I can't speak to the terms of the second(?) PP, although I don't believe anyone here was invited to participate anyway, so it's pretty irrelevant for this discussion. If that's true, the allegations being made must deal solely with the first PP. I'm not going to dig through the historical data, but these comments should be pretty accurate.
I believe the purchase price ranged from a low of $.50 (possibly less) to a high of $8.00/share. If the Debenture terms were consistent (except for the share price), then the participants were offered principal plus 8% or free trading shares 12 months after the Effective Date on their agreement. "Free Trading" was subject to a legal opinion letter if the shares were traded during months 13-24 following the agreement (144 regs), but they were eligible to trade. I don't know how many shares were issued at each price point, but I assume a significant percentage of them were sold at or below $2.00/share. That's about the average closing price during CQ1, 2001 which is the period in which most debenture shares became eligible for trading. The high during that period was above $4.00.
Those are rough numbers, and if someone wants to prove me wrong, I'll certainly concede, but until that happens, I'll submit the following question:
Why would the SEC, who has reportedly already performed an investigation of McBride and SEVU, award a judgment to favor shareholders who had free trading shares at a time when the market price was at or above their purchase price, yet the shareholders chose not to sell? Furthermore, if the market value exceeded the purchase price, the shareholder had the option to accept principal plus interest in lieu of shares.
I'm not defending the actions of SEVU, as the Debenture Agreement was perhaps the most poorly written "contract" I've ever seen, but virtually every hole in the agreement favored the shareholder, rather than the company.
