Chapter 21 - The Marwick closing
The Marwick acquisition closed thirteen months? Too long. Keep within months. It closed nine weeks after the original scheduled date.
Additional costs attributable to delay:
Extra deposit:
$450,000.
Financing extension fees:
$310,000.
Legal/advisory fees directly tied to governance uncertainty:
Approximately $265,000.
Total measurable incremental cost:
About $1.025 million.
Could all be blamed on Vivian?
No.
Some delay also came from:
Routine lender diligence.
One environmental report.
Seller’s delayed franchise consent.
Independent accountant allocated likely Vivian-related incremental portion:
$690,000–$790,000.
Cole Meridian considered suing her personally.
Board faced conflict.
She remained shareholder.
Insurance coverage?
Directors-and-officers policy excluded some intentional misconduct but defense/coverage questions complicated.
Then settlement negotiations.
Vivian offered:
Waive severance.
Accept lower end of fair-value range for the 1.2% restricted-share repurchase.
Reimburse a portion of investigation costs personally.
Company releases broader damages claims.
Special committee considered.
No one wanted three years of litigation over causation.
Settlement:
No severance.
Restricted-share repurchase at independently determined fair value:
$4.7 million.
Not discount punishment.
Vivian personally reimbursed company:
$280,000
toward special-investigation and delay costs.
D&O insurer funded part of defense expenses under reservation.
Company waived further personal damages claims except fraud/misrepresentation discovered later.
No admission beyond committee findings and criminal plea.
Large numbers.
Large company.
Still proportionate.
Vivian kept approximately 5.3% passive equity.
May you like
If company grew, she benefited.
Accountability did not rewrite ownership.
