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not sure that is the tune suggested by that article.
nols are divorced from the commons.
probably a county and western song about that someplace.
https://www.washingtonpost.com/business/economy/sears-where-eddie-lampert-shops-for-tax-savings/2019/03/08/f92ec750-406c-11e9-9361-301ffb5bd5e6_story.html
notice the comment: "Any New Sears owner other than Lampert would face severe limits on how much of Sears’s net operating losses could be used in a given year. The current annual limit: about 2.4 percent. “The number is based on a secret [Internal Revenue Service] formula, sort of like Coca-Cola,” Willens quips.
By contrast, Lampert can use those losses without restriction. The obvious way to do that is to have New Sears buy profitable businesses and use its net operating losses to shelter the acquired businesses’ profits."
a reverse merger with old sears (shldq) would not accomplish this. old sears (shldq) is NOT a profitable company.
based on comments by windstream mgmt. wouldn't be surprised if this is addressed in an upcoming hearing with judge drain.
aurelius setting up nieman marcus like it did windstream.
forcing cds language into debt restructuring concessions.
https://www.wsj.com/articles/neiman-marcus-in-debt-talks-makes-it-easier-to-bet-it-will-fail-11553605200
lcbm68,
when you now sign your posts as lcbm69 does that suggest another member entered your buying group?
guess the more who are in that group to share the loss means that any one individual's loss will be somewhat minimized.
if your group has as many shares as you suggest, it will be difficult exiting when reality sets in.
stop losses will be blown through if/when something even more definitively explicit than "the stock is worthless" is put out. such as a por, a dismissal from bankruptcy, a declaration of administrative insolvency or the receipt of a favorable irs private letter ruling given to holdco.
rc1968,
these "fact deniers" will be the ones clamoring that eddie lied to them because he said the best possible outcome for all stakeholders had been achieved.
reading and reading comprehension seem to have gone by the wayside.
the inability to understand what went out the door with holdco and what remained and what the obligations of shc and its debtor subsidiaries as debtors in possession means relative to "carrying on the business" until the complete transition to holdco has occurred is the source of this fantasy.
yes i should have. attention span that early without coffee focused on first line.
mapman,
when you say: "i'd say that is not possible.
the agreement with LPC limits the purchase to 50k shares a day"
the purchase agreement has a provision where the purchase of additional shares can be "put" on LPC under the "accelerated purchase" provision.
search either the recent sec filing for "accelerated purchase" or the original filing from oct 2015 for specifics.
In consideration for entering into the Purchase Agreement, the Company issued to LPC 179,598 shares of common stock as a commitment fee and shall issue up to 89,799 shares pro rata, when and if, LPC purchases at the Company’s discretion the $50 Million aggregate commitment. The Purchase Agreement may be terminated by the Company at any time at its discretion without any cost to the Company. The proceeds received by the Company pursuant to the Financing are expected to be used to help advance human clinical trials of ANAVEX 2-73 and for general corporate purposes.
sections below are from the purchase agreement between avxl and LPC. while i don't believe they are not somehow getting around this, this is nevertheless the provision regarding short/hedging in the agreement.
No Short-Selling or Hedging by Lincoln Park
Lincoln Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our common stock during any time prior to the termination of the Purchase Agreement.
Lincoln Park represented to us that at no time prior to the date of the Purchase Agreement has Lincoln Park or its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our Common Stock or any hedging transaction. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents, representatives or affiliates will not enter into or effect, directly or indirectly, any of the foregoing transactions.
jimbo,
not sure i understand your comment.
my read of the purchase agreement states that avxl can put shares onto LPC. when that is done, avxl is paid regardless of what LPC might choose to do with those shares.
as long as the purchase agreement is still in effect and as long as the $50 million has not been totally used up, then avxl can still put shares to LPC which they are required to purchase.
in the event of an accelerated purchase, the price must be above $3/share.
avxl can cancel the purchase agreement with LPC at any time for any reason or for no reason at all. so, avxl is not required to completely exhaust the facility with LPC and i see no restriction in the purchase agreement which prevents avxl from using any other "investors" (such as cantor) concurrently with the purchase agreement with LPC.
linda,
not sure if this is the date you are looking to find but it would seem logical to think the time to file might be based on the "completion date" of the spinoff which was april 24.
