Owner
Post by Franko10 ™ on Jan 28, 2006 7:49:05 GMT -5
Topic: CF: "Control" of CMKX
Author: rbitulsa from 32
There is another thread (topic = breakeven point for ETGMF), where an issue has resurfaced that could use some individual attention, as it highlights a debate that has been ongoing for many many months. It is my opinion that this ongoing debate seems to have focused primarily on an incorrect assumption, while overlooking a fundamental question...
The incorrect assumption that often appears in this long-running debate is:
If CMKX's A/S was increased, then UC either controlled a majority of shares, or NO ONE controlled a majority.
A question that should be asked, but is usually overlooked, is:
Subject to the A/S increases in 2004, might some other party (or group) have "controlled" a majority, as a "counter-party" to the pure residual shareholders; whether or not UC was a willing accomplice in the increases; whether or not UC was fooled, extorted, blackmailed, etc. into signing the docs - UC's role is a different issue. The issue is the controlling majority; could some other "group" (besides UC, his family, and friends) have "controlled" enough shares to have increased the A/S without a proxy?[/b]
Two other considerations:
(1) It's not what "contol" looked like on some date after-the fact that's relevant. It's what "control" looked like at the time of the A/S increases.
(2) I have argued in other threads on this board that "control" of CMKX cannot be determined by counting up the issued shares per the master shareholder's list. You not only have to consider an individual/group's control via shares issued, you have to factor in the deferred shares, awarded/granted, including any anti-dulition provisions, and the voting control represented by such shares.
I have discussed this issue recently in other posts:
cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137705579
This entire post is on this exact issue, suggesting that 1,000,000 deferred shares (to Tinto/Duval), representing 16% of the O/S (in 1999), were NOT on master shareholder's list, were hidden from everyone, anti-dilutable, and turned into 35 Billion shares some 4 years later (in early 2004), representing 16% control of CMKX when the O/S was capped at 200B - noting that this represents just 2 of more than 75 CMKX-related front companies (many controlled by one person - John Edwards), and only 1,000,000 of a potential 12,000,000 shares that were awarded in the same manner from '98 to '01 (pre UC).
And this excerpt from: cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1138195674: "Important note: using the word "issued" (as opposed to "outstanding") is a critical distinction, as the Issued Shares (per the master shareholder list) did not account for shares that had been "granted" but not yet physically printed. For example, shares that were granted under the old S-8 agreements, or by any other agreement, where the "issuance" was deferred, would be considered "Outstanding" for legal reporting purposes, but not "Issued", per the master shareholder list. This means that the percentage "Control" of the company was a quite different picture, than what is reflected on the master shareholder list (Tinto and Duval are 2 excellent examples). Further, toss in the fact that the "deferred shareholders" were illegally hiding their deferred share grants, and were also evading reporting requirements by dividing their "control" among multiple front companies (to stay under the beneficial ownership "caps") and you have made a good case for why the 15g was filed, deregistering the company."
And excerpts from: cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137879654 about CMKI's own Dominic Roelandt, taken from the related "Fraudulent Shell Factory" section of the article, where the box-job shell "contained false shareholder lists. In reality, Shaber and Wright owned virtually all of the companies' stock, and the individual shareholders listed in the documents were merely nominees for Shaber and Wright."
And don't forget Shawn Hackman, his relationship to CMKX, and what Hackman was busted for (and is now copping a plea on). Here are excerpts from the Hackman case at www.usdoj.gov/usao/nv/home/pressrelease/august2003/chapman80803.htm - noting I've only included the language which corresponds to this argument:
The bad guys "...obtained hidden control...creating a secret monopoly in which control of the shell corporation and its stock was concealed by the use of nominee...shareholders...[with the] company's securities...secretly "locked up"..., [using] Corrupt accountants, attorneys, stock transfer agents and others"
"This type of company is known in the securities industry as a "box job," a term that originally referred to the controlling individuals actually having the stock certificates in a box. The securities of that corporation are then registered for sale on public securities markets. Hidden control of a public "boxed" shell company is a very valuable commodity..."
Consider:
At some point it must be considered that the "Vegas Group" which moved Singal's defunct Canadian company into a new U.S. shell, in order to convert the group's uncollectible loans to CM300 into deferred and anti-dilutive shares, only to move Singal and those assets out the door (thus gaining "hidden control"), waiting for a way to get reimbursed for those failed loans...
At some point, it must be considered that the Vegas Group which financed Urban's purchase of the claims, which rolled that multi-million dollar debt into CMKI, which took 85% controll of the "Issued" shares at the time of the merger, which also (as referrenced above) potentially planted as much as 45% "hidden control" of the corporation through deferred shares granted as far back as 1998...
