No problem. I have a pretty good handle on the basic terms of the blank check companies, though there are always a few twists. As I said, the early offerings could not extend the 18-month deadline.
When I took a look at the proxy materials for TACA, I saw that there are some unpleasant ramifications for the management groups of those companies that fail to complete a transaction and have to liquidate.
TAC Acquisition (TACA.OB):
TAC had accrued and unpaid liabilities of approximately $4.14 million as of January 18, 2007, including approximately $1.3 million outstanding under its unsecured credit facility with Wachovia Bank, National Association, or Wachovia and approximately $2.16 million of estimated accrued and unpaid federal and state taxes.
Messrs. Cohen and Rosenthal are jointly and severally liable to pay any debts and obligations, including legal expenses, TAC has incurred as a result of claims by vendors for services rendered or products sold to TAC, or claims by any target business with which TAC has entered into a letter of intent, confidentiality agreement or other written agreement, in each case to the extent (i) such vendors or target businesses have not entered into a waiver agreement with TAC, and (ii) the payment of such debts and obligations actually reduces the amount of funds in the trust account. However, Messrs. Cohen and Rosenthal are not liable for approximately $2.98 million of TAC’s outstanding liabilities as of January 18, 2007, including approximately $814,000 of the amount outstanding under TAC’s unsecured credit facility with Wachovia which was used for the purpose of paying federal and state taxes, and the amount of TAC’s accrued and unpaid federal or state taxes. Messrs. Cohen and Rosenthal are required to jointly assume approximately $1.16 million of liabilities as of January 18, 2007 in accordance with the terms of their respective indemnification agreements with TAC.
Messrs. Cohen and Rosenthal have each confirmed to TAC that they expect to meet these obligations, and are currently negotiating with TAC’s creditors regarding satisfaction of its liabilities, which they expect to complete prior to the special meeting.
sec.gov
China Mineral Acquisition (CMAQ.PK)
China Mineral currently has net liabilities and obligations that exceed its available cash outside the IPO trust account by approximately US$100,000, or US$0.03 per Public Share. Its directors have agreed to cover any shortfall in resources to discharge these and certain future liabilities pursuant to indemnification obligations they provided the Company at the time of its IPO. The directors have confirmed to China Mineral that they expect to meet these obligations, and are currently negotiating with the Company's creditors regarding satisfaction of its liabilities, which they expect to complete prior to the special meeting.
sec.gov
Coastal Bancshares (CBAS.OB)
At December 31, 2006, we had approximately $500.00 in cash outside the IPO trust account and approximately $30.4 million in the IPO trust account. We had total liabilities of approximately $537,000. We expect to pay the Company’s liabilities in full or, in some cases, in a reduced amount agreed to by the relevant creditor(s) pursuant to negotiations currently in progress. In addition to satisfying these liabilities, we anticipate incurring additional professional, legal and accounting fees in connection with the Company’s dissolution and Plan of Liquidation. All cash for the payment of the foregoing, beyond any assets of the Company outside the IPO trust account, will be provided by Messrs. Grossman and Brunson or pursuant to arrangements they procure at no cost to the Company pursuant to their indemnification obligations.
sec.gov
Millstream II Acquisition (MSMA.OB)
Arthur Spector, Millstream II’s Chairman of the Board, Chief Executive Officer and President has agreed to indemnify Millstream II for losses it may suffer to the extent that the proceeds in the trust account are As of November 14, 2006, Millstream II had $101,172 of available cash outside of the trust account and had accounts payable and accrued expenses of approximately $451,935, which excludes Delaware franchise and Federal income taxes due of $64,000 but includes legal fees payable to Broad and Cassel, accounting fees due to Goldstein Golub Kessler LLP, trustee fees due to Continental Stock Transfer and Trust Company, printing and edgarizing fees relating to the proxy statement and the other quarterly and current reports payable to St. Ives Financial Printers and Scullen Printers, and Millstream II’s consultants’ fees payable to Renthon LLC. The funds outside the trust are insufficient to cover Millstream II’s current accounts payable and accrued expenses. Except for accrued liabilities for Delaware franchise tax and Federal income tax of $64,000, Millstream II currently believes all of the accounts payable and accrued expenses reflected on Millstream II’s balance sheet would be considered vendor claims for purposes of the indemnification provided by Mr. Arthur Spector. Millstream II would be required to make a claim for indemnification against Mr. Spector to cover these costs. Millstream II is not obligated to bring such claim. Under Delaware law, however, Millstream II’s Board of Directors must act on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the corporation in order to satisfy its fiduciary duty of care and duty of loyalty. In discharging its fiduciary duty, the Millstream II Board of Directors will consider among other things, the amount of such claim, the expense of bringing such claim, and the likelihood of collecting any judgments if successful on such claims. In the event that the Millstream II Board of Directors determines, based on all of the relevant information, that filing such claim would be in the best interest of the corporation, it will bring a claim against Mr. Spector to enforce his indemnification obligations. The trust assets will be reduced to the extent of the Delaware franchise tax and the Federal income tax amounts due. There can be no assurances that Millstream II will bring a claim against Mr. Spector to enforce his indemnification obligation or that if brought, Mr. Spector will be able to satisfy his obligations under the indemnification agreement. If Millstream II does not bring a claim against Mr. Spector or if Mr. Spector is unable to satisfy his obligations under the indemnification agreement, the trust
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