(Market Cap $20M; Ki-Yong Choi owns 20.2%)
On November 13, 2013 Ki-Yong Choi, derivatively on behalf of the Issuer, filed a complaint (the “Complaint”) in the Circuit Court for the Thirteenth Judicial District in and for Hillsborough County, Florida against David I. Portnoy, Mark L. Portnoy (collectively, David I. Portnoy and Mark L. Portnoy are sometimes referred to herein as the “Portnoy Defendants”), Anthony Atala, Harold D. Berger, George Gaines and Jonathan H. Wheeler (collectively, the “Defendants”) and the Issuer, as a nominal defendant.
The Complaint alleges that the Defendants (i) breached their duty to the Issuer’s stockholders by engaging in activities (the “Transactions”) that diverted corporate assets to themselves and/or other insiders in a manner to benefit the Portnoy Defendants and their friends and to ensure their entrenchment with the Issuer; (ii) engaged in systematic misconduct for the purpose of maintaining and entrenching themselves in their positions of power, thereby abusing their ability to control and to influence the Issuer; (iii) gave away substantial sums of money causing waste to valuable assets belonging to the Issuer; and, as a result of the foregoing, (iv) the Defendants were unjustly enriched at the expense of the Issuer.
The Complaint requests that the Court rescind the Transactions; assess damages against the Defendants in an amount to be proven at trial; remove from management any Defendant found to have breached his fiduciary duty to the Issuer; require the return of all compensation paid by the Issuer to each Defendant found to have breached a fiduciary duty to the Issuer to the maximum extent permitted by law; award attorney’s fees to the extent permissible; award costs of the legal action; award pre-judgment and post-judgment interest to the extent permissible; and award such other and further relief as the Court may deem just, equitable or proper.
Depending on various factors, including the Issuer’s financial position, results of operations and strategic direction, the outcome of discussions with other stockholders and the Issuer, actions taken by the Issuer, and the trading price levels of the Common Stock of the Issuer, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional shares of Common Stock of the Issuer or selling some or all of their shares of Common Stock of the Issuer, and/or otherwise changing their intentions with respect to any and all matters referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D.