Today I received the below "Memorandum" in the mail from Michael Robertson, "President & CEO" (and sole board member) for Linspire. (Click image to enlarge.)
It should be pointed out that "The stockholders voted..." and "...the stockholders approved a plan..." really means "Michael Robertson voted..." and "Michael Robertson approved a plan..." since the minority shareholders were not asked to give input. This is the third time, that I'm aware of, that Michael has done things by written consent, without any shareholder meeting or input. The first time was when he fired everyone from the board of directors other than himself, the second time was when he sold Linspire to Xandros, and now this time when he said he'll be dissolving Digital Cornerstone, Inc. Those are all pretty significant events to do on your own, without other board members or shareholder meetings.
According to this latest memorandum, Michael has a plan to "distribute [Linspire's] assets." I wonder what the minority shareholders will be getting? Considering I offered to purchase shares in the company at $.50 per share just one year ago, let's see how good a job Michael Robertson did in running Linspire this past year. Will the minority shareholders see more than $.50 per share? The same? Less?
Also, about a year ago, I presented a plan to Michael to have the company offer to buy back stock from shareholders at $.50 per share. Michael turned down that plan, saying that the company needed to keep all its cash to run the business. He obviously felt by keeping all the cash in the company and running the business himself, that he could make the shares worth more than $.50 per share. So, let's see how Michael performed for the shareholders. Did he turn water into wine, or into toxic waste? (From my vantage point, this is what it appears he's done this past year.)
Lastly, I'm curious how Digital Cornerstone, Inc. could be dissolved when they have ongoing litigation? Just one example is I know they are being sued by a former employee because Linspire did not honor his employment agreement.
I stand by my assessment, that the Xandros deal was all just a big ruse by Robertson to take all the assets and cash for himself, leaving the minority shareholders with nothing. I believe that dissolving Digital Cornerstone, Inc. is simply the next step in his "I-hope-everyone-forgets-about-all-of-this" plan.
Prove me wrong Michael. Anything north of $.50 per share distributed to the minority shareholders and I'll happily eat my words. Anything less than that, however, then in my mind you're either a lousy businessman (who made a bad judgment in not doing the stock buy-back plan), a thief (who took unauthorized funds for yourself, father-in-law, and/or your other businesses when YOU SAID all funds needed to remain in the company for Linspire to succeed), or you simply never intended to "take care of your peeps" all along (and just wanted to see everything go to you).
Stay tuned. I'll be sure and report back what's left for the 100 some-odd minority shareholders.
Kevin
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7 comments:
Kevin, It's quite interesting to follow your blog and the events at Linspire (altbeit sad in the bigger picture).
I am curious, since MR is the majority shareholder (51+%), does it really matter if they hold a board vote to what he did? I mean anything he puts on the table, and votes on, won't matter what the others vote, Right?
I mean if I'm right and I were him, I'd rather dispense with the formalities (i.e. arguing over the right / wrong of his methods) and just file the vote and be done.
Not trying to put discount what you did for them, but he did put up the majority of the $, no?
John
Minority shareholders still have rights. If you take money from investors, they get shares in your company, and really all those shares are, are rights that you have.
This past year Linspire has only had one member on the board of directors (Michael Robertson), and he has a fiduciary responsibility to ALL shareholders.
So, no, MR can't just do anything he wants. If that were the case, why would anyone ever invest in a company? If you own stock in a company, chances are you too are a minority shareholder. For example, if one large shareholder took your investment, and then transferred it to himself, would that be right?
Even if Robertson did everything legally and properly (which I have no reason to believe he did), his actions still show his disregard and contempt for minority shareholders.
My lawyers have been denied access to the books, and I'm a fairly sizable shareholder. It may take a lawsuit to find out what really happened. I've been trying for a year to have access to the books without success.
Makes one wonder what he's hiding or afraid my lawyer will find out.
Kevin
I will post it i know Kevin wont...
here is the link to the major shareholders and holdings as listed in the S1. KC has close to 6% of the stock vale he is basically the largest stock holder outside of people in MR's family. Sadly MR would have still had 63% of the stock even if the IPO had actually happened. What i dont know id if MR would have sold of Linspire if we had been publicly traded. and reflecting on the fact that he would have still had a 63% share of stock i wonder if that was negatively affecting the valuation we were getting from institutional buyers.
Kevin what is your view on this?
Still reading the blog... even if no one else is. Keep those following updated and informed since I somehow doubt I'll be reading this in a newspaper. I'm really curious to know what happens with all this. You've made such a big stink about it now that I expect you will follow up right or wrong. If you are wrong you'll be all the bigger man for it. I can clearly see the concern.
Anonymous...I HOPE I AM wrong. That would be the best for everyone. However, I've seen Robertson's behavior this past year and see no shred of decency in him or any concern for others, including former employees and shareholders. When you stoop so low as to falsely accuse several very good employees of embezzlement for having taken reasonable severance payments, that's pretty shameful and shows a total lack of ethics and character.
Kevin
My suggestion is to approach the court, as there are many rules which may question him to provide share ($0.50 or above) for Minority shareholders. There is no one can escape from the law. Best thing to provide the proof to the court.
Mano
At this point I don't know if i will see any of the money i did invest from the options i did strike. At least for me don't have the number of shares or finances punt in top lindows/linspire. If i do see any of the money back then it will be a nice surprise to me.
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