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Laidlaw and Roth, Cowen, Cannacord, etc. are no good.
Here is a link to our complaint:
https://pomerantzlawfirm.com/active-cases-rz/vhc
Folks can go to that page and review complaint and fill out form for more info.
Gustavo F. Bruckner | POMERANTZLLP | 600 Third Avenue, New York, NY 10016 | phone: 646.581.9941 | fax: 917.463.1044 | gfbruckner@pomlaw.com
response to Jeff Lease--- JWW on IV: fyi
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Msg 190083 of 190134 at 6/20/2020 3:05:52 PM by
nealhugh
edit | delete
The following message was updated on 6/20/2020 3:15:44 PM.
In response to msg 190080 by JeffsWaterWorks view thread
Reply to jl on substance
The entire complaint is useless and counter-productive and I certainly do hope they counter sue you for wasting everybody's time.--- Your opinion as the 'company man', OK.
I hope you deal with PITA and Manipulation of Share Price--- but you cannot, can you? I care more about that action for 9 months! than enrichment, plane and skybox... Power corrupts.
You never even suggested that the price of the jet rental is out of line (which I don't believe it to be). You also claim that the Larsons spent "millions" on their "private travel" which is just plain ignorant unless you're trying to say there was no business activity being done in Japan.--- My my jl--- YOU know how they USE the plane??? Tell us. You ever been on the plane?
Japan????--- mingmao said 'eoy '17'---THREE years ago.
You don't even attempt to show that the employees whose employment you question are not capable of functioning in those capacities (which I believe they are).--- KL and Short put their wife, son, 2 stepsons and son- in-law on payroll at very nice, HIGH salaries and options and perks, etc. Nepotism at work, at VHC, PUBLIC company.
And how come they would not let our MB poster Christopher Scott, Esq. run for BOD seat???
Think, jl, try to think. You are a 'liberal'--- why the restrictions???
You keep calling the company you "invested in" a patent troll, which is just plain stupid.--- I am not that concerned with VHC name-calling. MSM sucks, as I have mentioned to you re: Stuyvesant.
You claim to have been in contact with resellers but then also claim Gabriel to be useless. Every reseller I've talked to really likes what Gabriel does and what it is capable of doing.--- Oh really??? I said Short and his team are respected. I said that FL ISAO is using Gabriel nicely, per Mike Echols; SO, YOU lie again, jl, as usual: I have never said Gabriel is 'useless'.
And you say they 'really like', BUT what reseller has sold besides Asgard??? What do you know about the sales, margins, upkeep, maintenance???
Maybe, YOU know 0 as I have mentioned. You've just been 'had'.
You misrepresent the origins of the company.--- Huh? How? Came out of Short and Munger at SAIC, right? Tell us.
Your attack on the independent BoD members is laughable (oooohhh, the Columbia grad needs to point out that a self-made man never attended college).--- Who? Feiner, KL's personal guy?--- why is he there jl?
You also claim the company is making no money, but waited to file the lawsuit until after Apple3 was paid, to paraphrase a friend, "what kind of stupid are you?"--- Irrelevant. This was in the works for a long time BEFORE Apple III $.
If you think they might pay you to go away (because I have NO doubt this entire lawsuit is entirely about YOU)--- You are wrong, as usual. It amazes me how ignorant you can be... And you make no sense.
I also think you're crazy. KL didn't settle with Apple--- Yeah, I was told Apple offered $700+ million...so some say KL is just 'greedy'.
some internet board troll is only going to get more of the same if not worse.--- "Troll", says the company man... I have $ in the stocks I discuss.
(Borrow from your wife and you can buy too, jl, or get the paypal guys to help you, as usual. They pay for your ribs; same as VHC guys at the ASMs.)
I have been with VHC with $, and on this MB since Day 1 and before that, Yahoo... so watch your mouth jl.)
I also don't know a single shareholder that thinks they should settle this suit with you.--- What you think you know jl is not relevant.
There's more, but I'm sure you're foaming at the mouth by now and won't even attempt to comprehend what else i would say.--- "i" is right--- you are too small, off, and a 'nothing' to deal with properly. Company weakling.
But let's hear about PITA and Manipulation of Share Price!--- you NEVER deal with that. And you started the name-calling then jl!
and:
Are any of you 'bulls' paid to post?
