediator and defense unavailability
Page 5 — Even after Defendants' counsel indicated they-like Judge Lloyd-were not available on January 12, Plaintiffs' counsel doubled down, misrepresenting that Judge Lloyd was available and asserting that Defendants' counsel 'must, as attorneys, follow the Court's Order.' Plaintiffs' counsel went on to say that he would '[s]ee [Defense counsel] at mediation on the 12th.'
Stage 4
Interpretive — Inferences, Omissions, Patterns
5 nodes
INF-001
Inference
Strategic Forum Shopping Pattern
Plaintiffs' contradictory fee representations across jurisdictions suggests strategic presentation of lower figures in Virginia (where already paid) and inflated figures in Texas (where funds remain)
Page 8 — There is no proper purpose for Plaintiffs' reversal; they are simply trying to obtain relief in this Court that was already rejected by the Circuit Court of Fairfax County. Plaintiffs' Motion should be denied because Plaintiffs already obtained payment representing the outstanding balance on their total claim, including attorneys' fees.
INF-002
Inference
Mediation Avoidance Strategy
Pattern of non-response to scheduling attempts, unrealistic deadline demands, and request to exclude themselves from mediation suggests plaintiffs actively avoiding meaningful negotiation of fee amount
Page 5 — Plaintiffs ignored Defendants' attempts to schedule mediation for weeks. Plaintiffs' counsel then demanded to mediate on a day Judge Lloyd was not available. Specifically, on January 7, 2026, Plaintiffs' counsel demanded to conduct mediation on January 12, 2026. Judge Lloyd's case manager had already informed Defendants' counsel that Judge Lloyd was only available on six dates in January, starting on January 21, 2026.
INF-003
Inference
Evidentiary Burden Avoidance
Plaintiffs' failure to produce billing statements despite seeking over $850,000 distribution suggests inability to substantiate claimed fees under documentary scrutiny
Page 8 — Plaintiffs are seeking a disbursement of more than $850,000 but they have not provided any evidence to support this demand. Nor have they made any effort to show that the attorneys' fees and costs they seek to recover are actually within the scope of TCPRC § 31.002(b)(3).
OMI-001
Omission
Three Amended Motions Without Fee Documentation
Plaintiffs filed original, amended, and second amended motions for distribution - correcting misrepresentations about stipulations and receiver findings - but never included documentary support for fee amounts
Page 6 — Plaintiffs twice amended their Motion for Distribution to correct glaring misrepresentations. Plaintiffs' Original Motion for Distribution of Funds falsely claimed that Defendants had stipulated to the fees and costs sought. The Amended Motion for Distribution falsely asserted that the Receiver had found the fees sought were reasonable.
OMI-002
Omission
No Explanation for Cross-Jurisdiction Fee Discrepancy
Plaintiffs' motions omit any explanation or acknowledgment of the dramatic difference between Virginia and Texas fee representations
Page 6 — All three of Plaintiffs' motions for distribution of funds omit that, in October 2025, Plaintiffs told the Circuit Court of Fairfax County, Virginia, that their Texas attorneys' fees totaled only $173,763.59.

Extracted text

12 pages · 18858 characters

Exhibit 15 — Formatted Extract

Type: exhibit
Court: EDVA
Matter: HII v. Cyberlux interpleader
Docket: 3:25-cv-00483
EXHIBIT 15

Marilyn Burgess - District Clerk Harris County Envelope No. 110345798

CAUSE NO. 2024-48085

ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC, Plaintiffs/Judgment-Creditor

v. CYBERLUX CORPORATION and MARK D. SCHMIDT, Individually,

Defendant/Judgment Debtors.

