Thank You for your kind words. I didn't mean to imply that Wayne H and Steve B bought their at the time 50 million shares. Most of them were their "cut" when the then privately owned Swisher merged with the shell corporation Coolbrands. Coolbrands had two things that Swisher wanted. Around 80 million in cash and a public listing albeit on the Toronto Stock Exchange. My point although maybe not articulate was that at one point those shares worth north of 500 million and now are worth about 1% of that. They are out a bundle. One point though that wasn't at the time commonly known about those shares Wayne and Steve obtained. According to the S1 filled when the merger was announced both Wayne and Steve had lent out of their own pockets monies to run the down in the dumps Swisher. When that deal with CB closed they could have retired the debts by just dipping into CB's cash. They didn't. Instead they exchanged their debt for Swisher equity in the new company. That said to me that just maybe there was hope this new entity would have legs since they really were putting their own funds up on the table. Unfortunately as we now know their whole business plan of building a national market by buying up willy nilly dozens and dozens of mom and pop outfits with one big one tossed in for good measure(Choice) wasn't viable and the whole thing collapsed in a heap. They never could get it to work and never could get their own internal accounting of all of this to work either. Thus the why of where we are now.
By the way everyone here should read that clawback provision. This really is a gun at all of our heads. Very unusual as well in this kind of deal. You usually see this sort of thing a Bernie Madoff type situations. The only way to avoid it is to get out of the common altogether before they move to delist at which point you are stuck.
Clawback? As if what has happened isn't enough? BTW Left-I doubt Steve Berrard will launch a proxy fight here. There just isn't enough on the table to make it worth it to him. The more I read through the proxy the more disheartening it becomes. The shareholders really are being told to expect nothing.
Just came upon this nugget from the proxy.
Our stockholders may be liable to our creditors for part or all of the amount received from us in our liquidating distributions if reserves are inadequate.
If the Dissolution becomes effective, we may establish a contingency reserve designed to satisfy any additional claims and obligations that may arise. Any contingency reserve may not be adequate to cover all of our claims and obligations. Under the DGCL, if we fail to create an adequate contingency reserve for payment of our claims and obligations during the three-year period after we file the Certificate of Dissolution with the Delaware Secretary of State, each stockholder could be held liable for payment to our creditors of the lesser of (i) such stockholder's pro rata share of amounts owed to creditors in excess of the contingency reserve and (ii) the amounts previously received by such stockholder in dissolution from us and from any liquidating trust or trusts. Accordingly, in such event, a stockholder could be required to return part or all of the distributions previously made to such stockholder, and a stockholder could receive nothing from us under the Plan of Dissolution. Moreover, if a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a situation in which a stockholder may incur a net tax cost if the repayment of the amount previously distributed does not cause a commensurate reduction in taxes payable in an amount equal to the amount of the taxes paid on amounts previously distributed.
Not that easy however to buy 50% plus one left. Two individuals own 30% between them. Add to that what is held by current board members and assorted hangers on and you are mighty close to that 50%
What I find surprising is the common. Its held up nicely even after release of the proxy. I wonder if the consequences have sunk in. There isn't a whole lot in there that says the common is even worth what it is trading at now. They do everything they can to tell us not to get our hopes up on any kind of distribution.
They had before the rss 50 million shares between them.
I actually wouldn't mind hearing from Wayne on what he thought went wrong here. Wayne had that track record going back decades and it was his name that lit up the common back in 2010-2011. His reputation was well earned until Swisher came along.
Actually not all that unbelievable left. Whatever you think of Wayne H and Steve B . they have lost a bundle here since 2011. At one point they had 5 million shares between them worth upwards of 500 million. Today? 5 million worth almost 99% less. They will try to grab whatever crumbs are left.
