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My initial take would be no. The winding up process under this section specifically that the receiver can prosecute suits but may not continue the business ... "and of enabling them gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities and to distribute to their stockholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized."
I do not know if that means that, if we had a license in the works, he could not continue to pursue it with the purpose of selling it as part of the winding up process.
That was the same lame excuse ex-management (by order of the court now) used to keep the board in the dark. It costs too much to allow you (the board) to know what is actually going on. You can't talk to our attorneys and we have instructed them not to talk to you.
I am not a Delaware guy, but the section immediately prior to section 279 which talks about a receiver states that the corporation could be continued for three years or longer in order to properly wind up its affairs. This does not need to be a fire sale. What I would like to know is if we, the shareholders, can ask the receiver to continue the T-Mobile suit with a contingency attorney.
§ 278. Continuation of corporation after dissolution for purposes of suit and winding up affairs.
All corporations, whether they expire by their own limitation or are otherwise dissolved, shall nevertheless be continued, for the term of 3 years from such expiration or dissolution or for such longer period as the Court of Chancery shall in its discretion direct, bodies corporate for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities and to distribute to their stockholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized. With respect to any action, suit or proceeding begun by or against the corporation either prior to or within 3 years after the date of its expiration or dissolution, the action shall not abate by reason of the dissolution of the corporation; the corporation shall, solely for the purpose of such action, suit or proceeding, be continued as a body corporate beyond the 3-year period and until any judgments, orders or decrees therein shall be fully executed, without the necessity for any special direction to that effect by the Court of Chancery.
http://delcode.delaware.gov/title8/c001/sc10/index.shtml
Be careful that you do not overextend the authority of a Delaware receiver. He is not a receiver in a federal bankruptcy who has power in all fifty states. His ability to do anything about the 2006 judgement, which occurred while the company was still in compliance with most rules in a Texas courthouse is probably nil.
As much as I don't like it we may have to work with the last agreement considering the limited mandate of the court.
That was the reason why I was so pissed off when Storm made his now infamous statement at the Shareholders Forum that we would still owe the judgement if we won the case. If we won the case we would be enforcing the terms of an agreement where he already vacated the settlement, not trying to void that agreement.
Storm SHOULD be on the list of people the receiver sues to get money to distribute to the shareholders.
Sosa has a point. We need to be looking at what it will take to maximize the return to the shareholder. Broadening the powers to allow him to finish the T-mobile suit would not be a bad thing in my opinion.
Because it is still reality until the receiver changes it.
Diac never complied with the settlement terms. No surprise. He waited to see what would happen ... and probably will continue to wait until forced to comply by the court. Again, no surprise.
In this respect the receiver will be in a better position to deal with Diac.
Remember, he obtained a default judgement against the company for an unlawful contract, got millions of shares of stock, and rather than help the company succeed to see the value of his shares go up, he sucked the company dry of any funds it had and then tried to sell the patent. In my opinion not someone you can trust. His interests in this will be as a creditor, not as a shareholder.
For once I agree with you.
After all this time you really have to ask how Sosa obtained a document that only management could have in its current form ... or how he could know that managements plan was to stack the board to allow it to issue 200,000,000 shares, but apparently not hold a vote on board membership.
No matter now. There is no management. There is no board. Only a receiver.
I haven't see anything but I am assuming it was from management based on the recent influx of posts by management supporters.
Who was the response from?
I agree with your legal logic, and I also doubt that Turrini will see a dime if there is any proof of embezzlement. He may actually end up owing the company money, but Diac will be a more sticky matter.
More important, why would you ever agree to a term in a settlement that you knew you could not fulfill? Why would you set the company up for failure with Diac a third time in a term that was not authorized by the board? Heck, why would Diac want another 7M shares? More of the enigma that was management.
My guess is that it was part of a gambit to ensure the shareholders had no choice but to authorize the additional 200,000,000 shares. A more reasonable alternative is that they would buy them on the open market once they had an investor. Or maybe DSU was right all along. I just don't see why it was so important to add that term if you already had an agreement.
It is not really important anymore. The receiver probably won't spend a lot of time trying to figure it out. He will spend some time figuring out how to maximize return which may mean suing management for embezzlement. Civil suits, not criminal. but only for what is easy to prove and not if there is nothing to get in return.
Not sure how much will change with Diac. Unless he can go all the way back and vacate the default judgement, which I seriously doubt he has the authority to do, he will be forced to try to modify the current agreement into something that can actually be paid.
I am curious if the shareholders can petition him to continue the T-mobile litigation via a contingency attorney with the argument that it would maximize returns and allow him to meet the companies obligation to Diac. I guess now we wait and see.
That is a pretty honest assessment. I was hoping to maintain this as a going concern but that was not to be. There was no money and no realistic plan. Not unsurprising. At least from here on out the shareholders will know the person in charge is working to maximize return for them. Sad it had to be this way.
Now we wait to see how the receiver handles things.
I would love for you to do that. How can I help?
The answer is as it stands now with Williams.
I don't think there is anything in the law that would grant the judge that authority ... and while a shareholder's meeting might be a solution I think the current situation is going to require a more drastic solution. I am betting on the Custodian. It sounded like there was sufficient testimony to show that the company had the ability to be financially viable so I don't think the custodian's mandate will include dissolving the corporation unless all other options are closed.
Again, just a guess.
