SOURCE: Zealous Partners

November 16, 2010 06:00 ET

Zealous Asset Management LLC Sues Patient Safety Technologies and Former Partners

Ault Glazer Capital Partners and Zealous Partners Seek Payment and Damages for $2.4 Million Loan, Breach of Contract and Tortuous Interference

FOUNTAIN VALLEY, CA--(Marketwire - November 16, 2010) - Zealous Asset Management, LLC, Managing General Partner for hedge funds Zealous Partners, LLC (ZP) and Ault Glazer Capital Partners, LLC (AGCP) (collectively "The Funds") filed a lawsuit in Orange County Superior Court today, Case Number 30-2010-00424948, and have retained Arash Shirdel, Esq., Managing Partner of the Pacific Premier Law Group in Newport Beach, California. Mr. Shirdel will pursue their claims against Patient Safety Technologies, Inc. (OTCBB: PSTX) for breach of contract, breach of good faith and fair dealing, common counts-monies lent, intentional misrepresentation, fraud and tortuous interference, Dr. Louis Glazer, Board Member former Chief Executive Officer of PSTX.OB, major shareholder and Co-Founder of PSTX.OB, for fraud and tortuous interference, and Ms. Melanie Glazer, both major shareholder and Co-Founder of PSTX.OB for tortuous interference. Also named in the lawsuit is Stephen Bodnar a former partner in Ault Glazer Bodnar Acquisition Fund, LLC.

The suit alleges irreparable harm suffered by The Funds, Zealous Asset Management, LLC ("ZAM"), managing General Partner of The Funds and Zealous Holdings, Inc. ("ZHI"), parent of ZAM, as a result of the tortuous interference and misrepresentations made by the Glazers and management of PSTX.OB, about the financial strength of PSTX.OB and PSTX.OB's ability to service debts to The Funds. The lawsuit also alleges that due to the Glazer's controlling positions in the management of the AGCP and ZP, and as major shareholders in PSTX.OB, the Glazers were in unique positions to influence the decision making and actions of all of the companies and funds involved, often to the detriment of ZP, AGCP, ZAM and ZHI. 

From 2005 to 2006, ZHI, through its wholly owned subsidiary AGCP, made loans totaling $2.4 million to PSTX.OB. ("The Loans") on which PSTX.OB defaulted. On or about March 2007, as a result of PSTX.OB'S default on The Loans, PSTX.OB approached AGCP in order to remove The Loans from default status. On or about June 2007 PSTX.OB and AGCP agreed to enter into a new agreement and remove The Loans from default status ("Convertible Note"). Shortly after entering into the Convertible Note, on or about March 2008, PSTX.OB again defaulted, this time on the Convertible Note.

In early 2008, prior to the collapse of world financial markets, Zealous Trading Group, Inc (ZLUS), the publicly traded parent of ZHI, with the full and enthusiastic support of the Glazers as ZLUS board members with control interest, made an internal decision to move into the Adult Entertainment Industry. To reflect the Company's change in direction, ZLUS changed its name to Adult Entertainment Capital, Inc. In response to and as a result of published articles, members of PSTX.OB's board and management became apprehensive of the company's affiliation with the Adult Entertainment Industry and threatened legal action if PSTX.OB's name was mentioned in association with Adult Entertainment Capital, Inc. and the Adult Entertainment Industry in general.

In order to appease PSTX.OB's board, the Glazers, as members of both the board of directors of PSTX.OB and ZLUS, urged AGCP to modify and further discount the outstanding Convertible Note (Modified Agreement). As a result of the Glazers' intimate knowledge of AGCP and with knowledge that a default by PSTX.OB on the Modified Agreement would lead to AGCP's collapse, PSTX.OB, with the approval of the Glazers, intentionally defaulted on the Modified Agreement to AGCP. PSTX.OB's intentional default on the Modified Agreement interfered with AGCP's ability to satisfy its own debts and resulted in the eventual bankruptcy of ZHI. Additionally, PSTX.OB has defaulted on preferred stock interest payments owed to ZP. After two years of unsuccessful settlement attempts and the bankruptcy of ZHI Zealous Asset Management, LLC, Ault Glazer Capital Partners LLC and Zealous Partners, Inc. have reluctantly decided to pursue legal recourse against Patient Safety Technologies, Inc., the Glazers and Mr. Bodnar. 

About Zealous Partners, LLC, Ault Glazer Capital Partners, LLC and Zealous Holdings, Inc.

Zealous Partners, LLC, and Ault Glazer Capital Partners, LLC are independent Delaware Corporations and investment funds managed on behalf of Zealous Asset Management, Inc. and its parent company Zealous Holdings, Inc. whose parent is CoreStream Energy, Inc. f/k/a Zealous, Inc. Zealous Holdings, Inc. is a Nevada Corporation and a financial holding company and parent of Zealous Asset Management, LLC, a defunct company, and a wholly-owned subsidiary of CoreStream Energy, Inc. f/k/a Zealous, Inc. Zealous Holdings, Inc. is currently involved with bankruptcy proceedings.

Contact Information

  • Gary Patterson
    714-369-2933