One other thing I neglected to mention from the proxy. They also say that after the deal closes the end of this year but before they vote on a dissolution they may move to have the SEC cancel their registration and delist. That saves money and they will want that obviously. If they do go that route the public shareholders really are in a bind. They wont even be able to sell whatever shares they have and will have to wait for a distribution that may or may not come and could be as far out as 2019 according to the filing.
In glancing at this a bit further they also make clear that none of the anticipated expenses going forward that will come from that 40 million include any possible liabilities and/or penalties from the still ongoing SEC investigation of their business practices as well as law suits still outstanding from various parties with grievances of their own.
They have filed a preliminary proxy at the SEC. Over 100 pages and at the moment I don't have the time to start reading it but a quick perusal tells us the following. They intend at some point(anywhere from 1 to 3 years)to file a certificate of dissolution. As for the distribution they make it clear that this will be at the "sole discretion" of the BOD and will be substantially less than the amount of the original deal with Ecolab. At the most it wont be more than $1.38 and that is in 2019. Given the uncertainties of the business after the deal closes it given the fact they make it clear they and they alone determine the final payout I don't think we should assume we will get much of anything.
BTW-Its still unclear just what liabilities are going to be left by Ecolab for the Swisher shareholders to pickup. The 40 million deal calls for them to buy most of the assets and "current liabilities" but not much of anything else. So if by that the shareholders are being stuck will the short and long term debt and pension liabilities plus the cost of running a shell corporation from 2016 on until they dissolve (including salaries of the officers) we could wind up with nada.
Here are a couple of more questions to ponder left. They are forgotten but hardly gone and that is Wayne H and Steve B. They still own around 28% of the issued and outstanding shares. Where do they stand on this? If they are onboard then their shares along with the management pretty much makes this a done deal. And that 17.5 million shares outstanding is not the critical figure when trying to figure out how much might be available to the rest of us after the liabilities are paid off. The critical figure are fully diluted shares outstanding. That figure would include things like stock options and/or warrants granted to themselves. And they could always vote to reset the strike prices so in theory they could cash in that way as they go out the door. If they did that we the public shareholders might see very very little. That assumes management would go that route.
Left- I appreciate your sentiments here especially since I am still a shareholder(through Coolbrands) but seriously Ecolabs didn't really need to do anything let alone pony up 40 million. The second quarter results just released Monday were the death knell of the company. Swisher has never shown it can earn a cent and has been burning cash to the tune of a million a month for years but at least had the cash to burn, Quarter two was "times up" At the end of the quarter they were down to 1.7 million in cash. About a 6 week supply. Their sale of the Canadian assets just announced bought them barely enough to get them to September. The game was over and they knew it. If Ecolab wanted to wait Swisher would have been in BR and they then could have grabbed the assets for pennies on the dollar. Book value means little when you are dealing inside a Federal court. At this point it is still hard to tell from that P & S just whither the shareholders in this agreement although I admit I havnt read all 80 or so pages. Is Swisher just going to issue a small stipend to the shareholders after the deal closes and they pay off the liabilities left behind as per the terms of this agreement or do they intend like Coolbrands to remain a publicly traded shell corporation with a small amount of post deal cash and a market listing albeit BB waiting to see if they can conjure up another deal.
A quick listen to the cc and they are saying nothing about the Ecolab deal. Said the filing should be today and that would fill in the blanks. As a former Coolbrands shareholder this all sounds so so familiar. Coolbrands eventually sold off everything and then spent about 5 years as a publicly traded shell corporation before its next deal came along. That deal was Swisher. That reference to adjustments may mean writedowns of assets.
Well we already have had $6.00/share as a prediction as well. You have to look closely at what this offer really is. It is not an offer to buy Swisher for 40 million. It is an offer to buy certain of their assets for 40 million. So what is being left behind? Well they mention certain of the debt. What about the accounts payable? And the other liabilities? If those are going to be paid from the 40 million just how much will be left for the 17.5 million shares outstanding? Ecolab is nobodys fool. They don't do markups. When the actual deal is posted we will then see whether there is another shoe in here left to fall.