Key Developments For VCG Holding Corp.
VCG Holding Corp. (VCGH.O) (Consolidated Issue listed on NASDAQ Global Market)
Law Office Of Brodsky & Smith, LLC Announces Investigation Of VCG Holding Corp.
Law office of Brodsky & Smith, LLC announced that it is investigating potential claims against the Board of Directors of VCG Holding Corp. related to the transaction to take the Company private by the Chairman and Chief Executive Office, Lowrie Management, LLP, and certain other unidentified investors. Under the terms of the transaction, VCG Holding shareholders are to receive $2.10 per share in cash for each share of VCG Holding common stock they own. The investigation concerns whether the board breached their fiduciary duties given that VCG Holding stock traded at $2.27 on November 18, 2009 and $2.45 on June 11, 2009.
Wolf Haldenstein Investigates VCG Holding Corp. Proposed Acquisition
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP announced that it is investigating possible breaches of fiduciary duty by the Board of Directors of VCG Holding Corp. arising out of the proposed going-private transaction of VCG by the Company's Chairman and Chief Executive Officer, Troy Lowrie, Lowrie Management, LLLP, an entity controlled by Mr. Lowrie and certain other unidentified investors (collectively, Lowrie). On November 3, 2009, VCG filed an 8-k with the SEC announcing that it would be acquired by Lowrie in an all cash offer. Under the terms of the agreement, VCG stockholders will receive cash of $2.10 in exchange for each share of VCG common stock. Pursuant to this proposed going-private transaction, Lowrie may be underpaying for VCG, thus unlawfully harming VCG shareholders.
VCG Holding Corp. Forms Special Committee In Response To Acquisition Proposal
VCG Holding Corp. announced that it received a non-binding letter of intent on November 3, 2009 from the Company's Chairman and Chief Executive Officer, Troy Lowrie, Lowrie Management, LLLP, an entity controlled by Mr. Lowrie, and certain other unidentified investors (collectively, Lowrie), to acquire all of the outstanding common stock of the Company for $2.10 per share in cash (Acquisition). The Proposal contemplates that the Company would no longer be a public reporting or trading company following the closing of the Acquisition. The Company's Board of Directors has formed a Special Committee consisting solely of directors who are independent under the NASDAQ independence rules to review and evaluate the Proposal and to recommend to the Company's Board of Directors whether or not to approve or decline the Proposal. The Special Committee was formed to maximize shareholder value, including evaluating the Company's alternatives to the Proposal. The members of the Special Committee are George Sawicki, Kenton Sieckman and Carolyn Romero. The Proposal is subject to the approval of the Special Committee, the Company's Board of Directors and the Company's shareholders. No assurance can be given that an agreement on terms satisfactory to the Special Committee or the Board of Directors will result from the Proposal submitted by Lowrie or any other party, or that any transaction recommended by the Special Committee will be completed.
VCG Holding Corp. Announces Restatement Of 2007 Results
VCG Holding Corp. announced that it has decided to restate the 2007 financials in connection with the response to a comment letter received from the U.S. Securities and Exchange Commission (the SEC) regarding the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (the 2007 Annual Report) and the preparation of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the 2008 Annual Report). The SEC informed the Company on March 24, 2009 that it had no further comments to the 2007 Annual Report. The issues raised by the SEC in its comment letter addressed the Company's methodology for the valuation of certain assets and liabilities purchased in connection with the acquisition of 14 nightclubs in 2007 and 2008 and the allocation of the purchase prices to those assets and liabilities. As a result, the Company has modified the fair value of certain assets and liabilities acquired in 2007 and 2008 as well as the allocation of the purchase prices for certain of these assets and liabilities. In addition, in connection with the Company's review of its 2007 Financial Statements in response to the SEC's comment letter, the Company determined that Goodwill was overstated by $2.6 million, Additional Paid-in Capital was overstated by $1.2 million and Other Income was overstated by $1.4 million. These errors were not detected due to the high volume of acquisitions and related equity and debt transactions during 2007.
VCG Holding Corp. Authorizes Additional $1.0 Million Share Repurchase Program
VCG Holding Corp. announced that its Board of Directors has authorized the repurchase of up to $1.0 million of the Company's common stock. The Company may acquire the common stock through dealers or agents in transactions on the Nasdaq Stock Market or in privately negotiated transactions.
