Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | COMDISCO HOLDING CO INC | |
Entity Central Index Key | 1,179,484 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,028,951 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Statement of Net A
Consolidated Statement of Net Assets in Liquidation (Liquidation Basis) (Unaudited) - USD ($) | Jun. 30, 2015 |
Liquidation Basis | |
ASSETS | |
Cash and cash equivalents | $ 30,671,000 |
Cash - legally restricted | 4,000,000 |
Receivable from securities sold | 1,911,000 |
Assets held in trust for deferred compensation plan | 505,000 |
Other assets | 84,000 |
TOTAL ASSETS | 37,171,000 |
LIABILITIES | |
Contingent distribution rights liability | 10,779,000 |
Accrued compensation | 4,326,000 |
Accrued professional fees | 1,613,000 |
Other accrued costs | 956,000 |
Accrued liability for deferred compensation plan | 505,000 |
Accrued estimated disposal costs of liquidation | 588,000 |
Income taxes payable | 50,000 |
TOTAL LIABILITIES | 18,817,000 |
NET ASSETS IN LIQUIDATION | $ 18,354,000 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) (Unaudited) - Jun. 30, 2015 - Liquidation Basis - USD ($) $ in Thousands | Total | Total |
Net assets in liquidation, beginning of period | $ 18,320 | $ 28,158 |
Changes in net assets in liquidation | ||
Change in other assets | 37 | (29) |
Change in Contingent Distribution Rights Liability | (19) | 209 |
Change in accrued liabilities | 20 | (154) |
Change in accrued estimated disposal costs of liquidation | 0 | (420) |
Change in equity investments | (4) | 40 |
Liquidating distribution to Common Stockholders | 0 | (9,450) |
Net (decrease) in net assets in liquidation | 34 | (9,804) |
Net assets in liquidation, end of period | $ 18,354 | $ 18,354 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Liquidation Basis) (Unaudited) - USD ($) | 9 Months Ended |
Jun. 30, 2015 | |
Cash flows from financing: | |
Cash and cash equivalents at beginning of period | $ 31,992,000 |
Liquidation Basis | |
Cash flows from operating activities: | |
Equity investment proceeds net of sharing | 15,532,000 |
Bad debt recoveries, interest and other revenue | 261,000 |
Selling, general and administrative expenses | (1,875,000) |
Contingent Distribution Rights payments | (5,550,000) |
Income tax payments | (251,000) |
Net cash provided by operating activities | 8,117,000 |
Cash flows from financing: | |
Dividends paid on Common Stock | (9,450,000) |
Receipt of uncashed dividends | 12,000 |
Net cash used in financing | (9,438,000) |
Net increase (decrease) in cash and cash equivalents | (1,321,000) |
Cash and cash equivalents at beginning of period | 31,992,000 |
Cash and cash equivalents at end of period | $ 30,671,000 |
Consolidated Balance Sheet (Goi
Consolidated Balance Sheet (Going Concern Basis) (Audited) - USD ($) $ in Thousands | Sep. 30, 2014 |
ASSETS | |
Cash and cash equivalents | $ 31,992 |
Cash - legally restricted | 4,000 |
Equity investments | 697 |
Assets held in trust for deferred compensation plan | 501 |
Other assets | 248 |
TOTAL ASSETS | 37,438 |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
Accounts payable | 103 |
Income taxes payable | 90 |
Other liabilities: | |
Accrued compensation | 1,429 |
Contingent distribution rights liability | 10,437 |
Other liabilities | 168 |
Total other liabilities | 12,034 |
TOTAL LIABILITIES | 12,227 |
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 |
Additional paid-in capital | 28,414 |
Accumulated other comprehensive (loss) | (3) |
Accumulated deficit | (3,270) |
Total stockholders' equity | 25,211 |
Total liabilities and stockholders' equity | $ 37,438 |
Consolidated Balance Sheet Cons
Consolidated Balance Sheet Consolidated Balance Sheet (Going Concern Basis) (Audited) (Parenthetical) - Sep. 30, 2014 - $ / shares | Total |
Consolidated Balance Sheet (Going Concern Basis) (Audited) | |
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 Compr
Consolidated Statement of Comprehensive Income (Going Concern Basis) (Unaudited) - Jun. 30, 2014 - USD ($) $ in Thousands | Total | Total |
Revenue | ||
Gain on sale of equity investments | $ 0 | $ 1,590 |
Miscellaneous income | 0 | 100 |
Interest income | 11 | 54 |
Total revenue | 11 | 1,744 |
Costs and expenses | ||
Selling, general and administrative | 575 | 1,925 |
Contingent Distribution Rights | (827) | (141) |
Foreign exchange loss | 0 | 312 |
Bad debt recoveries | (421) | (463) |
Total costs and expenses | (673) | 1,633 |
Net earnings before income taxes | 684 | 111 |
Income tax expense (benefit) | 51 | (552) |
Net earnings | 633 | 663 |
Unrealized gains on securities: | ||
Unrealized holding gains arising during the period | 2 | 1,587 |
Reclassification adjustment for gains included in earnings | 0 | (1,588) |
Other comprehensive income (loss) | 2 | (1) |
Comprehensive income | $ 635 | $ 662 |
Basic and diluted net earnings per common share (in dollars per share) | $ 0.16 | $ 0.16 |
Consolidated Statement of Cash8
Consolidated Statement of Cash Flows (Going Concern Basis) (Unaudited) - USD ($) $ in Thousands | 9 Months Ended |
Jun. 30, 2014 | |
Cash flows from operating activities: | |