“2015 has already seen significant progress, highlighted by the successful completion of the spinoff of Communications, Sales and Leasing (‘CS&L’) on April 24,” said Tony Thomas, president and chief executive officer. “This transaction has made Windstream a stronger company with less debt and increased capacity to invest in our network and create value for our shareholders.”
linda,
how are you searching "the vanguard group" on the edgar data base?
i have input "the vanguard group" and it says "not matches"
thanks
still owe you a response on the effective date of something which i need to go back and find. been busy today
if biogen just announced a $5 billion share repurchase, doesn't that pretty much exhaust their cash hoard?
if LPC were to not hold on to any shares it purchased, how might it go about that and not, at least technically, violate the terms of the purchase agreement?
based on those trade numbers, wonder where the "missing" 500K-600K shares are hiding?
traded about 3x average daily volume today and as you pointed out closed at the hod with greater than average volume.
about three more days of this could account for all of a push of the additional shares to LPC.
relative to a prior poster's comment, even though that poster didn't think LPC holds on to shares it purchases (and i believe that as well), the purchase agreement specifically provides that LPC can not short or otherwise do anything to manipulate the stock price and that they are purchasing to hold as an investment.
i don't believe that but that is what LPC agreed to in the purchase agreement.
management may be just finishing out the last tranche with LPC before moving over to cantor.
the recent prospectus talked about $9+ million of share sales. at $3/share, which we are clearly above right now, that would mean placing around 3 million additional shares into the market.
we are already at 77% over the average daily volume so maybe LPC playing a bit here.
they could have used that money for an acquisition. maybe it's bonus time and they want to pump up the earnings per share.
dug a little deeper into the prospectus and the purchase agreement.
the $3 minimum pertained to any "accelerated purchases". according to the asset purchase agreement, there doesn't seem to be a minimum for "regular purchases".
the purchase agreement defines purchase price as:
“Purchase Price” means, with respect to any Regular Purchase made pursuant to Section 2(a) hereof, the lower of: (i) the lowest Sale Price on the applicable Purchase Date and (ii) the arithmetic average of the three (3) lowest Closing Sale Prices for the Common Stock during the ten (10) consecutive Business Days ending on the Business Day immediately preceding such Purchase Date (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction that occurs on or after the date of this Agreement).
there is an interesting table on page 20 of the following link which describes the number of shares avxl might put on LPC under varying stock price scenarios.
https://www.sec.gov/Archives/edgar/data/1314052/000161577419004136/s116733_424b5.htm
so, based on the recent run up in stock price above the $3 minimum for an "accelerated purchase" to be "demanded" of LPC by avxl, it seems like now would be the time for avxl to make such a transaction, unless they have something in their pocket which might indicate to them the pps will go higher.
can't explain the math discrepancy, but this is from the most recent annual report found on page 31:
Cash provided by financing activities for fiscal 2018 and 2017 were related to cash received from the issuance of common shares under the Purchase Agreement with Lincoln Park. During fiscal 2018, we issued 2.4 million shares for gross proceeds of $8.2 million. During fiscal 2017, we issued 7.1 million shares for gross proceeds of $27.3 million.
the fiscal year end is sept 30.
fiscal year 2017 ran from oct 1, 2016 ending sept 30, 2017
during that time period, the stock price ranged between the high $5's down to the high $3's so the effective put at a minimum of $3 seems right.
fiscal year 2018 ran from oct 1, 2017 ending sept 30, 2018
during that time period, the stock price ranged between the high $3's to the high $1's. putting shares to LPC early in fiscal 2018 would also have satisfied the $3 minimum.
posting based on this information in the most recent annual report:
51 W 52nd Street, 7th Floor, New York, NY USA 10019
(Address of principal executive offices)
that's in rockefeller center so wasn't thinking that was a trial location site.
also, since the annual report indicated nevada was the state of jurisdiction or incorporation just figured the location referenced above was what it said it was.
Anavex has an office in New York
New York, US (HQ)
51 W 52nd St
noticed it was the final tranche when i went back and looked at the various purchase agreements. with respect to the most current one, there is a $3.00 floor below which avxl can not push shares onto LPC as noted from language in the annual report:
_______________________________
We generally have the right to control the timing and amount of any sales of our shares to Lincoln Park, except that, pursuant to the terms of our agreements with Lincoln Park, we would be unable to sell shares to Lincoln Park if and when the closing sale price of our common stock is below $3.00 per share
______________________________
looked back at the various quarterly and annual reports and noticed ahortly after the current purchase agreement was put in place and after the 1:4 reverse split there were roughly 34.6 million shares outstanding. as of 1/22/19 there were roughly 46.9 million shares outstanding. that around a 36% dilution which most likely is fully attributable to LPC selling shares into the market.
since avxl has moved from a closing price of $1.52 on 12/12/18 to a closing friday of $3.08 it seems likely that avxl might just push a few more shares onto LPC which leads me to believe one might see a 2x to 3x increase in average daily volume during the week of april 8 based on looking at past 2 to 4 day spikes in volume.
i will be keeping an eye toward april and any volume spikes given the prospectus release last week.
linda,
my original answer was based on arkansas statute. win is incorporated in delaware but the statue of limitations is the same.
this may be the section. if so, then four years (could add 1 year based on when "fraud" realized).
