SEC Comment Letter for ENZON PHARMACEUTICALS, INC. (ENZN) (CIK 0000727510) (VISK) — May 1, 2009
ENZON PHARMACEUTICALS, INC. (ENZN) (CIK 0000727510)
Date: May 1, 2009 · CIK: 0000727510 · Accession: 0000000000-09-023467
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-12957
Letter
May 1 , 2009 Via U.S. Mail and facsimile at 212-986-8866 Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. 551 Fifth Avenue New York, New York 10176 Re: Enzon Pharmaceuticals, Inc. (“Enzon” or “the Company”) Preliminary Proxy Statement on Schedule 14A filed April 22, 2009 Filed by DellaCamera Capital Master Fund, Ltd., et al. Additional Soliciting Materials filed pursuant to Rule 14a-12 on April 22 and April 28, 2009 by DellaCamera Capital Master Fund, Ltd., et al. File No. 000-12957
Dear Mr. Davis:
We have reviewed your filing and have the following comments. If you disagree, we will consider your explanation as to w hy one or more of our comments may be inapplicable or a revision is unnecessary. Pl ease be as detailed as necessary in your explanation. After reviewing your respons e, we may or may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable requirements, and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other asp ect of our review. Please feel welcome to call us at th e telephone numbers listed at the end of this letter.
Schedule 14A
General 1. We note that you have created a box on the fr ont cover page identifying this filing as a preliminary consent statement. Please not e that the definition of proxy in Rule 14a- 1(f) includes consents. Revise the front cover page to conform to that of form Schedule 14A. See Rule 14a-6(m) in Schedule 14A. 2. Revise the proxy statement and form of proxy to clearly mark them as “Preliminary Copies.” Refer to Rule 14a-6(e)(1). 3. Please confirm that you will post your pr oxy materials on a specified, publicly- accessible Internet Web site (other than the Commission’s EDGAR Web site) and
Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 2 provide record holders with a notice informing them that the materials are available and explaining how to access those materials. Refer to Exchange Act Rule 14a-16 and Release 34-56135 available at h ttp://www.sec.gov/rules/final/2007/34-56135.pdf . 4. Please include disclosure of any past circ umstances in which your company has tried to affect change at Enzon, including, but not limited t o, interactions with Enzon management, nominations to the board of directors, or shareholder proposals. 5. We note that you have made statements in your soliciting materials that appear to directly or indirectly impugn th e character, integrity or pers onal reputation of Enzon’s chief executive officer, or directly or i ndirectly make charges about him concerning improper, illegal or immoral conduct or a ssociations, all without adequate factual foundation. The following problematic statemen ts are representative of those that appear in your soliciting materials: • “…we believe that [Mr. Buchalter] is directly responsible for the massive destruction of shareholder value that has occurred over his nearly four and one-half year tenure with Enz on.” (DFAN filed April 22, 2009); • “DellaCamera wants to empower other En zon shareholders to free themselves from a chief executive who has been excessively enriched with a compensation package that bears no rati onal relation to pe rformance.” (DFAN filed April 22, 2009); • The reference to stockholders being able to “…pave the way for a new President and Chief Exective Officer who would be more committed to increasing stockholder value” by removi ng Mr. Buchalter (thereby implying that Mr. Buchalter has not focused on his fiduciary duties and on increasing value for stockholders) (PREC14A filed April 22, 2009); • The board replacing Mr. Buchalter “with an officer more committed and capable of delivering greater value to” stockholders (thereby implying that Mr. Buchalter has not been committed to increasing value for stockholders) (PREC14A filed Ap ril 22, 2009); and • “Mr. Buchalter presid[ing] over a numbe r of failed initiatives.” (PREC14A filed April 22, 2009) Please do not use these or similar statemen ts in your soliciting materials without providing a proper factual foundation for th e statements. In addition, as to matters for which you do have a proper factual foundation, please avoid making statements about those matters that go beyond the scope of what is reasonably supported by the factual foundation. Please note that characte rizing a statement as your opinion or belief does not eliminat e the need to provide a proper factual foundation for the statement; there must be a reasonable basis for each opinion or belief that you express. Please refe r to Note (b) to Rule 14a-9.
Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 3 Our Concerns, page 4
6. Please provide the basis for your statemen t that you, “believe that the potential intrinsic value of Enzon is far in excess of the Corporation’s current stock price.” 7. You indicate in this section that, “Mr. Bu chalter has presided over a number of failed initiatives in the last year.” However, filings by the company indicate that the company decided not to proceed with cer tain of these initiatives because of unfavorable external market conditions. Please provide support for your assertion that these initiatives failed because of th e actions of the company or Mr. Buchalter. Our Proposals, page 5
8. In general, beyond the specific concerns a ddressed by comments below, please revise your disclosure in the discussion of each pr oposal to include a discussion of both the positive and negative potential effects on existi ng security holders of the company. Proposal 1 : Stockholder Author ity to Remove the Corporation’s Chief Executive Officer and/or President, page 5 9. Please revise your discussion of Proposal 1 to disclose that Mr. Buchalter’s employment agreement states that his employ ment may be terminated with or without cause only by the Board upon 30 days prior written notice, and to disclose the potential consequences of approval of Pr oposal 1 including, but not limited to, a breach of contract claim by Mr. Buchalter. 10. Please clarify whether the removal of the sentence, “The removal of an officer without cause shall be without prejudice to his contract ri ghts, if any” from Section 5.2 of the Bylaws is intended to allow the company to avoid any contractual obligations to Mr. Buchalter in the event Proposal 1 is approved. Also disclose any potential adverse effects the removal of such sentence might have on the Company’s ability to attract qualified officers in the future.
Proposal 2: Removal of Jeffrey H. Buchalter as Officer, page 6
11. We note that you refer to the attached Sc hedule 1 for a discussion of the severance payments Mr. Buchalter is entitled to receive under his employment agreement should this Proposal 2 be appr oved. Please revise either your disclosure here, or in Schedule 1, to include quantitative disclosu re, as included in Enzon’s definitive proxy statement for its 2009 annual meeting of st ockholders, of the benefits the company would be required to pay Mr . Buchalter under his employme nt agreement were he to be terminated without cause th rough approval of this proposal.
Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 4 12. You state that, “By voting to remove Jeffrey H. Buchalter, stockholders would create a vacancy and allow for the Board to a ppoint a new Chief Executive Officer and President.” Your disclosure also notes the risk that there can be no assurance that any successor to Mr. Buchalter, “would in fact be more committed to increasing stockholder value and/or making strategic d ecisions.” Please expand your disclosure to include the risks the company faces in the interim period after removing the Chief Executive Officer and President but before a successor is appointed. Consent Procedure Under Delaware Law, page 9
13. Disclose, if true, that all ex ecuted consents will be valid for 60 days or less. Also disclose the cut-off date for the submi ssion of consents and/or how you intend to notify security holders of when th e consent solicitation will expire. Certain Additional Information Concerning the Participants in the Solicitation, page 11
14. You state here that, “Additional informa tion concerning DellaCamera Master Fund and the other participants in the soli citation contemplated by this Consent Statement…is set forth below and on the Sche dules attached hereto.” However, there does not appear to be any further inform ation concerning the participants in the remainder of the solicitation statement, or in the schedules thereto. Please clarify the intent of this statement. Facts About Our Solicitation of Consents, page 11
15. Please be advised that all written soliciting materials, including any e-mails or scripts to be used in soliciting proxies must be filed under the cover of Schedule 14A on the date of first use. Refer to Rule 14a-6(b) and (c). Please confirm your understanding.
* * * As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provid e us with a response. You may wish to provide us with marked copies of the amendm ent to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested information. Detailed co ver letters greatly faci litate our review. Please understand that we may have addi tional comments after reviewing your amendment and responses to our comments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed investment decision. Since the filing persons are in
Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 5 possession of all facts relating to the filing pe rsons’ disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from each partic ipant acknowledging that:
the participant is responsible for the ade quacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the participant may not assert staff co mments as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
Please direct any questions to Mike Rosenthall at 202.551.3674 or to me at 202.551.3444. You may also contact me via facsimile at 202.772.9203. Please send all correspondence to us at the following ZIP code: 20549-3628.