How many of you, besides you and Landlord, do now or have had business with KL/VHC?
jl--- For a guy who says he is a liberal Dem, your positions on KL/BOD/VHC and Prime are simply disgraceful, hypocritical, and disgusting, as I have mentioned often here. Your Stuyvesant stuff is malicious and often libelous.
Enjoy your ribs at the courthouse in August!
from Stocktwits--- $VHC TY! IPcurious 6/18
For those attacking Neal about a "frivolous" lawsuit and think it may "hurt" their stock price, I am astounded that you have not addressed any of the FACTS Neal has brought to light.
Do you enjoy paying millions of dollars for KL's private plane that he LEASES BACK TO HIMSELF, paid for by you? Have you stopped for a second and asked what the stock price would be if KL didn't dilute the shit out of your shares to pay for his salary, his wife's salary his son's salary, his stepsons' salaries--- ALL DOING NOTHING for VHC?
It is absolutely nuts how you are willing to cover your eyes at all the wrongdoing that is being done to shareholders and instead take out your animosity on Neal, who is trying to bring some corporate governance to YOUR investment!
You call Neal's complaint frivolous; that is hysterical considering it is FACT! Those ridiculous compensation packages are FACTS. KL hiding his connection to PITA is a fact.
Shame on you. Kudos to you, Neal.
down 7.53% is not good sign---
Let's see how long Rosalind stays around...
They did this with KTOV for short time.
pomerantzlawfirm.com/active...
Tech Biz VirnetX's Brass Accused Of Bilking Millions
Law360 (June 9, 2020) -- VirnetX Holding Corp. has been hit with an investor's derivative lawsuit in Delaware Chancery Court claiming its CEO and directors have "bilked millions of dollars out of the company"...
...waste, unjust enrichment and breaching their fiduciary duty to the company. ...hold VirnetX's officers "accountable for years of self-dealing and knowing misstatements."
"In truth, VirnetX is a notorious patent troll, deriving substantially all of its revenue from extortionate 'licensing deals' and patent litigation."
Hurwitz alleges the company is "plagued by nepotism, waste, and corporate governance failures."
Larsen has engaged in an "unusual pattern of stock sales" and "appears to be attempting to monetize his holdings in VirnetX while the company's stock price is still artificially inflated."
I know the new Chairman.--- cool; tell us about him and your view.
I know the new business plan. DDC spoke about it on video a few weeks back.--- that was a few weeks back; you know current?
Hopefully they are done throwing sh*t against the wall and seeing what sticks.--- OK; are you buying stock? :)
nothing that wasn't already known.---you know the new Chairman? you know the new business plan?
They couldn't even tell you that their $100K+ order made it thru UK customs?--- new Chairman is in UK so we will know...
Since it appears most hemp farmers ate it in the shorts last year because they were unable to (A) find reliable customer to sell it to or (B) process the crop quickly enough so mold didn't ruin a vast majority of it, it's no wonder why Exactus decided NOT to grow a crop this year.--- nothing new... looks like about 50% of growers will not...
I guess it's a better strategy for them to pivot to act as a middleman for other farmers. Here, use my seeds and will we buy finished product from you so we can sell to our customers!--- that too, and more... I will check as we go along on progress.
Hopefully this is the last pivot they need to do.--- correct.
They have burned thru so much cash already.--- yes
Fortunately, they seemed to have hired someone who invested money in the company--- how much?
and now wants to protect his investment or imo make sure his money (loans) are repaid before the shareholders.--- whatever; I am attending to paying attention... will speak with AJ Monday again. DA on the BOD seems quite fine!
OK--- new Chairman, new BOD, new plan.
AJ, Derek and EZ are there.
I will speak with AJ again Monday.
Stay tuned.
I will know more after I speak with AJ and Colombian BOD Member today. Hold tight.
Should it be of concern that Bobby Yampolsky resigned as Chairman? Since he owns C2M, I think it sends a warning shot across the bow.--- Meaning???
Our largest stockholder, C2M, also competes with us and will continue to compete with us. C2M may require payments for business opportunities provided to us in exchange for its lost opportunities.--- I will ask about this.
During the year ended December 31, 2019, the Company received proceeds from the sale of the Company’s Common Stock of approximately $7.2 million.--- OK.
