SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Cortech, Inc.
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(Name of Registrant as Specified In Its Charter)
Asset Value Fund Limited Partnership
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(Name of Person(s) Filing Proxy Statement)
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Common Stock
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(032796DTI)
<PAGE>
ASSET VALUE FUND LIMITED PARTNERSHIP
376 MAIN STREET
BEDMINSTER, NJ 07921
(908) 234-1881
August 10, 1998
Dear Fellow Cortech Stockholder:
As you know, Asset Value, Cortech's largest stockholder, is seeking to
elect its four nominees who would then constitute a majority of the Cortech
Board. In the Fall of 1997, Asset Value requested only one seat on the Cortech
Board. The Board ignored the request and then proceeded to propose a merger with
BioStar, a bio-tech company which had a negative net worth of $5.6 million and
like Cortech, was losing substantial sums of money from its operations.
Only after Asset Value spent its own time and money, in what we believe was
a successful effort to protect all stockholders from this Merger, did CEO Bert
Fingerhut offer one seat on the Board. This was the same Fingerhut who has been
the Chairman of Cortech for six of the last seven years and as a director voted
for the Merger. In our view leaving Fingerhut in charge would be stockholder
malpractice. For this reason, Asset Value refused to accept one seat and
determined to seek control.
THE RED INKBLOT [PICTURE OF INKBLOT HERE]
We believe that Cortech has been like a red inkblot from its beginning,
losing over $86 million since inception. Think of it---$86 million has been lost
pursuing this technology. Yet, this technology has failed test, after test,
after test. Cortech, in our view, gets an F for science. But we think that
Fingerhut still doesn't get it. Even when Cortech lost another $1.4 million in
the first quarter of 1998, Fingerhut still stated on July 24,1998:
"Cortech's primary focus is finding partners to help it (i)
advance...[Cortech's technology] and (ii) develop new therapies,
using...[Cortech's technology]. All internal research and development
activities were discontinued in an effort to preserve the company's
financial resources. Cortech is, however, funding research
collaborations at several medical/academic institutions that are based
on its technology portfolio."
We ask Chairman Fingerhut:
HELLO, IS ANYBODY HOME?
How much more of the stockholders' money must be lost before Chairman
Fingerhut realizes that the F stands for failure not fantastic? We believe that
unless Asset Value's nominees are elected, your money and our money will be
dissipated on this failed technology down to your and our last penny.
<PAGE>
A PICTURE IS WORTH A THOUSAND WORDS
COMPARISON OF
CORTECH'S STOCK PERFORMANCE (NASDAQ SYMBOL-CRTQ)
TO
THE NASDAQ BIOTECHNOLOGY INDEX (IXBT) AND THE
AMERICAN STOCK EXCHANGE BIOTECHNOLOGY INDEX (BTK)
[GRAPH THE ABOVE]
<TABLE>
<CAPTION>
Cortech IXBT BTK
------ ----- ------
<S> <C> <C> <C>
1993 $18.25 197.88 115.78
1994 14.25 161.40 82.06
1995 3.65625 304.30 133.77
1996 3.8125 314.48 144.56
1997 2.03125 304.89 163.28
7/17/1998 .50 335.15 144.16
</TABLE>
NOT A PRETTY PICTURE!
DO YOU WANT A BOARD LED BY CEO BERT FINGERHUT WHO WAS THE CHAIRMAN FOR SIX
OF THE LAST SEVEN YEARS AND A DIRECTOR FOR THE LAST TEN YEARS WHILE CORTECH WAS
LOSING ALL THIS MONEY?
DO YOU WANT TO REPEAT THE LAST FIVE YEARS? WE THINK THE ANSWER IS CERTAINLY NOT.
THEN PLEASE VOTE FOR ASSET VALUE'S NOMINEES ON THE ENCLOSED GREEN PROXY BALLOT.
THERE THEY GO AGAIN
Given what we consider to be Cortech's abysmal record, we can understand
why management proposes to change the subject and resort to personal attacks. No
question that Asset Value and its managers have been successful activist
investors, an activity that does not always please the establishment and its
agents. We think the record shows that stockholders did well after Asset Value
or its affiliates became involved. Asset Value has committed to find a
transaction for Cortech that will benefit all stockholders and not just Asset
Value.
<PAGE>
CHAIRMAN FINGERHUT: YOU HAVE BEEN THE CHAIRMAN OF CORTECH FOR SIX OF THE LAST
SEVEN YEARS AND HAVE BEEN A DIRECTOR SINCE 1988. YOUR RECORD OF LEADERSHIP
SPEAKS FOR ITSELF; WE THINK IT GETS AN F AND THAT'S NOT FOR FANTASTIC!
While you have been part of the Cortech leadership, Cortech Stock values
have gone down, down, down while other stocks have gone up, up, up.
PERSONAL ATTACKS ARE NO SUBSTITUTE FOR HONEST DIALOGUE
First, Asset Value had to go to court to force management to call this
Meeting. Then, in our view, Fingerhut and the old Board subverted corporate
democracy by appointing new directors rather than give the stockholders an
opportunity to vote for them. Having seized control for themselves without
benefit of a stockholder vote, the Appointed Board now, hypocritically we think,
complains that Asset Value is asking stockholders in a democratically held
election to reverse that course.
JUST THE FACTS
Let's stick to the facts. There are real and substantive differences
between the Cortech future envisioned by Chairman Fingerhut and his appointed
Board and the future that Asset Value sees. He wants to continue to expend
Cortech's limited resources on its failed technology and we want to re-evaluate
those expenditures realistically. As we have said we intend to aggressively seek
a merger partner for Cortech in an open bidding process with the assistance of
an unaffiliated investment banker. Asset Value has pledged to benefit from any
transaction only to the same extent other stockholders benefit. As the largest
stockholder, we believe you can count on us.
REMEMBER:
Asset Value has pledged not to merge Cortech with an Asset Value affiliate
or a company in which Asset Value is a stockholder. Asset Value believes it
should gain from any future acquisition or Merger involving Cortech only to the
extent all stockholders benefit. Nor will Asset Value sell its Cortech Stock
before a transaction is consummated which Asset Value believes is in the
interests of all stockholders. Asset Value's nominees have pledged not to accept
any fees for serving as directors.
IT'S TIME FOR A CHANGE.
VOTE FOR A CHANGE.
VOTE FOR ASSET VALUE.
<PAGE>
SEND IN THE GREEN PROXY BALLOT
VOTE YES TO INCREASE THE BOARD
VOTE FOR ALL OF ASSET VALUE'S NOMINEES!
Very truly yours,
Paul O. Koether
Asset Value Fund Limited Partnership
IMPORTANT
If your shares are held in "Street Name" only your bank or broker can vote
your shares, and only upon receipt of your specific instructions. Please contact
the person responsible for your account and instruct them to execute a Green
Proxy Ballot as soon as possible.
If you have any questions or need further assistance in voting, please call
John W. Galuchie, Jr., of Asset Value Fund Limited Partnership collect at (908)
234-1881, or our proxy solicitor:
BEACON HILL PARTNERS, INC.
90 BROAD STREET
NEW YORK, NEW YORK 10004
(800) 253-3814
