GAINSCO Inc. (NYSE Amex: GAN), an insurance holding company headquartered in Dallas, has announced it will voluntarily suspend trading of its common stock. The company reports there are fewer than 300 holders of its common stock.
As result of the deregistration, the company will no longer be required to file reports with the Securities and Exchange Commission.
GAINSCO said it intends to file a Form 25 to delist its shares on the NYSE Amex in mid January and a Form 15 in late January 2011, and expects that delisting of its common stock to become effective 10 days after the filing of the Form 25 and the deregistration of its common stock will become effective 90 days after the date of the Form 15 filing.
Upon filing of Form 15, the company’s obligation to file periodic and current reports with the SEC under Section 13(a), including Forms 10-K, 10-Q and 8-K, will be immediately suspended.
The costs associated with operating as a reporting company, and the attendant demands on management, are not justified by the limited benefits, GAINSCO said.
In the last several years, the volume of trading in the company’s common stock has declined significantly, the public market has not offered liquidity for significant amounts of stock, and the stock often has not traded at all.
GAINSCO said it could not predict the precise cost savings that are expected to result from the decision to suspend its reporting obligations, but it believes the savings will be substantial. The company also expects that some legal and accounting fees and corporate insurance costs should be reduced over time because of the elimination of required SEC reporting.
GAINSCO intends to continue making information available to shareholders and to observe corporate governance practices comparable to those which have existed in recent years. Specifically, it intends to make available to shareholders annual audited financial statements prepared in accordance with generally accepted accounting principles, beginning with the statements for the year ended Dec. 31, 2010.
The timing of the audit is expected to be adjusted to coincide with the audit of the annual financial statements of its insurance company subsidiary, MGA Insurance Co. Inc. (MGA). MGA’s audited financial statements are filed with insurance regulatory agencies by June 1, of each year, and this may result in some savings in fees paid to the company’s independent auditor.
The company expects to make available quarterly and annual financial statements of MGA. GAINSCO expects to continue to hold an annual meeting of shareholders each year, but it anticipates not distributing a proxy statement or soliciting proxies from shareholders.
The company’s board currently consists of four independent directors and two management directors.
GAINSCO was established in 1978. GAINSCO Auto Insurance specializes in minimum-limits personal auto coverage and actively distributes its nonstandard personal auto products through independent retail agents in Florida, Georgia and South Carolina (Southeast Region) and in Arizona, New Mexico and Texas (Southwest Region).
Source: GAINSCO
Topics Carriers Texas Insurance Wholesale
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