Cara Ellison Corp. Will Not Accept TARP Funds, Company Says

Cara Ellison Corp. today announced it will not accept TARP funds, despite the growing financial instability of the energy giant. Just weeks after Ellison reported positive earnings and “very good” liquidity, the company has faced what one source called a “short term liquidity crisis.”

“Our markets are strong, even if the environment is precarious right now,” says Perry Kanaly, Director of Communications for the company. “We believe we can hold on without taxpayer funds.”

Timmothy Geithner last week said that he would ask several energy companies, including Cara Ellison Corp., to take funds to ensure that what happened to the banking industry does not happen to the energy industry. “It would be a catastrophe if any of the large energy companies failed,” Geithner said. “It is their patriotic duty to accept help on behalf of the taxpayer if they need it.”

When reached for a comment about the company’s refusal to accept government funds, Mr. Geithner’s spokesperson said that Mr. Geithner has not yet been informed of the situation but might have a comment later today.

It was reported that Ms. Ellison, the company’s CEO, took a personal bonus of $2 billion last year. When asked if Ms. Ellison plans to take an equal bonus this year, Mr. Kanaly stated that he does not discuss the private financial arrangements of executives.

EllisonBlogger: Psychiatrist Quoted In Chron Article Is ETF Prosecutor’s Husband

In what should be a shocking lapse in judgement but unfortunately is pretty routine for the Houston Chronicle, reporter Loren Steffy published an article about the statement that Cara Ellison put out this afternoon. Mr. Steffy then got a very negative quote from a psychiatrist by the name of Dr. Henry Walker, in which he says that Ellison is “paranoid”. It took all of two phone calls to learn that Dr. Henry Walker is the husband of Lydia Walker, a prosecutor on the Ellison Task Force.

I am starting to think the Houston Chronicle just doesn’t care anymore at all. They’re not even trying to be ethical.

Ellison Denies Conspiracy, Calls Government “Glorified Notary Publics”

In a rambling statement released by Cara Ellison Corp. today the Chief Executive has finally broken her silence over her indictment, as well as the firings and investigation into several of her closest confidants. “I was never involved in any conspiracy or fraud at Cara Ellison Corp. I did not do any one of the 753 things they are accusing me of doing,” says Miss Ellison, and then goes on to accuse the government of targeting not only herself but her company.

“This is the letter of a very disorganized mind,” says Dr. Henry Walker, chief psychiatrist at the George Washington Medical Center in Washington, D.C. “I would say that she’s almost paranoid, thinking that the government is out to get her. Very troubling indeed for stakeholders, as well as employees.”

The Ellison Task Force spokesman says they have not yet had time to read the statement but might have a reaction later in the day.

Statement From Cara Ellison, CEO of Cara Ellison Corp.

Dear shareholders,

Today we are faced with unprecedented business challenges. I am not speaking primarily of the weakened economy, which has had an effect on our business. The economy is a function of the attitudes of citizens all over our country, whereas the problems I am speaking of are the result of a small group of government officials. Our company is under attack by the United States Government.

In 2003, Chief Financial Officer Owen Kind formed an SPE called JML, which, as the news has reported, stands for Just My Luck. The purpose of JML was to provide liquidity to Cara Ellison Corp. on short notice. The due diligence costs and fees would be much less than those charged by banks. JML was a partnership. The other parties involved include banks, hedge funds, and other businesses. It was learned yesterday afternoon that Owen Kind improperly took for himself over $120 million dollars of JLM’s funds. I dismissed him immediately. I am deeply disappointed and shocked at his uncharacteristic behavior and I will cooperate in any investigation into the loss of those funds.

Today’s firings are the result of an internal investigation by our auditors. The individuals dismissed were mostly from JML, but I am personally sad to say that three of them were from headquarters of Cara Ellison Corp. This matter has been turned over to the FBI and I will not say more about that at this time.

These actions are a case of bad timing. Though they coincide with the indictment handed down on me, this is not any sort of conspiracy. I was never involved in any conspiracy or fraud at Cara Ellison Corp. I did not do any one of the 753 things they are accusing me of doing. They are using this witch hunt as a pretext to destroy our company. The United States Government would like nothing more that to appropriate the wealth of all businesses, but I promise you, shareholders and friends, as long as there is breath in my body, they will not touch Cara Ellison Corporation.

