LGE bought about 5% of Zenith in 1992. In November 1995, LGE bought an additional 13% and LG Semicon purchased about 38%. However, it was not disclosed until 1997 that it was LG Semicon who was the largest owner of Zenith common stock and not LGE as previously stated. In March of 1998, LGE purchased 2 million Zenith shares from LG Semicon for $5 per share and in May 1999 purchased the balance of LG Semicon's Zenith shares for a few won.
In hindsight, we should have prepared earlier for the LG prepack attack. The first "independent" board member selected by LG was the former CEO of USG, Eugene Connolly. His only remarkable experience was putting USG through a prepackaged Chapter 11. Many other signs of a prepack attack unfolded (early calling in of about $24 million of 2001 and 2002 short-term bonds, takeover by LGE of Zenith's Canadian, Mexican, Brazilian and other overseas distribution, etc..). However, most of us refused to believe that LGE would be so callous as to obliterate the jobs of the vast majority of Zenith's employees and 100% of their and our Zenith investments.
On May 22, 1998, LG/Zenith announced plans for Zenith to enter Chapter 11. The SEC delayed the process for approximately one year due to political pressure, incompleteness of the S-4 and other factors.
LG/Zenith is presently challenging the Judge's decision for the US Trustee to appoint an Official Equity Committee. They fear (rightly so!) that we will bring to light many instances of alleged bankruptcy fraud and successfully attack both the liabilities and asset numbers provided in the Disclosure statement.
Why fight? Best interest of LGE is to sit down with the Official Equity Committee and develop an unanimous consent agreement to be submitted for vote by Zenith's shareholders where we receive cash in return for Zenith stock. |
