United States securities and exchange commission logo
October 23, 2020
Tilman J. Fertitta
Chief Executive Officer
Landcadia Holdings II, Inc.
1510 West Loop South
Houston, TX 77027
Re: Landcadia Holdings
II, Inc.
Amendment No. 2 to
Preliminary Merger Proxy Statement on Schedule 14A
Filed October 13,
2020
File No. 001-38893
Dear Mr. Fertitta:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
October 2, 2020 letter.
Amendment No. 2 to Preliminary Merger Proxy Statement Filed October 13,
2020
Summary Term Sheet, page 10
1. We note the revisions
made throughout the filing in response to prior comment 1 to
indicate that the
reduction of principal on the Intercompany Note will occur at Closing
through a non-cash
distribution of capital to LF LLC. In your Summary Term Sheet
disclosure, please
address this capital distribution to LF LLC, as well as the expected non-
cash capital
distribution to LF LLC in consideration for the expected forgiveness of the
remaining principal
amounts outstanding on the Intercompany Note. In addition, please
ensure that disclosures
throughout your filing clearly indicate that the reduction of the
remaining principal
amounts outstanding under the Intercompany Note to occur
automatically with
further reductions of the principal amount outstanding under the Credit
Agreement will be
forgiven through a non-cash capital distribution to LF LLC, as noted
Tilman J. Fertitta
Landcadia Holdings II, Inc.
October 23, 2020
Page 2
from your response to prior comment 8.
Summary of this Proxy Statement
Sources and Uses for the Transaction, page 48
2. We note your revised disclosures in response to prior comment 4. As
previously
requested, please explain to us how these tables provide a complete
depiction of the
sources and uses for funding the transaction. In this regard, tell us
how your disclosure
clearly addresses the use of the Company s cash to fund GNOG s
prior capital
distribution, considering that the proceeds from the term loan were
used for a capital
distribution to LF LLC, as noted from your response to prior comment
8, and the
Company s cash is to be used as a source to repay this term loan. In
addition, please
clarify the redemption rights associated with the GNOG Rollover Equity
to also explain
the cash redemption option at the election of New GNOG.
Notes to Unaudited Pro Forma Combined Condensed Financial Information
Note 3. Adjustment to Unaudited Pro Forma Condensed Combined Financial
Information
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet, page 114
3. In response to prior comment 6, we note that the Landcadia HoldCo LLC
Agreement
specifically provides that the Company s audit committee or another
body of independent
directors of the Company will control the decision to settle the
redemption in either shares
or cash. In concluding that the settlement in cash or shares is at the
election of the
Company, please tell us what consideration was given to Landcadia
HoldCo s governance
structure. In this regard, tell us how the audit committee will be
appointed and who has
control over the members of the Board of Directors.
4. In response to prior comment 8, you indicate that the additional
issuances of units and
shares will be settled in cash. Please tell us how this form of
settlement is clear from
disclosures throughout your filing that indicate that the additional
shares and units will be
issued in consideration of payments to be made by LF LLC to GNOG LLC
under the
Intercompany Note. In addition, please clarify what payments will be
made by LF LLC,
considering your response that the Intercompany Note receivable will
be reduced through
a non-cash capital distribution. Finally, explain the accounting for
the reduction in the
receivable upon the payments to be made by LF LLC to GNOG LLC under
the
Intercompany Note in consideration for the additional issuances.
5. In response to prior comment 8, you indicate that the voting rights of
all shares held by
Mr. Fertitta and his affiliates will be capped at 79.9%. Please address
how the voting
FirstName LastNameTilman J. Fertitta
rights will be capped. For example, tell us if the units and shares
providing for voting
Comapany
rightsNameLandcadia Holdings
in excess of 79.9% II,redeemed/cancelled,
will be Inc. and, if so, if
such units and shares
Octoberare
23,expected to be
2020 Page 2 settled in cash.
FirstName LastName
Tilman J. Fertitta
FirstName LastNameTilman
Landcadia Holdings II, Inc. J. Fertitta
Comapany
October 23,NameLandcadia
2020 Holdings II, Inc.
October
Page 3 23, 2020 Page 3
FirstName LastName
Proposal No. 1 The Transaction Proposal
The Purchase Agreement
Structure; Consideration to be Paid in the Transaction, page 129
6. We note from your response to prior comment 9 that Landcadia Holdco
should be
evaluated as a corporation rather than a partnership because New GNOG
s status as
managing member of Landcadia Holdco is through a contractual right
rather than
Landcadia Holdco s equity at risk. Please tell us how you considered
ASC 810-10-15-
14(b)(1)(i) in determining that Landcadia Holdco does not have the
characteristics of a
VIE when New GNOG s decision-making authority is not through the
equity at risk.
7. We note from your response to prior comment 9 that you do not believe
that substantially
all the activities of Landcadia Holdco are conducted on behalf of the
related party group.
We believe the intent of this provision is to move the consolidation
analysis from the
voting interests model to the variable interests model in those
instances where it is clear
that the voting arrangements have been skewed such that the investor
with
disproportionately few voting rights, as compared to its economic
interest, derives
substantially all of the benefits of the activities of the entity. We
do not believe there is
bright-line set of criteria in making this assessment and should
consider all quantitative
and qualitative facts and circumstances. Please explain your
consideration of the fact that
the related party group holds 100% of the economic interests of
Landcadia Holdco. In
addition, if the activities of Landcadia Holdco are not conducted on
behalf of the related
party group, tell us on whose behalf are they conducted.
GNOG Management s Discussion and Analysis of Financial Condition and Results
of
Operations
Contractual Obligations, page 241
8. We note the revised disclosure in response to prior comment 11 of the
amounts you have
committed to pay over the next five years. Please also include changes
in GNOG s
contractual obligations during the interim period related to payments
due in more than five
years. In addition, please address GNOG s long-term debt obligations
in the disclosure.
Refer to Instruction 7 to Item 303(b) and Item 303(a)(5) of Regulation
S-K.
Golden Nugget Online Gaming, Inc.
Notes to the Unaudited Condensed Financial Statements
Note 9. Subsequent Events, page F-45
9. We note your revised disclosure in response to prior comment 12.
Please update the
disclosure based on the opening conference that was held on September
22, 2020. In
addition, please explain how you will be responsible for any findings
from the audit of
FEI s tax returns following the consummation of the merger
transaction.
Tilman J. Fertitta
FirstName LastNameTilman
Landcadia Holdings II, Inc. J. Fertitta
Comapany
October 23,NameLandcadia
2020 Holdings II, Inc.
October
Page 4 23, 2020 Page 4
FirstName LastName
General
10. Please revise to include the A&R Online Gaming Operations Agreement
and the Second
A&R Intercompany Note with the proxy statement.
You may contact Melissa Walsh, Staff Accountant, at (202) 551-3224 or
Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Derby, Staff
Attorney, at (202) 551-3334 or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Joel Rubinstein, Esq.