JAMAICA: INTERNATIONAL DIVORCE NEWS
The Jamaican Observer is reporting that Lascelles Chin, a divorced multi-millionaire who owns a food manufacturing company on the Caribbean island of Jamaica, is scheduled to take his food manufacturing company public tomorrow when an IPO is scheduled. However, potential investors are nervous about his 2007 divorce settlement agreement with his wife Audrey and how future quarrels between the Chins could put their investment at risk.
Back in 1994, Audrey brought a petition for divorce under Jamaica’s Married Women’s Property Act, seeking 50% of the shares of her husband’s company, in which, she claimed, she contributed to the company’s growth by working as the managing director from its inception till their divorce filing. Like Jamie McCourt in the Dodgers divorce in California, Mrs Chin had to fight for her right to get her fair share since her husband wanted to give her 1 share in the company and keep 249,999 shares (Per the Jamaican Observer) for himself. Can you believe a husband could do this to his wife? …not sure if Jamaica is community property or equitable distribution scheme. I am leaning towards it being an equitable distribution scheme. But still. How could that split ever be equitable? In anybody’s mind? Seriously?
After several appeals, the last of which was the with “London-based Privy Council” Mrs. Chin won her case and was awarded a 50% stake in the company. But what does this mean for potential investors who appear unpersuaded with the company’s prospectus that states that Ms. Chin’s stake goes to Lasco Foods only – one of the subsidiaries of a four-part conglomerate (Lasco Foods, Lasco Financial Services, Lasco Manufacturing and Lasco Distributors) – and that Lasco Foods is not being offered in the IPO? Jamaicans nationals, the only demographic qualified to purchase shares in the company (it will be traded on the Jamaican Stock Exchange) are worried that this divorce settlement agreement makes this investment too risky to be worth their while and Mr. Chin and his underwriters are understandably nervous on the eve of the IPO.
“Not so,” says Mr. Chin’s counsel, and lead underwriter Gary Peart (Mr. Peart is CEO of Mayberry Capital the company underwriting the IPO) when asked if the divorce will have any impact. “This IPO has nothing to do with the part of the company that is half owned by Mrs. Chin, namely, Lasco Foods. Only the other three subsidiaries, Lasco Financial Services, Lasco Distributors and Lasco Manufacturing are being offered. Consequently, there is no need for investors to fear that the company will lose value” or get saddled with the high cost of repeated lawsuits if the ex spouses continue to war with each other.
Time will tell, however. Even assuming the ex missus isn’t a problem, the IPO is less than a billion dollars. Actually, Mr. Chin trying to raise about $400M. That is really small for an IPO, isn’t it? Smaller doesn’t necessarily mean safer, does it? Don’t know the answer to that. But here are some of the things you should consider before you purchase shares in an IPO, whether with Lasco, or any other company, per Investopedia.com:
1. Why has the company elected to go public?
2. What will the company be doing with the money raised in the IPO?
3. What is the competitive landscape in the market for the business’s products or services? What is the company’s position in this landscape?
4. What are the company’s growth prospects?
5. What level of profitability does the company expect to achieve?
6. What is the management like? Do the people involved have previous experience running a publicly-traded company? Do they have a history of success in business ventures? Do they have sufficient business experience and qualifications to run the company? Does management itself own any shares in the business?
7. What is the business’s operating history, if any?
Sounds like the divorce from Mrs. Chin is the last thing investors need to be worried about. There are lots more important questions that need to be asked.
Tagged: International divorce, divorce news, corporate divorce news, settlement agreement, London