Sincerely, Perry J. Hindin Special Counsel Office of Mergers and Acquisitions
Show Raw Text
May 1 , 2009 Via U.S. Mail and facsimile at 212-986-8866 Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. 551 Fifth Avenue New York, New York 10176 Re: Enzon Pharmaceuticals, Inc. (“Enzon” or “the Company”) Preliminary Proxy Statement on Schedule 14A filed April 22, 2009 Filed by DellaCamera Capital Master Fund, Ltd., et al. Additional Soliciting Materials filed pursuant to Rule 14a-12 on April 22 and April 28, 2009 by DellaCamera Capital Master Fund, Ltd., et al. File No. 000-12957 Dear Mr. Davis: We have reviewed your filing and have the following comments. If you disagree, we will consider your explanation as to w hy one or more of our comments may be inapplicable or a revision is unnecessary. Pl ease be as detailed as necessary in your explanation. After reviewing your respons e, we may or may not raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable requirements, and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other asp ect of our review. Please feel welcome to call us at th e telephone numbers listed at the end of this letter. Schedule 14A General 1. We note that you have created a box on the fr ont cover page identifying this filing as a preliminary consent statement. Please not e that the definition of proxy in Rule 14a- 1(f) includes consents. Revise the front cover page to conform to that of form Schedule 14A. See Rule 14a-6(m) in Schedule 14A. 2. Revise the proxy statement and form of proxy to clearly mark them as “Preliminary Copies.” Refer to Rule 14a-6(e)(1). 3. Please confirm that you will post your pr oxy materials on a specified, publicly- accessible Internet Web site (other than the Commission’s EDGAR Web site) and Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 2 provide record holders with a notice informing them that the materials are available and explaining how to access those materials. Refer to Exchange Act Rule 14a-16 and Release 34-56135 available at h ttp://www.sec.gov/rules/final/2007/34-56135.pdf . 4. Please include disclosure of any past circ umstances in which your company has tried to affect change at Enzon, including, but not limited t o, interactions with Enzon management, nominations to the board of directors, or shareholder proposals. 5. We note that you have made statements in your soliciting materials that appear to directly or indirectly impugn th e character, integrity or pers onal reputation of Enzon’s chief executive officer, or directly or i ndirectly make charges about him concerning improper, illegal or immoral conduct or a ssociations, all without adequate factual foundation. The following problematic statemen ts are representative of those that appear in your soliciting materials: • “…we believe that [Mr. Buchalter] is directly responsible for the massive destruction of shareholder value that has occurred over his nearly four and one-half year tenure with Enz on.” (DFAN filed April 22, 2009); • “DellaCamera wants to empower other En zon shareholders to free themselves from a chief executive who has been excessively enriched with a compensation package that bears no rati onal relation to pe rformance.” (DFAN filed April 22, 2009); • The reference to stockholders being able to “…pave the way for a new President and Chief Exective Officer who would be more committed to increasing stockholder value” by removi ng Mr. Buchalter (thereby implying that Mr. Buchalter has not focused on his fiduciary duties and on increasing value for stockholders) (PREC14A filed April 22, 2009); • The board replacing Mr. Buchalter “with an officer more committed and capable of delivering greater value to” stockholders (thereby implying that Mr. Buchalter has not been committed to increasing value for stockholders) (PREC14A filed Ap ril 22, 2009); and • “Mr. Buchalter presid[ing] over a numbe r of failed initiatives.” (PREC14A filed April 22, 2009) Please do not use these or similar statemen ts in your soliciting materials without providing a proper factual foundation for th e statements. In addition, as to matters for which you do have a proper factual foundation, please avoid making statements about those matters that go beyond the scope of what is reasonably supported by the factual foundation. Please note that characte rizing a statement as your opinion or belief does not eliminat e the need to provide a proper factual foundation for the statement; there must be a reasonable basis for each opinion or belief that you express. Please refe r to Note (b) to Rule 14a-9. Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 3 Our Concerns, page 4 6. Please provide the basis for your statemen t that you, “believe that the potential intrinsic value of Enzon is far in excess of the Corporation’s current stock price.” 