GO SIMON
Posted on 08/09/2002 9:15:52 AM PDT by ElkGroveDan
California Political Review's
CAPITOL WATCH
A SNAP-SHOT OF CALIFORNIA STATE CAPITOL NEWS
WEEK OF AUGUST 2 -- AUGUST 8, 2002
Trial evidence belies fraud charges. Press reports of the Pacific Coin lawsuit failed to report evidence refuting plaintiff Paul Hindelang's fraud allegations against Simon & Sons. The Los Angeles Times reported that, in his lawsuit, "Hindelang argued that the Simon investors concealed from him -- until the last minute -- their plan to charge Pacific Coin several million dollars in investment banking fees. The Pacific Coin acquisition produced more than $1 million in fees for William E. Simon & Sons, but the firm denied hiding its intent to charge them."
The Times failed to report:
* that trial Judge Chalfant wrote in his summary judgment decision that documentary evidence existed that Hindelang knew of the fees,
* that Hindelang testified at trial that the $1.5 million fee was negotiated in advance of the February 1998 transaction, and that the negotiation included provisions for $1 million to be paid directly to him,
* that Hindelang signed documents agreeing to and acknowledging the fees before the transaction closed,
* and that, according to trial testimony, the competing investment bank (Seidler Haas) proposed $4 million in bank fees, more than twice Simon & Sons' $1.5 million fee.
According to the Los Angeles Times, "Also hidden from Hindelang -- fraudulently, the jury found -- was the Simon group's high-risk plan to borrow tens of millions of dollars to expand Pacific Coin, then take it public a few months later in a stock offering. Had it worked, the plan could have made the Simon investors a fortune."
Regarding expansion, the Times failed to report:
* that Hindelang's career in the payphone industry was characterized by growth by acquisition,
* that although Hindelang identified Pacific Coin's acquisition of Golden-Tel, Nevada's largest independent pay phone company, as evidence of an acquisition he opposed, he had tried to purchase Golden-Tel himself before entering business with Simon & Sons,
* that in January 1999, Hindelang signed a letter of intent, sent to Golden-Tel, agreeing to the $41 million acquisition price he later claimed was inappropriate and fraudulent,
* that Hindelang voted his 23 percent ownership in favor of the acquisition (without his votes, the 80 percent supermajority required for major acquisitions would not have been reached),
* that the new Pacific Coin had made eight prior acquisitions before Golden-Tel, and two more after, and that Hindelang supported them all, not exercising his right to stop them.
Regarding the stock offering, the Times failed to report:
* that any IPO also required an 80 percent vote to undertake and that Hindelang testified that his 23 percent gave him "the vote to stop it,"
* that Hindelang testified that he was told in advance of the deal that an IPO was a possibility, and that he knew he had "complete control" to stop any such IPO,
* that Hindelang admitted to receiving documents that revealed the possibility and procedures by which the company could be taken public,
* and that Judge Chalfant agreed with William E. Simon & Sons and the other cross defendants before trial that there was no basis for this fraud allegation.
Regarding making "a fortune," the Times failed to report that Hindelang alone profited, collecting $26 million from the Simon investment in his company. Investors lost their money when the banks seized the company.
Everything I've heard says the jury was pretty irate at Simon's firm. I wouldn't be surprised if Bob Mulholland gets some of them to appear in TV attack ads on Simon.
Understood, however, post-trial activities and motions I think have strict time limits. I doubt that Simon's attorneys are going to delay anything and will do all they can to keep it moving. We'll see.
On another matter as to this race, I trust you saw the thread with the Washington Times article (if you didn't let me know and I'll find it and ping you) where W is awaiting an RNC funded poll to determine whether to come to California for Simon. Though we may not see the results, we will know the impact of this jury verdict/Grayout ads forthwith if W cancels his appearance. My money says he does not. *fingers crossed for a Grayout backfire*
Honestly, I expect Simon to take a hit in the polls, but nothing major. I don't expect voters to flock to the Davis camp. If folks (including the RNC and national Pubbies) would relax and let this thing play out, I think Simon can still win. But as we see here, so-called conservatives and Republicans are falling all over themselves to tell us how Simon doesn't have a prayer.
Then again, they were doing that when all the news was good. :-)
Ain't that the case. *sigh* Methinks many are less that sincere pubbies. Your reading of the article appears accurate too. Definitely an interesting race so far. See ya around...
Friggan LA jury. Bunch of unemployeed rich-hollywood-liberal-wanna-bes. All friends of Woody Herrelson, I'd presume.
He should, if there is justice in the world, and issue a statement that the jury was filled with a bunch of idiots who should never have been empaneled!
ROFL!!!!
calgov2002:
 calgov2002: for old calgov2002 articles. calgov2002: for new calgov2002 articles. Other Bump Lists at: Free Republic Bump List Register |
Have there been any articles that would detail and explain what was behind their unhappiness?
Their decision just doesn't seem to fit with the facts as given here!
Were they perhaps bought?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.