ETS Payphones Recovery
A number of individuals have either commented or emailed me to ask about the value of their ETS payphone shares. The company still exists, but does not trade on any stock exchange. It does file with the SEC and you can read about some of their filings here. Although there is a receiver in place, there is no point in contacting the receiver as they will not answer specific questions about the value of your shares.
The receiver recently suffered a legal set back when it tried to sue the banks and trust companies which lent money to the purchasers of the ETS stock. The Appellate Court ruled that the receiver lacked standing to pursue this action. "The Trustee has the right to petition the United States Supreme Court for review of the Eleventh Circuit's decision and intends to do so."
In February, 2006 the company voted to wind down its operations and sell its asset to Empire Payphones and rename ítself "Payphone Wind Down Corporation." This is from their SEC filings: "Pursuant to the Asset Sale Agreement, the Company has agreed to sell substantially all of its assets used in its payphone business to Empire. Under the Asset Sale Agreement, the purchase price aggregates $4.5 million and will be paid in installments, some prior to the consummation of the transaction, as follows: (i) $250,000 in cash on November 1, 2005, (ii) payment of certain commissions under assigned contracts not to exceed $2.4 million in the aggregate and (iii) $1.85 million in cash, payable in monthly installments of $132,143 commencing December 1, 2005, with any remaining balance being paid at the closing of the transaction." However the monthly payments will be offset by payments to Empire: "In order to provide for the funding of operational losses of our payphone business pending consummation of the Asset Sale Agreement, the Company and Empire entered into the Management Services Agreement. Under the Management Services Agreement, Empire has agreed to provide to the Company management services and fund operational losses of our payphone business, subject to the oversight of our Board of Directors. In consideration for its management services and the use by us of Empire's affiliates' resources, Empire shall be entitled to receive a management fee calculated at the end of the initial term of the Management Services Agreement and at the end of any renewal term in the amount of the first $400,000 of excess revenue, after repayment of, among other amounts, all expenses of operation and any advances made by Empire to fund operational losses plus 50% of any excess revenue above $400,000. We shall receive the remaining 50% of excess revenue above $400,000. For use of Empire's affiliates' resources during the term of the Management Agreement, the affiliates shall receive a monthly resource fee of $92,000."
Any money left in the company will be distributed to the shareholders upon the final wind up date. It does not look very promising, I am afraid.
Technorati Tags: sec filings, stock exchange, payphone, lent money, ets, shares
Comments
is there any new information regarding the sale of ETS?? Last info i received i believe was this last spring and thought it stated activity would be taking place this summer. I have 4000 shares so I am estimating by the last letter from ETS my shares might be worth .27-.30 cent which adds up a max of $1200.00 for a $400,000.00 investment. Am i reading this right??
Posted by: sells | November 7, 2006 5:27 PM
The last information, from the receiver, indicated that the liquidation of ETS would finish up in early.
See etspayphones.com for further details.
Posted by: michael webster
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November 8, 2006 8:50 PM
ETSPAYPHONES.COM GIVES NO SPECIFIC DETAILS REGARDING TIMES DATES POTENTIAL PAYOUT ...DO YOU KNOW OF ANY SPECIFIC'S? RUMORED OR NOT?? MY DIRECT EMAIL IS
INSMT@AOL.COM IF YOU WISH TO CONTACT ME DIRECT. THE LASTEST INFO I HAVE WAS A LETTER FROM ETS PRIOR TO THE VOTE TO SELL. IF I AM READING IT CORRECTLY LOOKED LIKE .27 CENTS PER SHARE WAS THEIR ESTIMATE I HAVE IN EXCESS OF 4000 SHARES ..WHICH REPRESENTS A $400,000 INVESTMENT. SIMPLE MATH WOULD INDICATE A SETTLEMENT OF $1100.00. IS THERE ANY ADDITIONAL INFO OUT HERE ...THANKS
Posted by: sells | November 25, 2006 9:19 AM
The information I have access to is also on the receiver's web page. I understand that they want to complete this transaction by February, 2007.
Posted by: michael webster
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November 26, 2006 3:07 PM
I visited ETS website and the information listed doesn't appear to be anything new since june 2006 ....am I missing something ....where did you get the Feb 2007 of finalizing from ?? appreciate the info ,,,,thanks
Posted by: sells | December 4, 2006 5:20 PM
i contact American stock and transfer company and they said my ETS stock was zero balance. Is this happening to everyone ?
Posted by: sells | December 10, 2006 10:59 AM
I would guess that virtually every stock holder is wiped out.
Posted by: michael webster
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December 10, 2006 4:26 PM