Rose Glen Capital information
Rose Glen has lawsuits in regard to stock manipulation and shorting kinda like Kernaghan. mst checked these guys out, right?
SkyMall, Inc.
news.moneycentral.msn.com
ITEM 1. LEGAL PROCEEDINGS.
The Company is involved in legal actions in the ordinary course of its
business. Although the outcomes of any such legal actions cannot be predicted,
in the opinion of management, there is no legal proceeding pending or asserted
against or involving the Company the outcome of which is likely to have a
material adverse effect upon the consolidated financial position or results of
operations of the Company.
On January 29, 1999, a securities class action complaint was filed
against SkyMall and Robert Worsley, the Company's Chief Executive Officer,
Chairman and largest shareholder, in connection with certain disclosures made by
the Company in December 1998 relating to its Internet sales. The complaint was
filed in the United States District Court, District of Arizona, Case No.
CIV-99-0166-PHX-ROS. The complaint alleges unlawful manipulation of the price of
the Company's stock and insider selling during the period from December 28, 1998
through December 30, 1998. The complaint seeks unspecified damages for alleged
violations of federal securities laws. SkyMall and Mr. Worsley filed a motion to
dismiss the complaint on the basis that the complaint fails to state a claim
upon which relief can be granted. In September 2000, the motion was granted in
part and denied in part. SkyMall continues to believe that the allegations
against it and Mr. Worsley are substantially without merit and intends to
vigorously defend the lawsuit. The case will now proceed to the class
certification stage.
On November 22, 1999, RGC International Investors, LDC, the parent
company of Rose Glen Capital Management, filed a complaint in the Court of
Chancery New Castle County Delaware, Cause Number 17600 NC, RGC International
Investors, LDC v. SkyMall, Inc. RGC alleges that the Company was required to
close on a transaction for an equity investment in SkyMall. The Company has
filed a Petition for Removal to move the case to Delaware Federal Court, and has
filed a motion for dismissal on the basis that the complaint fails to state a
claim upon which relief can be granted. SkyMall believes that the allegations
against it are substantially without merit and intends to vigorously defend this
lawsuit. Trial in this matter is scheduled for February 6, 2001.
nettaxi.com
they like to countersue companies that sue them also.
Thursday April 20, 8:03 am Eastern Time
Nettaxi.com Responds to Retaliatory Lawsuit Filed by RGC
CAMPBELL, Calif.--(BUSINESS WIRE)--April 20, 2000--Nettaxi.com (OTCBB:NTXY)
Nettaxi.com today issued the following statement regarding a lawsuit filed by RGC International Investors, LDC in which RGC seeks $33 million on its original investment of $5 million:
We believe that the claim is frivolous and Nettaxi will vigorously defend it.
On March 31, 2000, we tendered repayment of $2,588,800 as payment in full of the outstanding principal and interest of the convertible debentures issued to RGC. That same day, we filed suit in the Superior Court of the State of California, County of Santa Clara, seeking the Court's confirmation of our right to repay the debenture. The suit also seeks damages in excess of $20 million against RGC for fraud and breach of fiduciary duty; injunctive relief prohibiting further conversions of the debenture and exercises of any options held by RGC; attorneys fees and costs.
google.com
Plaintiff RGC International Investors, LDC ("RGC") moves to
dismiss counterclaims asserted by defendants Greka Energy Corporation and
Saba Petroleum Company. I The counterclaims all have as their foundation
the allegation that RGC engaged in a purposeful plan to drive down the
market price of Saba's identically named predecessor corporation, "Old,
Saba," through a pattern of short sales transactions. RGC is alleged to have
been motivated by its ownership of Series A Preferred Stock of Old Saba,
preferred stock that could be converted into Old Saba common stock at
market price. Thus, RGC supposedly drove down the price of the Old Saba
shares, thereby reaping unfair profits because RGC could allegedly cover its
short sales without substantial economic risk through the increased number
of Old Saba shares RGC could obtain by converting its Series A Preferred
because of the decline in Old Saba's trading price. This alleged conduct
supposedly violated RGC's contractual obligation not to engage in market
manipulation that would decrease Old Saba's stock price.
