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Technology Stocks : Gigoptix, Inc.

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From: caly12/30/2009 11:00:03 AM
   of 148
Just posting some links and information here on GGOX and DBSI as I try to unravel what's going on.


Feds seek control of DBSI

Authorities say managers of the troubled Boise company engaged in 'serial misconduct."


Compliments of a Yahoo poster...

This is as of March 2008

Under the terms of the merger agreement, DBSI, Inc., which is currently GigOptix's majority shareholder through its subsidiaries Stellar Technologies and iTerra Communications LLC, will become the new company's largest shareholder.


This is how it was described in the latest 10Q

“GigOptix LLC was the successor company of iTerra Communications LLC, ("iTerra"), which was founded in 2000. In July 2007, as part of a reorganization plan, iTerra formed GigOptix LLC, a wholly-owned subsidiary. All of the assets and liabilities of iTerra, with the exception of the $45.8 million of debt and accrued interest due to iTerra's primary member, were transferred to GigOptix LLC along with all of iTerra's operations and intellectual property.”


Resignation of Douglas L. Swenson from the GigOptix, Inc. Board of Directors


In his first report about real estate company DBSI Inc., bankruptcy court-appointed investigator Joshua R. Hochberg’s words paint a picture of a massive web of closely connected companies that were primarily controlled by one individual that defrauded investors by putting their money to work not as they were promised.


I noticed this email from Investor Relations was "somehow" deleted from the board...


Thank you for your question and giving us the opportunity to set the record straight.

The investigation concerning GGOX and DBSI is now closed, and GigOptix has no reason to believe that they pertain to any possible future litigation by the DBSI trustee relating to GigOptix.

The public time entries described in the inquiry relate to the Trustee's examination last summer. They accurately reflect that the Trustee was looking into historical transactions between DBSI and its technology subsidiaries, including transactions between DBSI and iTerra / GigOptix. The fruits of that work appeared in the Trustee reports that were released this fall. The immediate impact of those reports, of course, was that DBSI was no longer allowed to retain its debtor in possession status. The Trustee's findings, as you know, also led to Doug Swenson resigning from the GigOptix board.

In order for the Examiner to be paid for the work which was done, it needs to petition the bankruptcy court to use funds that might otherwise be available to satisfy other claimants against the DBSI bankruptcy estate. In that petition, the Examiner needs to state what was done, and that is done by providing time records as is the case here. To date, we have no further information that the Examiner or the US Trustee is doing anything further that would involve GigOptix.

One further point of clarification, the US Trustee and the DBSI Chapter 11 Trustee are different. The US Trustee is a part of the US Attorney's Office, which is part of the US Department of Justice. Among other things, it is how the government becomes involved in bankruptcy cases. The Chapter 11 Trustee is the management of the DBSI bankruptcy estate. He was appointed after Doug Swenson was removed as President of DBSI. Prior to that time, DBSI operated as a debtor-in-possession, which means that the existing management continued to manage the bankruptcy estate after the filing of the bankruptcy. The Chapter 11 Trustee now fills that role. The duty of the Chapter 11 Trustee is to protect the creditors of DBSI.

Finally, in order to maximize the position of the DBSI creditors, the Chapter 11 Trustee has asserted that despite iTerra and Stellar not being part of the DBSI bankruptcy estate and DBSI only holding a majority but not whole interest in iTerra and Stellar, that the assets of these entities should be controlled by the Chapter 11 Trustee. This is currently playing out in the bankruptcy court and is not unexpected. GigOptix has had no involvement in the matter between iTerra/Stellar and the DBSI Chapter 11 Trustee. A key consideration relates to the 1.5 million shares that were paid to Mr. Swenson’s entity for GGOX’s acquisition of technology assets. The issue only centers on who will ultimately realize the financial benefit of this GGOX stock that is sold in the future.

I hope this is helpful and puts to rest many of the inaccurate perceptions and speculations that are being discussed via the Internet.
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