Wednesday, July 18, 2007

Cut and Run

We don’t often bother with OTC companies like Kings Road Entertainment (OTC:KREN), a motion picture studio that hasn’t produced a film since 2001. But we were intrigued by the phrasing of director Emanuel Neuman’s resignation letter, one of two filed today by Kings Road board members:

Unfortunately, I must resign from the Board of Directors of Kings Road Entertainment effective immediately. It was a true experience and education collaborating with the team at KRE for the past 9 months or so.”

Is it our imagination, or does the phrase “it was a true experience and education” have a sarcastic ring? You know, kind of like “it’s been real”?

After all, a shareholder recently sued Mr. Neuman and a couple of other Kings Road directors for breach of fiduciary duty. Fortunately for Mr. Neuman, last month a judge bounced the lawsuit when the plaintiff’s lawyer - who turned out to be practicing without a license - didn’t bother responding to a motion to dismiss. Perhaps this brush with non-lawyering caused Mr. Neuman to lose his enthusiasm for Kings Road and the glamorous business of non-moviemaking.

We also enjoyed the second resignation letter, signed by board member Michel Shane:

Please note that effective immediately I Michel Shane hereby resing [sic] my position as a director of the company. I will make myself available to help produce any projects that you have, especially THE BIG EASY and KICKBOXER. I no longer have the time to sit on the board of this company. I wish you all well.”

Mr. Shane’s letter has an ineffable “I'm getting the hell out of Dodge” feel. A couple of days later, on the July 4th holiday, Kings Road visited the home of yet another director, Christian DeFrank, to serve papers accusing DeFrank of stealing corporate opportunities, fraud, breach of contract, tortious interference, and more. Having glanced at the company’s past filings - which mostly contain lists of businesses it has exited - we’re curious what opportunities were left to steal.

We could also ask why this very same Mr. DeFrank (using his other name, Martin - yes this director has an a/k/a) was awarded a nice Indemnification Agreement with Kings Road last August, and why that document was made super-duper-retroactive all the way back to March of 2001. But enough already. We're tired.

In the company's 2001 direct-to-video swan song, Ticker (featuring a slightly pudgy Steven Seagal), two detectives named Nettles and Fuzzy battled terrorist gangs in San Francisco. Maybe Nettles and Fuzzy, tough guys for sure, can serve on the Kings Road board now that everyone else is wimping out.