Roy Rimmer Announces Votes to be Withheld from Directors for Equus Total Return

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Roy T. Rimmer, Jr., President of RNR Production Land & Cattle, holder of 400,000 shares of common stock of Equus Total Return, a New York Stock Exchange listed company, announced today that RNR intends to withhold its votes from five of the Fund’s incumbent directors.

Roy T. Rimmer, Jr., President of RNR Production Land & Cattle, holder of 400,000 shares of common stock of Equus Total Return, a New York Stock Exchange listed company, announced today that RNR intends to withhold its votes from five of the Fund’s incumbent directors. RNR will withhold its votes based on the limited disclosures in the Fund’s Proxy Statement and other recent disclosures, including a Press Release made by the Fund on June 7, 2011 announcing an important change in the Fund’s senior management.

Specifically, Mr. Rimmer intends to withhold votes from five directors, John A. Hardy (now the Fund’s CEO, and formerly its Executive Chairman until June 2, 2011), Fraser Atkinson (Audit Committee Chair), Kenneth J. Denos (member of the Fund’s Governance and Nominating Committee), Bertrand des Pallieres and Alessandro Benedetti (who was appointed as the Fund’s Executive Chairman on June 2, 2011) for the following reasons:

  •     Mr. Rimmer questions the Fund’s announcement of a material change in the Fund’s most senior management, only four days before the Annual Meeting of Stockholders on June 10, at a time when shareholders may have little time to reconsider their votes at the Annual Meeting. Mr. Rimmer would also like to know what arrangements or understandings exist between Mr. Benedetti and the Fund regarding his appointment and compensation as Executive Chairman. Moreover, according to the Fund’s most recent proxy statement, Mr. Benedetti attended only 63% of the board’s meetings in 2010 and did not attend the Fund's annual meeting of stockholders in 2010.
  •     Four of the Fund’s nominees, Messrs. Hardy (the Fund’s CEO), Atkinson (Chair of the Fund’s Audit Committee), Benedetti (the Fund’s recently-appointed Executive Chairman) and des Pallieres also hold officer and/or director positions in Versatile Systems, Inc., an affiliate of Mobiquity Investments Limited, and were appointed to the Fund’s board in April 2010. Mr. Rimmer believes that the representation of Versatile/Mobiquity on the Board of Directors of the Fund is disproportionate to their equity interests in the Fund and may present conflicts of interest.
  •     In addition to his role as the Fund’s Audit Committee Chair, Fraser Atkinson is also the Chief Financial Officer of Versatile. In his position as CFO at Versatile, Mr. Atkinson reports directly to Mr. Hardy, who is the CEO of Versatile as well as CEO of the Fund. Mr. Rimmer questions Mr. Atkinson’s dual roles and believes that the relationships between Mr. Atkinson and Mr. Hardy and other nominees have the potential to compromise Mr. Atkinson’s independence in his role as Chair of the Fund’s Audit Committee.
  •     Mr. Rimmer believes that John Hardy’s dual roles as CEO (and formerly Executive Chairman) of the Fund and as CEO of Versatile/Mobiquity present potential conflicts of interest and also divide Mr. Hardy’s attention from solely representing the interests of the Fund’s stockholders.
  •     Mr. Rimmer questions the actions taken by the Board of Directors to approve a proposed rights offering in or around November 2010 at a discount to the market price of the Fund’s shares. The proposed rights offering was contrary to the Fund’s previous public statements in its Form 10-Q filed prior to the offering, that declines in the Fund’s stock price below net asset value made it “undesirable to issue additional shares of our common stock.” Mr. Rimmer believes that two write-downs of Fund assets in the second and third quarter of 2010 reduced the trading price of the Fund’s common stock prior to the announcement of the rights offering at a discount to market price. Mr. Rimmer thus questions the timing of the rights offering, and whether it would expand the equity holdings and influence of Versatile/Mobiquity to the detriment of other stockholders.
  •     The Fund’s net assets declined from $50.9 million in December 2009 to $37.8 million on June 30, 2010, and continued to fall to $31.4 million as of September 30, 2010, shortly before the rights offering was announced. Mr. Rimmer believes that this decline in the value of the Fund’s net assets resulted from the Fund’s decision to write down millions of dollars on certain of its assets, including certain promissory notes that were subsequently sold in February 2011 for $10 million, an amount that appears to be several multiples of the written-down value of the Notes. Mr. Rimmer questions these wide variations in accounting estimates.
  •     Messrs. Benedetti and des Pallieres are directors of the Fund and, as of June 2, 2011, Mr. Benedetti is the Executive Chairman. Both of these incumbent directors also are or have been directors of Versatile. Mr. Rimmer questions potential conflicts of interest that may arise from these overlapping board memberships, as well as in these nominees’ relationships with John Hardy and Fraser Atkinson as officers of Versatile.
  •     Mr. Rimmer questions the propriety of Kenneth I. Denos continuing to serve on the Fund’s Governance and Nominating Committee, as Mr. Denos is not a disinterested director.
  •     Two quarterly write-downs of Fund assets were taken in the second and third quarter of 2010, without prior disclosure of potential impairments. Mr. Rimmer believes that these write-downs significantly reduced the trading price of the Fund’s common stock. On May 17, 2011, the Fund announced that its net asset value as of March 31, 2011 had dropped to $36.3 million, down from $38.1 million as of December 31, 2010 and $50 million as of March 31, 2010.
  •     Mr. Rimmer questions, for multiple reasons, the wisdom and intent of the Board’s recent decision to issue nearly 20% of the Fund’s common stock in exchange for bonds of Orco Germany S.A. In particular, Orco Germany appears to be in financial distress, has had significant doubt cast on its ability to continue as a going concern, and will likely have to restructure its bond debt before maturity in May 2012. Mr. Rimmer also questions certain relationships among Messrs. Benedetti and des Pallieres and the sellers of the Orco Germany bonds.

Mr. Rimmer is seeking solely to inform the Fund’s stockholders of his voting intentions and reasons for withholding votes for Messrs. Hardy, Atkinson, Denos, Benedetti and des Pallieres. He is not soliciting the votes of other stockholders, or seeking the grant, withholding or revocation of any proxy as to shares of the Fund.

Roy T. Rimmer, Jr., President, RNR Production Land & Cattle
(817) 437-2599

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Roy T. Rimmer, Jr.
RNR Production Land & Cattle
(817) 437-2599
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