Does anyone know the next deadline for the 10-K, the point at which it becomes a "deal-breaker" . . . or is it just needed before the deal can close? Or could the deal close without it? I've seen 10-K's get delayed for so long (in less complex situations) that the stock ends up getting delisted, so I'm just wondering . . .
This is confusing to me. They have had all that high powered outside people perusing the books, reserves and accounting since they discovered their major oops (technical term) in August. They finally got it together for the 2nd and 3rd quarters, albeit quite late, and they now have other entities perusing the books and reserves, so they should have been able to report year end on time. They should have reported the GAAP and 10K for stockholders and now are late with statutory financials--at least I assume they have not reported those to the NAIC as required by 4-1. The statutory financials are done by individual insurance company, by state and by line, so there is more granular information in those. So why? Do they have to do it all over again? If so then there may (or may not) be funny business going on. Otherwise, lets get on with the show.
The proxy said that ACP withdrew an earlier proposal due to concerns about their causing problems with ACP making its filings following the closing of a deal. Would be nice to know if they still have those concerns and what was being done about it. Perhaps ACP needs the basic Tower accounting control structure (such as it is) to not continue to deteriorate or they will pull out. As to what the drop-dead date is, I don't know but I think that the one big accounting issue rather than actually filing the 10-K.
Of course, the business issues are pretty important too.
Jesus Christ people, do you guys read ANYTHING the company files? (1) They gave the reasons for the delay in the NT-10K filing (has nothing to do with reserving issues - Merkel's SA article is 100% wrong on this), (2) they said in an 8-K filing in March that the 10-K filing will be made on OR ABOUT the end of March (so could be anytime this week) - they never said it would definitely be filed on 3/31, and (3) yes, they obviously have to file the 10-K in order to close the merger (but if you read the merger proxy filing, they say the merger isn't closing until Q3 2014).
The FORM 12b-25 language is boilerplate (essentially, "we were busy with other filings", and "Tower is unable to timely file its 2013 Form 10-K without unreasonable effort or expense, and Tower could not eliminate the reasons causing the inability to file the 2013 Form 10-K timely without unreasonable effort or expense. Tower is continuing to work diligently on the completion of its 2013 Form 10-K and currently anticipates that it will be filed with the SEC by approximately the end of March 2014.") . . . . there is obviously a reason for the additional delay beyond the target date of the end of March . . . the reason is probably because it is a complex filing, but the Company is in silent mode . . . the 10Q was delayed before due to "unexpected" loss reserve issues (specifically "due to the additional time needed to review matters relating to Tower’s estimate of its loss reserves and the related impact to the recoverability of its goodwill and deferred tax assets") . . . would the 10K be this late if the loss reserves weren't still complicating things . . . I think not . . . . what on earth gives you confidence that they know what they are talking about in the NT 10K, and that isn't just lawyer speak? . . . the later it is, the more likely an "issue" not yet disclosed is the cause . . .
When you consider that they have included it as an exhibit to the preliminary proxy that the shareholders need before they vote, it seems pretty important with respect to their guarantee of a timely vote. I cannot imagine the proxy being revised to exclude this document, now that the SEC has in hand the preliminary. I would offer that any delay from here on out could be a dealbreaker unless AFSI & ACP have already received the numbers and some assurances as to timing. Might be good of mgt to let the rest of the shareholders in on this, if indeed it is the case.
It would be odd to blow up the entire deal because the 10-K couldn't be filed on time due to some minor issue (that would imply the buyer wants out of the deal) . . . but it's also true that a deadline extension isn't always a sure thing . . . and revising the proxy would be unusual (but not unheard of) . . . but the biggest thing is if the delay is actually due to something that would be material to the buyer, because then all bets are off - and it's possibly "zero here we come!"