Gayle wrote:
=== Vince, I don't know how the 'market' 'knows' stuff but it's a bit
uncanny how developments seem to mirror price action even though the
developments aren't in the news. Sometime late this evening we became
aware of a 'hiccup' --- one of the Three Musketeers had called the GIFS
office and found a strange voice on the other end.
This message is going to the two groups we have direct responsibility to:
1) GIFS holders and 2) Forum co-editors, as well as a copy to the e-mail
addresses for Mohamed and the investor relations department, so they will be
aware of the communications. For those of you who are in Waaco's Forum,
you know that we consider our job to 1) make sure you use monopoly money to
play in this crazy environment, 2) make sure you have a steady flow of
information about the stocks we follow, and 3) help to develop action
scenarios anytime our investments are at risk.
This is one of those situations where anyone following this knows it is a
never-ending soap opera where the plot twists and turns are unpredictable,
to say the least. Today's situation is no different. But before we get
into that, please be aware that we are going to offer everyone some ideas on
how we can become pro-active in protecting our investments --- and again we
will enlist the help of those in the Forum at large who are not holders to
take a moment early Tuesday morning to help your compadres.
The understanding is that around 3 p.m., some folks from the State of
Tennessee marched into the offices of GIFS and 'think' they have assumed
control. At least for the day, they had court authority to do so. These
are not securities people, and the SEC does not seem to be involved at all.
In fact, given the timing and circumstances, and knowing that CRIC has had a
running disagreement with a low-level bureaucrat in the Dept. of Insurance
who appears to be in cahoots with political opponents of one of the major
bondees of CRIC, and if you consider the timing of the action today,
suspicions of close proximity to the shorters is not beyond belief.
The marchees were Jean Bryant, who has been appointed 'Conservatore' for the
State of Tennessee, and her assistant Martha Davis. Mike Rehtorik was a
virtual captive of these individuals for the next hour and a half as they
served him and asked for documents and tried to call off the sale of CRIC.
The good news is that they MAY not have stopped that. Our understanding is,
and they were informed that the primary sale documents changed hands Sunday.
So this aspect is going to be a sticking point in any legal maneuverings.
They were in touch with Dr. Aquino's office in San Juan shortly after 3 p.m.
but there is a big question as to whether or not the sale was long done (or
at least, done) at that point. We don't have a definitive answer to that.
The basis for the action by the state --- all CIVIL, we might add --- was
that the sale of CRIC might 'jeopardize' some of the state's interests in
bonding collaterals, etc. of CRIC, in essence, unless there's a lot more
here than meets the eye --- some pretty flimsy excuses for taking over a
'public company', when that authority is certainly questionable if not
downright actionable.
The reason we use the word 'flimsy' is that they seemed to be questioning
the company's liabilities in several cases where the deals being bonded were
completed or near completed and the company has no effective remaining
liability at all. It was more a 'fishing expedition' than a specific charge.
In other words, we're no legal eagle here, but the idea is that if they have
something to say or do to or about CRIC, they should search out the rightful
owners, which at this moment may be Suisse whatever and Dr. Aquino, and in
any event, we're not sure any of that has anything whatsoever to do with
GIFS itself, its other subsidiaries, including majority ownership of ANOTHER
public company, IMXS, or your and my shareholdings in general. They may be
there illegally barking up the wrong tree. However, with the company caught
off guard and the CEO out of the country, exerting or reestablishing those
rights were impossible, and may not yet be settled overnight. Remember
that GIFS itself is a Nevada corporation, and among actions possibly
available is to reexert authority out of Nevada and even possibly to change
the domicile or pass resolutions in Nevada that would move the company out
of Tennessee.
It is thought that Mohamed may be enroute back or at the least burning the
midnight oil with attorneys hoping to get a leg up in court, perhaps in
Nashville, Tuesday morning. There was some thought of halting trading at
the company's request to preserve the value of the stock at present levels,
but it is not known at this point who has the right or even the wherewithal
to put out a release or contact anyone about this. On the other hand, if
the company reexerts authority there may be more value to be achieved at a
lower level. All of this is obviously up in the air and everyone has to
work for his or her own portfolio. However, that aside, because we are not
going to offer advice here on that --- there are some things that can be
done to preserve your interests and to make sure you are positioned should
the Tennessee yokels be in there screwing up YOUR shareholder value, and
making themselves and their benefactors liable for damages.
Again, we don't know their side of the underlying situation here, but it is
durn might suspicious the way it was handled so we're not inclined at this
point to give these folks the benefit of the doubt. They're going to have
to get out front pretty damn quick and produce some evidence that they know
what they're doing, have a good reason for doing it, and can preserve
shareholder value if they're going to sit in Mohamed's chair, whether it's
for two hours, two days or two weeks. And they NEED TO KNOW that there are
other people involved out here beyond Mohamed. We have done some quick
additions and believe that the people on this list and others we've talked
to (one group that has 300k shares that will be in the thick of it
tomorrow), hold over half the float, to be conservative. We are not
without power and we are not without resources. And our first power is to
agressively question this situation!
We might add that Michael Rehtorik has chosen to be 'cooperative', and will
be in the office Tuesday morning at their request. They have not been
antagonistic towards him, although they do seem to be antagonistic towards
Mohamed, and rather than fight them and get tossed out the door, Rehtorik
and the staff are opting to follow the lead of whoever seems to have the
authority to call the shots. For the moment that appears to be the
'Conservatore'.
The name itself implies that it is Ms. Jean's job to 'conserve' the value of
the company, and that means that if there are interested shareholders there
is no reason you can't tell her what YOU consider to be her job vis a vis
your shareholder value at 423-266-7544 when the doors open in the morning.
