June 9 Payne hearing — tender, wiring dispute and conditional receiver termination
Original sourceCertified reporter transcript of adversarial counsel argument and judicial management; no bank transfer evidence or subsequent termination order.
Each card carries the governed distillate name from the database. Open the quoted anchor before relying on the interpretation.
quotationattribution
Berleth acknowledges the other judgments he invokes have not yet been filed for local enforcement.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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final payment on that contract of about $25 million .
That should be coming in in the next 10 to 14 days,
somewhere in that timeframe , from HII.
The receiver 's problem is, is while it's
certainly the $2.1 million collection that was initially
started on, there are at least four other federal and
state final judgments , formal UCCs out there against
Cyber lux, and at least another seven more pending
litigation s. And what Cyber lux is trying to do is get a
little bit of money , get out from under the
receivership , take the $25 million and abscond . They
haven 't made payroll yet, Judge . And so, if nobody else
needs to be protected , it's the employees of Cyber lux,
who weren 't paid even before the receivership and
weren 't paid by payroll during the receiver ship. We
must protect -- I mean, obviously , these litigation s are
not from a debtor that likes to pay their bills . These
are litigation s that are ongoing because they don't pay
their bills . And if we give Cyber lux the $25 million ,
they have a history of not paying their bills , and we
must pay those .
The Court can -- as you said, you've read
these , the argument s and authorities . The Court must
give credence to other court orders , specifically , the
U.S. Constitution .
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
This is Volume1 of3 of the June9,2025 motion-to-stay hearing before Judge Latosha Lewis Payne, Harris County55th District Court, Cause2024-4
This is Volume1 of3 of the June9,2025 motion-to-stay hearing before Judge Latosha Lewis Payne, Harris County55th District Court, Cause2024-48085. Reporter Tamika T.Bartee certifies the requested proceedings June14. Transcript pages1–40 plus concordance are supplied; volumes2–3 and underlying exhibits are not.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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REPORTER 'S RECORD
VOLUME 1 OF 3 VOLUMES
TRIAL COURT CAUSE NO. 2024-48085
ATLANTIC WAVE HOLDINGS ,LLC
and SECURE COMMUNITY , LLC
Plaintiff /Judgment
Creditor
VS.
CYBERLUX CORPORATION and
MARK D. SCHMIDT ,
Individually
Defendant /Judgment Debtors
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IN THE DISTRICT COURT
OF HARRIS COUNTY , TEXAS
55th JUDICIAL DISTRICT
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MOTION TO STAY
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On the 9th day of June, 2025, the following
proceedings came on to be heard in the above -entitled
and numbered cause before the Honorable Latosha Lewis
Payne , Judge presiding , held in Houston , Harris County ,
Texas ;
Proceedings reported by machine shorthand .
Tamika T. Bartee , B.C.R.,RPR, CSR #12593
Official Court Reporter
Harris County , Texas
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Payne relies on Berleth’s stated next step after payment and says other enforcement proceedings have not yet been brought within local juris
Payne relies on Berleth’s stated next step after payment and says other enforcement proceedings have not yet been brought within local jurisdiction; she declines a prospective ruling on what may happen with other judgments. This is a case-specific hearing exchange, not blanket adjudication that no other creditor can ever recover.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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THE COURT : I'm not asking -- I am asking
you a different question . I am not asking you what
you're asking me. I'm asking you, if the 3.094 is sent
over and that's the amount , are you paying that amount ?
Because before , a few minutes ago, you were sort of
disputing what the amount was.
MR. PENNETTI : So what I was trying to
point out, Judge , is that the amount is in dispute now
that that amount will not be paid. So unless Legalist
has changed their position , and they no longer want to
issue a protective advance , and Mr. Berleth can speak to
that. That amount -- the amount that Mr. Berleth just
stated on the record , what I believe that would be paid
today , and I'm just simply asking that the Court rule,
once that's paid, that Mr. Berleth doesn 't have
authority to go out and sell the Cyber lux subsidiary , he
doesn 't have authority to go seize the $25 million
payment or try to get HII to wire him money instead of
wiring it to Cyberlux . That's what I am asking .
THE COURT : Well, I think Mr. Berleth has
made the representation on the record to the Court that
should that amount be paid, the next action he will take
will not be to go and scour the Earth for this extra
$25 million or for other judgment s that neither -- no
court in Harris County has jurisdiction over at this
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Priddy represents about$2.755million already sits in his firm’s trust account from Legalist, expects interest in funding the increased amoun
Priddy represents about$2.755million already sits in his firm’s trust account from Legalist, expects interest in funding the increased amount, and asks24hours for client-to-firm and firm-to-receiver wires. Funds held by lender counsel are distinct from funds paid to the receiver; the additional advance remains conditional on client coordination.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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None of that has happened . The Court hasn't -- it
hasn't been attracted back to the 129th. Nobody knows
even if they are filed , whether they're going to come to
the 129th. There might be a whole different Court that
has jurisdiction over those enforcement matters and over
those judgments .
