AICI Capital Trust 9% Pfd (fka AICPQ)

[Possum336]

Thanks for all of the great info it is much appreciated

[Enterprising Investor]

The Trustee also states in the filing that the following distributions have been made to the Estate from the the AIC: $2,000,000 on 7/19/19, $1,279,000 on 6/02/20 and $1,327,539 on 11/24/20.

AICPQ holders have already received the net proceeds from the $2,000,000, but nothing yet from the $1,279,000 or $1,327,539.

It looks like the Estate currently has about $6,606,539 or $1.74 per share in gross proceeds to distribute.

The upcoming payout has far exceeded my expectations.

[Enterprising Investor]

Affidavit of Richard D. Myers, Trustee in Support of Motion for Order Authorizing Sale of Assets Free and Clear of Liens, Claims, Interests and Encumbrances. Filed by Richard D. Myers on behalf of Richard D. Myers (1/11/21)

According to the filing, the Trustee had four potential bidders sign NDAs related to the Stalking Horse bid process. After the filing of the Motion, approximately 14 potential bidders contacted the Trustee or his special counsel, with an additional four bidders signing NDAs.

There were no competing proposals submitted by the 1/05/21 bid deadline. The Stalking Horse Bidder was the Successful Bidder. It has submitted an earnest money deposit of $200,000.

The Court must now approve. The Sale Closing is conditioned upon: (a) the approval of the Form A filed by the Successful Bidder with the Nebraska Department of Insurance and (b) a final and non-appealable Order from the State Court, dismissing the Estate's subsidiary, Acceptance Insurance Company from its rehabilitation proceedings.

Source: PACER [Docket 668]

[Enterprising Investor]

Sale Hearing to Consider the Sale of Certain Assets of the Estate and Objections, if any: Hearing scheduled for 1/12/2021 at 01:00 PM at Omaha Courtroom-Telephonic Hearing. Objections due by 12:00 PM CT 1/11/2021. Movant shall provide detailed notice to all creditors and parties in interest and file a certificate of service with the court. (12/08/20)

Source: PACER [Docket 660]

[Enterprising Investor]

Order Granting Motion to Approve Auction and Bidding Procedures; Approve Break-Up Fee; Prescribe Manner of Notice and Order Granting Motion to Sell Property Free and Clear of Liens under 11 U.S.C. Section 363(f) filed by Trustee Richard D. Myers.

The Sale Hearing shall commence on or before 1/12/21 at 1:00 p.m. (CT) before the Bankruptcy Court for the District of Nebraska, 18 Plaza, Omaha, Nebraska 68102.

Parties may appear by telephone. Objections, if any, to the Sale must be made on or before 1/11/21 at 12:00 p.m.

The deadline by which all Bids for the Debtor's Assets must be actually received by the parties specified in the Bid Procedures is 5:00 p.m. (CT), on 1/05/21.

Auction will be held 1/08/21 at 10:00 a.m. (CT), is the date and time the Auction, if one is needed. Such Auction will be held at the offices of the Trustee: Law Offices of Richard D. Myers, Chapter 7 Trustee, 11404 West Dodge Road, Suite 500, Omaha, Nebraska, or such later time on such day or other place as the Trustee shall notify the Notice Parties and all Qualified Bidders who have submitted Qualified Bids. Movant is responsible for giving notice to parties in interest as required by rule or statute. ORDERED by Judge Thomas L. Saladino (12/08/20)

Source: PACER [Docket 659]

[Enterprising Investor]

Order Granting Motion to Approve Auction and Bidding Procedures; Approve Break-Up Fee; Prescribe Manner of Notice and Order Granting Motion to Sell Property Free and Clear of Liens under 11 U.S.C. Section 363(f) Filed by Trustee Richard D. Myers. The pleading was filed, served and noticed pursuant to local rules. No timely resistance/objection was filed. The motion is granted due to no resistance. A DETAILED SALE ORDER SHALL BE SUBMITTED BY MOVANT. Movant is responsible for giving notice to parties in interest as required by rule or statute. ORDERED by Judge Thomas L. Saladino. (12/07/20)

Source: PACER [Docket 658]

[Enterprising Investor]

No objections filed by 12/04/20 per PACER.

The Entry of Auction and Bid Procedures Order should occur now on 12/07/20 (Day 24).