There wasn't much in the way of revenues $345K to offset that. But there was almost $5 million in professional and consulting expenses so I think I know where the money went to.--- I will ask.
Somehow I seem to have hit a nerve with you and I'm not sure why it bothers you so much. You should spend more asking the company why there is such as revolving door of personnel and stop taking AJ at his word. He's paid to be as positive as possible.
###
Ignorance always bothers me and you know 0.
I take AJ at his word since he was recommended to me by one I can trust. And he, EA and Derek are with the co.
Bobby is gone but I don't care.
I will know more after mtg manana.
TY, Neal
PS--- Am I happy we are down 60%--- no!!!
Somehow I seem to have hit a nerve with you and I'm not sure why it bothers you so much. You should spend more asking the company why there is such as revolving door of personnel and stop taking AJ at his word. He's paid to be as positive as possible.
###
Ignorance always bothers me and you know 0.
I take AJ at his word since he was recommended to me by one I can trust. And he, EA and Derek are with the co.
Bobby is gone but I don't care.
I will know more after mtg manana.
TY, Neal
PS--- Am I happy we are down 60%--- no!!!
tiger--- again, since you know nothing, why post?
Re: ALL VALID: Re: Law 360 --- pls call me if interested. Neal H. Hurwitz 212-666-6217. TY!
https://pomerantzlawfirm.com/active-cases-rz/vhc
Tech Biz VirnetX's Brass Accused Of Bilking Millions
By Archive
Email Rose Krebs
" href="https://www.law360.com/articles/1281235/tech-biz-virnetx-s-brass-accused-of-bilking-millions?ts_pk=3d48cc83-49a1-4c7e-88a3-36bf95e6ef3e&utm_source=user-alerts&utm_medium=email&utm_campaign=tracked-search-alert#" data-original-title="" title="" style="box-sizing: border-box; background: transparent; color: #0067b1; margin: 0px; padding: 0px; vertical-align: baseline; outline: none;" target="_blank">Rose Krebs
Law360 (June 9, 2020, 7:52 PM EDT) -- VirnetX Holding Corp. has been hit with an investor's derivative lawsuit in Delaware Chancery Court claiming its CEO and directors have "bilked millions of dollars out of the company" through years of excessive pay and self-interested actions.
In a suit made public Friday, stockholder Neal Hurwitz accused VirnetX's CEO, President and Chairman Kendall Larsen and other directors of corporate waste, unjust enrichment and breaching their fiduciary duty to the company. Hurwitz said his suit aims to hold VirnetX's officers "accountable for years of self-dealing and knowing misstatements."
He accuses the officers of "misrepresenting the company's business model and prospects in its SEC filings" while they have enriched themselves through excessive or unnecessary compensation. Initially filed under seal, the suit was made public Friday and comes months after Hurwitz filed another Chancery complaint that sought access to VirnetX's records to investigate potential wrongdoing.
In his December books and records suit, Hurwitz said he was concerned the software firm's CEO is running the company "as a personal piggy-bank" and that VirnetX isn't giving investors like him a clear picture of what's actually going on with the company's financial health.
There is a divergence between what the company claims as its business model and what it actually does, Hurwitz alleges.
"For over 13 years VirnetX has falsely held itself out as a publicly-traded technology company that 'develop[s] software and technology solutions for securing real-time communications over the internet,'" the more recent suit claims. "In truth, VirnetX is a notorious patent troll, deriving substantially all of its revenue from extortionate 'licensing deals' and patent litigation."
Hurwitz asserts the company has "spent years falsely touting its development of new patents and technology" and that the company's main software product, "a purportedly secure messaging program," has produced "no meaningful income for VirnetX and has attracted few users."
Instead the company has engaged in what Hurwitz called "patent trolling" by filing multiple lawsuits against major tech companies.
"From the beginning, the sole purpose of VirnetX has been to leverage its patents, many of which are now decades old and even predate the founding of VirnetX, in an effort to extort money from major technology corporations like Microsoft Corporation, Apple Inc., and Cisco Systems, Inc."
One of those suits involving Apple is headed for a retrial this summer in Texas federal court, with hundreds of millions of dollars in damages potentially at stake. In 2018, a Texas federal jury found that Apple's virtual private network systems infringed four VirnetX patents and ordered Apple to pay roughly $600 million, but the damages award was thrown out by the Federal Circuit, which ruled in November that Apple only infringed two of the four patents.