Equity investment proceeds net of sharing | $ 1,590 |
Bad debt recoveries, interest and other revenue | 613 |
Selling, general and administrative expenses | (1,695) |
Income tax payments | (354) |
Income tax receipts | 733 |
Net cash provided by operating activities | 887 |
Cash flows from investing activities: | |
Redemption of short -term investment | 4,003 |
Net cash provided by investing activities | 4,003 |
Effect of exchange rates on cash and cash equivalents | (35) |
Net increase (decrease) in cash and cash equivalents | 4,855 |
Cash and cash equivalents at beginning of period | 27,671 |
Cash and cash equivalents at end of period | $ 32,526 |
Consolidated Statement of Cash9
Consolidated Statement of Cash Flows (Going Concern Basis) (Unaudited) - Jun. 30, 2014 - USD ($) $ in Thousands | Total |
Reconciliation of net earnings to net cash provided by operating activities: | |
Net earnings | $ 663 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |
Taxes payable and other tax balances | 89 |
Change in Canadian income tax receivables/payables | (262) |
Contingent Distribution Rights | (141) |
Receivables | 10 |
Selling, general and administrative expenses | 230 |
Other, including foreign exchange | 298 |
Net cash provided by operating activities | $ 887 |
Reorganization
Reorganization | 9 Months Ended |
Jun. 30, 2015 | |
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 entered judgment in favor of the Federal SIP Defendants. The basis of the judge’s ruling was his finding that both the bank and the Company committed an arranging violation under the applicable margin lending regulations. Therefore, 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 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 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 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. On November 6, 2014, the court scheduled a settlement conference for December 9, 2014. As of the date of this filing, the settlement conference is still ongoing. On December 10, 2014, the court suspended the briefing schedule for all of the appeals filed. Subsequently, on July 10, 2015, the court issued a briefing schedule starting August 17, 2015 and ending October 28, 2015. 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. The pending fraudulent conveyance actions filed by the litigation trustee against certain State SIP Defendants were continued to November 3, 2015 for a status hearing. On July 26, 2013, Nisen and Elliott, 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 June 30, 2015, 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 Recen
Basis of Presentation and Recently Issued Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2015 | |
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 June 30, 2014, 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 that affect the amounts reported in the consolidated financial statements and the related notes. To the extent there are any changes in the Company’s October 1, 2014 initial estimates, there will be changes reflected in the Statement of Changes in Net Assets in Liquidation. As cash is received or paid, consistent with the Company’s initial estimates, there will be no change to the Net Assets in Liquidation which is the amount expected to be available for eventual distribution to the common stockholders. However, any cash distribution to the common stockholders during a fiscal quarter would be shown as a change in Net Assets in Liquidation during such fiscal quarter. 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 Accounting
Cumulative Effect of Accounting Change/Net Assets in Liquidation | 9 Months Ended |
Jun. 30, 2015 | |
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 Stockholder’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): Stockholder’s Equity as of September 30, 2014 $ Increase due to estimated net realizable value of equity investments Increase due to estimated net realizable value of other assets Increase for CDR liability Liability for accrued compensation Liability for accrued professional fees Liability for accrued other costs Income taxes payable Liability for estimated disposal costs of liquidation Adjustment to reflect the change to the liquidation basis of accounting Estimated value of net assets in liquidation as of October 1, 2014 $ In applying liquidation basis of accounting, the Company recognized a net increase of $2,947,000 in its estimated value of net assets in liquidation. The net assets in liquidation as of June 30, 2015 have been reduced to $18,354,000 primarily due to a liquidating distribution during the nine months ended June 30, 2015. Therefore, the future liquidating distribution would be approximately $4.56 per common share. This estimate of the liquidating distribution 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 | 9 Months Ended |
Jun. 30, 2015 | |
Equity Investments. | |
