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SHAREHOLDER LAWSUIT FILED AGAINST TAKEOVER GROUP OF POLAR MOLECULAR CORPORATION -- GROUP OUSTED BY FEDERAL BANKRUPTCY JUDGE

 SAGINAW, Mich., May 20 /PRNewswire/ -- The following was released by The Committee to Save Polar Molecular Corporaton:
 The Committee to Save Polar Molecular Corporation and co-founder Mark L. Nelson announced today that they have filed a shareholder suit against Charles Johnston and others who took over the company in a proxy battle on June 30, 1992.
 Attorney for the plaintiffs, Victor Mastromarco, said, "I have filed a lawsuit in the U.S. District Court for the Eastern District of Michigan on behalf of certain shareholders for the benefit of all shareholders of Polar Molecular Corporation." The suit was brought to: (1) invalidate the proxy takeover of PMC by Charles Johnston, et al, (2) stop Johnston's attempts to liquidate the company, seize the assets of the corporation for his own personal gain, and extinguish the stock of all the current shareholders of the company, as proposed in Johnston's bankruptcy reorganization plan, (3) seek damages for all shareholders.
 The suit alleges violations of the Securities and Exchange Commission rules and regulations, including claims of fraud and misrepresentation. (1) Johnston and his group are charged with defrauding PMC shareholders by misrepresenting their true intentions in the filing of documents with the SEC in proxy materials which they used to get votes to take over PMC. (2) Johnston denied in his proxy materials charges leveled by the founders of the company that he would merely loan the company some money, declare bankruptcy, and seize the company's valuable patents, trademarks and technology for his own benefit. (3) Johnston promised in his proxy materials to infuse equity capital into the company, re-list the company on NASDAQ, install a highly qualified management team and improve shareholder value and equity. (4) However, according to the suit, Johnston violated his promises to shareholders, loaned PMC money and declared bankruptcy on Feb. 2.
 Suit was also filed against the new corporation created by Johnston, New Age Fuel Additives, located in Fort Lauderdale, Fla. The suit charges that Johnston, Brian Taylor and other defendants purposely attempted to (1) interfere with PMC's business relationships, (2) attempted to divert this business away from PMC in order to justify the bankruptcy and liquidation of the company, (3) attempted to divert the company's patents and other assets to New Age Fuel Additives Corporation.
 Another defendant in the suit is Advest, Inc., an investment banking firm for PMC.
 Mastromarco stated, "We have also alleged within the complaint that the investment banking firm, Advest, Inc., violated various Securities and Exchange rules and regulations and acted in the background, as part of the group, in violation of the fiduciary duties it owed to the shareholders."
 Johnston, et al, Ousted By U.S. Boston Bankruptcy Judge
 in Emergency Hearing
 As a result of the alleged misconduct of Charles Johnston, et al, motions were heard in Boston Bankruptcy Court on Thursday, May 13. The motions were advanced by attorneys representing unsecured creditors, the Committee to Save Polar Molecular, and Mark L. Nelson. (1) The Court ruled that the handling of the company's affairs, including its recently declaring a termination of operations, warranted removing existing management from control of the company. (2) The Court also ruled that a United States Trustee should be appointed to take charge of the company, its assets, records and papers, and day to day operations.
 Polar Molecular Corporation, under Johnston, filed for Chapter 11 bankruptcy protection on Feb. 2, 1993, and quickly filed a plan of reorganization on April 23, calling for the liquidation and sale of the corporation's assets, and the extinguishment of all of Polar's issued and outstanding stock. The liquidating sale proposed by Johnston before he was ousted by a federal judge calls for a transfer of all assets to insider Johnston via his wholly owned company, New Age Fuel Additives Corp. Existing shareholders receive nothing under Johnston's plan.
 -0- 5/20/93
 /CONTACT: Victor Mastromarco, plaintiffs' attorney, 517-752-1414; or Terry Maynard of the Committee to Save Polar Molecular, or Mark Nelson, 517-886-4222/
 (PMCX)


CO: Committee to Save Polar Molecular Corporation ST: Michigan IN: SU:

JG -- DE007 -- 0655 05/20/93 10:05 EDT
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Publication:PR Newswire
Date:May 20, 1993
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