The government and the media are also investigating the bonus structure of our company. I assure you there is nothing illegal or immoral about the bonuses that certain of our executives have earned.

Yes, it is true that we are facing challenges. We are facing not only a worldwide weakened economy, we are also facing the persecution of the chief executive of a $200 billion company with 100,000 employees around the globe, and many thousands of vendors, clients, and customers that rely on us. We are facing the betrayal of people we all trusted, and liked personally.

I will not step down. I will not take a plea deal for my own alleged misdeeds. And I will not allow a small group of small-minded anti-business glorified notary publics in the Department of Justice to force me into giving up the thing I love most in the world. Yes, we are facing challenges. We are facing anti-business attitudes the likes of which I have never seen. We are facing the Ellison Task Force, which is comprised of young attorneys desperate to cut their teeth on a big case to make their careers. I personally am fighting an indictment I know to be completely false.

It is a challenge. But that’s why we are here. We are Cara Ellison Corp. and we are changing the world.

Cara Ellison Executives Fired En Masse

This morning it was learned that eight top executives at Cara Ellison Corp. have been fired, including the Chief Accounting Officer, the Chief Technical Officer, and the Treasurer. The other executives are managing directors of a partnership corporation called JML, which sources tell us stands for Just My Luck. The firings come one day after CFO Owen Kind was abruptly dismissed.

Yesterday, Ellison Task Force prosecutor Jonathan E. Summers stated that the entire upper echelons of Cara Ellison Corp. may have been involved in a conspiracy. Summers said the nature of the conspiracy is outlined in Ms. Ellison’s 1,400 page indictment but did not say to what extent Mr. Kind might have been involved. Today he stated that all eight individuals are under investigation.

Calls to Ms. Ellison’s office and her attorney were not returned. However, the company spokesman said Ms. Ellison herself would give a statement at 1pm Central Standard Time.

Cara Ellison CFO Fired, “Evidence of Conspiracy Comes To Light” Says ETF

Cara Ellison Corp. CFO Owen Kind has been fired, according to a statement released by Cara Ellison Corp. this afternoon. The statement did not give any reasons behind the surprising dismissal, but Ellison Task Force prosecutor Jonathan E. Summers offered that “evidence of a wide-ranging conspiracy through-out the Ellison Corporation is coming to light.”

When asked if Mr. Kind is under investigation, Mr. Summers replied that the entire Cara Ellison Corp. organization is under investigation. “The upper echelons of the company seem to have been involved in the conspiracy that was instigated by Ms. Ellison.”

Cara Ellison Corp stock (CEC) fell 1% today after heavy trading.

Cara Ellison Corp. CFO Owen Kind Leaves Company After Eight Years of Service

FOR IMMEDIATE RELEASE

This afternoon it was announced that Cara Ellison Corp. CFO Owen Kind will leave the company, effective immediately.

“Owen Kind has been a valuable member of our team for many years. We are disappointed in his departure,” says CEO Cara Ellison.

No other information is available at this time.

CONTACT
Perry Kanaly
Director of Public Relations
perry.kanaly@caraellison.com
Ph: 713.201.0010
1400 Smith Street
Houston, TX 77056

Cara Ellison Q109 Earnings Call Transcript

Executives

Cara Ellison – Chief Executive Officer
Owen Kind – Chief Financial Officer
Perry Kanaly – Director of Public Relations

Operator

Welcome to the Cara Ellison Corporations first quarter conference call. A recording of this call including the question and answer session will be available for replay later today. Information on how to access the replay is available in the first quarter earnings conference call announcement issued earlier this week, a copy of which has been posted at http://www.caraellisoncorp.com.

At this time I would like to turn the call over to Ms. Cara Ellison, CEO of Cara Ellison Corporation.

Cara Ellison

Thank you for joining the Cara Ellison first quarter earnings call. Today we want to cover two topics: our first quarter and our view of 2009. For the first quarter our financial results were impacted by the sharp and severe downturn in the economy which began at the end of September. However, compared to our peers, we are weathering the storm very well, very ably.

Pipeline traffic was up 7%, retail electricity is up %3, Broadband eked out a small profit of $2.3 million, which we did not expect until the second quarter of 2010. Across all divisions, we’ve seen a net increase in revenue of 12%.

