Court Fails to See Evidence of Victory Contracts

Market Wire, May, 2006

The California Appellate Court, in a May 17, 2006 ruling (Docket Number D046790), has determined that Victory Energy Corporation (OTCBB: VTYE), formally known as Victory Capital Holdings Corporation, did not provide any evidence of contractual relationships or customers. This determination came in spite of several press releases by the Company, announcing various acquisitions and other relationships; and Victory's claim that former CEO George Sharp "had actual knowledge that Victory had valid, contractual relationships with its customers." That claim was made within a SLAPP suit prepared by Victory's Counsel, William K. Vogeler of Grundeck & Vogeler, and filed against Mr. Sharp on February 18, 2005. The SLAPP was in answer to Mr. Sharp's initial civil action (California Superior Court GIC840172) brought against Victory, Michael Osborn and Harold Gregg for Fraud, Negligent Misrepresentation, and Breach of Contract. The Court struck the counter-suit under the anti-SLAPP statute, and awarded Mr. Sharp costs and attorney fees.

In conjunction with its findings, the Court refers to this exchange with current Victory CEO, Jon Fullenkamp’s deposition.

Q    [Sharp's counsel]  What is the business of Victory?

A    [Fullenkamp]  Victory is a holding company.

Q    Does it have customers?

[Fullenkamp's counsel]  Objection, vague and ambiguous as to the meaning of
the word 'customers.' You can answer if you know.

[Fullenkamp]  Define 'customers'

By [Sharp's counsel]: Q  Are you aware that you have sued George Sharp for
interfering with Victory's contractual relations with its customers?

[Fullenkamp's counsel]:  Objection, assumes a legal conclusion, facts not
in evidence.  You may answer if you want.

[Fullenkamp]:  I don't have a legal background to be able to answer that.

Q    What is the source of revenue for Victory?"

Immediately after this question, Fullenkamp's attorney requested a discussion off the record. Back on record, exhibits were labeled and the deposition ended.

The Court's entire ruling is available at:

http://www.courtinfo.ca.gov/opinions/nonpub/D046790.PDF

According to the website www.thefirstamendment.org ,

"SLAPP [Strategic Lawsuit Against Public Participation] filers frequently use lawsuits based on ordinary civil claims such as defamation, conspiracy, malicious prosecution, nuisance, interference with contract and/or economic advantage, as a means of transforming public debate into lawsuits.

Most SLAPPs are ultimately legally unsuccessful. While most SLAPPs lose in court, they 'succeed' in the public arena. This is because defending a SLAPP, even when the legal defense is strong, requires a substantial investment of money, time, and resources."

The website goes on to say,

"A SLAPPback [suit] is a way to seek monetary damages, including pain and suffering, from the SLAPP filer on the theory that the original SLAPP constituted an abuse of the legal process.

In the past, juries in some SLAPPback suits have ordered SLAPP filers to pay large sums of monetary and punitive damages to the original SLAPP target."

CONTACT: George Sharp (310) 498-4455 Email Contact