Equity Investments | 4. Equity Investments The Company’s estimate of the fair value of its private company 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 $89,239,000 in proceeds (prior to management fees and sharing) since the inception of the management agreement with Windspeed. Windspeed has received a combined $15,444,000 in management fees and sharing through June 30, 2015. Marketable equity investments: During April 2015, t he Company discovered that it had received 1,499 shares in NxStage Medical, Inc., a publicly traded company. The shares were received in 1999 as part of a product spinoff from a former customer who subsequently went out of business. During the quarter ended June 30, 2015, these shares were sold for approximately $22,600 before Windspeed management sharing of approximately $3,400. As of June 30, 2015, the Company does not own any shares in publicly traded companies. In addition, the Company holds 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 private company investments was, in consultation with Windspeed, to regularly review and estimate the fair value of such 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 June 30, 2015, the Company had no investments in private companies. The Company sold its last two preferred stock holdings in private companies during the nine months ended June 30, 2015 for $433,000 and received net proceeds of $368,000 after Windspeed management sharing of $65,000. See Note 9 of these Notes to Consolidated Financial Statement (In Liquidation) for the fair value disclosure. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2015 | |
Income Taxes | |
Income Taxes | 5. Income Taxes As of June 30, 2015, the Company files a U.S. Federal income tax return and a State of Illinois income tax return. As of the date of this filing, the federal tax years open to examination in the U.S. are fiscal years ended September 30, 2012 through September 30, 2014. 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 | 9 Months Ended |
Jun. 30, 2015 | |
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 Windspeed management sharing as of June 30, 2015 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 June 30, 2015 and September 30, 2014 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 such assets as estimated recoveries and estimated accrued interest income expected to be received before liquidation. |
Other Financial Information
Other Financial Information | 9 Months Ended |
Jun. 30, 2015 | |
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 the 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, Windspeed 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 June 30, 2015, the sharing percentage is 37%, which is the maximum sharing percent. As of the date of this filing, there were 1,840 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 because estimates are currently not determinable. The Company made a CDR payment of approximately $5,550,000 during the nine months ended June 30, 2015. |
Financial Information by Geogra
Financial Information by Geographic Area | 9 Months Ended |
Jun. 30, 2015 | |
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 | 9 Months Ended |
Jun. 30, 2015 | |
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 June 30, 2015 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. June 30, 2015 Level 1 Level 2 Level 3 Total Fair Value Assets Money market accounts $ $ $ $ Equity Investments (A) Assets held in trust for deferred compensation plan (C) Total $ $ $ $ September 30, 2014 Level 1 Level 2 Level 3 Total Fair Value Assets Money market accounts $ $ $ $ Equity Investments (B) Assets held in trust for deferred compensation plan (C) Total $ $ $ $ (A) As of June 30, 2015, all equity investments have been sold. (B) As of September 30, 2014, 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 Windspeed 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 June 30, 2015 and the year ended September 30, 2014 is as follows: Change in Decrease due Decrease in Decrease due Fair Value Unrealized to Increase due to cost to Fair Value September 30, Realized Estimated impairment purchase basis transfer from June 2014 Value of assets of shares due to sale Level 3 to 30, 2015 Level 1 Level 3 only Equity Investments $ $ (433,000 ) $ (315,000 ) $ $ $ $ $ 0 Change in Decrease due Decrease in Decrease due Fair Value Unrealized to Increase due to cost to Fair Value September 30, Realized Estimated impairment purchase of basis transfer from September 2013 Value of assets shares due to sale Level 3 to 30, 2014 Level 2 Level 3 only Equity Investments $ $ 0 $ 11,504,000 $ $ $ $ (19,631,000 ) $ 748,000 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. The Company does not own any preferred stock holdings in private companies. Previously, the fair value of the Company’s private company 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 were outside the control of the Company and were subject to significant volatility. |
Cumulative Effect of Accounti19
Cumulative Effect of Accounting Change/Net Assets in Liquidation (Table) | 9 Months Ended |
Jun. 30, 2015 | |
Cumulative Effect of Accounting Change/Net Assets in Liquidation | |
