Replies to post #117281 on DD Support Board and Research Team

[bar1080]

This is what I've wondered about:

"Some may have a legitimate claim to the entity because of money owed to them which cant be collected because prior management left, but for most custodianship petitions, that is not the case."

Aren't we looking at contempt of court or perjury here on a local level?

[janice shell]

The hijackers often times create convertible debt Notes from the fees associated with gaining control of the shell then use that debt to create tens if not hundreds of millions of unregistered discounted free trading shares of stock. The hijackers or associates of the hijackers will often sucker gullible naive small business owners into using their shells for reverse mergers as a way to raise capital for their struggling businesses then offer to provide the financing and services needed to make the going public process easy. Later those liabilities for the services and the financing are turned into discounted unregistered free trading stock and dumped during pump & dump activity.

Yes. That seems to have been the plan with the GOFF shell. The current action against Tracy in that connection makes that clear. Luckily for Harvey Romanek, the buyer, he evidently realized Tracy was jerking him around, and consulted another attorney.

In these cases, Tracy seems to sell the shell with the promise that the buyer's company will go public through an "APO" (Alternative Public Offering). APOs are supposed to involve financing by an "institutional investor". With GOFF, that was the disreputable Chris Davies.

And I'm sure similar "institutional investments" are planned for other Tracy shells. If any of them comes through, the likely result will be extremely toxic.

[shajandr]

"The hijackers often times create convertible debt Notes from the fees associated with gaining control of the shell"

First, your educational posts on iHub really ought to qualify for some CLE teaching credits granted to you.

Second, I am puzzled by how the quoted scheme works. The activities and costs associated with X gaining control of the corporation were nott authorized by the corporation so how could they have been incurred by the corporation? Prior to X gaining control there either was no management to authorize such or the prior management was still in effect and they sure didn't authorize it.

Is this a retroactive reimbursement that is authorized by the new management? If so, I'd suppose this is similar to an assumption of debt from a third party - butt what is the CONsideration that the corporation receives at the time of assumption of the debt obligation? It seems more like a gift to the corporation that is nott legally an obligation that would be released by an assumption of debt.

Can you explain whether this issuance of debt for the fees and costs associated with gaining control of the shell is legal? It seems to me that it is nott.

Third, great work as usual.

[Zorax]

Bottom line is that these abandoned shells, way more often than not, are just used for dirty insider enrichment schemes and pump & dump schemes and are not good for the market.

Absolutely agree on this and everything else in your post. I was submitting that the literal and actual act of taking over an abandoned shell in and of itself doesn't feel like hijacking. If I bought a shell, and did nothing nefarious with it, I wouldn't want to be branded as a highjacker when all I did was buy a shell.
But I'm not sure a regular citizen can by a shell outright anyhow.

Thanks for everything you guys do.

[Huggy Bear]

And in the case of the ORRV hijacking by Adam Tracy sometimes they freely issue stock to god knows all who or for what - the shells are dark filers.

Tracy issued one billion shares, more than doubling the previously existing O/S.

I wouldn't count on Rule 144 being followed in the resale of this stock by the recipient parties.