Equus Total Return, Inc. (NYSE: EQS) (the “Fund”) today sent a
letter to shareholders of the Fund in response to misleading
statements from the “Committee to Enhance Equus,” a group led by
Sam Douglass (the founder of the Fund and an officer or director of
Equus since its inception) and his wife, Paula Douglass (who until
March 17, 2010 had been an officer of the Fund and Vice Chairman of
the Fund’s former investment adviser).
“The Douglass Committee is seeking to regain control of the
Equus board by launching a costly and disruptive proxy contest for
reasons that we believe are self-serving and not in the best
interest of shareholders,” said Richard F. Bergner, Chairman of the
Board of Equus. “The Douglasses have long-standing ties to Equus
and exaggerated the independence of their nominees in an attempt to
mislead shareholders.”
Mr. Bergner continued, “In contrast to the Douglass Committee’s
director slate, the Fund’s director nominees – which include four
new directors who represent the largest single shareholder owning
9.28% in the Fund, and whose interests are aligned with all
shareholders – will be intently focused on building value for
shareholders and transforming Equus from a small Houston-based fund
into a much larger, internationally focused and dynamic investment
vehicle that can capitalize on opportunities around the world. Our
objective is to put Equus firmly back on the track of receiving
regular income and capital appreciation from our portfolio
companies, with a goal of reinstituting the Fund’s quarterly
dividend that was discontinued in early 2009 under the Douglasses’
leadership.”
The Fund urged Equus shareholders to take an important step
towards putting the Fund back on the right track by reading the
Fund’s letter and definitive proxy statement in their entirety and
voting their shares on the WHITE proxy card today. Even if
you have previously voted on the gold proxy card supplied by the
Douglass Committee, you can still support the new direction of the
Fund by voting the enclosed WHITE proxy card today.
If you have any questions, require assistance in voting your
WHITE proxy card, or need additional copies of the Fund’s
proxy materials, please call Georgeson Inc. toll-free at
866-821-2606 (banks and brokerage firms should call 212-440-9800),
or email equus@georgeson.com. Shareholders also can find additional
materials on the annual meeting, including biographies for each of
the Fund’s director nominees, and how to vote on the Fund’s website
at www.equuscap.com.
Presented below is the text of the letter:
April 20, 2010
Dear Equus Shareholder,
We recently sent you the proxy materials and WHITE proxy
card for the upcoming 2010 Annual Meeting of Stockholders of Equus
Total Return, Inc. (“Equus” or “the Fund”), wherein you were asked
to elect the Fund’s directors for the next year. This year’s
meeting represents one of the most important in the history of your
Fund and this vote is one of the most critical you will make
regarding its future. The meeting will be held on May 12, 2010
and shareholders of record as of March 15, 2010 are entitled to
vote.
No matter how many shares you
own, please make sure they are represented at the
meeting.
Submit your vote on the
attached WHITE proxy card
today.
You may receive proxy materials from “The Committee to Enhance
Equus,” a group led by Sam Douglass (the founder of the Fund and an
officer or director of Equus since its inception) and his wife,
Paula Douglass (who until recently had been an officer of the Fund
and Vice Chairman of the Fund’s former investment adviser). Do not
be misled. The Douglass Committee is seeking to take control of the
Equus board by launching a costly and disruptive proxy contest for
reasons that we believe are self-serving and not in the best
interest of shareholders, as discussed below.
Don’t be fooled by the Douglass Committee’s misleading
statements. We urge you to consider the information below
and vote TODAY in favor of the Fund’s nominees on the WHITE proxy
card enclosed.
1.
OUR FOUR NEW BOARD NOMINEES
REPRESENT THE SINGLE LARGEST SHAREHOLDER OF THE FUND. THEIR
INTERESTS ARE FULLY ALLIGNED WITH THAT OF ALL SHAREHOLDERS – TO
INCREASE SHAREHOLDER VALUE.
Alessandro Benedetti, Bertrand des Pallieres, John A. Hardy, and
Fraser Atkinson, the four new nominees for your Board of Directors,
represent 822,031 shares, or 9.28% of Equus stock. As
representatives of our largest shareholder, their interests in and
objectives for the Fund are aligned with all of our shareholders –
they have a strong, vested interest in increasing Equus shareholder
value.
