I posted this over a year ago (on another board)..nobody gave any opinion as to whether the preferred can be exercised.
If the preferred shares were issued illegally..could it be that they are not now legally convertable to common? Or, could we, the stuckholders go to court to protect our interests?
From the recent SEC report.
"In summary, the Order finds that since electing to be regulated as a business development company ("BDC") in January 2004, the Company has, among other things, issued senior securities without the required asset coverage, issued warrants without approval of its shareholders, issued prohibited non-voting stock, issued securities for services, failed to make and keep required records, and failed to establish a majority of non-interested directors on its board of directors. As a result, the Company violated certain provisions of the Investment Act of 1940 (the "1940 Act"). In addition, the Company failed to obtain a fidelity bond and implement a compliance program as required under the 1940 Act. Finally, the Company failed to comply with certain provisions for exemption from registration under the 1933 Act as related to Rule 609 of Regulation E because it did not file required offering status reports in connection with a securities offering commenced in January 2004."
