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to prolonged corporate unrest and to his decision to call upon
shareholders to clean up the house. He mentioned the dissatis-
faction of the management personnel with the way the company
was managed, which had led to the board of directors' 16 July
decision to drastically limit the presidential role in managing
the company. He also wrote about the board of directors' rather
irresponsible position with respect to the power supply crises
and the financial situation of the company.
Early in March of this year [1974] I had proposed to the
board, with the support at that time of the senior staff
of the Company, that salaries be reduced and that other
measures be taken so as to conserve the available cash re-
sources of the Company. The board in its wisdom refused
to act on my recommendation, although it did allow me to
cease drawing my own salary.
After my powers were limited the operating expenses of
the Company increased from approximately $40,000 per
month to approximately $49,000 per month. As well, in
my view, no real progress was made in the manufacture of
our product.
By 1 October, reported Kutt, “Cash on hand and in the bank
amounted to less than $8,000 and the remaining available bank
line was less than $50,000.” These financial strictures had to
result in the layoffs announced on 2 October.
In his letter, Kutt implicitly accused Wallace, Robertson, and
Elliot of not acting in the best interest of the company at such a
critical moment. He reported that Wallace authorized a $10,000
payment to Borden & Elliot on account of their fees as counsel
to MCM . “I objected strongly to Mr. Wallace,” reported Kutt,
“because both W. Struan Robertson and B.V. Elliot, partners of
the firm, had assured me that the Company would not have to
pay Borden & Elliot until such time as it could afford to do so.”
 
 
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