Concord Camera Corporation (NDAQ: LENS) may soon be in trouble after a large shareholder expressed dissatisfaction regarding the company's response to his concerns. Everest Special Situations Funds have been petitioning the company to make key changes for some time now, but their calls have gone unheard. Now, the activist hedge fund is threatening to take its fight public through a proxy contest to replace the board of directors and unlock value itself.

Here's a copy of their September 11th letter to the board:

Dear Mr. Lampert:
 
As you know Everest Special Situations Fund L.P. (“we”) owns approximately 7.29% of the outstanding capital stock of Concord Camera Corp. (“Concord” or the “Company”).  During the past year, through multiple written letters, an in-person meeting and numerous telephone conference calls with management, we have expressed our deep concern over the future of the Company and provided our views on ways to maximize shareholder value.  Unfortunately, despite your assurance that our serious concerns were being promptly addressed in a meaningful way, it appears our concerns and suggestions have fallen on deaf ears.  The Company has not provided us with or implemented any substantive responses regarding the significant concerns we have raised, including:

• the Company’s disastrous operational performance, including 17 consecutive quarters of losses;
• the Chief Executive Officer’s excessive compensation;
• the Company’s significant holdings in illiquid auction rate securities and how it intends to liquidate these positions; and
• the inadequate response of the Special Committee of the Board as to why after 2 years it still has not suggested any strategic alternatives for the Company.
  

As we have repeatedly suggested, in order to maximize shareholder value, the Company should immediately begin a liquidation process and accept our offer to assist in this process.  For all the reasons listed above and in our other public letters, we have lost faith in the ability of the Company’s current Board and management to carry out a liquidation.  If the Company had any intention of liquidating, management should have already communicated with the Company’s clients in order to lead a prompt and orderly process which would maximize collection of the Company’s account receivables and help the Company and its clients plan ahead.  As management has not done so, shareholders can only reasonably draw two conclusions:

• management is looking to entrench itself and not pursue a liquidation; or
• management is not capable in carrying out a liquidation.
  

We demand that the Company immediately modify the Board of Directors composition to add representatives of the Company’s shareholders to assist with and accelerate a liquidation or sale process.
 
If the Company does not promptly meet our reasonable demand, we will not hesitate to enforce our rights as shareholders to seek Board representation or take any other actions which we deem appropriate.  Specifically, we intend to nominate a slate of directors with experience in liquidations and sales processes at the Company’s next annual meeting of shareholders and intend to take all necessary steps to maximize shareholder value immediately following the election of our slate.

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KHD Humboldt Wedag International Limited (NYSE: KHD) may have one of the strangest names on Wall Street, but it also represents one of the best values around. The industrial plant engineering and equipment supply company has been beaten down by the economic slowdown and now trades with a PE-to-Growth ratio of just 0.33. This indicates that KHD is substantially undervalued given its current share price, earnings per share, and earnings growth rates.

Many investors see KHD as an infrastructure play given its strong presence internationally. Over half of the company's $1.3 billion backlog comes from Russia, Eastern Europe, and Asia as their economies continue to grow. The company is also financially sound having reported an 88% increase in year-over-year profits and a doubling of its order intake. Combined, these factors make this company a definite growth play in addition to a value play.

KHD Humboldt Wedag International Ltd. is engaged in industrial plant engineering and equipment supply business and has a royalty interest in the Wabush iron ore mine. The Company's industrial plant engineering and equipment supply business focuses on services for the cement, coal and mineral processing industries. KHD Humboldt Wedag International supplies plant systems, as well as machinery and equipment worldwide for the manufacture of cement and the processing of coal and minerals, whether for new plants, redevelopments of existing plants or capacity increases for existing plants. The Company designs and provides equipment that produce clinker, cement, clean coal, and minerals such as copper and precious metals. The scope of services also includes feasibility studies, raw material testing, financing concepts, erection and commissioning, personnel training, and pre and post sales services.

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Goldman Sachs (NYSE: GS) shares have plunged the most ever after a government rescue plan for American International Group failed to ease credit concerns. Many attribute the movements to rumors and fears, but these same factors have arguably led to problems in the first place. The big fear in this case relates to the $62 trillion credit default swaps market where Goldman Sachs has become a large player. The concern is that insurers that wrote the swaps won't be able to make good on their contracts.

Credit default swaps are essentially insurance policies again a credit default - that is, the possibility that a company won't make good on its debts. The seller of the swap - or policy - gets a regular stream of premium income. In return, the seller of the swap agrees to pay the buyer if the company goes broke or stops paying its debts for some other reason. Interestingly, the market for swaps is estimated at $62 trillion compared to just $6 trillion in underlying bonds.

Companies like AIG provided these insurance policies on bonds and their troubles are causing concern that the policies won't be honored. Investment banks like Lehman Brothers and Goldman Sachs rely on these policies to balance the risk of the bond portfolio. The government's bailout of AIG has also caused rumors that some policies won't be honored or that there may be other delays in the issuance of these insurance policies that are now needed more than ever before.

As a result, shares of Goldman Sachs are trading lower despite an extremely positive earnings report in which it announced a sharp reduction in leveraged loans.

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