At some time it must be considered that the Vegas Group installed the CFO (Desormeau), the attorneys (Cook, Coffey, and Dvorak), and maybe even the management (James Kinney and Ginger Guiterrez, aka Part Time Management) - not to mention the participation of others like McIntyre, Tuali, and Walters...
At some point it must be considered that deferred shares were granted without UC's knowledge, that anti-dilution agreements existed without UC's knowledge, and that Desormeau, as CFO, was affecting the issuance of shares without the "approval" of UC...
At some point it must be considered that the "Vegas Group" had almost complete control from the beginning of CMKI until some point in 2004, up to and including the time periods when the A/S was raised...
At some point it must be considered that Urban Casavant, knowingly or otherwise, was only the President through the "glorified title" afforded him by others, and has never "controlled" any of the corporate matters of CMKI/CMKX, other than those activities related to exploiting the claims (via Koch, Walker, and Ron) and promoting the CMKX company (the racing, the billboards, the "pumps", etc.)
Very quick comment on UC...
I want it clear that I am not making these comments as a defense for Urban. I'm not trying to state that Urban is "innocent" in this mess. I am trying to suggest that, if crimes have been committed, then the Vegas Group is the "most guilty" party; sometimes I feel that so much focus is placed on Urban, that the real crooks are getting a "free pass" from the shareholders...
response to a question made...
Hey pepe -
whether deferred shares can or cannot, or will or will not show up on the master shareholder's list... I would argue that they DID NOT, in the case of CMKI/CMKX. (see below)
Keep in mind that what was done at some point, after the fact, became illegal, and when you get to the DEF-14C - none of the deferred shares were included in the listed issued and outstanding, which would be a violation of many laws. So when you look at this, keep it in context with the question "Why did CMKI deregister and go non-reporting", and who controlled at least 85% of the company at that time.
this thread (3 part post) presents the evidence for it happening in the case of CMKI/CMKX cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137705579 as follows:
CMKI reported 30,561,038 shares outstanding as of June 13, 2001 (per their DEF 14A).
If you look at the Master Shareholder list, it shows that only 16,555,109 shares were issued as of June 13th, 2001.
So the total reported shares outstanding exceeds the total reported issued by about 14,000,000 shares on 6/13/01.
It is possible that the 1998, 2000, and 2001 S-8’s reconcile the difference. These 3 Equity Plans registered a combined total of approximately 14,000,000 shares, which could be used (in general) to issue either employee stock-options, or deferred compensation grants to others. It appears these 14,000,000 shares were shown as "outstanding" only for reporting purposes, but were not "issued" at the time, only "awarded" under the S-8's. The filings indicate that Samual Singal, then the President of CMKI (an employee) was issued 2,000,000 shares (pre-split) under the plan. But 100% of these shares were executed by Singal in August of ‘01, and the master shareholder list accounts for all issuances of shares to Singal, as reported in CMKI’s filing.
This leaves 12,000,000 S-8 shares, at least ~98% of which were awarded to non-employees, and subject to the deferred compensation stock and anti-dilution provisions.
And then there's the Tinto/Duval evidence from my 2nd post in this thread, not included here.
Then you can review the old CMKI S-8's (3rd post in the thread), of which I've included some of the language below:
From CMKI's S-8's
"Deferred Stock" means Common Stock to be received, under an award made pursuant to Section 8, below, at the end of a specified deferral period.
In order to prevent the dilution or enlargement of the rights of holders …the 2001 Plan is subject to equitable adjustment in terms of any award (both of shares and price)
permit a Holder to elect to defer a payment under the Plan under such rules and procedures as the Committee may establish, including the payment or crediting of interest on deferred amounts denominated in cash and of dividend equivalents on deferred amounts denominated in Common Stock;
exercised within ten years of the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined voting power of all classes of stock of the Company ("10% Shareholder").
After more hate posts for UC
Good points, all. You are obviously very emotional about this issue and who can blame you.
You guys go after UC. I'll get Edwards. Fair enough?
In the meantime, since you don't care to discuss Edwards, here's a "did the right thing" CFO's resignation and "whistle-blower" letter from a company that's related to ours. Noted him stating at the end that the SEC should investigate... No new civil/criminal actions I can find as a result of this whistle blower taking the "right steps", but the company was in receivership in less than a year... Maybe he should have done what the SEC advised Jarvis to do ("get a good securities lawyer").
