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U.S. Securities and Exchange Commission

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA


SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street N.W.
Washington, D.C. 20549,

Plaintiff,   

v.

WILLIAM A. WILKERSON,

Defendant.   


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Civil Action No. 03 2197 (HHK)

COMPLAINT

Plaintiff Securities and Exchange Commission ("Commission") alleges that:

JURISDICTION

1. This Court has jurisdiction pursuant to Sections 21(d)(3) and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. 78u(d)(3) and 78aa.

DEFENDANT

2. William A. Wilkerson, 61, is a resident of Florida. Wilkerson joined BCT International, Inc. in 1986. During the relevant time, he was the Chairman of the Board, Chief Executive Officer and President of BCT International, Inc. Wilkerson was the sole officer and shareholder of The Phoenix Group of Florida, Inc.

OTHER RELEVANT ENTITIES

3. BCT International, Inc. ("BCTI") is a Delaware corporation headquartered in Fort Lauderdale, Florida. BCTI is a holding company of Business Cards Tomorrow, Inc., which franchises wholesale thermography printing plants and sells paper stock and catalogs. During the relevant period, BCTI's common stock was registered with the Commission pursuant to Section 12(g) of the Exchange Act and traded on the NASDAQ Electronic Bulletin Board under the symbol BCTI.OB.

4. The Phoenix Group of Florida, Inc. ("Phoenix Group") is a Nevada corporation headquartered and doing business in Florida. Wilkerson formed Phoenix Group for the purpose of acquiring and owning shares of BCT International, Inc.

5. Phoenix Acquisition Corp. ("PAC") is a Delaware corporation and a wholly-owned subsidiary of Phoenix Group that was formed solely for the purpose of effecting transactions involving the purchase or acquisition of the issued and outstanding shares of BCTI.

FACTUAL ALLEGATIONS

Introduction

6. This matter involves violations of the "going private" rules under Section 13(e) of the Exchange Act. Rule 13e-3 under the Exchange Act requires issuers or their affiliates who take steps to effect a going private transaction to promptly disclose information relating to that transaction by filing a Schedule 13E-3 with the Commission. Between May and September 2001, Wilkerson and Phoenix Group engaged in a series of transactions to purchase BCTI stock for the purpose of acquiring control of BCTI and taking it private. However, Wilkerson and Phoenix Group failed to timely file a Schedule 13E-3 disclosing these purchases and their intent to effect a going private transaction, and they failed to disseminate the disclosure to security holders as required by Rule 13e-3(f).

7. As a result, holders of BCTI securities and other investors did not know of Defendant's efforts to take BCTI private, nor were they provided with other important information that was required to be disclosed, such as: (i) the purposes for the transaction; (ii) the effects that the transaction would have on BCTI and its unaffiliated security holders; and (iii) the factors concerning the fairness of the transaction to the unaffiliated security holders.

8. Wilkerson and Phoenix Group also failed to make adequate and timely disclosures in the Schedules 13D that they filed with the Commission.

9. Defendant thus violated Sections 13(d) and 13(e) of the Exchange Act and Rules 13d-1, 13d-2 and 13e-3 thereunder.

Defendant's Acquisitions of BCTI Stock

10. Beginning in 1986, Wilkerson acquired shares of the company through the sale of his business to BCTI, the conversion of loans he made to the company, and a convertible debenture that he converted into BCTI stock. By May 1, 2001, Wilkerson owned 998,057 shares of BCTI stock, or 19.1% of its issued and outstanding shares. He also acquired options under BCTI's stock option plan to purchase an additional 330,000 shares of BCTI stock.

11. In May 2001, Wilkerson initiated a series of transactions to purchase additional BCTI stock. The purpose of these transactions was to gain control of the company and take it private. All of the transactions were private transactions in which Wilkerson purchased or acquired the right to purchase BCTI stock. Wilkerson entered into these transactions directly or through Phoenix Group, an entity that he formed in June 2001 for the purpose of acquiring and owning BCTI stock.

12. Between May and September 2001, Wilkerson and/or Phoenix Group made the following acquisitions of BCTI stock:

Date

Transaction

# of Shares

Price per share

Shares Owned by Wilkerson/ PhoenixGroup

Wilkerson/Phoenix Group's % of BCTI shares outstanding

5/20/01

Rights under Option Agreement

623,782

$1.75

1,951,839

35.8%

8/17/01

Assignment of Rights under Stock Purchase Agreement

618,442

$1.50

2,570,281

47.1%

8/20 -21/01

Negotiated Purchases

237,848

$0.90

2,808,129

51.5%

9/1/01

Negotiated Purchases

288,858

$0.90

3,096,987

56.8%

13. As a result of these transactions, by August 21, 2001, Wilkerson and Phoenix Group had acquired majority ownership and control of the company.

Defendant's Plan to Take BCTI Private

14. On May 23, 2001, Wilkerson disclosed to BCTI's board of directors, which he controlled, his May 20 acquisition of an option to purchase 623,782 shares of BCTI stock. According to the minutes of the board meeting, Wilkerson "expressed to the BCTI Board his interest in exploring the possibility of purchasing the shares of BCTI common stock not already owned by him."

15. In June 2001, Wilkerson sought financing for his purchases of BCTI stock. In mid-June, Wilkerson received a loan proposal from a bank reflecting that the purpose of the financing was "the purchase of outstanding shares of common stock of [BCTI] in one or more private transactions."

16. On June 19, Wilkerson informed BCTI's board of directors that he was preparing a proposal "involving the purchase of the Company's shares not already owned by [him]." In anticipation of Wilkerson's proposal, BCTI's board retained counsel to assist it in connection with its "review of matters related to a potential 'going private' transaction." Shortly thereafter, on June 25, Wilkerson formed Phoenix Group to acquire the outstanding shares of BCTI stock that he did not already own.