The Notice of Sale could then be filed as early as 12/08/20 (Day 25).

[Enterprising Investor]

Will GLS show up at the auction?

Stephanie Mocatta and others may have been required to sign a NCA when they left SOBC DARAG.

[Enterprising Investor]

Maiden Holdings, Ltd. Announces Formation of Genesis Legacy Solutions (12/04/20)

PEMBROKE, Bermuda--(BUSINESS WIRE)--Maiden Holdings, Ltd. (NASDAQ: MHLD) ("Maiden") today announced the formation of Genesis Legacy Solutions (“GLS”). GLS will specialize in providing a full range of legacy services to small U.S. insurance entities, particularly those in run-off or with blocks of reserves that are no longer core, working with clients to develop and implement finality solutions including acquiring entire companies. The Genesis team will be led by Brian Johnston as Chief Executive Officer and Chief Financial Officer, joined by Tom Hodson as Deputy CEO and General Counsel and Stephanie Mocatta, Executive Vice President, leading GLS’s business development. The GLS team has extensive experience in the finality and legacy solutions segment, most recently at SOBC DARAG, and specializes in solutions oriented for smaller insurance companies.

Johnston stated: “We are delighted to be working with Pat, Larry and the Maiden team. There is depth and breadth of insurance knowledge within Maiden which is both complementary to the GLS team and will allow us to grow and develop our business. Maiden have been extremely positive about GLS’s business plan and are keen to help us expand.”

Maiden’s Co-Chief Executive Officers Patrick J. Haveron and Lawrence F. Metz stated: “The formation of GLS is highly complementary to our overall longer-term strategy. GLS, along with other recent insurance industry investments, are enabling Maiden to leverage its knowledge base while not re-entering active underwriting and maintaining an efficient operating profile. We believe the GLS team will not only enhance Maiden’s profitability through both fee income and effective claims management services, but it will also increase our asset base through the addition of blocks of reserves or companies that can be successfully wound down. This should further enhance our ability to pursue the asset and capital management pillars of our strategy. The GLS team brings a wealth of knowledge, experience and well-known market presence that should enable them to quickly activate its strategy. We are excited to have the GLS team join Maiden and look forward to supporting Brian, Tom, Stephanie and the team in developing and growing GLS.”

About Maiden Holdings, Ltd.

Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007.

https://www.businesswire.com/news/home/20201204005077/en/Maiden-Holdings-Ltd.-Announces-Formation-Genesis-Legacy

[goldcanyon341]

December 4, 2020

Tomorrow is the court hearing to approve the stalking horse sale starting at $4,000,000.

The assets being sold include:

Net Admitted Assets $6,819,309
Non Admitted Assets 4,497,558

Total $11,316,867

What about those non admitted assets:
(from the 3rd quarter report)

At September 30,2020 approximately $4.2 million of bonds and $0.2 million of cash equivalents are in trust and pledged to Clarendon and Praetorian to secure Acceptance's obligations under the reinsurance agreements. In addition to securing amounts assumed by Acceptance from Clarendon and Praetorian under the reinsurance agreements, these trust balances also secure, in part, reinsurance balances due to Clarendon Reinsurers. The total amounts of the pledged assets have been non-admitted as the funds are not readily available to meet policyholder obligations.
Acceptance has not established a liability as the amounts pledged and nonadmitted far exceed any reasonably estimated loss to Acceptance from such guarantees based on management's review of the current status of this situation.

The "Clarendon Reinsurers" companies already have $10,000,000 originally ceded loss and loss adjustment expense reserves above and beyond the $4.4 million non-admitted assets.

In addition, Acceptance has $85,098,643 of unused operating loss carryforwards that will go along with the sale. They belong to the insurance company.

[goldcanyon341]

December 4, 2020

Tomorrow is the court hearing to approve the stalking horse sale starting at $4,000,000.

The assets being sold include:

Net Admitted Assets $6,819,309
Non Admitted Assets 4,497,558

Total

[PostCog]

Thanks for the update. Reporting issue resolved. Do not expect any further problems.

[Enterprising Investor]

Additional bidders could include Broadbill Partners and an unknown entity working with Aaron Prisco of Prisco Consulting/Propel Advisory Group, Inc.

