While Cap'n Ron no doubt is puttering around on his big ass redneck yacht this holiday weekend, I'm considering getting some legal advice in regards to seeking legal redress from the self dealing I, as a minority shareholder, have been subjected to over too long a time.
I am not a securities or corporate attorney but an argument can be made that there has been a consistent breach of fiduciary duties to minority shareholders in Deep Down, Inc.
The law, as I understand it, is generally as follows:
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Fiduciary Duties to Minority Shareholders
Shareholders are generally prohibited from directly controlling the business of the corporation. Their control, to the extent it may be exercised at all, is indirect. Their primary source of control is the power to elect the members of the board of directors.
Majority or control shareholders may be subjected to personal liability when they vote their shares to perpetrate fraud on other shareholders. Shareholders may be personally liable for damages resulting from the breach of their fiduciary duties either to the corporation or to minority shareholders.
Controlling shareholders owe a duty of loyalty to the minority shareholders of a corporation. This duty generally applies when a controlling shareholder engages in transactions with the corporation. In such cases, the relationship with the minority shareholders must meet the test of intrinsic fairness. Under this standard, the controlling shareholder must show that its transactions with the corporation were objectively fair.
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While this is a general restatement of the law, keep in mind that DPDW is incorporated in either Nevada or Delaware (I've forgotten which but it's in the filings), giving the board of directors, corporate officers and majority shareholders (i.e., Ron & Company) some extra degree of protection. (Yes, there is a reason why corporations choose to incorporate in those states.) I've been around long enough to know that a shareholder law suit is not an automatic path to redress. But, IMHO, Ron and Company are on thin ice at the very least and they should be concerned that "piercing the corporate veil" to obtain compensation from their personal assets is not out of the question.
I'd rather not go down this road but they certainly have tried my patience to say the least. As of this writing I'm inclined to perhaps give it one more quarter to see if the trend continues or if they see the light and devote some plausible efforts to moving the pps north and refrain from skimming the profits before they hit the bottom line. Others may not be so patient. In the meantime I'm going to put some effort into making some inquiries, getting some legal advice, and watching and waiting. I encourage my fellow minority shareholders to do the same.
Good luck!
-Fritz
The more you know, the less you don't know.
AI