So I think that's not anything that I can
make a ruling on in terms of those other judgment s that
may or may not be filed for enforcement here. You can
certainly take care of those other judgment s before an
enforcement action is even filed here. So I am not
going to make a ruling on what he can do about these
other things that many things can happen differently ,
okay.
MR. PRIDDY : Judge Payne , this is Austin
Priddy for Legalist . I just want to very quickly say
for the record , we have in my law firm's trust account
about 2.755 million that Legalist previously transferred
to us based on the understanding that amount was needed
to satisfy the judgment . Based on the representation s
made today , I understand that number is now a little
south of 3.1 million . We will relay that to our client
today . I have every reason to think they're going to be
interested in tendering that full amount . I would ask,
because of the nature of trying to coordinate payment s
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Payne continues the matter to Wednesday8:30 for payment status and possible termination steps. Asked for a stay, she says she will trust rep
Payne continues the matter to Wednesday8:30 for payment status and possible termination steps. Asked for a stay, she says she will trust representations that the receiver will await payment; Berleth says goods have shipped and he is awaiting Legalist or HII payment. No separate signed stay or termination order appears here.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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and multiple wires , a wire from Legalist to my firm, and
then a wire from my firm to Mr. Berleth , we would intend
to make that payment today , if you can. It may need to
be tomorrow , just to give us that extra day to get the
funds in from Legalist and then transferred to Mr.
Berleth .
And again , from my perspective , like
Mr. Penentti said, this doesn 't change anything because
if the amount is ultimately not tendered , Mr. Berleth
can carry on. All I am asking for is an additional
24 hours to tender that payment so that we have time to
coordinate with our client .
THE COURT : Okay. So, what I will do is, I
will leave this matter open. We will continue it to
Wednesday -- I don't know. I don't know if Gomez will
be back. We will continue it to Wednesday at 8:30 and
then the parties will give a report to the Court on
where we are, what the status is of the payment and then
what the Court would need to do about the termination of
the receiver .
MR. PENNETTI : And, Judge , with that in
mind, can we have a stay until Wednesday morning at
8:30?
THE COURT : I am going to trust counsel 's
representation s that this is where -- that he's not
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Walton rejects any stipulation that only$912,000 is owed, emphasising the May15 wording at minimum and claimed fees over$592,000. He says ap
Walton rejects any stipulation that only$912,000 is owed, emphasising the May15 wording at minimum and claimed fees over$592,000. He says approximately$3.094million should cover the Virginia judgment being enforced, while preserving other claims including approximately$6.7million. Pennetti maintains the need for credits and offsets. The exchange does not reconcile the ultimate judgment balance.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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going to do anything . He's going to await your payment
until Wednesday .
MR. BERLETH : There 's nothing to do, Judge .
THE COURT : Yeah.
MR. BERLETH : I mean, the facility is --
all the stuff has been shipped . Really , the only thing
to do is to either await payment from Legalist or await
payment from HII. That's all I am doing . So their idea
that I am somehow going out and, you know, flipping
mattress cushions , there 's nothing to do at this point .
THE COURT : Okay. So I'm going to --
MR. WALTON : And, Your Honor , David Walton
for Atlantic Wave. If I can just touch on one point
briefly , understanding that the Court 's instructions on
this matter -- in Cyber lux' motions , they misrepresent
that Atlantic Wave has stipulated to the amount due and
owed to Atlantic Wave under the judgment by
mischaracterizing statement s in our letter of May 15th.
Simply put, there 's been no such stipulation . That is a
complete misrepresentation of that letter , and Atlantic
Wave objects to any conclusory statement to the contrary
made by Cyberlux .
I just put that out there on the record
because we are talking about in these motions an amount
that are to be paid through this wire payment , and the
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
When Berleth asks to admit exhibits1–12, Payne says she will take into consideration exhibits attached to either motion or response and cont
When Berleth asks to admit exhibits1–12, Payne says she will take into consideration exhibits attached to either motion or response and continues the hearing. The reporter certifies the volume, leaving transcription cost and payer blank. Underlying exhibit truth is not established merely by the certified transcript.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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MR. WALTON : Counsel 's perception is not a
stipulation and that's my point . He is misrepresenting
to this Court that a stipulation was made and there has
been no such stipulation .
THE COURT : Okay. We are all at that point
to where --
Go ahead .
MR. BERLETH : Your Honor , just real quick ,
I want to admit Exhibits 1 through 12 for the receiver .
THE COURT : Exhibits 1 through 12?
MR. BERLETH : Yes. They were attached to
my response .
THE COURT : Okay. I am going to take under
consideration any exhibits attached to either the motion
or the response .
MR. BERLETH : We'll continue to Wednesday .
THE COURT : Okay. All right .
So we'll continue to Wednesday at 8:30 by
Zoom, and then we'll see if the amount that's owed has
been paid.
Okay. Thank you. You are excused . Have a
wonderful week.
