I know there are a lot of you waiting for an update on the Palladin (formerly Bad Toys)/Southland Health Services situation. I finally had a chance to chat with CEO Larry Lunan today, and very little progress is being made.
First of all- let me clear something up- I would not touch PLHI- the stock. There is no reason to own the stock right now, as Southland as a public company is still going no where. If you own it, sell it and take the tax loss. If you don’t own it, don’t buy it. My view could change in the future.
A lot of us own shares of Southland Health Services. We got it through a share dividend from the former Bad Toys. The shares have been registered and are free trading, but there is no trading in the stock yet.
I have suggested all along this stock would never find a reasonable level until Southland Health Services got out of hock with the IRS on some back tax issues that were inherited with the acquisition of the company.
Unfortunately, I have to report there has been zero progress on relieving the tax situation. The company believes it has a lender that will finance Southland with enough capital to pay off the back taxes, but CEO Larry Lunan says he cannot come to any reasonable settlement with the IRS. Very little progress is being made.
The company has chosen to engage in one manuever- it has put one of its subsidiaries on Chapter 11 bankruptcy. This allows the subsidiary to continue to do business, but provides protection from creditors.
This subsidiary only represents 11% of Southland’s sales, but according to the CEO, 100% of the back tax problem. Perhaps this tactic will give Southland some leverage.
The company itself is doing very well. Q3 revenues should be up along with profits, and the company appears to be in little danger of becoming extinct in any way for the time being.
However, management is making no progress on getting the stock trading, which is really all we care about. It’s not what we want to hear, but it’s the truth.
It’s not over, but it’s certainly disappointing. Anything can happen from here. There is really nothing to do but wait. We’ll see if our certs become money or wall paper.
I find it very hard to believe they can’t come to some kind of reasonable settlement. I din’t really know what’s going on but do we really want to mess with the IRS? Work out a settlement and lets move on!!!
Editor: Amen, brother. Since I don’t run the company, I can’t make that happen. Wish I could.
Back in the spring I received my “dividend shares” of Southland, but in the summer they were taken back out of my account. I’ve been expecting them to reappear, but they haven’t. Can anyone shed any light on this situation?
Thanks,
Bob Marco
Editor: You will receive a stock certificate in the mail. If you don’t, just call the company and ask them what happened. Larry Lunan- (423) 247-9560
I’m a Belgian investor and still did’t receive any shares??? Is the process still ongoing? Any idea?
Editor: you will have to call the company. Larry Lunan: (423) 247-9560
You said that Southland is “free trading”, but hasn’t traded yet. What’s the stock symbol?
Editor: It’s not trading, but if it were your shares would be free trading. If and when it does, you can sell your shares if you so choose to. Until then, there is nothing to do.
in response to guy who hasn’t recieved his shares yet. I spoke to the conpany because I have not recieved my shares either. What I was told is E* Trade folder is just being processed now. My overall feel for this company is poor.When you call they just don’t seem very professional. Just my opinion.
Editor: Your opinion seems to be backed up by the facts of performance. There is one positive- Southland Health Services is functioning quite nicely on its own- so if they can ever get past this nonsense, it could have a happy ending. Perhaps they could just sell the company, and cash out all the shareholders.
I was just flipping around the recent filings, and noticed a 10-Q that Paladin filed Monday. I got tired of reading that if the refinancing doesn’t go well, the Company is threatened. THey must have mentioned it a dozen times in the filing. I ask you, if PLHI fails, does Southland have the ability to go it alone. In other words, can Southland truly be a stand alone entity (we all might be better off if this happened!)? I just know that you have mentioned that Southland is profitable and growing. That must be good for something, shouldn’t it?
Editor: It depends on the IRS- if they can’t pay off the back taxes, and the IRS wants to get really aggressive and take the company into receivership, it is possible Southland could fold for the back taxes. However, they have not fallen behind on their taxes under the current management. It’s old back taxes. I can’t say for sure one way or another, but there’s really nothing you or I can do about it but wait it out. I wouldn’t even take the time to read that Q- I’m sure it was hideous.
Concerning PLHI (Formerly BTYH), I tried calling the humber listed for Lunan that you have listed because I still have not gotten my shares on Southland. Much to my surprise, the number has been disconnected and is no longer in service. If this is the telephone number for the CEO I wonder what this tells me about the company.
Editor: Just spoke with him last week. I have (423) 247-9560.
I just received my stock certificate for Southland yesterday. Does this mean things are moving forward?
Editor: It’s not an indication one way or another. I’d like to say yes, but I just can’t.
Did this company settle with the IRS? There is some buzz that they settled last week. Can you tell us if this is true.
Editor: Will look into it. I haven’t heard anything to confirm this is true.
I received my stock certificate for Southland and my shares are listed with Scottrade. When Southland starts trading do I have to sign over the certificate to Scottrade before I can sell the shares. If the IPO opens high, I may want to sell. I know I’m getting ahead of the game but I’m not sure what to do with the certificate to make it active in my account.