Los cos Los cos Los cos Los cos Los cos los cos

IN THE DISTRICT COURT OF

HARRIS COUNTY, TEXAS

129TH JUDICIAL DISTRICT

DEFENDANTS' RESPONSE TO PLAINTIFFS' SECOND AMENDED MOTION FOR DISTRIBUTION OF FUNDS, AND MOTION TO ABATE

Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC's Second Amended Motion for Distribution of Funds ("Motion") should be denied because (1) Plaintiffs failed to comply with this Court'sorder to mediate the issue of attorneys' fees, which is the only issue set out in their Second Amended Motion for Distribution of Funds; and (2) Plaintiffs have not provided any evidence to support the $857,734.19 attorneys' fees and costs1 they seek to recover.

Plaintiffs cannot recover any of their attorneys' fees without documentary evidence of those fees, which Plaintiffs have not provided to either Defendants or this Court. Even if Plaintiffs adduce documentation to support their fee demand, Texas Civil Practice & Remedies Code § 31.002(e) limits Plaintiffs' recovery of attorneys' fees to the attorneys' fees incurred in the pursuit of turnover relief, and under no circumstance may Plaintiffs

1
By Plaintiffs' own admission, this figure is a gross overstatement of the fees Plaintiffs' actually incurred in this matter. Plaintiffs informed the Circuit Court of Fairfax County, Virginia, only a few weeks ago that their Texas attorneys' fees totaled $173,763.59.

recover their attorneys' fees for other Texas matters or matters pending in other jurisdictions.

INTRODUCTION

On December 8, 2025, this Court ordered the Parties and Receiver Robert W. Berleth to conduct mediation of the remaining issues in this matter no later than January 15, 2026, which includes the amount of reasonable and necessary attorneys' fees, if any, that Plaintiffs may recover under § 31.002.

counsel for the Receiver regarding their availability for mediation. Plaintiffs' counsel and Receiver's counsel did not respond. Exhibit B.2

On December 30, 2025, Defendants' counsel followed up with Plaintiffs' counsel and Receiver's counsel regarding their availability for mediation. Plaintiffs' counsel and Receiver's counsel did not respond. Id.

On January 6, 2026, Defendants' counsel followed up with Plaintiffs' counsel and Receiver's counsel regarding their availability for mediation. Plaintiffs' counsel did not respond. Receiver's counselresponded and asked to schedule a call to discuss Defendants' counsel's motions to withdraw, filed on January 5, 2026. Id.

Defendants' counsel and Receiver's counsel held a teleconference on January 9, 2026. See Exhibit A. During that call, Receiver's counsel indicated he and Receiver would not participate in mediation until Thompson Coburn LLP's Motion to Withdraw was decided. Id. Defendants' counsel responded that: (1) compliance with the Court's mediation order was mandatory; (2) the motions to withdraw had no bearing on the Court's

2
The Declaration of Alexander J. Pennetti is attached as Exhibit A.

mediation order; (3) Thompson Coburn LLP remained counsel of record for Defendants until the Court grants the firm's request to withdraw; and (5) the Court's earliest availability provided to Defendants' counsel to hear the motion to withdraw was March 2, 2026. Id.

Although the Parties and Receiver have agreed that Hon. Russell Lloyd is a suitable mediator for this matter, neither Plaintiffs nor the Receiver have provided their availability for mediation for any of the dates provided by Judge Lloyd's case manager. Id.

ARGUMENT
A. The Motion should be denied because Plaintiffs have refused to schedule the court-ordered mediation of the issues identified in the Motion.

At the hearing on December 8, 2025, the Receiver indicated he did not wish to proceed on his own motion to supplement his powers. Receiver's counsel asserted that the Receiver had improperly been denied the opportunity to attend the Parties' mediation that was limited by the Court of Appeals to only the parties and that mediation occurred on December 5, 2025.3

The Parties discussed this issue with the Court, and Plaintiffs and Defendants indicated they were not opposed to conducting a second mediation. Based on that discussion, the Court ordered the Parties and the Receiver to mediate all outstanding issues in this matter -including the issues of Plaintiffs' attorneys' fees-on or before January 15, 2026.

3
Plaintiffs and Defendants participated in mediation on that date for 12 hours, but the parties did not reach a settlement.

