What historically happens during a "Q" op?
Usually when they announce the "Q", the stock drops like a rock, then will bounce, and slowly become less volitile intra-day. Then at the end the shareholders lose everything.
A rare b/k is COPI. Appears a NYSE company, CEI, is pre-packaging a b/k. It still remains to be seen what will really happen:
CRESCENT OPERATING INC: CRESCENT REAL ESTATE EQUITIES CO - C
B: CRESCENT OPERATING INC: CRESCENT REAL ESTATE EQUITIES CO - Crescent
Operating Settlement Agreement With CEI
New York, New York, Feb 18, 2002 (Market News Publishing via COMTEX) --
Crescent Operating, Inc. ("Crescent Operating" or the "Company") announced that
it has executed an agreement (the "Agreement") with Crescent Real Estate
Equities Company (NYSE:CEI) ("CEI"), which provides, among other things, the
basis for Crescent Operating to file a prepackaged bankruptcy plan that the
Company believes will provide for a limited recovery to its stockholders. In
summary, the Agreement provides the following:
-- CEI will assist and provide funding to Crescent Operating for the
implementation of a prepackaged bankruptcy of Crescent Operating, which funding
is expected to provide for the settlement or satisfaction of all of the
Company's known creditors. -- Crescent Operating will immediately transfer to
CEI assets related to its hospitality business and will permit CEI to foreclose
on the Company's equity interests in its residential land development and
related entities. In connection with the transfer and foreclosure, CEI will
cancel and extinguish indebtedness and lease obligations aggregating
approximately $63.7 million. -- The Agreement provides for the issuance of CEI
common shares to Crescent Operating stockholders, following confirmation of
Crescent Operating's bankruptcy plan. CEI has agreed to provide approximately
$14.0 million to Crescent Operating in the form of cash and common shares of CEI
to fund costs, claims and expenses relating to the bankruptcy and related
transactions, and to provide for the distribution of CEI common shares to the
Crescent Operating stockholders. As part of the bankruptcy, it is expected that
the balance of the indebtedness and lease obligations of Crescent Operating to
CEI will be canceled. The number of CEI common shares to be issued to the
Company stockholders will be based upon the aggregate claims, costs and expenses
incurred by CEI and Crescent Operating in connection with the Company's
bankruptcy and related transactions. The Company anticipates that the value of
the CEI common shares issued (which is part of the $14.0 million consideration
previously mentioned) will be approximately $5.0 to $8.0 million, or
approximately $0.46 to $0.74 per share of Crescent Operating common stock. The
final amount, which will not be determined until the confirmation of Crescent
Operating's bankruptcy plan, could vary substantially from this estimate. -- The
Agreement calls for the proposed bankruptcy plan to be submitted to the
Company's stockholders for approval. CEI will not be obligated to issue its
shares to the Company's stockholders unless the holders of two-thirds of the
shares that are voted at the meeting approve the bankruptcy plan. The Company is
not required, however, to have stockholder approval to file for bankruptcy
protection, and will do so whether or not approval is obtained. The Company
believes that if it is required to file for bankruptcy protection without the
prior stockholder approval of the bankruptcy plan, the stockholders will receive
nothing in the bankruptcy, as the Company's debts far exceed its assets, and its
creditors, including CEI, will not be paid in full. -- Crescent Operating will
further agree to sell its interest in the tenant of the AmeriCold temperature
controlled logistics properties to a new entity that will be owned by the CEI
shareholders. The proceeds of the sale are to be applied by the Company to the
repayment of the Company's $15 million obligation to Bank of America.
Prior to execution of the Settlement Agreement, all of the members of the board
of directors other than Jeffrey L. Stevens resigned from the board of directors,
and John Goff resigned as president and chief executive officer due to the
conflict of interest between CEI and Crescent Operating. Jeffrey L. Stevens will
assume that position through completion of the bankruptcy proceedings.