On March 17, 2010, a majority of your Fund directors determined
that Equus needed to change course away from years of stagnation
and declining value under Sam and Paula Douglass. This is why Sam
and Paula Douglass are not part of the Fund’s director nominee
slate. We expect that the four new Board members, will, if elected,
provide the Fund with access to investment opportunities, capital
as required, execution capacity and management expertise. We invite
you to read the backgrounds of our new director nominees summarized
at the end of this letter to better understand the tremendous
resources they will bring to Equus.
2.
SAM AND PAULA DOUGLASS
(FOUNDERS OF ‘THE COMMITTEE TO ENHANCE EQUUS’) HAVE BEEN INTIMATELY
INVOLVED IN THE MANAGEMENT OF THE FUND SINCE ITS CREATION
The Douglass Committee has attempted to mislead shareholders and
characterize the Douglasses as outsiders not associated with the
management of the Fund, but in fact:
- Sam Douglass was the founder of
the Fund and has been an officer or director of Equus since its
inception;
- ALL of the Fund’s current
investments, including those
investments which have performed poorly in the past several
years, were approved by Sam or Paula Douglass as officers
and directors of Moore, Clayton Capital Advisors (“MCCA”), the
Fund’s most recent investment adviser;
- One or both of Mr. and Mrs.
Douglass have been a member of the Fund’s investment committee
since the formation of the Fund until March 2010 when a majority of
your directors determined to change course by terminating Mrs.
Douglass’ employment and nominating four new directors with no ties
or preexisting relationship with Sam Douglass.
3.
THE DOUGLASSES HAVE RECEIVED
MILLIONS OF DOLLARS FROM MCCA
Sam Douglass was the chief supporter of MCCA and its appointment
as adviser to the Fund because he and Paula Douglass stood to
personally benefit from its involvement:
- MCCA was appointed as the Fund’s
investment adviser in June 2005 in connection with the sale by Sam
Douglass of the Fund’s previous investment advisor, Equus Capital
Management Company (“ECMC”), to MCCA’s parent company.
- Two trusts controlled by Sam
Douglass were entitled to receive $6 million from the sale of ECMC,
a large portion of which was a continuing earn-out contingent on
MCCA remaining as advisor to the Fund.
- At the time it was sold, ECMC was beneficially
owned and controlled by Sam Douglass.
- Mr. and Mrs. Douglass became
officers, directors, and employees of MCCA, collectively drawing
over $1.6 million in salary and bonus.
- When MCCA’s investment
management agreement with the Fund was terminated in June 2009, Mr.
and Mrs. Douglass were no longer entitled to receive income from
MCCA as employees or as installment payments for the purchase of
ECMC.
ASK YOURSELF WHY THE DOUGLASSES
ARE NOW UNDERTAKING THIS PROXY
CONTEST TO GET CONTROL OF THE
FUND’S MANAGEMENT
4.
THE DOUGLASS COMMITTEE’S BOARD
SLATE ALSO INCLUDES BOTH THE CHAIRMAN AND CEO OF A COMPANY THAT IS
IN DEFAULT ON A $2.2 MILLION LOAN FROM EQUUS
Jonathan H. Godshall and John D. White serve as the CEO and
Chairman, respectively, of Trulite, Inc., a portfolio company of
Equus that has defaulted on a $2.2 million loan which was
originated by Sam and Paula Douglass on behalf of the Fund. Each of
Messrs. Godshall and White and Paula Douglass are directors of
Trulite. Instead of pressing for collection and recovery of this
investment, the Douglasses, through the Douglass Committee, have
instead sought to appoint Messrs. Godshall and White, both based in
Houston, as well as Paula Douglass to your Fund’s Board of
Directors.
DON’T LET SAM AND PAULA DOUGLASS DERAIL THE
TURN-AROUND
While the Board is in the process of executing a turn-around,
Sam and Paula Douglass have chosen to launch this costly and
disruptive proxy contest, seeking to replace your entire board with
their Houston friends and associates. Please do not be misled.