Since that hearing, Plaintiffs have refused to cooperate in scheduling the mediation. First, despite their December 8, 2025, agreement to mediate and this Court's order, Plaintiffs argued that they do not need to attend mediation. Plaintiffs' Motion for Expedited Hearing, at 2 (stating that the Court's order "really does not need to include [Plaintiffs] at this point . .. "). In essence, Plaintiffs asked the Court to rescind its mediation order only with respect to Plaintiffs so that they may "avoid further delay in making the [requested] distribution.). Id. at 1.

Second, Plaintiffs ignored Defendants' attempts to schedule mediation for weeks.

counsel then demanded to mediate on a day Judge Lloyd was not available. Specifically, on January 7, 2026, Plaintiffs' counsel demanded to conduct mediation on January 12, 2026. Exhibit B. Judge Lloyd's case manager had already informed Defendants' counsel that Judge Lloyd was only available on six dates in January, starting on January 21, 2026. Exhibit D. Even after Defendants' counsel indicated they-like Judge Lloyd-were not available on January 12, Plaintiffs' counsel doubled down, misrepresenting that Judge Lloyd was available and asserting that Defendants' counsel "must, as attorneys, follow the Court's Order." Id. Plaintiffs' counsel went on to say that he would "[s]ee [Defense counsel] at mediation on the 12th." Id. Defendants' counsel forwarded the case manager's email to counsel for Plaintiffs and counsel for the Receiver, asking which days they were available to mediate. Neither have responded to that inquiry or otherwise provided their availability for the days Judge Lloyd is available.4

4
Plaintiffs' counsel has since suggested the Parties hold their own "settlement conference." Exhibit E. Even if this was more than just another attempt to sidestep the Court's order,

In short, neither Plaintiffs nor the Receiver has complied with this Court's prior order that the Parties and the Receiver mediate the remaining issues in this matter, and it appears that they are unwilling to do so.

B. Plaintiffs' Motion should be denied because Plaintiffs -without any evidentiary support -- grossly misrepresented the total amount of fees incurred in Texas.

Eight days after this Court issued its order to mediate from the bench after all Parties and the Receiver agreed to mediate all remaining issues fincluding the issue of whether-and how much-attorneys' fees Plaintiffs may recover), Plaintiffs filed their Motion for Distribution of Funds. The original Motion for Distribution of Funds asked this Court to distribute $806,400.96 to Plaintiffs, a figure Plaintiffs said represented their "reasonable attorneys' fees and cost [sic] in this Texas enforcement proceeding and the other related proceedings in Texas."5 Plaintiffs' Motion for Distribution of Funds, at 2. Plaintiffs twice amended their Motion for Distribution to correct glaring misrepresentations.6 Their Second Amended Motion for Distribution of Funds now claims that Plaintiffs "are owed at least $857,734.19 in reasonable attorneys' fees and cost [sic] in this Texas enforcement proceeding and the other related proceedings in Texas." Second Am. Mot., at 2.

All three of Plaintiffs' motions for distribution of funds omit that, in October 2025,

Plaintiffs told the Circuit Court of Fairfax County, Virginia, that their Texas attorneys' fees

this is not a suitable alternative because the Parties have been engaged in ongoing, settlement discussions, all of which have been unsuccessful.

5
Section 31.002 does not allow Plaintiffs to recover attorneys' fees from "other" proceedings. See Defs' Response to Amended Motion for Expedited Hearing, at 4-6.
6
Plaintiffs' Original Motion for Distribution of Funds falsely claimed that Defendants had stipulated to the fees and costs sought. The Amended Motion for Distribution falsely asserted that the Receiver had found the fees sought were reasonable.

totaled only $173,763.59. Exhibit C. Indeed, at a hearing on a motion for disbursement of funds in Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, Case No. CL-2025-3413, Plaintiffs attempted to recover $749,014.03, which Plaintiffs claimed represented the total amount of fees and costs incurred by all their attorneys in Texas, California, and Virginia (including fee and sanctions award from the underlying judgment). Exhibit C is a chart that Plaintiffs submitted, in which Plaintiffs identified that their Texas attorneys' fees totaled $173,763.59- See id. After hearing arguments of counsel and receiving that chart,7 the Circuit Court of Fairfax County, that the Plaintiffs' total claim was $1,140,004.66, and the total claim included Plaintiffs' "reasonable and necessary attorney's fees and costs Defendants' Amended Response to Receivers Motion to Supplement, at 6.

