Overseas Shipholding Group Inc., the New York-based tanker-fleet operator that was the subject of my column last week, filed for Chapter 11 bankruptcy-court protection today. In hindsight, it was a perfect short for anyone paying attention to the company's securities filings.
On Oct. 3, Overseas Shipholding disclosed that a member of its board and audit committee, G. Allen Andreas III, had resigned, citing a disagreement with the company over its handling of a tax issue. Andreas, a former vice president at the Wall Street investment bank Allen & Co, is a 43-year-old money manager in New York at Galaco Capital, which oversees his family's holdings.
Less than three weeks later, on Oct. 22, the company said investors should no longer rely on its financial statements since 2009, citing the same tax issue Andreas had cautioned about in his resignation letter. The company also said it might file for Chapter 11.
Overseas Shipholding's stock closed at $7.08 on Oct. 2, the day before Andreas's resignation letter was made public. It fell to $6.82 on Oct. 3. Yesterday, the shares closed at $1.13. Today, the New York Stock Exchange suspended trading in the stock and began delisting proceedings.
At least Andreas gave investors some advance warning.
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