UPDATE: Stone Energy (SGY): Thomas Satterfield Files 13D Showing 9.9% Stake, Challenges Restructuring Plan
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(Updated - November 29, 2016 10:26 AM EST)
Thomas Satterfield files 13D on Stone Energy (NYSE: SGY) showing 9.9% stake. The investor believes that the restructuring plan recently announced by the Issuer disproportionately impairs the interests of the Issuer’s common shareholders and unfairly advantages other stakeholders, especially the Issuer’s board of directors and management.
From the filing:
Item 4. Purpose of Transaction.
The Reporting Person initially purchased the Shares reported herein as a passive investor based on the Reporting Person’s belief that such securities represented an attractive investment opportunity. However, the Reporting Person is filing this statement on Schedule 13D pursuant to §240.13d-1(e) because the Reporting Person now holds the Shares with a purpose or effect of changing or influencing control of the Issuer. Specifically, the Reporting Person believes that the restructuring plan recently announced by the Issuer disproportionately impairs the interests of the Issuer’s common shareholders and unfairly advantages other stakeholders, especially the Issuer’s board of directors and management. The proposed plan is substantially divergent from plans outlined in the Issuer’s presentation at the December 10, 2015 Capital One Conference (on which date commodity prices were lower than corresponding prices as of the date of the filing of this statement on Schedule 13D), and well below what the Bondholders Ad Hoc Committee offered in the Restructuring Proposal dated August 21, 2016, filed as Exhibit 99.2 to the Issuer’s Current Report on Form 8-K filed August 23, 2016. The announcement of the plan shocked the market, causing a drop of approximately 50% in the price of the Shares.
The Reporting Person does not intend to support the proposed restructuring plan if the Issuer files for bankruptcy and the plan is submitted without changes. To that end, the Reporting Person has engaged Quinn Emanuel Urquhart & Sullivan, LLP to represent the Stone Energy Shareholders Ad Hoc Committee to request that an Equity Committee be appointed to represent the interests of the Issuer’s common shareholders in the proposed bankruptcy. The Reporting Person further intends to engage counsel to initiate a shareholder’s class action to recover losses incurred by the Issuer’s common shareholders. In addition, the Reporting Person intends to retain financial advisors and to speak with other common shareholders of the Issuer in furtherance of the foregoing purposes, and plans to request that other common shareholders participate in funding certain expenses to be incurred in seeking the appointment of an Equity Committee.
Depending on overall market conditions, other investment opportunities available to the Reporting Person, and the availability of securities of the Issuer at prices that would make the purchase or sale of such securities desirable, the Reporting Person may endeavor to (i) increase or decrease his position in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise on such terms and at such times as the Reporting Person may deem advisable and/or (ii) enter into transactions that increase or hedge the Reporting Person’s economic exposure to the Shares without affecting the Reporting Person’s beneficial ownership of Shares.
The Reporting Person has no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D, except as set forth herein or as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons may take positions regarding or make proposals with respect to, or with respect to potential changes in, the Issuer’s operations, management, certificate of incorporation and bylaws, composition of the board of directors, ownership, capital or corporate structure, dividend policy, potential acquisitions or sales, businesses or assets, strategy and/or plans of the Issuer as a means of enhancing stockholder value. The Reporting Person may change his intention with respect to any and all matters referred to in Item 4. The Reporting Person intends to review his investment in the Issuer on an ongoing basis and may from time to time in the future express his views to and/or meet with management, the Issuer’s board of directors, other stockholders or third parties, including potential acquirers, service providers and financing sources, and/or may formulate plans or proposals regarding the Issuer, its assets or its securities. Such possible plans or proposals may include one or more plans or proposals that relate to or would result in one or more of the changes referred to herein, or any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D
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