Box Jobbers - 1
Shareholders/CFO - 0
www.sec.gov/Archives/edgar/data/1073876/000107938204000012/e9901.txt
VISUAL BIBLE INTERNATIONAL INC.
May 20, 2004
Memo to Maurice Colson
President and CEO
Visual Bible International, Inc. (VBI)
C/C-Howard Drabinsky, Edward Gilbert, Louis Lettieri
Re: VBI-10- KSB Financial Officer's Certificate
During calendar year 2003, the Company lost operational control of its core business activities and the implementation of required financial controls was stymied. As a result I cannot execute the certification statement required to be filed with the Company's 2003 10-K as to do so would be an illegal act.
As reported in my September 5, 2003, letter (copy attached), with the departure of Gerry Quinn it was essential to appoint a CEO to provide management review and control over JBM Entertainment, Inc. (JBM). There was no replacement and as a result there was ineffective control over the activities of JBM.
Management oversight of JBM was curtailed despite the objections of the Chairman of the Audit Committee, John Curran, Chartered Accountant, the President and CEO, Gerry Quinn, Chartered Accountant and Dr. Steven Small, Chairman of the Board. All were asked to resign or were terminated directly or indirectly at the request of Elly Reisman.
Upon the departure of Gerry Quinn, JBM effectively reported to Elly Reisman, a director of the Company, its major shareholder and major creditor. He also "controlled" the Board of Directors. In addition, Reisman, Red Brook Developments Limited, SOHO FINANCIAL and Edward Rosenblat effectively usurped control of the Company. Under their stewardship the Company failed to achieve the plans originally put forth and the Company is now on the brink of receivership.
In addition the failure of Reisman's agent, Edward Rosenblat to timely approve the hiring of adequate financial staff to implement systems, procedures and controls undoubtedly contributed to the insolvency of the Company.
The issue of Reisman's fiduciary duty to the Company's shareholders has been raised in Dr. Small's letter of resignation. I believe that the Company should ask the SEC to investigate these matters. In the absence of the Board taking this action I must consider direct action under the "whistle blower" status afforded me.
Accordingly for the reasons given the certification statement cannot be provided.
/s/Harold Kramer
Principal Financial Officer
1235 BAY STREET SUITE 300. TORONTO ONTARIO. M5R 3K4
PHONE: 416.921.9950 .FAX: 416.921.9951
Author: rbitulsa from 32
There is another thread (topic = breakeven point for ETGMF), where an issue has resurfaced that could use some individual attention, as it highlights a debate that has been ongoing for many many months. It is my opinion that this ongoing debate seems to have focused primarily on an incorrect assumption, while overlooking a fundamental question...
The incorrect assumption that often appears in this long-running debate is:
If CMKX's A/S was increased, then UC either controlled a majority of shares, or NO ONE controlled a majority.
A question that should be asked, but is usually overlooked, is:
Subject to the A/S increases in 2004, might some other party (or group) have "controlled" a majority, as a "counter-party" to the pure residual shareholders; whether or not UC was a willing accomplice in the increases; whether or not UC was fooled, extorted, blackmailed, etc. into signing the docs - UC's role is a different issue. The issue is the controlling majority; could some other "group" (besides UC, his family, and friends) have "controlled" enough shares to have increased the A/S without a proxy?[/b]
Two other considerations:
(1) It's not what "contol" looked like on some date after-the fact that's relevant. It's what "control" looked like at the time of the A/S increases.
(2) I have argued in other threads on this board that "control" of CMKX cannot be determined by counting up the issued shares per the master shareholder's list. You not only have to consider an individual/group's control via shares issued, you have to factor in the deferred shares, awarded/granted, including any anti-dulition provisions, and the voting control represented by such shares.
I have discussed this issue recently in other posts:
cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137705579
This entire post is on this exact issue, suggesting that 1,000,000 deferred shares (to Tinto/Duval), representing 16% of the O/S (in 1999), were NOT on master shareholder's list, were hidden from everyone, anti-dilutable, and turned into 35 Billion shares some 4 years later (in early 2004), representing 16% control of CMKX when the O/S was capped at 200B - noting that this represents just 2 of more than 75 CMKX-related front companies (many controlled by one person - John Edwards), and only 1,000,000 of a potential 12,000,000 shares that were awarded in the same manner from '98 to '01 (pre UC).
