NEW YORK, Dec. 6, 2016 /PRNewswire/ -- On November 29, 2016, Manchester Management LLC and its affiliates (the "Plaintiffs) filed a complaint in Federal District Court for the Southern District of New York against Echo Therapeutics, Inc. ("Echo") (OTC-BB trading symbol: "ECTE"), Platinum Management, Platinum, Mark Nordlicht, Bernard Fuchs, Medical Technologies Innovation Asia, Ltd ("MTIA"), Michael Goldberg (CEO of Navidea Biopharmaceuticals), Shepherd Goldberg, and Alec Goldberg.
Collectively, the suit alleges that the "Platinum/Goldberg/MTIA Defendants", among other items, violated Federal Securities Laws including Section 10b and Rule 10b-5 of the Securities Exchange Act of 1934 and conspired to steal the intellectual property of Echo. This stems from both the prior theft and current attempts to steal the crucial IP of Echo.
In connection with such lawsuit, the Plaintiffs on such date also filed an Order to Show Cause seeking, among other relief, a temporary restraining order against Platinum/Goldberg/MTIA Defendants to prevent the Platinum/Goldberg/MTIA Defendants from transferring any assets of Echo and taking any actions to subordinate the rights of the Plaintiffs and other senior note holders (the "TRO").
On November 29, 2016, the court granted the Plaintiff's motion for the TRO.
The Manchester led Plaintiffs were purchasers of senior secured promissory notes of Echo in a private placement conducted in approximately December 2015 and May 2016. In connection with the private placement, Platinum was named collateral agent for all of the Noteholders. However, Echo, led and controlled by various Platinum/Goldberg/MTIA Defendants made various believed fraudulent disclosures that are believed to be fraudulent and/or failed to disclose, among other items, that:
- Platinum and its affiliates secretly controlled Echo
- The Goldbergs were affiliates of Platinum
- That Michael Goldberg, a former executive, control person, and portfolio manager of Platinum failed to disclose his beneficial ownership of securities of Echo through Platinum pursuant to a written agreement with Platinum.
- That various Platinum/Goldberg/MTIA Defendants had already conspired to and stole certain Echo key assets and were conspiring to steal the remaining material IP assets of Echo including, but not limited to, the source code for the glucose monitoring algorithm and technology associated with version 2 and later version 3 of Echo's continuous glucose monitor.
Over the last 5 months, Manchester has offered a series of substantive and credible proposals to finance and revitalize Echo including infusions of both capital and management expertise. Every such proposal has been rejected by one or more of the Platinum/Goldberg/MTIA Defendants. In particular, the Goldbergs, as the sole directors of the Board of Echo, have repeatedly placed their personal interests above those of Echo and the holders of its securities while repeatedly threatening to shutter operations at Echo rather than consider any proposals other than the transfer of Echo's intellectual property to MTIA. This intellectual property was developed at an estimated cost of over $100 million.
These and other actions leave legal action as our only remaining avenue to protect our investment and the rights of shareholders and debt holders.
We have been and remain committed to our efforts to save the company and its assets, human and otherwise. Only bad faith negotiations, continued attempted self-dealing and other actions by the current board and management driven by undisclosed conflicts of interest have prevented us from commencing this new chapter in the development of the Echo technology.
We remain hopeful that the current directors and officers of Echo will step aside and allow us to create value as we have done in the past at other companies.
Interested parties should contact:
Ryan Whalen, Member | Gusrae Kaplan Nusbaum PLLC |
120 Wall Street | New York, NY 10005 | T:(212) 269-1400 |
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SOURCE Manchester Management LLC