Please discard any gold proxy card you may receive from the
Douglass Committee. The Douglasses' own proxy materials state that
Mrs. Douglass intends to seek reimbursement from the Fund for her
proxy solicitation expenses, which could total up to $300,000 --
without a vote of the Fund's shareholders. Ask yourself if the
Douglasses' nominees' interests are the same as yours. Support real
change by voting the enclosed WHITE proxy card.
OUR OBJECTIVE
In contrast to the direction taken by the Douglasses, we believe
that our new director nominees will help transform Equus from a
small Houston-based fund into a much larger, internationally
focused and dynamic investment vehicle that can capitalize on
opportunities around the world. Our objective is to put Equus
firmly back on the track of receiving regular income and capital
appreciation from our portfolio companies, with a view to resuming
the Fund’s quarterly dividend that was discontinued in early 2009
under the Douglasses leadership.
The election of the Fund’s director nominees will ensure that
the Board can continue to move forward with its plan to build
shareholder value and will position the Fund to benefit from the
significant actions we have already taken.
YOUR VOTE IS IMPORTANT;
VOTE THE WHITE PROXY CARD
TODAY
To support your Board, please sign, date and return the WHITE
proxy card in the postage paid envelope provided. Even if you
have previously voted on the gold proxy card supplied by the
Douglass Committee, you can still support your Board by voting the
enclosed WHITE proxy card today. YOUR RESPONSE TODAY WILL
HELP PUT THE FUND BACK ON THE RIGHT TRACK.
If you have any questions, require assistance in voting your
WHITE proxy card, or need additional copies of the Company’s
proxy materials, please call our proxy solicitation firm, Georgeson
Inc. toll-free at 866-821-2606 (banks and brokerage firms should
call 212-440-9800), or email equus@georgeson.com. Shareholders also
can find additional materials on the annual meeting and how to vote
on our website at www.equuscap.com.
We thank you for your consideration and support.
Sincerely, /S/ Richard F. Bergner Richard F. Bergner
Chairman of the Board
Equus Total Return, Inc. is a business development company that
trades as a closed-end fund on the New York Stock Exchange, under
the symbol "EQS". Additional information on Equus Total Return,
Inc. may be obtained from Equus’ website at www.equuscap.com.
This press release may contain certain forward-looking
statements regarding future circumstances. These forward-looking
statements are based upon the Fund’s current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the risks and uncertainties described in the Fund’s
filings with the Securities and Exchange Commission. Actual
results, events, and performance may differ. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. The Fund undertakes no
obligation to release publicly any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. The inclusion of any statement in this letter
does not constitute an admission by the Fund or any other person
that the events or circumstances described in such statements are
material.
Important Information
The Fund has filed a definitive proxy statement and other
relevant documents concerning the 2010 Annual Meeting of
Stockholders with the United States Securities and Exchange
Commission (“SEC”) on April 12, 2010. Before soliciting proxies,
the Fund will provide stockholders with the definitive proxy
statement. The Fund advises stockholders to read the definitive
proxy statement because it contains important information about the
election of directors and any other matters to be presented at the
2010 Annual Meeting of Stockholders. Stockholders may obtain free
copies of the definitive proxy statement and other documents the
Company files with the SEC at the SEC’s website at www.sec.gov.
They may also access a copy of the Fund’s definitive proxy
statement by accessing www.equuscap.com. In addition, stockholders
may obtain a free copy of the definitive proxy statement and other
related documents by contacting Georgeson Inc. toll-free at
866-821-2606 (banks and brokerage firms should call 212-440-9800),
or email equus@georgeson.com.
The Fund, its directors, some of its executive officers and
certain other of its employees are participants in the solicitation
of proxies in respect of the matters to be considered at the 2010
Annual Meeting of Stockholders. Information about the participants
is set forth in the definitive proxy statement. Information about
the participants’ direct or indirect interests in the matters to be
considered at the annual meeting is also contained in the proxy
statement referred to above.
Equus Total Return (NYSE:EQS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Equus Total Return (NYSE:EQS)
Historical Stock Chart
From Jul 2023 to Jul 2024