http://www.azcentral.com/arizonarepublic/business/articles/2008/08/06/20080806biz-syntaxbrillian0806.html
Bankruptcy judge OKs Syntax-Brillian review
6 comments
by Andrew Johnson - Aug. 6, 2008 12:00 AM
The Arizona Republic
Shareholders of Syntax-Brillian Corp., which filed for bankruptcy last month, can't stop wondering how the Tempe-based company's assets deteriorated in less than a year.
They may get some answers now that a bankruptcy judge has approved a request by the U.S. Trustees Office for an independent examiner to review the company's financial records.
The move is a coup for investors, who in recent weeks have accused the high-definition television maker's former management of intentionally masking the company's true financial situation over the past several months.
Judge Brendan Shannon approved the trustees office's request at a hearing Monday.
The trustees office, a division of the U.S. Department of Justice that monitors bankruptcy proceedings, has yet to name a specific examiner. The examiner's findings could be used to determine who was accountable for the company's financial turmoil.
In the company's last quarterly earnings filing with the U.S. Securities and Exchange Commission in September, Syntax-Brillian reported $550.7 million in assets and $227.5 million in liabilities.
Less than a year later, the company listed only $175.7 million in assets and debt worth $259.4 million in its July 8 Chapter 11 petition.
An examiner's findings could have bearing on whether investors and other creditors file lawsuits against the company, said attorney Lee Squitieri in New York City.
"It will be most relevant to the question of who bears any accountability . . . for the demise of the company, and whether the examiner sees the possibility of viable claims to recover assets on behalf of the estate," said Squitieri, who has been asked to represent some shareholders in potential lawsuits against the company.
Syntax-Brillian and some former executives already face several class-action investor suits alleging fraud and fiduciary malfeasance.
In bankruptcy filings, the company said it had about 29,000 shareholders as of the end of June. Nasdaq delisted Syntax-Brillian's stock, which the company has said is now worthless.
Some investors also have opposed the company's proposed sale of its TV-related assets, which its attorneys have said will maximize value for Syntax-Brillian's stakeholders.
Shannon approved bidding procedures for the proposed sale, which sets guidelines for who can bid and how. But the final sale is subject to court approval.
Syntax-Brillian's next hearing is Aug. 20 in U.S. Bankruptcy Court in Wilmington, Del.
Reach the reporter at andrew.johnson@arizonarepublic.com
or 602-444-8280. Read his entrepreneurs blog at
innovation.azcentral.com.
END of Article:
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With 15-20 responses to the Reporter by3 PM PST Today, 8/7/2008, I think we can influence this reporter, and get other coverage! So we can get another Article Published by the Arizona replublic reporter, Andrew Johnson, please emphasize any of these these points:
1) Significant loss of Syntax Brillian value in the Debtors’ enterprise has yet to be explained and much of it happened under the management of Greg Rayburn, the current CEO (Employee of FTI).
2) The deterioration of the Syntax Brillian finances is partially attributable to the exorbitant fees charged by FTI, Greg Rayburn.
3) Current CEO Greg Rayburn is acting on behalf of Silver Point and has yet to provide the court with its trading records to confirm or deny that Silver Point or affiliates held significant short positions in the stock and had no incentive to reorganize in a manner that preserved share value.
4) Syntax Brillian stock had a large naked short position and was on the REG SHO list. Silver Point had access to insider information and it is essential that it provide the court with a history of all trading transactions in the shares of Syntax-Brillian.
5) With the expedited Bankruptcy filing, after months of refusing to release financials, of releasing misleading information, the Syntax Brillian (debtors) are attempting to prevent a discovery process by an independent neutral examiner. That information constitutes a vital asset to all constituents not only in preserving the value of the estate but in future legal actions that might be pursued against current and former directors and the corporation’s partners in Taiwan and Hong Kong.
6) Once the assets of Syntax Brillian are transferred outside the jurisdiction of American courts, the constituents who have a stake in the estate will have no recourse to take legal actions against TCV, Kolin, Digimedia and SCHOT. Many of the former directors who have inflicted so much damage on the estate might already be in Taiwan – a country with which the United States has no extradition treaties. And it is worth noting that the current management, under Greg Rayburn, has already engaged in the conveyance of valuable property of the estate to the very entities that will be the subject of the Examiner's inquiry into the murky relationships between the debtors' management,TCV, Kolin, Digimedia and SCHOT.
7) As CEO Greg Rayburn stated plainly that shareholders have zero equity in the estate and that their shares are to use his words ‘worthless.’ He has adamantly refused to provide shareholders with financial re
7) As CEO Greg Rayburn has stated plainly that the shareholders have zero equity in the estate and that their shares are to use his words ‘worthless.’ He has adamantly refused to provide shareholders with financial records to determine how their equity evaporated under his management and the management of the previous directors. The company gave out misleading information under his management that caused shareholders to continue to maintain their holdings.
I cant believe the SEC and bancruptcy court may let this robbery take place. I am starting to lose all faith in the whole system. This is something you might see in a third world country or dictatorship. For this to be taking place on the US stock market is very disturbing. If this is allowed to happen what other companies will try the same scheme. They are basically trying to steal the whole company from the rightful owners (shareholders).