November 09, 2010 08:30 ET
Veltex Corporation Updates Key Asset Recovery Plan
CHICAGO, IL--(Marketwire - November 9, 2010) - On February 22, 2010, Veltex Corporation (PINKSHEETS: VLXC) announced that the corporation had engaged the services of Blecher & Collins, P.C., a nationally acclaimed business litigation firm, to recover damages to the corporation by various entities and individuals. Blecher & Collins had been retained to commence the prosecution of claims against former officers and directors, law firms, accounting and bookkeeping firms, and transfer agents, and to investigate and pursue potential claims against banks. Maxwell M. Blecher and Maryann R. Marzano pilot the litigation team on behalf of Veltex Corporation.
In August of 2008, Utah state court Judge Kate A. Toomey removed the past and former board of directors and management, which included Javeed A. Matin, Saasha Campbell and Mazhar Ul Haque.
The new current Veltex board of directors, which were elected by the shareholders in 2009, and management, are fully dedicated and determined to seeing the that all property which has been wrongfully removed be returned to the corporation with maximum value and in a timely fashion.
On March 10, 2010, Blecher & Collins filed a 96 page federal complaint on behalf of Veltex Corporation in the United States District Court, Central District of California (Western Division - Los Angeles) entitled, Veltex Corporation vs. Javeed Azziz Matin et al, case number 2:10-cv-01746-ABC-PJW. That case alleges damages from 22 individual and corporate defendants in excess of $35,000,000 (Thirty Five Million) dollars. The corporation believes that the final total damages could be substantially higher given the amount of fraudulent transfer and conveyance of corporate assets discovered to date. The investigation and accounting of damages is continuing.
On July 16, 2010, Blecher & Collins, on behalf of Veltex Corporation, filed a 330 page (including exhibits) First Amended Complaint with the Court. To date, numerous defendants have been found in default by the clerk of the Court and one individual defendant has settled with the corporation under a Confidential and Non-Disclosure Agreement. The Court has set a trial date for January 2012. The corporation is currently reviewing individual state claims against certain named defendants.
On November 1, 2010, the United States Securities and Exchange Commission, the SEC, filed a parallel suit in the United States District Court, Central District of California entitled, Securities and Exchange Commission vs. Javeed A. Matin and Wilshire Equity, Inc., case number 5-2010cv01686. That case alleges similar counts to Veltex's claim and is against two defendants, Javeed A. Matin and Wilshire Equity, Inc., that the corporation has also named in the March 10, 2010 complaint.
On November 1, 2010, a SEC administrative law judge entered an Order instituting a Cease-and-Desist Proceeding and a Cease-and-Desist Order against Mazhar Ul Haque. Mr. Haque is also a named individual defendant in the corporations March 10, 2010 complaint.
On December 29, 2009, Veltex Corporation filed an Adversary Proceeding complaint in the United States Bankruptcy Court in case 2:09-AP-03558-PC against former Veltex receiver Lee G. Scharf alleging willful and malicious conduct and breach of fiduciary duty, among others. Damages to the corporation alleged in the complaint are in excess of $500,000 (Five Hundred Thousand) dollars. Mr. Scharf filed for bankruptcy on September 9, 2009. Veltex Corporation has a similar complaint filed in the State of Utah alleging similar issues against Mr. Scharf. These matters pending against Mr. Scharf are currently ongoing and will be updated as developments warrant. Veltex Corporation has retained the services of foremost Los Angeles bankruptcy attorney Stella Havkin of the firm Litwak & Havkin in Los Angeles. The Salt Lake City Utah law firm of Cohne, Rappaport & Segal, P.C. has been retained by Veltex and attorney Jeffery L. Silvestrini is lead counsel in the matter pending against Mr. Scharf in Utah State Court before the Honorable Kate A. Toomey.
On February 24, 2010, Veltex Corporation entered in a Standstill and Confidentiality Agreement with a major Los Angeles private corporation. Due diligence has been conducted and completed, however, due to the fluidity of the monetary damages to Veltex and until such time that values can be placed in regards to the current litigation, both firms have agreed to remain in place and reestablish talks that may result in better financial terms for both parties.
Blecher & Collins is recognized as one of the premier complex business litigation law firms in the country. Founded by Maxwell M. Blecher in 1971 and based in Los Angeles, California, the firm excels in handling a full range of complex business and commercial litigation. Blecher & Collins is uniquely positioned to provide unparalleled legal representation to Veltex with its team of highly experienced attorneys. Blecher & Collins has successfully prosecuted business and securities fraud claims, claims for embezzlement and banking fraud, and legal and accounting malpractice claims. Blecher & Collins has successfully challenged major corporations such as Eastman Kodak, Johnson & Johnson and AT&T, among others. Blecher & Collins is an AV peer-review rated firm is proud to count among its alumni two California state court judges and a federal court magistrate. Details of the firm can be found at www.blechercollins.com.
Veltex will update shareholders with developments as progress warrants.
Veltex Corporation maintains its corporate headquarters in Chicago, Illinois.
Safe Harbor Statement
Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors.