The latest 10-q just filed shows how grim Swisher's circumstances were. At quarters end they had about 1 million in cash down from 7 million on 06/30. About a week or two worth. Without the Eco deal they were left with no way to pay bills short of a bankruptcy. At this point all that is left is the wait to see how much of that 40 million will be left for the shareholder distribution. Swisher yet again goes over this in the 10-q. Read if carefully especially the part about the clawback provision. That should give anyone pause who is thinking of buying the common here in hopes of a payback above where the common is now.
Perhaps as part of their asset purchase they also acquired some of Swishers trademarks. The name Swisher does have some value and has been around long before Wayne H and Steve B took them over in 2004.
Not sure what you mean by "run it" If you mean the public company Swisher that certainly isnt true. Eco bought 40 million in cherry picked assets. That they will run or absorb. The surviving Swisher has the 40 million in cash and a boatload of liabilities pending. That Swisher is going to be delisted at some point at the company's request and then liquidated. All of this is in their assorted filings. What if anything will be left for the remaining shareholders remains to be seen but it will be way less than the 40 million. That part is in the filings as well. I cant imagine why Eco would want anything to do with the now shell company Swisher that is left. Their whole agreement was very carefully drawn up to preclude their having any responsibility for Swisher now or going forward. The $1.04 the common is selling for now may in short order look very generous.
Remember-Swisher already announced they are going to move to be delisted period. At some point we wont even be able to sell.All we will be able to do is wait and see what will be left in say 3 years or so. That is also in the filings.
Unfortunately left it is not the shareholders money at this point. There are a long line of claimants in front of us. This is why Eco carefully constructed this deal. They have no liability for anything that may come up including current pending suits and any that may come up later. ( Will Fidelity sue?) Remember the company already said it could be 3 years before everything winds down. Oh and if they move to delist completely you won't even be able to sell.
I believe that the latest SEC filing pretty much tells the end game.
Following closing the Company will use the remaining balance of proceeds from the Sale Transaction to pay ongoing corporate and administrative costs and expenses associated with winding down the Company, liabilities and potential liabilities relating to or arising out of pension plan obligations to employees of its predecessor, outstanding litigation matters of the Company, including but not limited to pending stockholder litigation related to the Sale Transaction, and potential liabilities relating to the Company's indemnification obligations, if any, to Ecolab pursuant to the Agreement, or to current and former officers and directors pursuant to the Company's bylaws and articles of incorporation (collectively, the "On-going Obligations"). As a result of the On-going Obligations, if the Board of Directors determines to proceed with the Plan of Dissolution and Complete Liquidation, which plan was approved by the Company's stockholders at its Annual Meeting on October 15, 2015, the Company believes the value of its remaining assets that will ultimately be available for distribution to stockholders, if any distribution is made, will be significantly and materially less, in the aggregate, than the proceeds received in the Sale Transaction. The Company can neither estimate nor provide any assurance regarding amounts to be distributed to stockholders if the Board of Directors proceeds with the dissolution.
So just how much do you think will be left in three years or so when pension costs also come from the now 38 million
A couple of more things to ponder.
What about Wayne H and Steve B? They were running things when this bookkeeping scheme was birthed back in 2011. They knew nothing and they saw nothing? Uh Huh
Then there is Fidelity. Remember them? Largest shareholder. Owned at one point over 20 million shares that they bought directly from the company for north of 100 million. Two separate deals in the spring of 2011. What must they think now? If it is we wuz robbed they could jump in and file a suit for fraud. That could blow up the EcoLabs deal if they ask the Feds to move against it on the grounds of unlawful conveyance of assets.This is already ugly and could get much worse
And all of this over what were really penny ante types of wrongdoing. The copy of the settlement of 2 million with the feds shows these were really small time crooks
Never is a distinct possibility. Even the company said that in their filing. First off no funds will be distributed from that 40 million until all outstanding liabilities have been closed. That includes settlement of any and all suits pending. Further the company also said it could be three years before the funds if any become available.
Ecolabs deal was very very carefully put together by them. They are not buying Swisher. Just so cherry picked assets so they will have no liability down the road for anything other than what is in the asset sale with Swisher.
According to the CC there is no collar here. That increases the risk to the EMC common stockholders. If VNW tanks any more the eventual deal might not be any more than what we have now. 28 and change.Or less for that matter. For those who asked why the common isn't at $33 this is one reason.
On the other hand there is a two month window if someone else wants to jump in. Dell said a closing might not be until well into 2016. A lot can happen both good and not so good with that much time left.
Pretty much correct although it isn't clear how they will handle fractional shares in the tracking stock differential. Probably average down the shares and add cash for the differential. This deal is basically a play on the VM ware common. If you think it has legs long term this deal is OK although if you remember EMC back in the day when it was 4 times higher not so much.
The blinking question mark here is whether and how easily a biding war gets started.