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8-K - CURRENT REPORT - Swisher Hygiene Inc. | swsh_8k.htm |
PRESS
RELEASE
Exhibit
99.1
SWISHER HYGIENE INC.
ANNOUNCES INTERIM DISTRIBUTION OF $10.0 MILLION
TO ITS STOCKHOLDERS OF RECORD AS OF JUNE 29, 2020,
PAYABLE JULY 15, 2020 AT THE RATE OF $0.5657 PER SHARE
FORT LAUDERDALE, FL – June 22, 2020 – Swisher Hygiene
Inc. (the “Company”) today announced that it will make
a distribution of approximately $10.0 million to its stockholders
of record as of June 29, 2020, payable July 15, 2020, at the rate
of $0.5657 per share of its outstanding common stock, $.001 par
value.
As
previously reported in a Current Report on Form 8-K, filed with the
Securities and Exchange Commission (the “SEC”) on July
1, 2019, the Company, on June 27, 2019, filed a motion with the
Court of Chancery of the State of Delaware (the “Delaware
Court”) seeking the Delaware Court’s approval to make
an interim distribution to the Company’s stockholders of not
more than $10.0 million (the “Interim
Distribution”).
On
April 28, 2020, the Delaware Court heard oral arguments from
certain purported claimants seeking to substantiate their claims
against the Company, and from Honeycrest Holdings, Ltd., opposing
the Company’s motion for the Interim Distribution, and from
the Company in response to the foregoing. On June 12, 2020, in a
Letter Opinion, the Delaware Court granted the Company’s
motion for an Interim Distribution of not more than $10.0 million,
set reserves totaling approximately $6.9 million for two claimants
while the merits of their claims are being determined, and denied
all remaining claims presented to it for
consideration.
Pursuant
to the Delaware Court’s approval of the Company’s
request for an Interim Distribution of not more than $10.0 million,
on June 17, 2020, the Company’s Board of Directors considered
and approved a distribution to the Company’s stockholders of
record as of June 29, 2020, of approximately US$10.0 million,
calculated at the rate of US$0.5657 per share of the
Company’s outstanding common stock, $001 par value, payable
on July 15, 2020 (the “Payable Date”), and payable in
US dollars.
As
noted above, the Delaware Court has directed the Company to reserve
approximately $6.9 million for the two claims that remain
outstanding against the Company. The Company believes that one of
those claims, for approximately $4,000, is simply mistaken and
appears to be a claim against a company that has never been related
to or in any way affiliated with the Company. The other claim
relates to the ongoing, 20-plus year litigation between the Company
and Honeycrest Holdings, Ltd. Mediation in that matter was held in
November 2019, and was unsuccessful. A second New York Court
mandated mediation has been scheduled for July 1, 2020. In granting
the Company’s motion for an Interim Distribution, the
Delaware Court found that a reserve for the Honeycrest litigation
of $6.9 million, would be “reasonably, in fact amply, likely
to satisfy any judgment obtained by Honeycrest.” Because of
the amount of this reserve, unless it is subsequently reduced by
the Delaware Court, the Company does not contemplate making a
further distribution to its stockholders until the Honeycrest
Holdings, Ltd. claims are dismissed, or otherwise resolved,. The
Company cannot reasonably estimate when such dismissal or
resolution is likely to happen, or if at such time, the Company
will have assets remaining available for distribution to its
stockholders.
The
Company believes the Interim Distribution announced today will, for
U.S. federal income tax purposes, be considered a liquidating
distribution and be treated as a return of capital made pursuant to
the Company’s winding up and liquidation. As such, for U.S.
federal income tax purposes, U.S. holders of our common stock
generally will recognize a capital gain or loss equal to the
difference between the amount of cash distributed to the U.S.
holder and its adjusted tax basis in the Company’s common
stock. A cost recovery approach will generally be applied, and a
U.S. holder’s full tax basis will generally be recovered
before any gain is recognized. Any loss generally will be
recognized by a U.S. holder only in the tax year in which the
shareholder receives the Company’s final liquidating
distribution.
Stockholders should consult their own tax advisors for tax advice
in connection with the winding up and liquidation. We have not
requested a ruling from the U.S. Internal Revenue Service or any
other tax authority with respect to the anticipated tax
consequences of our winding up and liquidation, and we will not
seek an opinion of counsel with respect to the anticipated tax
consequences of any liquidating distributions.
In the event any stockholder wishes to update its mailing address
or does not receive a distribution as expected and wishes to have a
check reissued, it should contact the Company’s Transfer
Agent, TSX Trust, by email at
tmxeinvestorservices@tmx.com, or by telephone 1-866-600-5869
(in North America) or 416-342-1091 (International). Failure by such
stockholder to contact the Transfer Agent on or prior to the fifth
anniversary of the June 29, 2020 record date for the distribution
will result in forfeiture of any entitlement to payment of the
distribution that would otherwise be payable to such
stockholder.
Cautionary Statement on Forward-Looking Information
All
statements other than statements of historical fact contained in
this press release constitute "forward-looking information" or
"forward-looking statements" within the meaning of the U.S. federal
securities laws and the Securities Act (Ontario) and are based on
the expectations, estimates and projections of management as of the
date of this press release unless otherwise stated. All statements
other than historical facts are, or may be, deemed to be forward
looking statements. The words "plans," "expects," "is expected,"
"scheduled," "estimates," or "believes," or similar words or
variations of such words and phrases or statements that certain
actions, events or results "may," "could," "would," "might," or
"will be taken," "occur," and similar expressions identify
forward-looking statements.
Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company as of
the date of such statements, are inherently subject to significant
business, economic and competitive uncertainties and
contingencies. All of these assumptions have been
derived from information currently available to the Company
including information obtained by the Company from third-party
sources. These assumptions may prove to be incorrect in whole or in
part. All of the forward-looking statements made in this
press release are qualified by the above cautionary statements. The
forward-looking information set forth in this press release is
subject to various assumptions, risks, uncertainties and other
factors that are difficult to predict and which could cause actual
results to differ materially from those expressed or implied in the
forward-looking information. The Company disclaims any intention or
obligation to update or revise any forward-looking statements to
reflect subsequent events and circumstances, except to the extent
required by applicable law.
About Swisher Hygiene Inc.
Swisher
Hygiene Inc. closed on the sale of its U.S. operations to Ecolab
Inc. on November 2, 2015 and as a result has no remaining operating
assets. On Friday, May 27, 2016 (the “Final Record
Date”), the Company filed a Certificate of Dissolution.
Pursuant to the Plan of Dissolution, and under Delaware law, the
dissolution of the Company was effective as of 6:00 p.m. Eastern
Time on the Final Record Date. Under Delaware law, the dissolved
corporation is continued for three (3) years from the date on which
the Certificate of Dissolution was filed, unless extended by
direction of the Court of Chancery, to enable the Company’s
directors to wind up the affairs of the corporation, including the
discharge of the Company’s liabilities and to distribute to
the stockholders any remaining assets. The Court of Chancery has
extended the Company’s corporate existence on three
occasions, most recently through September 30, 2020. Except as
discussed in this press release, no assurances can be made as to if
or when any shareholder distribution will be made, or the amount of
any such distribution, if one is made.
For Further Information, Please Contact:
Swisher
Hygiene Inc.
Investor Contact:
Garrett
Edson, ICR
Phone:
(203) 682-8331