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LUXR

Retailer Sues PIPE Investors Claiming Death-Spiral, Pump and Dump Schemes

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Founders of online “flash-sale” retailer Luxeyard (LUXR) are accusing a group of microcap investors of a carefully planned scheme to pump and dump their stock through selling unrestricted shares without disclosing their affiliate relationship. The battle has been taking in place in federal and state courts in Texas and California where reverse merger investors Kevan Casey, Scott Gann, Jonathan Friedlander, Rick Huttner, and Larry Isen are accused of using multiple shell companies to hide ownership of over 10% and avoid Rule 144 filing requirements. They stand accused of reaping around $30 million in only 60 days via aggressive stock promotion by former Fox Business contributor Tobin Smith and others. The investors recently petitioned the Delaware courts to place the company in involuntary bankruptcy. Amir Mireskandari and Khaled Alattar founded Luxeyard as a luxury retailer that would execute auction-like flash sales on high-end home goods.

Marc Lasry
News

Boulevard SPAC Completes IPO

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Marc Lasry
Boulevard Acquisition Corporation (BLVDU) raised $210 million in an IPO completed February 19. The SPAC is sponsored by an affiliate of Avenue Capital Group, a $13 billion hedge fund that specializes in distressed debt and special situations investments. The blank check company issued 21 million units, consisting of one share of common stock and a warrant to purchase one half of a common share, for $10 each through an underwriter syndicate led by Citigroup and including Maxim Group and I-Bankers Securities. Glazer Capital Management, led by Paul Glazer, acquired a 6% interest in the SPAC via the IPO. The SPAC has 24 months to complete a merger with a private company. No sector target has been named, however Avenue’s principal Marc Lasry has shown recent interest in casinos and gambling, purchasing the Trump Casinos and Resorts properties in Atlantic City, N.J., out of bankruptcy.

Markets

Real Estate Platforms Driving Private Securities Transactions

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Six months after the Securities and Exchange Commission lifted the ban on general solicitation in Regulation D offerings, adoption of the practice remains muted among many industries thanks in large part to concerns over the requirement that issuers verify investor accreditation. Yet that hurdle, and the SEC’s plodding pace to adopt JOBS Act Title III rules that would open up crowdfunding to all investors, have done little to slow a ramp up of real estate private placement platforms.

While websites such as AngelList and EquityNet largely aim to help fledgling companies or entrepreneurs get off the ground, real estate portals are pursuing a broad range of strategies, from selling slivers of small loans to rehab single-family homes to raising millions of dollars to finance development. The platforms typically charge administration fees to investors or issuers. The platforms are also employing a variety of business models. New York-based Propellr, which officially launched last month, curates deals and plows 10% alongside its investors.

News
Michael Chernoff

MDB Capital Appoints Michael Chernoff CIPO

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MDB Capital Group appointed Michael Chernoff as chief Intellectual Property officer (CIPO). In his new role, Chernoff will oversee all patent portfolio development for MDB IP Development Services (IPDS) division clients. Chernoff brings over 20 years of experience in the field of intellectual property to his role at MDB. Prior to leading the patent team at Accenture, he served as an associate patent counsel for a large telecommunications company and also as an Associate at a boutique IP law firm.