Jean Paul
A court found in favor of the 2 funds and SLMU must either pay the 2 funds the $5.5 million they owe or SLMU will be forced to give back ARISE or the 2 funds will takeover SLMU.
I dont know all the legal ramifications here, but if I were to take a guess:
1. SLMU will either pay back the 2 funds the $5.5 million throughissuing stock in the company. The 2 funds will sell the stock at any price becuase they will continue to sell until they get their money back. This will result in SLMU being in the 0001 share price range.
2. The 2 funds take over SLMU, terminate all current SLMU management and insiders, and then they would hire a real management team to run the company. Arise assets would stay in SLMU.
3. A settlement can be made between SLMU and the 2 funds resulting in the 2 funds taking possession of Arise business.
Then the funds would move forward by either
--- placing Arise into 1 of their portfolio companies
--- selling Arise to the highest bidder
--- hiring someone to run Arise as a private company
I dont know of too many other options.
There has been message board postings here that state a settlement has been reached....I dont believe that to be true.
1. If a settlement were reached, SLMU would be obligated to file an 8K
2. If a settlement were reached, what is it.
Whether 1 fund, or both funds settle, the 8K would have to be filed by SLMU.
On top of everything, I would imagine the 2 funds are going to stick together on this law suit and NOT break up in which 1 fund would settle.
Furthermore, I see no incentive for them to settle.
As per the court order, SLMU's only option is to increase authorized shares and start giving the 2 funds shares so the 2 funds can get their $5.5 million back.
SLMU has no leverage to settle, for example - they have no money. I can understand if they had $2-4 million and they negotiated the $5.5 million down, but SLMU has no money.
More importantly, the only revenue being generated at SLMU is from Arise business operations, hence, the 2 funds can claim all of the positive cash flow (if any) for themselves.