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UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Pennetti argues the Chapter31 receiver is limited to the domesticated judgment and should stop after sufficient tender; seeks registry payme
Pennetti argues the Chapter31 receiver is limited to the domesticated judgment and should stop after sufficient tender; seeks registry payment, satisfaction and retroactive removal of Schmidt from the turnover order. He describes going-concern operations and subsidiary-sale risk but expressly lacks clarity about which subsidiary owns which contracts. These are counsel arguments, not adjudicated operational facts.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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hearing on judgment debtor 's motion to stay and motion
to modify and correct . I'll address the motion to stay
first .
Essentially , in terms of background , this
is a foreign judgment domestication action brought by
Mr. Walton 's client s, the judgment creditors . This
arose from a settlement agreement in Virginia . As part
of that settlement , there is a consent judgment entered
that's being enforced here. Cyber lux continue s to
operate as a going concern as a defense contractor as a
wholly -owned subsidiary . It's my understanding there
are several active contracts . I'll talk about one
contract that's recently completed a little bit. But I
just wanted to let you know that Cyber lux is not winding
up business or anything like that; it's continuing to
operate as a going concern .
And that's particularly important because
this is a receivership under Chapter 31, so a
post-judgment receivership under 31.002(b)(3).
And, Judge , do you mind if I share my
screen ?
THE COURT : Sure.
MR. PENNETTI : And so, I'll share the
statute with you here, 31.002(b)(3), and the highlighted
portion is what I'm looking at. And the Court 's
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Pennetti says $2.755million was tendered to cover the judgment, interest, receiver allowance and $21,677 remand fees; he disputes the turnov
Pennetti says $2.755million was tendered to cover the judgment, interest, receiver allowance and $21,677 remand fees; he disputes the turnover amount around$2.11million against the May15 letter’s minimum$912,000. His rounded components do not supply a reconciled ledger or proof receiver receipt.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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counsel for Legalist , he was on that call; he's present
here today . And I won't speak for him, but Legalist is
a lending partner of Cyberlux Corporation ; it has an
existing credit agreement with Cyber lux. And under that
credit agreement , it's my understanding -- Legalist 's
counsel may correct me -- Legalist is allowed to make
protective advances under the credit agreement . In
other words , Legalist can pay money on the judgment
without our consent . So they don't need my permission
or anything like that. They can just pay these funds to
protect their collateral . And that's what Legal ist
attempted to do in this case.
So on Thursday , the call I mentioned I had
with the receiver , Legalist 's counsel and myself ,
Legalist 's counsel and I, on behalf of Cyberlux ,
tendered funds sufficient to satisfy the judgment ,
sufficient to pay an award of attorney s' fees to
Atlantic Wave, and sufficient to pay the receiver 's fee
in this case.
So we tender ed $2.755 million . The 2.1 for
the judgment , interest on the judgment ; $546,000 to
cover the receiver 's fee. Now the receiver 's fee, of
course , Judge , has to be determined by the Court after
reviewing the receiver 's accounting . But out of an
abundance of caution , we tendered 25 percent on the
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Pennetti describes government convenience termination, February final-payment negotiations, May delivery instructions, joint inspection and
Pennetti describes government convenience termination, February final-payment negotiations, May delivery instructions, joint inspection and shipment, anticipating roughly$25million less unknown offsets. Berleth also anticipates approximately$25million within10–14days. Neither statement proves the net entitlement, acceptance or payment actually received.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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judgment amount to make sure the receiver 's fee would be
fully covered . We also tendered $21,677 representing
the attorney 's fees award Mr. Walton won on a remand
issue , which was discussed in the receiver 's response .
So it's our position it's not germane to this hearing .
But essentially , during that call, it was
about a half hour long. And at the end of the call with
the receiver , we asked for and the receiver agreed to
provide his wiring instruction s. The turnover order
requires us to pay the receiver directly . There is no
language about depositing funds to the court registry ,
which I spoke with the court 's accounting personnel
myself and they told me that if we paid funds to the
court's registry , it would be rejected without express
language in the order allowing us to do so.
So the receiver hasn't given us any payment
instructions . And after our Thursday call, it's my
understanding , what I've learned is the receiver is
currently engaging with third parties , and I understand
soliciting bids to try to sell Cyberlux , the subsidiary .
The receiver is currently coordinating with HII Mission
Technologies to try to obtain and collect $25 million
receivable that is going to be paid to Cyber lux.
And so, essentially , we're offering payment
for the full amount of the judgment and the receiver 's
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Pennetti disputes lack of hearing notice, showing a service list covering four receiver employees and a courtesy email to Berleth and counse
Pennetti disputes lack of hearing notice, showing a service list covering four receiver employees and a courtesy email to Berleth and counsel. He acknowledges Berleth himself does not appear on the service list. The screen-shared records are not attached in this volume.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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by HII. And so the receiver 's solicitation of bids has
concern ed a variety of business stakeholders in the
company and business partners outside the company . So
there is a significant risk if the receiver continues to
act, it's going to destroy the business . I am not sure
how urgent that is at this point , but if the receiver
continues to take these actions that are outside it's
authority , it will destroy the business .
