Life Support For LiveWire?
On Monday, October 26, LiveWire disclosed that CEO Karim Donnez had resigned, effective October 21. This set off a chain of events culminating in a “Special Restructuring Committee” being established and the appointment of a “Chief Restructuring Officer” effective immediately. “Major stuff happens when you appoint a CRO (Chief Restructuring officer,” explains our Wall Street insider. What is public knowledge is the 8K SEC filing this week. Here is the updated timeline for what has transpired:
October 21: CEO Karim Donnez departs
October 22: David Barse and Scott Nash appointed to Board Of Directors
October 25: Special Restructuring Committee appoints Roy Gallagher as Chief Restructuring Officer
October 25 LiveWire Conflicts Committee dissolved
October 28: LiveWire Group to release Q3 financials
Investing.com reports that David Barse and Scott Nash were named to the Board of Directors on October 22. Barse was also named to a newly formed Special Restructuring Committee. “According to the filing, Mr. Barse is considered independent under New York Stock Exchange rules and will receive a monthly cash fee of $45,000 for his board service, with additional per diem fees… Nash, currently the General Manager of Quality for Harley-Davidson, Inc., will not receive additional compensation for his LiveWire board service.”
The Special Restructuring Committee appointed Roy Gallagher as Chief Restructuring Officer, effective immediately. A Senior Managing Director at Ankura Consulting Group, LLC, Gallagher has more than 25 years in global financial markets focused on distressed debt investing. He will serve as the principal executive officer of LiveWire Group and report to the Special Restructuring Committee. According to Invest.com, Gallagher’s monthly services fee of $140,000 will be paid to Ankura Consulting Group, with additional hourly fees for other personnel, as outlined in the engagement letter.
LiveWire shares were down 63% year-to-date and trading at $1.65 today. LiveWire posted a negative gross profit margin of 11% in the past 12 months and continues to burn through cash. LiveWire Group also announced it will release its third quarter financial results before market hours on Thursday, October 29. There will be no separate earnings call.
