Taxes on the sale of the Titanic Assets

[Kraven]

If the former, he had an obligation to disclose it as a material fact and if the latter, as I said, the disclosure was good and not misleading in my view.

 

From an 8-K in April 2012:

 

Premier Exhibitions, Inc. (Nasdaq:PRXI), a leading presenter of museum-quality touring exhibitions around the world, announced that due to the level of interest in its auction of the Titanic artifact collection and the late entry of additional potential bidders, the Company has extended the deadline for the submission of bids to 5 p.m. on Monday, April 9, 2012.

(emphasis supplied)

 

It's reasonable to assume that there were bids on the table then. Shareholders got details on none of those bids. So, the material fact assumption on every bid does not seem to hold.                                                   

 

Ultimately, it's not so much that the bid didn't fructify (that was a risk all holders assumed). It's the impression that there wasn't ever a chance of it happening that has led to a lot of disgruntlement.

 

Best,

Ragu

 

Good lord.  You have answered your own question.  Additional POTENTIAL bidders = someone called him and said "hey Mark, dude, I loved Leo and Kate in the movie Titanic and I've got a lot of money burning a hole in my pocket.  I would be thrilled to come down and check out all that stuff (and, heh heh, maybe that nude picture of Kate will be there) and hell, since my wallet is too fat right now I'd love to lighten it up".  So no, that kind of potential bid doesn't need to be disclosed.  The bid that was disclosed was a NON-BINDING commitment letter that was SUBJECT TO FINANCING.  There is nothing nefarious about that, but it is what it is and he said what it is.  I am not sure how he could have said it otherwise.

[ragu]

Additional POTENTIAL bidders=

 

Bids already on the table as of April 4, 2012, none of which were disclosed. My emphasis ought to have been on the "additional" alone.

 

Best,

Ragu

[ragu]

There is nothing nefarious about that, but it is what it is and he said what it is.

 

FWIW, I don't think it was nefarious (you may still be arguing with ItsAValueTrap on that one). As you say, it was required to be disclosed because there was an agreement in place, not the fact that there had been an actual bid in place. So, there was no subjective evaluation on PRXI's part when making this disclosure.

 

And no, I have no problem with how it was phrased. If someone initiated a short position based on that wording alone, I'd say good luck. They needed it.

 

Best,

Ragu

[constructive]

It's reasonable to assume that there were bids on the table then. Shareholders got details on none of those bids. So, the material fact assumption on every bid does not seem to hold.                                                   

 

I think it's reasonable to assume the opposite. If PRXI had multiple bids in hand, they probably would have disclosed them and wouldn't have extended bidding.

 

Referring to additional potential bidders doesn't imply that any actual bidders exist. They might have had 3 potential bidders, and then added 2 more potential bidders.

[gg]

On last night's call they mentioned that the LOI was submitted by a consortium based in "Hampton Roads area of Southeast Virginia". If you google that, plus the word "museum", you can see that the Hamptons Road Naval Museum (http://www.history.navy.mil/museums/hrnm/index.html) is based in Hamptons Roads area of Southeast Virginia.

 

I went to the museum's website, and this notice is on the homepage;

"Special Notice: Beginning on July 8th until further notice, the Hampton Roads Naval Museum will close Monday to absorb reductions resulting from the announced Federal furlough."

 

This does not bode too well for their ability to spend $189 million on titanic assets...

[Cunninghamew]

On last night's call they mentioned that the LOI was submitted by a consortium based in "Hampton Roads area of Southeast Virginia". If you google that, plus the word "museum", you can see that the Hamptons Road Naval Museum (http://www.history.navy.mil/museums/hrnm/index.html) is based in Hamptons Roads area of Southeast Virginia.

 

I went to the museum's website, and this notice is on the homepage;

"Special Notice: Beginning on July 8th until further notice, the Hampton Roads Naval Museum will close Monday to absorb reductions resulting from the announced Federal furlough."

 

This does not bode too well for their ability to spend $189 million on titanic assets...

 

Now that is proper due diligence.... thanks GG

[Olmsted]

On last night's call they mentioned that the LOI was submitted by a consortium based in "Hampton Roads area of Southeast Virginia". If you google that, plus the word "museum", you can see that the Hamptons Road Naval Museum (http://www.history.navy.mil/museums/hrnm/index.html) is based in Hamptons Roads area of Southeast Virginia.

 

I went to the museum's website, and this notice is on the homepage;

"Special Notice: Beginning on July 8th until further notice, the Hampton Roads Naval Museum will close Monday to absorb reductions resulting from the announced Federal furlough."

 

This does not bode too well for their ability to spend $189 million on titanic assets...

 

There are lots of maritime museums in the Hampton Roads area.  The one you mention is run by the US Navy.  They wouldn't be buying Titanic assets, sequester or no sequester.

[DukeCrow]

On last night's call they mentioned that the LOI was submitted by a consortium based in "Hampton Roads area of Southeast Virginia". If you google that, plus the word "museum", you can see that the Hamptons Road Naval Museum (http://www.history.navy.mil/museums/hrnm/index.html) is based in Hamptons Roads area of Southeast Virginia.

 

I went to the museum's website, and this notice is on the homepage;

"Special Notice: Beginning on July 8th until further notice, the Hampton Roads Naval Museum will close Monday to absorb reductions resulting from the announced Federal furlough."

 

This does not bode too well for their ability to spend $189 million on titanic assets...

 

There are lots of maritime museums in the Hampton Roads area.  The one you mention is run by the US Navy.  They wouldn't be buying Titanic assets, sequester or no sequester.

 

Correct. For example, there is also the Mariners' Museum (http://www.marinersmuseum.org/).

 

Besides, I doubt any of these museums would be buying the assets with their own money. It's probably safe to say that whichever museum it is has been looking for private donors to help fund the purchase and the proper display of the artifacts. That's why it's been described as a public-private consortium. The CEO pretty much laid it all out on the conference call.

[ItsAValueTrap]

Looks like the consortium fell through.

 

Monetization of Titanic Assets Update

 

While both parties have worked diligently to finalize a transaction to transfer the Titanic assets, the Company terminated the non-binding LOI with the Hampton Roads consortium effective today. Mr. Weiser stated, "We always believed that Hampton Roads was an ideal location for the permanent home of the collection and the proposed transaction met our criteria of price, court satisfaction and tax efficiency. However, this group has failed to secure sufficient financing so we believe the Company needs to focus on pursuing alternatives to effect a sale of these assets for the benefit of shareholders. From the Company's perspective, we view the termination of the LOI not as the end but as a new beginning for the process; one that will get us closer towards finalizing this in a manner that fulfills our shareholders' expectations and satisfies the requirements of the court."

http://finance.yahoo.com/news/premier-exhibitions-reports-second-quarter-204310725.html

 

Some analysis on quarterly earnings at Seeking Alpha:  http://seekingalpha.com/currents/post/1321722

 

 

*20/20 hindsight says I covered too early.

[ItsAValueTrap]

Ack... somebody started a thread in the investment ideas section.  Please go there!

 

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/prxi-premier-exhibitions/