Replies to post #278948 on Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

Interesting questions.

(1) Why did Adam Usdan attempt a hostile takeover of Elite in 2009? Was it to take over the ELI-216 technology or to stop it from ever going commercial?
(2) What was Adam Usdan reaction when Jerry Treppel and Chris Dick thwarted the hostile takeover by forming a partnership with Epic?
(3) Did Adam Usdan act alone or was he partnered with others in the hostile acts against Elite?
(4) Was Trellus part of a cohort that Shorted Elite’s PPS from dollars to pennies and thereby prevented Elite from raising monies to support the ELI-216 phase III trials?
(5) Why did Adam Usdan divide the remaining 10% ownership of 18.9 mil into 4 ownerships so that each was less than 5% and therefore did not require Form 4 filings?

As far I know, I've never met Adam Usdan. I know he was at Northwestern's Kellogg Graduate School of Management around the same time I was an undergrad. It's possible I may have terrorized him with my bike on Sheridan Ave a few times. Also, we used to occasionally crash a Kellogg party. Kellogg students were a little more, shall we say, mature than we were. Most of the time it was like trying to have fun at your mom & dad's card party, but a few were a pretty good time. They always had beer, and the women thought we were cute and funny and always wanted to smoke some of our weed, which, of course, made them cute and funny, too. But I never met Adam Usdan, as far as I know, and I definitely never asked him about why he did what he did with Elite stock.


As far as I know the story, while Trellus did own shares purchased open market in the multi-dollar range, the biggest volume of their shares came via preferred shares bought straight from the company, well after the steep decline in share price. It was basically like rescue financing- something like half a million dollars got them a controlling interest. I've never gone through those SEC filings in a way that I could be any more specific than that, but I do think it is fair to say that in early 2009, Trellus thought they had enough shares and enough support on the board to control the company, for whatever reason they wanted it. Please correct me if I'm wrong, but if the majority of their shares were Preferred bought directly from the company, then it is hardly a "hostile" takeover.


The Trellus deal didn't become "hostile" until March 2009, when Dick & Treppel brought in the Epic guys. With the Epic deal, Trellus immediately lost their board control, as 3 Epic guys got seated plus Treppel. After a special shareholder meeting to increase authorized shares, Trellus was diluted out of a majority position, and then Elite immediately "voluntarily" delisted from Amex (which is kind of like saying we "voluntarily" left those Kellogg parties), thus making it very difficult for Trellus to do anything other than be pissed about it.


So, now go back and re-read the list of questions above keeping in mind that the Trellus takeover was friendly until Elite & Epic made it hostile. Knowing the truth, it is pretty easy to make an argument that Usdan and Trellus were the ones who got screwed. Whatever actions they took to extricate themselves from a bad investment were likely warranted. There is zero evidence they were anything other than supportive investors prior to March 2009, although the fever swamps become ripe with rumor and innuendo every time the share price drops a fraction of a cent. I'll further add that Trellus is still an active, well-respected hedge fund, and it is not at all known for becoming involved in hostile deals or engaging in retaliatory actions. Adam Usdan, besides running Trellus, also sits on the board of trustees of multiple companies, philanthropies, and major universities- including Wesleyan and Brandeis. I think the likelihood that Adam Usdan spends any time at all thinking about Elite Pharmaceuticals is very, very low.

[julesnemo3]

Excellent, insightful questions, which I believe are tied a post I made about 3 years ago. ELTP longs may recall when I made reference to the 40 million shares traded as an outlier day. They snagged on one day more shares of ELTP than even I own. LOL.

Does anyone think that the game that is being played with ELTP a game about pennies? Love the poison pill to this day. LOL

No hurries.

(1) Why did Adam Usdan attempt a hostile takeover of Elite in 2009? Was it to take over the ELI-216 technology or to stop it from ever going commercial?
(2) What was Adam Usdan reaction when Jerry Treppel and Chris Dick thwarted the hostile takeover by forming a partnership with Epic?
(3) Did Adam Usdan act alone or was he partnered with others in the hostile acts against Elite?
(4) Was Trellus part of a cohort that Shorted Elite’s PPS from dollars to pennies and thereby prevented Elite from raising monies to support the ELI-216 phase III trials?
(5) Why did Adam Usdan divide the remaining 10% ownership of 18.9 mil into 4 ownerships so that each was less than 5% and therefore did not require Form 4 filings?