BEWARE:
The Corporate Hijacking – Fleecing the Stockholders
Joseph Arcaro filed the original application for appointment of a custodian on April 11, 2011. Arcaro is an old hand at creating and peddling public shells; he’s in fact known in some circles as “The Shell King.” In his petition for custodianship of Kitcher, he stated that the purpose of the action was “to continue the business of the corporation for the benefit of the corporation and its stockholders.” Interestingly enough, in support of the motion to be appointed as custodian (a fiduciary), Arcaro failed to disclose that he would not continue the business of the company and instead would create a public shell company to sell for use in a reverse merger transaction. The creation of the shell company would require that the interests of the company’s legitimate shareholders be wiped out with reverse stock splits while issuing new shares to Arcaro and/or the final shell purchaser. What is also interesting is that in two of those five cases, the custodianship action was stopped when the companies’ transfer agents—who are encouraged by the SEC to act as “gatekeepers”—objected, declining to provide shareholder lists to Arcaro. As is true in all custodianship hijackings, Arcaro committed fraud to obtain control of the public shell as a custodian.
The illegal Kitcher state court proceeding went without a hitch, and Arcaro was granted custodianship of the shell a little more than a month later, on May 24. Arcaro enacted a 1:40reverse split on June 13, 2011. He then lost no time finding a buyer for the shell. On October 14, he entered into a stock purchase agreement with Michael Ceccon, by the terms of which he sold 1 million shares of common stock to Ceccon. Three days later, Ceccon became the company’s sole officer and director, controlling the company with 57.14% ownership. A glaring omission in the filing is any account of Ceccon’s background. There’s a section for it, titled “Business Experience,” but all that’s noted below is “insert.”
