PHOENIX GOLD FILES TO DE-REGISTER STOCK
Phoenix Gold, acting just days after its annual shareholders meeting, filed with the SEC to de-register its common stock, a move that will relieve it of requirements to file annual and quarterly reports. Phoenix Gold disclosed its plans following its annual meeting on Feb. 3 during which the topic of de- registering its stock wasn’t discussed, according to those who attended the meeting in Portland, Ore.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The action raised the ire of shareholder Wynnefield Capital, which owns a 13.8% stake in Phoenix Gold and has waged an on- going battle with management in an to allow cumulative voting at the annual meeting. The company’s top management, including CEO Timothy Johnson, controls 67% of the company’s outstanding common stock and annually defeats Wynnefield’s proposal.
This year’s annual meeting was the first since former CEO Keith Peterson resigned in Dec. And it also followed a move by Peterson to sell the 1.6 million shares of Phoenix Gold stock he owns to PG Holdings, a company of which Johnson is the operating manager, according to SEC filings. In connection with PG Holdings purchase of Peterson’s stock for $3.5 million, Johnson was granted proxy to vote his shares at the annual meeting earlier this month, the filing stated. Johnson owns 2 million shares (67.6% of outstanding common).
In announcing the decision to de-register Phoenix Gold’s stock, Johnson maintained the move will result in a “significant cost savings” as the company will no longer have to pay audit, legal and filing fees. The exact of the savings wasn’t disclosed and CFO Joseph O'Brien wasn’t available for comment at our deadline on Tues. Phoenix Gold’s stock will still be eligible to be traded on the “Pink Sheets,” a centralized quotation service the collects and publishes quotes in real time through its Web site.
“We think the timing and substance of this is emblematic of Phoenix Gold’s cursory treatment of its outside shareholders over the past several years,” said Wynnefield Managing Dir. Nelson Obus, whose company purchased its stake in Phoenix Gold in May 1995. “With this announcement, we feel that management has decided to turn its back on outside shareholders after using their capital for the 8 years the company has been public.”
Wynnefield wasn’t informed of Phoenix Gold’s intention to de-register the stock until after the stock markets closed on Feb. 6, a spokesman said. It had, however, been approached by Phoenix Gold management in Aug. with regards to possibly divesting some stock to increase the public float to avoid delisting, Wynnefield said in an SEC filing.
Phoenix Gold has undergone major changes in recent months with the arrival of industry veteran Rusty Bennett, who was promoted to senior sales & mktg. dir. in Oct., and the departure of Peterson. Johnson replaced Peterson, while Exec. Vp Roland MacBeth, who joined the company in Oct., advanced to pres. Phoenix also acquired the assets of bankrupt Carver Corp. earlier this year. Peterson and Johnson each were paid an $194,423 salary in fiscal 2003, down from $200,000 a year earlier, according to SEC documents.