Check the RTIN Thread.....Here's the First News of the week!!
Restaurant Teams International, Inc. Files Suit in Federal Court Against Canadian Debenture Holders
PR Newswire - November 09, 1998 09:33
LONGVIEW, Texas, Nov. 9 /PRNewswire/ -- Restaurant Teams International, Inc. (OTC Bulletin Board: RTIN) (RTIN) announced today that it will not convert into stock its $3 million issue of convertible debentures with Sovereign Partners, L.P., Canadian Advantage Limited Partnership, and Dominion Capital Fund, Ltd, and that the Company has undertaken to pursue litigation for rescission of the debentures and damages. The Company filed suit in the United States District Court for the Eastern District of Texas in Tyler, Texas on Friday November 6, 1998 naming the three debenture holders, and Steve Hicks, Mark Valentine, Thomson, Kernahgan & Co. Ltd., Corporate Capital Management, and Mark Savage as defendants in the suit.
The Company alleges that the debenture holders and their agents, who are the other defendants, made material misrepresentations in the promotion of the debenture in May 1998, and further that the debenture holders breached the agreements and engaged in related misconduct, including but not limited to unlawful short selling of the Company's common stock.
The Company understands that it is one of 10 or more small public companies that have entered into similar transactions with the same parties, and that in all cases the defendants have engaged in similar behavior resulting in loss of market value of the combined companies stock in excess of $500,000,000.
The Company has also complained of the investors conduct to the Securities and Exchange Commission (SEC), the National Association of Securities Dealers Regulation (NASDR), and the Depository Trust Company (DTC), regarding the unlawful short selling which has driven the Company's stock from a price of $4.40 per share before the debenture sales to a close Friday of $2.06, despite the fact that during the time of such decline the Company has issued all positive news.
Curtis A. Swanson, Chief Financial Officer of the Company stated; "It is appalling that these funds, many of them out of Canada, can come to the United States and make investments in growing companies only to short sell their stock to the point that they destroy the investments made by hard working people who often have been long term supporters of Companies such as ours. It is not fair to the investors in this country to have to abide by different standards than those that have open access to our markets but don't have the accountability that we are all held to, such as making sure you have an affirmative determination that the stock can be borrowed before you short sell it." Mr. Swanson further stated; "We believe this is a prime case of market manipulation. Even when we released good news such as record earnings in the first 1/2 of 1998, up 600%, or an acquisition that will result in unit growth of 300% and revenue growth of 433%, our stock was continually being sold short, thus the lower price."
Stanley Swanson, Chief Executive Officer of the company, stated, "We are greatly disappointed in the funding for the debentures. We always look for honest investors who believe in our company and want the opportunity to participate in our future value and growth. This is currently happening through expansion, and most recently, acquisition. Our company has never been stronger, and we are looking forward to the rescission of the debenture and the return of any shares held by non-investors through this debenture instrument."
The Company also announced that it has been reviewing terms from several sources of short and long term funding from U.S. lending and investment banking institutions. These fundings will be used to complete its acquisition of the Old San Francisco Steak House chain (closing anticipated between the 1st and 15th of December). The short term funding will also facilitate other expansion plans and provides for the elimination of existing bank debt.
Restaurant Teams International, Inc. is the developer of the Fresh'n Lite Cafe & Grill and Street Talk Cafe concepts. Both concepts are full service, casual dining operations that feature a variety of your favorite foods along with many choices of non-fat and low fat menu items without sacrificing taste, service, value, or atmosphere.
This press release contains forward-looking statements, which are generally preceded by words such as "believes", "expects", "anticipates", or "intends". Such statements are subject to risks and uncertainties, including but not limited to competitive conditions, real estate zoning and permitting complications, government regulations, and general conditions in the restaurant market.
SOURCE Restaurant Teams International, Inc.
/CONTACT: Investor Relations of Restaurant Teams International, Inc.,
903-758-2811, fax, 903-758-1666/
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