On April 26, 2010, the Securities and Exchange Commission issued
a subpoena and notice that it was conducting an investigation into
possible violations of federal securities laws in connection with
trading in Equus Total Return, Inc. (NYSE: EQS) stock by certain
companies, including Versatile Systems, Inc.
The current majority of Equus’ Board of Directors has nominated
on its white card four new director candidates from Versatile
Systems—Benedetti, des Pallieres, Hardy and Atkinson—for election
at the Company’s annual meeting, scheduled for May 12, 2010.
The Committee to Enhance Equus, which owns 11.4% of the
outstanding shares of Equus and is collectively the Company’s
largest stockholder, announced that it is mailing a letter to
stockholders urging them to throw out the white card and to vote
the Committee’s GOLD
proxy card today.
The complete text of the letter from the Committee is below and
can be found at: www.ourmaterials.com/enhanceequus.
SEC SUBPOENAS INFORMATION ON
TRADING IN EQUUS STOCK BY COMPANIES TIED TO WHITE CARD DIRECTOR
NOMINEES
INVESTIGATION INTO POSSIBLE
VIOLATIONS OF FEDERAL SECURITIES LAWS
VOTE THE COMMITTEE’S GOLD PROXY CARD TODAY
Dear Equus Stockholder,
With the 2010 Annual Meeting of Equus
Stockholders only days away, The Committee to Enhance Equus, which
collectively owns approximately 11.4% of the outstanding shares of
Equus and is the Company’s largest stockholder, urges you to
consider the facts:
FACT:
THE SEC HAS SUBPOENAED
INFORMATION REGARDING TRADING IN EQUUS STOCK BY VERSATILE SYSTEMS –
REPRESENTED BY FOUR NEW DIRECTOR NOMINEES OF THE “HOLDOVER 5
MAJORITY” – IN CONNECTION WITH POTENTIAL SECURITIES LAW
VIOLATIONS
On April 26, 2010, the Securities and
Exchange Commission issued a subpoena and notice that it was
conducting an investigation into possible violations of federal securities
laws in connection with trading in Equus stock by certain
companies, including Versatile Systems, Inc. This is
particularly troubling since four new director nominees
—Benedetti, des Pallieres, Hardy and Atkinson (the “Versatile 4”) —
who have been proposed by the current five-member majority of the
Board (the “Holdover 5 Majority”) are either directors or officers
of Versatile Systems.
Equus
stockholders should ask themselves: Why hasn’t the
Holdover 5 Majority disclosed this troubling subpoena to
stockholders who are currently casting their votes?
FACT:
PUBLIC COURT RECORDS CITE
ARREST FOR FALSE ACCOUNTING AND INCARCERATION OF HOLDOVER 5
MAJORITY NOMINEE ALESSANDRO BENEDETTI
Equally alarming, Alessandro Benedetti,
one of the Versatile 4 director nominees proposed by the Holdover 5
Majority, was also the subject of a criminal investigation which
led to his arrest on charges including false accounting for which
he subsequently pled guilty and accepted a sentence of
imprisonment, according to a Justice on the High Court of
Justice Chancery Division of the United Kingdom. The Holdover 5
Majority and Mr. Benedetti recently published a narrow, obscure
denial attempting to argue that the arrest and imprisonment were
somehow not criminal in nature. We strongly disagree and ask that
you read what Justice Patten of the High Court wrote about Mr.
Benedetti’s previous attempts to make this argument:
“Although when asked
about this in cross-examination [Mr. Benedetti] suggested that this
did not amount to and should not be treated as a criminal
conviction, it seems obvious to me
that the opposite is the case.” (emphasis added)
Equus
stockholders should ask themselves: Is this who you
want representing your interests on the Equus Board of
Directors? The Committee believes stockholders deserve a Board
with integrity and has put forth nine highly qualified, principled
nominees. Vote the Committee’s GOLD proxy card today.
FACT:
EQUUS HAS SUFFERED A 65%
DECLINE IN STOCK PRICE OVER THE PAST FIVE YEARS
Equus stockholders should demand core
change in the Board. From June 2005 until June 2009, during the
time that Moore, Clayton Capital Advisors, Inc. (MCCA) was
Equus’ investment adviser, Equus’ stock price declined 61%.
The downward spiral continued to a total decline of 65% as
of March 26, 2010.1 Kenneth Denos was the President and CEO of
MCCA, and is CEO of MCC Global N.V. MCC Global introduced the
Versatile 4 to Equus, and Mr. Denos, a member of the Holdover 5
Majority, nominated them to the Board. A 65% decline in stock
price should be more than enough for stockholders to
suffer.
We believe core change on the Equus
Board is necessary. We also believe that returning the
Holdover 5 Majority is NOT core change.
The Holdover 5 Majority is also asking you
to support the Versatile 4, the four new director nominees who
represent the interests of only ONE stockholder, Versatile
Systems.
In contrast, the Committee’s candidates
would bring a desperately needed fresh perspective to Equus and
would oversee the implementation of disciplined strategies designed
to enhance and sustain value for all Equus stockholders. For
continuity, our nominees include two current members of the Board
and a former officer of Equus.