Editor: All you do is send the cert to your broker or drop it off. You probably will have to sign a document called a “Stock Power” as well. I hope you end up having a need to get it to Scottrade. Until it opens for trading, it doesn’t mean a whole heck of a lot. The company could be sold, but that wasn’t the plan.
From your last comment, are you implying that the company has sold. Did they get squared away with the IRS? Isn’t that beneficial to us all?
Editor: not at all- I haven’t heard anything about them settling the problem.
Ineresting article in the Selma Times-Journal dated November 6, 2007. In the second sentence a spokesman for Emergystat states they are “days away from securing $15 million” http://www.selmatimesjournal.com/articles/2007/11/11/news/local/news%20638.txt
Editor: Thanks for the contribution. That gives a new sense of hope here in the new year. Perhaps there is some truth to it. Any lender who steps in has to do it in conjunction with taking out the IRS debt.
Just had this pop up on my news screener dated Dec.21/07. One way or another, this whole fiasco should be resolved soon, because GE and the IRS are obviously getting impatient:
Paladin Holdings, Inc. (OTCBB: PLHI)
Paladin Holdings, Inc. closed at $0.05 Thursday, trading 37,300 shares.
Company News- December 21, 2007: Paladin Holdings, Inc. Releases Southland Update Regarding Emergystat of Sulligent
Paladin Holdings, Inc. (OTCBB: PLHI) released earlier today its Southland update regarding Emergystat of Sulligent. At the request of General Electric Capital Corporation (“General Electric”), a court today has ordered Emergystat of Sulligent, Inc. (“Sulligent”), a wholly owned subsidiary of Southland Health Services, Inc. (“Southland”), operator of ambulance and emergency medical services in certain Alabama counties, not to use its funds to pay the expenses for required functions supplied by its parent company, Southland Health Services, Inc., virtually crippling Sulligent’s ability to operate and requiring that Sulligent operate outside the prescribed legal requirements by the state.
The denied functions include call taking and emergency medical dispatch, proper collection of fees for transportation services, planning and oversight of the proper method of handling drugs and hazardous waste, properly maintaining the vehicles for both licensing and service, certain Human Resource services ensuring personnel meet all certifications and other specific requirements, and maintaining required insurance levels which are vital to the continuing operation of Sulligent as well as being mandated by both the Statutory Authority Code of Alabama section 420-2-1-.03 “Ground Ambulances,” specifically subsections (6), (10), (13), (14), (16), and (17) as well as OSHA 29CFR parts 1904 and 1952. In addition to these specific functions, Sulligent was denied the right to pay for general accounting and other normal administrative services. General Electric also asked the court to require Sulligent to make payments in excess of the required statutory obligation (IRS Code) to the Internal Revenue Service in the amount of $25,000 a week as a condition to access to any of its operating cash to pay only basic direct cost such as paramedic wages. General Electric refused Sulligent’s request to pay Southland for the State mandated services.
Sulligent has advised the court that it cannot operate its business under the restrictions demanded by General Electric. Sulligent is reviewing the court order and exploring all options available to it. In order to ensure no disruption in service in the areas in which Sulligent provides EMS services, Extended Emergency Medical Services (“EMS”), a wholly owned subsidiary of Southland, has offered to provide services on a temporary basis in those counties. Each county has the option to accept this temporary arrangement until such time they can evaluate their permanent EMS solution. Southland is committed not to allow any disruption within the areas of the service previously provided by Sulligent, and will not allow General Electric’s request and the subsequent court approval of General Electric’s request to harm any of the individuals within the areas served by Sulligent.
Larry Lunan, President and CEO of Southland Health Services, Inc., stated, “The Sulligent subsidiary sought protection under Chapter 11 Bankruptcy Code; so it, under this relief, could work out an acceptable solution and payment plan for the Sulligent tax deficiency.” Even though this stated purpose was communicated to both the IRS and General Electric, the Company and Mr. Lunan have been attacked viciously in every court hearing. Southland, since Sulligent’s filing, has provided Sulligent in excess of $300,000 cash and an additional $300,000 in uncompensated mandatory services through December 17, 2007. This commitment by Southland to support the subsidiary, Sulligent, has been vilified by all parties which resulted in this latest order. The Company is committed to continue to pursue a favorable outcome for its shareholders and will keep our shareholders informed as well as ensure that emergency medical services are not interrupted and are available to the constituents of the counties the Company serves.
About Paladin Holdings, Inc.
Paladin Holdings, Inc. (OTCBB: PLHI) participates in two distinct business segments: Bad Toys, Inc.
This division, Bad Toys, Inc., American Eagle Manufacturing Company and Gambler Motorcycle Company, continues to design, manufacture, distribute, service and sell custom made, Harley-Davidson type, V-twin motorcycles from component parts. We also offer premium accessories, parts, customizing items and apparel related to Harley-Davidson motorcycles on-line and directly from our retail and factory outlets. This division also participates in Sprint Car Racing products and custom car construction and restoration.
