Evidence Record
Order
1. Effective August 29, 2023, HII's predecessor in interest and Cyberlux Corporation ("Cyberlux") entered into Subcontract No. P000043846 (the "Subcontract").
DISTIL analysis
DISTIL Run
Profile
Standard
Version
1
Doc Type
Court Order (Interpleader Motion)
Total Nodes
30
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
Court Order (Interpleader Motion) U.S. District Court, Eastern District of Virginia Federal civil litigation involving contract termination settlement and competing creditor claims 2023-08-29 to 2026-02-20
financial_complexitymultiple_competing_claimscontract_indemnificationgarnishment_proceedings
Analytical Frame
Judicial resolution of disputed funds through interpleader relief
Analytical Summary
This federal court order grants HII Mission Technologies Corp. unopposed motion for interpleader deposit of $23.7 million in disputed subcontract termination funds. The case arises from HII's termination of a subcontract with Cyberlux Corporation and subsequent receipt of $25.8 million from the government. Multiple creditors assert competing claims to these funds. The court authorizes HII to deposit the disputed amount (after deducting $1.4 million for prior garnishment and $588k for legal fees) into the court registry, releases HII from all liability related to these funds, and dismisses HII from the action with prejudice. The order establishes HII's right to recoup attorneys' fees under the termination settlement agreement's indemnification clause.
Key Points
- HII received $25,769,369.03 from the government related to terminated Cyberlux subcontract
- Multiple creditors assert competing claims to the received funds
- Court authorizes deduction of $587,888.36 for HII's legal fees under indemnification clause
- $1,444,543.11 previously deposited with Fairfax Circuit Court under garnishment order
- HII to deposit $23,736,937.56 into court registry and be dismissed with prejudice
- All parties permanently enjoined from pursuing claims against HII related to these funds
Stage 2
Core — Entities, Events, Claims
19 nodes
ENT-001
Entity
HII Mission Technologies Corp.
Plaintiff corporation seeking interpleader relief; prime contractor that received government funds related to terminated subcontract with Cyberlux; predecessor in interest entered subcontract August 29, 2023
Page 1 — HII Mission Technologies Corp. ("HII"), pursuant to 28 U.S.C. § 1335, 28 U.S.C. § 2361, and Rule 67 of the Federal Rules of Civil Procedure. (ECF No. 143.)
ENT-002
Entity
Cyberlux Corporation
Defendant corporation; subcontractor under Subcontract No. P000043846 effective August 29, 2023; subcontract terminated for convenience May 17, 2024; subject of multiple creditor claims
Page 1 — HII's predecessor in interest and Cyberlux Corporation ("Cyberlux") entered into Subcontract No. P000043846 (the "Subcontract").
ENT-003
Entity
The Government
Source of funds; Department of the Navy and the General Services Administration (GSA), Federal Systems Integration and Management Center; paid HII $25,769,369.03 related to subcontract termination
Page 2 — The parties define "the Government" as the Department of the Navy and the General Services Administration ("GSA"), Federal Systems Integration and Management Center, which is part of the GSA Federal Acquisition Service, Office of Assisted Acquisition Services.
ENT-004
Entity
Atlantic Wave Holdings, LLC and Secure Community, LLC
Creditors who served garnishment summons on HII on March 11, 2025, based on judgment against Cyberlux and Mark Schmidt entered June 28, 2023, by Circuit Court of the City of Richmond
Page 2 — On March 11, 2025, HII was served with a garnishment summons by Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure") (the "Garnishment Summons") in case number CL25-3413 in the Fairfax Circuit Court, seeking to garnish "[a]ny monies owed to" Cyberlux based on a judgment entered in favor of Atlantic Wave and Secure and against Cyberlux and Mark Schmidt by the Circuit Court of the City of Richmond on June 28, 2023.
ENT-005
Entity
Cyberlux Creditors
Multiple competing claimants to received funds including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth (receiver for Cyberlux); Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; United States; Assure Global, LLC d/b/a WeShield; Roman Investments PR LLC, MAS USA MGT LLC, and Michael Sinensky; Fairwinds Technologies LLC; Thin Air Gear, LLC
Page 3 — HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds, including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth, solely in his capacity as receiver for Cyberlux; Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; the United States; Assure Global, LLC d/b/a WeShield; Roman Investments PR LLC, MAS USA MGT LLC, and Michael Sinensky; Fairwinds Technologies LLC; and Thin Air Gear, LLC (collectively, the "Cyberlux Creditors").