And this excerpt from: cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1138195674: "Important note: using the word "issued" (as opposed to "outstanding") is a critical distinction, as the Issued Shares (per the master shareholder list) did not account for shares that had been "granted" but not yet physically printed. For example, shares that were granted under the old S-8 agreements, or by any other agreement, where the "issuance" was deferred, would be considered "Outstanding" for legal reporting purposes, but not "Issued", per the master shareholder list. This means that the percentage "Control" of the company was a quite different picture, than what is reflected on the master shareholder list (Tinto and Duval are 2 excellent examples). Further, toss in the fact that the "deferred shareholders" were illegally hiding their deferred share grants, and were also evading reporting requirements by dividing their "control" among multiple front companies (to stay under the beneficial ownership "caps") and you have made a good case for why the 15g was filed, deregistering the company."
And excerpts from: cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137879654 about CMKI's own Dominic Roelandt, taken from the related "Fraudulent Shell Factory" section of the article, where the box-job shell "contained false shareholder lists. In reality, Shaber and Wright owned virtually all of the companies' stock, and the individual shareholders listed in the documents were merely nominees for Shaber and Wright."
And don't forget Shawn Hackman, his relationship to CMKX, and what Hackman was busted for (and is now copping a plea on). Here are excerpts from the Hackman case at www.usdoj.gov/usao/nv/home/pressrelease/august2003/chapman80803.htm - noting I've only included the language which corresponds to this argument:
The bad guys "...obtained hidden control...creating a secret monopoly in which control of the shell corporation and its stock was concealed by the use of nominee...shareholders...[with the] company's securities...secretly "locked up"..., [using] Corrupt accountants, attorneys, stock transfer agents and others"
"This type of company is known in the securities industry as a "box job," a term that originally referred to the controlling individuals actually having the stock certificates in a box. The securities of that corporation are then registered for sale on public securities markets. Hidden control of a public "boxed" shell company is a very valuable commodity..."
Consider:
At some point it must be considered that the "Vegas Group" which moved Singal's defunct Canadian company into a new U.S. shell, in order to convert the group's uncollectible loans to CM300 into deferred and anti-dilutive shares, only to move Singal and those assets out the door (thus gaining "hidden control"), waiting for a way to get reimbursed for those failed loans...
At some point, it must be considered that the Vegas Group which financed Urban's purchase of the claims, which rolled that multi-million dollar debt into CMKI, which took 85% controll of the "Issued" shares at the time of the merger, which also (as referrenced above) potentially planted as much as 45% "hidden control" of the corporation through deferred shares granted as far back as 1998...
At some time it must be considered that the Vegas Group installed the CFO (Desormeau), the attorneys (Cook, Coffey, and Dvorak), and maybe even the management (James Kinney and Ginger Guiterrez, aka Part Time Management) - not to mention the participation of others like McIntyre, Tuali, and Walters...
At some point it must be considered that deferred shares were granted without UC's knowledge, that anti-dilution agreements existed without UC's knowledge, and that Desormeau, as CFO, was affecting the issuance of shares without the "approval" of UC...
At some point it must be considered that the "Vegas Group" had almost complete control from the beginning of CMKI until some point in 2004, up to and including the time periods when the A/S was raised...
At some point it must be considered that Urban Casavant, knowingly or otherwise, was only the President through the "glorified title" afforded him by others, and has never "controlled" any of the corporate matters of CMKI/CMKX, other than those activities related to exploiting the claims (via Koch, Walker, and Ron) and promoting the CMKX company (the racing, the billboards, the "pumps", etc.)
Very quick comment on UC...
I want it clear that I am not making these comments as a defense for Urban. I'm not trying to state that Urban is "innocent" in this mess. I am trying to suggest that, if crimes have been committed, then the Vegas Group is the "most guilty" party; sometimes I feel that so much focus is placed on Urban, that the real crooks are getting a "free pass" from the shareholders...
response to a question made...
Hey pepe -
whether deferred shares can or cannot, or will or will not show up on the master shareholder's list... I would argue that they DID NOT, in the case of CMKI/CMKX. (see below)
Keep in mind that what was done at some point, after the fact, became illegal, and when you get to the DEF-14C - none of the deferred shares were included in the listed issued and outstanding, which would be a violation of many laws. So when you look at this, keep it in context with the question "Why did CMKI deregister and go non-reporting", and who controlled at least 85% of the company at that time.
this thread (3 part post) presents the evidence for it happening in the case of CMKI/CMKX cmkxdiamond.proboards66.com/index.cgi?board=general1&action=display&thread=1137705579 as follows:
CMKI reported 30,561,038 shares outstanding as of June 13, 2001 (per their DEF 14A).
If you look at the Master Shareholder list, it shows that only 16,555,109 shares were issued as of June 13th, 2001.
