re: Hudson Bay and the great conversation that it has started.
Let's look back at the work Kirkland did, going to August 2023:
Specifically the language. It's important that they denote a potential Section 16 reporting claim.
Further down, we have a reporting issue.
I believe that these could be the result of the combination of RC and HBC's holdings. From the cooperation/standstill, RC was allowed to increase his position to 19.99%.
From the share buybacks, he was pushed from 9.8% to 11.8%.
Now, if you look at HBC at 9.99% limit and RC at his purchase which concluded at 9.8% limit, you are under 19.99% with 19.97%.
However, if you take RC's pushed 11.8%, you arrive at 21.79% ownership and are in violation of the standstill.
Could this have been the move to establish "harm" and justify a future suit? Or to assist in a suit brought forward by Mr. Goldberg? I don't know.
—
Then we also have the fun topic of the new HBC 16(b). So let me pose a question..
What if the Section 16(b) is not the result of HBC going over 9.99% (they can't), but because the window of time from RC's sell on August 18 to HBC's entry on February 8 is less than 6 months?
That is a violation, if they are related.
This only applies if RC and HBC are related—if RC is an attribution party (affiliate) through the HBC deal, this is a violation of 16(b). Their combined ownership is greater than 10% and the time between the sale and the buy is less than 6 months.
I wonder if that is why it is under seal?
I also wonder, is that why JP Morgan was in such a rush on the weekend of February 4-5 to declare the Company insolvent and push it into Chapter 7, well before the grace period to repay the bond note had expired?
fun times. 🥷
$BBBY #BBBY $BBBYQ #BBBYQ
"but wait, there's more"
To be clear, in order to meet the standard to qualify for a Section 16(b) violation, you must be a >10% shareholder.
HBC's equity agreement had specific measures implemented in it that would not allow HBC to go over 9.99% ownership, at any point in time.
Remember, an equity agreement is a two-party contract. HBC is providing money and the Company is providing the shares.
From the previous post:
"the holder will not have the right.."
The agreement states that HBC would not be allowed to request more shares in exchange for money, if it were to take them over 9.99% ownership.
But that is not the only thing and this is very important to make clear. If someone were of the belief that the Company was acting to deliberately push HBC over the 9.99% maximum, well we have an issue. They can't.
Why? Well the equity agreement was designed in a way that protected HBC, their interests and interests of any attribution parties (affiliates) working with them.
uh oh.
As you can see, because even if you believed that Mrs. Etlin, Mrs Gove and Mr. Kastin would deliberately attempt to push HBC over 10%, that would be immediately nullified and the Company would hold any shares that would push them above the threshold in abeyance, until they would not be at risk of going over 9.99%.
—
So, the simple question. If you observe the equity agreement, HBC was not able to cross the threshold that would qualify them for a Section 16(b) violation. Knowing that, how can they be pursued for one, unless it is related to a certain someone else?
Ryan Cohen's Section 16(b) suit was not filed under seal because there's nothing special about them. So why is this one, unless he might he mentioned?
$BBBY #BBBY $BBBYQ #BBBYQ
May 2, 2024 · 6:14 PM UTC
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