Live, I think that it's possible that you might have hit more closely to the mark than you realize. Here is a snip of your post, note carefully the names of the defendants in this lawsuit:
LONGVIEW, Texas, Nov. 9 /PRNewswire/ -- Restaurant Teams International, Inc.
(OTC Bulletin Board: RTIN - news; 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.
Now take a look at this snip from an S-3 filed by DCI, that shows the holders of the series F Preferred shares that are to be bought back:
The Company sold Convertible Preferred Stock to certain
holders. The conversion prices for the Preferred Stock may not
be greater than $4.00 per common share and is calculated by
averaging the two lowest closing bid prices of the Company's
Common Stock as quoted by Bloomberg for the ten day trading
period ending on the day prior to the date of conversion times
(x) seventy five percent (75%). The holders of the Preferred
Stock have up to two (2) years to convert and cannot convert
prior to July 30, 1998. The Company has the right to redeem (buy
back) convertible preferred shares at any time prior to receiving
a conversion notice by the holders and it is the Company's
present intention to redeem a portion or all of the preferred
shares. The holders are as follows: Sovereign Partners, L.P., FT
Trading Unlimited, Dominion Capital Fund and Augustine Fund, L.P.
See "SELLING STOCKHOLDERS."
Note also that the buyback provision DCI has told us about is clearly spelled out here. Now how about a hypothetical situation that might currently exist:
The series F shares have never been converted, however this group believes that DCI will never be able to buy these shares back, wants their money back NOW rather than later, plus knows full well that if they short into the selling already flowing from Canada from the Card Call shares, that they can drive the price of DCTC even lower. Note that the way the deal was structured, the lower our share price, the more shares they would recieve. In fact at our low of .67, they could in theory have converted the 3 million $$ + their dividends into something over 5 million shares. I will bet that they shorted something close to this number of shares, fully expecting to get those shares from DCI, when the rug got pulled out from under them with DCI buying back the series F shares. With other groups shorting along with the convertible holders, it is quite easy to see how our total short in DCI could be as high as the 10 million shares I mentioned in an earlier post. So what does a group that is short to this extent do? Use every tactic available to shake out shares and hold the price down. Hmmm, Lucky says he does this for a living but he didn't say WHO he might be working for....
James |
