LAS VEGAS, NV—District Court Judge Elizabeth Gonzales yesterday granted a motion by the plaintiffs in Consipio v. Private Media seeking a preliminary injunction against Private Media Group. The order comes three months after the plaintiffs—Consipio Holdings, former CEO Ilan Bunimovitz, Tisbury Services and Claudio Gianacio—filed suit, alleging a number of serious charges against the Barcelona-base company, the current CEO, Berth Milton and several Board members. At the on-set of the proceedings, in August, Gonzales had issued a temporary restraining order (TRO) in the action.
In the ruling yesterday, however, following months of testimony by the parties in the lawsuit, Gonzales concluded that the plaintiffs “have demonstrated a reasonable likelihood of success on the merits of their claims asserted in the First Verified Complaint filed herein.”
In that complaint, the plaintiffs had alleged that Milton, “assisted by a majority of the Board of Directors of PRVT, has mismanaged PRVT’s assets, committed malfeasance, engaged in flagrant self-dealing and violated his fiduciary duties to PRVT and its shareholders.”
Similar to the restrictions imposed upon Private by the TRO, yesterday’s order enjoins Private from issuing any additional shares of stock, incurring any debt outside of the normal functioning of the business, moving or transferring any funds from or into banks, paying any bonuses to officers of the company, or undertaking any abnormal transactions, or from “holding or conducting any Special meeting of its Board of Directors without prior order from this Court.”
The judge did decline to appoint a receiver to oversee Private in the interim, a decision that had been sought by the plaintiffs, saying instead that ‘less restrictive supervision by this Court is appropriate related to the governance of this Nevada Corporation (Private).”
Judge Gonzales also noted, with respect to compensation awarded Berth Milton in 2009, “The modification of the recommendation of the independent directors regarding the treatment of the $193,000 of additional compensation received by Milton in 2009 is of concern to the court. The involvement of [Private’s U.S. securities counsel Samuel] Guzik in obtaining a modification of this decision represents taint.” Taint is a legal term that refers to evidence that has been tainted or ruined in some manner.
The order can be read here