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SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

I was wondering where was the SEC on this? Although bankruptcy judge allowed HTZ to issue stock in bankruptcy, HTZ cannot just file with the SEC and issue stock. Filing    https://www.sec.gov/Archives/edgar/data/1657853/000110465920073132/tm2022223-1_424b5.htm

I was under the impression that the SEC would have to approve the prospectus. And now the SEC is raising problems with disclosures on what may be a worthless stock [there is a ton of deeply discounted bonds ahead of stock (old & new)]. Jefferies may also be liable for peddling worthless stock.   https://www.cnbc.com/2020/06/17/the-sec-told-bankrupt-hertz-it-has-issues-with-its-plan-to-sell-stoc...

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

So, HTZ will now wait on stock issue until the SEC review is done. What were HTZ and Jefferies trying to pull?   https://www.cnbc.com/2020/06/17/hertz-halts-plan-to-sell-500-million-in-shares-after-sec-review.html

New filing today says that was their intention all along.   https://www.sec.gov/ix?doc=/Archives/edgar/data/47129/000110465920074139/tm2022223d3_8k.htm

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures


@yogibearbull wrote:

I was wondering where was the SEC on this? Although bankruptcy judge allowed HTZ to issue stock in bankruptcy, HTZ cannot just file with the SEC and issue stock. Filing    https://www.sec.gov/Archives/edgar/data/1657853/000110465920073132/tm2022223-1_424b5.htm

I was under the impression that the SEC would have to approve the prospectus. And now the SEC is raising problems with disclosures on what may be a worthless stock [there is a ton of deeply discounted bonds ahead of stock (old & new)]. Jefferies may also be liable for peddling worthless stock.   https://www.cnbc.com/2020/06/17/the-sec-told-bankrupt-hertz-it-has-issues-with-its-plan-to-sell-stoc...


Unlike many state securities laws which authorize regulators to reject a stock offering which would result in investors purchasing speculative stock which would be worthless when issued, the federal securities law is designed to Be purely informational to inform prospective Investors of all material and contingent risks of owning the stock. It remains to be seen what objections the SEC has and what additional disclosures will be required.

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

The SEC saw the bad publicity about the issue & decided it would give a black eye to the agency if it didn't stop it. No objection to the facts included in the prospectus. 

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures


@aubfan wrote:

The SEC saw the bad publicity about the issue & decided it would give a black eye to the agency if it didn't stop it. No objection to the facts included in the prospectus. 


But how can sec stop the secondary issue if the risks are fully disclosed?

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

S-3 filings for secondaries or shelf-registrations from "well-known and seasoned companies" do get expedited approval from the SEC, sometimes in a day. But the SEC can take its time [many days, even weeks] for companies that don't qualify. It is preposterous for a company under bankruptcy, and whose stock is under exchange delisting notice, to expect to be treated as "well-known and seasoned". Lawyers from the SEC, HTZ and Jefferies will probably go through several iterations of dense legalese overs weeks to sort differences out and the day-trading craze for potentially worthless stock may dissipate by then. Any stock sale before the SEC is fully satisfied may be subject to recission and that has happened.

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Re: SEC Has Problems with Bankrupt HTZ Stock Issuance Disclosures

Another trading halt for news today - HTZ ditching stock offering & getting typical DIP loan during bankruptcy.  https://www.marketwatch.com/story/hertz-ends-plan-to-sell-stocks-2020-06-18?siteid=yhoof2&yptr=yahoo

SEC filing to end stock offer.  https://www.sec.gov/ix?doc=/Archives/edgar/data/47129/000110465920074614/tm2022892-1_8k.htm

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