The case is now back in district court to settle the damages bill based on the trimmed infringement finding. Apple has argued that its customers do not use a redesigned version of its VPN On-Demand feature at issue in the case. The tech giant is also trying to strike down the patents at the Patent Trial and Appeal Board.
"The company's fortune rises, and falls based on the successes of its patent trolling activities," Hurwitz asserts.
But since the company's business model is focused mainly on "monitoring litigation and licensing deals," VirnetX should "be expected to have very little in the way of salary and overhead," the suit contends.
Instead, Hurwitz alleges the company is "plagued by nepotism, waste, and corporate governance failures."
"An incredible 33% percent of the company's employees are related to the company's top two executives and are paid exorbitant compensation while contributing little to nothing of value to the company or its stockholders," the suit claims.
The company has also paid "outsized and exorbitant compensation" to officers, including what Hurwitz alleges is millions spent on private air travel for Larsen and his wife.
Hurwitz flagged salaries of certain of VirnetX's executives, including Larsen's annual salary, which ranged from roughly $625,000 in 2016 to about $700,000 in 2018. He also asserted that Larsen has engaged in an "unusual pattern of stock sales" and "appears to be attempting to monetize his holdings in VirnetX while the company's stock price is still artificially inflated."
The suit seeks recoupment of "excessive and unearned compensation being paid to the executives, employees, and non-employee directors."
Allegations in the derivative suit are based, in part, on records obtained through his December records suit, Hurwitz said. Under section 220 of Delaware General Corporation Law, an investor can seek to have the Chancery Court compel a company to turn over records if the investor can show a proper purpose such as investigating wrongdoing.
"We consider this to be a nuisance lawsuit," a representative for VirnetX told Law360 Tuesday.
Counsel for Hurwitz did not immediately respond to a request for comment Tuesday.
Hurwitz is represented by Kurt M. Heyman and Gillian L. Andrews of Heyman Enerio Gattuso & Hirzel LLP, Gustavo F. Bruckner and Samuel J. Adams of Pomerantz LLP and Daniel Kuznicki of Kuznicki Law PLLC.
Counsel information for VirnetX wasn't immediately available Tuesday.
The case is Hurwitz v. Larsen et al., case number 2020-0425, in the Court of Chancery of the State of Delaware.
--Additional reporting by Mike LaSusa, Tiffany Hu, Ryan Davis, Dani Kass and Khorri Atkinson. Editing by Jack Karp.
For a reprint of this article, please contact reprints@law360.com.
Tiger--- you think? Since you know nothing, what could be 'funny' to you? Eh?
AJ, EA, Derek all on board.
Be circumspect.
TY, Neal
AJ, EA, Derek on board.
Just fyi: interesting:
Another CBD Suit Put On Hold While FDA Develops Rules
By Sam Reisman
Law360 (June 16, 2020, 10:10 PM EDT) -- A California federal judge has hit pause on a proposed class action alleging a Florida CBD company mislabeled its products, saying the suit can wait until the U.S. Food and Drug Administration releases long-awaited rules regulating the popular hemp-derived compound.
Monday's decision marks at least the third time this year a federal judge has stayed a consumer class action against a CBD company, pending anticipated FDA rulemaking, while citing the doctrine of primary jurisdiction, under which courts can defer matters where a regulator has primary oversight.
Following the analysis of similar decisions this year in California and Florida federal court, U.S. District Judge Morrison J. England wrote in his order that the FDA had full authority to regulate consumable CBD products and had made clear its intention to do so, making it imprudent for courts to rule on the matter and potentially produce inconsistent guidance.
The instant case was originally brought in September by Kenneth Glass against Global Widget LLC, which does business as Hemp Bombs, alleging that the CBD products he purchased from the company were labeled with incorrect dosage information and that he would not have purchased the products had he known they were not yet regulated.
It is one of several similar consumer class actions to hit the courts in recent months, following the broad legalization of hemp and the explosion of the hemp-derived CBD industry in 2019. The suits have generally alleged that the products were unlawfully marketed with unfounded claims about their curative properties and that the cannabinoid content of the products was misrepresented.
