Friday, 22 October 2010

Ouch! That's gotta hurt!

RNS Number : 8245U
xG Technology Inc.
22 October 2010

Additional shareholder loan facility clarification

Further to its announcement on October 8, 2010...The Company would like to clarify that..., Ceinwen Lloyd did not participate in discussions concerning the transaction in its final form and did not participate in the Directors' approval. The Company has since been informed that she would not have approved the transaction.

Poor old Johan. One minute he's playing mind games with Rick, vying for Alpha status. The next minute Rick's sidestepped him all together and dealt the deal that essentially separates Johan from all that lovely money he's put into xG Rick's pockets.

As we know, Rick and Johan's relationship was always 'challenging' - due to them both being arseholes. Richard Kromka explains in the court documents...

“Dealing with Treco’s and xG’s management presented an even more challenging scenario. Neither would communicate with the other, so Kromka many times had to serve as the go-between, which placed him in untenable situations.... Bohman and Lloyd avoided speaking directly to Mooers and told Kromka that the reason for this was to increase Mooers’ “insecurity” in their relationship and that they will only talk to Mooers when 'he ran out of cash' and they constantly discussed with Kromka the idea of suing Mooers and taking over xG”. Then when critical descisions had to be made they would “be out of communication with Kromka” entirely, leaving him hanging.
I presume this is what happened here: There was a meeting but as per normal for xG the new clarification is fairly ambiguous in it's language. It says that the new loan was only approved by the 'majority' of board members. Hmm.

This could mean that only two of the remaining three directors approved it. I.e. it was a 1/2 split, which is now a 2/2 split. That could be interesting legally. On the other hand of course it could mean a 1/3 split, we may never know.

What is certain however is that Johan, as we assumed, wasn't happy. (If you are reading this - you can't say I didn't warn you....) And that this announcement is an on-record strengthening of their legal position, in preparation for the shit hitting the fan, when Rick activates his 'failure to pay himself' plan.


  1. How will this affect Treco's unpaid invoices for base stations?

  2. Great question. Mooers wanted to demonstrate 'sales' and 'profitability' so they played 'balance sheet bingo' and lo! Sales. They never were real sales.

    I assume Bohman was complicit with this. He knew that when the company goes down it would be very difficult to chase these debts. The administrator may try, but chances of success will be close to zero. I suppose a lot will depend on what the contract actually says, and if the base stations were actually made (they must be gathering dust by now if they were..)

  3. Personally I wouldn't be surprised if xG tries to collect the money even though nothing has been delivered.

  4. Probably Huang. Ultimately it'll be for the lawyers to decide. Looking back, xG announced it as an 'order' rather than a 'contract'. That implies to me that there may not be anything actually signed to that effect. It could just be a verbal agreement.

    If so, it could be argued in a court of law that that constitutes a verbal contract - and I'm sure xG would try. But it's not as nailed down as a signature. I understand that the time frame where you can sue for breach of contract is a lot shorter than for a written one.

  5. I'd love to know Bohmann's thinking at the time of his cash infusions. Did he really believe in the technology and they were genuine investments? Or did he view "working" with MB as merely a way to make money and his involvement was a bit more cynical than the PRs would indicate?

    If it's the former, I might feel a little sorry for him. But come on, it would take a real idiot not to spot all the red flags. An investor that stupid deserves to lose his shirt. If it's the latter, well, I just have to laugh. No honor among thieves, as they say.

    Regardless, I hope Bohmann puts up a good legal fight. If he just rolls over, how long will it be before MB simply form a new company and the cycle starts anew?

    Let the bloodbath begin!

  6. Hi Billy,

    Yeah. He must be especially pissed off that when he was buying shares for Casper Holdings the price was held at $5. He was essentially bidding against himself! That wasted a few million.