Here is a summons issued by the US courts on behalf of Wizard World against Gareb Shamus, co-founder of Wizard World.
It is part of a new twist in the case against co-founder Stephen Shamus, and a new complaint made by Wizard World, not only against Stephen Shamus but also brothers Gareb and Kenneth Shamus, Gareb's companies 4 Brothers and Pivot Media, companies It's All Normal owned by Stephen Shamus, Gem Funding, and other shareholders Eric Weisblum, Robert Knie and Vincent Labarbara.
The complaint state that Gareb, Stephen and their companies have not made required federal disclosures, and referring to the main case we have been covering which states that shareholders Eric Weisblum, Robert Knie and Vincent Labarbara had knowledge of a plan for shareholders to replace the board of directors.
The complaint claims that Eric (who controls Gem Funding), Robert and Vincent are all friends of the Shamuses as well as large shareholders. And that they haven't declared their group intentions regarding their share ownership, under federal guidelines.
It states that Stephen Shamus was upset he was not given the CEO position after the resignation of John Macaluso, passed over for outsider John D Maatta.
Subsequent to Mr. Maatta's appointment, Stephen Shamus expressed his upset that he had been "passed-over three times" to operate Wizard World as its CEO, stating his pique at the dread of "having to train another management team." Stephen Shamus commenced a course of conduct which was petulant, obstructive, and harmful to the operations of Wizard World. His poor behavior came to a denouement when he ultimately refused to communicate with management, publicly stating his intention to resign from the Company.
That Weisman and Labarbara were only interested in the issuing of press releases that might help the company's lacklustre share price.
The agitation over the issuance of press releases continued over the summer when requests were made to issue releases praising former management and crowing about objectively marginal quarterly operating results. Company management, attempting to rebuild and grow its business, refused the pressure to issue press releases that were not warranted in order to satisfy the phantom motivations of Weisblum and Labarbara.
This was enough, according to the paperwork, to attempt a coup.
Having been rebuffed by Wizard World management, defendants Weisblum and Labarbara decided to join forces with the Shamus Brothers to pursue a change in the Board and to install Stephen Shamus as the new CEO. As Stephen Shamus's own statements confirm, these two defendants, along with defendant Robb Knie, planned to team up with the Shamus Brothers to take control of Wizard World. The Company regularly held its annual meetings in the fourth quarter of the year. A board member of Wizard World who was employed by Weisblum began to push for a shareholder meeting. Defendants thus anticipated that a shareholder meeting would occur shortly and agreed to work together to determine its outcome. Their plan has not borne fruit only because Wizard World has yet to schedule its 2016 annual meeting.
Well, they have run out of time for that, I guess. As for those press releases? On December 1, 2016, Jerrick Media Holdings, Inc financed by Mr. Labarbara's company, Network 1, issues a press release stating it was intending to buy Wizard World, and they state this was to,
encourage shareholders to purchase shares of Wizard World in order to then support the anticipated proxy contest by the Shamus Brothers and the other defendants. The press release was hopelessly misleading, as Wizard World had no intention of being acquired by Jerrick Media and the suggestion that a deal was either imminent or in the works was without the slightest factual basis. Indeed, Jerrick Media had no contacts at all with Wizard World before or
after the release.
So successful a press release was it that Bleeding Cool, taking an interest in this case, managed to miss it completely. Talking of which, the case also states, regarding the defendants,
Their conduct is believed to involve the manufacture of fraudulent and defamatory alleged insider information passed to third party bloggers and press outlets in furtherance of their wrongful scheme and objectives. The false stories are libelous under the laws of the United States and the United Kingdom, which is where at least some of the false stories originated. They were placed with the specific goal of discrediting Wizard World senior management in order to further the proxy context that Defendants were then pursuing.
From Bleeding Cool's perspective regarding this case, we have only used information in official US court documents, such as we are doing here, and presented them in that context – and have also passed proposed articles to official Wizard World representatives, such as Jerry Milani, for comment before publication in the US. As far as I am aware, we have not been passed information in the fashion alleged above.
If anything, I feel a little left out.
The suit demands that the courts declare the defendants have violated SEC rules, ensure they file their interests and plans regarding Wizard World correctly, and prevent them from trading in Wizard World shares, or voting with them, until they have done so and the market has had a chance to react. And pay Wizard World's costs and additional just and proper relief.
However, since filing this paperwork, something behind the scenes has happened and Robert Knie is no longer named in the complaint.
The latest step, in what continues to be an ongoing case well into 2017. You can follow Bleeding Cool reportage here.