NEW YORK, Feb 11, 2003 (BUSINESS WIRE) -- Maxcor Financial Inc., the U.S.
broker-dealer subsidiary of Maxcor Financial Group Inc. (Nasdaq: MAXF),
announced that it has filed suit in the Supreme Court of the State of New York,
County of New York, seeking a uniform and permanent resolution of the disputes
surrounding the settlement of when-issued trades in NTL Inc. common stock.
The settlement of when-issued trades in NTL common stock was thrown into turmoil
on January 10th when NTL emerged from bankruptcy under a plan of reorganization
providing for the issuance of one-fourth the number of shares as was previously
contemplated. Maxcor and other participants in the when-issued trading market
expected that when-issued trades would be adjusted to reflect what was
effectively a 1-for-4 reverse stock split. Unfortunately, a number of buyers in
that market, seizing upon a Nasdaq advisory that it would not cancel the
when-issued trades, have instead attempted to claim a windfall and take delivery
of shares with a value potentially 4x in excess of what they bargained for.
As previously announced, Maxcor and other sellers of when-issued NTL shares
sought and obtained preliminary relief on January 16th from the United States
Bankruptcy Court for the Southern District of New York. Recognizing that the
reverse stock split was supposed to be a ministerial matter that did not
adversely affect anyone's rights, the Court's relief allowed all sellers to
force settlement of their transactions on an adjusted basis that reflected the
reverse stock split. The Court then extended this relief through February 5th
pursuant to a second order.
Many of Maxcor's counterparties settled their when-issued transactions on an
adjusted basis in accordance with the Bankruptcy Court's orders, but others did
not. As a result, after the Bankruptcy Court's temporary relief dissolved,
Maxcor filed its suit in New York State Supreme Court - a court with broader
jurisdictional reach. The suit names all counterparties who traded with Maxcor
in when-issued NTL shares. Roger Schwed, General Counsel of Maxcor's parent
company, explained: "We principally filed this suit to pursue those parties who
are persisting in trying to grab a windfall by refusing to adjust to reflect
what was intended by NTL and the Bankruptcy Court to be a neutral transaction
with the same effect as a 1-for-4 reverse stock split. However, we felt obliged
to name all parties to our trades, whether they had adjusted with us or not, in
order to ensure that a consistent result obtains in all instances."
A number of industry participants, including several of Maxcor's counterparties
who are named in the suit, have privately expressed support for Maxcor's efforts
to bring this matter to a close on a consistent basis. Without a single forum in
which to seek a uniform resolution, participants in the when-issued market for
NTL shares who acted both as buyers and sellers risk being whipsawed by
inconsistent results that potentially might force them to deliver, when acting
as a seller, four times as many shares as they receive when acting as a buyer.
Maxcor cautioned that it could not currently predict with any certainty the
ultimate outcome of its lawsuit or of the settlement disputes themselves, the
time frame for their resolution, or whether its previously announced estimate of
their possible financial impact will be mitigated. Maxcor said, however, that it
was currently exploring whether all of the affected parties might have an
interest in seeking a speedier, negotiated result through consensual mediation.
Maxcor also noted that one party named in its lawsuit, to whom Maxcor was a net
seller, has already settled out of it by agreeing to finalize the settlement of
all of its trades with Maxcor on a fully-adjusted basis.
Maxcor Financial Inc. is an SEC-registered broker-dealer, specializing in
institutional sales and trading operations in high-yield and distressed debt,
municipal bonds, convertible securities and equities. Through its Euro Brokers
division, Maxcor is also a leading domestic and international inter-dealer
broker specializing in U.S. Treasury and federal agency bonds and repurchase
agreements, emerging market debt products and other fixed income securities.
Maxcor is a subsidiary of Maxcor Financial Group Inc., www.maxf.com, which
employs approximately 500 persons worldwide and maintains principal offices in
New York, London and Tokyo.
This release contains certain "forward-looking" statements made pursuant to the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Wherever possible, we have identified these forward-looking statements by
words such as "believes," "anticipates," "expects," "intends" and similar
phrases. Such forward-looking statements, which describe our current beliefs
concerning future business conditions and the outlook for the Company, are
subject to significant uncertainties, many of which are beyond our control.
Actual results or performance could differ materially from what we expect.
Uncertainties include factors such as: market and economic conditions, including
the level of trading volumes in the instruments we broker and interest rate
volatilities; the scope of the New York financial community's recovery, in
general, from the World Trade Center terrorist attacks; the effects of any
additional terrorist acts or acts of war and governments' military and other
responses to them; the scope of our recoveries from insurers; the success of
possible remedies discussed in this release; the success of our technology
development and deployment; the status of our relationships with employees,
clients, business partners, vendors and clearing firms; possible third-party
litigations or regulatory actions against us or other unanticipated
contingencies; the scope of our trading gains and losses; the actions of our
competitors; and government regulatory changes. Reference is made to the
"Cautionary Statements" section of our 2001 Annual Report on Form 10-K and to
our subsequent filings with the Securities and Exchange Commission for a fuller
description of these and additional uncertainties. The forward-looking
statements made herein are only made as of the date of this press release, and
we do not undertake any obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
CONTACT: Maxcor - New York
Roger Schwed, 212/748-7000 |
