SEC Comment Letter for BRC Group Holdings, Inc. (RILY, RILYG, RILYL, RILYN, RILYP, RILYT, RILYZ) (CIK 0001464790) (RILY) — Apr 12, 2017
BRC Group Holdings, Inc. (RILY, RILYG, RILYL, RILYN, RILYP, RILYT, RILYZ) (CIK 0001464790)
Date: April 12, 2017 · CIK: 0001464790 · Accession: 0000000000-17-012605
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-216764
Letter
Mail Stop 3561 April 12, 2017 Phillip J. Ahn Chief Operating Officer B. Riley Financial, Inc. 21255 Burbank Boulevard, Suite 400 Woodland Hills, California 91367
Re: B. Riley Financial, Inc. Registration Statement on Form S -4 Filed March 17, 2017 File No. 333-216764
Dear Mr. Ahn :
We have limited our review of your registration statement to those issues we have addressed in our 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 this letter by amending your registration statement and providing the requested information . If you do not believe our com ments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments.
Summary
Pre-Closing Dividend, page 12
1. Please disclose here, and in the section discussing the Pre -Closing Dividend on page 100, whether and how, including during the interim period between sending the materials to shareh olders and the shareholder vote, the FBR board intends to notify shareholders of any changes in the likelihood of paying the Pre -Closing Dividend and of any changes to the amount of the Pre -Closing Dividend. In addition, please discuss whether and how, in the event the Pre -Closing Dividend is less than $8.50, the FBR board will notify shareholders as to whether and why such change in the dividend amount affects its recommendation that shareholders approve the merger, and whether and why such change in the dividend amount affects its willingness to rely on the fairness opinion; in this regard, we note that both FBR’s board’s recommendation that shareholders approve
Phillip J. Ahn B. Riley Financial, Inc. April 12, 2017 Page 2
the merger and the conclusions reached in the fairness opinion were based in part on the assum ption that FBR will pay a dividend of at least $8.50.
Material U.S. Federal Income Tax Consequences of the Merger, page 21
2. Please revise this section and the related section on page 9 to identify briefly the uncertainty relating to the tax treatment o f the Pre -Closing Dividend.
Risk Factors , page 30
3. As it appears that the section entitled “Risk Factors —Risks Factors Relating to the Pre - Closing Dividend ,” as referenced on page 31 or “Risk Factors —Risks Relating to the Pre-Closing Dividend ,” referenced on page 32, does not exist. Please revise the references, directing readers to the appropriate location of those risk factors, including to the discussion of the factors referenced in the first paragraph of page 31.
4. Please include a risk factor discussing the uncertainty relating to the tax treatment of the Pre-Closing Dividend.
The amount of the pre -closing dividend is uncertain, page 31
5. In this risk factor, p lease disclos e that the Pre -Closing Dividend amount, if any, will not be kn own when the FBR shareholder vote occurs.
The Merger
Background of the Merger , page 53
6. Please revise this section to describe the nature of FBR’s discussions with market participants other than B. Riley, and the reasons that such discussions were ter minated. Please also explain the background of B. Riley’s decision to pursue discussions with FBR regarding potential strategic opportunities, and the nature and conclusions of any similar discussions between B. Riley and other market participants. Final ly, throughout your discussion and where possible, please identify the “senior management” and “representatives” who engaged in the identified communications and attended the identified meetings.
B. Riley Agreement with Richard J. Hendrix, page 75
7. We note that, although FBR & Co.’s 10 -K is incorporated by reference, the Part III information from that 10 -K is forward incorporated and will be contained in FBR & Co.’s proxy, which is not yet filed. Accordingly, please provide the executive compensation i nformation required by Item 18(a)(7)(ii) of Form S -4 for Mr. Hendrix.
Phillip J. Ahn B. Riley Financial, Inc. April 12, 2017 Page 3
The Merger Agreement
Pre-Closing Dividend , page 100
8. Where appropriate, please revise your disclosure to highlight that FBR’s board’s recommendation that the shareholders approve the merger, as well as the conclusions of the fairness opinion, are based in part on the assumption that FBR will pay a Pre -Closing Dividend of $8.50, and that FBR may not pay a dividend of such amount o r at all.
Material U.S. Federal Income Tax Consequences of the Merger, page 116
9. Please make revisions throughout your “Material U.S. Federal Income Tax Consequences of the Merger” section to state that each conclusion with respect to tax matters is th e opinion of counsel. Please also revise the tax opinions filed as Exhibits 8.1 and 8.2 to clearly state that the disclosure in the tax consequences section of the prospectus is the opinion of counsel. Please note that opining on the accuracy of the disc losure alone, without stating that the disclosure is the opinion of counsel, is not sufficient. For guidance, refer to Section III.B.2 of Staff Legal Bulletin No. 19 , which is available on our website.
We remind you that the company and its management ar e responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or a bsence of action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration . Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement.
Please contact Charlie Guidry, Staff Attorney, at 202 -551-3621, Lilyanna Peyser , Special Counsel, at 202 -551-3222 , or me at 202 -551-3720 with any question s.