Schedule of reconciliation of Stockholder'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 Stockholder’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): Stockholder’s Equity as of September 30, 2014 $ Increase due to estimated net realizable value of equity investments Increase due to estimated net realizable value of other assets Increase for CDR liability Liability for accrued compensation Liability for accrued professional fees Liability for accrued other costs Income taxes payable Liability for estimated disposal costs of liquidation Adjustment to reflect the change to the liquidation basis of accounting Estimated value of net assets in liquidation as of October 1, 2014 $ |
Fair Value Measurements (Table)
Fair Value Measurements (Table) | 9 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements | |
Schedule of financial assets that are measured at fair value on a recurring basis | June 30, 2015 Level 1 Level 2 Level 3 Total Fair Value Assets Money market accounts $ $ $ $ Equity Investments (A) Assets held in trust for deferred compensation plan (C) Total $ $ $ $ September 30, 2014 Level 1 Level 2 Level 3 Total Fair Value Assets Money market accounts $ $ $ $ Equity Investments (B) Assets held in trust for deferred compensation plan (C) Total $ $ $ $ (A) As of June 30, 2015, all equity investments have been sold. (B) As of September 30, 2014, 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 Windspeed 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 | Change in Decrease due Decrease in Decrease due Fair Value Unrealized to Increase due to cost to Fair Value September 30, Realized Estimated impairment purchase basis transfer from June 2014 Value of assets of shares due to sale Level 3 to 30, 2015 Level 1 Level 3 only Equity Investments $ $ (433,000 ) $ (315,000 ) $ $ $ $ $ 0 Change in Decrease due Decrease in Decrease due Fair Value Unrealized to Increase due to cost to Fair Value September 30, Realized Estimated impairment purchase of basis transfer from September 2013 Value of assets shares due to sale Level 3 to 30, 2014 Level 2 Level 3 only Equity Investments $ $ 0 $ 11,504,000 $ $ $ $ (19,631,000 ) $ 748,000 |
Reorganization (Details)
Reorganization (Details) shares in Millions | Feb. 04, 2005item | Jul. 16, 2001item | Feb. 28, 1998itemshares | Sep. 30, 2005item | Jun. 30, 2015item |
Reorganization | |||||
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 participants who took out full recourse, personal loans to purchase shares of the entity's common stock | 106 | ||||
Number of shares of Comdisco, Inc.'s common stock purchased by the SIP Participants | shares | 6 | ||||
Number of SIP Participants for which the Litigation Trust is solely responsible for collection of amounts due on the promissory notes | 69 |
Cumulative Effect of Accounti22
Cumulative Effect of Accounting Change/Net Assets in Liquidation (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 |
Reconciliation of Stockholder's Equity under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting | ||||
Stockholder's Equity | $ 25,211 | |||
Liquidation Basis | ||||
Reconciliation of Stockholder'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) | |||
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 | $ 28,158 | $ 18,354 | $ 18,320 | $ 28,158 |
Liquidating Distribution Per Common Share | $ 4.56 |
Equity Investments (Detail)
Equity Investments (Detail) | Feb. 21, 2011 | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($)item | Jun. 30, 2014USD ($) | Dec. 31, 1999shares | Jun. 30, 2015USD ($) |
Equity Investments | ||||||
Equity Investments in Number of Privately Held Companies | item | 0 | |||||
Proceeds (after sharing) on the sale of marketable equity securities | $ 1,590,000 | |||||
Liquidation Basis | ||||||
Equity Investments | ||||||
Proceeds (after sharing) on the sale of marketable equity securities | $ 15,532,000 | |||||
NX Stage Medical Inc | ||||||
Equity Investments | ||||||
Shares received from former customer as a result of product spin off | shares | 1,499 | |||||
NX Stage Medical Inc | Liquidation Basis | ||||||
Equity Investments | ||||||
Proceeds from sale of equity investments prior to management sharing | $ 22,600 | |||||
Amount paid for management sharing | $ 3,400 | |||||
Last two preferred stock holdings in private companies | ||||||
Equity Investments | ||||||
Number of preferred stock holdings sold in privately held companies | item | 2 | |||||
Last two preferred stock holdings in private companies | Liquidation Basis | ||||||
Equity Investments | ||||||
Proceeds from sale of equity investments prior to management sharing | $ 433,000 | |||||
Proceeds (after sharing) on the sale of marketable equity securities | 368,000 | |||||
Amount paid for management sharing | $ 65,000 | |||||
Windspeed | Management agreement With Windspeed | ||||||
Equity Investments | ||||||
Percentage of proceeds from certain companies in the portfolio that will go to Windspeed | 100.00% | |||||
Windspeed | Management agreement With Windspeed | Liquidation Basis | ||||||
Equity Investments | ||||||
Proceeds from sale of equity investments prior to management fees and sharing | $ 89,239,000 | |||||
Amount paid to for management fees and sharing | $ 15,444,000 |
Income Taxes (Detail)
Income Taxes (Detail) | Jun. 30, 2015USD ($) |
Liquidation Basis | |
Income Taxes | |
Net uncertain tax positions | $ 0 |
