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.
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.