Defendant's Schedule 13D Filings

17. On June 29, 2001, Wilkerson filed a Schedule 13D with the Commission disclosing his acquisition of the option on May 20, which increased his beneficial ownership of BCTI stock from 19.1% to 35.8%. (In the Schedule 13D that he filed on June 29, 2001, Wilkerson calculated the percentage of shares that he beneficially owned as 35.1%.)

18. In the Schedule 13D, Wilkerson disclosed in boilerplate fashion that he was "considering various alternative courses of action with respect to the management and ongoing operations of the Issuer" and that he may engage in one or more of the following activities: (i) the acquisition of additional BCTI stock; (ii) the acquisition of all or substantially all of BCTI's assets or the remaining outstanding BCTI stock (whether by means of a merger or another form of transaction); (iii) meetings and discussions with BCTI's board (on which Wilkerson then served) with the intent to influence the BCTI's business and affairs; and (iv) any other activities deemed by Wilkerson to be effective for the purpose of so influencing BCTI's business and affairs.

19. On August 22, 2001, Wilkerson and Phoenix Group jointly filed a Schedule 13D disclosing beneficial ownership of 56.1% of BCTI's issued and outstanding shares, including the receipt of an assignment of rights to purchase 618,482 shares of BCTI stock under a stock purchase agreement and the acquisition of 237,848 additional shares of BCTI through privately negotiated purchases. The disclosures in the Schedule 13D concerning the purpose of these transactions were virtually identical to the disclosures that Wilkerson made in the Schedule 13D that he filed on June 29.

20. On September 7, 2001, Wilkerson and Phoenix Group jointly filed an amended Schedule 13D with the Commission disclosing that Phoenix Group had exercised its rights under the option agreement and that, through various privately negotiated oral agreements, Phoenix Group had acquired the right to purchase an additional 288,858 shares of BCTI stock. As a result of these transactions, Wilkerson and Phoenix Group held roughly 56.8% of the company's stock. In an exhibit to the amended Schedule 13D, Wilkerson and Phoenix Group disclosed for the first time their intent to "purchase for cash all of the Company's shares held by persons other than Phoenix (or its affiliates)."

21. In November 2001, BCTI's board approved an offer from Wilkerson and Phoenix Group and PAC to purchase all of the outstanding BCTI stock not already owned by them at $1.13 per share. On December 17, 2001, BCTI, Wilkerson, Phoenix Group and PAC jointly filed a preliminary proxy statement and, for the first time, a Schedule 13E-3 with the Commission. The Schedule 13E-3 disclosed that as a result of the contemplated transactions, BCTI "will be a privately held corporation, 100% of which will be beneficially owned by [Phoenix Group and Wilkerson]."

FIRST CAUSE OF ACTION

Defendant Violated Section 13(e) of the
Exchange Act and Rule13e-3 thereunder

22. Plaintiff realleges and incorporates by reference paragraphs 1 through 21 above.

23. Rule 13e-3 under the Exchange Act requires issuers or their affiliates who take steps to effect a going private transaction to promptly disclose information relating to that transaction by filing a Schedule 13E-3 with the Commission [17 C.F.R. 240.13e-3(d)(1)].

24. Acts in contravention of Rule 13e-3 under the Exchange Act also constitute violation of Section 13(e) of the Exchange Act [15 U.S.C. 78m(e)].

25. Between May and September 2001, Wilkerson and Phoenix Group engaged in a series of transactions, including purchases of BCTI stock, for the purpose of acquiring control of BCTI and taking it private.

26. Because Wilkerson failed to timely file a Schedule 13E-3 disclosing these transactions and his intent to effect a going private transaction, he violated Section 13(e) of the Exchange Act and Rule 13e-3 thereunder.

SECOND CAUSE OF ACTION

Defendant Violated Section 13(d) of the Exchange Act
and Rules13d-1 and 13d-2 thereunder

27. Plaintiff realleges and incorporates by reference paragraphs 1 through 26 above.

28. Section 13(d) of the Exchange Act and the rules thereunder require a person acquiring beneficial ownership of more than 5% of a class of registered equity securities (and not eligible to file a Schedule 13G pursuant to Rule 13d-1(b)) to disclose within ten days certain information relating to his or her share acquisition on Schedule 13D [15 U.S.C. 78m(d)].

29. Acts in contravention of Rules 13d-1 and 13d-2 under the Exchange Act also constitute violations of Section 13(d) of the Exchange Act [15 U.S.C. 78m(d)].

30. Wilkerson's and Phoenix Group's June 29, 2001, August 22, 2001, and September 7, 2001 amendments to their Schedule 13D did not timely or adequately disclose that (1) they had formed an intent to acquire control of the company and take BCTI private, (2) the purpose of the shares they acquired through privately negotiated purchases and the exercise of options was in furtherance of that objective, and (3) they intended to acquire additional shares for the same purpose.

31. By failing to make adequate and timely disclosures in the Schedules 13D that he filed with the Commission, Wilkerson violated Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder.

PRAYER FOR RELIEF

WHEREFORE, plaintiff Commission respectfully requests that the Court enter a Final Judgment ordering Defendant to pay a civil money penalty pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. 78u(d)(3)].

Respectfully submitted,


________________________
Antonia Chion
Scott W. Friestad
Daniel M. Hawke (D.C. Bar No. 424874)
Lavonna Delane Olson (D.C. Bar No. 423566)
Attorneys for Plaintiff
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0708
(202) 942-4787


Dated: October 27, 2003


http://www.sec.gov/litigation/complaints/comp18427.htm


Modified: 10/27/2003