This Article is Huge!! Says Koppelman could become New CEO;
Georgia-Based Medient Studios CEO Forced Out Amid Pressure, Lack of Confidence
Staff Report From Georgia CEO
Thursday, June 12th, 2014
Manu Kumaran, founder and CEO of Medient Studios said in a statement that he has been forced out of the company. Georgia CEO has not been able to confirm further details or who will take over as CEO.
In March 2013, Medient Studios (MDNT) announced a deal with the Effingham County Industrial Development Authority to develop a movie studio, entertainment facility and campus in Effingham County, Ga. Medient plans to create over 1,000 jobs and spend an initial $90 million on the 1,500 acre property. Mr. Kumaran, called the $700 million project a “Disneyland meets Googleplex mega campus.” Georgia CEO reported on the company and its challenges in May. (See the full report here)
Below is Kumaran's statement as released to GPB Savannah last night.
"A number of illegitimate actions, in my view, have occurred over the last 48 hours, which have allegedly removed me as an Officer, Chairman of the Board, and majority voting rights holder of the company. In my view, these matters should be more comprehensively discussed in a forthcoming 8K. Bear in mind that the 8K filing is from the perspective of those persons who have taken these actions against me. I intend, as promptly as possible, to take such legal actions as my counsel deem appropriate to reverse the actions against me. Needless to say, Medient is my baby and I am stunned and deeply saddened by the events of the past 48 hours but this isn't over just yet. ~Manu Kumaran”
Thus far there has not been a filing with the SEC explaining Mr. Kumaran’s departure. However on June 10th, activist investor Tim Stabosz disclosed a 5.4% position in the stock. Storage Newsletter says that Mr Stabosz is a long time 'deep value' investor, looking for turnaround situations in areas of the market he considers to be extremely inefficient, with an emphasis on underfollowed microcap, and low-priced stocks.
In the filing Mr. Stabosz says while he believes the company has a visionary business model, he is very disappointed that company management has seen fit to pay off company liabilities through massive issuances of common stock. He believes that this represents poor financial planning, and that it damages the willingness of long term investors to commit to the company's vision. Further, according to Mr. Stabosz, the "company has gone through the functional equivalent of a prepackaged bankruptcy, with the increase in common shares outstanding from 40 or so million, in the fall of 2013, to the most recently reported 661 million. The notion that management has "no other options," other than massive share issuances, shows the desperate need for Medient to find candidates for its board of directors with experience in finding more appropriate, and legitimate, sources of capital, that do not damage the company's image and reputation in the investment community, and where common stockholders can feel that their equity ownership is PROTECTED, rather than cannabilized."
See the full filing here.
Some speculate that Charles Koppelman will become CEO. Mr. Koppelman was named to the board in December of 2013. He currently serves as chairman/CEO of CAK Entertainment, a brand development firm that provides advisory work for such artists as Jennifer Lopez, Marc Anthony, Nicki Minaj and Adam Levine. He's also currently a board of directors member of Six Flags Entertainment Corp. Over his career, TK has enjoyed entertainment industry stints as chairman/CEO of Martha Stewart Living Omnimedia, chairman/CEO of EMI Records and chairman of Steve Madden.
