Judge Issues Restraining Order Against Private

Aug 14, 2010 10:00 PM PST
LAS VEGAS — A judge has given the green light to former Private Media Group CEO Ilan Bunimovitz and two large investors in their quest to restrain Private from conducting a wide range of business activities, XBIZ learned Saturday.

The temporary restraining order OK’d by Clark County District Court Judge Eric Goodman puts a halt to any special meetings by Private’s board of directors without authorization from the court.

The injunction also enjoins Private from issuing any additional shares of stock, incurring any additional debt, disposing of any business assets outside of the ordinary course of business and making any loans to any officer, affiliate or director of the company.

In addition, it forces Private from closing any bank or brokerage account and paying any bonus to any officer or director of the company.

“Plaintiffs have established that there is a reasonable probability of success on the merit of their claims,” Goodman said in the ruling.

A hearing has been set for Sept. 3, with Goodman planning to weigh a preliminary restraining order and whether a receiver should be appointed to handle Barcelona-based Private’s business dealings. The Clark County court heard arguments in the case from plaintiffs on Friday.

The suit, filed last week, includes as plaintiffs Bunimovitz, along with stockholders Consipio Holding BV, which purports to hold 5.6 million shares of the company, and Tisbury Services Ltd., which owns 2.8 million shares. Bunimovitz owns 1.9 million shares.

Bunimovitz on Saturday told XBIZ he couldn’t comment on the case while it is being litigated. The decision is "very encouraging, though I can't go on record while it is in court," he said.

Last month, Bunimovitz’s attorneys claimed there was no legitimate basis or cause for his purported termination. Berth Milton, a long-time Private executive and board chairman, replaced Bunimovitz as acting CEO on July 19.

Bunimovitz has been contesting his termination from the company because "it was taken in retaliation for his efforts to investigate self-dealing transactions by [Milton] that were possibly contrary to the [Private's] interests and violative of the federal securities laws," according to a statement.

Private said Bunimovitz was terminated by the company under provisions allowing it to terminate the agreement for cause.

Attorneys for Private were not immediately available for comment at Saturday’s post time.

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