In the California case cited heavily by Judge England, which involved claims against CBD maker CV Sciences Inc., U.S. District Judge Virginia A. Phillips ruled in May that the dispute would benefit from regulatory clarity and issued a stay. Both Judge England's and Judge Phillips' decisions adopted the analysis of U.S. District Judge Ursula Ungaro's decision in January to apply the primary jurisdiction doctrine and stay a similar case in Florida federal court until the FDA issued its rules.
It did not take long for Judge England's decision to become, in turn, its own reference point in another CBD case. Global Widget, defending itself in another proposed consumer class action in Massachusetts federal court, filed a notice of supplemental authority on Tuesday, calling the court's attention to the recent order in the Glass case. The company had previously sought a stay of the case, pending the release of the FDA's rules.
The new California opinion was relevant to the Massachusetts case "because Global Widget is the sole defendant in both putative class actions, the Global Widget products at issue are identical or substantially similar in both actions, and the legal theories, claims, and necessary analysis are identical or substantially similar in both actions," the company said in its Tuesday brief.
The FDA has been warning CBD producers in recent months against making questionable or unfounded health claims about their products. More recently, the agency has particularly targeted CBD companies that have marketed their products as treatments or cures for COVID-19.
In November, the agency said it would not grant CBD a status of "generally recognized as safe." The agency's position since March is that "it is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement."
Counsel for Global Widget declined to comment. Counsel for Glass did not immediately respond to a request for comment.
Glass is represented by Neal J. Deckant, Frederick J. Klorczyk III and Brittany S. Scott of Bursor & Fisher PA.
Global Widget is represented by Sara M. Turner and Kyle A. Diamantas of Baker Donelson Bearman Caldwell & Berkowitz PC and Angel A. Garganta of Venable LLP.
The case is Glass v. Global Widget LLC, case number 2:19-cv-01906, in U.S. District Court for the Eastern District of California.
--Additional reporting by Jack Queen, Dave Simpson and Nathan Hale. Editing by Aaron Pelc.
For a reprint of this article, please contact reprints@law360.com.
.13--- better... Let's move (up!)
For over 13 years VirnetX has falsely held itself out as a publicly-traded
technology company that “develop[s] software and technology solutions for
securing real-time communications over the Internet.” In truth, VirnetX is a
notorious patent troll, deriving substantially all of its revenue from extortionate
“licensing deals” and patent litigation.
OK--- I am looking into it...
My question is what is Rosalind doing???
They were in KTOV strong and out...
Is this stock manipulation?
Two from Ros are on BOD now... interesting,
and they dismissed Jennifer and Barbara...
Rueckert quits BOD with angry note--- what happened???
He seems straight...
AND what happened with Marco Taglietti????
Give me answers please... :)
Might be a play up with Rosalind actions...
TY, Neal Hugh Hurwitz
on Facebook
and recall Sabby!!!???
2020-05-14 13D/A Rosalind Advisors, Inc. 701,500 9.90 --- why are they here???
2020-02-14 13G/A Altium Capital Management Lp 134,069 9.90
2020-02-05 13G Hudson Bay Capital Management LP 4,351 9.99
2019-02-14 13G/A Ayrton Capital LLC 0 0.00
2018-02-14 13G/A Renaissance Technologies LLC 0 0.00
2017-02-06 13G/A INTRACOASTAL CAPITAL, LLC 39,478 1.80
2017-01-31 13G/A Empery Asset Management, LP 0 0.00
2015-07-27 13G KOPIN MITCHELL P 1,589,141 6.80
2015-03-10 13G/A BlackRock Inc. 508,211 4.20
2015-01-08 13G/A Sabby Management, LLC 196,100 2.02
Waiting on Apple V and Schroeder and that is it.
I was around from Koly to Ladd. My friend put in $10 million to get Ladd control. Then there was Taney and Hobbs and Pomerantz sued for $8 million settlement--- Hobbs was a horror acc to people I spoke with.
I am in touch with James Pingpank.
Simpson was a hard worker I heard.
Rosalind was in KTOV when I was --- looks like some Israelis/Jews outof Toronto---
I have always been critical of the DCTH BOD--- Harold should be held accountable and Stoll.
Now--- who knows, but the upside is there IF FDA gets involved with this again. Pazdur killed them last time even tho Alexander was there. See DCTH on IV.
TY, Neal H. Hurwitz, NY NY Medellin Israel
OK--- and Dr's post is also germane:
"You're reading too much into trivial things!
