LAS VEGAS, Nev.—This morning, the District Court judge in Consipio v. Private Media ruled on a motion by Private that would have denied Consipio Holdings the right to vote its 5.6 million shares of Private common stock.
“Motion denied,” the judge said, in a Las Vegas courtroom, bringing the hearing to a quick conclusion.
The significance of today’s ruling cannot be overstated; in one fell swoop it shifts the balance of power among Private shareholders away from the current CEO Berth Milton and his supporters to a group of shareholders that includes current plaintiffs Consipio, Tisbury Services and former CEO Ilan Bunimovitz, and other shareholders—the aggregate of whose shares amount to a shade over 50 percent of outstanding Private common stock.
The disposition of the Consipio shares has been a main point of contention for quite a while, and stems from the pledging of the 5.6 million shares in 2001 by Milton as part of a loan from Commerzbank. The loan was subsequently acquired by Consipio in 2003.
According to the Consipio complaint, Consipio currently holds “debt in the principle amount of $5.5 million that is currently in default.” In lieu of payment, and as the “sole and lawful owner of the voting rights to 5.6 million shares of PRVT common stock," Consipio claimed the right to vote those shares in an upcoming shareholder meeting. The Private motion denied today attempted to prevent Consipio from exercising that right.
Barring an unforeseen occurrence, the ruling also signals what can only be seen as an inevitable shake-up of Private’s Board of Directors, as well as the possible removal of Milton as CEO of the company.
AVN will continue to follow this case as it develops.