To: Ga Bard who wrote (6698 ) 7/13/1999 6:01:00 PM From: Puck Read Replies (1) | Respond to
GB, I am a shareholder of LONE, an acquisition minded insurance company that has suffered terribly from short selling related to the unfortunate issuance of reg. S debentures late in 1997. About a year ago LONE joined a now rather large class action lawsuit against many of the debenture purchasers claiming that the defendents engaged in unlawful short selling beginning on the day they purchased the debentures. The suit has been filed under the RICO statute, seeking treble damages based on the loss of market capitalization. The suit is in progress and so far the defendents have unsuccessful in having it dismissed. LONE believes that the defendents, all of whom are offshore, are continuing their short selling activities to bring as much pressure to bear on the company. LONE is in a sort of catch-22. Their investment bankers can raise money for them to repurchase the debentures but can't do so until the share price is above a certain threshold (the limit might be $1)--right now its at $.15. The debentures can be repurchased upon demand, so it is in the debenture holders interest to prevent this from happening by pressuring the share price as much as possible. About a month ago a poster on the LONE thread said that the only way for LONE to force the debenture holders to cease and desist from whatever shorting activity they may be engaging in and to force the alleged short sellers to square their positions would for LONE to get a court order requiring the short sellers to do so. The poster, who I don't know and haven't seen since, said that you might be familiar with other companies who were in LONE's predicament and successfully battled the short sellers by getting such a court order. I wish to know if you in fact do know of other companies that took this course of action and, if so, who they were so that I can inform LONE management of their precedent.
