Stock sales planned by Equinox receiver

Grace Leong

Thursday, May 2, 2002 | 11:19 a.m.

The court-appointed receiver of multilevel marketing company Equinox International Corp. of Las Vegas -- which was shut down in 2000 as an illegal pyramid scheme -- wants the court to pre-approve a sale of Equinox's planned stock holdings in two companies.

Robb Evans, Equinox's receiver, on Friday requested court approval to modify sale procedures of Equinox's assets including 86,609 shares of Oregon-based Inherent.com Inc. and 10,000 shares of Valley Community Bank of Pleasanton, Calif. The assets are to be liquidated as part of a settlement with the Federal Trade Commission.

The FTC finalized a settlement in April 2000 that led to the shutdown of Equinox and the liquidation of its assets to help fund a restitution pool for some 55,000 distributors that lost money because they were allegedly recruited through deceptive advertising and false claims of income.

Evans, in a March 1-Aug. 31 report, said he estimates the restitution fund will total between $15 million and $31 million after the sale of Equinox's two other remaining assets -- a $13.5 million home at Boca Raton, Fla., and a 110-foot yacht called Moonraker that's valued at up to $7.9 million.

Although Evans said he isn't planning to sell the two companies' stock at this point, he said he wants to be in a position to sell the securities quickly once he receives an appropriate offer or when market conditions present the right opportunity because of the stock's "limited markets and potential price volatility."

Evans challenged federal regulations that require the court to appoint "three disinterested persons" to appraise properties prior to "confirmation of any private sale," saying the market is the best indicator of stock value and that "one appraisal, let alone three, would delay the sale, potentially prejudicing the receivership estate."

Evans said he discovered that only 5,000 shares in Valley Community Bank have been traded in the past 12 months at a price of $8.75 a share.

"When there is a limited market for a publicly traded stock, a party wishing to sell the securities must find a 'market-maker' willing to buy the shares or who can locate a party wishing to buy the same," Evans said.

Evans said he has so far received but isn't accepting offers of between $7.70 and $8.20 a share because he "doesn't believe it to be in the estate's best interest." However, he wants court approval to allow him to sell the bank stock at not less than a minimum floor price of $6.56 a share, which is "80 percent of the last offer he obtained," should the market rapidly deteriorate.

Evans also wants approval to sell the Inherent.Com stock for "not less than 80 percent of the book value of the shares," which is estimated at $251,000 for the year ending Dec. 31, 2001. Evans said Equinox owns 43.87 percent of Inherent.com's stock, which has an estimated book value of $110,000.