Daily Journal Corporation Responds to BuHeUI's Threat to Control Board
Daily Journal Corporation issued a statement in response to "a flood of false, misleading and self-interested correspondence" from Buxton Helmsley USA and its CEO Alexander Erwin Parker, to the Company and members of its Board of Directors. BuHeUI, which until recently held no shares of the company and now appears to be the record holder of one share, has threatened to run a campaign to take control of the Board unless the company agrees to enter into a "cooperation agreement" with BuHeUI. The company said, "Mr. Parker started sending error-filled letters to the Company in July alleging that it was improperly expensing software development costs that should be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed. Expensing less and capitalizing more would overstate the Company's net income and, according to Mr. Parker, 'unlock value.' He then demanded two seats on the Company's Board and a consulting contract that would give him a cash payment of 15 cents for every dollar of appreciation in the Company's stock price. He estimated that this would pay him $24M. Keep in mind, he was not a stockholder of the Company - just a young, self-styled activist looking to make easy money at the expense of stockholders. The Company refuted Mr. Parker's accounting allegations and rejected his transparent hustle, so he's back with a new approach. In the last two weeks, Mr. Parker has sent no fewer than 13 letters and emails to the Company, its directors and officers. Like his letters from over the summer, Mr. Parker's most recent communications again baselessly allege that the Company's software accounting is incorrect, add allegations of securities law violations and governance failures and threaten a proxy contest for control of the Board unless the Company agrees to his demands. The letters also double down on Mr. Parker's modus operandi: threaten everyone with reputational ruin until they give you what you want. But you're not allowed to do that. Mr. Parker has stepped over the line...To be clear, there is no merit to any of the accusations underlying these threats or referrals. Mr. Parker has made these threats and referrals solely to harass and intimidate the Company, its auditor, its directors and its senior executives into making some sort of deal with him. In the Board's view, enough is enough. The Company has referred this matter to federal and state authorities to evaluate the evidence and consider criminal prosecution of BuHeUI and Mr. Parker. It has also referred them to the SEC's Enforcement Division for consideration of civil charges related to their threats."