The doctrine of judicial estoppel prohibits Plaintiffs from abandoning their representations to the Circuit Court of Fairfax County and taking a clearly inconsistent position before this Court. (Reed v. City of Arlington, 650 F.3d 571, 576 (5th Cir. 2011) (citing New Hampshire, 532 U.S. at 750, 121 (S.Ct. 1808); Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 294 (5th Cir. 2004) (applying Judicial estoppel where positions taken in litigation are "clearly inconsistent

7
Plaintiffs' counsel has repeatedly suggested that additional information was adduced at the October hearing held in Fairfax County, Virginia. Despite several requests, Plaintiffs have not produced any of that information or other documentation to support their demand for attorneys' fees.

There is no proper purpose for Plaintiffs' reversal; they are simply trying to obtain relief in this Court that was already rejected by the Circuit Court of Fairfax County. Plaintiffs' Motion should be denied because Plaintiffs already obtained payment representing the outstanding balance on their total claim, including attorneys' fees. In any event, the Motion should be denied because Plaintiffs grossly overstated the amount of attorneys' fees they have incurred, and they are judicially estopped from changing the position they previously took in Virginia.

C. Plaintiffs have not provided any evidence of the attorneys' fees and costs that they seek to recover in this case.

Plaintiffs are seeking a disbursement of more than $850,000 but they have not provided any evidence to support this demand. Nor have they made any effort to show that the attorneys' fees and costs they seek to recover are actually within the scope of TCPRC § 31.002(b)(3).

Courts may not award attorneys' fees to a party unless and until the party proves that the fees incurred were reasonable and necessary. Dilston House Condo. Ass'n v. White, 230 S.W.3d 714, 718 (Tex. App .- Houston [14th Dist.] 2007, no pet.) (citing Manon v. Tejas Toyota, Inc., 162 S.W.3d 743, 751 (Tex.App .- Houston [14th Dist.] 2005, no pet.).

This is true even when an award of attorneys' fees is mandatory. Id .; see also Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 484 (Tex. 2019) ("When fee-shifting is authorized, the party seeking to recover those fees bears the burden of establishing the fees are reasonable and necessary." ) (quoting In re Nat'l Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017)). When a party seeks to recover attorneys' fees

Unofficial Copy Office of Mary Bergen Distin

under § 31.002(e), the party must prove that the fees were incurred for turnover relief. Feldman v. Watts, 586 S.W.3d 591, 596 (Tex. App .- Houston [14th Dist.] 2019, no pet.) ("The Feldman Parties also sought fees for work that did not involve the pursuit of turnover relief, but they were not entitled to attorney's fees under section 31.002(e) for this work.").

Plaintiffs seem to believe that they are not required to billing statements to Defendants and that the Court may instead determine a reasonable amount of attorneys' fees based on the billing statements of Defendants' counsel. See generally Exhibit E. That position is wrong under Texas law for two reasons.

First, Plaintiffs have an evidentiary burden to prove the amount of reasonable and necessary attorneys' fees to which they are entitled. Dilston House, 230 S.W.3d at 718. As such, they must produce actual evidence, in the form of billing statements to Defendants and Defendants are entitled to cross-examine any sworn testimony related to the alleged fees incurred. In re Scherer, 684 S.W.3d 875, 893 (Tex. App .- Eastland 2024, no pet.) (discussing that billing statements of the party's counsel are discoverable when that party seeks to recover attorneys' fees); see also El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 762 (Tex. 2012) ("A meaningful review of the hours claimed is particularly important because the usual incentive to charge only reasonable attorney's fees is absent when fees are paid by the opposing party.").

