7.2% Holder Makes Books and Records Request, Citing CEO's $100 Million "Fantasy Valuation" of the Company, and CEO's Illicit Efforts to "Scare Away" Potential Bidders
Files Form 13D Amendment; Submits Letter to Board of Directors
LAPORTE, Ind., June 13, 2013 (GLOBE NEWSWIRE) -- Timothy Stabosz, at 7.2% ownership, the largest outside shareholder of Scott's Liquid Gold, Inc. (OTCBB:SLGD), today announced an offer he made, on June 6, 2013, to purchase all of the shares held by CEO Mark Goldstein, at a price of 50 cents per share, conditioned on removal of the company's 15% "poison pill." (The offer was declined by Goldstein.) Stabosz remarked, "Goldstein's board has had a grand old time attempting to vilify my efforts to have the company do a 50 cent tender offer, to any and all shareholders who want to rightfully take their capital out of this company, and divorce themselves from this CEO's longstanding record of value destruction. With the board's attacking my integrity in its most recent 8-K letter, I thought it would only be fair to call the board's bluff, and go on record as being willing to either SELL my shares back to the company at 50 cents, or BUY Mr. Goldstein's position for 50 cents. The fact of the matter is, the value of Scott's Liquid Gold would be maximized, if Goldstein were gone, or if the company were sold outright. Being forced to remain 'tethered' to a CEO, who has caused the company to lose money for 10 consecutive years, and 14 out of the last 15 years, is a form of subjugation, for the outside shareholder base, that is morally, ethically, and fiduciarily untenable for this board to continue to perpetrate."
Stabosz continued, "I am not surprised the board refuses to hold Goldstein accountable, as the proposed 'new' board consists of, outrageously, 4 out of 5 members who own NO COMMON STOCK WHATSOEVER, and therefore, have no vested interest in making sure that the person that runs the company is the best candidate. This has been the longstanding tragedy of Scott's Liquid Gold for a generation now...a board, hand-picked by Mark Goldstein, whose primary loyalty is to maintain Goldstein's, and his spouse's, employment sinecures, rather than actually creating value for all shareholders."
In a related matter, Stabosz indicated that, also on June 6th, he made a books and records request of the company, seeking to inspect the board minutes, and any Special Committee minutes, related to expressions of interest received, or offers to purchase the company, from 1999-2001, and 2010 to present. The letter, in which Stabosz makes the request, can be found at the following web link:
http://www.sec.gov/Archives/edgar/data/88000/000116289313000004/bksrcs.txt
Stabosz commented, "When the CEO of a company, speaking to prospective suitors, recklessly and manipulatively ascribes a 'fantasy value' for the company, of $100+ million, it is de facto quite obvious that the CEO is attempting to 'kill' the possibility of a value-maximizing sale of the company, exclusively in order to protect his own job, and his glorious family fiefdom, into perpetuity. Such self-dealing on the part of a minority owner CEO represents a conflict of interest, a breach of fiduciary duty, and a potential fraud claim. I seek to inspect the books, to verify that the board is doing its job in overseeing Goldstein's handling of suitors for the company, or whether, as I have every reason to believe, the board has inappropriately given 'carte blanche' to Goldstein, to 'kill' any and every potential deal, no matter how substantive the premium."
Finally, Stabosz noted his filing with the SEC of a 13D Amendment, and attached letter, in which he rebuts the scurrilous allegations of the board's recent 8-K letter. His formal 13D filing, and the letter, can be accessed at the following two web links, respectively:
http://www.sec.gov/Archives/edgar/data/88000/000116289313000004/slgd13d7.txt
http://www.sec.gov/Archives/edgar/data/88000/000116289313000004/sl.txt
Stabosz summed up, "Scott's Liquid Gold, under family scion Mark Goldstein, has been a lurid narrative of self-dealing, waste of corporate assets, nepotism, and cronyism. It is also a story of denial, delusion, hubris, and tragically, the destruction of the lion's share of the value of a once great brand and company, that is due EXCLUSIVELY to the CEO's managerial incompetence...and a wretched board, that defers to the CEO's every whim. As someone who has held shares in this company, continuously, for 5 1/2 years, and as the company's largest independent shareholder, it has been my hope and wish that by drawing attention to and EXPOSING the evil that is going on in this company's boardroom, change will be brought about, and a nominally public company will finally be operated for ALL shareholders...and not just one family. In closing, I want to put the Scott's Liquid Gold board on notice, that if it receives credible expressions of interest to purchase the company, a Special Committee MUST be formed, so that a rigorous and bonafide process of evaluation of that offer may occur. Letting Goldstein 'have his way' with offers for this company, or literally driving bidders off, MUST END NOW! Should the board continue to fail in its duties, and turn a blind eye to the grotesque pattern of licentiousness, fabrication, and gamesmanship, that is Mark Goldstein's stock in trade, you will be subject to a suit for breach of fiduciary duty, and a host of other potential actionable claims," Stabosz concluded.