Raser Technologies interested party requests trustee, alleges fraud

By Caroline Salls

Pittsburgh, June 15 - Raser Technologies, Inc. interested party Prescott Lovern has asked the U.S. Bankruptcy Court for the District of Delaware to appoint a Chapter 11 trustee amid allegations of "fraud, incompetence, gross mismanagement and dishonesty," according to a Wednesday court filing.

Lovern is also asking the court to order the company to produce documents to determine whether fraud was committed with Raser's bankruptcy filing, whether a trustee should be appointed to investigate the alleged fraud and whether the company's proposed plan should be confirmed.

According to the motion, Thermo 1 financing participants Linden Partners and Merrill Lynch "not only engaged in short selling of the [company's] stock, but may have engaged in illegal naked short selling."

"Linden's intent in entering into the transaction with Raser was to ultimately drive Raser into bankruptcy so they could acquire Raser's assets for pennies on the dollar," Lovern said in the motion.

In addition, Lovern said former Raser chief executive officer Kraig Higginson promised that the shares of any split between the company's geothermal and electric motor businesses would be distributed to shareholders, but that distribution did not happen.

Lovern said Higginson and CEO Nicholas Goodman also knew or should have known about an alleged breach of contract related to the company's failure to provide "green" power to Anaheim, Calif., but they never told shareholders about the contractual defect.

Provo, Utah-based Raser is a technology licensing and development company focused on geothermal power generation. The company filed for bankruptcy on April 29, and its Chapter 11 case number is 11-11315.

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