Remedies of the creditor previously stated that the creditor may obtain an attachment or remedy against the asset transferred in accordance with the procedures specifically described by sections 16-110-201;211. Now, the creditor is allowed to attach property if the remedy is available under applicable law. 4-59-207(a)(2). The regulation more generally allows the attachment subject to principles of equity and applicable rules of civil procedure. 4-59-207(a)(3).
A claim for relief with respect to a transfer or obligation will be extinguished unless an action is brought no later than four years after the transfer was made or the obligation was incurred. 4-59-209(a). The regulation has increased the length of time, whereby previously only three years was allowed. Moreover, if it has been longer than four years, it may not be later than one year after the transfer or obligation was or could reasonably have been discovered by the claimant. 4-59-209(a).
the recent report filed for reimbursement of expenses filed on the docket this week had some line items which indicated they were looking at what was projected to be brought in from liquidation sales versus what was actually brought in.
so agree, there will be some type of reconciliation which might be presented on the next monthly financial update.
don't see much chance of new sears filing chapt 22.
they will just methodically reduce the footprint, sell underperforming stores, continue with employee layoffs, repurpose the real estate and become something other than a retail behemoth.
eddie has finally gotten what he wanted all along. a massive amount of real estate which can be repurposed in a profitable way.
don't see any possibility of newco going down that road.
chemist,
i do think that is much closer to the pecking order in this particular case.
based on the debt to be resolved, still don't see much left once the bottom of the pecking order is reached
mike,
you were asking about sears merging with another company in order to protect their nols.
i didn't get involved with the american airlines bk and merger but others on the board did.
since sears sold substantially all of its go forward assets to transform holdco, i don't think it is a comparable situation to the american airlines and u s airways merger since unlike sears, american airlines did not sell substantially all, or maybe even any, of its assets before the u s airways merger.
therefore, since a significant portion of american airlines' business which gave rise to the nols in the first place were still retained by american airlines, i believe that was the situation which permitted the merged company to utilize american airlines nols.
this is different than the sears transaction where there doesn't appear to be a significant portion of shc's business entities left which originally gave rise to the nols in the first place.
additionally, in order to utilize the nols, it is also my understanding that the company using the nols must be in substantially the same type of business as the company which gave rise to the nols in the first place.
since us airways and american airlines were in identical businesses there was no question about that point.
if the nols remain with transform holdco, since transform holdco acquired most of the assets which gave rise to the nols in the first place they should be good. if anything, a merger of transform holdco with seritage sounds like a much better possibility than a merger with the remaining sears shell and seritage.
been on the wrong side of a couple of lincoln park transactions so am just leery of them. have a small position in avxl but if i think lincoln park is playing games would consider getting out and then back in.
just putting this out as a psa fwiw. didn't see a lot of comment when this prospectus was filed on the 18th.
link is for the recent prospectus avxl filed advising of a sale in excess of $9 million of stock to lincoln park capital fund.
https://www.sec.gov/Archives/edgar/data/1314052/000161577419004136/s116733_424b5.htm
experience with other small bios dealing with lincoln park leads me to believe there will be a public relations run up in the stock price when lincoln park makes this purchase and then lincoln park will short or otherwise dump shares on the market.
don't know what the long term implications are for avxl but in and around any lincoln park purchase will be a flipping opportunity for sure if past experience holds true.
don't believe this is a long term investment by lincoln park, they are just an atm being used by avxl.
keep an eye on this and don't be sucked in during any run up in price unless you are intending to be unabashedly long and don't care about short term fluctuations in the share price.
win holding pretty steady, will be interesting to see what the new accumulations by vanguard might mean in the long term
another important date is in april when judge drain told both lampert and shc that HE will decide the issues regarding who owes whom what regarding the money in question argued during the omnibus hearing on the 21st of march if they don't take care of it themselves.
to me that leaves the door wide open for shc to be declared administratively insolvent.
don't think that would be good for lampert since shc has many things yet to do regarding the transfer of things to holdco which might get dicey to impossible if shc were thrown into chapt 7 or if the case were dismissed and shc had to fight it out in courts without bk protection.
