ValCom, Inc. Update Of Recent Events By Patrick Willemsen, Chairman Of The Board
CLEARWATER, Fla., April 18, 2012 /PRNewswire/ -- ValCom, Inc. (Pinksheets: VLCO) As a result of an Order and Judgment in the recent litigation with respect to the governance and management of ValCom, Vince Vellardita was removed as Chief Executive Officer, President and Chairman of ValCom, and the new composition of the ValCom board of directors was established. Shortly after Vellardita's removal, the board of directors of ValCom appointed me as Chairman of the Board of Directors, and Timothy Harrington as Chief Executive Officer.
We want to explain what was disputed in this litigation and how this dispute has been resolved. We also want to briefly outline where ValCom currently stands, and management's near-term priorities and long-term vision for creating value at ValCom.
Disputed Items in Recent Litigation
- Prior to the commencement of the litigation, at the instigation of Tim Harrington, a current board member, an appraisal of ValCom's media library was undertaken beginning in February 2011. The appraisal revealed that the library was comprised of thousands of motion pictures and songs, as well as T.V. shows and episodes, and was an undervalued asset with what we believe is great potential.
- On May 11, 2011, at a meeting following the annual meeting of shareholders, a mandate was given by the board of directors to then-CEO Vellardita to (i) monetize ValCom's media library, (ii) begin the process necessary to collect royalties due to ValCom (both past due and future), and (iii) fully document ValCom's rightful claims to the library's contents.
- In the months following the May 11, 2011 meetings, a majority of the board of directors of ValCom was of the view that the company was in need of new leadership due to its inability to achieve strong financial results despite ownership of a valuable media library.
- As the summer of 2011 progressed, it became apparent to the majority of the board of directors that little or no progress was being made in monetizing ValCom's media library and that other serious problems had arisen with customers and vendors. The majority board was of the view that, despite the board's mandates, Vellardita was not fulfilling his responsibilities as CEO and, in fact, was acting contrary to ValCom's best interests. Concurrently, inaccurate and incomplete press releases were being issued by Vellardita, without the board's knowledge or consent, touting spurious actions by ValCom (including stock buybacks and debt reductions). Despite the board's directive to refrain from such conduct, Vellardita continued ignoring these mandates and his responsibilities as CEO.
- In early August 2011, amicable discussions commenced between the majority board and Vellardita about the future governance of ValCom and Vellardita's stepping down from his role as CEO. Suddenly, in late August 2011, without notice or warning, Vellardita caused a purported shareholder action by written consent to be taken, using improperly issued shares to effect such consent, in an attempt to remove Silvana Costa Manning, Tim Harrington, and Mike Vredegoor from, and elect Rahul Rathod and Nalin Rathod to, the ValCom board.
- Shortly after Vellardita's attempted August 2011 shareholder action, the majority board of ValCom adopted resolutions to terminate Vellardita as CEO and appoint Patrick Willemsen in his stead.
- In August 2011, Silvana Costa Manning and Patrick Willemsen filed a complaint with the Delaware Court of Chancery in an action to clarify that Manning, Harrington, and Vredegoor are directors, and that Rahul Rathod and Nalin Rathod are not directors, since their purported election was based on (i) failures to abide by proper corporate protocols and (ii) improperly issued ValCom securities. Concurrently with the filing of the complaint, Manning filed a motion for an interim order to maintain the status quo with respect to the business and affairs of ValCom pending resolution of the action. The motion for status quo order sought to maintain the ValCom governance structure immediately following the May 11, 2011 shareholder meeting and prior to the purported August 2011 shareholder action.
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