Private Media Group's Receiver a Seasoned Accountant
BARCELONA — Private Media Group, in a filing with regulators today, explained why a Nevada judge appointed board member Eric Johnson to the post of receiver for the company.
The 8-K amended statement on current business affairs included a detailed account of the Aug. 25 order that alleged the company disobeyed court orders, as well as the failure to call in outstanding loans and board of directors' "gross mismanagement" in handling company business.
Newly appointed receiver Johnson, 45, serves as the CEO, CFO and president of Private subsidiary Entruphema Inc., which operates Sureflix Digital Distribution Inc. and Sureflix Digital Logistics Inc., companies engaged in the business of digital distribution of premium gay adult content. He has held those titles since 2003.
Entruphema and the Sureflix units were acquired by Private in October 2009, and two months later Johnson was appointed to Private's board of directors pursuant to the Sureflix acquisition deal.
Johnson, who hasn't responded to XBIZ requests for comment on his appointment, apparently has the skill set for the position.
Johnson holds the designations of Chartered Accountant in Canada and CPA in the U.S. A graduate of the University of Toronto, where he earned his bachelor of commerce degree, Johnson also is an ASACP advisory council member.
"Mr. Johnson’s extensive experience in planning and managing online adult content is a valuable asset to the board in matters involving strategic planning," Private said in his curriculum vitae last year. "His accounting experience also allows him to contribute to addressing accounting issues."
Johnson, as receiver, will receive a raise in his annual compensation from the company, boosted from $235,000 (Canadian) to $282,000 (Canadian).
He is responsible for calling all the shots in the company, and will be on the hook for preserving the company’s assets and business and setting the date for an annual meeting of shareholders.
More than two weeks into his new job, Johnson already has called for a special board of directors meeting that will take place tomorrow. It isn't clear what agenda the board meeting will follow, but the company could discuss filling the board seat previously held by Peter Dixinger, who is named in the investor suit targeting board members and CEO Berth Milton, or possibly a bankruptcy filing.
"Johnson shall have, among the usual powers, all the functions, powers, tenure and duties to be exercised under the direction of the court as are conferred on receivers ... including, without limitation, the power and authority to hire such attorneys, accountants, managers, consultants and other advisers and assistants at Private's expense as he deems necessary and prudent under the circumstances, and to suspend any officer or employee of Private or any director, officer, administrator, managing member or employee of any direct or indirect subsidiary of Private."
The task for running Private is monumental indeed because the company operates 20 divisions, including Cine Craft Ltd. of Gibralter, Coldfair Holdings Ltd of Cyprus, Fraserside Holdings Ltd. of Cyprus, Peach Entertainment Distribution AB of Sweden, Milcap Media Group S.L.U. of Spain, Private Media Group Services S.L. of Spain, Private Benelux B.V. of The Netherlands, Private France SAS of France, Private North America Ltd. of California, Barbuda B.V. of The Netherlands, Ceresland S.L. of Spain, Private Media Group Canada Inc. of Canada, Fraserside IP LLC U.S. of Iowa, ThinkForward Inc. of California, GreenCine, Inc. U.S. of Delaware, Mama’s LLC U.S. of Delaware, GameLink LLC of Delaware, eLine LLC of Delaware, Sureflix Digital Distribution Inc. of Delaware and Entruphema Inc. of Canada.
Clark County, Nev., Judge Elizabeth Gonzalez has ordered Johnson as receiver to file reports summarizing his activities with the company and all of its divisions.
"The monthly report shall detail such costs as may be incurred by Private at Mr. Johnson’s direction in performing his duties as receiver including travel expenses and compensation paid to professional advisers and consultants and others retained by him," Gonzales ordered. "The reports shall be accompanied by financial statements including consolidated balance sheets, consolidated statements of income or loss, consolidated statements of cash flows and consolidated statements of shareholders’ equity."