Friday, 28 August 2015
Last updated 12 min ago
May 10 2011 | 12:24pm ET
A Florida "hedge fund" manager is accused of offering to buy Eastman Kodak and the parent of American Airlines without having the means to do so.
Sterling Global Holdings and Allen Weintraub had actually been rejected by three banks in their bid to raise more than $4.5 billion to buy the two companies. But that didn't stop Sterling from sending letters to both, offering $1.3 billion for Kodak and $3.25 billion for AMR Corp.
Both companies quickly turned the offers over to the Securities and Exchange Commission.
"We thoroughly investigated the letter from Sterling Global, believed it to be a hoax, and turned the matter over to the SEC," Kodak spokesman David Lanzillo told Dow Jones Newswires. AMR spokesman Ed Martelle said that "we have no corroborating information to demonstrate the offer described in the letters as legitimate. We believe the SEC actions speak for themselves."
"Neither Weintraub nor Sterling Global has the means to purchase either Kodak or AMR by tender offer or otherwise as they have no substantial assets or resources," the SEC alleged in Florida federal court.
"Weintraub falsely claimed that he had bank agreements in place to obtain the approximately $4.5 billion in financing that the tender offers would require," the complaint continues. "In communications with various media outlets, Weintraub misrepresented his experience in purchasing and operating companies and failed to disclose his prior felony convictions, SEC injunction, and officer and director bar."
In March, as he was crafting his offers for the two companies, Weintraub told Dow Jones, "We work similar to a hedge fund, but with a very limited amount of investors."
May 27 2015 | 2:15pm ET
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