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Karl and Ashley Miller Today Released a Summary of the Formal Complaint to the SEC to Require MMC Energy, Inc. Directors to Disclose Involvement in Material Litigation That Will Reduce the Company's Assets

Posted on: Sunday, 20 September 2009, 23:01 CDT

MIAMI, Sept. 21 /PRNewswire/ -- Karl and Ashley Miller today released a summary of the formal complaint to the SEC to require MMC Energy, Inc. Board of Directors (Nasdaq: MMCE) to disclose involvement in material litigation that will reduce the Company's assets, which seeks an order from the SEC forcing the MMC Board of Directors to disclose to its shareholders the company's involvement in multiple and complex material litigation that will reduce the assets of the company available to distribute to shareholders.

The Summary of the Complaint to the SEC is as follows:

Attention Securities and Exchange Commission

Reference: MMC Energy, Inc Undisclosed Material and Complex Litigation

We are writing as substantial shareholders in MMC Energy, Inc. (MMC), to voice our concern over your failure to require MMC to disclose the company's involvement in substantial material litigation of which we are aware. The cost of this litigation will undoubtedly reduce the amount of cash available to be distributed to shareholders on a per share basis under MMC's liquidation and dissolution plan and MMC should be required to disclose the existence of this litigation and its past and potential cost.

On Tuesday, September 15, 2009, MMC issued a press release announcing its intention to vigorously prosecute a case the company filed against me in the Federal District Court for the Southern District of New York, in May of 2008, which alleges breach of a Separation Agreement in connection with a proxy contest in March, April and May of 2008.

In fact, Mr. Miller did not breach any contract but assuming for the sake of argument only that he did, MMC will not likely be entitled to any damages and under even the most optimistic scenario would not be entitled to damages that exceed the costs of conducting this litigation which will almost certainly be $500,000 or more that will be borne by shareholders.

As the MMC Board of Directors well knew, Mr. Miller had signed a founder's contract with the company in May of 2006, which required that he be paid compensation under a specified formula that included paying all his benefits until May of 2011. Under the terms of that contract he was entitled to more compensation than he agreed to take in the Separation Agreement and he agreed to take less as a major shareholder to avoid litigation that would deplete company assets.

As a result MMC paid less than it was required to pay and its damages for any breach of contract would be less than zero as the Separation Agreement allowed MMC to keep monies which it was required to pay to Mr. Miller. Certainly MMC's shareholders are entitled to a full explanation as to why they are now being required to pay for litigation that even if successful will not result in any recovery for the shareholders.

We also find troubling MMC's announcement in the same press release, that the company "will defend" President and CEO Michael J. Hamilton and Directors George Rountree, III and Richard H. Bryan by providing legal counsel at company expense, in a lawsuit we have filed in Florida against them. In that lawsuit those individuals are alleged to have acted in their own pecuniary self-interest and not for the benefit of the company or its stockholders.

Again, we find it difficult to understand why the SEC has not required MMC to provide full disclosure for its payments for Hamilton, Rountree and Bryan, particularly since the company had previously used shareholder money to purchase an insurance policy for its directors and officers in the event of such legal action against them. In fact, MMC failed to disclose to shareholders the existence of either of these lawsuits.

For all of these reasons, we respectfully request that the SEC require MMC to disclose its involvements in the litigation in New York and Florida and to disclose just how much the company has paid and has committed to pay to Kasowitz, Benson, Torres and Friedman, LLP, for litigation that is not in the best interests of the company or its shareholders.

SOURCE VBCC

Source: PR Newswire

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