Has anybody seen any sort of quantification of the potential tax liability faced by the company b/c of Connie Blackguard's renunciation of his Canadian citizenship. I'm also of the understanding that there's a very large potential claim by advertisers. Anyone have any info on the likelihood of this being pursued and how much we're potentially on the hook for?
The tax liability issue should be mostly settled in early 06. Less than $150M will be paid to the IRS for a partial settlement and they'll settle for about that much with Canada. If the Candians dont take it, HLR will sue. The liability to the advertisers has been settled. It's charge has been taken and it's being paid out in-kind with ads. The mgmt has really turned things around. Expect a sale of the Canadian Group in early 06 too. All that will remain would be litigation and selling off HLR to a private equity firms. Strategics won't pay the big bucks. All the wise guys in this stock (check out who owns it) know it's worth at least 12 and more likely, $14+. Except I'd expect a special dividend somewhere in there, which means there'll be less capital gains (unless there's a share repurchase). The risk is with the time it'll take and the outcome of a host of uncorrelated occurences. I expect good near term upside with the SH's meeting in January, getting current with the 3Q05 10-Q in a couple weeks and interest by mutual funds. I've had losses in this name but I expect a turnaround and it'll happen quickly. The losses are the price of admission.