Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Jan. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | COMDISCO HOLDING CO INC | |
Entity Central Index Key | 1179484 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -21 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,028,951 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Consolidated_Statement_of_Net_
Consolidated Statement of Net Assets in Liquidation (Liquidation Basis) (Unaudited) (USD $) | Dec. 31, 2014 |
ASSETS | |
Cash - legally restricted | $4,000,000 |
Liquidation Basis of Accounting | |
ASSETS | |
Cash and cash equivalents | 46,512,000 |
Cash - legally restricted | 4,000,000 |
Receivable from securities sold | 1,911,000 |
Equity Method Investments | 415,000 |
Assets held in trust for deferred compensation plan | 502,000 |
Other assets | 519,000 |
Total assets | 53,859,000 |
LIABILITIES | |
Contingent Distribution Rights | 16,436,000 |
Accrued compensation | 4,831,000 |
Accrued Professional Fees | 2,075,000 |
Other accrued costs | 1,203,000 |
Accrued liability for deferred compensation plan | 502,000 |
Accrued estimated disposal costs of liquidation | 588,000 |
Income taxes payable | 240,000 |
Total liabilities | 25,875,000 |
Net Assets, Total | $27,984,000 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) (Unaudited) (Liquidation Basis of Accounting, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Liquidation Basis of Accounting | |
Net assets in liquidation, beginning of period | $28,158 |
Changes in net assets in liquidation | |
Change in other assets | 170 |
Change to Contingent Distribution Rights Liability | 102 |
Change in accrued liabilities | -26 |
Change in accrued estimated disposal costs of liquidation | -420 |
Liquidating distributions to CDR Holders | 0 |
Liquidating distributions to Common Shareholders | 0 |
Net increase (decrease) in net assets in liquidation | -174 |
Net assets in liquidation, end of period | $27,984 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows (Liquidation Basis) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Liquidation Basis of Accounting | |
Cash flows from operating activities: | |
Equity investment proceeds net of sharing | $15,144,000 |
Bad debt recoveries, interest and other revenue | 37,000 |
Selling, general and administrative expenses | -579,000 |
Income tax payments | -82,000 |
Net cash provided by operating activities | 14,520,000 |
Net increase in cash and cash equivalents | 14,520,000 |
Cash and cash equivalents at beginning of period | 31,992,000 |
Cash and cash equivalents at end of period | $46,512,000 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Sep. 30, 2014 |
ASSETS | |
Cash and cash equivalents | $31,992,000 |
Cash - legally restricted | 4,000,000 |
Equity investments | 697,000 |
Assets held in trust for deferred compensation plan | 501,000 |
Other assets | 248,000 |
Total assets | 37,438,000 |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
Accounts payable | 103,000 |
Income taxes payable | 90,000 |
Other liabilities: | |
Accrued compensation | 1,429,000 |
Contingent Distribution Rights | 10,437,000 |
Other liabilities | 168,000 |
Total other liabilities | 12,034,000 |
Total liabilities | 12,227,000 |
Stockholders' equity | |
Common Stock $.01 par value. Authorized 10,000,000 shares; originally issued 4,200,000 shares; 4,028,951 shares issued and outstanding at September 30, 2014 | 70,000 |
Additional paid-in capital | 28,414,000 |
Accumulated other comprehensive (loss) | -3,000 |
Accumulated deficit | -3,270,000 |
Total stockholders' equity | 25,211,000 |
Total liabilities and stockholders' equity | $37,438,000 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Sep. 30, 2014 |
Consolidated Balance Sheets | |
Common Stock, par value (in dollars per share) | $0.01 |
Common Stock, Authorized shares | 10,000,000 |
Common Stock originally issued shares | 4,200,000 |
Common Stock shares issued | 4,028,951 |
Common Stock shares outstanding | 4,028,951 |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income (Loss) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Revenue | |
Gain on sale of equity investments | $2 |
Interest income | 28 |
Total revenue | 30 |
Costs and expenses | |
Selling, general and administrative | 662 |
Contingent Distribution Rights | 399 |
Foreign exchange loss | 161 |
Bad debt recoveries | -29 |
Total costs and expenses | 1,193 |
Net loss before income taxes | -1,163 |
Income tax expense | 56 |
Net loss | -1,219 |
Unrealized gains on securities: | |
Unrealized holding gains arising during the period | 1,612 |
Other comprehensive income | 1,612 |
Comprehensive income | $393 |
Basic and diluted net loss per common share (in dollars per share) | ($0.30) |
Consolidated_Statement_of_Cash1
Consolidated Statement of Cash Flows (Going Concern Basis) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Cash flows from operating activities: | |
Equity investment proceeds net of sharing | $2 |
Bad debt recoveries, interest and other revenue | 34 |
Selling, general and administrative expenses | -593 |
Income tax receipts | 731 |
Net cash provided by operating activities | 174 |
Effect of exchange rates on cash and cash equivalents | -23 |
Net increase in cash and cash equivalents | 151 |
Cash and cash equivalents at beginning of period | 27,671 |
Cash and cash equivalents at end of period | $27,822 |
Consolidated_Statement_of_Cash2
Consolidated Statement of Cash Flows (Going Concern Basis)- Continued (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Reconciliation of net loss to net cash provided by operating activities: | |
Net loss | ($1,219) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
Taxes payable and other tax balances | 56 |
Change in Canadian income tax receivables | 731 |
Contingent Distribution Rights | 399 |
Selling, general and administrative expenses | 69 |
Other, including foreign exchange | 138 |