Equus
stockholders should ask themselves: Isn’t it time for
a core change in the Equus boardroom? Vote the Committee’s
GOLD proxy card
today.
FACT:
COMMITTEE NOMINEES PLAN TO
REVERSE DAMAGE INFLICTED ON EQUUS STOCKHOLDERS
The Committee’s nominees plan to reverse
the course of Equus and put our company back on track to increasing
value for all Equus stockholders. The Committee’s nominees, if
elected, intend to implement a variety of strategies to enhance
stockholder value, including:
- Initiating a formal search for
and installing a CEO – a vacant position – with fund management
experience;
- Establishing a committee to
critically assess past investments, particularly those originated
by MCCA, and immediately implementing preservation of value
strategies;
- Returning Equus to a principled
investment approach by investing in profitable companies with a
history of earnings, while also pursuing secured mezzanine
opportunities for both current income and dividend yields; and
- Restoring sound corporate
governance practices to the boardroom.
Equus
stockholders should ask themselves: Would you rather
that Equus execute a thoughtful plan designed to enhance value for
all Equus stockholders OR continue to pursue a hollow, undefined
investment strategy that has failed? Vote the Committee’s
GOLD proxy card
today.
FACT:
THE COMMITTEE TO ENHANCE EQUUS OWNS 11.4% OF
EQUUS STOCK AND IS CLOSELY ALIGNED WITH THE INTERESTS OF ALL EQUUS
STOCKHOLDERS
The Committee and its highly qualified,
talented and experienced nominees collectively own 11.4% of Equus
stock making us the Company’s largest stockholder. Our slate of
director nominees is comprised of widely respected, well-connected
leaders in their respective communities and industries. If elected,
our nominees have the motivation and experience to act in the best
interests of all Equus stockholders.
The Holdover 5 Majority and the
Versatile 4 collectively own ONLY ONE HALF OF ONE PERCENT of Equus
common stock personally.
Richard Bergner, the current Chairman of
the Board and a member of the Holdover 5 Majority, has NEVER OWNED
A SINGLE SHARE OF EQUUS STOCK.
Equus
stockholders should ask themselves: Wouldn’t you
rather have a Board comprised of directors with a meaningful stake
in the Company’s future? Vote the Committee’s GOLD proxy card today.
THE ANNUAL MEETING IS ONLY DAYS
AWAYVOTE THE COMMITTEE’S GOLD PROXY CARD TODAY
The Committee’s nominees will bring
integrity, discipline, experience and principled investment
strategies back to Equus, for the benefit of ALL stockholders. We’ve provided
you with the facts, now it is time to vote – vote the Committee’s
GOLD proxy card
today.
We encourage you to read our proxy
statement and related materials, which are available at no cost at
www.ourmaterials.com/enhanceequus. If you have any questions, or
need assistance voting your GOLD proxy card, please contact
MacKenzie Partners, Inc., which is assisting us in this
solicitation, at (800) 322-2885 (toll-free) or (212) 929-5500 (call
collect) or by email at enhanceequus@mackenziepartners.com. You may
also be able to vote by telephone or internet by following the
instructions on the enclosed vote form.
Sincerely,THE COMMITTEE TO ENHANCE
EQUUS
1The last trading day before members of
the Committee announced their intention to launch a proxy
contest
If you have any questions, require
assistance in voting your shares, or needadditional copies
of The Committee To Enhance Equus’ proxy materials, please call
MacKenzie Partners at the phonenumbers listed below.
MacKenzie Partners, Inc.105
Madison AvenueNew York, NY
10016enhanceequus@mackenziepartners.com(212) 929-5500 (call
collect)OrTOLL-FREE (800) 322-2885
THE COMMITTEE TO ENHANCE EQUUS HAS FILED A DEFINITIVE PROXY
STATEMENT AND OTHER DOCUMENTS WITH THE SECURITIES AND EXCHANGE
COMMISSION. SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE
DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT
INFORMATION REGARDING THE SOLICITATION OF PROXIES FOR USE AT EQUUS
TOTAL RETURN, INC.’S ANNUAL MEETING, INCLUDING INFORMATION RELATING
TO THE COMMITTEE, OUR NOMINEES AND THE PARTICIPANTS IN THIS
SOLICITATION. THE DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
ARE AVAILABLE TO EQUUS STOCKHOLDERS FROM THE PARTICIPANTS AT NO
CHARGE AT WWW.OURMATERIALS.COM/ENHANCEEQUUS AND ARE ALSO AVAILABLE
AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION’S WEBSITE AT
WWW.SEC.GOV. THE DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
WERE DISSEMINATED TO SECURITY HOLDERS ON OR ABOUT APRIL 15,
2010.
This letter includes forward-looking statements. Except for the
historical information contained herein, the matters discussed in
this letter are forward-looking statements that involve certain
risks and uncertainties such as the Committee’s plans and
expectations regarding Board initiatives. These risks and
uncertainties include, among other things, market and economic
conditions. If any of these risks or uncertainties materializes, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The Committee
disclaims any intention or obligation to update publicly or reverse
such statements, whether as a result of new information, future
events or otherwise.
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