[Enterprising Investor]

Proposed Time Table for Sale (Event - Proposed Date After Filing Motion)

Objection to Auction/Bid Procedures - 21

Entry of Auction and Bid Procedures Order - 24

Date by which Notice of Sale Served - 25

Determination of Qualified Bidders/Bid Deadline - 45

Auction - 49

Sale Objection Deadline - 50

Sale Hearing - 51

Entry of Final Sale Order - 52

The Trustee is seeking a waiver of the 14-day period staying any order to sell or assign property of the Estate under Bankruptcy Rules 6004(h) and 6006(d).

[goldcanyon341]

Motion for sale of Subsidiary Acceptance Insurance Company

1)The Stalking Horse is DARAG North America

2)The Stalking Horse bid is $4,000,000

3) Date of court hearing to approve Motion for Sale is 12/4/2020

4) Sale includes the surplus note for $20,000,000.

5) Purchase Price Adjustment. The Purchase Price is based on an adjusted net asset value
(“NAV”) of Six Million Eight Hundred Nineteen Thousand Three Hundred and Nine Dollars ($6,819,309)
(the “Signing NAV”). The Purchase Price divided by the Signing NAV is the “Applicable Percentage

6)1.4.3 Notwithstanding anything in this Agreement to the contrary, the Closing NAV shall not include the approximate One Million Three Hundred Twenty-Seven Thousand Dollars($1,327,000) 2019 trust release related to the “Praetorian Trust”

7) 6. Reliance Insurance Company.
The Company, and former affiliates Acceptance Indemnity Insurance Company (“AIIC”) and Redland Insurance Company (“RIC”), filed proofs of claim on an aggregate basis in the Reliance Insurance Company (In Liquidation) case filed in the Commonwealth Court of Pennsylvania (Cause NO.: 1 REL 2001) (the “Reliance Proofs of Claim”). With respect to any proceeds or distributions related to such Reliance Proofs of Claim (the “Reliance Proceeds”), the Company’s portion of such Reliance Proceeds (with Company’s portion including any Reliance Proceeds with respect to RIC),
total approximately ninety-four percent (94%) of the Reliance Proceeds (the “Seller’s Share”), with the remaining approximately six percent (6%) of any Reliance Proceeds belonging to AIIC (“AIIC’s Share”).
The parties agree that the Seller shall be solely entitled to the Seller’s Share of the Reliance Proceeds. Upon receipt of any Reliance Proceeds from the Reliance Proofs of Claim, the Company shall promptly pay the Seller’s Share to the Seller and AIIC’s Share to AIIC, and in no event later than ten (10) business days after
the Company is in possession of receipt of such Reliance Proceeds. If Closing has occurred, Purchaser shall cause Company to pay such Reliance Proceeds received by Company to Seller and AIIC as set forth above. Seller may sell its Seller’s Share in the Reliance Proofs of Claim, in its sole discretion, to any third
party (the “Reliance Claim Buyer”) at any time. Upon written notice by Seller of such sale to Company,Company shall pay, and after Closing Purchaser shall cause Company to pay, any Reliance Proceeds that Company receives related to Seller’s Share to the Reliance Claim Buyer, in accordance with the same terms and conditions it would have paid such Seller’s Share to Seller under this Section 6. Any such Reliance Proofs of Claim and Reliance Proceeds shall not be considered when determining the Closing NAV.

8) Initial overbid would be $4,286,000. In which case the stalking horse would receive a breakup fee of $186,000. Bids after the initial overbid would be in $50,000 increments.

[Enterprising Investor]

Motion to Approve Auction and Bidding Procedures; Approve Break-Up Fee; Prescribe Manner of Notice and, Motion to Sell Property Free and Clear of Liens under 11 U.S.C. Section 363(f). Filed by Trustee Richard D. Myers (11/12/20)

Objections due by 12/4/2020.

Source: PACER [Docket 650]

[AKAPAK]

Thanks for the update.

[Enterprising Investor]

No new filings since 8/26/20.

[Enterprising Investor]

AIC Q3 2020 Financial Results (9/30/20)

Underwriting Loss was $708,538.

Investment Income was $164,264.

Net Loss was $544,274.

All figures YTD.

AIC had $11.3 million in assets at 6/30/20. Non-Admitted assets totaled $4.5 million, making Net Admitted Assets $6.8 million.

Surplus Notes remained at $16.721 million.

