So we all “know” the prospective fate of SGI … assets to be sold for a song to Rackable, employees let go … equity shareholders left holding effectively nothing.
Whats odd is that outstanding equity shares haven’t been canceled yet. At some point, this suggests that there will be an exchange … X SGIC shares for 1 share of RACK.
But thats not the curious thing.
Last friday, an order was was entered which gave effective veto power to SGIC for any sale of equity over a very specific amount.
Not sure if this is normal. This does seem to suggest that SGIC holds an effective veto over sales which would compromise its ability to preserve a net operating loss.
Apart from keeping it from paying income taxes, why would they want to do this?
I am missing something here.