IMPORTANT INFORMATION
Crescent Operating filed a preliminary proxy statement with the Securities and
Exchange Commission (the "Commission") on February 14, 2002 in connection with
the proposals to be voted upon at a Special Meeting of Stockholders of Crescent
Operating to be held as soon as practicable. In connection with the proposed
transaction, CEI will file an exchange offer prospectus and a registration
statement with the Commission. It is anticipated that the definitive joint proxy
statement / prospectus will be mailed in April 2002 to each Crescent Operating
stockholder of record on the record date, subject to clearance from the
Commission. Crescent Operating and CEI and their respective officers and
directors may be considered participants in the solicitation of proxies in favor
of the proposal to be voted upon at the Special Meeting. Information regarding
their positions and security holdings is available in the public filings of
Crescent Operating and CEI, which are available at the Commission's web site at
www.sec.gov. Stockholders of Crescent Operating may obtain additional
information regarding the interests of the participants and additional
information by reading the definitive joint proxy statement / prospectus when it
becomes available.
INVESTORS AND STOCKHOLDERS ARE URGED AND ADVISED TO READ THESE AND ALL RELATED
DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and stockholders
may obtain a free copy of the exchange offer prospectus, the proxy statement and
related documents from the Commission's web site at sec.gov. Free
copies of these documents may also be obtained from CEI by directing a request
to Crescent Real Estate Equities Company, Investor Relations, 777 Main Street,
Suite 2100, Fort Worth, Texas 76102, (817) 321-1412 or from Crescent Operating
by directing a request to Crescent Operating, Inc., Investor Relations, 777
Taylor Street, Suite 1050, Fort Worth, Texas 76102, (817) 339-2200.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements are generally
characterized by terms such as "believe," "expect" and "may."
Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, actual results
could differ materially from those described in the forward-looking statements.
In addition to any forward-looking statements contained in this press release,
the future operations of Crescent Operating and its subsidiaries may be
adversely affected by one or more of the following factors:
-- the current inability of the Company to pay its ongoing and
deferred rent obligations to CEI, the operating partnership of
CEI, as they come due,
-- the high levels of debt that the Company maintains and the
Company's current inability to generate revenue sufficient to
meet debt service payments, other obligations and operating
expenses,
-- the availability of the financing that likely will be
necessary to maintain the Company's operations and
investments,
-- the ability of CEI to foreclose on the Company's assets under
the terms of its loans to the Company which would further
reduce the Company's income and available cash,
-- the current and continuing underperformance or non-performance
of the Company's existing business investments,
-- the Company's inability to reach an agreement with its
creditors which may result in the Company losing control of
its assets or operations or both either through foreclosure or
bankruptcy,
-- any unfavorable resolution of issues that relate to the
bankruptcy petition of Charter Behavioral Health Systems, LLC
("CBHS"), including, but not limited to, judgments against the
Company in respect of lawsuits instituted in connection with
the closure of certain CBHS facilities prior to CBHS's filing
bankruptcy, and
-- the impact of changes in the industries in which the Company's
businesses and investments operate (including equipment sales
and leasing, hospitality, temperature controlled logistics and
land development) and the economic, demographic and other
competitive conditions affecting those industries, the
Company's cash flows and the value of the Company's
investments.
For a more complete discussion of these and other risk factors, please see the
Company's SEC reports, including its proxy statement for the Annual Meeting,
annual reports on Form 10-K, particularly for the year ended December 31, 2000,
quarterly reports on Form 10-Q, particularly for the quarter ended September 30,
2001, and current reports on Form 8-K.
ABOUT THE COMPANY
Crescent Operating is a diversified management company which through various
subsidiaries and affiliates, owns, leases or operates a portfolio of assets
consisting primarily of three business-class hotels, five luxury resorts and
spas, an interest in a temperature controlled logistics operating company, an
interest in three residential developments, and an equipment sales and leasing
business.
Filed by Crescent Operating, Inc.
Pursuant to Rule 425 under Securities Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Crescent
Operating, Inc.
Commission File No. 000-22725
CONTACT: TEL: 817/339-2210 Crescent Operating, Inc., Fort Worth
Jeffrey L. Stevens |