seems there is more pressure on lampert to settle than on sears.
howaboot,
when you suggest:
"5. I think in the end, Seritage will merge with SHLDQ to subsume the rest of the properties left over, to subsume the NOL's, to renegotiate rents on the remaining properties, etc."
there are no "rest of the properties". all of the go-forward properties have already been sold to transform holdco (that's well over 400 stores, the corporate headquarters, various warehouses, auto centers, and whatever else holdco purchased). the stores which were not sold to holdco are being liquidated. those properties, if rented, are being returned to the landlords, and if owned are being sold to satisfy various debts. there will be nothing left under the shc umbrella.
in your point 2, you posit the irs will not provide lampert with a favorable ruling. that's is possible, but regarding the structuring of the apa, at least regarding the ability to utilize the nols, there was a lot of thought put into that.
however, realizing the irs might not provide a favorable ruling, the apa provides that lampert (holdco) could reject the nols which were included in holdco's purchase price. that language in the apa reads like an option agreement. what i can not find anyplace is if that "option" is not exercised (based on not getting a favorable irs ruling) does holdco receive any type of credit or does the option to acquire the nols (and tax credits) just "expire worthless"?
in the event they expire worthless for holdco, that leaves the question can they be used by the old sears umbrella? see prior post regarding american airlines merger with us airways for thoughts on that situation and how it might apply if the nols were to revert to shc.
so, the real key for both sides is whether or not holdco will get a favorable irs ruling. i don't know the timeframe for that but can imagine it might be within 90 days of the closing (at the earliers) which throws things out to early May.
chevy,
that's only partially true.
administrative claims are paid before creditors.
and with another twist to that, superpriority claims are paid before administrative claims.
who holds superpriority claims in the sears bankruptcy? lampert!
howaboot,
familiarize yourself with the "G" reorg nuances.
lampert, as a creditor, will be considered a shareholder of shc and its debtor subsidiaries on that basis alone.
words are important in the section you quoted: "provided the stock and securities of the controlled corporation are distributed to the old corporation's shareholders".
remember, transform holdco has already provided 3000 shares of it own class b securities to shc and the debtor subsidiaries. the distribution agreement for those shares provides they will be distributed by the subsidiary debtors (but not by shc) to their creditors.
remember, creditors in bankruptcy are considered stockholders. lampert as a creditor will receive the stock back.
while this seems a perverse implementation of the rule, i believe that is the way it will be done.
at no place in the rules you quoted (or even in the parts which you did not quote) does it say that stock will be distributed to ALL of the old corporation's shareholders.
that's why i say words are important. distributing to lampert alone satisfies this provision without bringing along ANY of the common shareholders, including lampert as the largest holder of common shares.
the quirk about shareholders seems to be satisfying the condition that at least one of the major shareholders of the company giving rise to the nols (that would be lampert as the majority shareholder of shc stock "shldq") must also be the major shareholder of the acquiring company (lampert is the 100% owner of transform holdco).
further to this point, lampert is a secured creditor, and more importantly a superpriority creditor, and as a creditor he is considered a shareholder.
it is my understanding the shareholder requirement can be met based on lampert's "shareholder" status as a creditor which would also be a method of leaving out the common shareholders in total.
there have been a number of publications to this point but few on this board share my opinion as to how this will end up.
language from the asset purchase agreement:
Sellers agree to cooperate with Buyer in order that, for federal income Tax purposes, the transactions effected pursuant to this Agreement, together with the distributions made by, and liquidation of, Sellers pursuant to the Bankruptcy Plan, are treated as one or more plans of reorganization under section 368 of the Code and as qualifying as one or more reorganizations under section 368(a)(1)(G) of the Code
actually, the "G" reorganization was done for the benefit of transform holdco so that they would be able to utilize the nols and tax credits.
the only way the nols would go back to shc would be if lampert is unable to secure a favorable irs ruling in which case lampert could reject them.
if lampert could not get a favorable irs ruling and the nols reverted to shc, i'm not sure shc would be able to utilize them because i think in order for shc to be able to then utilize them, shc would have to have a substantial portion of the business(es) which originally gave rise to the nols in the first place.
since substantially all of the go-forward assets of shc's subsidiaries were sold to transform holdco, not exactly sure what assets are left which (1) gave rise to the nols in the first place, and (2) which are still being held by shc around which shc could reorganize.
additionally, regardless of the nols, shc and its debtor subsidiaries are required to wind down and liquidate within three taxable years of the closing which occurred on february 11, 2019.
it possible if the nols were rejected by lampert and went back to shc they might be worthless.