LKA International, Inc. vs. Brannon Limited Partnership, et al.

Oct 11, 2012

OUTCOME: The company was able to convert all of its outstanding debts into free-trading shares of its common stock without registering such shares, thereby opening the door to new financing.

LKA International, Inc. is a publicly traded company that was heavily indebted to the defendants in this case, and was in need of new financing to continue to remain in business. The company was willin ... g to issue, and the defendants were willing to accept, shares of the company's common stock in exchange for settling the past due debts, provided that such shares could be resold on the open market without any restrictions and the need to register such securities with the Securities & Exchange Commission or the Florida Office of Financial Regulation. In order for the issuance of the shares to be exempt from registration under the Securities Act of 1933 and the Florida Securities and Investors Protection Act, a court must approve the fairness of the transaction to those to whom the securities will be issued. Accordingly, an action was brought to determine whether the transaction was fair to the defendants.