ENT-006
Entity
Judge John A. Gibney, Jr.
Senior United States District Judge for the Eastern District of Virginia, Richmond Division; signed order on February 20, 2026
Page 6 — John A. Gibney, Jr.
Senior United States District Judge
EVT-001
Event
Subcontract Execution
August 29, 2023: HII's predecessor in interest and Cyberlux Corporation entered into Subcontract No. P000043846
Page 1 — Effective August 29, 2023, HII's predecessor in interest and Cyberlux Corporation ("Cyberlux") entered into Subcontract No. P000043846 (the "Subcontract").
EVT-002
Event
Subcontract Termination for Convenience
May 17, 2024: HII terminated the Subcontract for convenience in accordance with the Subcontract's applicable terms and conditions
Page 1 — In accordance with the Subcontract's applicable terms and conditions, on May 17, 2024, HII terminated for convenience the Subcontract.
EVT-003
Event
Termination Settlement Agreement
February 26, 2025: HII and Cyberlux executed Modification No. 4 to Subcontract No. P000043846 to Effectuate a Termination Settlement (Mod. 4), governing parties' respective duties and obligations on and after that effective date
Page 1 — Subsequently, HII and Cyberlux executed Modification No. 4 to Subcontract No. P000043846 to Effectuate a Termination Settlement ("Mod. 4"), effective February 26, 2025, which governs the parties' respective duties and obligations on and after that effective date.
EVT-004
Event
First Government Payment
May 28, 2025: HII received partial payment from the Government in the amount of $2,757,254.39 related to termination and stop work costs under Mod. 4
Page 2 — On May 28, 2025, HII received a partial payment from the Government in the amount of $2,757,254.39 related to termination and stop work costs under Mod. 4.
EVT-005
Event
Final Government Payment
July 15, 2025: HII received final payment from the Government as relevant to Cyberlux in the amount of $23,012,114.64
Page 2 — On July 15, 2025, HII received final payment from the Government as relevant to Cyberlux in the amount of $23,012,114.64.
EVT-006
Event
Garnishment Summons Service
March 11, 2025: HII was served with a garnishment summons by Atlantic Wave and Secure in case number CL25-3413 in the Fairfax Circuit Court, seeking to garnish monies owed to Cyberlux based on June 28, 2023 judgment
Page 2 — On March 11, 2025, HII was served with a garnishment summons by Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure") (the "Garnishment Summons") in case number CL25-3413 in the Fairfax Circuit Court, seeking to garnish "[a]ny monies owed to" Cyberlux based on a judgment entered in favor of Atlantic Wave and Secure and against Cyberlux and Mark Schmidt by the Circuit Court of the City of Richmond on June 28, 2023.
EVT-007
Event
Fairfax Garnishment Deposit
August 15, 2025: Pursuant to Fairfax Circuit Court orders entered July 22, 2025 and August 15, 2025, HII deposited $1,444,543.11 of the Received Funds into the Fairfax Circuit Court
Page 2 — Pursuant to the Orders of the Fairfax Circuit Court entered on July 22, 2025, and August 15, 2025, HII deposited the sum of $1,444,543.11 of the Received Funds into the Fairfax Circuit Court on August 15, 2025 (the "Fairfax Garnishment Deposit").
EVT-008
Event
Court Order Granting Interpleader
February 20, 2026: U.S. District Court (Judge Gibney) granted HII's unopposed motion for interpleader deposit, ordering deposit of $23,736,937.56 into court registry by March 6, 2026, and dismissing HII with prejudice
Page 5 — Accordingly, the Court GRANTS the motion for interpleader deposit, (ECF No. 143), and DIRECTS HII to deposit the amount of $23,736,937.56, the Disputed Funds, into a Disputed Ownership Fund within this Court's Registry Investment System by Friday, March 6, 2026.
CLM-001
Claim
Indemnification Obligation for Creditor-Related Expenses
Under Section 7 of Mod. 4, Cyberlux agreed to indemnify and hold HII harmless from damages, expenses, liabilities, and losses, including attorneys' fees and other out-of-pocket expenses, incurred by HII in connection with threatened, pending, or completed inquiries, claims, actions, suits, or proceedings relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities
Page 1, 2 — Under Section 7 of Mod. 4, Cyberlux agreed to indemnify and hold HII harmless from damages, expenses, liabilities, and losses, including attorneys' fees and other out-of-pocket expenses, incurred by HII in connection with threatened, pending, or completed inquiries, claims, actions, suits, or proceedings relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
CLM-002
Claim
HII Right to Recoup Attorneys' Fees
HII asserts it is entitled to recoup, under Section 7 of Mod. 4 and equitable principles of interpleader, its attorneys' fees and costs incurred in connection with Cyberlux's competing creditor claims and disposition of the Received Funds; HII has incurred $587,888.36 in such fees and costs since execution of Mod. 4
Page 3 — HII asserts that it is entitled to recoup, under Section 7 of Mod. 4 and equitable principles of interpleader, its attorneys' fees and costs incurred in connection with Cyberlux's competing creditor claims and disposition of the Received Funds. HII has incurred $587,888.36 in such attorneys' fees and costs since the execution of Mod. 4.
CLM-003
Claim
Multiple Competing Claims to Received Funds
HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds from Cyberlux Creditors; HII is uncertain as to priority, payment, and validity of alleged claims and lacks sufficient knowledge to make such determination
Page 3 — HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds, including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth, solely in his capacity as receiver for Cyberlux; Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; the United States; Assure Global, LLC d/b/a WeShield; Roman Investments PR LLC, MAS USA MGT LLC, and Michael Sinensky; Fairwinds Technologies LLC; and Thin Air Gear, LLC (collectively, the "Cyberlux Creditors"). HII is uncertain as to priority, payment, and the validity of the alleged claims to and interests in the Received Funds and lacks sufficient present knowledge, information, and belief to make such a determination.
CLM-004
Claim
Court Jurisdictional Finding
Based on evidence and filings, the Court has jurisdiction over this action and each party pursuant to 28 U.S.C. § 1335; the amount in dispute exceeds $500 and there are two or more adverse claimants of diverse citizenship
Page 4 — Based on the foregoing and the evidence and filings before the Court, the Court has jurisdiction over this action and each party pursuant to 28 U.S.C. § 1335. The amount in dispute exceeds $500 and there are two or more adverse claimants of diverse citizenship.
CLM-005
Claim
HII Entitlement to Interpleader Relief
HII is entitled to interpleader relief under 28 U.S.C. §§ 1335 and 2361
Page 4 — HII is entitled to interpleader relief under 28 U.S.C. §§ 1335 and 2361.
Stage 3
In Situ — Quotations, Tells, Tensions, Questions
6 nodes
QUO-001
Quotation
Total Received Funds Calculation
Court's calculation establishing total funds received by HII from the Government related to the Subcontract: $25,769,369.03
Page 2 — As a result, HII has received a total of $25,769,369.03 from the Government related to the Subcontract (the "Received Funds").
QUO-002
Quotation
Disputed Funds Calculation
Court's calculation of Disputed Funds to be deposited: $25,769,369.03 (Received Funds) less $1,444,543.11 (Fairfax Garnishment Deposit) less $587,888.36 (HII Attorneys' Fees and Costs) equals $23,736,937.56 (Disputed Funds)
Page 3, 4 — $25,769,369.03 Received Funds Less $1,444,543.11 Fairfax Circuit Court Garnishment Deposit Less $587,888.36 HII Attorneys' Fees and Costs = $23,736,937.56 Disputed Funds
TEN-001
Tension
Indemnification Despite Cyberlux Dispute
The indemnification provision in Mod. 4 creates potential tension by requiring Cyberlux to indemnify HII for expenses related to creditor claims 'even if Cyberlux disputes such liabilities,' effectively binding Cyberlux to pay for defense of claims it may contest
Page 1, 2 — Under Section 7 of Mod. 4, Cyberlux agreed to indemnify and hold HII harmless from damages, expenses, liabilities, and losses, including attorneys' fees and other out-of-pocket expenses, incurred by HII in connection with threatened, pending, or completed inquiries, claims, actions, suits, or proceedings relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
TEN-002
Tension
HII's Uncertainty About Competing Claims
Despite being the stakeholder holding funds, HII explicitly states it is uncertain as to priority, payment, and validity of the alleged claims and lacks sufficient present knowledge, information, and belief to make such determinations, justifying interpleader relief but highlighting information asymmetry
Page 3 — HII is uncertain as to priority, payment, and the validity of the alleged claims to and interests in the Received Funds and lacks sufficient present knowledge, information, and belief to make such a determination.
QST-001
Question
Status of Receiver's Authority
Robert W. Berleth is listed as a competing claimant 'solely in his capacity as receiver for Cyberlux,' but the order does not clarify the scope of his authority, whether he represents all creditor interests, or how his role affects the competing claims structure
Page 3 — Robert W. Berleth, solely in his capacity as receiver for Cyberlux
QST-002
Question
United States as Competing Claimant
The United States is listed as one of the competing claimants to the funds, but it is unclear what legal basis the United States has to claim funds it already paid to HII as termination settlement costs
Page 3 — HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds, including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth, solely in his capacity as receiver for Cyberlux; Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; the United States
Stage 4
Interpretive — Inferences, Omissions, Patterns
5 nodes
INF-001
Inference
Creditors' Rights Cannot Exceed Cyberlux's Rights
The court reasons that the rights of Cyberlux's creditors can rise no higher than the rights of Cyberlux itself, citing Virginia Code Ann. § 8.9-404(a) which provides that assignee rights are subject to all terms of the agreement between the account debtor and assignor; therefore, HII's contractual right to recoup attorneys' fees under Mod. 4 reduces the amount payable to Cyberlux and consequently reduces the amount reachable by Cyberlux creditors
Page 4 — The rights of the creditors of Cyberlux can rise no higher than the rights of Cyberlux. See generally Va. Code Ann. § 8.9-404(a) (the rights of an assignee of an account receivable "are subject to all terms of the agreement between the account debtor [HII] and assignor [Cyberlux] and any defense or claim in recoupment arising from the transaction that gave rise to the contract"). As a result, HII's right to recoup attorneys' fees and costs under Mod. 4 reduces the amount otherwise payable to Cyberlux, and, therefore, reduces the amount otherwise reachable by the creditors of Cyberlux, including the Cyberlux Creditors.
INF-002
Inference
Broad Release and Discharge of HII
Upon deposit, HII receives comprehensive discharge from any and all liability related to the Received Funds, extending to Cyberlux, all creditors, and their respective agents, employees, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting on their behalf; this encompasses liabilities, claims, security interests, liens, writs, trusts, suits, debts, judgments, dues, sums, and causes of action whether at law or in equity
Page 5 — Upon HII's deposit of the Disputed Funds into the registry of the Court, HII SHALL be discharged and released from any and all liability to Cyberlux, its creditors (including each of the Cyberlux Creditors and anyone later joined as a party to this action), and each of their respective agents, employees, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting directly or indirectly on their behalf, related to or arising out of the Received Funds. HII, including its agents, parent, affiliates, employees, representatives, trustees, predecessors, successors, and assigns, SHALL be released, discharged, and exculpated from and against any and all liabilities, claims, security interests, liens, writs, trusts, suits, debts, judgments, dues, sums, and/or causes of action, whether at law or in equity, related to or arising from the Received Funds.
INF-003
Inference
Permanent Injunction Against Future Actions
The court permanently restrains and enjoins all parties except HII, their privities, agents, employees, officers, attorneys, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting on their behalf, from instituting, maintaining, or prosecuting any suit, civil action, summons, writ, civil proceeding, petition, or arbitration in any state, federal or other court, tribunal, or forum against HII asserting any claims arising from or related to the Received Funds or any interest therein
Page 5 — All parties to this action and their privities other than HII, and each of their respective agents, employees, officers, attorneys, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting directly or indirectly on their behalf, and any other persons who are in active concert or participation with any of the foregoing, are PERMANENTLY RESTRAINED AND ENJOINED from instituting, maintaining and/or prosecuting any suit, civil action, summons, writ, civil proceeding, petition, or arbitration in any state, federal or other court, tribunal, or forum against HII asserting any claims arising from or related to the Received Funds or any interest therein, to the fullest extent of the law.
OMI-001
Omission
No Detail on Creditor Claim Amounts or Bases
The order lists multiple Cyberlux Creditors asserting competing claims but provides no details about the amount, nature, or legal basis of each creditor's claim, nor the total amount of all creditor claims relative to the $23.7 million in dispute
Page 3 — HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds, including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth, solely in his capacity as receiver for Cyberlux; Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; the United States; Assure Global, LLC d/b/a WeShield; Roman Investments PR LLC, MAS USA MGT LLC, and Michael Sinensky; Fairwinds Technologies LLC; and Thin Air Gear, LLC (collectively, the "Cyberlux Creditors").
OMI-002
Omission
No Detail on Underlying Subcontract Work or Termination Reason
The order states the subcontract was terminated for convenience but provides no information about the nature of the work performed, the reason for termination beyond 'convenience,' or why the government ultimately paid $25.8 million in termination costs
Page 1 — In accordance with the Subcontract's applicable terms and conditions, on May 17, 2024, HII terminated for convenience the Subcontract.
Extracted text
6 pages · 9013 charactersFiling Header
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division
HII MISSION TECHNOLOGIES CORP., Plaintiff,
V.
Civil Action No. 3:25cv483
CYBERLUX CORP., et al., Defendants.
ORDER
This matter comes before the Court on an unopposed motion for interpleader deposit (the "Motion") filed by the plaintiff, HII Mission Technologies Corp. ("HII"), pursuant to 28 U.S.C. § 1335, 28 U.S.C. § 2361, and Rule 67 of the Federal Rules of Civil Procedure. (ECF No. 143.) Upon due consideration of the Motion, and for good cause shown, the Court makes the following findings of fact and conclusions of law:
Findings of Fact
Background of the Cyberlux Receivable
1.
Effective August 29, 2023, HII's predecessor in interest and Cyberlux Corporation ("Cyberlux") entered into Subcontract No. P000043846 (the "Subcontract").
2.
In accordance with the Subcontract's applicable terms and conditions, on May 17, 2024, HII terminated for convenience the Subcontract.
3.
Subsequently, HII and Cyberlux executed Modification No. 4 to Subcontract No. P000043846 to Effectuate a Termination Settlement ("Mod. 4"), effective February 26, 2025, which governs the parties' respective duties and obligations on and after that effective date.
4.
Under Section 7 of Mod. 4, Cyberlux agreed to indemnify and hold HII harmless from damages, expenses, liabilities, and losses, including attorneys' fees and other out-of-pocket
expenses, incurred by HII in connection with threatened, pending, or completed inquiries, claims, actions, suits, or proceedings relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
5.
On May 28, 2025, HII received a partial payment from the Government1 in the amount of $2,757,254.39 related to termination and stop work costs under Mod. 4.
6.
On July 15, 2025, HII received final payment from the Government as relevant to Cyberlux in the amount of $23,012,114.64.
7.
As a result, HII has received a total of $25,769,369.03 from the Government related to the Subcontract (the "Received Funds").
Fairfax Garnishment Deposit
8.
On March 11, 2025, HII was served with a garnishment summons by Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure") (the "Garnishment Summons") in case number CL25-3413 in the Fairfax Circuit Court, seeking to garnish "[a]ny monies owed to" Cyberlux based on a judgment entered in favor of Atlantic Wave and Secure and against Cyberlux and Mark Schmidt by the Circuit Court of the City of Richmond on June 28, 2023.
9.
Pursuant to the Orders of the Fairfax Circuit Court entered on July 22, 2025, and August 15, 2025, HII deposited the sum of $1,444,543.11 of the Received Funds into the Fairfax Circuit Court on August 15, 2025 (the "Fairfax Garnishment Deposit").
1
The parties define "the Government" as the Department of the Navy and the General Services Administration ("GSA"), Federal Systems Integration and Management Center, which is part of the GSA Federal Acquisition Service, Office of Assisted Acquisition Services.
HII Recoupment
10.
HII asserts that it is entitled to recoup, under Section 7 of Mod. 4 and equitable principles of interpleader, its attorneys' fees and costs incurred in connection with Cyberlux's competing creditor claims and disposition of the Received Funds.
11.
HII has incurred $587,888.36 in such attorneys' fees and costs since the execution of Mod. 4.
Competing Claims
12.
HII is in receipt of, and/or on notice of, multiple competing claims to and alleged interests in the Received Funds, including: Cyberlux; Legalist SPV III, LP; Robert W. Berleth, solely in his capacity as receiver for Cyberlux; Advanced Navigation and Positioning Corporation; Atlantic Wave; Secure; the United States; Assure Global, LLC d/b/a WeShield; Roman Investments PR LLC, MAS USA MGT LLC, and Michael Sinensky; Fairwinds Technologies LLC; and Thin Air Gear, LLC (collectively, the "Cyberlux Creditors").
