A few unhappy shareholders (owning less than 1% of the stock) formed Cornerstone Composites (CC). They wanted to bring down current management at CTC, replace them with their chosen group of board members, run ACCC business in China through CC, and get a bunch of cheap shares and warrants for providing a line of credit to CTC. They filed an objection to the CTC BK exit plan, which gave them a chance to cross-examine the CTC witnesses during the BK hearing. From all appearances in the courtroom they seemed to be an annoyance to all parties. Their summary argument at the end of the hearing was an eye-rolling snicker.
Three things before the history of CC.
- There are 2 groups of shareholders from MI. The good group are significant shareholders and include patsy63. The religious group (by their proclamation - they don't meet my definition of good religion) is CC and they are insignificant holders, less than 1%. Don't mix up the 2 MI groups. patsy63 group = good, CC group = bad.
-ACTS is a trading company that specializes in China. ACTS was CTC's agent in China.
-The Holland Board of Public Works is a CTC customer. The first I believe to install ACCC in an energized line. The alias ddpower (now posts as pwrxfmr) was employed as the Superintendent of Electric Transmission and Distribution for Holland and was a CTC shareholder. He probably stopped posting on RB because it was a conflict of interest since he was spending the public’s money on CTC. No longer employed by Holland Public Works, he is posting as pwrxfmr.
People:
D = ddpower and pwrxfmr, ex Holland Public Works employee
M = bsissar, stock broker, spiritual leader of CC
T = president of CC, former floor trader in Chicago
J = Officer in CC, patent attorney
P = Ex CTC sales person put forward by CC as a board candidate
E = sintwang, partner in ACTS, the CTC China agent
R= xfactor, partner in ACTS, the CTC China agent
W = Partner in ACTS, the CTC China agent, lives in China
The genesis of CC follows. If not 100% accurate it’s pretty damn close:
12/01 - CTC enters into a relationship with Jiangsu Far East. SWW (which became ACTS) was the go between.
03/02 – CTC signs an agreement with SWW to represent them in China.
09/03 – CTC files a suit against Acquvest for non-performance.
07/04 – MOU between CTC and JFE. ACTS is the agent.
08/04 – First commercial ACCC hung by Holland Public Works.
09/04 – Acquvest files a countersuit against CTC.
10/04 – At CTC shareholder meeting D of Holland Public Works provides update on ACCC install. With D are several CTC shareholders from MI, including M & T. All very happy campers.
10/04 to 05/05 – ACTS is not happy with the progress of the proposed MOU. Lots of RB posts by E and R (ACTS).
10/04 to 09/05 – Sometime in this period CC people begin working with ACTS on unrelated Chinese business. Not sure if they met at 10/04 or 03/05 shareholder meetings or perhaps another way. Clearly they have business outside CTC prior to BK.
03/05 – CTC shareholders meeting. Chinese MOU is not going to happen as planned. There will be no exclusive agreement. In attendance are D, M, T, ACTS and Acquvest. D provides an update on ACCC install at Holland Public Works.
04/05 – Phone calls by M and T to CTC shareholders looking for dirt on BW and criticizing his performance. In these calls they declare CTC will file for bankruptcy shortly. Hmmmm.
04/05 – D declares to a MI good guy shareholder he sold all his shares. Hmmmm.
04/05 – Raging Bull post by E hinting at pending CTC bankruptcy. Hmmmm.
04/05 – Huge sell off of CTC shares prior to bankruptcy. Hmmmm.
05/05 – CTC files for Chapter 11 protection.
05/05 to 09/05 – Numerous RB posts by E and R running down CTC management and discussions of China. E contacts RB posters off line to share inside info on JFE and CTC.
08/05 – ACTS files a 10 mm claim against CTC in BK court.
09/05 – ACTS arranges a visit to China for CC principals in order to meet with JFE. While in China W is the CC sponsor. The purpose of the visit is to get a commitment from JFE to CC.