However, certain of our divisions have seen pressured margins, with aviation’s gross margin dropping 56 basis points from the prior year to 40.9%. Because we foresaw a constriction in orders for airplane engines, we took appropriate measures in 2008 to aggressively cut costs, which helped offset much of that decline.

Adjusted EBITDA for the quarter was $3.4 billion, up $9 million from the same quarter of last year.

Looking ahead, we see a difficult year in 2009. There is no sign yet that the economy has hit bottom and is beginning to turn. We anticipate improvement in each of the successive quarters, but our growth will be limited due to global economic factors that are out of our control.

We remain focused on the fundamentals of our business. Much work still needs to be done but we have a clear direction, a clear set of priorities and a newly rebuilt management team capable of executing the plan. With that, let me take some calls from analysts.

DOUGLAS KEANE, PUTNAM LOVELL: Good morning Miss Ellison and others. Last quarter you mentioned a write-down of $120 million due to the erosion of the dollar overseas. My question is, since the dollar continues to decline, how are you … how are you making money overseas?

OWEN KIND, CFO: Hi Doug, it’s Owen. We’ve created some very effective hedges, and if you have looked at our 10K, which we filed last week, you will see the sale of several merchant assets. So we’re less exposed, for one thing, and secondly, we’ve done some good structuring to keep losses at an absolute minimum.

KEANE: Okay, just one follow up. I have looked at the 10K but I don’t have it memorized. Could you talk about the assets that have been sold?

KIND: We’ve sold our Brazilian power plant and several smaller ones in Uzbekistan, Lithuania, Portugal, India, and Columbia.

KEANE: Okay… thank you.

CYNTHIA BELL, JVS: Good morning. I would like to know what the numbers look like on Broadband. Last time we talked, you had just installed test markets and were saying you’d have a loss of $130 million for several quarters. So how… what was the strategy there?

KIND: Hi Cynthia. Our contracts with Blockbuster was modified to allow us access to a broader customer base. We spread over Comcast and Verizon, which trebled our customer base, allowing us to see a modest profit within a very short period of time.

BELL: Huh. Okay. Thank you very much.

JONATHAN GRUEN, CITIBANK: Hi guys. Miss Ellison, I don’t want to be impolite here but your indictment seems to have been good for the stock. It’s up 17% since your arrest. Can you give us any idea why?

ELLISON: I’m not able to speak about pending legal matters.

GRUEN: Could you comment about why the stock has gone up 17%?

ELLISON: Maybe we are just a very strong company and our stakeholders believe in us.

[Laughter]

SAM WATERS, MORGAN STANLEY: Miss Ellison, I’d like to ask a question, another question, about Broadband. If the reception of the products has been so successful, why then was the profit only barely above the line, barely $2 million, since your 10K says your product is in over ten million homes?

ELLISON: Cara Ellison Corp. has grown in the last quarter, most notably in Broadband. Our agreement with Blockbuster has been successful really before we were ready for it to be, and because of that success, other companies like Comcast and Verizon have partnered with us, which were were not expecting. We grew quite fast, and in that regard we’re a victim of our own success. Those operating expenses that we had to accept to grow were expanded at the same time our customer base was growing.

WATERS: Okay, I guess that makes sense. Thanks.

JASON KATZ, VALIANT: Hi Miss Ellison.

ELLISON: [Unintelligible]

KATZ: Miss Ellison, I noticed you didn’t talk about Little Cara Snack Cakes at all. Could you tell us how the baked goods division is doing?

ELLISON: Our small consumer products division has shown an increase in revenue of 0.3%.

KATZ: Are people eating as much cake as last quarter? Or is there some economic reason the gains in the snack cake industry are so much less than the aviation engines or pipelines?

ELLISON: Katz, go to hell.

KATZ: Miss Ellison, I am only trying to understand your company.

ELLISON: Bullshit. You’re a short seller. You’re trying to decrease the stock price.

KATZ: Miss Ellison -

PERRY KANALY: Katz, this is Kanaly. Your question has been asked and answered.

KATZ: Miss Ellison, did you break up with Jason Bennett?

ELLISON: Is this Perez Hilton?

KATZ: Miss Ellison -

ELLISON: This is crazy.

