Equus Commences Legal Proceedings to Collect on
Proxy Advisory Firms Note Conflict of Interest with Douglass Committee Nominees; Equus Urges
Shareholders to Vote the WHITE Proxy Card Today
May 04, 2010 06:03 PM Eastern Daylight Time
HOUSTON--(EON: Enhanced Online News)--Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Fund”)
today announced that it has filed a claim to collect $2.5 million owing from Trulite, Inc. (“Trulite”), a portfolio
company of Equus that is led by three members of the “Committee to Enhance Equus”/(Douglass Committee).
Trulite defaulted on the loan on January 26, 2010 and currently owes Equus the principal amount of $2.3 million plus
$200,000 in accumulated interest.
The loan to Trulite was originated by Paula Douglass, who until March 2010 had been an officer of the Fund and a
member of the Fund’s Investment Committee. Despite the fact that Paula Douglass, Jonathan Godshall and John
White, the vice chairman and chairman of Trulite, respectively, are on the Board of Directors of Trulite, they have
been nominated for directors at Equus by the Douglass Committee, which is waging a costly proxy contest to regain
control of the Fund for Paula Douglass and her husband, Sam Douglass.
The conflict has been pointed out by two independent proxy advisory firms, which recently noted the following:
“With respect to the Dissident’s [Douglass Committee’s] non-incumbent nominees, Messrs. Godshall and White
serve as the vice chairman and chairman, respectively, of Trulite, Inc. (“Trulite”), one of Equus’ portfolio companies.
Paula Douglass originated a $2.3 million loan to Trulite, on which Trulite defaulted and upon which the Company
[Equus] took action to collect on April 23, 2010. We believe these issues raise questions about whether certain of
the [Douglass Committee’s] non-incumbent nominees may take actions or have interests that are not aligned with, or
may, in fact, be inimical to, the interests of shareholders.”
- Glass Lewis & Co., April 28, 2010 (B