Second, the fees and costs incurred by Defendants are not relevant to the inquiry before the Court, which is the amount of reasonable and necessary attorney's fees, if any, that may be awarded to Plaintiffs. See In re Nat'l Lloyds Ins. Co., 532 S.W.3d 794, 805 (Tex. 2017) (discussing that an opposing party's billing statements are only discoverable if the opposing party seeks to recover its fees or uses its fee statements to refute the

reasonableness of the requesting party's fees); Mora v. Allsup's Convenience Stores, Inc., No. 2:08-CV-100, 2011 WL 13286042, at *4 (N.D. Tex. Mar. 11, 2011) (comparing other federal circuits to the Fifth Circuit and finding that the "costs incurred by defense counsel, which may include trips to meet with clients and other expenses particular to the posture of the defense attorneys and their clients, has no relevance to the reasonableness of the costs incurred by plaintiffs.") (emphasis added) (quoting Harkless v. Sweeny I.S.D., 608 F.2d 594 (5th Cir. 1979)).

Plaintiffs' Motion for Distribution of Funds should be denied and/or abated until Plaintiffs produce evidence to support their demand for_attorneys' fees.8 Defendants' request that the Court provide Plaintiffs a deadline to produce such evidence, including all billing statements upon which Plaintiffs rely, and if evidence is not produced by that deadline, the Court should deny Plaintiffs' request in its entirety.

CONCLUSION

There is no good-faith basis for Plaintiffs' refusal to mediate, and Plaintiffs cannot recover any attorneys' fees of costs without providing actual evidence to both the Court and Defendants. The Court should deny Plaintiffs' Second Motion for Distribution and compel Plaintiffs to mediate on or before February 13, 2026, in accordance with the Court's December 8, 2025 bench ruling.

The Court should also require Plaintiffs to produce, at least 48 hours prior to mediation, unredacted documentary evidence that supports the attorneys' fees they seek to

8
There is no dispute that the Receiver obtained $3,083,639.75 on or about June 11, 2025. Plaintiffs cannot recover attorneys' fees incurred after that date. See Thomas v. Thomas, 917 S.W.2d 425, 438 (Tex. App .- Waco 1996, no writ). Plaintiffs may only recover attorneys' fees incurred in the pursuit of turnover relief. Feldman, 586 S.W.3d at 596.

recover. The Court should separately require the Receiver to adduce, prior to mediation, evidence of the fees and expenses he alleges were incurred for this appointment.

If Plaintiffs fail to comply with the Court's order, the Court should bar Plaintiffs from recovering any fees and costs. In any event, the Court should bar Plaintiffs from recovering any fees incurred after June 11, 2025; any fees that were not incurred in the pursuit of turnover relief; and any fees exceeding a total of $173,763.59.

Alternatively, the Court should abate any hearing on the Second Amended Motion for Distribution of Funds until after the Parties and the Receiver conduct mediation. In the interim, because the only issues remaining concern recoverable fees, the Court should order ternathe Court's registry. The Court also should discharge the Receiver and terminate the receivership. Defendants respectfully ask that the Court grant Defendants the relief requested above and all other relief to which they are entitled.

Unofficial Copy Office of Marilyn Burgess District Court

Respectfully submitted,

Is/ Alexander J. Pennetti Elizabeth G. Myers State Bar No. 24047767

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

THOMPSON COBURN LLP 2100 Ross Avenue, Suite 3200 Dallas, Texas 75201 Tel Phone: (972) 629-7100 Fax: (972) 629-7171 emyers@thompsoncoburn.com 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 January 22, 2026.

/s/ Alexander J. Pennetti

Alexander J. Pennetti

Unofficial Copy Office of Marilyn Burgess District Clerk

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ip-hii-edva-00483-doc-0175-exhibit-17.pdf
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