IPO's Only Asset Is A Lawsuit, $4.6 Billion Suit Is Sole Asset Of Planned Stock Issue

Discussion in 'Wall St. News' started by nutmeg, Nov 22, 2008.

  1. In an unprecedented move that some are comparing to gambling on the legal system, a $4.6 billion lawsuit is being packaged as the sole asset of a special-purpose company that is preparing an initial public stock offering.

    The company, VR Holdings Inc. of Linthicum Heights, Md., is using the IPO strategy as a way to provide liquidity for the suit’s 2,500 individual claimants, 2,000 of whom are older than 65 and concerned that they may not live to see the suit settled. The legal action, which was filed in July 2007 and has a history dating to 1996, involves racketeering charges against half a dozen hedge funds and money managers.

    The planned IPO “will give the claimants a vehicle to hopefully generate some funds for themselves,” said John Baker, president of VR Holdings, which is a creation of the plaintiffs and claimants in the lawsuit. The offering essentially is a way to sell stakes in the suit’s eventual payout.

    VR Holdings plans to register its shares with the Pink Sheets market, an electronic-quotation system operated by New York-based Pink OTC Markets Inc., and conduct an IPO early in 2009.

    “For investors, the shares will be like an option that sells for around $1 but has a potential upside of $12 or $14,” Mr. Baker said. […] “The idea leaves me a little cold because it is basically betting on the legal system, and that’s not very appealing to me,” said Jim Kennedy, president of Marathon Capital Management LLC in Hunt Valley, Md. “Who am I to know what’s on the mind of a judge or a jury? And if the issue was black and white, it wouldn’t be in court to begin with,” added Mr. Kennedy, who manages $175 million for his clients.
     


  2. It'll open at $20/share on its first day of trading as an IPO! :D
     
  3. I want some!!
     
  4. Time to go to law school.
     
  5. "Currently, plaintiffs are still fighting to get the lawsuit into court. Earlier this year, the U.S. District Court of Northern Illinois dismissed the case, based on the expiration of a four-year statute of limitations."

    http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081116/REG/311179965

    Pink sheets is exactly where this POS needs to be.