Avitar, Inc. announces underwriter court action; Avitar will vigorously oppose.WALLINGFORD, CT--(BUSINESS WIRE)--Sept. 20, 1996--Avitar, Inc. [Nasdaq SmallCap Market: AVIT AVIT Aarupadai Veedu Institute of Technology AVIT Audiovisual Instructional Technology (Common Stock); AVITW (Redeemable Warrants)] announced today that A.S. Goldmen & Co., Inc. ("Goldmen") and certain holders of underwriter's warrants issued by Avitar (formerly known as Managed Health Benefits Corporation) has commenced court action against Avitar by filing a complaint in Federal Court seeking, among other things, damages of $6,261,839.00 based upon the underwriter's warrant agreement between Avitar and Goldmen. As previously reported, Avitar believes that the anti-dilution and other provisions of the warrant agreement are unfair and unreasonable - indeed unconscionable Unusually harsh and shocking to the conscience; that which is so grossly unfair that a court will proscribe it. When a court uses the word unconscionable to describe conduct, it means that the conduct does not conform to the dictates of conscience. . The NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). Corporate Finance Department has confirmed that the underwriter's claims based upon such anti-dilution provisions Anti-Dilution Provision A provision in an option or a convertible security. It protects an investor from dilution resulting from later issues of stock at a lower price than the investor originally paid. are in violation of the NASD Rules of Fair Practice. Accordingly, Avitar has advised the underwriter repeatedly that claims based upon the anti-dilution provisions are in violation of the NASD rules. Avitar intends to oppose this court action vigorously based upon both the rule violations and otherwise. Further, Avitar expects that NASD will enforce its rules against the underwriter as required by the Exchange Act. Avitar, Inc. designs, develops, manufactures and markets healthcare products and services including Hydrasorb(TM), a proprietary line of polyurethane polyurethane Any of a class of very versatile polymers that are made into flexible and rigid foams, fibres, elastomers (elastic polymers), surface coatings, and adhesives. wound care dressings. The Company also provides healthcare cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. services to employers and third-party payers. CONTACT: AVITAR, INC. Peter Phildius, Chairman of the Board (617) 821-2440 Jay Leatherman, Chief Financial Officer (203) 265-3594 |
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