Dolan Faces Stock Delisting, Hires “Restructuring Officer”

Minneapolis-based Dolan’s stock has fallen to $0.52 per share, well below the New York Stock Exchange’s listing requirements, and a new executive appointment illustrates continued distress.

The Dolan Company continues to see trying times, appointing a chief restructuring officer (CRO) to try to right the ship as the company faces possible delisting from the New York Stock Exchange (NYSE).
 
Minneapolis-based Dolan provides professional services and business information to the legal, financial, and real estate industries.
 
Dolan’s stock has fallen nearly 90 percent in the last year, reaching $0.52 by Tuesday afternoon, well below the minimum requirements of the NYSE. The exchange sent a listings notice to Dolan because it requires an average closing price of at least $1 per share over 30 consecutive trading days to remain listed.
 
Dolan also said recently that it appointed Kevin Nystrom, the managing director of New York-based restructuring and financial advisory firm Zolfo Cooper, as its CRO. Dolan said Nystrom would report to the board of directors and will have oversight responsibility for the company’s operations and finances.
 
A CRO is sometimes hired when a company’s executives become overwhelmed with handling day-to-day operations in addition to a restructuring process, although the position has also been used to guide companies through bankruptcy proceedings, according to a Forbes report.
 
Dolan said Nystrom will work with Miami-based investment firm Bayside Capital, which holds the majority of Dolan’s debt under the company’s senior credit facility. Dolan CEO and President James Dolan said Nystrom will play “a very important role” in the company’s “efforts to stabilize [its] finances and strengthen [its] businesses.”

 
Dolan’s stock saw one of its steepest falls in November when it plummeted 50 percent after the company reported a continued quarterly loss and a 20 percent drop in sales.
 
For the third quarter, which ended September 30, the company reported total revenue of $35.5 million, down from $44.7 million in the third quarter of 2012. Third-quarter revenue fell short of analysts’ projections of $43.8 million.
 
Dolan Company’s revenue has been falling year after year—from $294 million in 2010 to $269 million in 2011 to $254 million in 2012. Now, the company expects its 2013 revenue to be between $150 and $154 million—almost half what it was three years before. Although a portion of that drop came from the sale of two of its struggling mortgage default businesses in July.
 
In September, Dolan adopted a so-called “shareholder rights plan,” which is meant to limit the amount of the company’s stock a shareholder or potential shareholder might purchase. The move was ultimately made to allow Dolan to pay lower income taxes in the coming years.
 
Dolan is one of Minnesota’s 60 largest public companies based on its annual revenue, although it may drop a few spots throughout 2014.

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