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TreeCon Resources, Inc. Announces Resignation of Chairman and CEO
DALLAS, Dec. 31 /PRNewswire-FirstCall/ -- TreeCon Resources, Inc. today
announced the resignation of James Rudis as its Chairman and Chief Executive
Officer, effective December 29, 2003. No replacement has yet been named as
Rudis' successor.
The resignation was expected and is in conjunction with TreeCon's October 2002
spin-off of its former subsidiary, Overhill Farms, Inc. Rudis continues to
serve as Chairman and Chief Executive Officer of Overhill Farms, Inc.
The Company also disclosed, in response to shareholder inquiries, that no
further action has been taken with respect to the previously announced proposal
received from Florida A.P., Inc. All negotiations between the Company and
Florida A.P. have been through Paul Tanner, former Chairman and CEO of TreeCon
(previously known as Polyphase Corporation and Overhill Corporation), who
apparently now leads the Florida investment group. After reviewing the original
proposal and following several unsuccessful requests for additional information,
the Company determined that there was insufficient evidence of Tanner's ability
to complete the transaction or satisfy the Company's obligations. The Company
sought to obtain, among other things, financial information concerning the
proposed purchaser and evidence of its ability to pay the purchase price, the
identity of management and control persons of Florida A.P. and the disclosure of
Tanner's affiliation with the group. Tanner was advised of the Company's
concerns and management's belief that execution of a definitive agreement, as
proposed, and/or Tanner's failure to orchestrate a timely closing would put the
Company at risk. Following further negotiations involving Tanner and TreeCon's
attorney, the Company believed that a reasonable compromise had been reached and
instructed its counsel to draft a new proposal, on materially similar terms,
which was delivered to Mr. Tanner. Mr. Tanner has never responded to such
proposal, strengthening the Company's belief that he did not have the ability to
complete the proposed transaction.
Negotiations were further burdened by virtue of the fact that the Company was
holding a judgment against Mr. Tanner and others in the approximate amount of
$19.5 million awarded in a civil lawsuit filed by the Company with regard to
prior transactions involving Mr. Tanner and other entities, which remained
unsatisfied despite a settlement with Mr. Tanner for a discounted amount of
slightly over $1.0 million. Though long past due, Tanner has made no payments
against the agreed settlement. While negotiations with Florida A.P. were
continuing, the Company postponed collection efforts against Mr. Tanner. Having
received no response from Mr. Tanner with respect to the latest proposal as
described above, the Company recently commenced collection activities, including
initiation of foreclosure proceedings on certain real property securing the
indebtedness created by the settlement agreement.
The Company remains open to any and all viable proposals presenting the
potential to increase shareholder value.
TreeCon is a holding company with operations in the forestry industry.
DATASOURCE: TreeCon Resources, Inc.
CONTACT: James Rudis of Overhill Farms, Inc., +1-323-582-9977