Replies to post #20097 on Newlead Holdings Ltd. (fka NEWLF)

[stockstuffer]

Shorts won't get anymore shares to cover from IR. IR will stop selling as it may jeopardize their existence. Just my opinion.

[MONEYMADE]

By early May, the parties” relationship had soured. Ironridge 
 attributes the deterioration to the fact that they were unable to 
 come to terms on a “favor” to NewLead in which Ironridge 
 would repay one of its notes prior to the time payment was 
 due. O'Neil Decl. ¶¶ 42–47. But according to NewLead, 
 it was because Ironridge was engaging in “death spiral” 
 financing by which it intentionally manipulated NewLead's 
 share price downward. Bertsos Decl. ¶¶ 11–14. According 
 to this theory, a financier purchases convertible stock which 
 can be converted into common stock for less than its market 
 value, and the lower the stock price, the more common shares 
 it receives. Bertsos Decl. ¶¶ 48–49. The financier short sells 
 common stock to drive down the share price, converts its 
 preference shares into common shares at depressed prices, 
 and uses those shares to cover its short positions. Bertsos 
 Decl. ¶ 50. 
 NewLead accuses Ironridge of short selling shares because 
 according to its calculations, if it was not using the shares it 
 obtained to cover short positions, on April 16, 2014 it would 
 have had 10% or more of NewLead's shares, in violation of 
 the cap. Bertsos Decl. ¶ 90, Ex. L. Ironridge denies short 
 selling NewLead shares, asserts that NewLead's calculation 
 of the cap violation has a simple arithmetic error, and attaches 
 account records showing no short sales. O'Neil Decl. ¶¶ 54– 
 57. 
 NewLead also accuses Ironridge of violating the daily trading 
 limits on five occasions. Bertsos Decl. ¶ 82, Ex. J; June 9, 
 2014 Tr. 48:16–50:19. lronridge disagrees, arguing one of 
 the measures of the daily trading limit is measured by dollar 
 volume, not hy number of shares, in which case it has not 
 violated the trading limits. O'Neil Decl. ¶¶ 59–63, Ex. 31. 
 By obtaining additional common shares that dilute the 
 value of existing shares, NewLead accuses lronridge of 
 responsibility for NewLead's plunging stock price. On May 
 7, 2014, NewLead did not comply with Ironridge's request 
 to convert new preference shares. O'Neil Decl. ¶ 48. On 
 May 9, NewLead informed lronridge it believed lronridge 
 had violated their agreement O'Neil Decl. ¶ 48, Ex. 24. 
 That same day, lronridge commenced arbitration proceedings 
 against NewLead in Bermuda, as required for disputes under 
 their agreement. O'Neil Decl. ¶ 49, Ex. 26. On May 12, 
 NewLead sent lronridge Global Partners LLC (“Ironridge 
 Partners”), Ironridge's parent company, a notice of default 
 stating NewLead was terminating the agreements due to 
 Ironridge's material breaches. O'Neil Decl. ¶ 50, Bertsos Decl. 
 ¶ 14, Ex. B. On May 27, NewLead sent lronridge notice 
 that to the extent their agreements are still valid, it was 
 switching its election and would now pay its dividend and 
 applicable embedded dividend liability in cash, not common 
 shares. Bertsos Decl. ¶ 21, Ex. E. lronridge continued to 
 demand common shares from the NASDAQ transfer agent in 
 satisfaction of embedded dividend liabilities after this notice. 
 Bertsos Decl. ¶¶ 24–25, Ex. G. 
 *3 On June 3, 2014, NewLead filed this proceeding and 
 sought a temporary restraining order in aid of arbitration 
 enjoining Ironridge from obtaining additional common 
 shares. ECF Nos. 2–4, NewLead stated it intended to 
 file arbitration counterclaims seeking a declaration that 
 its agreements with Ironridge are terminated, that even if 
 they are not tenninated Ironridge has no entitlement to 
 additional common shares, and for violations of state and 
 federal securities laws. Bertsos Decl. ¶ 8. NewLead asserted 
 preliminary relief was necessary because Ironridge had driven 
 down NewLead's share price from $146.50 on March 13, 
 2014 (one month before Ironridge's first transaction) to 39 
 cents on May 15 (more than two weeks before NewLead riled 
 the action). Bertsos Decl. ¶ 11. It argued that it would not 
 survive if Ironridge continued to obtain new shares and drive 
 down the share price. Bertsos Decl. ¶¶ 29–33, 
 This Court held a conference with counsel for the parties 
 on June 3 shortly after the action was filed to determine 
 whether a temporary restraining order should issue. Though 
 NewLead's motion sought to enjoin Ironridge from receiving 
 any common shares, its counsel conceded Ironridge was 
 entitled to convert preference shares. June 3, 2014 Tr. 15:24– 
 16:14. This Court issued a limited temporary restraining order 
 enjoining Ironridge from obtaining additional common shares 
 in satisfaction of embedded dividend liabilities. ECF No. 5. 
 This Court held an evidentiary hearing on June 9, 2014. 
 DISCUSSION 
 I. Personal Jurisdiction 
 The amenability of an out-of-state corporation to suit in a 
 federal district court is determined by the law of the state 
 in which the district court sits.Sole Resort, S.A. de C.V. v. 
 Allure Resorts Management, LLC, 450 F.3d 100, 102–03 
 (2d Cir.2006) (citing Fed.R.Civ.P. 4(k)(1)(A)).“A plaintiff 
 bears the burden of demonstrating personal jurisdiction over a 
 person or entity against whom it seeks to bring suit.”Penguin 
 Grp, (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d 
 Cir.2010). In order to obtain a preliminary injunction, a