Net cash provided by operating activities | $174 |
Reorganization
Reorganization | 3 Months Ended |
Dec. 31, 2014 | |
Reorganization | |
Reorganization | |
1. Reorganization | |
On July 16, 2001, Comdisco, Inc. and 50 of its domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the “Bankruptcy court”) (consolidated case number 01-24795). Comdisco Holding Company, Inc., as the successor company to Comdisco, Inc., emerged from bankruptcy under the Plan that became effective on August 12, 2002. For financial reporting purposes only, however, the effective date for implementation of fresh-start reporting was July 31, 2002. Effective October 1, 2014, the Company has applied the liquidation basis of accounting on a prospective basis. See Note 2 of these Notes to Consolidated Financial Statements (In Liquidation). | |
Comdisco Holding Company, Inc. (the “Company”) was formed on August 8, 2002 for the purpose of selling, collecting or otherwise reducing to money in an orderly manner the remaining assets of the Company and all of its direct and indirect subsidiaries, including Comdisco, Inc. The Company’s business purpose is limited to the orderly sale or collection of all its remaining assets. Pursuant to the Plan and restrictions contained in its Certificate, the Company is specifically prohibited from engaging in any business activities inconsistent with its limited business purpose. | |
Litigation Trust: In February 1998, pursuant to Comdisco, Inc.’s Shared Investment Plan (the “SIP”), 106 employees (the “SIP Participants”) took out full recourse, personal loans to purchase approximately six million shares of Comdisco, Inc.’s common stock. In connection therewith, Comdisco, Inc. executed a guaranty dated February 2, 1998 (the “Guaranty”) providing a guaranty of the loans in the event of default by the SIP Participants to the lenders under the SIP (the “SIP Lenders”). The Company and the SIP Lenders subsequently reached a settlement on the Guaranty that was approved by the Bankruptcy court on December 9, 2004. The Plan and the litigation trust agreement provided that, under certain circumstances, subrogation rights that the Company may have against the SIP Participants and their respective promissory notes be placed in a trust for the benefit of the C-4 creditors (the “Trust Assets”). Under the Plan, the Litigation Trust is solely responsible for collection of amounts due on the promissory notes of the sixty-nine SIP Participants who did not take advantage of the SIP Relief (as defined in the Plan). The Company has a limited indemnification obligation to the litigation trustee under the litigation trust agreement. | |
SIP Litigation: On February 4, 2005, the Litigation Trust commenced lawsuits both in the United States District Court for the Northern District of Illinois (the “Federal SIP Lawsuits”) and in the Circuit Court of Cook County Illinois (the “State SIP Lawsuits”) to collect on the remaining SIP Participants’ promissory notes. | |
Federal SIP Lawsuits: The Litigation Trust filed and a federal district court judge entered summary judgments (and amended judgments) against all but one of the SIP Participants who were defendants in the federal cases (the “Federal SIP Defendants”) on their respective SIP promissory notes, and the Litigation Trust commenced collection actions against them. Additionally, the federal district court judge entered orders directing that certain CDRs and related proceeds held by the estate of Comdisco, Inc. and Computershare (f/k/a BNY Mellon) (holder of CDRs) on behalf of those Federal SIP Defendants be turned over to the Litigation Trust. Pursuant to such orders, the Company turned over CDRs and related proceeds and will continue to do so if additional orders are entered. | |
The Federal SIP Defendants filed appeals on those judgments. On October 18, 2010, the Seventh Circuit affirmed the rulings in favor of the Litigation Trust, but remanded certain fraud issues to the trial court. On November 1, 2010, the Federal SIP Defendants filed a petition for a hearing before the full appellate panel. On June 28, 2011, the Seventh Circuit ruled and vacated the summary judgments and remanded the cases for further proceedings. | |
Following a series of motions, hearings and the completion of discovery, at a hearing on July 8, 2013, Judge Robert Gettleman set a trial date for September 23, 2013. The trial’s actual start date was September 24, 2013. On October 21, 2014, the judge orally ruled and entered judgment in favor of the Federal SIP Defendants. The basis of the judge’s ruling and judgment was his finding that both the bank and the Company committed an arranging violation under the applicable margin lending regulations. Therefore, the judge ruled that the promissory notes were void and unenforceable. | |
On October 29, 2014, the litigation trustee filed an appeal of the judgment to the United States Court of Appeals for the Seventh Circuit (“Appellate Court”). | |
On November 6, 2014, the court scheduled a settlement conference for December 9, 2014. On November 7, 2014, the court issued a briefing schedule. On November 20, 2014, the Federal SIP Defendants filed a Notice of Appeal of the October 21, 2014 judgment and of an order entered on August 12, 2013. On December 10, 2014, the court suspended the briefing schedule for all of the appeals filed. Also, on November 20, 2014, the Federal SIP Defendants filed a Motion for Extension of Time to file Bills of Costs. On December 4, 2014, the judge approved this motion and allowed the Federal SIP Defendants to file their Bills of Costs after all appeals have been completed. As of the date of this filing, the settlement conference is still ongoing. | |
As part of the appeal and cross-appeal, the Company and its counsel filed motions to request that certain memos, testimony and offers of proof be kept under seal. On February 3, 2015, the Appellate Court granted the motions. | |