Surplus was $3.46 million, up slightly from $3.45 million at 6/30/20.

AIC also had more than $85.1 million of unused operating loss carryforwards at 9/30/20.

[Enterprising Investor]

Order Approving Second Application For Compensation for Polsinelli PC, Special Counsel, Filed by James E. Bird. The pleading was filed, served and noticed pursuant to local rules. No timely resistance/objection was filed. The motion is granted. Fees are approved for Polsinelli PC, in the amount of $231,505.00, and expenses awarded in the amount of $332.75. Movant is responsible for giving notice to parties in interest as required by rule or statute. ORDERED by Judge Thomas L. Saladino (8/26/10)

Source: PACER [Docket 648]

[Possum336]

Thanks again for you great assistance and info

[Enterprising Investor]

AIC wrote off $4.5 million in reinsurance balances from Reliance Insurance Company due to uncollected reinsurance due to insolvency back in 2018.

This is the first time I have ever read about any potential recovery.

[Enterprising Investor]

Second Application for Fees & Expenses for Polsinelli PC, Special Counsel, Fee: $231505.00, Expenses: $332.75. Filed by James E. Bird 9013 Objections due by 8/25/2020 (8/04/20)

The Estate anticipates receiving a further sizeable distribution from AIC on its Surplus Note related to a further release of trust funds from Enstar.

The Trustee and his counsel have been negotiating in earnest with the stalking horse bidder since receiving a bid in October. The proposed transaction structure potentially change a month ago to eliminate a closing condition that the parties determined may be difficult to obtain. The stalking horse is doing additional due diligence as a result. It is hope that the parties will sign the agreement and file a Motion to Approve the Sale of Stock in AIC and the Surplus Note from AIC, subject to higher and better bids at auction, in the near future.

The Debtor also expects additional value to the Estate from distributions paid on AIC's Proof of Claim of approximately $6,382,768 in the Reliance Insurance Company (In Liquidation) proceedings.

Source: PACER [Docket 646]

[Enterprising Investor]

AIC Q2 2020 Financial Results (6/30/20)

Underwriting Loss was $475,126.

Investment Income was $118,940.

Net Loss was $356,186.

All figures YTD.

AIC had $11.5 million in assets at 6/30/20. Non-Admitted assets totaled $4.7 million, making Net Admitted Assets $6.8 million.

Surplus Notes at $16.721 million. A $1.279 million payment was made to AICI on 6/01/20.

Surplus was $3.45 million, down from $5 million at 3/31/20.

AIC also had more than $84.9 million of unused operating loss carryforwards at 6/30/20.

[Possum336]

Thank you for your valuable assistance and information

[vpagano]

As always, thanks for staying on top of this one for us EI!

[Enterprising Investor]

Financials appear to have been filed late on 5/06/20.

I believe the actual due date was 5/01/20.

Text portion of these reports is generally limited, and I was unable to locate any mention of an actual or planned pay down on Surplus Notes.

I continue to check PACER regularly.

[Enterprising Investor]

AIC Q1 2020 Financial Results (3/31/20)

Underwriting Loss was $235,352.

Investment Income was $65,188.

Net Loss was $170,164.

AIC had $13.2 million in assets at 3/31/20. Non-Admitted assets totaled $4.6 million, making Net Admitted Assets $8.5 million. No change in Surplus Notes at $18 million.

Surplus was $5 million, up from $4 million at 12/31/19.

AIC also had more than $84.7 million of unused operating loss carryforwards at 3/31/20.

[Enterprising Investor]

Save your money.

There are no new filings on PACER.

The NAIC filings for 2019 did not detail any subsequent events. I was hoping to learn a second distribution on the Surplus Notes had been made. No such luck.

[PostCog]

Had to resubmit mine also.

Reconcile your transaction history with your 1099. Be prepared to wait, and do not be surprised if this exceeds the date of April 15th.

For the future, I am considering a partial transfer of assets on the account. This will undoubtedly occur again next year when it will be a much larger issue.

Going to look at Pacer this weekend to see if there are any new filings. I do not have any idea re the date of the next distribution.

Silly me for allowing this to happen a 2nd time.