Other Assets (Detail)
Other Assets (Detail) - USD ($) | Oct. 29, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 |
Receivable from Securities sold | ||||
Proceeds (after sharing) on the sale of marketable equity securities | $ 1,590,000 | |||
Cash - legally restricted | $ 4,000,000 | |||
Liquidation Basis | ||||
Receivable from Securities sold | ||||
Fair market value of equity investments held in receivables from securities sold | $ 1,911,000 | |||
Proceeds (after sharing) on the sale of marketable equity securities | 15,532,000 | |||
Cash - legally restricted | 4,000,000 | $ 4,000,000 | ||
Liquidation Basis | 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 | |||
Liquidation Basis | 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) - Jun. 30, 2015 | USD ($)itemshares |
Maximum sharing percentage of CDR holders | 37.00% |
Number of CDR holders | 1,840 |
Contingent distribution rights outstanding | shares | 148,448,188 |
Liquidation Basis | |
CDR payment | $ | $ 5,550,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($)item | Sep. 30, 2014USD ($)item | |
Fair Value Measurements | ||
Number of privately held companies in which the entity has made equity investments | item | 0 | |
Equity-Investments | ||
Fair Value Measurements | ||
Number of privately held companies in which the entity has made equity investments | item | 3 | |
Fair Value, Measurements, Recurring | ||
Fair Value Measurements | ||
Assets Fair Value | $ 52,671,000 | |
Fair Value, Measurements, Recurring | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 31,791,000 | |
Fair Value, Measurements, Recurring | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 20,379,000 | |
Fair value of equity investments on a gross basis | 20,379,000 | |
Fair value of management sharing | 2,965,000 | |
Net fair value balance of equity investments | 17,414,000 | |
Fair Value, Measurements, Recurring | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 501,000 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value Measurements | ||
Assets Fair Value | 32,292,000 | |
Fair Value, Measurements, Recurring | Level 1 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 31,791,000 | |
Fair Value, Measurements, Recurring | Level 1 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 501,000 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value Measurements | ||
Assets Fair Value | 19,631,000 | |
Fair Value, Measurements, Recurring | Level 2 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 19,631,000 | |
Fair Value, Measurements, Recurring | Level 2 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value Measurements | ||
Assets Fair Value | 748,000 | |
Fair Value, Measurements, Recurring | Level 3 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 748,000 | |
Fair Value, Measurements, Recurring | Level 3 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | $ 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | ||
Fair Value Measurements | ||
Liabilities Fair Value | $ 0 | |
Assets Fair Value | 31,051,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 30,546,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 505,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 1 | ||
Fair Value Measurements | ||
Assets Fair Value | 31,051,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 1 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 30,546,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 1 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 1 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 505,000 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 2 | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 2 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 2 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 2 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 3 | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 3 | Money market accounts | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 3 | Equity-Investments | ||
Fair Value Measurements | ||
Assets Fair Value | 0 | |
Fair Value, Measurements, Recurring | Liquidation Basis | Level 3 | Assets held in trust for deferred compensation plan | ||
Fair Value Measurements | ||
Assets Fair Value | $ 0 |
Fair Value Measurements (Deta28
Fair Value Measurements (Detail 2) - Equity-Investments - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Sep. 30, 2014 | |
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 | 0 | |
Change in Unrealized Estimated Value | 11,504,000 | |
Decrease due to impairment of assets | 0 | |
Increase due to purchase of shares | 0 | |
Decrease in cost basis due to sale | 0 | |
Decrease due to transfer from Level 3 to Level 1 or 2 | (19,631,000) | |
Fair value at the end of the period | 748,000 | |
Liquidation Basis | ||
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 | |
Realized | (433,000) | |
Change in Unrealized Estimated Value | (315,000) | |
Decrease due to impairment of assets | 0 | |
Increase due to purchase of shares | 0 | |
Decrease in cost basis due to sale | 0 | |
Decrease due to transfer from Level 3 to Level 1 or 2 | 0 | |
Fair value at the end of the period | $ 0 | $ 748,000 |