Investor Says Equus Board Diluted Shares To Seize Control

Law360, Houston (August 21, 2012, 8:06 PM EDT) -- The largest individual shareholder in Equus Total Return Inc. launched a suit Friday in Texas state court, alleging that the company’s board of directors diluted her shares in the private equity firm in a bid to grasp control.

Paula Douglass claims the Equus board of directors traded nearly 2 million new shares of stock in exchange for bonds issued by a failing German real estate company, causing financial losses and reducing the voting power of her shares.

“The directors knew that Equus shareholders would never receive...
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