State SIP Lawsuits: After a series of hearings, motions and counter-motions, amended pleadings and individual bankruptcies and settlements, the remaining State SIP Defendants and the litigation trustee entered into an agreed Stipulation And Order (the “Stipulation”) which, among other things, stays the trials in the state cases pending the resolution and any appeal of the trial in the federal cases. On August 12, 2013, the Stipulation was approved by Judge Tailor. On December 30, 2014, Judge Tailor placed all state cases on the Law Division Stay Calendar. On February 2, 2015, fraudulent conveyance actions filed by the litigation trustee against certain State SIP Defendants were continued to August 4, 2015 for a status hearing. | |
On July 26, 2013, Nisen and Elliot, LLC, an outside legal firm for the Company, filed a Petition to Intervene and a Motion for Protective Order in the state cases in order to preserve the Company’s attorney-client work product privilege in that litigation. Due to the state cases being placed on the Law Division Stay Calendar, this motion will not be heard until the state cases are removed from the Law Division Stay Calendar and returned back to Judge Tailor. | |
Litigation Trust Reports: By early 2005, sixty-nine SIP Participant’s promissory notes were transferred to the Litigation Trust. As reported in various Status Reports of Comdisco Litigation Trustee, of the sixty-nine SIP Participants: forty-one have settled or otherwise resolved their obligation; twelve have filed personal bankruptcy; and, sixteen notes remain outstanding (five in the federal court and eleven in the state court). During the quarter ended December 31, 2014, the Litigation Trust did not reach any settlements, which leaves the total number of promissory notes settled or otherwise resolved by the Litigation Trust at forty-one. | |
For more details regarding the Litigation Trust and related proceedings, please refer to the Status Reports of Comdisco Litigation Trustee filed quarterly in the Bankruptcy court. Any proceeds collected by the Litigation Trust, net of expenses, will be considered Trust Assets and distributed in accordance with the Plan and the litigation trust agreement. | |
Basis_of_Presentation_and_Rece
Basis of Presentation and Recently Issued Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2014 | |
Basis of Presentation and Recently Issued Accounting Pronouncements | |
Basis of Presentation and Recently Issued Accounting Pronouncements | |
2. Basis of Presentation and Recently Issued Accounting Pronouncements | |
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. The information furnished herein includes all adjustments, consisting of normal recurring adjustments except where indicated, which are, in the opinion of management, necessary for a fair presentation of the results of operations for these interim periods. | |
Going Concern Basis of Accounting – periods prior to October 1, 2014 | |
The consolidated financial statements for the periods ended September 30, 2014 and December 31, 2013, were prepared on the going concern basis of accounting, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. | |
Prior period financial results have not been restated under the liquidation basis of accounting. | |
Liquidation Basis of Accounting – periods beginning and subsequent to October 1, 2014 | |
Under the Plan, the Company was charged with, and has been, liquidating its assets. While there have been no changes either to the Plan, or the Company’s obligations under it, the Company adopted ASU 2013-07, Liquidation Basis of Accounting as of October 1, 2014 and accordingly, determined that liquidation was imminent. Therefore, effective October 1, 2014, the Company applied the liquidation basis of accounting on a prospective basis in conformity with accounting principles generally accepted in the United States of America. The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the plan of liquidation and requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes. The Company continually evaluates opportunities for the orderly sale and collection of its remaining assets. It is anticipated that the Company will have reduced all of its assets to cash, determined its final CDR liability after the resolution of the pending SIP litigation, resolved its final federal and state tax obligations and made distributions of all available cash to holders of its common stock and CDRs in the manner and priorities set forth in the Plan and completed all regulatory filings within the next few years. At that point, the Company will cease operations. The costs in liquidation will generally be incurred ratably over the remaining anticipated time frame. If the timing of any of these steps changes, the future accrued costs may change. Results could differ from these estimates and may affect the net assets in liquidation and actual cash flows. | |
These consolidated financial statements of net assets in liquidation should be read in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended September 30, 2014 included in the Annual Report on Form 10-K, as filed with the SEC on December 11, 2014. | |
The Company has evaluated subsequent events through the date of this filing and does not believe there are any material subsequent events which would require further disclosure. | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. | |
Cumulative_Effect_of_Accountin
Cumulative Effect of Accounting Change/Net Assets in Liquidation | 3 Months Ended | |||
Dec. 31, 2014 | ||||
Cumulative Effect Of Accounting Change Net Assets In Liquidation | ||||
Cumulative Effect of Accounting Change/Net Assets in Liquidation | ||||
3. Cumulative Effect of Accounting Change/Net Assets in Liquidation | ||||
