Echo Therapeutics Board Once Again Impedes The Rights Of Echo Stockholders
Refuses to Honor Platinum Management's Demand for Books and Records
Platinum Forced to File Suit to Enforce its Statutory Rights as it Continues to Seek Information Relating to Possible Mismanagement, Breaches of Fiduciary Duty and Wrongdoing by Officers and Directors of Echo
NEW YORK, Sept. 12, 2014 /PRNewswire/ -- An affiliate of Platinum Management (NY) LLC ("Platinum"), the largest stockholder of Echo Therapeutics, Inc. ("Echo" or the "Company") (NASDAQ: ECTE) owning approximately 30% of Echo's outstanding Common Stock on a fully converted basis, today filed suit in Delaware following the refusal by Echo to provide documents in response to Platinum's demand for certain books and records of the Company under Section 220 of the Delaware General Corporation Law. Platinum had previously delivered a letter to Echo pursuant to Section 220 demanding to inspect books and records relating to possible mismanagement, breaches of fiduciary duty and wrongdoing by, among others, members of the Board and the Company's current interim CEO, Kimberly A. Burke.
Platinum submitted its demand because it has reason to believe based on input from a former service provider that certain directors, officers and other employees of the Company may have been involved in, and/or may have attempted to cover-up potentially improper conduct.
Mark Nordlicht, Managing Member, Chief Executive Officer and Chief Investment Officer of Platinum, stated: "Today we had no choice but to file suit to enforce our statutory rights as we continue to seek information relating to possible mismanagement, breaches of fiduciary duty and wrongdoing by officers and directors of Echo because, once again, Vincent D. Enright, William F. Grieco and James F. Smith, the Lingering Directors, have refused to act properly on behalf of stockholders of the Company. While we were disappointed with their refusal, we cannot say we were surprised. Repeatedly, we have found that the Lingering Directors cannot be counted on to perform even the most basic of their legal obligations. As detailed in our 220 Demand Letter, we have serious concerns that the Lingering Directors' actions may be the result of more than mere incompetence."
Mr. Nordlicht continued, "As the Company's largest stockholder, we are acutely aware that Echo is a company of limited means. With that in mind, we have repeatedly tried to work constructively with this Board to put the Company on a strategic path necessary to maximize value for all stockholders. Time and again the Lingering Directors refused to return the favor. It was our hope then that the overwhelming repudiation of their regime at the Annual Meeting and the July 18, 2014 Town Hall Meeting was too strong a message for even the Lingering Directors to ignore. Unfortunately, the Lingering Directors turned a deaf ear, once again demonstrating they are apparently capable of only three things: acting in what we believe to be their own self-interest, failing to fulfill even the most basic of their obligations as directors and ignoring the will of stockholders."
Mr. Nordlicht concluded, "If the Lingering Directors intend to continue to refuse to heed the will of stockholders, Platinum intends to continue exploring all actions necessary to ensure the Board is comprised of competent individuals unrelated to Platinum who have the best interest of stockholders in mind. In the meantime, the Lingering Directors and members of management must understand that Platinum will continue to investigate their past and current conduct and to hold them fully accountable for their actions."
Contacts:
Media:
Platinum Management (NY) LLC
Uri Landesman, President
212-582-2222
SOURCE Platinum Management (NY) LLC
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