http://biztaxlaw.about.com/od/startingacorporation/a/boardliability.htm

Boards have liabilities in certain areas:

· Duty of Care
Boards have a duty of care to act in the best interest of the shareholders.

· Duty of Loyalty
Boards have a duty to avoid potential and actual conflicts of interest.

·

http://biztaxlaw.about.com/od/glossaryc/g/conflictinteres.htm

A conflict of interest is a situation in which an individual has competing interests or loyalties. A conflict of interest can exist in several kinds of situations:

· with a public official whose personal interests conflict with his/her professional position

· with an employee who works for one company but who may have personal interests that compete with his/her employment

· with a person who has a position of authority in one organization that conflicts with his or her interests in another organization

· with a person who has conflicting responsibilities

example: The board member signed a conflict of interest agreement after disclosing his affiliation with one of the company's suppliers.

Our board hired and allowed our former CEO to move forward (and according to Gloria, with much due dilligence on the part of the board) with the purchase of other companies that turned out to be not in the best interest of shareholders.

Our board allowed its legal team to negotiate a settlement agreement with the J3. This agreement abandoned litigation intended to recover millions. Did they act in the best interest of shareholders, especially when so much $$$ was expected to be recovered. The end result was a settlement agreement shrouded in mystery and a settlement amount that left all shareholders confused about what really happened and who really benefitted.

Carlton Johnson works for Eric Swartz. Isn’t or wasn’t Eric Swartz a supplier (of cash) to PTSC? Was there a conflict of interest here and if so was a conflict of interest agreement signed disclosing this affiliation?

Was there a conflict of interest created when Gloria, who worked for the Faulk family, became a director?

From Gloria’s e-mail:

There was a short time during that period, when the company carried no D & O insurance, which means that as a board member, I received no board fees and subjected all my personal assets to risk. The same is true of Carl and Helmut Falk. Why would we do that if not because we cared and believed in what we had.

Now that the company has D&O insurance does that now mean that Gloria, Carl and Helmut no longer care or believe in what they have? Or have they failed in their fiduciary responsibilites to shareholders and that is why there is D&O insurance? The longer they remain silent and ignore shareholders the more I am inclined to believe they don’t care about us. Hope I am proved wrong.