According to a motion filed by the plaintiff on January 14, 2008, pursuant to Federal Rules of Civil Procedure Rule 41(a)(1)(i), Plaintiff Legacy Trading Group, LLC hereby dismisses the action without prejudice. That day, U.S. District Court Judge M. James Lorenz signed the Order granting the plaintiff’s motion to dismiss without prejudice.
The class action complaint alleges violations of Section 14(A) and (C) of the Securities Exchange Act of 1934 and Arizona corporation law. The Plaintiff brings this class action pursuant to Federal Rule of Civil Procedure 23(b)(2)on behalf of the following Class: All Unico, Inc. common shareholders, who were shareholders entitled to vote at Unico's December 21, 2007 Special Shareholder meeting, excluding Unico, Inc.'s directors, officers, and employee, or legal representatives.
Specifically, the complaint alleges that on November 20, 2007 Unico filed a Definitive Proxy Statement with the SEC. The Proxy Statement discloses that Unico will hold a special shareholders meeting on December 21, 2007 in San Diego , California at which time, the shareholders will vote on a reverse stock split.
According to the Proxy Statement, an approval of the reverse split will enable Unico to effect, during a six month period, a reserve stock split whereby every 500 currently outstanding shares would be exchanged for one new share. A reverse stock split has two devastating consequences. First, because it has no effect on the number of authorized shares, which is currently 5 billion, it is probable that new shares will be issued, which would severely dilute the current shareholder's interests. In fact, the Proxy Statement references the likelihood of this occurrence. There are 4,815,363,072 shares issued and outstanding and 184,636,928 shares authorized by unissued. … In other words, current common shareholders would go from owning 96% of the authorized shares, to less than 1% of the authorized shares.
Second, the reserve split is an undeserved boon to the five directors. According to the Proxy Statement, the five Unico directors own 9,300,000 Series A Preferred shares representing 95% of the designated Series A Preferred shares. The Series A are convertible into shares of common stock on a one for one (1:1) basis. This ratio will not change following the reverse split! … In other words, by way of this reverse split, the board goes from 1% ownership of the common stock to nearly 50% of the common shares if they so choose to convert.
Unfortunately, Unico has not given the shareholders notification of the Special Shareholder Meeting in violation of Section 14(a) of the Securities Exchange Act of 1934 and in violation of Arizona corporation law.