I wrote on this site a bit over a week ago about a company called Swisher Hygiene (SWSH) that is basically defunct. A former aggregator of laundry services and the like, the company over extended, got mixed up in some bad accounting, settled a class action lawsuit, and then started selling off its bits until there were no bits left to sell.
Now sitting on a lump of cash, the board of directors and executive want to wrap it all up, send a cheque to shareholders, and walk away.
And shareholders are pretty okay with that deal.
Only catch? The board wants three years before its forced to hand over that cash.
On April 14, 2016, Swisher announced that its Board of Directors approved the filing on Friday, May 27, 2016 of a Certificate of Dissolution and that under Delaware law, the dissolved corporation would be continued for at least three (3) years to enable the directors to wind up Swisher’s affairs, including the discharge of its liabilities, and to distribute to the stockholders the remaining assets, if any. The announcement indicated that the Board of Directors could not assure holders if or when any such distribution would be made, or the amount of any such distribution, if one is made. The announcement further indicated that after the filing on May 27, 2016, Swisher stockholders will not be able to make any further transactions in the shares of Swisher Common Stock on any recognized exchange.
Yep, you’re looking at three years of who knows how many six-figure executive salaries as everyone sits around staring at a pile of cash, wondering what to do with it, and watching it slowly reduce in size as said executives ponder their place in this big crazy world.
Maybe if they look at it long enough, it’ll turn into a pony.
Obviously, shareholders would prefer to get their money today, while it’s still a pile and not a mound. And, luckily for them, someone is prepared to make that happen.
Andrew Stranberg is offering $0.98 per share, right now, to all shareholders. He wants the board to change its long goodbye plans and instead take him up on his offer. Walk away, leave the keys, and everyone gets paid out now at a premium to the current $0.93 share price.
Sounds like a good option? Maybe if you don’t want Swisher to pay your country club membership for the next three years, yokel. But for execs on a pretty well paid deal, despite having run the company into the ground, into a class action lawsuit, and into non-business, Stranberg is a pain in their asses.
An offer to purchase or related letter of transmittal has not been filed with the Securities and Exchange Commission nor provided to the Company for review, nor has any date or timeframe been provided concerning when or if the intended tender offer would ever commence. As such, the Company has no factual basis on which it can seriously evaluate the substance and viability of Mr. Stranberg’s intention.
The press release indicates the Company’s Plan of Dissolution may at this time be rejected by the Company’s stockholders. As clearly noted in numerous Company public filings, on October 15, 2015, the Company’s stockholders voted on and approved by an overwhelming margin the Plan of Dissolution currently being implemented by the board of directors. No further stockholder approval is required to implement the Plan of Dissolution.
Now, it’s true that OTC companies sometimes see ‘offers-via-press-release’ that are nothing more than a means of fucking with a share price in peril, or shaking the tree to see if anything falls out.
But who doesn’t at least contact the guy in question, whose phone number I was able to get without too much hassle, and at least sound him out? Who takes the stance that they’re not even going to discuss options with the guy before putting out a news release facepalming him?
A group of guys on a good thing, that’s who. Shareholders indeed approved a plan of dissolving the company because, in the face of no other option, at least then they get something back. But nobody – NOBODY – prefers to wait three years sitting on untradeable stock with no indication as to whether they’ll get the money that’s currently sitting there, or any amount of money less than that, over a premium to market RIGHT NOW.
Stranberg has the cash. He owns a shipping line, he makes millions dealing with hospitality giants in the promotional product space and has the network and cash to, if he so chooses, bring Swisher back into actual operation.
Alternately, he could set tall the share certs on fire and have a high-priced weiner roast while playing a Taylor Swift mix tape in his underwear. Because, frankly, if he’s buying your dead $0.93 stock at $0.98, you don’t ask any more questions other than “do you have the money today” and “where do I sign?”
I’m going to be speaking to Stranberg later this week because it’s an interesting story. The Swisher board should be speaking to him as a matter of duty to their shareholders. If that’s, indeed, who they work for these days.
— Chris Parry
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.