The following is a reconciliation of Shareholder’s Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting as of October 1, 2014 (in thousands): | ||||
Shareholder’s Equity as of September 30, 2014 | $ | 25,211 | ||
Increase due to estimated net realizable value of Equity Investments | 19,349 | |||
Increase due to estimated net realizable value of other assets | 157 | |||
Increase for CDR liability | -6,101 | |||
Liability for accrued compensation | -4,086 | |||
Liability for accrued professional fees | -4,623 | |||
Liability for accrued other costs | -1,349 | |||
Income taxes payable | -232 | |||
Liability for estimated disposal costs of liquidation | -168 | |||
Adjustment to reflect the change to the liquidation basis of accounting | 2,947 | |||
Estimated value of net assets in liquidation as of October 1, 2014 | $ | 28,158 | ||
In applying liquidation basis of accounting, the Company is recognizing a net increase of $2,947,000 in its estimated value of net assets in liquidation. The adjustment is accounted for as an increase to retained earnings in the balance sheet as of October 1, 2014. | ||||
During the period of October 1, 2014 through December 31, 2014, the Company’s estimated net assets in liquidation decreased by $174,000. The primary reason for the decline in net assets was due to an increase in the estimated disposal costs of liquidation for the Company’s stored paper and electronic records. Such paper and electronic records will continue to be stored and ultimately destroyed once the Company has completed its liquidation. | ||||
The net assets in liquidation as of the quarter ended December 31, 2014 would result in liquidating distributions of approximately $6.95 per common share. This estimate of liquidating distributions includes projections of costs and expenses to be incurred during the time period estimated to complete the plan of liquidation. There is inherent uncertainty with these projections, and they could change materially based on the timing of the completion of all the steps necessary for the liquidation. | ||||
Equity_Investments
Equity Investments | 3 Months Ended |
Dec. 31, 2014 | |
Equity Investments. | |
Equity Investments | |
4. Equity Investments | |
The Company’s estimate of the fair value of its private company investments (“Equity Investments”) was made in consultation with Windspeed Acquisition Fund GP, LLC (“Windspeed”), a professional management group, who manages the Company’s Equity Investments on an ongoing basis. Windspeed shares in the net receipts from the sale of the Company’s Equity Investments at a set percentage in certain designated portions of the portfolio of companies. The Windspeed February 2004 management agreement was extended on April 5, 2011 (with an effective date of February 21, 2011) until February 20, 2013 (the “Initial Extension”). The Windspeed management agreement was subsequently extended effective February 21, 2013 through February 20, 2015 and extended again effective February 12, 2015 through February 12, 2017 (the “Subsequent Extensions”). Prior to the Initial Extension, Windspeed received fixed and declining management fees. Under the terms of the Initial and Subsequent Extensions, Windspeed is not, and will not, be paid any ongoing management fees. In lieu of such management fee payment, 100% of any proceeds from certain designated companies in the portfolio will go to Windspeed. Realized gains on the sale of Equity Investments are presented on a gross basis. Any management sharing amounts with Windspeed are included in accrued professional fees. The Company has received approximately $88,762,000 in proceeds (prior to management fees and sharing) since the inception of the management agreement with Windspeed. Windspeed has received a combined $15,354,000 in management fees and sharing through December 31, 2014. | |
Marketable equity investments: | |
At December 31, 2014, the Company did not own shares in any public company. | |
However, the Company does hold a limited number of securities in trust for a deferred compensation plan which are not available for distribution under the Plan. | |
The Company’s practice is to work in conjunction with Windspeed to sell its marketable equity securities within a reasonable period of time after the expiration of the lockup period, utilizing various timing strategies which seek to maximize the return to the Company. However, in the future, there is no assurance as to whether or not the Company either will be able to liquidate such positions held for any lockup period or realize any amount on such positions. | |
Equity investments in private companies: | |
Under the going concern basis of accounting, the Company’s policy for assessing the carrying value of Equity Investments was, in consultation with Windspeed, to regularly review and estimate the fair value of such Equity Investments. The Company also identified and recorded impairment losses on Equity Investments when market and customer specific events and circumstances indicated the carrying value might be impaired. All write-downs were considered permanent impairments for financial reporting purposes. | |
As of December 31, 2014, the Company had two investments in private companies. In conjunction with applying the liquidation basis of accounting, the Company has determined the liquidation value based on estimated cash proceeds anticipated to be received for such investments, which, in the aggregate amount is estimated to be approximately $415,000. See Note 9 of these Notes to Consolidated Financial Statement (In Liquidation) for the fair value disclosure. | |
Income_Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2014 | |
Income Taxes | |
Income Taxes | 5. Income Taxes |
As of December 31, 2014, the Company files income tax returns in the U.S. federal jurisdiction and the State of Illinois. | |
As of the date of this filing, the federal tax years open to examination in the U.S. are fiscal years ended September 30, 2011 through September 30, 2013. | |
