Jarta- The below is where I have a problem with the Frizzel letter
The actions requested by the two derivative rights demands I have made on behalf of shareholders involve complicated transactions and involve business dealings and relationships which I do not profess to understand entirely. However, refusal of the Company to pursue any of the matters that would be of benefit to the Company has the potential of imposing legal liabilities on current management. THESE DEMANDS ARE NOT WITCH HUNTS BY SHAREHOLDERS. SHAREHOLDERS WANT THIS COMPANY TO SUCCEED AND RETURN TO TRADING.
It may be that some of the matters referred to in these derivative demands are better handled internally than through time consuming and costly litigation. In Texas, Art. 5.14 of the Texas Business Corporation Act provides for guidance on how a corporation can evaluate the requests by shareholders for derivative action. Shareholders would request the Company to appoint a small independent committee to evaluate the demands and make some recommendation to the Company and shareholders counsel regarding this proposed litigation. This might help some Company management from the dilemma it might find itself in as it decides on the merits of shareholders request.
excerpts
However, refusal of the Company to pursue any of the matters that would be of benefit to the Company has the potential of imposing legal liabilities on current management.
Now this part implies that he is warning the company to do something, in essence giving the impression this action may be just a threat.
excerpt
It may be that some of the matters referred to in these derivative demands are better handled internally than through time consuming and costly litigation
Here again he implies he is not fully ready to do what the letter implies , if the Company, will do something.
AI
