Equus Condemns Desperate Attempts by “Committee to Enhance Equus”/(Douglass Committee) to Block Change & Regain Control o...
May 03 2010 - 4:17PM
Business Wire
Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Fund”)
today condemned the “Committee to Enhance Equus”/(Douglass
Committee) for releasing information about Equus that is the
subject of a confidential inquiry by the SEC. On April 26, 2010,
the Fund received a subpoena for information, wherein the SEC
stipulated that “[t]his investigation is a non-public fact-finding
inquiry” and that “the investigation does not mean that we have a
negative opinion of any person, entity, or security.” Accordingly,
pursuant to the SEC’s stipulation, the Fund could not publicly
release this information, but in view of the this confidentiality
breach and the misrepresentations contained in the Douglass
Committtee’s release of May 3, 2010, the Fund is now
responding.
The Douglass Committee is running a costly proxy contest to
regain control of the Fund so that Sam and Paula Douglass (who
helped oversee the Fund’s decline over the past two decades), in
the Fund’s opinion, can maintain the status quo and continue to
benefit themselves personally at the expense of Equus’
shareholders.
Richard Bergner, Chairman of the Fund, commented:
“In its latest press release and letter to shareholders, the
Douglass Committee has made public information about Equus that
should have remained confidential in an effort to boost their
flagging efforts to regain control of the Fund. Despite being
provided a copy of the subpoena and being informed that the SEC
inquiry was non-public, the Douglass Committee has, contrary to the
provisions of the subpoena, chosen to issue this information
publicly in a press release. Moreover, the subject of the subpoena
has been investigated by the Fund and its counsel and determined to
be unfounded. This is simply another attempt by Sam Douglass and
his hand-picked nominees on the Douglass Committee to regain
control of the Fund.”
Mr. Bergner further commented;
“The facts behind today’s release by the Douglass Committee and
our response are as follows:
- In late March 2010, just days
after a majority of the directors of the Fund approved the
nomination of a slate of directors that excluded Sam Douglass,
certain individuals, whom we believe are partisans of Sam Douglass,
submitted a memorandum to the Fund’s external counsel, alleging a
possible violation of securities laws by Versatile Systems
Inc.
- The Fund and its counsel
conducted an inquiry and examined each of the allegations contained
in the memorandum. Both the Fund and its counsel concluded that the
evidence provided by the complainants was insufficient to warrant
any further action by the Fund, and communicated the results of its
analysis to the existing Equus board and its employees.
- Undeterred, we believe that
these persons and/or members of the Douglass Committee forwarded
this memorandum to the SEC who responded with a confidential
request for information in the form of a subpoena. The Fund is
fully complying with this request and representatives of Versatile
have informed the Fund that Versatile intends to cooperate fully
with any information request from the SEC. At this point, the SEC
has not contacted Versatile and has not requested any information
from Versatile. We are confident that the SEC will conclude that no
wrongdoing has occurred and that the inquiry is the result of an
attempt by the Douglass Committee to derail change at Equus.”
About Equus
The Fund 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 the Fund may be obtained from the
Fund’s 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 filed a definitive proxy statement concerning the 2010
Annual Meeting of Stockholders with the United States Securities
and Exchange Commission (“SEC”) on April 12, 2010. The Fund has
also filed other relevant documents with the SEC. The Fund advises
stockholders to read the definitive proxy statement, as well as the
other relevant documents filed with the SEC, because they contain
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 the other documents the Fund 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 the other related documents
by contacting Georgeson Inc. by telephone toll-free at 866-821-2606
(banks and brokerage firms should call 212-440-9800), or by email
at 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.
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