Uncertain Tax Positions: | |
The Company has no uncertain tax positions included in the Company’s consolidated statement of net assets in liquidation. | |
Other_Assets
Other Assets | 3 Months Ended |
Dec. 31, 2014 | |
Other Assets. | |
Other Assets | |
6. Other Assets | |
During the quarter ended September 30, 2014, it was announced that Ebates, Inc. (“Ebates”) would be acquired by Rakuten, Inc., a Japanese company (“Rakuten”). The Plan of Merger was signed on September 24, 2014, pending various conditions, including regulatory approval. On October 9, 2014, Rakuten completed the acquisition and on October 29, 2014, the Company received the initial distribution. The gross proceeds distributed were approximately $17,720,000 of which the Company received approximately $15,144,000 in net proceeds and Windspeed received approximately $2,576,000 in management sharing. The Company holds a $1,911,000 receivable from securities sold before management sharing as of December 31, 2014 related to the Ebates transaction. Such proceeds are held in escrow under the terms of the merger documents until January 2016. The actual amount to be distributed from the escrow may be impacted by provisions of, and claims asserted against, the escrow. | |
The Company holds legally restricted cash in the amount of $4,000,000 as of December 31, 2014 and September 30, 2013 which is an indemnification reserve set aside by the Company for any potential indemnified losses in lieu of the litigation trustee purchasing insurance coverage. | |
Assets held in trust for deferred compensation plan are assets that are held in a Rabbi Trust for the benefit of deferred employee compensation and are not available for distribution under the Plan. | |
Other assets on the consolidated statement of net assets in liquidation include estimated recoveries, estimated accrued interest income, and other projected cash inflows expected to be received before liquidation. | |
Other_Financial_Information
Other Financial Information | 3 Months Ended |
Dec. 31, 2014 | |
Other Financial Information | |
Other Financial Information | |
7. Other Financial Information | |
The liability for accrued compensation includes payroll and estimated amounts payable under the Company’s Bankruptcy court approved compensation plans. There is a separate liability representing the accrued liability for assets held in trust for deferred compensation plan that was previously included in the accrued compensation liability as of September 30, 2014. | |
The liability for accrued professional fees includes projected future costs for outside counsel for the corporate, bankruptcy, liquidation and SEC requirements, outside accounting and audit services, consulting fees, management sharing and corporate bankruptcy required work. | |
The liability for other accrued costs includes projected future costs for rent, insurance, travel, miscellaneous other corporate expenses and an accrued VAT liability for a foreign jurisdiction. | |
The liability for accrued estimated disposal costs of liquidation includes projected future costs to continue to store and dispose of the Company’s paper and electronic records. | |
Contingent Distribution Rights | |
Although the CDRs trade over-the-counter, for financial reporting purposes, the Company records CDRs as a liability under both the going concern and liquidation bases of accounting and as an operating expense under the going concern basis of accounting. | |
The Plan entitled holders of CDRs to previously share at increasing percentages in the proceeds realized from the Company’s assets based upon the present value of distributions to certain C-4 creditors in the bankruptcy estate of Comdisco, Inc. However, as of December 31, 2014, the sharing percentage is 37%, which is the maximum sharing percent. As of the date of this filing, there were 1,844 holders of record of the Company’s CDRs and there were 148,448,188 outstanding CDRs. | |
The Company maintains sufficient cash reserves for operations and any increase in the potential CDR liability relating to increases in the Company’s net assets in liquidation and any potential net distributions from the Litigation Trust to the C-4 creditors. The outcome and the timing of the actual net distributions from the Litigation Trust will impact both the timing and the amount of future liquidating dividends and CDR payments. | |
As of October 1, 2014, the Company has adopted the liquidation basis of accounting. The CDR liability is an amount that is calculated as Total Assets less Total Liabilities (excluding the CDR liability) times 37%. However, any impact of potential net distributions from the Litigation Trust on the CDR liability is not included as estimates are currently not determinable. | |
Financial_Information_by_Geogr
Financial Information by Geographic Area | 3 Months Ended |
Dec. 31, 2014 | |
Financial Information by Geographic Area | |
Financial Information by Geographic Area | |
8. Financial Information by Geographic Area | |
Since the year ended September 30, 2013, all revenues generated and assets held are in North America. | |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
9. Fair Value Measurements | |||||||||||||||||||||||
The three levels of inputs used to measure fair value are as follows: | |||||||||||||||||||||||
· | Level 1 - Quoted prices in active markets for identical assets and liabilities | ||||||||||||||||||||||
· | Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||||||||||||||||
· | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | ||||||||||||||||||||||
