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  • pkn4mom pkn4mom Aug 9, 2000 4:55 PM Flag

    I've examined the proxy. My 21,000...

    You must have different figures than I do. I am
    under the assumption that as of March CCA's net worth
    was around (243) million. Since well over half the
    liabilities are debt to PZN, then the 20 mil still seems a
    pretty darn decent deal to me.
    Do you honestly think
    that it will cost PZN LESS than 20 mil to let CCA go
    bankrupt and then either create it's own management
    company or establish beneficial relationships with
    companies who have been competitors for years?

    Read
    page 108 of the proxy and you will see that the merger
    can be completed without the proxy and also for
    discussion of how the vote might positively impact
    litigation.

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    • Our figures agree. As of March 2000 CCA had a
      negative net worth of $(243) million (page F-101 of the
      proxy). If you are correct that over half the liabilities
      are debt to PZN, total liabilities being $419
      million, then the negative net worth after deleting the
      $210 million CCA liabilities to PZN would be $(33)
      million. And this ignores any PZN liabilities to CCA that
      might be netted away in a bankruptcy. So why would PZN
      pay $20 million (positive) for the privilege of
      assuming $(33) million in net debts?

      As to what
      the cost of any alternative might be, I would not
      attempt to guess. As I have said before, I will vote no
      and thereby let the institutions decide. In any case,
      do you honestly think that it is fair for insiders
      to use our money to pay themselves $20 million for
      what is at minimum a negative net worth of $(33)
      million?

      Regarding page 108 of the proxy, there is the claim that
      under Maryland law they can merge without shareholder
      approval. But it does not say what would then be required.
      They obviously want the shareholder approval or they
      would not seek it. They claim that it may reduce PZN
      liability under shareholder suits, but they do not state
      why this would be so. Anyone who takes the word of
      these crooks is a fool. My guess is that they expect
      shareholder approval of this proposal to protect insiders
      from personal liability, by shifting that liability to
      the common shareholders foolish enough to vote for
      the insider proposal. I can imagine that shareholders
      could vote to assume the liability otherwise falling
      upon insiders. I can not imagine how shareholders
      could vote to reduce their own liabilities. If that
      were possible, tobacco company shareholders would
      simply vote to absolve themselves of corporate
      liability. Fat chance.

      I also note at the top of page
      109 that under Maryland law an abstention or non-vote
      will have no effect on the proposal. Therefore, VOTE
      NO, do not abstain.

 
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