The wording likely gets by the SEC because S&P is doing the same thing with their S&P Long-Only Merger Arbitrage Index

http://www.bloomberg.com/apps/quote?ticker=SPARBM%3AIND

The current price is a robbery. If there is a way to give more notoriety to this thief?

Mike

Material United States Federal Income Tax Considerations
-Tax Consequences of the Hiland Partners Merger
–Recognition of Gain or Loss.

Generally, a Hiland Partners common unitholder’s initial tax basis for its common units will have been the amount he paid for the common units plus its share of Hiland Partners’ nonrecourse liabilities. That basis will have been increased by its share of Hiland Partners’ income and by any increases in its share of Hiland Partners’ nonrecourse liabilities. That basis will have been decreased, but not below zero, by distributions from Hiland Partners to the common unitholder, by the common unitholder’s share of Hiland Partners’ losses, by any decreases in its share of Hiland Partners’ nonrecourse liabilities, and by its share of Hiland Partners’ expenditures that are not deductible in computing taxable income and are not required to be capitalized. A Hiland Partners common unitholder has no share of Hiland Partners’ debt that is recourse to Hiland Partner’s general partner, but has a share (generally based on its share of Hiland Partners’ profits) of Hiland Partners’ nonrecourse liabilities.
 
A common unitholder’s amount realized will be measured by the sum of the Hiland Partners merger consideration received by him plus its share of Hiland Partners’ nonrecourse liabilities. Because the amount realized includes a common unitholder’s share of Hiland Partners’ nonrecourse liabilities, the gain recognized could result in a tax liability in excess of the cash received as the Hiland Partners merger consideration. However, because of the prices at which the holders of Hiland Partners common units have purchased such common units, it is not anticipated that existing Hiland Partners common unitholders will recognize additional taxable gain as a result of their allocation of such nonrecourse liabilities of Hiland Partners.

Thanks for alerting me to your articles on my website. Had they come up in the first couple of pages on my Google search of blank check companies, I would have had much more information that I could have used in my article. (I probably should also have done a search on SPACs.)

The arbitrage aspect is certainly interesting and unfortunately not available anymore. Had I read your January article when it came out!

Sincerely,

Dr. Kris
Founder, StockMarketCookBook.com

We’d agree that there will be some value left in the equity, though heavily diluted. Curious as to if you think there is still value in the debt then?

Thanks again for the piece.

Jay
marketfolly.com