EXDI owes me money, as they do to multiple other parties. Over the course of 2019 they went through $7-8 mil before we could get an enforceable judgement. Right now they don't have any money to pay anyone.
My wish, and I assume the wish of all other creditors, is for EXDI to revitalize, start making serious money and start paying off its debts. So we have aligned interests with longs here. If they could deliver on their promises, the debts are trivial, and I truly wish they could prosper. However, I don't see good trajectory from what has been disclosed, unfortunately.
That's all, it's a simple dispute over trivial amounts. You should base your investment decisions on the business of the company, not on side-shows."
Hey Tiger: pay attention to your own posting:
"An arbitrator has been appointed in the matter and on May 1, 2020 issued a procedural order suspending further proceedings."
So--- done, eh?
Law 360--- 'Nuisance', eh? KL can jump.
https://www.law360.com/articles/1281235/tech-biz-virnetx-s-brass-accused-of-bilking-millions?ts_pk=3d48cc83-49a1-4c7e-88a3-36bf95e6ef3e&utm_source=user-alerts&utm_medium=email&utm_campaign=tracked-search-alert
Tech Biz VirnetX's Brass Accused Of Bilking Millions
Share us on:
Law360 (June 9, 2020, 7:52 PM EDT) -- VirnetX Holding Corp. has been hit with an investor's derivative lawsuit in Delaware Chancery Court claiming its CEO and directors have "bilked millions of dollars out of the company" through years of excessive pay and self-interested actions.
In a suit made public Friday, stockholder Neal Hurwitz accused VirnetX's CEO, President and Chairman Kendall Larsen and other directors of corporate waste, unjust enrichment and breaching their fiduciary duty to the company. Hurwitz said his suit aims to hold VirnetX's officers "accountable for years of self-dealing and knowing misstatements."
He accuses the officers of "misrepresenting the company's business model and prospects in its SEC filings" while they have enriched themselves through excessive or unnecessary compensation. Initially filed under seal, the suit was made public Friday and comes months after Hurwitz filed another Chancery complaint that sought access to VirnetX's records to investigate potential wrongdoing.
In his December books and records suit, Hurwitz said he was concerned the software firm's CEO is running the company "as a personal piggy-bank" and that VirnetX isn't giving investors like him a clear picture of what's actually going on with the company's financial health.
There is a divergence between what the company claims as its business model and what it actually does, Hurwitz alleges.
"For over 13 years VirnetX has falsely held itself out as a publicly-traded technology company that 'develop[s] software and technology solutions for securing real-time communications over the internet,'" the more recent suit claims. "In truth, VirnetX is a notorious patent troll, deriving substantially all of its revenue from extortionate 'licensing deals' and patent litigation."
Hurwitz asserts the company has "spent years falsely touting its development of new patents and technology" and that the company's main software product, "a purportedly secure messaging program," has produced "no meaningful income for VirnetX and has attracted few users."
Instead the company has engaged in what Hurwitz called "patent trolling" by filing multiple lawsuits against major tech companies.
"From the beginning, the sole purpose of VirnetX has been to leverage its patents, many of which are now decades old and even predate the founding of VirnetX, in an effort to extort money from major technology corporations like Microsoft Corporation, Apple Inc., and Cisco Systems, Inc."
One of those suits involving Apple is headed for a retrial this summer in Texas federal court, with hundreds of millions of dollars in damages potentially at stake. In 2018, a Texas federal jury found that Apple's virtual private network systems infringed four VirnetX patents and ordered Apple to pay roughly $600 million, but the damages award was thrown out by the Federal Circuit, which ruled in November that Apple only infringed two of the four patents.
The case is now back in district court to settle the damages bill based on the trimmed infringement finding. Apple has argued that its customers do not use a redesigned version of its VPN On-Demand feature at issue in the case. The tech giant is also trying to strike down the patents at the Patent Trial and Appeal Board.
"The company's fortune rises, and falls based on the successes of its patent trolling activities," Hurwitz asserts.
But since the company's business model is focused mainly on "monitoring litigation and licensing deals," VirnetX should "be expected to have very little in the way of salary and overhead," the suit contends.
Instead, Hurwitz alleges the company is "plagued by nepotism, waste, and corporate governance failures."