So the total reported shares outstanding exceeds the total reported issued by about 14,000,000 shares on 6/13/01.
It is possible that the 1998, 2000, and 2001 S-8’s reconcile the difference. These 3 Equity Plans registered a combined total of approximately 14,000,000 shares, which could be used (in general) to issue either employee stock-options, or deferred compensation grants to others. It appears these 14,000,000 shares were shown as "outstanding" only for reporting purposes, but were not "issued" at the time, only "awarded" under the S-8's. The filings indicate that Samual Singal, then the President of CMKI (an employee) was issued 2,000,000 shares (pre-split) under the plan. But 100% of these shares were executed by Singal in August of ‘01, and the master shareholder list accounts for all issuances of shares to Singal, as reported in CMKI’s filing.
This leaves 12,000,000 S-8 shares, at least ~98% of which were awarded to non-employees, and subject to the deferred compensation stock and anti-dilution provisions.
And then there's the Tinto/Duval evidence from my 2nd post in this thread, not included here.
Then you can review the old CMKI S-8's (3rd post in the thread), of which I've included some of the language below:
From CMKI's S-8's
"Deferred Stock" means Common Stock to be received, under an award made pursuant to Section 8, below, at the end of a specified deferral period.
In order to prevent the dilution or enlargement of the rights of holders …the 2001 Plan is subject to equitable adjustment in terms of any award (both of shares and price)
permit a Holder to elect to defer a payment under the Plan under such rules and procedures as the Committee may establish, including the payment or crediting of interest on deferred amounts denominated in cash and of dividend equivalents on deferred amounts denominated in Common Stock;
exercised within ten years of the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined voting power of all classes of stock of the Company ("10% Shareholder").
After more hate posts for UC
Good points, all. You are obviously very emotional about this issue and who can blame you.
You guys go after UC. I'll get Edwards. Fair enough?
In the meantime, since you don't care to discuss Edwards, here's a "did the right thing" CFO's resignation and "whistle-blower" letter from a company that's related to ours. Noted him stating at the end that the SEC should investigate... No new civil/criminal actions I can find as a result of this whistle blower taking the "right steps", but the company was in receivership in less than a year... Maybe he should have done what the SEC advised Jarvis to do ("get a good securities lawyer").
Box Jobbers - 1
Shareholders/CFO - 0
www.sec.gov/Archives/edgar/data/1073876/000107938204000012/e9901.txt
VISUAL BIBLE INTERNATIONAL INC.
May 20, 2004
Memo to Maurice Colson
President and CEO
Visual Bible International, Inc. (VBI)
C/C-Howard Drabinsky, Edward Gilbert, Louis Lettieri
Re: VBI-10- KSB Financial Officer's Certificate
During calendar year 2003, the Company lost operational control of its core business activities and the implementation of required financial controls was stymied. As a result I cannot execute the certification statement required to be filed with the Company's 2003 10-K as to do so would be an illegal act.
As reported in my September 5, 2003, letter (copy attached), with the departure of Gerry Quinn it was essential to appoint a CEO to provide management review and control over JBM Entertainment, Inc. (JBM). There was no replacement and as a result there was ineffective control over the activities of JBM.
Management oversight of JBM was curtailed despite the objections of the Chairman of the Audit Committee, John Curran, Chartered Accountant, the President and CEO, Gerry Quinn, Chartered Accountant and Dr. Steven Small, Chairman of the Board. All were asked to resign or were terminated directly or indirectly at the request of Elly Reisman.
Upon the departure of Gerry Quinn, JBM effectively reported to Elly Reisman, a director of the Company, its major shareholder and major creditor. He also "controlled" the Board of Directors. In addition, Reisman, Red Brook Developments Limited, SOHO FINANCIAL and Edward Rosenblat effectively usurped control of the Company. Under their stewardship the Company failed to achieve the plans originally put forth and the Company is now on the brink of receivership.
In addition the failure of Reisman's agent, Edward Rosenblat to timely approve the hiring of adequate financial staff to implement systems, procedures and controls undoubtedly contributed to the insolvency of the Company.
The issue of Reisman's fiduciary duty to the Company's shareholders has been raised in Dr. Small's letter of resignation. I believe that the Company should ask the SEC to investigate these matters. In the absence of the Board taking this action I must consider direct action under the "whistle blower" status afforded me.
Accordingly for the reasons given the certification statement cannot be provided.
/s/Harold Kramer
Principal Financial Officer
1235 BAY STREET SUITE 300. TORONTO ONTARIO. M5R 3K4
PHONE: 416.921.9950 .FAX: 416.921.9951
