CALGARY, Alberta, Jan. 24, 2013 /PRNewswire/ - Equal Energy Ltd. (TSX: EQU) (NYSE: EQU) has today initiated legal proceedings against Mr. Nawar Alsaadi and Dr. Adam Goldstein on the grounds of their repeated and flagrant violation of disclosure requirements under US securities laws.
Equal's filing with the United States District Court, Southern District of New York, alleges that Mr. Alsaadi and Dr. Goldstein have ignored since as early as February 2012 disclosure requirements under Sections 13(d) and 14(a) of the US Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder as part of their campaign against Equal's board of directors and senior management.
As a result of these actions, the investing public has been unable to gain crucial information required by law relating to disclosure by shareholders or shareholder groups holding more than 5% of a company's shares and by persons engaging in proxy solicitations. Investors are thus unable to assess the degree of control that Mr. Alsaadi, Dr. Goldstein and other members of their group exert over Equal, details of their true plans and intentions, and whether they have any understandings or arrangements with third parties regarding the ownership or voting of Equal shares. This information is material to the investing public.
"Such undisclosed agreements potentially enable certain shareholders to take control of a company without warning and without paying a control premium, to the distinct disadvantage of other uninformed shareholders", the filing says. "Moreover, shareholders fulminating for change may have undisclosed financial incentives, including ones that may present conflicts of interest with other shareholders." Equal believes that the violations of Mr. Alsaadi and Dr. Goldstein could undermine the integrity of shareholder votes at the upcoming annual meeting, and is therefore pursuing the matter to ensure that all shareholders have access to full and complete information prior to the meeting.