A federal judge set a hearing for Feb. 27...
A federal judge set a hearing for Feb. 27 on Emerson Radio’s motion to dismiss a federal racketeering suit filed against it, Emerson said in an SEC filing. The motion before U.S. District Judge Sheri Bluebond, Los Angeles, seeks to…
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dismiss a suit filed against Emerson last July by investors Fred and Stephen Kayne and Milton Okun for failing to state a claim, the company said. The Kayne’s suit claimed Emerson was the “alter ego” for its parent company, Grande Holdings, and is liable for the $47 million judgment made against Grande. The allegation is part of the suit that sought to enforce a $35 million judgment, that increased to $47 million with interest. Following a trial in California Superior Court in December 2010, Judge Mary Ann Murphy in June approved the $47 million judgment and awarded $875,000 in attorneys fees. After the superior court decision, Kayne and others sued Grande and executives Christopher Ho, Adrian Ma and others claiming violations of federal racketeering laws. Ho and Ma are former Emerson Radio CEOs, the latter having resigned earlier last year. Among the other executives named in the suit are Emerson board member Eduard Will and former Emerson Chief Financial Officer Greenfield Pitts, who left the company in September 2010. Emerson paid Will $20,000 in Q3 ended Dec. 31 for work related to “strategy” for the Kayne suit, the company said. Investors have maintained that Emerson’s board and executives “intentionally interfered” with their efforts to get the $47 million. The legal action followed the High Court of Taiwan in May appointing FTI Consulting to liquidate Grande. The Kayne’s federal suit partly stemmed from an action investors originally took against former Grande subsidiary MTC Electronic Technologies. Meanwhile, Emerson posted a $347,000 gain on the sale of its headquarters in Parsippany, N.J., and began renting office space this month in Moonachie, N.J., the company said. Emerson’s Q3 net income narrowed to $3.17 million from $4.18 million a year earlier, the latter having benefitted from the $966,000 sale of marketable securities. Revenue rose to $43.4 million from $40.5 million. Housewares sales grew to $38.5 million from $33.1 million as an increase in microwave oven revenue offset a decline in compact refrigerators. Audio net sales slipped to $2.2 million from $5 million, while those from licensing declined to $2.2 million from $2.5 million. Deutsche Bank also sold 9,322 shares in Q3, but continues to control 3.3 million. Grande and Deutsche Bank both claim to own 12.5 percent of Emerson, the latter maintaining it gained the stake to secure debt owed by Grande, the company said.