The Company has included a tabular disclosure for financial assets that are measured at fair value on a recurring basis in the consolidated statements of net assets in liquidation as of the period ending December 31, 2014 and in the consolidated balance sheet as of the year ending September 30, 2014. The Company currently holds no financial liabilities that are measured at fair value on a recurring basis. | |||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Fair Value | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market accounts | $ | 46,342,000 | $ | 0 | $ | 0 | $ | 46,342,000 | |||||||||||||||
Equity Investments (A) | 0 | 0 | 763,000 | 763,000 | |||||||||||||||||||
Assets held in trust for deferred compensation plan (C) | 502,000 | 0 | 0 | 502,000 | |||||||||||||||||||
Total | $ | 46,844,000 | $ | 0 | $ | 763,000 | $ | 47,607,000 | |||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Fair Value | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market accounts | $ | 31,791,000 | $ | 0 | $ | 0 | $ | 31,791,000 | |||||||||||||||
Equity Investments (B) | 0 | 19,631,000 | 748,000 | 20,379,000 | |||||||||||||||||||
Assets held in trust for deferred compensation plan (C) | 501,000 | 0 | 0 | 501,000 | |||||||||||||||||||
Total | $ | 32,292,000 | $ | 19,631,000 | $ | 748,000 | $ | 52,671,000 | |||||||||||||||
(A) | Equity investments for Level 3 are made up of stock in two privately held companies; FMV on a gross basis is $763,000 with management sharing of $114,000 and a net fair value balance of $649,000. | ||||||||||||||||||||||
(B) | Equity investments for Level 2 and 3 were made up of stock in three privately held companies; FMV on a gross basis was $20,379,000 with management sharing of $2,965,000 and a net fair value balance of $17,414,000. | ||||||||||||||||||||||
(C) | Assets held in trust for deferred compensation plan are made up of bonds, equity and money market funds that are actively traded. | ||||||||||||||||||||||
These assets are held in a Rabbi Trust for the benefit of deferred employee compensation and are not available for distribution under the Plan. | |||||||||||||||||||||||
Reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs for the period ended December 31, 2014 and the year ended September 30, 2014 is as follows: | |||||||||||||||||||||||
Fair Value | Realized | Change in | Decrease due to | Increase due to | Decrease in cost | Decrease due to | Fair Value | ||||||||||||||||
September 30, | (net of fees) | Unrealized | impairment | purchase | basis | transfer from | December | ||||||||||||||||
2014 | Estimated Value | of assets | of shares | due to sale | Level 3 to Level 1 | 31, 2014 | |||||||||||||||||
Level 3 only | $ | $ | 0 | $ 15,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ 763,000 | ||||||||||
Equity Investments | 748,000 | ||||||||||||||||||||||
Fair Value | Realized | Change in | Decrease due to | Increase due to | Decrease in cost | Decrease due to | Fair Value | ||||||||||||||||
September 30, | (net of fees) | Unrealized | impairment | purchase of | basis | transfer from | September | ||||||||||||||||
2013 | Estimated Value | of assets | shares | due to sale | Level 3 to Level 2 | 30, 2014 | |||||||||||||||||
Level 3 only | $ | $ | 0 | $ 11,504,000 | $ | 0 | $ | 0 | $ | 0 | $ (19,631,000 | ) | $ 748,000 | ||||||||||
Equity Investments | 8,875,000 | ||||||||||||||||||||||
In accordance with the provisions of ASC Topic 320, “Accounting for Certain Investments in Debt and Equity Securities,” marketable equity investments (equity investments having a readily determinable fair value) would have a carrying value and a fair value based on quoted market prices. The Company’s practice is to sell its marketable equity investments upon the expiration of the lock-up period. | |||||||||||||||||||||||
Equity Investments consist primarily of preferred stock holdings in two private companies. As of December 31, 2014, the liquidation value of Equity Investments was $415,000 and the fair market value measured using Level 3 inputs was $763,000, before management sharing. The difference in valuation amounts is due to the fact that the Company may have limited options to dispose of these investments over the projected liquidation timeline. The liquidation value amount (which is the Company’s current estimated amount of cash that could be collected on such Equity Investments) is the amount reflected in the consolidated statement of net assets in liquidation (rather than the fair value). The fair value of the Company’s Equity Investments was determined in consultation with Windspeed based on the market approach, including, but not limited to, pending offers to purchase the preferred stock holdings, quoted trading levels for publicly-traded securities in similar industries and/or markets, industry and company multiples, industry acceptance in the market place, liquidity discounts due to lock ups, estimated revenue, and customer, product and market share growth by the respective companies in the portfolio. Substantially all of these factors are outside the control of the Company and are subject to significant volatility. There can be no assurance that the Company will be able to realize the estimated fair market value. | |||||||||||||||||||||||
Cumulative_Effect_of_Accountin1
Cumulative Effect of Accounting Change/Net Assets in Liquidation (Table) | 3 Months Ended | |||
Dec. 31, 2014 | ||||
Cumulative Effect Of Accounting Change Net Assets In Liquidation | ||||
Schedule of reconciliation of Shareholder's Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting | ||||
The following is a reconciliation of Shareholder’s Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting as of October 1, 2014 (in thousands): | ||||
Shareholder’s Equity as of September 30, 2014 | $ | 25,211 | ||
Increase due to estimated net realizable value of Equity Investments | 19,349 | |||
Increase due to estimated net realizable value of other assets | 157 | |||
Increase for CDR liability | -6,101 | |||
Liability for accrued compensation | -4,086 | |||
Liability for accrued professional fees | -4,623 | |||
Liability for accrued other costs | -1,349 | |||
