Note 14 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Note 14 - Commitments and Contingencies

Note 14 – Commitments and Contingencies

Legal Issues:

(i)   Branislav Jovanovic

In June, 2012 the company’s former President, Branislav Jovanovic of Calgary, Alberta, Canada commenced arbitration proceedings against the company with such proceedings filed with the International Centre for Dispute Resolution in Las Vegas, NV.  The statement of claim filed by the plaintiff in the arbitration proceedings alleged unpaid sums of approximately $150,000 USD.  The company replied and filed a Statement of Defence in the arbitration proceedings on July 28, 2012.  The company filed a statement of defence and asserted, amongst other things, that the arbitration proceedings should be terminated.  By way of a direction issued by the International Centre for Dispute Resolution on September 25, 2012 the arbitration was terminated and the claim was dismissed due to inaction by the Plaintiff in prosecuting his claim.

On July 30, 2012 the company commenced legal proceedings in the Alberta Court of Queen’s Bench in Calgary, Canada against Branislav Jovanovic.  In the claim the company alleged that Mr. Jovanovic had submitted false expense claims and made other demands for reimbursement for expenses claimed to have been incurred for the company at the time that he was the sole director and officer.  At the time, in April, 2011 Mr. Jovanovic caused the company to pay him for these claims with the issuance of stock to himself and other family members.  The amount sought to be repaid was approximately 70,000 shares and at the time the action was commenced, the value of those shares was approximately $300,000 USD.  On October 4, 2012 the company sought and obtained a temporary injunction from the Alberta Court of Queen’s Bench in Calgary, Canada, stopping Mr. Jovanovic from trading those shares for a period. After the Court granted an extension to late October, 2012, the temporary injunction expired.    The action is moving forward into document discovery this year.

The day after the initial injunction was granted by the Court in Alberta, Canada, and on October 5, 2012 Mr. Jovanovic started a new lawsuit in US Federal Court in Las Vegas NV seeking an unquantified claim against the company in debt for a sum claimed to exceed $75,000 USD.  The company believes that the demand is the same claim Jovanovic sought unsuccessfully in his arbitration proceedings.   In November, 2012 the company applied in Federal Court to dismiss the Plaintiff’s complaint and on January 8, 2013 the Court did so and dismissed the entire action.  In issuing the order, Judge Hicks ruled that the exclusive jurisdiction for the parties’ dispute was Alberta, Canada where the company’s action was filed.   

Currently, all claims by or on behalf of Branislav Jovanovic against the company have been dismissed.  The company expects to continue to press forward with its action to require Mr. Jovanovic to account to the company for his actions and explain his activities. Any assessment of the action is premature at this time.

(ii)    George Sharp Claim

On April 16, 2013 a California resident named George Sharp filed suit against the company and its director and former directors of matters that related to the promotional activities once conducted by management when the company was known as Greenwood Gold Resources Inc. BluForest is filed a statement of defence against these claims and will press forward with its defence against these allegations. Mr. Sharp announced his addition of BluForest Inc. independent consultant Jim Can as a defendant to this lawsuit.

On Friday, October 25, 2013, BluForest CEO Charles Miller and BluForest Advisor Jim Can were granted a ruling by presiding Judge Joel M. Pressman on the Motion to Quash Services of Summons. Mr. Miller and Mr. Can were successfully removed in the lawsuit brought against BluForest et al.

The Company will continue move to dismiss this action and undertake any other defenses vigorously. Any assessment of the action is premature at this time

Commitments

On August 12, 2013 BluForest signed an LOI and entered into discussions with Global Fuel Limited (“Global Fuel”) based in London, England, for the pre-purchase two Tons of Carbon Credit per Hectare per Year owned by BluForest Inc.,  commencing September 2013.

Under the terms of the LOI, BluForest will assign a first priority lien to the property held in assets of BluForest Inc. in Ecuador known as "Hacienda Juval" consisting of 105,000 Hectares as indicated on the Balance Sheets of BluForest registered in Ecuador. Global Fuel Limited has examined the appraisals and audits of BluForest Inc and concur with the value stated therein of the aforementioned property.

The LOI with Global Fuel is structured such that a prepayment of $12,000,000 by Global Fuel will be made for the delivery of the Carbon Credits and will be for a period not to exceed 24 months. At that time Global Fuel expects the estimated 210,000 tonnes of Carbon Credits to have been, Validated, Verified, Certified and ready for market. If, for whatever reason, the Credits are not delivered as agreed to Global Fuel will consider the agreement in default and move to have the prepayment funds reclassified as a loan to BluForest.

In the event that BluForest "Fails to Deliver" the aforementioned Carbon Credits or "Repay" the above sums at an interest rate calculated from the one month LIBOR ARM Index plus a margin of 2% with a floor rate of 5.75%, as defined in the General Security Agreement, Global Fuel Limited then may move to attach the herein mentioned assets in priority, without dispute. The company is continuing to undertake due diligence and will announce the signing of a definitive agreement in the event that one is signed.