As noted, if you don't reach Jean Bryant you may wind up talking to Martha
Davis, but that's okay, too. We don't see how they have any choice but for
one of them to take your call. And we don't believe that any of us have to
take 'no' for an answer. The fax # there is 423-266-7750.
You can properly demand to know if they know what they're doing and let them
know that you're holding them personally responsible should they commit
misfeasance (or is it malfeasance?) vis a vis your investments. You can
also let them know that you EXPECT them to preserve the share price, and
that to do that, it is your opinion (we all know that) that the value of the
company was going to be DRAMATICALLY ENHANCED by the sale of the CRIC unit
and you can properly demand as a shareholder that they DIRECT that that sale
be finalized, if it has not been.
You can also ask them how the hell they get off thinking they can take
control of your shareholdings in GIFS when their beef is with CRIC, no
matter the merits or demerits of that. You will probably think of some
other good questions, and don't hesitate to pop them right back here and
we'll pass them through.
Remember, Jean Bryant and Martha Davis have taken it upon themselves to
assume the position for the moment as your CEO and they have to know the
hornet's nest they are stirring up and the responsibility they have to YOU.
This is not an ordinary conservatory action. They are messing with YOUR
value. No matter what you do, it is obviously important that you do your
part to help your fellow shareholders in driving these points home, plus
anything else you want to ask. These are your legitimate rights, and if
they are legitimately assuming CEO duties, they have a responsibility to
respond.
That's not all ... there are others you can talk to, and ESPECIALLY if they
stonewall your legitimate inquiries. The Assistant Attorney Generals of
HickState (uh, Tennessee) who signed the order are Janet M. Klenfelter at
615-741-7403, Sarah Hiestand, 615-741-6035 and John Collier at 615-741-3756.
You can also call the Nashville Tennessean and let the editors there know in
no uncertain terms what you think of any response you get that is not
forthcoming or satisfactory. These are your rights, and we believe it is
important that they find out EARLY in the MORNING and OFTEN in the MORNING
that they are messing with YOU, and they better darn well be on good legal
grounds with exerting any kind of authority beyond the obvious and limited
authority some shareholders already believe they MIGHT have, depending on
the circumstances and depending on whether they are being USED by the
shorters, with CRIC itself. And there, they maybe should go to Sao Paulo
because that may be where CRIC is now.
One of the suspicious elements of this is that their legal documents in
exerting control went all the way back to SMUG ... this may be a way the
shorters are using to try to develop some sort of scenario whereby their
'ownership' of these invalidated, dilutive shares of theres may be deemed valid.
As noted, we would expect Mohamed to take steps to reassert his authority,
and unless the State can show that they can enhance shareholder value better
than Mohamed was doing or did until they stepped in, it would seem
appropriate as a shareholder to demand that they either reinstall the CEO or
see to it that the CRIC deal is properly and expeditiously closed. Also,
they better have some good answers as to what kind of communications they
have had with Lou Sitaris and gang from SMUG.
We know this is a bit of a shock, but don't know how that could be with
everything going on to date. Nothing at this point is surprising at this
end. The important thing is that now for the first time, as Waaco has
shown many times before, we have instant communications and a community of
interest on our side and the people taking these kinds of actions have never
had to confront this element before. In the past, shareholders might get
the word a couple of days later when it's all over except for the shouting.
We have the opportunity to intervene on our own behalves before they even
get their day started. This is shareholder power and we're sure it will be
used and reported back here to the benefit of all holders.
While it seems too early to take any kind of shareholder action, since the
standing for that would only be in the event of damages ... in other words
we're not sure shareholders can seek injunctive relief the way Mohamed can
... but if there are major holders on this list who want their attorneys to
address this in a legal way early Tuesday ... the proper person for service
appears to be:
Douglas N. Sizemore, Commonwealth of Tennessee Dept. of Commerce &
Insurance, 5000 James Robertson Parkway, 4th Floor, Nashville, TN 37243.
Good luck. This is not the place to write 'woe is me' letters. It is the
place to write information that the rest of us can exchange and USE in a
PRO-ACTIVE manner.
Also, if you want to protect your interests on the public boards, and you
see something posted that you feel is problematic, there is no reason you
can't let those reading KNOW you're being pro-active and enlist anyone's
help in contacting Jean Bryant and Martha Davis at 423-266-7544 or the Asst.
AGs Janet Kleinfelter at 615-741-7403, Sarah Heistand at 615-741-6035 or
John Collier at 615-741-3756.
If they can't answer you properly or reassure you of shareholder value, you
can remind them that the damn Chattanooga Choo Choo leaves at a quarter to
nine and there's a seat for them on that! The same as you would tell the
CEO of any company. They have to know they have taken this role and this
is how CEO's are treated if they don't act in your best interests!
Quick and decisive and totally unexpected mass reaction from the holders CAN
be effective. It's worth a shot, right? Let us know what happens (but
please, this is for WORKING holders not crying holders). Together we can
to some degree at least control our fates, and we're not laying down just
yet.
So we're only going to pass through ACTION REPORTS. Please don't clutter
the mail with anything else ... Also, please remember that we are acting in
the absence of a SAC moderator. We still persist in asking one of you to
step forward at this point so we can return to reporting not leading the
charge. We don't want to be in conflict here. Please step forward. We'll
send you the list and you're it!
P.S. At this point in time it would not be in our best interests to bother
Mike. He is currently not in charge and it does no good to jaw with him
about your concerns ... it only distracts him in a critical period. Nor
Mohamed. Until they reexert authority, if they can, it makes sense to put
the questions you would be asking them to the Conservatore and to the
Attorneys General who had the gall to think their authority exteneds up the
ladder from CRIC to your PUBLIC company. Maybe it does. We doubt it. But
it's their responsibility at this time to prove that to you, not the other
way around.
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