Having a hell of a time clearing legal, but here is some info from me on the trading issue, will get the rest out as soon as I can.
I have had numerous conversations with the current management of Copper King. They are hard at work handling the tasks necessary to begin rebuilding the company. We are all somewhat constrained in what we can say to the public (the truly substantive information must be provided first through the Court) but there are some things I can provide minor updates on.
First, one of the major issues all of us are concerned about is the trading issue. My understanding is that all of the problems surrounding the Complaint from the SEC have been resolved as far as the Company is concerned. There are ongoing SEC actions against some of the individuals named by the SEC and there may be others to be named later, but the Company, as an entity, is not subject to those actions at this point.
Satisfying the requirements of the Depository Trust Corporation is the problem now. Lee Abbott, representing the Board of Directors, has had ongoing conversations with the DTC and it’s legal department. He has also talked with several attorney’s and broker dealers who are familiar with DTC policies and procedures. He has been searching for the best way to get quickly get the stock trading again but has run into one “road block” after another.
DTC procedural policy sets up a somewhat cumbersome set of requirements for a company with the past history of Copper King to re-establish trading once it has been halted. It turns out in the case of Copper King that the trading was halted not so much because of the SEC actions as because of the combination of the SEC actions and the performance of the stock (read price per share) immediately prior to the suspension of trading.
As it has been explained by the DTC one way for Copper King to begin trading again is for the Company to prove, by using the books and records of the Company, that all of the shares now outstanding were issued legally. Once that process is completed and an Attorney has issued a legal opinion, the next step is to find a Broker Dealer who is willing to accept the liability placed on them by the DTC as a “Sponsoring Broker.” The Broker Dealers who have been spoken to have indicated that they might be willing to back Copper King if the Company could provide proof of legality sufficient to satisfy the legal counsel of the B/D. A process Copper King would need to pay for.
Obviously the Company cannot provide any documentation showing that all of the Capital Stock was legally issued because it probably was not. The allegation that Company Stock was not legally issued is a part of the SEC Complaint and even though the people who may have facilitated the issuing of the stock in question are no longer part of the Company, that does not negate the Company’s responsibility to any B/D or to the DTC.
Besides the problem of proving all shares were legally issued the Company is also required to provide financial statements that have been properly prepared and audited by approved auditors. As will be explained later (hopefully today) Copper King is not yet in a position to begin an audit.
Another option the Company is considering using to re-establish trading is to use the Bankruptcy Court or some other “court of competent jurisdiction” to issue an order requiring that trading be restarted. Of course, there are also some requirements put on the Company if we use this option.