Southland Health Services, Inc.
The second business segment, in which the company is a major shareholder (25%) of Southland Health Services, Inc., provides an array of Health Care services including ambulatory emergency and non-emergency patient transport, wheel-chair van, stretcher van and related transport services. Southland operates in over 200 communities within the following seven states: Mississippi, Alabama, Florida, Kansas, Tennessee, Virginia, and Georgia. We operate in excess of 207 ambulances and wheelchair vans and have over 940 full and part-time employees. At our current run rate we will transport more than 130,000 patients in this calendar year.
Editor: Sure seems like the whole thing could be falling apart. Clearly, this is not a good thing for Lunan and Southland. I believe this division has all the debt, and it would appear Lunan lost in court. Don’t know where it goes from here.
HIHO!
Happy New Year! I have to tell you that Scottrade recently “Delivered Out” my shares of Southland without notice. When I inquired about this, I was told that my shares went to a transfer agent, and that the transfer agent would send my certificates to me in 4 to 6 weeks. I hope I am not receiving wallpaper! There was NO reason explained for this action.
I have been screwed in so many ways in this penny stock game that I have to wonder what is going on here with Southland. I thought it sucked when a different stock I owned at .013 reverse split (WITHOUT NOTICE) 100 for 1 to 1.30, and dropped to less than .30 per share in days. My advice to Larry: Get it together and make a deal. Your investors demand it!
Thank you.
Michael
Editor: Amen, brother. He’s got a lot more at stake than you or I, but the bottom line- you have to get the job done, and so far it ain’t happening. Big disappointment. However, I don’t spend a lot of time worrying about it as there is nothing to be done but wait.
My shares of southland were in my fidelity account at some when i look today they were gone. Do you have any ideas about this or has any one else you know had there shares added to there trading accout then stripped away? I wonder if southland would reverse back to plhi if the share price would climb over .05 to at least get rid of the whole cluster mess.
Editor: Right now, I am not very hopeful this will turn out well. It has been an awfully long process, and Southland is still not out of the woods with the IRS. I am sure some entities are starting to get impatient.
Southland stocks from spinoff appeared in my Ameritrade account in February, 2007; disappeared in June of 2007 with an explanation “spinoff reversed by company.” I called Paladin, talked to Alan Walls, who told me that the spinoff was not reversed; but that they have not yet “reconciled” all the Ameritrade accounts yet. He said that Ameritrade (and apparently Scott trade and Fidelelity) were incorrectly credited with the shares which were to be distributed to stockholders directly. This, the disappearance of the shares in June (in my case). He reassured me that the certificates would be forthcoming, but could not give a time-line estimate. He said the shares would be sent to the investor directly, unless the account was a retirement account. I hope this helps and I agree that Mr. Lunan needs to clean up his mess very soon and honor his committments.
Editor: Yes- thanks for the contribution. Others have had the same experience. None of it matters if Lunan does not get the IRS and GE Capital situations resolved. So far, no good. At this point, I have to figure chances are pretty slim he is going to be able to move this situation in a positive direction. In short, he is failing. Too bad- great little company that could have a decent value in the open market.
Recently, my partner and I were notified by email from TDAmeritrade that we will have to pursue the spin off shares of Southland with the SEC. According to TDAmeritrade, PLHI (formerly Bad Toys) is requesting “nonpublic information” from TDAmeritrade concerning persons entitled to receive the Southland spin off shares. It is TDAmeritrade’s position that they cannot release the infomation requested because it violates Regulation SP and furthermore, the requested information is not necessary to accomplish the spin off. Accordingly, they have furnished us with both the email address and the physical address of the SEC for purposes of filing a complaint.
The email address is http://www.SEC.gov and on the designated main page, you will see a box with a link inside of it that reads “File a Tip or Complaint”. You will need to click on this link which then will allow you to submit the complaint electronically.
The mailing address is:
SEC Complaint Center
100 F Street NE
Washington, D.C. 20549-0213
Fax Number (202) 772-9295
It is sad that we as shareholders are put in this position just to get what is rightfully ours. However, after a year of waiting for the promised spinoff shares, the patience of my partner and myself is completely exhausted.
David Tanner
Editor: Very helpful. I recommend everyone who is in this position follow up with complaints against both the company and TDAmeritrade.
You said this company was dead. Their press release today says otherwise. Who is right???? As I recall Rural Metro was also once written off for dead under somewhat similar circumstances—WRONG!!!!
Editor: Rural Metro got their stock trading publicly on the NASDAQ- Rural Metro didn’t have substantial IRS debt. I’m not saying it couldn’t happen, but there is absolutely no indication of any kind that this company is going to get a listing to trade, and it’s been well over a year since the registration went effective. A slight glimmer, but very slight.