Investor Seeks 'Phantom Pain' Device Co.'s Shareholder List
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Law360, Wilmington (October 4, 2017, 4:24 PM EDT) -- A shareholder in medical device maker Calmare Therapeutics Inc. Tuesday asked the Delaware Chancery Court to order the company to produce its shareholder list, saying he wants to start a discussion on the company’s “underperformance and mismanagement.”
Stan Yarbro said the Fairfield, Connecticut-based company — which makes a device to treat the “phantom pain” of amputees — has failed to produce the list despite repeated demands.
“After a number of follow-up requests, on August 22, 2017 — 18 days after the initial request — counsel for the company stated he had not obtained authorization from the company to provide the stockholder list and that he could not provide a timetable of when that would occur, if at all,” he said.
Yarbro said he is seeking a list of stockholders in order to communicate with them about the company’s “long history of underperformance and mismanagement.”
“Yarbro and the stockholders are considering all available options to benefit the stockholders including, without limitation, commencement of a consent solicitation or proxy solicitation,” he said.
Counsel for Yarbro and representatives of Calmare did not immediately respond to requests for comment Wednesday.
In June, investor William Austin Lewis and several of his investing firms filed a suit in New York federal court seeking to recover millions of dollars in damages from Calmare and four of its directors, including its CEO. Lewis alleged the company has made false and misleading statements to cover up “egregious mismanagement.”
According to the suit, the company has falsely claimed to have secured a $15 million contract with the U.S. government, to be working to develop regular income streams and to develop a second-stage device, when in actuality it has barely made payroll and has operated in the red for as long as Lewis had held stock.
Calmare has not hired enough salespeople to market its device successfully and has spent exorbitant sums on contracts and consulting agreements that have failed to produce results, according to the complaint, which also claimed investor money had been spent on personal and company expenses.
Yarbro is represented by Andrew D. Cordo and Lauren Dunkle Fortunado of Ashby & Geddes PA and Jason C. Moreau and Mark B. Rosen of Pierce Atwood LLP.
Counsel information for Calmare was not immediately available Wednesday.
The case is Stan Yarbro v. Calmare Therapeutics Inc., case number not available, in the Court of Chancery of the State of Delaware.
--Additional reporting by William Gorta. Editing by Bruce Goldman.
