The Basch Report: Hedge funds buy Titanic artifacts for $19.5 million

Bankrupt Premier Exhibitions valued items at $218 million, but no other bidders emerged and judge let sale go through.

  • By Mark Basch
  • | 5:20 a.m. October 25, 2018
  • | 5 Free Articles Remaining!
File image The famed British passenger liner RMS Titanic sank on April 15, 1912, after colliding with an iceberg. More than 1,500 people died.
File image The famed British passenger liner RMS Titanic sank on April 15, 1912, after colliding with an iceberg. More than 1,500 people died.
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The two-year saga over the fate of 5,500 artifacts from the RMS Titanic ended in a Jacksonville courtroom last week when U.S. Bankruptcy Judge Paul Glenn approved their sale.

A group of hedge funds submitted a “stalking horse” bid of $19.5 million for the collection and the court scheduled an auction for Oct. 11 to seek higher bids. However, no other bids emerged and Glenn approved the sale to the group at a hearing last Thursday.

Premier Exhibitions Inc., a publicly traded company that owned the collection, filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Jacksonville in June 2016.

Premier valued the collection at $218 million in its original court filings and hoped to resolve its debts by selling a portion of the artifacts from the famed ocean liner that sank in 1912.

However, Glenn rejected the plan because of previous legal decisions that restricted the sale of the artifacts.

A committee of equity holders objected to the $19.5 million sale, saying it undervalued the collection. But Glenn approved the sale despite those objections.

“The process conducted by the Debtors pursuant to the Bidding Procedures obtained the highest and best value for the Transferred Assets for the Debtors and their estates, and any other transaction would not have yielded as favorable an economic result,” Glenn’s order said.

According to a New York Times story last week, a group of British museums backed by the National Geographic Society and “Titanic” movie director James Cameron hoped to submit a higher bid for the collection. However, the group could raise only $19.2 million, the story said.

The winning bidders were affiliates of funds managed by PacBridge Capital Partners, Apollo Global Management and Alta Fundamental Advisors. Its plans for the collection have not been announced.

The group owns about 40 percent of Premier’s stock, the sale order said.

Glenn’s order said the sale “will provide a greater recovery for the Debtors’ estates, creditors and stakeholders than would be provided by any other practically available alternative.”

Premier listed $12 million in unsecured debt in its original bankruptcy petition and recent filings said it expected unsecured creditors will receive 59 percent to 71 percent payment of their claims.

Stockholders are unlikely to get anything.

Premier’s stock continues to trade in the OTC market and was listed at about 15 cents this week.

The company produced exhibitions related to the Titanic and other historical events, but it is unclear if it will have any ongoing operations after selling the artifacts.

It attributed its bankruptcy filing to losses from an exhibition on the television show “Saturday Night Live.”

Premier is headquartered in Atlanta but it filed for Chapter 11 reorganization in Jacksonville because the company and some of its subsidiaries are incorporated in Florida.

Hurricane impacts Ameris farm loans

When a major storm like Hurricane Michael hits, much attention is focused on the cost of property damage as homes and other buildings are leveled.

However, Ameris Bancorp borrowers have more exposure to losses from another source: agriculture.

During the bank’s quarterly conference call last week, Chief Credit Officer Jon Edwards said Ameris has about $180 million in agriculture loans outstanding to farmers in areas affected by Michael, or about 75 percent of the bank’s total agriculture loan portfolio.

“The primary crops affected were cotton and pecans, as most of the peanuts had been harvested by the time the storm hit,” Edwards said.

“Depending on where your farm was located within those affected areas, the impact may have been as low as a 10 percent loss of yield up to a total loss.”

The good news, he said, is most of those farmers have crop insurance or will be eligible for government assistance.

“I believe most of our farmers and ag-related businesses have the capacity to restructure if needed and actual loan losses should not be material,” he said.

Edwards said Ameris has $127 million in secured real estate loans that may be affected by Michael.

“Our customers and our lending staff are still in the process of inspecting properties and assessing damages, so the final impact is still a bit unclear,” he said.

Ameris has three branches in the Panama City metropolitan area, the region which took the hardest hit from the storm. That represents about 5 percent of bank deposits in Panama City, ranking it eighth in the market, according to Federal Deposit Insurance Corp. data.

Ameris is officially headquartered in Moultrie, Georgia, but its executive offices are in Jacksonville. It has 125 branches in Florida, Georgia, Alabama and South Carolina.

The bank’s total loan portfolio was $8.5 billion at the end of the third quarter, so losses from the hurricane will not have a major impact on its financial results.

Ameris reported a big increase in third-quarter earnings, with adjusted earnings per share of 91 cents, up from 63 cents in the third quarter of 2017.

The earnings were in line with analysts’ forecasts that ranged from 88 cents to 92 cents, according to Yahoo Finance.

Ameris’ stock rose 36 cents to $43.44 Friday after the earnings report but the stock has been slumping recently, falling from levels in the mid-$50s in June.

The company has been looking at acquisition opportunities but CEO Dennis Zember said during the conference call he’s been getting questions about the stock drop affecting its ability to make a deal.

“Our stock price falling obviously impacts how aggressively we can go after a deal but our story is good enough that it resonates with boards and management teams and I’m not concerned that we can’t find a good deal even with today’s stock price,” he said.

TapImmune merges with Marker

TapImmune Inc. last week completed its merger with Marker Therapeutics Inc., with the merged company now operating under the Marker name.

TapImmune was headquartered in Jacksonville and the new Marker’s Securities and Exchange Commission filings continued to list its address in Jacksonville.

However, the company, which is developing cancer therapies, intends to move its headquarters to Houston as part of a collaboration with researchers at the Baylor College of Medicine.

TapImmune moved its headquarters from Seattle to Jacksonville in 2015 when it began trials of a breast cancer treatment at the Mayo Clinic but has only had a handful of employees. Its annual report said the company had seven employees.

Marker, which was privately held, was headquartered in Minnesota before the merger.

The new Marker began trading last Thursday on the Nasdaq Capital Market under the ticker symbol “MRKR.”

Marker’s stock closed its first day of trading at $8.63, up 29 cents on the day.

Although neither company had any products on the market or was producing any revenue, news of the merger sent TapImmune’s stock up from about $3 when the deal was announced in May to a high of $13.55.

As part of the merger of equals, Marker has a new board of directors consisting of three members appointed by each company. TapImmune Chairman Glynn Wilson, who as CEO moved the company to Jacksonville, is not serving on the new board.

Wilson’s successor as CEO, Peter Hoang, is continuing as CEO of Marker.

While Marker has no products on the market now or likely in the immediate future, Hoang said in a news release the merger will give the combined company more capabilities.

“With the transaction completed, we can now push our clinical trials forward more efficiently with the full resources available to the combined company,” he said.



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