The receiver -- the last thing I'll
address . The receiver claims I didn't provide notice to
him of this hearing , so I'll share a couple of
notifications , as well as the e-mail I sent him. He
says he didn't get notice of this hearing through the
e-filing service and I didn't provide him a courtesy
e-mail. Both of those are untrue. And I will share
the -- my computer is freezing , I'm sorry . I'll show
you the verification of service , first .
Can you see this, Judge ?
THE COURT : Yes.
MR. PENNETTI : Okay. Here's the notice of
hearing . I don't know why, but Mr. Berleth doesn 't
appear to be on this. But he's got four employees ;
there 's one lawyer , three paralegals . All four of them
are here. Tristian Harris is the lawyer ; Martin , Davis
and Jackson are the paralegal s, at least based on my
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Berleth argues other judgments, UCC interests, pending suits and unpaid payroll justify protecting the expected HII fund, alleging abscondin
Berleth argues other judgments, UCC interests, pending suits and unpaid payroll justify protecting the expected HII fund, alleging absconding risk. When Payne asks whether other judgments were filed for local enforcement, he first says he believes so, then expressly acknowledges the filings have not happened and the matters are not yet pending in Harris County.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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final payment on that contract of about $25 million .
That should be coming in in the next 10 to 14 days,
somewhere in that timeframe , from HII.
The receiver 's problem is, is while it's
certainly the $2.1 million collection that was initially
started on, there are at least four other federal and
state final judgments , formal UCCs out there against
Cyber lux, and at least another seven more pending
litigation s. And what Cyber lux is trying to do is get a
little bit of money , get out from under the
receivership , take the $25 million and abscond . They
haven 't made payroll yet, Judge . And so, if nobody else
needs to be protected , it's the employees of Cyber lux,
who weren 't paid even before the receivership and
weren 't paid by payroll during the receiver ship. We
must protect -- I mean, obviously , these litigation s are
not from a debtor that likes to pay their bills . These
are litigation s that are ongoing because they don't pay
their bills . And if we give Cyber lux the $25 million ,
they have a history of not paying their bills , and we
must pay those .
The Court can -- as you said, you've read
these , the argument s and authorities . The Court must
give credence to other court orders , specifically , the
U.S. Constitution .
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Berleth states $3,094,660.81 would lead him to move to terminate and distribute funds, while court approval of fees and distribution remains
Berleth states $3,094,660.81 would lead him to move to terminate and distribute funds, while court approval of fees and distribution remains necessary. He says no funds were received. The judge’s spoken$3.9million slips are corrected on transcriptpage31 to$3.094million; they are not a separate ordered payoff amount.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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2024, right ?
MR. BERLETH : I believe it was October of
2024, Your Honor .
THE COURT : Is it October ? Okay.
MR. BERLETH : It may be even before that.
It may have been in July.
THE COURT : And -- July 30th. At least it
started the case. And the others that you're referring
to are not yet pending before any court in Harris
County ?
MR. BERLETH : Not yet, Your Honor . That's
why they're trying to do this as an emergency . It's to
do it before the others can get their filings on file
and let the 129th sort it all out. That's the exact
point of this emergency , which it's not an emergency .
There is no prejudice here.
THE COURT : For the matter in this case,
let's talk about that. How much is owed?
MR. BERLETH : I have $3,094,660.81, which
is at the top line of the demonstrative I've handed you
up there .
THE COURT : And have you been paid or
offered to be paid that three million ?
MR. BERLETH : I have not.
THE COURT : So what is the disconnect
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Berleth says wiring instructions were sent and available on his website. Priddy says he has not seen them, identifies the website’s contact-
Berleth says wiring instructions were sent and available on his website. Priddy says he has not seen them, identifies the website’s contact-us requirement for routing details, and reports no instructions known Friday; he does not categorically prove none were sent later. Payne repeatedly asks when and to whom instructions were sent. The transcript contains no email delivery proof.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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they had lost their emergency stay and, in fact, had
been ordered almost $10,000 in attorney s' fees to the
defense against that emergency stay.
THE COURT : Okay. I appreciate that.
However , let's get back to my question , which is, what
is the disconnect in this instance when they say --
basically you're saying he's incorrect in that he had --
I don't want to say --
MR. BERLETH : I don't have the money ,
Judge .
THE COURT : You don't have the money ? He
didn't offer you the money ?
MR. BERLETH : They've asked me for the
wiring instructions and I've sent them to Scott Prostoc ,
the counsel for Legalist . Legalist has to pay me
directly ; it can't go through Cyberlux . I've offered
them my wiring instructions . My wiring instructions are
printed on my website , so...
THE COURT : So you have wiring
instructions . You've given them wiring instructions .
You've received no funds ?
MR. BERLETH : Correct .
THE COURT : Okay.
MR. BERLETH : It's not an emergency .
THE COURT : And there 's an
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Berleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says up
Berleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says upon payment he will file a motion to terminate; termination and distribution await Judge Gomez’s approval. The undertaking does not establish subsequent performance.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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client and they asked if we were paying , and we told
them at that time we did not receive wiring
instruction s.
THE COURT : Okay. And then, when did you
send it?
MR. BERLETH : I'll just make this real easy
for the Court . I'll represent to the Court here on the
record that they will have wiring instruction s to all
counsel by noon today .
THE COURT : Did you send -- when did you
send it?
MR. BERLETH : I sent it, I believe ,
Thursday afternoon or Friday morning last week. And
then, over the weekend , I spoke with Legalist , and it's
my understanding from my director --
THE COURT : To whom did you speak at
Legalist ?
MR. BERLETH : I spoke with their director
of investment s and they are -- they want their money and
they want to be paid out of this 25 million . And so,
that's where -- that's where we left it. They're going
to contact again , today . This case has been very
rapidly evolving over the past week and I think
everybody needs to take a deep breath , stop with the
emergency motion s. If they want to wire me the money by
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
otherattribution
Berleth will provide counsel wiring instructions and resend to Prostok with return receipt requested.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
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client and they asked if we were paying , and we told
them at that time we did not receive wiring
instruction s.
THE COURT : Okay. And then, when did you
send it?
MR. BERLETH : I'll just make this real easy
for the Court . I'll represent to the Court here on the
record that they will have wiring instruction s to all
counsel by noon today .
THE COURT : Did you send -- when did you
send it?
MR. BERLETH : I sent it, I believe ,
Thursday afternoon or Friday morning last week. And
then, over the weekend , I spoke with Legalist , and it's
my understanding from my director --
THE COURT : To whom did you speak at
Legalist ?
MR. BERLETH : I spoke with their director
of investment s and they are -- they want their money and
they want to be paid out of this 25 million . And so,
that's where -- that's where we left it. They're going
to contact again , today . This case has been very
rapidly evolving over the past week and I think
everybody needs to take a deep breath , stop with the
emergency motion s. If they want to wire me the money by
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
otherattribution
Berleth will move to terminate receivership and distribute funds after the stated payoff is received.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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client and they asked if we were paying , and we told
them at that time we did not receive wiring
instruction s.
THE COURT : Okay. And then, when did you
send it?
MR. BERLETH : I'll just make this real easy
for the Court . I'll represent to the Court here on the
record that they will have wiring instruction s to all
counsel by noon today .
THE COURT : Did you send -- when did you
send it?
MR. BERLETH : I sent it, I believe ,
Thursday afternoon or Friday morning last week. And
then, over the weekend , I spoke with Legalist , and it's
my understanding from my director --
THE COURT : To whom did you speak at
Legalist ?
MR. BERLETH : I spoke with their director
of investment s and they are -- they want their money and
they want to be paid out of this 25 million . And so,
that's where -- that's where we left it. They're going
to contact again , today . This case has been very
rapidly evolving over the past week and I think
everybody needs to take a deep breath , stop with the
emergency motion s. If they want to wire me the money by
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Latosha Lewis Payne
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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REPORTER 'S RECORD
VOLUME 1 OF 3 VOLUMES
TRIAL COURT CAUSE NO. 2024-48085
ATLANTIC WAVE HOLDINGS ,LLC
and SECURE COMMUNITY , LLC
Plaintiff /Judgment
Creditor
VS.
CYBERLUX CORPORATION and
MARK D. SCHMIDT ,
Individually
Defendant /Judgment Debtors
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
IN THE DISTRICT COURT
OF HARRIS COUNTY , TEXAS
55th JUDICIAL DISTRICT
------------------------------
MOTION TO STAY
------------------------------
On the 9th day of June, 2025, the following
proceedings came on to be heard in the above -entitled
and numbered cause before the Honorable Latosha Lewis
Payne , Judge presiding , held in Houston , Harris County ,
Texas ;
Proceedings reported by machine shorthand .
