United States securities and exchange commission logo
December 16, 2020
Thomas Sipp
Chief Financial Officer
Sculptor Capital Management, Inc.
9 West 57th Street
New York, New York 10019
Re: Sculptor Capital
Management, Inc.
Form 10-K/A for the
Fiscal Year Ended December 31, 2019
Filed February 25,
2020
File No. 001-33805
Dear Mr. Sipp:
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.
Form 10-K/A for the Fiscal Year Ended December 31, 2019
Notes to Consolidated Financial Statements
3. Recapitalization, page F-22
1. For each component
within the series of transactions involved in the recapitalization (e.g.,
reallocation of equity,
distribution holiday, liquidity redemption, cash sweep, etc.) and the
restructuring of the
2016 Preferred Units into debt securities and 2019 Preferred Units,
please expand your
disclosures in future filings to quantify the corresponding adjustments
(in units and dollars,
as applicable), specify the reporting period, and identify the financial
statement line item(s)
impacted in connection with the initial and subsequent accounting
treatment.
2. We note that some of
the rights and terms of the RSUs, as well as equity interests and
classes of units,
appear to have been modified as a result of the recapitalization. Please
provide us with your
accounting analysis explaining how you accounted for these
Thomas Sipp
FirstName LastNameThomas
Sculptor Capital Management, Sipp
Inc.
Comapany16,
December NameSculptor
2020 Capital Management, Inc.
December
Page 2 16, 2020 Page 2
FirstName LastName
modifications in the financial statements, including your
consideration as to whether they
resulted in incremental compensation expense during any periods
presented.
3. Considering the multiple classes of units outstanding, of which some
appear to have
cumulative participation during the Distribution Holiday, please
provide us with your
analysis explaining the impact the recapitalization and Distribution
Holiday (if any) had
on your earnings per share calculation citing the relevant
authoritative literature
supporting your current presentation.
4. We note that the Company recognized a $3.2 billion reclassification
between
Accumulated Deficit and Additional Paid-in Capital upon corporate
conversion. Please
provide us with your accounting analysis supporting the
classification, calculation and
treatment associated with this transaction along with reference to
relevant authoritative
literature. As part of your response, provide us with additional
considerations as to
whether this transaction impacted the Company s tax assets or
liabilities.
Cash Sweep, page F-23
5. We note that in connection with the Cash Sweep, an amount equal to the
excess of the
Free Cash Balance over the minimum Free Cash Balance of $200.0 million
will be used to
repay the 2018 Term Loan and redeem the 2019 Preferred Unit. Please
expand your
disclosures in future filings to disclose the definition of "Free Cash
Balance" and provide
a measure of progress toward the $200 million threshold referenced in
your disclosure.
6. As it relates to the payments made under the Cash Sweep, including the
excess Free Cash
Balance to be paid in the fourth quarter of each year, tell us what
amounts (if any) are
accrued during interim reporting periods. If not, tell us why.
7. We note that as long as the Cash Sweep is in effect, the Sculptor
Operating Group may
only use funds from a cumulative discretionary one-time basket of up
to $50.0 million in
the aggregate, or reserve up to $17.0 million in the aggregate
annually (the Discretionary
Basket ), to engage in certain Restricted Activities . Please
tell us if you have classified
this Discretionary Basket as Restricted Cash in the financial
statements. If not, tell us
why.
Distribution Holiday, page F-23
8. We note that the Distribution Holiday will terminate on the earlier of
(x) 45 days after the
last day of the first calendar quarter as of which the achievement of
$600.0 million of
Distribution Holiday Economic Income (as defined in the Sculptor
Operating
Partnerships limited partnership agreements) is realized and (y)
April 1, 2026. Please
expand your disclosures in future filings to disclose the definition
of "Distribution Holiday
Economic Income" and provide a measure of progress toward the $600
million
achievement threshold referenced in your disclosure.
Thomas Sipp
Sculptor Capital Management, Inc.
December 16, 2020
Page 3
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Lory Empie at 202-551-3714 or Robert Klein at
202-551-3847 if you
have questions regarding comments on the financial statements and related
matters.
FirstName LastNameThomas Sipp Sincerely,
Comapany NameSculptor Capital Management, Inc.
Division of
Corporation Finance
December 16, 2020 Page 3 Office of Finance
FirstName LastName