Interplay - Sold!

If I understand this SEC filing correctly, a controlling interest in Interplay (56%) has been sold by Titus to a Swedish company called FPD without Herve Caen's prior knowledge:

On March 21, 2008 the Chief Executive Officer and Interim Chief Financial Officer, Herve Caen, received a letter providing written notice of there having been a change in control of the registrant. According to such letter, Financial Planning and Development S.A., a Luxembourg company ("FPD"), acquired the holding of approximately 58 million shares of common stock of the registrant, representing approximately 56% of the outstanding shares of capital stock of the registrant, previously held by Titus Interactive S.A. (in bankruptcy) ("Titus") on April 30, 2007 in a private sale by the bankruptcy trustee of Titus. The amount of the consideration paid for such holding by FPD is not known to the registrant. The source of the funds used for the acquisition is not known to the registrant. There were and are no arrangements or understandings with respect to election of directors or other matters of the registrant, known to the registrant. There are no arrangements, known to the registrant, including any pledge by any person of securities of the registrant or any parent, the operation of which may at a subsequent date result in a change in control of the registrant.

Those of you with expertise in SEC filings can expand on the ramifications in our forums. Thanks to a poster on Qt3 for the link.
More information.

Herve Caen is the bankruptcy trustee of Titus.

Considering that, how likely does all that "is not known to the registrant" sound?

To be honest I'm peddling in the dark here, though I'm usually pretty well up to speed with Interplay dealings. There's no way to find out who FPD is, but it sounds like it's just a cover for Caen to move majority ownership from the bankrupt Titus to a proxy company, thus gaining majority ownership himself.
(this also activates a prior set option for Caen to buy 6 million stock at 3 cents a piece)

I was holding off posting this on GB (but now I did, anyway), because this seems like it's just a prepatory filing, and we should get more news in their 10-Q, hell - hopefully today. Interplay is about to be late on its filing. Again.

Swedish company ???

From Luxembourg, not Sweden.

Luxembourg, the cheese capital of Sweden.

Luxembourg is not part of Sweden but it's own country.
http://en.wikipedia.org/wiki/Luxembourg

Apparently, we don't have any CPAs active on our boards, so I guess I'll go ahead and express a few opinions. I haven't actually been up to speed on Interplay, but here's my take on this filing (I also dug a little deeper at Edgar).

First, Herve Caen had better be telling the truth about not knowing who bought the shares or for how much. It's illegal to lie to the SEC, and people do go to jail for that sort of thing. Since the previous owner of the shares, Titus Interactive S.A. is in bankruptcy, a judge, somewhere, undoubtedly decided on the sale.

According to Edgar, fewer than 10% of Interplay's shares are outstanding. So whomever it is, they bought a little over half of those (or about 5% of Interplay), giving them a controlling interest in the company (not to be confused with ownership of the company). They seem to have paid about seven cents per share.

Let me clarify.

Originally Posted by Squeek
First, Herve Caen had better be telling the truth about not knowing who bought the shares or for how much. It's illegal to lie to the SEC, and people do go to jail for that sort of thing. Since the previous owner of the shares, Titus Interactive S.A. is in bankruptcy, a judge, somewhere, undoubtedly decided on the sale.

Herve Caen has lied to SEC before.

Titus Interactive S.A. is a French company founded by Herve and Eric Caen. Eric Caen was the CEO at the time of its bankruptcy. When it was forced into liquidation by court order at the end of 2006, Eric appointed Herve as the bankruptcy trustee.

This deal happened in April 2007, as a part of Titus' liquidation. Almost all of the money from Titus' liquidation was funneled to Interplay, as no doubt this was too.

Is there any way for Herve to actually not know what happened here? That seems unlikely.

Originally Posted by Squeek
According to Edgar, fewer than 10% of Interplay's shares are outstanding. So whomever it is, they bought a little over half of those (or about 5% of Interplay), giving them a controlling interest in the company (not to be confused with ownership of the company). They seem to have paid about seven cents per share.

Wait, 90% of Interplay is treasury stock?

I did not know that. That does indeed make most of these reports on the Watch/Codex/NMA/GB inaccurate.

Originally Posted by Brother None
Let me clarify…Is there any way for Herve to actually not know what happened here? That seems unlikely.

OK, now I see why you're so sure he's not telling the truth. I've never been through bankruptcy protection before (or is it liquidation?), but I can imagine he may just not be privy to those details right away.

Originally Posted by Brother None
Wait, 90% of Interplay is treasury stock?

Why would that mean that?

Treasury stock means stock that is held by the company. So if you are authorized to have 100MM shares and you have 10MM outstanding, then you have 90MM as treasury stock or 'on the shelf.' Companies do this so they can issue new stock down the road without having to refile with the SEC.

They may also think their stock is undervalued by the market, but it back 'cheap' and sell it back into the market later at hopefully a higher price.

I'll have to see what the filing reads. 10% outstanding could mean that 90% was just not publicly traded, but not likely. IIRC Interplay did a pretty big stock buyback at one point, so having 90% on the shelf does not seem unlikely.

FYI, although I'm not a CPA, I am a CFA Charterholder (Chartered Financial Analyst), so I'm pretty familiar with these filings. I'll look through it a bit more one of these evenings.

Originally Posted by Squeek
OK, now I see why you're so sure he's not telling the truth. I've never been through bankruptcy protection before (or is it liquidation?), but I can imagine he may just not be privy to those details right away.

Titus went through enforced bankruptcy and liquidation.

The laws in France are probably unique anyway (it being France), so I'm not sure what details a bankruptcy trustee is privy to there. However, I believe Herve has hinted at Titus having been sold before, and this deal did happen a year ago.

It fits Herve's modus operandi to try and sneak stuff like this past SEC. It works surprisingly well for the AMF apparently, and I wouldn't put it past him if something sneaky is going on here. After all, this also triggers Herve's option to buy 6 million shares at .03 cents a share, something that was set up…also a year ago.

Originally Posted by Squeek
Why would that mean that?

It wouldn't, but I'd imagine a large chunk of it would be treasury. I'm not sure of the numbers or Interplay's trading history, m'self.

(you'll have to excuse me if I don't adapt the right lingo on the fly. My grasp of markets is tenuous, and settled in another language)

What is the AMF?

Originally Posted by blatantninja
What is the AMF?

Autorité des marchés financiers, the French SEC.

Ahh, thanks!