Tamika T. Bartee , B.C.R.,RPR, CSR #12593
Official Court Reporter
Harris County , Texas
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Robert W. Berleth
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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A P P E A R A N C E S
APPOINTED RECEIVER :
Mr. Robert W. Berleth
State Bar No. 24091860
BERLETH & ASSOCIATES
9950 Cypresswood , Suite 200
Houston , TX 77070
E-mail: rberleth @berlethlaw .com
COUNSEL FOR THE RECEIVER :
Mr. Derek Loetzerich
State Bar No. 24102105
THE LAW OFFICE OF DEREK LOETZERICH
P.O. Box 542069
Houston , TX 77254
E-mail: derek @loetzerichlaw .com
COUNSEL FOR THE PLAINTIFFS ATLANTIC WAVE
AND SECURE COMMUNITY :
Mr. David Walton
State Bar No. 24042120
BELL NUNNALLY
2323 Ross Avenue , Suite 1900
Dallas , TX 75201
E-mail: dwalton @bellnunnally .com
FOR THE DEFENDANTS CYBERLUX CORPORATION
AND MARK D. SCHMIDT :
Mr. Alexander J. Pennetti
State Bar No. 24110208
Mr. Douglas Lang
State Bar No. 11895500
THOMPSON COBURN LLP
2100 Ross Avenue , Suite 3200
Dallas , TX 75201
E-mail: apennetti @thompsoncoburn .com
E-mail: dlang @thompsoncoburn .com
Also Present : Mr. Chuck Watts , Special Counsel ,
Cyberlux
Mr. Jimmy Robinson , Counsel , Virginia
Litigation
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Alexander J. Pennetti
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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A P P E A R A N C E S
APPOINTED RECEIVER :
Mr. Robert W. Berleth
State Bar No. 24091860
BERLETH & ASSOCIATES
9950 Cypresswood , Suite 200
Houston , TX 77070
E-mail: rberleth @berlethlaw .com
COUNSEL FOR THE RECEIVER :
Mr. Derek Loetzerich
State Bar No. 24102105
THE LAW OFFICE OF DEREK LOETZERICH
P.O. Box 542069
Houston , TX 77254
E-mail: derek @loetzerichlaw .com
COUNSEL FOR THE PLAINTIFFS ATLANTIC WAVE
AND SECURE COMMUNITY :
Mr. David Walton
State Bar No. 24042120
BELL NUNNALLY
2323 Ross Avenue , Suite 1900
Dallas , TX 75201
E-mail: dwalton @bellnunnally .com
FOR THE DEFENDANTS CYBERLUX CORPORATION
AND MARK D. SCHMIDT :
Mr. Alexander J. Pennetti
State Bar No. 24110208
Mr. Douglas Lang
State Bar No. 11895500
THOMPSON COBURN LLP
2100 Ross Avenue , Suite 3200
Dallas , TX 75201
E-mail: apennetti @thompsoncoburn .com
E-mail: dlang @thompsoncoburn .com
Also Present : Mr. Chuck Watts , Special Counsel ,
Cyberlux
Mr. Jimmy Robinson , Counsel , Virginia
Litigation
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
David Walton
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
3
A P P E A R A N C E S
APPOINTED RECEIVER :
Mr. Robert W. Berleth
State Bar No. 24091860
BERLETH & ASSOCIATES
9950 Cypresswood , Suite 200
Houston , TX 77070
E-mail: rberleth @berlethlaw .com
COUNSEL FOR THE RECEIVER :
Mr. Derek Loetzerich
State Bar No. 24102105
THE LAW OFFICE OF DEREK LOETZERICH
P.O. Box 542069
Houston , TX 77254
E-mail: derek @loetzerichlaw .com
COUNSEL FOR THE PLAINTIFFS ATLANTIC WAVE
AND SECURE COMMUNITY :
Mr. David Walton
State Bar No. 24042120
BELL NUNNALLY
2323 Ross Avenue , Suite 1900
Dallas , TX 75201
E-mail: dwalton @bellnunnally .com
FOR THE DEFENDANTS CYBERLUX CORPORATION
AND MARK D. SCHMIDT :
Mr. Alexander J. Pennetti
State Bar No. 24110208
Mr. Douglas Lang
State Bar No. 11895500
THOMPSON COBURN LLP
2100 Ross Avenue , Suite 3200
Dallas , TX 75201
E-mail: apennetti @thompsoncoburn .com
E-mail: dlang @thompsoncoburn .com
Also Present : Mr. Chuck Watts , Special Counsel ,
Cyberlux
Mr. Jimmy Robinson , Counsel , Virginia
Litigation
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Austin Priddy
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
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A P P E A R A N C E S
COUNSEL FOR LEGALIST
Mr. Austin Priddy
State Bar No. 24098284
VARTABEDIAN HESTER & HAYNES LLP
301 Commerce Street , Ste. 3635
Fort Worth , TX 76102 -4143
E-mail: austin .priddy @vhh.law
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Tamika T. Bartee
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
40
REPORTER 'S CERTIFICATE
THE STATE OF TEXAS )
COUNTY OF HARRIS )
I, Tamika T. Bartee , Official Court Reporter in and
for the 55th District Court , Harris County , State of
Texas , do hereby certify that the above and foregoing
contains a true and correct transcription of all
portions of evidence and other proceedings requested in
writing by counsel for the parties to be included in
this volume of the Reporter 's Record , Volume 1, in the
above -styled and numbered cause , all of which occurred
in open court or in chambers and were reported by me.
I further certify that this Reporter 's Record ,
Volume 1 of the proceedings truly and correctly
references the exhibits , if any, admitted by the
respective parties .
I further certify that the total cost for the
preparation of this Reporter 's Record is $__________ and
was paid by ___________________.
WITNESS MY OFFICIAL HAND this the 14th day of June,
2025.
/s/Tamika T. Bartee
Tamika T. Bartee , Texas CSR 12593
Expiration Date: 01/31/26
Official Court Reporter
55th Judicial District Court
Harris County , Texas
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
inferenceinference
The hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to jud
The hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to judicial approval. It does not itself prove payment or terminate the receiver.
omissiongap
The underlying exhibits, wiring emails, bank receipts, later hearing volumes and signed termination disposition are absent from this volume.