"An incredible 33% percent of the company's employees are related to the company's top two executives and are paid exorbitant compensation while contributing little to nothing of value to the company or its stockholders," the suit claims.
The company has also paid "outsized and exorbitant compensation" to officers, including what Hurwitz alleges is millions spent on private air travel for Larsen and his wife.
Hurwitz flagged salaries of certain of VirnetX's executives, including Larsen's annual salary, which ranged from roughly $625,000 in 2016 to about $700,000 in 2018. He also asserted that Larsen has engaged in an "unusual pattern of stock sales" and "appears to be attempting to monetize his holdings in VirnetX while the company's stock price is still artificially inflated."
The suit seeks recoupment of "excessive and unearned compensation being paid to the executives, employees, and non-employee directors."
Allegations in the derivative suit are based, in part, on records obtained through his December records suit, Hurwitz said. Under section 220 of Delaware General Corporation Law, an investor can seek to have the Chancery Court compel a company to turn over records if the investor can show a proper purpose such as investigating wrongdoing.
"We consider this to be a nuisance lawsuit," a representative for VirnetX told Law360 Tuesday.
Counsel for Hurwitz did not immediately respond to a request for comment Tuesday.
Hurwitz is represented by Kurt M. Heyman and Gillian L. Andrews of Heyman Enerio Gattuso & Hirzel LLP, Gustavo F. Bruckner and Samuel J. Adams of Pomerantz LLP and Daniel Kuznicki of Kuznicki Law PLLC.
Counsel information for VirnetX wasn't immediately available Tuesday.
The case is Hurwitz v. Larsen et al., case number 2020-0425, in the Court of Chancery of the State of Delaware.
--Additional reporting by Mike LaSusa, Tiffany Hu, Ryan Davis, Dani Kass and Khorri Atkinson. Editing by Jack Karp.
For a reprint of this article, please contact reprints@law360.com.
No--- we are holding.
How about JCPNQ... :)
Re: Filed 6.5.20 --- call me if interested. Neal H. Hurwitz 212-666-6217.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
NEAL HURWITZ, on behalf of VIRNETX HOLDING CORPORATION, Plaintiff,
v. KENDALL LARSEN, ROBERT D. SHORT III, GARY FEINER, MICHAEL F. ANGELO, and THOMAS M. O’BRIEN, Defendants,
VIRNETX HOLDING CORPORATION, a Delaware Corporation, Nominal Defendant.
VERIFIED STOCKHOLDER DERIVATIVE COMPLAINT FOR BREACH OF FIDUCIARY DUTY, UNJUST ENRICHMENT, AND WASTE OF CORPORATE ASSETS
Will the company survive, and do well, are all that matter now.
I am trusting AJ too. Emiliano and Derek and Puzder.
Bobby???
Meanwhile, it has been rough and not happy at all.
Dr--- yes... and what about Q1?
AJ said there are sales in Q1--- $700K if I recall...
and there are orders...
We shall see.
The big deal is will this survive.
See HS post.
TY, Neal
Tiger--- your opinion is welcome.
I was trying to give you an out because it was much more diplomatic than saying you were gullible.--- 'gullible'???
But who knows you, the actor may save the company in the end.--- actor???
The repriced options may give him the incentive to make sales at ANY cost because what the executives need the most right now is cash flow to pay their salaries and a rising share price to eventually cash in their options. And at some point, the other executives will get their options repriced too.--- AJ said they had sales Q1. And they have orders he says.
All IMO.--- si. I have no opinion really, just trying to keep up with reality and info.
Tiger--- what you write is not proven at all.
The point is and has always been that this company was very suspect--- ??? from the start yet it was continued to be pushed down--- ??? investors throats (here and IV)--- ??? that was a top notch management team with a corporate mouthpiece who was wildly optimistic about their story.--- overstated, but OK... they said they did well with the planting.
At least you have recognized in the last three months that actual results apparently were not in line with what they were presented to you in your private conversations months before.--- OK...
I feel bad that you were blatantly deceived.--- ???'blatantly deceived'??? How do you KNOW that???
Note: This year’s Annual Stockholders Meeting will cover the business issues addressed in your proxy materials. There will be no informal presentation.
tiger--- as they said: they are not planting;
GG and Levor gone.
Etc.
Do you have some substantive contributions to make here?
tiger--- we know all that, so:
what is your point?