GAINSCO Inc. reported it has closed the previously announced restructuring of the company that was approved by its shareholders on Jan. 18, 2005, and is more fully described in the company’s proxy statement dated Dec. 22, 2004.
“This is a major milestone for GAINSCO. As a result of the capital from this restructuring, the Company can now pursue a long-term strategic growth plan. We are now focused on our goal of profitably growing and diversifying our nonstandard personal automobile insurance business in the five states of Florida, Texas, Arizona, Nevada and California,” stated Glenn W. Anderson, President and Chief Executive Officer.
As previously disclosed, on Aug, 27, 2004, the company entered into agreements with the holders of its preferred stock and another investor providing for a recapitalization of the company, subject to shareholder approval. The agreements were with Goff Moore Strategic Partners LP (GMSP) then-holder of the company’s Series A and Series C preferred stock and approximately 5 percent of the outstanding common stock; Robert W. Stallings, the chairman of the Board and then-holder of the company’s Series B preferred stock; and First Western Capital LLC, a limited liability company owned by James R. Reis
The recapitalization substantially reduced the company’s existing preferred stock redemption obligations and resulted in cash proceeds to the company of approximately $8.7 million (before an estimated $2 million in transaction costs and approximately $3.4 million used to redeem the Series C preferred stock).
With the restructuring, Stallings became executive chairman of the Board of the company and Reis became executive vice president with responsibility for risk management.
The number of shares of common stock outstanding has increased from 21,169,736 to 61,084,960 as a result of the restructuring, including the 600,000 shares issued to Anderson (400,000 of which are subject to certain forfeiture conditions). GMSP now owns 33 percent of the outstanding common stock of the company, Stallings owns 22 percent and First Western owns 11 percent.
Was this article valuable?
Here are more articles you may enjoy.