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Technology Stocks : Blank Check IPOs (SPACS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (2051)	12/12/2009 10:34:18 AM
From: Glenn Petersen	Respond to of 3862

On May 15, 2009, the shareholders of Pinpoint Advance voted to liquidate the trust fund. They also voted their approval to change the company's charter so that it could continue its corporate existence. The company has filed a $10 million lawsuit against Elbit System, arguing that it illegally backed out of an agreement to sell a controlling stake in its Kinetic Systems subsidiary to Pinpoint. Pinpoint sues Elbit Systems for backing out of Kinetics sale By Yoram Gabison Elbit Systems is being accused of bad faith in its negotiations in mid-2008 to sell its controlling stake in subsidiary Kinetic Systems to Pinpoint Advance Corporation. Pinpoint is suing Elbit Systems, its CEO Jacob Gadot and Kinetic (now a wholly owned subsidiary of Elbit Systems) in the Petah Tikva District Court, for NIS 37 million in damages. Pinpoint is a SPAC - special-purpose acquisition company - that raised $30 million in April 2007 on the Nasdaq bulletin board. Under American law it had to obtain the shareholders' approval for an investment within 18-24 months, or return their money. Advertisement This legal structure exposes a SPAC's founders to the risk of having to finance the company's operations from their own pocket until the end of its existence within two years. Pinpoint founders Adiv Baruch, Ronen Zadok, Yaron Schwalb and Yoav Schwalb allege that this risk materialized for them, due to the misconduct of Elbit Systems and its representatives regarding the negotiations over Kinetic. The putative buyers were approached by Elbit Systems in 2006, which suggested they buy part of its stake (then 56%) in Kinetic. Elbit Systems cited poor relations with the minority shareholders, Menahem Yam-Shahor and Keinan Refaeli, the claimants charge. According to the suit, Elbit Systems planned to merge Kinetic into Pinpoint following an exchange of shares, based on the idea that a merger of Kinetic with Pinpoint would make it easier for Elbit Systems to sell the rest of its Kinetic shares. Elbit Systems and Pinpoint negotiated until July 2008, based on sales forecasts provided by Kinetic for 2008 and 2009. The two signed a letter of intent in July 2008, for Pinpoint to buy 36.5% of Kinetic from Elbit Systems for $27.7 million in cash, and Pinpoint would merge into a subsidiary of Kinetic, which would allocate shares to Pinpoint's owners. The agreement even set compensation for Kinetic's shareholders if the company's operating profits exceeded $13 million in 2009. Pinpoint's founders claim that Elbit Systems knew Pinpoint had to finalize the deal by October 18, 2008, and that Pinpoint had other investment offers that it chose to let slide in favor of the Kinetic deal, based on the letter of intent and the founders' belief in Elbit Systems' good faith. Elbit Systems claims the letter of intent did not develop into a binding agreement due to new information at Kinetic and a dispute between Elbit Systems and Kinetic's other shareholders. The parties were supposed to meet on October 10, 2008 to finalize the agreement, which was to be signed on October 12. While representatives of Elbit Systems and Pinpoint were working on the wording of an announcement to the press, however, Gadot informed Yam-Shahor that Kinetic had received or was about to receive a new order that would boost Kinetic's profits in 2009. Gadot then informed Yam-Shahor that Elbit Systems was exercising its right not to sign the agreement due to that information. Pinpoint now claims that Elbit Systems negotiations for the sale of Kinetic were not conducted in good faith, but rather in order to set a market price for the minority shareholders in Kinetic, based on the negotiations with Pinpoint. haaretz.com