To: WhiteKnight who wrote (4369 ) 3/26/1999 8:04:00 PM From: WhiteKnight Read Replies (1) | Respond to of 4571
Brush Creek Mining and Development Co. Inc. 11117 Lower Circle, Grass Valley, CA 95949 (530) 477-0834 Fax: (530) 477-6020 March 25, 1999 Sigmund S. Wissner-Gross Heller, Horowitz &Feit, P.C. 292 Madison Avenue NewYork, N.Y. 10017 Gentlemen: I am in receipt of your correspondence, which claims you represent seven Brush Creek or former Brush Creek shareholders. I have held many discussions with David Mersereau and can assure you that his claims are without merit. I have been told by Howard Kalodner, former Dean of the Western New England College of Law, Board member of Brush Creek, and participant in the same private placement offering as your clients, that the company did use its best efforts and that no specific guarantees, deadlines, penalties or consequential damages were incorporated into the private placement offering. The company is not aware of any fraudulent inducement and certainly by the fact that the registration statement was filed when the company had the funds to complete the filing, this should indicate that your statement that the Company never intended to honor their contractual obligations is false and without merit. The company did, in fact honor their obligations without litigation or additional involvement of your clients. I took office on November 15, 1998 after the company had filed notice of its intent to file bankruptcy. I have worked without salary, advanced funds to pay for the company's audit and filing of 10-k and 10-q reports, negotiated settlements of law suits, and entered into a merger agreement to raise $10 million for the company so that it may avoid bankruptcy. If you seek injunctive relief to impede the pending merger, the company will file bankruptcy and ask the trustee to sue you for consequential damages. Your threatened lawsuit is pure highway robbery. I will not tolerate it. You do not need to seek injunctive relief to void the pending merger. You need to provide constructive proof that you want the merger to be completed. I will resign upon receipt of your lawsuit and cause the shareholders to seek a class action lawsuit against your firm and your clients for your attempt to interfere with my efforts to save this company. I will use the bankruptcy petition to obtain an automatic stay of your lawsuit. Your clients invested approximately $100,000 and are claiming lost profits of $3.3 million because they were not able to sell their shares a few weeks before the company obtained a $9 million funding commitment from Sterling. The likelihood that they would have wanted or known when to sell their shares to obtain the highest price is certainly questionable. The company had never had any revenue, never has to this date had any revenue, has lost over $50 million in gold exploration, and you believe they are entitled to $3.3 million in lost profits on potential stock sales. This is absurd. The entire dollar volume of stock sold in the company since your clients invested has not totaled $3.3 million. The few shares that sold for these prices could not have sustained even a few thousand shares of selling, much less 1.5 million shares of selling by your clients. I propose to offer the following settlement. If your clients, represented by 75% of the shares purchased, desire to provide a settlement and release of any claims, prior to April 30, 1999, I will agree to continue using my best efforts to complete the merger. If I do not receive such constructive evidence of your assistance in settling your client's claims, I will resign effective April 30th. If I receive a lawsuit from your firm, I will immediately resign and cancel my efforts to save the company from bankruptcy. The choice is yours. Either your clients take a positive action to provide me assurances you aren't simply going to wait and file your suit after the merger, or I will look for another tax loss carry forward company who's shareholder's aren't total idiots. Please be assured I will post this correspondence on the Yahoo bulletin board so that all shareholders who want to take action against you will know exactly who and why to file a class action suit against your firm and your clients for your threatened interference. I have had it with David Mercereau's bullshit. As a stockbroker, he should probably be more concerned with his SEC violations than those of the Company. His participation and fees in a private placement are prohibited by NASD rules. His motives in this threatened lawsuit seem to be his attempt to divert criticism from his recommendations and involvement in selling the private placement shares rather than as an injured party. How much has David Mercereau profited from his commissions (and shares received) while everyone else lost money? Perhaps he should be returning money to your other clients. Sincerely, Larry Stockett The White Knight with No Tolerance for Greedy Idiots