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Tamika T. Bartee, Official Court Reporter, CSR #12593
55th Judicial District Court, Harris County, Texas
1
REPORTER 'S RECORD
VOLUME 1 OF 3 VOLUMES
TRIAL COURT CAUSE NO. 2024-48085
ATLANTIC WAVE HOLDINGS ,LLC
and SECURE COMMUNITY , LLC
Plaintiff /Judgment
Creditor
VS.
CYBERLUX CORPORATION and
MARK D. SCHMIDT ,
Individually
Defendant /Judgment Debtors
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
IN THE DISTRICT COURT
OF HARRIS COUNTY , TEXAS
55th JUDICIAL DISTRICT
------------------------------
MOTION TO STAY
------------------------------
On the 9th day of June, 2025, the following
proceedings came on to be heard in the above -entitled
and numbered cause before the Honorable Latosha Lewis
Payne , Judge presiding , held in Houston , Harris County ,
Texas ;
Proceedings reported by machine shorthand .
Tamika T. Bartee , B.C.R.,RPR, CSR #12593
Official Court Reporter
Harris County , Texas
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
otherattribution
Complete supplied 48-page source reviewed at SHA-256 6fb83e45d7da7565f006f99e8dc09308cd3105e8ebd0e42876cfe94e5bcf7548. Source assertions, or
Complete supplied 48-page source reviewed at SHA-256 6fb83e45d7da7565f006f99e8dc09308cd3105e8ebd0e42876cfe94e5bcf7548. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. Exact version_e658666daa4240b096e6c8a0370bcf86; SHA256 6fb83e45d7da7565f006f99e8dc09308cd3105e8ebd0e42876cfe94e5bcf7548. All48pages read including concordance; material speaker,amountcorrection,undertaking,continuance and certificate pages visually checked. PDFpage is transcriptpage+1 for pages2–41. Original extraction retained.
When were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and ter
When were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and termination?
distillateobservation
CONNECT
Reviewed relationships
The canvas follows the database: source to DISTIL record, DISTIL record to knowledge object, then reviewed relationship. Position alone means nothing.
The form would grant turnover against Cyberlux but deny it against Schmidt; it recites original award components, credits and an October31,2024 remaining amount$848,363.37, and appoint Berleth subject to$2,000 bond. These are proposed findings, not established ledger balances or an effective appointment in this copy.supportsPennetti argues the Chapter31 receiver is limited to the domesticated judgment and should stop after sufficient tender; seeks registry payment, satisfaction and retroactive removal of Schmidt from the turnover order. He describes going-concern operations and subsidiary-sale risk but expressly lacks clarity about which subsidiary owns which contracts. These are counsel arguments, not adjudicated operational facts.
Proposed Schmidt exclusion supplies context to counsel’s later scope argument, not proof the exclusion was entered.
At 9:49 AM Berleth disputes payment in full, cites Cyberlux objections to disbursement and says the receivership remains. He predicts September or October as the earliest termination hearing and asserts the appeal prevents setting it meanwhile. These are counsel’s legal and procedural assertions; no docket or order establishes them here. He interprets Priddy’s email as instructions to proceed without Legalist.qualifiesBerleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says upon payment he will file a motion to terminate; termination and distribution await Judge Gomez’s approval. The undertaking does not establish subsequent performance.
June 9 conditional termination undertaking differs in date and procedural posture from June 27 receiver assertions; intervening payment and court record required.
Walton rejects any stipulation that only$912,000 is owed, emphasising the May15 wording at minimum and claimed fees over$592,000. He says approximately$3.094million should cover the Virginia judgment being enforced, while preserving other claims including approximately$6.7million. Pennetti maintains the need for credits and offsets. The exchange does not reconcile the ultimate judgment balance.qualifiesWalton describes the June 28, 2023 Virginia amended judgment, January 2024 California and July 2024 Texas domestications, and a minimum $912,000 balance after credits. He quotes agreed security and lien interests and reports July 6, 2023 Virginia and Texas UCC filings as perfecting collateral interests. The financing statements and priority analysis are not attached.
Walton explicitly rejects treating his minimum912kletterfigure as a cappedstipulation.
Berleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says upon payment he will file a motion to terminate; termination and distribution await Judge Gomez’s approval. The undertaking does not establish subsequent performance.supportsThe hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to judicial approval. It does not itself prove payment or terminate the receiver.
Specifically named source propositions support the bounded distinction or question.
Payne continues the matter to Wednesday8:30 for payment status and possible termination steps. Asked for a stay, she says she will trust representations that the receiver will await payment; Berleth says goods have shipped and he is awaiting Legalist or HII payment. No separate signed stay or termination order appears here.supportsDid this hearing establish a completed payoff and termination?
Specifically named source propositions support the bounded distinction or question.
Payne continues the matter to Wednesday8:30 for payment status and possible termination steps. Asked for a stay, she says she will trust representations that the receiver will await payment; Berleth says goods have shipped and he is awaiting Legalist or HII payment. No separate signed stay or termination order appears here.supportsWhen were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and termination?
