Thursday, October 8, 2015

RadioShack Put Options Accelerated

On October 2, 2015, the United States Bankruptcy Court for the District of Delaware confirmed the First Amended Joint Plan of Reorganization (Plan) for RS Legacy Corporation (RSHCQ). The Plan became effective on October 8, 2015, and RSHCQ shares were canceled.

Effective October 8, 2015, existing RSHCQ options are adjusted to no longer call for the delivery of RS Legacy Corporation Common Shares upon exercise. The option symbol RSHCQ will not change. In settlement of RSHCQ exercise/assignment activity, a RSHCQ put exerciser (or call assignee) will receive a cash payment of the full aggregate strike price amount on the exercise settlement date. A RSHCQ put assignee (or call exerciser) will pay this amount on the exercise settlement date. Settlement will take place through OCC’s cash settlement system on the third business day after exercise. Since RSHCQ options are American-style, they are exercisable at the election of the holder. Expiration processing for RSHCQ options will take place in the normal fashion, including automatic exercise thresholds.

Pursuant to OCC Rule 807, equity stock option contracts whose deliverables are adjusted to call for cash-only delivery will be subject to an acceleration of the expiration dates for outstanding option series. (See OCC Information Memo 23707) Additionally, the exercise by exception (ex by ex) threshold for expiring series will be $.01 in all account types. All series of RS Legacy Corporation options whose expiration dates are after 10-16-2015 will have their expiration dates advanced to 10-16-2015. Expiration dates occurring before 10-16-2015 (e.g., Flex options) will remain unchanged. All RS Legacy Corporation options will utilize a $.01 exercise threshold.

No comments: