MIAMI, Oct. 5, 2007 (PRIME NEWSWIRE) -- Aventura Holdings, Inc. (OTCBB:AVNT) (referred to as "Aventura", the "Company", "we", "our" or "us") has received inquiries through our website regarding the status of the business relationship with Horvath Holdings, LLC (Horvath) and the future direction of the Company. This release seeks to summarize and clarify recent events.
On May 16, 2006, Aventura and Horvath entered into a series of agreements that were intended to be a vehicle through which Horvath could possibly acquire a controlling interest in Aventura in the event Horvath properly exercised a one year Warrant and complied with all other conditions set forth in transaction documents. Horvath did not properly exercise the Warrant nor did Horvath comply with such conditions.
In or around November of 2005, Craig Waltzer the Company's president was introduced to Donald Foss, chairman of sub-prime lender Credit Acceptance Corporation (Nasdaq:CACC) and met Foss at CACC headquarters in Southfield, Michigan. According to Foss' representations at that time, Foss had businesses aside from CACC and was a significant creditor of Horvath. Foss was seeking a vehicle to aid in the repayment of a $7 million purchase money debt owed by Horvath to Foss, in addition to repayment of other debts owed by Horvath to Foss, Foss Trusts, and other Foss-owned or Foss-controlled entities. During this meeting, Foss expressed his desire that Horvath acquire a controlling interest in Aventura stock in exchange for Horvath-owned stock of successful automobile dealerships and sub-prime automobile finance companies formerly owned by Foss. Aventura agreed, entered into a series of transactions and hired Foss lawyer Michael Raymond and his Detroit, Michigan firm Dickinson Wright PLLC as its counsel. Allan Apple (Foss' accountant and former Credit Acceptance Corporation (Nasdaq:CACC) Secretary) and Michael Raymond became Donald Foss spokespersons to Aventura following the Aventura and Horvath transaction.
During the warrant period, Aventura's due diligence on Horvath/Foss automobile dealerships revealed little if any value and inadequate financial recordkeeping. Foss (through Apple and Raymond) proposed to foreclose Foss' position on Horvath and directed Horvath to exchange Horvath-owned sub-prime automobile finance companies for Aventura stock. On October 1, 2006 Horvath partially exercised the warrant by exchanging a thirty percent (30%) interest in a Horvath-owned sub-prime automobile finance company for Aventura stock. Aventura issued a replacement warrant for the unused remainder. Raymond presented Aventura with a derisory valuation of the Horvath company exchanged for Aventura stock six months after exercising the warrant.
Preceding expiration of the replacement warrant, Waltzer informed Foss, Apple, Raymond and Horvath of numerous concerns regarding valuation of Horvath-owned companies and the replacement warrant expired May 16, 2007 at 5 PM without exercise. On June 11, 2007, Horvath and Foss filed a lawsuit in United States District Court Southern District of Florida (Case Number 07-60816-CIV-Altonaga / Turnoff) seeking specific performance of the expired replacement warrant. On June 12, 2007, Horvath attempted to exercise the expired replacement warrant by delivering shares in Horvath-owned sub-prime automobile finance companies and a subscription form to Horvath's Florida counsel. On June 18, 2007, Judge Altonaga heard seven hours of testimony and concluded that Horvath was unlikely to prevail in its lawsuit since the replacement warrant had already expired when Horvath attempted to exercise its rights and denied all Horvath / Foss motions.
Aventura learned through its due diligence that:
* Horvath / Foss automobile dealerships and sub-prime automobile finance companies are insolvent and may have negative value
* Donald Foss had a direct interest in Horvath Holdings, LLC and Horvath-"owned" sub-prime automobile finance companies contrary to Aventura relied upon representations made on Credit Acceptance Corporation's quarterly and annual reports (Forms 10-Q and 10-K)
* Donald Foss controlled Aventura as an undisclosed principal during the term of the warrant
* Horvath / Foss sub-prime automobile finance companies operate unlicensed and may not be in compliance with other local laws
* Dickinson Wright interpreted dual consent as an invitation to intentionally serve their other clients who may provide greater fees to the detriment of Aventura
* Credit Acceptance Corporation (Nasdaq:CACC), Donald Foss, Mark Horvath, Horvath /Foss automobile dealerships and Horvath /Foss sub-prime automobile finance companies are defendants in a Racketeer Influenced and Corrupt Organization (RICO) lawsuit in Florida Northern District Court (Case Number 3:2007cv00209) involving financed automobiles.
In summary, it initially appeared that the acquisition of Horvath was a good move for Aventura and our shareholders. When a team acquires a great athlete and the athlete does not perform as well as in the past it is a disappointment for the team. Sometimes it is because of injury, sometimes the athlete loses their ability and sometimes it is the athlete's inappropriate behavior. Whatever the reason, Aventura's relationship with Foss, Apple, Raymond and Horvath resulted in a poor performance, maybe for all of the mentioned reasons. In some instances an athlete acquired by a new team can not perform up to their expected level and reacts in such a way that brings embarrassment to the team, themselves and the community. Foss, Apple, Raymond and Horvath have been an embarrassment to Aventura, our shareholders and themselves. Aventura will move forward by returning to management's roots exploring emerging technologies.
About Aventura Holdings, Inc.
Aventura Holdings, Inc. owns a majority interest in Ohio Funding Group, Inc. (Ohio). Ohio was a lender in the sub-prime automobile market. Ohio collects from its borrowers and services loans on recourse debt.
Safe Harbor
This press release may contain "forward-looking statements." Although Aventura Holdings, Inc. believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Aventura Holdings, Inc. assumes no obligation to update those statements to reflect actual results, changes in assumptions and other factors. The forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those projected. Additional information that could lead to material changes in performance is contained in filings with the Securities and Exchange Commission.