Specifically named source propositions support the bounded distinction or question.
Priddy represents about$2.755million already sits in his firm’s trust account from Legalist, expects interest in funding the increased amount, and asks24hours for client-to-firm and firm-to-receiver wires. Funds held by lender counsel are distinct from funds paid to the receiver; the additional advance remains conditional on client coordination.supportsThe hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to judicial approval. It does not itself prove payment or terminate the receiver.
Specifically named source propositions support the bounded distinction or question.
Priddy represents about$2.755million already sits in his firm’s trust account from Legalist, expects interest in funding the increased amount, and asks24hours for client-to-firm and firm-to-receiver wires. Funds held by lender counsel are distinct from funds paid to the receiver; the additional advance remains conditional on client coordination.supportsDid this hearing establish a completed payoff and termination?
Specifically named source propositions support the bounded distinction or question.
Berleth states $3,094,660.81 would lead him to move to terminate and distribute funds, while court approval of fees and distribution remains necessary. He says no funds were received. The judge’s spoken$3.9million slips are corrected on transcriptpage31 to$3.094million; they are not a separate ordered payoff amount.supportsThe hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to judicial approval. It does not itself prove payment or terminate the receiver.
Specifically named source propositions support the bounded distinction or question.
When Berleth asks to admit exhibits1–12, Payne says she will take into consideration exhibits attached to either motion or response and continues the hearing. The reporter certifies the volume, leaving transcription cost and payer blank. Underlying exhibit truth is not established merely by the certified transcript.supportsThe underlying exhibits, wiring emails, bank receipts, later hearing volumes and signed termination disposition are absent from this volume.
Specifically named source propositions support the bounded distinction or question.
This is Volume1 of3 of the June9,2025 motion-to-stay hearing before Judge Latosha Lewis Payne, Harris County55th District Court, Cause2024-48085. Reporter Tamika T.Bartee certifies the requested proceedings June14. Transcript pages1–40 plus concordance are supplied; volumes2–3 and underlying exhibits are not.supportsThe underlying exhibits, wiring emails, bank receipts, later hearing volumes and signed termination disposition are absent from this volume.
Specifically named source propositions support the bounded distinction or question.
Berleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says upon payment he will file a motion to terminate; termination and distribution await Judge Gomez’s approval. The undertaking does not establish subsequent performance.supportsDid this hearing establish a completed payoff and termination?
Specifically named source propositions support the bounded distinction or question.
Berleth undertakes to provide instructions to counsel by noon June9 and resend them to Prostok by return-receipt-requested email. He says upon payment he will file a motion to terminate; termination and distribution await Judge Gomez’s approval. The undertaking does not establish subsequent performance.supportsWhen were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and termination?
Specifically named source propositions support the bounded distinction or question.
Berleth says wiring instructions were sent and available on his website. Priddy says he has not seen them, identifies the website’s contact-us requirement for routing details, and reports no instructions known Friday; he does not categorically prove none were sent later. Payne repeatedly asks when and to whom instructions were sent. The transcript contains no email delivery proof.supportsThe underlying exhibits, wiring emails, bank receipts, later hearing volumes and signed termination disposition are absent from this volume.
Specifically named source propositions support the bounded distinction or question.
Berleth says wiring instructions were sent and available on his website. Priddy says he has not seen them, identifies the website’s contact-us requirement for routing details, and reports no instructions known Friday; he does not categorically prove none were sent later. Payne repeatedly asks when and to whom instructions were sent. The transcript contains no email delivery proof.supportsWhen were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and termination?
Specifically named source propositions support the bounded distinction or question.
Berleth states $3,094,660.81 would lead him to move to terminate and distribute funds, while court approval of fees and distribution remains necessary. He says no funds were received. The judge’s spoken$3.9million slips are corrected on transcriptpage31 to$3.094million; they are not a separate ordered payoff amount.supportsDid this hearing establish a completed payoff and termination?
Specifically named source propositions support the bounded distinction or question.
Berleth states $3,094,660.81 would lead him to move to terminate and distribute funds, while court approval of fees and distribution remains necessary. He says no funds were received. The judge’s spoken$3.9million slips are corrected on transcriptpage31 to$3.094million; they are not a separate ordered payoff amount.supportsWhen were complete wiring instructions delivered, what amount reached the receiver, and what later order governed fees, distribution and termination?
Specifically named source propositions support the bounded distinction or question.
Payne continues the matter to Wednesday8:30 for payment status and possible termination steps. Asked for a stay, she says she will trust representations that the receiver will await payment; Berleth says goods have shipped and he is awaiting Legalist or HII payment. No separate signed stay or termination order appears here.supportsThe hearing turns on the gap between proposed protective funding and money actually received, then on conditional termination subject to judicial approval. It does not itself prove payment or terminate the receiver.
Specifically named source propositions support the bounded distinction or question.
WEIGH
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A score appears only when its components and change threshold are published.
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The active Website Edition contains no applied score snapshot for this source or its connected objects. That means not assessed—not zero.