[goldcanyon341]

What is Nonadmitted Balance

A nonadmitted balance is an item on an insurer’s balance sheet that represents reinsured liabilities for which the reinsurer has not provided collateral. Nonadmitted balance entries reduce the policyholders’ surplus because they represent a liability.
BREAKING DOWN Nonadmitted Balance

Insurance companies cede risk to reinsurers in order to reduce their exposure to the risks associated with the policies that they underwrite. In exchange for taking on some of the insurer’s risk the reinsurer is provided a fee, often a portion of the premium. The reinsurer is thus responsible for claims made up to a certain level, and is required to demonstrate that it will be able to handle those claims if losses do arise.

Insurers may require a reinsurance company to provide assets as collateral as proof that the reinsurer will be able to cover a risk if a claim is made against the policy. If the reinsurer is required to provide collateral then this will reduce the nonadmitted balance, and thus increase the insurer’s surplus. Reinsurers and other captive insurance companies typically use a letter of credit (LOC) as the source of collateral. The letter of credit is issued by a bank. If the ceding insurance company does not require the reinsurer to provide collateral to cover the nonadmitted balance and the reinsurer becomes insolvent, the insurance company will treat the nonadmitted balance as the loss reserve and write the balance off.

The nonadmitted balance represents the portion of unearned premiums and loss reserves that do not count on the insurer’s statutory statements, which is where the insurer accounts for any capital and surplus required to maintain its license to conduct insurance business. Because the balance is nonadmitted, the insurer cannot count the balance toward its solvency ratio or any regulatory required reserve level, meaning that the loss reserve associated with the nonadmitted balance cannot count toward the general loss reserve. For this reason, insurance companies have an incentive to require reinsurers to provide collateral.
Examples of Nonadmitted Assets

Some examples of nonadmitted assets include assets consisting of goodwill, furniture and fixtures, automobiles, agent debt balances, accrued income on investments in default and other items. They are excluded in order to present a balance sheet that is as conservative as possible. However, a rise in the proportion of nonadmitted assets to admitted assets is an indication that a company may be investing in nonproductive or risky assets. However, this isn't always this case. To determine one way or another, an insurance company's financial's must be closely scrutinized to determine if the proportion of nonadmitted assets on the balance sheet is truly an indicator of nonproductive or risky assets.

[Enterprising Investor]

Luckily, I’m able to avoid these types of issue by using a retirement account.

[vpagano]

Looks like I have to fight again, ugh.

"This is a follow up to our conversation yesterday regarding how information was reported on your 1099. Our team reviewed the 1099 and the document submitted, and determined that the way that this would be classified is as Taxable Interest. Please let us know if you have any questions about this."

[Enterprising Investor]

No mention of any subsequent events after year end and the filing date of 2/26/20.

[Enterprising Investor]

AIC 2019 Financial Results (12/31/19)

Underwriting Loss was $2,139,455.

Investment Income was $341,289.

Net Loss was $1,819,545.

AIC had $14.0 million in assets at 12/31/19. Non-Admitted assets totaled $5.8 million, making Net Admitted Assets $8.2 million. Surplus Notes declined by $2 million as a result of AIC making a principal payment to AICI on 7/09/19.

Surplus was $4 million.

AIC also had more than $84 million of unused operating loss carryforwards at 9/30/19. The exact number is unknown due to a typo.

[PostCog]

Other brokerages reported as 1099-DIV cash liquidation distribution. Here is a copy of the notice of distribution:

https://docs.google.com/document/d/19faF45vR8GVO4aGU-UgugZldkNnQIyHA5A7OgB4SM8k/edit?usp=sharing

[Enterprising Investor]

It should be treated as a return of capital up to your basis.

[vpagano]

Mine came through on 1099-Int, listed as interest income....is that what it should be? Thanks.

-V

[PostCog]

From the Dept of Corrections: If anyone is holding this in an Etrade account, I suggest that you inspect your 1099 carefully, and kindly do the needful.

[PostCog]

A famous person once said "I feel your pain." The difference, of course, I am sincere.

[mrholty]

Wanted to stop by and congratulate you guys.

I had to go back and check when I sold out. I sold out a few months after my last posts here in 2012. I'd like to say that I rolled that money into some real winners but I didn't. I used it for a private equity investment that ultimately went bust and after liquidation only got about 10% of my investments back.

Congrats again and hopefully your final liquidation will be large and soon.

[Enterprising Investor]

I like how you are thinking.