4. EQUITY FINANCING
On July 18, 1997, RGC International Investors LDC and Advantage Fund Ltd., each
of which is an accredited investor as defined in Regulation D to the best
knowledge of the Company, purchased from the Company 3,000 shares of Series B
Convertible Preferred Stock at a price per share of $1,000, with net proceeds to
the Company of approximately $2,732,000.
google.com
This negative price momentum may be accelerated by selling pressure from
professional short sellers who seek out such companies as short selling opportunities. This
type of activity has even reached the Internet, where we came across various "death spiral
clubs" who systematically search SEC filings for death spirals and advise others to short the
4
issuer's common stock3. Moreover, the issue announcement may be a signal that the firm is in
serious trouble and is unable to raise conventional financing. For example, Illinois
Superconductor issued a floorless convertible in June 1997 and saw its stock price decline
from $ 13 to $ 1 in two months. Edward Laves, CEO, justified his financing choice by
pointing out that the convertible placement was the only financial option after a failed
secondary public offering4.
On the positive side, Brennan (1986) points out that making the conversion price
dependent on the market price avoids the adverse selection problem (Myers and Majluf
(1984)) when a firm issues equity or a normal convertible security with a fixed conversion
price. Indeed, by making the conversion price float, companies no longer have an incentive to
issue stock or convertibles when they believe their shares are overvalued. Moreover, as the
convertible is fully hedged against expropriation through risk-shifting and issuing securities of
greater seniority, the company avoids agency costs normally associated with debt financing
(Myers (1977)). Hence, a theoretical argument can be made that a floorless convertible is a
powerful financial innovation, which will be especially useful for firms where information
asymmetry and agency costs are potentially large, such as high growth, risky firms.
washtech.com
here's part of the article. Great article.
Another local company, CyberCash Inc. of Reston, took on high-stakes financing in early 1999. Investors Rose Glen Capital Management LP and Palladin Group LP invested a combined $15 million in the company in exchange for stock in the form of warrants. The way the deals were structured, if the company’s stock fell, the investors were in line to get a proportionally greater number of shares.
The stock did just that. As the stock dropped to 88 cents a share from $9.77, shares entitled to Palladin and Rose Glen rose to nearly 15.6 million from 1.4 million. CyberCash’s founder and chairman, William N. Melton, resigned in protest in January. Melton said he quit to persuade the two main investors to renegotiate the deal, saying the original deal would significantly dilute the value of the electronic credit card processing company. The company and its investors reached an agreement several days later under which the investors agreed to exercise only a portion of their warrants to avoid extreme dilution of the stock.
CyberCash has since filed for Chapter 11 bankruptcy protection and is selling its assets and operations to pay its debts. A California company, VeriSign Inc., last week submitted a winning bid of $20 million for CyberCash’s services, pending the approval of a bankruptcy court judge.
CyberCash’s chief financial officer, John Karnes, did not respond to calls for comment on the original financing deal.
Another company, Teligent Inc. of Vienna, is on a desperate quest for cash. In December, it secured a commitment for $250 million from Rose Glen, the same firm that invested in CyberCash. The equity financing would allow Teligent to sell stock to Rose Glen at a 5 percent discount over 18 months. But Teligent has not been able to tap into the money because the stock price hasn’t reached the required minimum of $2 a share, said Kerry Watterson, Teligent’s vice president of investor relations. Teligent’s shares have been trading under $1. The firm is shopping for another investor, Watterson said. Rose Glen refused to comment for this article.
Other companies that have struck deals for financing with more terms than traditional financing would dictate include the telecommunications firm E.spire Communications of Reston, which took on $125 million in equity financing in September but filed for Chapter 11 bankruptcy protection last month.
thestreet.com
Telephoning Teligent: The concern about Teligent's (TGNT:Nasdaq - news) ability to raise cash, as first mentioned here back in October, was not a question of whether it would find the cash, but what the terms would be. Now we know.
On Friday the company signed a deal that is loaded with high-priced terms and little in the way of commitment by the lender; put another way, the lender can sell its stock -- not something investors want from someone serious about saving a company. Investors will be looking closely at any SEC filings containing details of the deal to see if the lender/investor, Rose Glen Capital, can short Teligent's stock. (Not a good sign for common investors!) ...
some insider sales. They do a lot of otcbb companies. How well are these companies doing?
biz.yahoo.com
If the managing director of RGC is in the Caymans and signs the SEC docs, is the contract valid as the Caymans do not recognize US laws? Just asking. |
