UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 5, 2000
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CHADMOORE WIRELESS GROUP, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-20999 84-1058165
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2875 E. PATRICK LANE, SUITE G
LAS VEGAS, NEVADA 89120
(Address of principal executive offices) (Zip Code)
(702) 740-5633
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
FORM 10-QSB REPORT FOR THIRD QUARTER
On October 18, 2002, Chadmoore Wireless Group, Inc., a dissolved
Colorado corporation - 2002 ("Chadmoore"), engaged McGladrey & Pullen, LLP
("McGladrey") as its independent auditors for its current fiscal year ending
December 31, 2002. Management has determined that its financial statements
should be presented on a liquidation basis. Chadmoore has not yet filed a Form
10-QSB Report for the quarter ended September 30, 2002. The delay in filing is
due to the time required for Chadmoore to present its financial statements on a
liquidation basis and for McGladrey to complete the review of the financial
statements required by Regulation S-X. Chadmoore expects that the Form 10-QSB
Report will be filed in the mid-January 2003 timeframe.
EMERGENCY RADIO SERVICES SETTLEMENT
In October, 2001, Chadmoore received a demand for arbitration from
Emergency Radio Services, Inc. ("ERS") with respect to a breach of contract
claim. In its demand for arbitration, ERS argued that an agreement executed
between ERS and Chadmoore in 1997 entitled it to numerous radio channels in Fort
Wayne, Indiana. Based upon the scope of ERS' demand, Chadmoore previously
reserved $5.65 million for this matter. However, this matter has recently been
settled. In the settlement, ERS released Chadmoore fully from any and all claims
in exchange for Chadmoore's transfer to ERS of five remaining channels in the
Fort Wayne, Indiana market and a cash payment of $375,000. As the amount paid in
the settlement is less than the amount previously reserved for this matter,
management intends to make a distribution of cash to Chadmoore shareholders from
the balance of the amount previously reserved (the "ERS Reserve") in connection
with this matter in the near future. Chadmoore is currently evaluating whether
any of the ERS reserve should be reserved in connection with the Ashcroft ITV,
Inc. and Electronic Maintenance Company, ("EMCO") matters described below. Once
this evaluation is complete, Chadmoore will announce the amount of the next
distribution.
THIRD MOBILE SUIT
A complaint was filed by Third Mobile Limited, a Texas Limited
Liability Company and shareholder of Chadmoore, naming Chadmoore as defendant on
December 13, 2001 in the United States District Court for the District of
Nevada. The complaint was served on Chadmoore on January 31, 2002. The complaint
seeks monetary damages relating to certain oral misrepresentations Robert Moore
or other Chadmoore representatives allegedly made to Third Mobile around
January, 1995 that induced Third Mobile to invest $700,000 in Chadmoore
Communications, Inc. Chadmoore believes the complaint is without substantive
merit and is also likely barred by the applicable statute of limitations since
it relates to events, which took place seven years ago in January and February
of 1995. Chadmoore has filed its first response in this matter with the District
Court. Moreover, initial discovery has commenced in this matter and on May 14,
2002, Chadmoore caused outside counsel to file a motion to dismiss Third
Mobile's complaint. At this time, the motion remains pending before the court.
In the interim, and based on Third Mobile's attempts to initiate extended
discovery proceedings, Chadmoore has indicated its unwillingness to consent to a
further extension of the court ordered discovery period. Moreover, Chadmoore has
informed Third Mobile's counsel of its decision along with its affirmation to
Third Mobile's counsel that should this matter proceed to District Court for
trial, Chadmoore will seek sanctions against Third Mobile for filing what the
Company believes is a frivolous complaint. Further, Chadmoore's communication
noted it will request that the Court order Third Mobile to pay the Company's
legal expenses in connection with this matter. Management cannot forecast the
final outcome of this matter, nor can it currently provide a timetable for when
it believes the matter will be concluded. Nevertheless, based on management's
review of the complaint, conferences with outside counsel, and recent discovery
proceedings, Chadmoore believes it is not probable that a substantial adverse
impact on Chadmoore will result from this matter. Pending the outcome of this
proceedings, and based on written demands from Third Mobile, Chadmoore continues
to reserve $3.75 million in cash in connection with this matter.
ASHCROFT ITV, INC. CLAIM
In late September, 2002, Chadmoore received a letter from Ashcroft ITV,
Inc. ("Ashcroft") seeking settlement of purported claims related to licenses
which Ashcroft contends were transferred to Chadmoore. Ashcroft's letter
requested a payment of 4,162,000, apparently for purported mismanagement, breach
of contract, and breach of fiduciary duty in connection with the licenses.
Chadmoore has reviewed its files and Chadmoore management has analyzed the
matter at considerable length, and consulted with outside counsel. Chadmoore
believes that Ashcroft's claims are invalid, and that even if the claims were
valid, Chadmoore has a reasonable argument that it should be liable to Ashcroft
for no more than approximately $25,000 in license payments. Chadmoore further
believes it has claims against Ashcroft for interim management fees of
approximately $89,000 earned while Chadmoore managed and operated Ashcroft's
licensed facilities in order to keep them in compliance with FCC requirements.
Chadmoore is attempting to resolve the matter with Ashcroft, but to date has not
met with success. Chadmoore cannot forecast the ultimate outcome of this matter,
or provide a timetable for anticipated resolution.
ELECTRONIC MAINTENANCE COMPANY SUIT
On December 4, 2002, Electronic Maintenance Company, Inc. ("EMCO"), a
Louisiana Corporation, filed a complaint naming Chadmoore as defendant, in the
19th Judicial District Court of the Parish of East Baton Rouge of the State of
Louisiana. The complaint was served on Chadmoore's agent of service on December
9, 2002 and was presented to Chadmoore on December 11, 2002. The complaint seeks
monetary damages relating to Chadmoore's role as a majority partner in PTT Baton
Rouge, LLP, an entity in which EMCO had a minority interest. The complaint asks
the court to provide monetary relief in an unspecified amount to EMCO, due to
what EMCO alleges is action taken by Chadmoore in breach of its obligations
imposed by the Chadmoore and EMCO partnership agreement. Chadmoore believes the
complaint is of limited substantive merit and is also barred from being heard in
state court in Louisiana due to controlling language in the Chadmoore/EMCO
partnership documentation which requires any disputes between the parties to be
resolved through arbitration to be held in Las Vegas, Nevada. Chadmoore has
retained the services of Louisiana counsel and intends to file a timely response
in this matter on or before December 24, 2002. Management cannot predict the
final outcome of this matter, nor provide what it believes will be an accurate
timetable for when this matter will be concluded. Nevertheless, based on
management's review of the complaint and conferences with outside counsel in
Louisiana, Chadmoore believes it more likely than not that no substantial
adverse impact on Chadmoore will result from this proceeding. Chadmoore also,
through counsel, has requested a conference with counsel for EMCO seeking
further clarification of the actual level of damages being sought so that,
should it prove warranted, the company may create an additional cash reserve in
connection with this matter.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHADMOORE WIRELESS GROUP, INC.
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a dissolved Colorado corporation - 2002
(Registrant)
December 19, 2002 By: /s/ STEPHEN K. RADUSCH
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Date Name: Stephen K. Radusch
Title: Chief Financial and Accounting
Officer