However, Myers has no choice but to pass on the net proceeds from $2 million paydown on the Surplus Note and the projected $5 million from the sale of AIC since this a Chapter 7 case.

Someone would have to file a motion to convert the case back to Chapter 11.

This could actually be done after the funds have been distributed to AICPQ holders. Our class is still owned tens of millions of dollars.

There is only one issue - AICIQ as a shell has little value since it is no longer trades. If it did, I would gladly take some of my proceeds and start the process to bid for it. I am sure some of you remember Performing Brands, Inc (PFOB).

[goldcanyon341]

PostCog, your information was exactly correct. Hats off to you.

$1,426,235.17 was the total distribution and $.37582 is the actual per share distribution.

[jip53]

nice!,got mine at etrade ,happy holidays and thanks for sharing!

[AKAPAK]

Santa also at Schwab IRA. Thanks for all your DD and info provided to board.

[Enterprising Investor]

Santa Claus delivered an early present.

Distribution received in my IRA rollover account at Fido.

[goldcanyon341]

On October 21,2019 there was a court hearing held regarding claims objections filed by parties to Acceptance Insurance. An audio of that hearing is filed as Docket #629 on Pacer.gov.

A) Mr Myers, the Trustee, gave a background of the case and made some important points which are worthy of discussion.


B) The parent company, AICI, has $84,625,062 in operating tax loss carry forwards available. Under Section 382 of the IRS Code, at least 50.1% of a reorganized company would have to include parties to the bankruptcy as stockholders in order to use the $84,625,062 NOL.

C) The parent company has one remaining subsidiary that is coming out of "Rehabilitation" and will be an active insurance company. That subsidiary is Acceptance Insurance Company (AIC). AIC insures agricultural crops for farmers. Mr Meyers believes he can sell AIC as an active insurance company for approximately $5 million dollars.

Under items B) and C) above, there are opportunities which investors should take a look at before discarding.

Referring to C) The Deutsche Bank, Trust Preferred are owed $119,704,189.92 and as a group could easily bid for the AIC subsidiary but would forgo the $5,000,000 in cash that Mr Meyers anticipates getting.

Referring to B) we could issue new shares of the parent company, reorganized AICI, to both common and trust pref holders. Trust Pref holders would own approximately 90% of the new common. This would be similar to what WMIH (Washington Mutual)and NOVC (Novastar) did in their reorganizations. AICI would be a shell company and would have to have a rights offering to raise money and then buy a business in order to use the NOLs.

Combination of B) and C) would involve keeping AIC the subsidiary and issuing $5,000,000 in debt to the trust pref. Then issuing new common with 90% going to trust pref. Trust Pref would exchange its claim for $119,704,189.92 for the $5,000,000 in debt plus 90% of the common. I believe this would meet the requirements of IRS section 382.

I would like to thank Enterprising Investor for the information he has provided. As a result of his input, I did this further due diligence. We should at least discuss these options before discarding them.

[PostCog]

The bankruptcy trustee stated during the claim objection hearing that fees would be retained from the first distribution. Nothing further mentioned, but could be holding funds for atty fees and the projected percentage trustee compensation.

[goldcanyon341]

I'm a little miffed by the number $1,426,235.17 as a distribution. The reason being that in docket 641 filed on 11/12/2019 the Trustee is clearly identifying Deutsche Bank Trust Company for a proposed payment of $1,729,616.30 at this time. That would leave a remaining balance of $75,234.26 in the Trust to cover operating expenses.

Deutsche Bank Trust filed claim #67 in the bankruptcy and its allowed claim is $119,704,189.92 or $31.5426 per each Trust Preferred share.

$1,729,616.30
-$1,426,235.17
______________
$303,381.13

We will have to wait and see what happened to the $303,381.13.

[Enterprising Investor]

You are welcome.

If I had kept my mouth shut, there would be no proof of concept.

In all my years of doing this, few people understand what I’m telling them. A smaller amount do listen, but are too slow to react. As a result, I gave up trying to “sell” my ideas years ago.

I was listening to a podcast earlier today that validated a very rare way of thinking - if you invest a small percentage in a group of option-like, small cap deals over time, taking a total loss on one is no big deal when another produces a 10x result.

I already have a couple deals looking for a capital infusion. The gut will let me know which lead to follow.