09/05 – CTC catches wind of threatening action by ACTS and CC.
09/05 – CC and ACTS set up a meeting with other CTC shareholders to discuss their plan. The CC plan as presented on the phone.
- Get a commitment from Far East for CTC ACCC.
- Take the order to BW along with a line of credit in exchange for CTC shares and CC’s choice of members on CTC's board.
- All orders for China would go through CC.
- If not accepted by BW they will threaten to take their plan to the BK judge and threaten to blow the whistle on BW for some unsubstantiated security violations.
- Acquvest has been consulted and if CC could force Benton to step down Acquvest could settle with the new leadership.
09/05 – Meeting with CC, ACTS, and selected CTC shareholders in Irvine. Prior to the meeting CC visits CTC as friendly shareholders. When they arrive at the meeting they greet ACTS with much love and proceed to run down CTC people they met with as liars and no nothings. Discussions held in regards to China and the state of affairs at CTC. J shares pictures from his laptop of JFE facilities. CC is told by CTC shareholders their plan won’t work while CTC is in BK as there is no way BW would accept the plan and CTC is all but assured of exiting BK on October 12. At best it would delay the proceedings. When asked about the detail of the CC plan, the CC people said it is nothing but a safety net for CTC in case they might not get approval. This is a far cry from what was earlier presented and what they attempted in court. While discussing the CTC BK they stated the BK shocked them, all their sell stops were taken out prior to BK day (oh really, than why the phone calls and RB posts prior to BK?). Oh, and BK was not the “religious” thing to do by CTC.
09/05 – CC visits CTC to present the plan to BW. BW is not available to them. CC meets with Brian B for a short period to present the documents. CC asks to view the facility and they are turned away.
09/05 – garth outs E and R on RB. E and R say good-bye to RB (at least as sintwang and xfactor).
09/05 – D, now posting as pwrxfmr posts on RB that CTC has a $35,000,000 order and wants to send details to RB regulars.
09/05 – D posts the CC plan will go to Judge Ryan.
09/05 – The plan is sent around and discussed with RB posters using fax and email from J and M.
09/05 – M posts as bsissar that he is not a part of CC, but the CC plan should be considered.
09/05 –RB posters correctly tie CC to Cornerstone religious kooks.
09/05 – garth outs M and bsissar says good-bye to RB.
09/05 – CC files an objection to CTC plan in BK court.
10/05 – A CC principal loses their position of employment based on CC activities.
10/05 – CC files to delay BK proceedings.
10/05 – Friendly CTC shareholders gather signatures against CC.
10/05 – CC is heard in court. The CC principals are there at the first 2 hearings. They are absent at the last. When the friendly shareholders objection letter to CC is presented in court CC is surprised and has their attorney demand a list of the shareholders and their holdings. During a break the attorney for AQ wants to know if signatures for the support letter were solicited on RB (“you mean like CC presented their plan?” tisk tisk).
The CC objections to the CTC plan used some of the stuff billiethekid_2, tedca5, needabreak50 have posted. CC was trying to prove CTC was turning down a 35 mm order at a time when they needed business. At some point in the proceedings one of the CC principals left to present their order again to CTC in order to show CTC wasn't responsive.
In final arguments the AQ attorney passed because they settled. That left the CC attorney and his pitiful summary. What was really funny was after the judge approved the plan he told CC they can now go about doing business with CTC (like the order was real! Too funny!)
Today we know the judge confirmed the BK exit order would be signed shortly, AQ will get their ransom, and the Tarbox issue will be settled outside of the BK.
So what about CC? My guess is CC is probably trying to figure out a way around CTC to do business with JFE. I believe CC and ACTS are lucky CTC chose not to go after them for interference. As the debtor, CTC had the exclusive right to pursue their plan. I wouldn’t doubt the collusion of CC with ACTS might have forced ACTS to drop their suit and settle.
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