KATZ: Miss Ellison, when you get out of prison, will you come back to be CEO of this company? Or will it be sold off, piece by piece, to competitors?

ELLISON: Shut your mouth!

KATZ: That’s what’s going to happen.

KANALY: Please, let’s just take another -

KIND: I agree.

KATZ: You’re going to prison and the only part of this company you’ll see again are the Little Cara Snack Cakes they serve to you at lunch. Prison cake! Prison cake!

END TRANSCRIPT

Cara Ellison Will Report at 2pm Today

I received a few emails asking if Cara Ellison Corp. was going to report earnings today. Of course, Cara Ellison Corp. will report first quarter earnings at 2pm, as is our custom. A full transcript will be available shortly after that.

Ellison Task Force “Mis-Indicted” Ellison On Assault: Original Charges Remain

Hours after announcing that the Ellison Task Force had indicted energy magnate Cara Ellison on a single count of assault of a federal agent, which brought the total counts against her to 754, United States Attorney Jonathan E. Summers of the Ellison Task Force submitted a statement that Ms. Ellison had been “mis-indicted” and the count would be dropped immediately.

“It was an honest mistake,” said Mr. Summers. “While it is incontrovertibly true that Ms. Ellison assaulted the agent, we did not intend to indict her on this count.”

When asked to explain how the Ellison Task Force might accidentally indict someone, Mr. Summers declined to elaborate, stating “that’s a question of work product, and that’s confidential.”

Nancy Reynolds of the University of Houston Law School, an expert in white collar defense, says that it is likely the Ellison Task Force did not want to risk over-prosecuting Ellison or appearing to be petty in the eyes of the jury pool. “Most average citizens can’t wrap their minds around 753 counts of financial charges. Adding one more just seems vindictive. It’s possible they dropped the charge when they realized they realized the public’s sympathy seemed to be with Cara Ellison on that issue.”

When reached at Cara Ellison Corporation headquarters, company spokesman Perry Kanaly said, “Ms. Ellison is innocent. It doesn’t matter to her how many charges they pile onto that indictment, they’re all false.”

Another Count Added To Cara Ellison’s Indictment

After her arrest last month on 753 counts of securities fraud, insider trading, blackmail, perjury, extortion, insider trading, and wire fraud, another count of assault has been added to Cara Ellison’s federal indictment. When FBI agents attempted to help Ms. Ellison out of a vehicle at the Court House, she stumbled and the agent in charge moved to right her, accidentally striking Ellison in the face, and forcing her head to hit the car door. Ellison retaliated by spitting at the agent.

“It was a federal offense, what she did,” says prosecutor Lydia Walker of of the Ellison Task Force. “We intend to show you can’t abuse the system and you can’t abuse federal personnel.”

Cara Ellison, who remains employed as CEO of Cara Ellison Corp., did not answer emails for this article. Company spokesman, Perry Kanaly, however, replied that Ms. Ellison is innocent of every one of the charges against her. “Whether it’s 753 counts, 754, or a million, Ms. Ellison is innocent.”

The Daily Star

Cara Ellison To Sue Daily Post For Copyright, Trademark Infringement

Cara Ellison Corp. announced today that it is suing the Daily Post after the tabloid published two pictures of CEO Cara Ellison, violating Ms. Ellison’s copyright and trademark on her own image. Attorneys for the firm declined comment but Ms. Ellison’s criminal defense attorney Robert Langston confirmed that a civil suit has been filed. When asked if it was wise of Ms. Ellison to be filing lawsuits when she has 753 felonies pending against her in a federal indictment, Mr. Langston said, “You’re a damn fool,” and hung up the phone.

Ms. Ellison declined comment for this story.

The Daily Post

To DBW RE: New Hire

DBW,

We have created a new position in your group, the Vice President of Online Communications, and that position has been filled by a young woman named Anna Lisa Kramer. She is twenty-three years old, attended Villanova, though there was some unpleasantness there and she has not yet completed her baccalaureate degree. She has worked as a Dallas Cowboys cheerleader (see attached picture) and briefly as a paid intern at Merrill Lynch before the collapse of that company. In our firm, she will be expected to produce daily updates to our website which reflect the Company’s ongoing commitment to increasing shareholder value.

She will be reporting directly to you. Please make her feel welcome.

Sincerely,

Cara Ellison

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