This is my first experience at a Stock Talk Site and I am not sure that I have the whole Idea yet. Let me start my story:
I was one of the founders of E-Data and am also one its largest shareholders. As everyone that follows this service is aware, the company has had its share of management and lawyering problems ever since the beginning. Until the present time, everyone probably meant well, but either the timing was wrong, the technology had not advanced enough or the stars were not properly located in the sky. The current management of this company makes these former dreamers the greatest empire builders in history.
Because of the continued ineptness and diminution of shareholder's rights (no shareholder meeting in 4 years) a group (a slate) was formed (five people) to hold a meeting and vote out present management. Our proposed Board is made up of five people, three of whom are lawyers and one of the lawyers is considered one of the Dean's of Patent Law. Another is an accountant who is well known for his activities often as a Court appointed Trustee and forensic accountant. The last is myself. I have a small Investment Banking Firm called Chapman Spira and Carson LLC that is located on Wall Street.
The current management had been promising the us that material things were happening with the company that required a vote of shareholders and meeting would soon be held. No meeting was ever called in spite of the fact that E-Data management entered into several extremely material but questionable transactions. At this point, two of the directors demanded that one be held. For this and other reasons, one of those two directors resigned over his frustration with management as well as other disputes with them. The other hired outside counsel and asked the Utah Court for a TRO (Temporary Restraining order) which would bar the current management from wasting corporate assets until the shareholders had been heard from. Their side has not been silent, they have proposed board of five people as well, none of whom lives in the United States, and four of the five are foreign nationals. To my knowledge, not one action has ever been filed on the Company?s behalf in any jurisdiction but the U. S. and yet this group seems to feel that they can do a better job in France, Scotland, and Holland.
This group of overseas residents does not seem to believe that American Laws affect them in proxy fights or anything else for that matter. In their desire to pack the voting lists they have violated the TRO and American Law on no less than two occasions. In the first instance they tried to sell additional shares to one of the Directors at a bargain price using a dated 504 offering memo refuted by its author, the lawyer that wrote it. He has sent letters to all concerned indicated that this was done without his permission and the material may well be misleading. Not satisfied with this action, they still thought they could get their friends into the stock at a cheap price and be able to vote beside. I am also informed that they submitted an opinion letter to the transfer agent that was signed by the Company?s counsel in April of 1999. Company counsel had only a short time before issued a letter saying that he would not opine relative to the merits of the sale. Naturally, the 504 went on to say that the shares were not being purchased for resale and yet the potential director-owner of the shares in a discussion with one of the Company?s Directors indicated that he was not putting up the money for the purchase, it was coming from others. Moreover, this particular nominee has also been threatening the company consistently with what I am advised is frivolously litigation and it does not need a brain surgeon to figure out that this does not make a lot of sense.
The shareholders meeting will be held on January 24, 2000 at the building in which I office at 45 Wall Street. When you receive your proxies they will contain substantial detailed information regarding our slate and what has transpired until now. In addition, I have a few memos that I have put together that some of you might find interesting.
My full name is Robert Spira and I would be happy to talk at length to anyone that has an interest in the company and I can be reached at my office at 212-425-6100 during normal business hours. My fax number is 212-425-6229 and my e-mail is bobspira@chapmanspira.com. I welcome your interest. In the meantime, I understand that the court case will be heard shortly and no matter what the outcome, things have never looked brighter, but not with the crew that is currently running the show. |