Income taxes payable | -232 | |||
Liability for estimated disposal costs of liquidation | -168 | |||
Adjustment to reflect the change to the liquidation basis of accounting | 2,947 | |||
Estimated value of net assets in liquidation as of October 1, 2014 | $ | 28,158 | ||
Fair_Value_Measurements_Table
Fair Value Measurements (Table) | 3 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Schedule of financial assets that are measured at fair value on a recurring basis | |||||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Fair Value | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market accounts | $ | 46,342,000 | $ | 0 | $ | 0 | $ | 46,342,000 | |||||||||||||||
Equity Investments (A) | 0 | 0 | 763,000 | 763,000 | |||||||||||||||||||
Assets held in trust for deferred compensation plan (C) | 502,000 | 0 | 0 | 502,000 | |||||||||||||||||||
Total | $ | 46,844,000 | $ | 0 | $ | 763,000 | $ | 47,607,000 | |||||||||||||||
September 30, 2014 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Fair Value | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market accounts | $ | 31,791,000 | $ | 0 | $ | 0 | $ | 31,791,000 | |||||||||||||||
Equity Investments (B) | 0 | 19,631,000 | 748,000 | 20,379,000 | |||||||||||||||||||
Assets held in trust for deferred compensation plan (C) | 501,000 | 0 | 0 | 501,000 | |||||||||||||||||||
Total | $ | 32,292,000 | $ | 19,631,000 | $ | 748,000 | $ | 52,671,000 | |||||||||||||||
(A) | Equity investments for Level 3 are made up of stock in two privately held companies; FMV on a gross basis is $763,000 with management sharing of $114,000 and a net fair value balance of $649,000. | ||||||||||||||||||||||
(B) | Equity investments for Level 2 and 3 were made up of stock in three privately held companies; FMV on a gross basis was $20,379,000 with management sharing of $2,965,000 and a net fair value balance of $17,414,000. | ||||||||||||||||||||||
(C) | Assets held in trust for deferred compensation plan are made up of bonds, equity and money market funds that are actively traded. | ||||||||||||||||||||||
These assets are held in a Rabbi Trust for the benefit of deferred employee compensation and are not available for distribution under the Plan. | |||||||||||||||||||||||
Schedule of reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs | |||||||||||||||||||||||
Fair Value | Realized | Change in | Decrease due to | Increase due to | Decrease in cost | Decrease due to | Fair Value | ||||||||||||||||
September 30, | (net of fees) | Unrealized | impairment | purchase | basis | transfer from | December | ||||||||||||||||
2014 | Estimated Value | of assets | of shares | due to sale | Level 3 to Level 1 | 31, 2014 | |||||||||||||||||
Level 3 only | $ | $ | 0 | $ 15,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ 763,000 | ||||||||||
Equity Investments | 748,000 | ||||||||||||||||||||||
Fair Value | Realized | Change in | Decrease due to | Increase due to | Decrease in cost | Decrease due to | Fair Value | ||||||||||||||||
September 30, | (net of fees) | Unrealized | impairment | purchase of | basis | transfer from | September | ||||||||||||||||
2013 | Estimated Value | of assets | shares | due to sale | Level 3 to Level 2 | 30, 2014 | |||||||||||||||||
Level 3 only | $ | $ | 0 | $ 11,504,000 | $ | 0 | $ | 0 | $ | 0 | $ (19,631,000 | ) | $ 748,000 | ||||||||||
Equity Investments | 8,875,000 | ||||||||||||||||||||||
Reorganization_Details
Reorganization (Details) | 1 Months Ended | 3 Months Ended | 24 Months Ended | 111 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Feb. 28, 2005 | Feb. 28, 1998 | Dec. 31, 2014 | Dec. 31, 2005 | Dec. 31, 2014 | Jul. 16, 2001 |
item | item | item | item | item | item | |
Reorganization | ||||||
Number of participants who took out full recourse, personal loans to purchase shares of the entity's common stock | 106 | |||||
Number of SIP Participants for which the Litigation Trust is solely responsible for collection of amounts due on the promissory notes | 69 | |||||
Number of SIP Participants against whom summary judgments were not entered by a federal district court judge | 1 | |||||
Number of SIP notes transferred to the Litigation Trust | 69 | |||||
Number of SIP Participants who have settled or otherwise resolved their obligation | 41 | |||||
Number of SIP Participants who filed personal bankruptcy | 12 | |||||
Number of cases remain outstanding | 16 | |||||
Number of cases remain outstanding in federal court | 5 | |||||
Number of cases remain outstanding in state court | 11 | |||||
Predecessor | ||||||
Reorganization | ||||||
Number of domestic subsidiaries filed voluntary petitions for relief under Chapter 11 | 50 | |||||
Number of shares of Comdisco, Inc.'s common stock purchased by the SIP Participants | 6 |
Cumulative_Effect_of_Accountin2
Cumulative Effect of Accounting Change/Net Assets in Liquidation (Details) (USD $) | 0 Months Ended | 3 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 01, 2014 | Dec. 31, 2014 | Oct. 01, 2014 | Sep. 30, 2014 |
Reconciliation of Shareholder's Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting | ||||
Shareholder's Equity | $25,211 | |||
Liquidation Basis of Accounting | ||||
Reconciliation of Shareholder's Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting | ||||
Increase due to estimated net realizable value of Equity Investments | 19,349 | |||
Increase due to estimated net realizable value of other assets | 157 | |||
Increase for CDR liability | -6,101 | |||
Liability for accrued compensation | -4,086 | -4,086 | ||
Liability for accrued professional fees | -4,623 | -4,623 | ||
Liability for accrued other costs | -1,349 | -1,349 | ||
Income taxes payable | -232 | -232 | ||
Liability for estimated disposal costs of liquidation | -168 | -168 | ||
Adjustment to reflect the change to the liquidation basis of accounting | 2,947 | 2,947 | ||
