The only thing that is official is that Laidlaw will get 2.5 million and will be going after the other 2.5 million.
That is NOT what the PR says. It is actually quite illuminating in some ways.
1. There has been some question as to why the the AR is showing as unpaid in the end of year 2010 financials?
2. What was the definition of "retains a significant interest" that LLEG referred to on it's website?
3. What kind of issue did the SEC have with the financials?
I think the PR sheds some light on all three questions. It could be entirely possible that
1. The entire cost to Cate was a $5,000,000 "Note" to LBP.
2. LLEG appears to only have been a partner in LBP and was only due 50% of that note.
3. LLEG decided to represent that "Note" as an account receivable...big no-no. Also it appears the purchase sale agreement allowed for some adjustments...and LLEG may have made some optimistic assumptions about the adjustments to get it higher than the $2.5 million. I believe the financial was in the $2.7 million.
4. LLEG's "significant interest" was merely collecting on that note and there was no additional payment coming.
5. We also know that the purchase sale agreement has an arbitration process...so it may be likely that LLEG may not be able to sue...at least not anytime soon.
I also doubt there is ANY chance that Cate not paying the note in any way can lead to LLEG retaining any interest or ownership. The fact there is an arbitration process is one clue, the fact the consideration was a "note payable" and not cash. But more importantly I suspect, that Cate was not going to risk it's entire investment and those of it's investors over $5,000,000.
The purchase sale agreement must have also laid out some criteria under which it would not have to pay on the note. I wonder if the suspension or investigation may have given that out to Cate.