So Turrini fancied himself assistant general corporate council at the time that we failed to show up in court and Diac won the $116M default judgement. I am going to love to hear what Turrini, attorney at law, considers a material event.
Thanks again.
So it appears from the judge's point of view that Williams has more knowledge of corporate rules and more business sense than Turrini, Pierce and Carlo combined. Wonder if the judge will appoint Williams as the receiver for the company.
This has been discussed way back when. But like anything else on this board, it is just us talking. Someone in management actually has to do something.
You hit on the problem I am having with having your business plan be getting a new investor to give us a couple of million dollars. What exactly are you going to use it for, how are you going to accept it as a loan or are you going to issue new shares, and how does any of this benefit current shareholders?
Issuing 200 million new shares at a penny or two each will get you 2-4 million dollars but it will make my shares worth have of what they were before. What do you need $2million for? $300K for financials on the high end and another $100 or so for legal fees for compliance but beyond that what? Pay for management and some new office furniture I suppose. But nothing that will really make us any money. Maybe it is all for the good but I don't see how.
Don't need $2million for a contingency attorney and that brings in money. Just takes time.
Kinda my point. Dave was the cautionary tail that Pierce should have listened to.
Keep pumping money in with nothing coming out was part of what I think drove Diac to force the company to litigate against T-Mobile. As I recall, Turrini preferred talks.
I am just curious. Seems to be his standard line. I was surprised that Pierce fell for it. She seemed inexperienced and naive but not particularly stupid. Either that or she was not part of the game that Desmond was playing with me.
The other thing that amazes me is that some of the shareholders see investors as the answer rather than simply going after T-Mobile, which, if done right, costs nothing. Investors are not the answer, profits are. But many people see it the other way around.
What I find interesting is that Pierce was falling for Turrini's scam. Sir H. said that Pierce's family had thrown in to the tune of about $30,000. I remember Pierce telling me that her mom was in for about $10K shortly after she became CFO. Desmond had told me that Turrini had a big investor but that it fell through so they were looking for money.
Sir H, was there any testimony regarding how many times Turrini claimed that he had a big investor ready to invest but something happened that was not his fault that caused the deal to fall through?
Sir H, I also find it odd that you were allowed to stay -in that the courtroom was not cleared if what was being testified to was truly confidential, but if you are not comfortable disclosing what the different terms were that is your choice. It is enough for me that you have shared what you have.
Thanks
Sir H, can you shed any light on the testimony regarding how we lost the contingency attorney? When did it occur and the circumstances.
Ans again, thanks for all you have done.
The Judge can decide the law but I am interested in the facts as testified to. I give a little more credence to what is said in open court under oath versus what is said at a stockholder's forum or in a PR.
Someone here stated that there was testimony to the effect that Williams forced a contingency attorney to quit. Can you shed any light on that?
Maybe at the trial in Delaware, not at the Forum in California.
I think you and I are talking about two different things. Sorry for the confusion.
So, you are saying that at the forum no one asked Turrini about his criminal record but Williams was asked about his? That is what you are saying?
I did not need to be at the forum, I can watch the video.
Being a Delaware Chancellery Judge, with Delaware being the jurisdiction of choice for corporations, I am sure he has heard it all. He will see through all the parties. He will make a solid judgement. I just believe the law really only offers one option.
I am also sorry I am not being clear. I guess we just come at this from different viewpoints. My guess is that we are not that far apart, but this medium does not really lend itself to consensus. It is great for creating dissension.
This battle was unfortunately inevitable. I just hope the outcome has some finality to it so that we are not back in the same court again in twelve months.
Clearly we do not share a moral code because you have no problem with people lying or stealing from you. As an investor or a business person those are pretty high on my list of things I don't want people who are in charge of my money to do.
Yes, who asked?
Yes, you have it right. Theft is significantly different than assault.
You don't see any of us complaining that Turrini has a restraining order because he allegedly mistreats his female companions. Not really relevant to the operation of the business. Theft is.
If he would have come clean at the Forum than things might be different, but he chose to be less than honest. Strike two.
The judge will determine whether there was a third strike somewhere in his testimony that will mean he is outta here.
You are going to have to explain because I don't see how.
Turrini was asked at the Forum about allegation of a criminal record. He denied he had one. He may have been accurate but he was not honest.
I am unaware of any time when a shareholder publicly asked Williams, Pierce, or Walsh about their criminal record.
Nobody at the Forum asked about Williams' criminal record. Turrini was asked point blank and lied, if not directly then by omission. Also Turrini was prosecuted for theft which is relevant to corporate governance and management. Williams was arrested for defending himself. Therein lies the difference.
It will be interesting to hear a more about the specifics of the testimony but so far nothing that has come out that is drastically different from what we've come to believe. Pierce is still willing to lie to a judge (I haven't had time to check my phone records since December?); Turrini is still a thief (a prosecutor in Miami is not going to waste time going forward with a case against someone with no prior criminal record who accidentally picks up the wrong bag and gives it back); and Williams is still the guy you want to bring to a gunfight (took a sub machine-gun away from a Saudi guard!).
It seems that whatever was mentioned in open court regarding the settlement and was not objected to by one of the two lawyers is now a matter of public record.
The one thing that bothers me is the testimony that we had a contingency attorney and lost him because he could not handle Williams' emails. I would really like to know a little more about that.
... and thanks again Sir H or everything you have done and continue to do.