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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: akmike who wrote (2527)	10/7/2000 6:31:12 PM
From: bubbavan	Respond to of 2702

Mike: I agree with most of your analysis. I don't understand why the company could possibly have such huge write-offs in the area of property and equipment. One explanation is that Pappas and his buddies are agressively trying to drop the company's solvency position for legal maneuvering/chapter 11 purposes. The alternative explanation would be that they have built or purchased millions of dollars of equipment that either doesn't work as planned or is now not working/broken. I realize that it takes more the WD-40 to keep their assembly line going, but I really doubt that it is not functioning and of substantial economic value, especially since Pappas keeps insisting that they are operating as usual and shipping out product to customers. Who knows what the accounting people capitalized incorrectly, but the magnitude of the write-offs that management has mentioned in this area seem so far beyond what one would expect as reasonable. I believe a special shareholder meeting should be discussed, or we need to get management to open up to an investor committee to help provide technical/financial expertise to the board, which obviously is not overly qualified to turn a struggling company around, especially a high-tech company. I too am concerned about severance packages and ongoing committments to board members and former management. You raise a valid point about KPMG's fee agreement - is their a maximum, or do they have a "blank check". I still believe in VARI-L's products, their customer list is strong, and the company should be able to overcome its problems with Wall Street, as long as Pappas and his crew don't intentionally run it into bankruptcy to in some way protect the few board members or management at the harm of us shareholders. That would not be a wise thing for them to do.

To: akmike who wrote (2527)	10/7/2000 8:39:51 PM
From: Bosco	Read Replies (1) \| Respond to of 2702

Hi ak - I think all the longs who have not sold care, since this problems hit our pocketbook. That said, caring is one thing, venting frustration is another. To begin with, I am not an accountant; in fact, I don't read financial stmts that well. But this problem is unlikely to be overnight problem, and thus it is unlikely to be answered overnight. I think everyone should be pssed off with former mgt, who may or may not be criminally responsible. However, I wouldn't want to take it out on the interim mgt and KPMG. Sure, they don't do this out of the goodness of their heart. They are willing to take the messy job b/c they ve something to gain. My guess is that Mr Pappas & crew will get a big chunk of the company for their inconvenience. And yes, KPMG will be able to bill its consultant fees. But realistically, us longs who stick around are hitching a ride from them. There is obviously a chance we will get ripeoff from them too. If anyone has a better alternative, I think most people are interested. OTOH, pssing them off now without reason doesn't sound a rational course of action. If you ve read the PRs, you will also know the original BoD is a goner, which in appearance anyway is an attempt to tell the shareholder they are trying a clean start. Like you, I'd like to see more details also. I guess I am willing to let them with a bit more space for now to keep the business running. A friend of mine had an misfortune once and ended up in the emergency room of a hospital, his wife complained that the hospital staff wasn't terribly informative. While it may be true some of the staff are not trained in bedside manner, the truth is that soothing her nerve is not as important as saving my friend's life! Just my take of the situation. best, Bosco

To: akmike who wrote (2527)	10/8/2000 4:58:31 PM
From: Labrador	Respond to of 2702

>>While we are informed of operations proceeding normally with growth, we are not informed about turnover or lack thereof among company employees. Does KPMG have a blank check to get the books in order or have they submitted a proposal with a maximum fixed fee against hourly charges? Is there not even an estimate of the cost? How about with Mr. Pappas and his associates? They don't work inexpensively, and yet they are in charge and we know their hourly rates, but are there performance hurdles or some safeguards that might limit their compensation other than their conscience and the funds available? << I suspect that there was an estimate of the cost, but with set hourly rates. Obviously, not a "fixed fee" arrangement as there was no way to determine the extend of the problems, without actually doing the work. I am sure that the estimate was vastly exceeded. It sounds like the books were in shambles, and that the released accounting statements were flagrantly erroneous from A to Z. I suspect that the cost of the study is a minimum of $1 million. Further, given the ligitation, and the SEC scrutiny, one would expect the work to pick over the books, like jackals on a carcass.