13.
HII is uncertain as to priority, payment, and the validity of the alleged claims to and interests in the Received Funds and lacks sufficient present knowledge, information, and belief to make such a determination.
14.
As such, HII seeks to interplead and deposit into a Disputed Ownership Fund within this Court's Registry Investment System, pursuant to Rule 67(a) of the Federal Rules of Civil Procedure and the Court's April 1, 2017, Standing Order re: Deposit and Investment of Registry Funds, for disbursement as the Court may direct, the amount of $23,736,937.56 (the "Disputed Funds"), with the Disputed Funds being calculated as follows:
$25,769,369.03
Received Funds
Less
$1,444,543.11
Fairfax Circuit Court Garnishment Deposit
Less
$587,888.36
HII Attorneys' Fees and Costs
=
$23,736,937.56
Disputed Funds
Conclusions of Law
15.
Based on the foregoing and the evidence and filings before the Court, the Court has jurisdiction over this action and each party pursuant to 28 U.S.C. § 1335. The amount in dispute exceeds $500 and there are two or more adverse claimants of diverse citizenship.
16.
HII is entitled to interpleader relief under 28 U.S.C. §§ 1335 and 2361.
17.
Pursuant to Section 7 of Mod. 4, Cyberlux agreed to indemnify and hold HII harmless from and against any and all expenses, including attorneys' fees and other out-of-pocket expenses incurred or suffered by HII in connection with any inquiry, claim, action, suit, or proceeding arising out of or relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
18.
The rights of the creditors of Cyberlux can rise no higher than the rights of Cyberlux. See generally Va. Code Ann. § 8.9-404(a) (the rights of an assignee of an account receivable "are subject to all terms of the agreement between the account debtor [HII] and assignor [Cyberlux] and any defense or claim in recoupment arising from the transaction that gave rise to the contract").
19.
As a result, HII's right to recoup attorneys' fees and costs under Mod. 4 reduces the amount otherwise payable to Cyberlux, and, therefore, reduces the amount otherwise reachable by the creditors of Cyberlux, including the Cyberlux Creditors.
20.
Accordingly, the Court GRANTS the motion for interpleader deposit, (ECF No. 143), and DIRECTS HII to deposit the amount of $23,736,937.56, the Disputed Funds, into a Disputed Ownership Fund within this Court's Registry Investment System by Friday, March 6, 2026. The Court shall contact HII with further instructions to make this deposit.
21.
Upon HII's deposit of the Disputed Funds into the registry of the Court, HII SHALL be discharged and released from any and all liability to Cyberlux, its creditors (including each of the Cyberlux Creditors and anyone later joined as a party to this action), and each of their respective agents, employees, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting directly or indirectly on their behalf, related to or arising out of the Received Funds.
22.
HII, including its agents, parent, affiliates, employees, representatives, trustees, predecessors, successors, and assigns, SHALL be released, discharged, and exculpated from and against any and all liabilities, claims, security interests, liens, writs, trusts, suits, debts, judgments, dues, sums, and/or causes of action, whether at law or in equity, related to or arising from the Received Funds.
23.
All parties to this action and their privities other than HII, and each of their respective agents, employees, officers, attorneys, affiliates, parents, subsidiaries, successors, predecessors, assigns, or anyone acting directly or indirectly on their behalf, and any other persons who are in active concert or participation with any of the foregoing, are PERMANENTLY RESTRAINED AND ENJOINED from instituting, maintaining and/or prosecuting any suit, civil action, summons, writ, civil proceeding, petition, or arbitration in any state, federal or other court, tribunal, or forum against HII asserting any claims arising from or related to the Received Funds or any interest therein, to the fullest extent of the law.
24.
Upon proper deposit of the Disputed Funds pursuant to Sections 20 and 21 of this Order, HII shall be DISMISSED WITH PREJUDICE from this action.
25.
This Order is a final judgment solely as to HII pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.
It is so ORDERED. Let the Clerk send a copy of this Order to all counsel of record.
Date: 20
February 2026 Richmond, VA
/s/ 15/
John A. Gibney, Jr. Senior United States District Judge
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