7. You indicate in this section that, “Mr. Bu chalter has presided over a number of failed initiatives in the last year.” However, filings by the company indicate that the company decided not to proceed with cer tain of these initiatives because of unfavorable external market conditions. Please provide support for your assertion that these initiatives failed because of th e actions of the company or Mr. Buchalter. Our Proposals, page 5 8. In general, beyond the specific concerns a ddressed by comments below, please revise your disclosure in the discussion of each pr oposal to include a discussion of both the positive and negative potential effects on existi ng security holders of the company. Proposal 1 : Stockholder Author ity to Remove the Corporation’s Chief Executive Officer and/or President, page 5 9. Please revise your discussion of Proposal 1 to disclose that Mr. Buchalter’s employment agreement states that his employ ment may be terminated with or without cause only by the Board upon 30 days prior written notice, and to disclose the potential consequences of approval of Pr oposal 1 including, but not limited to, a breach of contract claim by Mr. Buchalter. 10. Please clarify whether the removal of the sentence, “The removal of an officer without cause shall be without prejudice to his contract ri ghts, if any” from Section 5.2 of the Bylaws is intended to allow the company to avoid any contractual obligations to Mr. Buchalter in the event Proposal 1 is approved. Also disclose any potential adverse effects the removal of such sentence might have on the Company’s ability to attract qualified officers in the future. Proposal 2: Removal of Jeffrey H. Buchalter as Officer, page 6 11. We note that you refer to the attached Sc hedule 1 for a discussion of the severance payments Mr. Buchalter is entitled to receive under his employment agreement should this Proposal 2 be appr oved. Please revise either your disclosure here, or in Schedule 1, to include quantitative disclosu re, as included in Enzon’s definitive proxy statement for its 2009 annual meeting of st ockholders, of the benefits the company would be required to pay Mr . Buchalter under his employme nt agreement were he to be terminated without cause th rough approval of this proposal. Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 4 12. You state that, “By voting to remove Jeffrey H. Buchalter, stockholders would create a vacancy and allow for the Board to a ppoint a new Chief Executive Officer and President.” Your disclosure also notes the risk that there can be no assurance that any successor to Mr. Buchalter, “would in fact be more committed to increasing stockholder value and/or making strategic d ecisions.” Please expand your disclosure to include the risks the company faces in the interim period after removing the Chief Executive Officer and President but before a successor is appointed. Consent Procedure Under Delaware Law, page 9 13. Disclose, if true, that all ex ecuted consents will be valid for 60 days or less. Also disclose the cut-off date for the submi ssion of consents and/or how you intend to notify security holders of when th e consent solicitation will expire. Certain Additional Information Concerning the Participants in the Solicitation, page 11 14. You state here that, “Additional informa tion concerning DellaCamera Master Fund and the other participants in the soli citation contemplated by this Consent Statement…is set forth below and on the Sche dules attached hereto.” However, there does not appear to be any further inform ation concerning the participants in the remainder of the solicitation statement, or in the schedules thereto. Please clarify the intent of this statement. Facts About Our Solicitation of Consents, page 11 15. Please be advised that all written soliciting materials, including any e-mails or scripts to be used in soliciting proxies must be filed under the cover of Schedule 14A on the date of first use. Refer to Rule 14a-6(b) and (c). Please confirm your understanding. * * * As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provid e us with a response. You may wish to provide us with marked copies of the amendm ent to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested information. Detailed co ver letters greatly faci litate our review. Please understand that we may have addi tional comments after reviewing your amendment and responses to our comments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed investment decision. Since the filing persons are in Christopher P. Davis, Esq. Kleinberg, Kaplan, Wolff & Cohen, P.C. May 1, 2009 Page 5 possession of all facts relating to the filing pe rsons’ disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from each partic ipant acknowledging that: the participant is responsible for the ade quacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the participant may not assert staff co mments as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. Please direct any questions to Mike Rosenthall at 202.551.3674 or to me at 202.551.3444. You may also contact me via facsimile at 202.772.9203. Please send all correspondence to us at the following ZIP code: 20549-3628. Sincerely, Perry J. Hindin Special Counsel Office of Mergers and Acquisitions