Danka Business Systems shareholders to seek involuntary liquidation of company

By Lisa Kerner

Charlotte, N.C., Nov. 14 - Danka Business Systems plc said that while its board of directors has assessed available alternatives since the sale of Danka Office Imaging Co. to Konica Minolta Corp., there is no guarantee that holders of the company's convertible participating shares will not take available legal action and seek an involuntary winding up of the company to recover amounts to which they are entitled under Danka's articles of association.

The amounts, however, exceed the net proceeds from the sale of Danka Office Imaging, according to a form 10-Q filed with the Securities and Exchange Commission.

Cypress Merchant Banking Partners II LP and some affiliates intend to file an application in the English High Court seeking the involuntary winding up of the company.

Danka Business Systems said in an involuntary liquidation, it is unlikely that ordinary shareholders, including holders of American Depositary Shares, would receive any distribution.

The company said it will convene an extraordinary general meeting where shareholders will be asked to approve a resolution for Danka to enter into a members' voluntary liquidation, it was previously reported.

Danka believes that since the sale of Danka Office Imaging to Konica Minolta, the company has no reason to exist.

The liquidation has been strongly opposed by Danka shareholder DCML LLC.

Prior to the sale of Danka Office Imaging, St. Petersburg, Fla.-based Danka Business Systems provided office imaging equipment, software, support and related services and supplies in the United States.

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