Musicmaker.com Makes Plea to Stockholders
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You say you want a revolution? This Beatles ditty seems to be a way of corporate life at musicmaker.com as much as it is a sale item.
The provider of customized music CDs Monday urged its stockholders to ignore communication "from an insurgent stockholder group comprised of BCG Strategic Investors, Barrington Companies Equity Partners, dot com Investment Corporation and their affiliates."
In a letter signed by Devarajan S. Pathukarai, chairman of musicmaker.com, stockholders are asked "to not sign consent forms sent by the insurgents."
"The Insurgents publicly stated their intention to seek written consents to take certain actions to take control of the musicmaker.com board of directors, including amending the bylaws to increase the number of directors to 15 and to nominate eight individuals, including James Mitarotonda and Seymour Holtzman to the board of directors," according to the letter.
"The musicmaker.com board of directors unanimously believes these proposals are not in the best interest of the public or the stockholders. The musicmaker.com board of directors has adopted a Plan of Complete Liquidation and Dissolution which, if approved by the company's stockholders, will provide for an orderly liquidation of the company's assets," Pathukarai wrote.
Measures proposed by the existing board of directors include closing the company's New York City office, terminating all unnecessary employees while leaving a minimal staff to wind up business affairs and closing down all operations and the company's Web site.
"We are concerned that the Insurgent's proposals may disrupt the orderly completion of the liquidation," Pathukarai wrote. "In contrast, the Insurgents have failed to identify their proposed plans for liquidation of the company and failed to disclose all of their contacts, arrangements and understanding of third parties."
The company's share price plummeted to $2-7/8 from a high of $281-1/4 on the day of its initial public offering in July 1999. Monday morning the stock was down 3/16, trading at 4 5/16.
Although a liquidation sale is anticipated, the site was not accessible at press time. A spokesperson for the company was not available for comment.