Elco Securities, LTD v. Dear Cashmere Holdings, Inc.

Background

The parties reported that they had settled their dispute in principle. The proposed settlement included issuing “free trading” shares of Dear Cashmere Holdings, Inc. common stock to plaintiff Elco Securities, LTD and/or its designees. The parties also consented to the jurisdiction of the designated magistrate judge for the remaining proceedings under 28 U.S.C. § 636(c).

Order

The court vacated all deadlines previously set in the action. It ordered the parties to submit, by June 6, 2025, a joint motion requesting an order under Section 3(a)(10) of the Securities Act of 1933, 15 U.S.C. § 77c(a)(10), approving the issuance of the Dear Cashmere shares as exempt from registration under the Act.

The court required the motion to include a fully executed copy of the settlement agreement, redacted as needed to comply with Federal Rule of Civil Procedure 5.2; one or more declarations or affidavits showing that issuing and delivering the shares would be fair to Elco; a memorandum of law; and a proposed order. After receiving the motion, the court stated that it would schedule the hearing required by Section 3(a)(10). The order noted that all people to whom the securities were proposed to be issued would have the right to appear at that hearing.

Disposition and Significance

The court entered an administrative and settlement-related order: it vacated the existing deadlines and ordered the parties to file the specified joint motion. It did not rule on the merits of the underlying dispute or finally approve the share issuance in this order. Judge Barbara Moses signed the order as a United States Magistrate Judge.