Sincerely,
/s/ Lilyanna Peyser for
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Mail Stop 3561 April 12, 2017 Phillip J. Ahn Chief Operating Officer B. Riley Financial, Inc. 21255 Burbank Boulevard, Suite 400 Woodland Hills, California 91367 Re: B. Riley Financial, Inc. Registration Statement on Form S -4 Filed March 17, 2017 File No. 333-216764 Dear Mr. Ahn : We have limited our review of your registration statement to those issues we have addressed in our 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 this letter by amending your registration statement and providing the requested information . If you do not believe our com ments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Summary Pre-Closing Dividend, page 12 1. Please disclose here, and in the section discussing the Pre -Closing Dividend on page 100, whether and how, including during the interim period between sending the materials to shareh olders and the shareholder vote, the FBR board intends to notify shareholders of any changes in the likelihood of paying the Pre -Closing Dividend and of any changes to the amount of the Pre -Closing Dividend. In addition, please discuss whether and how, in the event the Pre -Closing Dividend is less than $8.50, the FBR board will notify shareholders as to whether and why such change in the dividend amount affects its recommendation that shareholders approve the merger, and whether and why such change in the dividend amount affects its willingness to rely on the fairness opinion; in this regard, we note that both FBR’s board’s recommendation that shareholders approve Phillip J. Ahn B. Riley Financial, Inc. April 12, 2017 Page 2 the merger and the conclusions reached in the fairness opinion were based in part on the assum ption that FBR will pay a dividend of at least $8.50. Material U.S. Federal Income Tax Consequences of the Merger, page 21 2. Please revise this section and the related section on page 9 to identify briefly the uncertainty relating to the tax treatment o f the Pre -Closing Dividend. Risk Factors , page 30 3. As it appears that the section entitled “Risk Factors —Risks Factors Relating to the Pre - Closing Dividend ,” as referenced on page 31 or “Risk Factors —Risks Relating to the Pre-Closing Dividend ,” referenced on page 32, does not exist. Please revise the references, directing readers to the appropriate location of those risk factors, including to the discussion of the factors referenced in the first paragraph of page 31. 4. Please include a risk factor discussing the uncertainty relating to the tax treatment of the Pre-Closing Dividend. The amount of the pre -closing dividend is uncertain, page 31 5. In this risk factor, p lease disclos e that the Pre -Closing Dividend amount, if any, will not be kn own when the FBR shareholder vote occurs. The Merger Background of the Merger , page 53 6. Please revise this section to describe the nature of FBR’s discussions with market participants other than B. Riley, and the reasons that such discussions were ter minated. Please also explain the background of B. Riley’s decision to pursue discussions with FBR regarding potential strategic opportunities, and the nature and conclusions of any similar discussions between B. Riley and other market participants. Final ly, throughout your discussion and where possible, please identify the “senior management” and “representatives” who engaged in the identified communications and attended the identified meetings. B. Riley Agreement with Richard J. Hendrix, page 75 7. We note that, although FBR & Co.’s 10 -K is incorporated by reference, the Part III information from that 10 -K is forward incorporated and will be contained in FBR & Co.’s proxy, which is not yet filed. Accordingly, please provide the executive compensation i nformation required by Item 18(a)(7)(ii) of Form S -4 for Mr. Hendrix. Phillip J. Ahn B. Riley Financial, Inc. April 12, 2017 Page 3 The Merger Agreement Pre-Closing Dividend , page 100 8. Where appropriate, please revise your disclosure to highlight that FBR’s board’s recommendation that the shareholders approve the merger, as well as the conclusions of the fairness opinion, are based in part on the assumption that FBR will pay a Pre -Closing Dividend of $8.50, and that FBR may not pay a dividend of such amount o r at all. Material U.S. Federal Income Tax Consequences of the Merger, page 116 9. Please make revisions throughout your “Material U.S. Federal Income Tax Consequences of the Merger” section to state that each conclusion with respect to tax matters is th e opinion of counsel. Please also revise the tax opinions filed as Exhibits 8.1 and 8.2 to clearly state that the disclosure in the tax consequences section of the prospectus is the opinion of counsel. Please note that opining on the accuracy of the disc losure alone, without stating that the disclosure is the opinion of counsel, is not sufficient. For guidance, refer to Section III.B.2 of Staff Legal Bulletin No. 19 , which is available on our website. We remind you that the company and its management ar e responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or a bsence of action by the staff. Refer to Rules 460 and 461 regarding requests for acceleration . Please allow adequate time for us to review any amendment prior to the requested effective date of the registration statement. Please contact Charlie Guidry, Staff Attorney, at 202 -551-3621, Lilyanna Peyser , Special Counsel, at 202 -551-3222 , or me at 202 -551-3720 with any question s. Sincerely, /s/ Lilyanna Peyser for Mara L. Ransom Assistant Director Office of Consumer Products cc: Patrick S. Brown , Esq.