The other company -- Eugene had controlling (voting) interest through his preferred shares. Thus, Eugene could vote for a reverse split whenever he desired.
This is what Eugene said in a press release:
Kentucky Energy, Inc. Releases Chairman's Letter to Shareholders Date : 09/21/2010 @ 9:03AM
"I remain excited about our future and I ask for your support through your personal investments in the company as well as those from your friends and families."