Estimated value of net assets in liquidation | 28,158 | 27,984 | 28,158 | 28,158 |
Decrease in net assets in liquidation | ($174) | |||
Liquidating Distribution Per Common Share | $6.95 |
Equity_Investments_Detail
Equity Investments (Detail) (USD $) | 3 Months Ended | 0 Months Ended | 131 Months Ended | |
Dec. 31, 2014 | Feb. 21, 2011 | Dec. 31, 2014 | Sep. 30, 2014 | |
item | ||||
Equity Investments | ||||
Equity Investments in Number of Privately Held Companies | 2 | |||
Equity Method Investments | $697,000 | |||
Liquidation Basis of Accounting | ||||
Equity Investments | ||||
Equity Method Investments | 415,000 | 415,000 | ||
Windspeed | Management agreement With Windspeed | ||||
Equity Investments | ||||
Percentage of proceeds from certain companies in the portfolio that will go to Windspeed | 100.00% | |||
Proceeds from sale of equity investments prior to management fees and sharing | 88,762,000 | |||
Payment for Management Fee and Sharing | $15,354,000 |
Income_Taxes_Detail
Income Taxes (Detail) (USD $) | Dec. 31, 2014 |
Income Taxes | |
Net uncertain tax positions | $0 |
Other_Assets_Detail
Other Assets (Detail) (USD $) | 3 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | Oct. 29, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | |
Receivable from Securities sold | ||||
Proceeds (after sharing) on the sale of marketable equity securities | $2,000 | |||
Cash - legally restricted | 4,000,000 | 4,000,000 | ||
Ebates | ||||
Receivable from Securities sold | ||||
Fair market value of equity investments held in receivables from securities sold | 1,911,000 | |||
Proceeds from sale of equity investments prior to management sharing | 17,720,000 | |||
Proceeds (after sharing) on the sale of marketable equity securities | 15,144,000 | |||
Ebates | Windspeed | Management agreement With Windspeed | ||||
Receivable from Securities sold | ||||
Amount paid for management sharing | $2,576,000 |
Other_Financial_Information_De
Other Financial Information (Detail) | Dec. 31, 2014 |
item | |
Other Financial Information | |
Maximum sharing percentage of CDR holders | 37.00% |
Number of CDR holders | 1,844 |
Contingent distribution rights outstanding | 148,448,188 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Sep. 30, 2014 | |
item | item | |
Fair Value Measurements | ||
Number of privately held companies in which the entity has made equity investments | 2 | |
Equity Investments | ||
Fair Value Measurements | ||
Number of privately held companies in which the entity has made equity investments | 3 | |
Level 3 | Equity Investments | ||
Fair Value Measurements | ||
Number of privately held companies in which the entity has made equity investments | 2 | |
Fair Value, Measurements, Recurring | ||
Fair Value Measurements | ||
Liabilities Fair Value | 0 | |
Assets Fair Value | 47,607,000 | 52,671,000 |
Fair Value, Measurements, Recurring | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 46,342,000 | 31,791,000 |
Fair Value, Measurements, Recurring | Equity Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 763,000 | 20,379,000 |
Fair value of equity investments on a gross basis | 763,000 | 20,379,000 |
Fair value of management sharing | 114,000 | 2,965,000 |
Net fair value balance of equity investments | 649,000 | 17,414,000 |
Fair Value, Measurements, Recurring | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 502,000 | 501,000 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value Measurements | ||
Assets Fair Value | 46,844,000 | 32,292,000 |
Fair Value, Measurements, Recurring | Level 1 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 46,342,000 | 31,791,000 |
Fair Value, Measurements, Recurring | Level 1 | Equity Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 502,000 | 501,000 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 19,631,000 |
Fair Value, Measurements, Recurring | Level 2 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Equity Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 19,631,000 |
Fair Value, Measurements, Recurring | Level 2 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value Measurements | ||
Assets Fair Value | 763,000 | 748,000 |
Fair Value, Measurements, Recurring | Level 3 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Equity Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 763,000 | 748,000 |
Fair Value, Measurements, Recurring | Level 3 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | 0 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Detail 2) (USD $) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Sep. 30, 2014 | |
item | ||
Reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs | ||
Number of privately held companies in which the entity has made equity investments | 2 | |
Equity investments in private companies | $697,000 | |
Equity Investments | ||
Reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs | ||
Fair value at the beginning of the period | 748,000 | 8,875,000 |
Realized (net of fees) | 0 | 0 |
Change in Unrealized Estimated Value | 15,000 | 11,504,000 |
Decrease due to impairment of assets | 0 | 0 |
Increase due to purchase of shares | 0 | 0 |
Decrease in cost basis due to sale | 0 | 0 |
Decrease due to transfer from Level 3 to Level 1 or 2 | 0 | -19,631,000 |
Fair value at the end of the period | 763,000 | 748,000 |
Number of privately held companies in which the entity has made equity investments | 3 | |
Equity Investments | Investment concentration risk | ||
Reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs | ||
Number of privately held companies in which the entity has made equity investments | 2 | |
Equity Investments | Investment concentration risk | Two individual companies | ||
Reconciliation of financial assets measured at fair value on a recurring basis using Level 3 inputs | ||
Equity investments in private companies | 415,000 | |
Fair value of equity investments on a gross basis | $763,000 |