By : Erik Gruenwedel | Posted: 14 Jan 2010
Image Entertainment’s executive transfer and cash infusion drew a swift rebuke from NASDAQ, which in a Jan. 13 letter to Image said the transaction and board transfer violated its rules for publicly traded companies.
Image Jan. 12 announced the formation of a new management team, spearheaded by home entertainment veteran Ted Green as chairman and CEO of the Chatsworth Calif.-based distributor.
Green is part of new five-member board brought on following the Jan. 11 closing of a $22 million preferred stock sale to San Francisco investment group JH Partners LLC, which assumed control of the company.
The trading board questioned why the deal was done without shareholder approval, how more than 20% of the company’s stock was sold below market value and why the deal was knowingly consummated in violation of NASDAQ rules.
NASDAQ also said the newly seated board failed to include any independent directors as required, in addition to an audit committee overseeing executive compensation and other issues.
The alleged transgressions and the threat to de-list Image shares due to insufficient market capitalization, will be discussed a pending hearing, according to Image.