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meVC DRAPER FISHER JURVETSON FUND I, INC.
(d/b/a MVC CAPITAL)
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MVC CAPITAL SUES MILLENCO FOR VIOLATIONS
OF FEDERAL SECURITIES LAW
Complaint Alleges "Conspiracy" to Take Control of MVC Capital, Liquidate Fund
Menlo Park, CA - February 6, 2003 - MVC Capital (NYSE: MVC), an information
technology venture capital fund, announced today that it has filed a complaint
in the United States District Court Southern District of New York against
Millennium Partners, L.P., Millenco, L.P., and Karpus Management, Inc. for
multiple violations of federal securities law.
The complaint alleges that the defendants, which collectively are beneficial
owners of more than 10% of the stock of MVC Capital, have conspired to take
control of MVC and then immediately or gradually liquidate the Fund's assets for
their own profit, through a variety of illegal acts, including,
o prohibited pyramiding of stock ownership
o material misrepresentations and omissions in various mandatory SEC filings
o fraudulent proxy solicitations in anticipation of MVC's February 28 annual
meeting
o market manipulation
The complaint also alleges that Millenco and Karpus Management have carefully
coordinated the timing of their purchases of MVC Capital stock to allow them to
artificially hold down MVC's stock price as they accumulated their positions.
"One defendant bought a significant volume of MVC Capital shares for a period of
time and then, almost simultaneous with the end of those purchases, the other
defendant commenced its purchases. This exceptional coordination of purchases
could not conceivably have been coincidental given its magnitude and extent over
several months in 2002," the complaint said. These purchases evidence "a scheme
by defendants to coordinate their purchases that could have only one purpose: to
artificially keep depressed the market price of MVC Capital shares."
The complaint also alleges that Millenco and Karpus have made deceptive filings
with the SEC. "Nowhere in any of those filings or elsewhere has any defendant
publicly disclosed that (a) they are acting in concert for the purpose of
acquiring, holding, voting and/or disposing of MVC Capital shares....(b) they
collectively own more than 10% of the outstanding shares of MVC Capital and so
are statutory insiders....(c) they agreed in 2002 to act together for the
purpose of acquiring control over the Fund to cash their shares out at a profit,
(d) they acted in concert to manipulate and artificially depress the price of
MVC Capital shares on the New York Stock Exchange, and (e) Millennium Partners
and its affiliates are prohibited by the anti-pyramiding provisions of the
Investment Company Act from controlling more than 3% of MVC Capital."
The complaint asks the Court for preliminary and permanent injunctive relief,
including,
o requiring Millennium Partners to sell all MVC shares it owns in excess
of 3% of the outstanding stock into the open market
o prohibiting Millennium Partners, and any persons or entities it
controls, from voting more than 3% of the outstanding shares
of MVC Capital
o prohibiting all defendants from voting any proxies obtained or to be
obtained from any shareholder that has executed such proxy less than 48
hours after defendants make corrective disclosures to remedy their
material misrepresentations and omissions.
About MVC Capital
MVC Capital, a business development company, was formed to provide individual
investors with the opportunity to invest in venture capital, a historically top-
performing asset class previously open only to high-net-worth individuals and
institutional investors. The Fund's investment objective is long-term capital
appreciation from venture capital investments in information technology
companies. MVC Capital utilizes both equity investing and lending to achieve its
objective. Additional information on the Fund and its investments may be
obtained by writing to MVC Capital, 3000 Sand Hill Road, Building One, Suite
155, Menlo Park, CA 94025, Attention: Secretary, via the website at
www.mvccapital.com, or by calling (877) 474-6382.
We encourage you to sign up for MVC Capital's email notification list by
clicking on the following link:
http://www.mvccapital.com/mailing_list/subscribe.jsp
Contact:
MVC Capital
Brian Matthews, 650/926-7015 (Investors)
or
The Abernathy MacGregor Group (Media)
Mike Pascale/Rhonda Barnat, 212/371-5999
IN CONNECTION WITH THE ABOVE-DESCRIBED MATTERS AND ITS 2003 ANNUAL MEETING OF
SHAREHOLDERS, meVC DRAPER FISHER JURVETSON FUND I, INC. (d/b/a MVC CAPITAL) HAS
FILED A PROXY STATEMENT AND INTENDS TO FILE OTHER MATERIALS WITH THE SECURITIES
AND EXCHANGE COMMISSION. SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND
THESE OTHER MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SHAREHOLDERS MAY OBTAIN A FREE COPY OF THE PROXY
STATEMENT AND THESE OTHER MATERIALS WHEN THEY BECOME AVAILABLE AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CONCERNING
MVC CAPITAL AT THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
HTTP://WWW.SEC.GOV. SHAREHOLDERS MAY ALSO OBTAIN FOR FREE THE PROXY STATEMENT
AND OTHER DOCUMENTS FILED BY MVC CAPITAL WITH THE SECURITIES AND
EXCHANGE COMMISSION IN CONNECTION WITH THE ABOVE-DESCRIBED MATTERS BY DIRECTING
A REQUEST TO BRIAN MATTHEWS AT 3000 SAND HILL ROAD, BUILDING ONE, SUITE 155,
MENLO PARK, CA 94025 OR 650-926-7015.
MVC CAPITAL AND ITS DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE
PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM MVC CAPITAL SHAREHOLDERS WITH
RESPECT TO THE ABOVE-DESCRIBED MATTERS. INFORMATION REGARDING THESE DIRECTORS
AND EXECUTIVE OFFICERS AND THEIR OWNERSHIP OF MVC CAPITAL COMMON STOCK IS SET
FORTH IN MVC CAPITAL'S PROXY STATEMENT FOR ITS 2003 ANNUAL MEETING OF
SHAREHOLDERS. ADDITIONAL INFORMATION REGARDING THESE DIRECTORS AND EXECUTIVE
OFFICERS AND THEIR INTERESTS IS INCLUDED IN THE PROXY STATEMENT.
STATEMENTS IN THIS ANNOUNCEMENT OTHER THAN HISTORICAL DATA AND INFORMATION
CONSTITUTE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED OR IMPLIED
BY SUCH FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES MAY
INCLUDE, BUT ARE NOT LIMITED TO, RECENT CHANGES IN SENIOR MANAGEMENT,
FLUCTUATIONS IN OPERATING RESULTS, MARKET CONDITIONS, CHANGES IN TECHNOLOGY,
INCREASED COMPETITION AND OTHER RISKS IDENTIFIED BY MVC CAPITAL FROM TIME TO
TIME IN ITS FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.