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February 15, 1987

RANK ORGANISATION PRESSES TELECOM PLUS TO LIQUIDATE AS BOARD FACES SUITS

By CBR Staff Writer

Rank Organisation Plc is in line for a very substantial profit on its shares in Telecom Plus International Inc if it can persuade the company to liquidate and distribute the proceeds to holders at the annual meeting next month – but six officers of the Boca Raton, Florida company are under fire from a shareholder lawsuit. Rank Organisation, through its Rank America and Rank Industries America subsidiaries, holds 23% of the equity in Telecom Plus, and would be in line for a payout of at least $50m if its motion for liquidation and distribution of the proceeds were successful: Telecom Plus has already sold its cellular interests to McCaw Communications for $71m, and has agreed to sell most of the rest of its business – mainly distributing and installling private telephone exchanges and telephone systems – to Siemens AG for $165m. If that sale is successfully completed, and there are no obvious reasons why it should not be, Telecom Plus will be left with over $250m in cash, and businesses generating less than $10m a year. But the officers have other things to worry about in the shape of the lawsuit brought on behalf of the company against six of their number. The suit alleges that they took Telecom Plus into joint ventures with a number of companies, notably Vodavi Technology, on terms which enabled them to use the company’s cash to enhance the value of options they were granted in the joint ventures. The suit is demanding $8.7m actual damages, punitively tripled to $26.1m.

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