Skywest Limited 03(R) - Review Panel Requires Further Disclosure in Skywest 03 Review Proceedings

TP04/080

The Panel announces that on 01 September 2004, it has advised both CaptiveVision Capital Limited (CVC) and Skywest Limited (Skywest) that it has made a declaration of unacceptable circumstances in relation to the affairs of Skywest and has made orders requiring further disclosure for CVC’s off-market takeover bid for all of the ordinary shares in Skywest (the CVC Bid) to proceed. The declaration and orders are annexed to this Media Release.

The decision relates to an application by CVC for review of the decision made by the sitting Panel (the Skywest 03 Panel) in the Skywest 03 proceedings. The decision in Skywest 03 was announced by Panel media releaseTP04/69 on 30 July 2004. That Media Release gives a good deal of background to the substance of both proceedings and is available from the Panel's website.

The Review Panel advised that it has found, as did the Skywest 03 Panel, that unacceptable circumstances existed in relation to the affairs of Skywest. The unacceptable circumstances arose as a consequence of non-public, material information given by the Chief Financial Officer of Skywest, Mr Craig Lovelady, to CVC prior to and during the CVC Bid, which CVC did not disclose in its bidder’s statement.

However, faced with circumstances which had moved somewhat further, and with the benefit of considerably more information than the Skywest 03 Panel, the Review Panel decided that it could allow the CVC Bid to proceed, with supplementary disclosure, and subject to many of the same conditions and requirements that the Skywest 03 Panel considered necessary.

The Review Panel will consider referring aspects of the Skywest proceedings to ASIC, asking ASIC to consider whether those aspects warrant further enquiries or enforcement action by ASIC.

Declaration and Orders

In general terms, the Panel has ordered that:

  1. the CVC Bid be allowed to proceed after CVC and Skywest make the following disclosures, in a form acceptable to the Panel:
    1. CVC, in a supplementary bidder’s statement sent to all Skywest shareholders:
      1. CVC has obtained information concerning the affairs of Skywest (the CVC Information) which was material to, but has not been provided to, shareholders in Skywest, including details of the nature and extent of the relationship between Mr Lovelady and CVC and Advent Television Ltd, and including details of how the CVC Information was provided to CVC and over what period of time;
      2. a description of the CVC Information (noting that it is not possible to determine exactly what was given to CVC);
    2. Skywest, in a supplementary target’s statement sent to all Skywest shareholders:
      1. subject to obtaining any necessary exemption from ASIC, the present status of its proposals to issue shares under a prospectus and become a listed entity;
      2. its expectation as to its financial performance during the financial year ending on 30 June 2005 and as to its financial position on 30 June 2005, with an appropriate statement of risks and contingencies;
  2. all Skywest shareholders who have accepted the CVC offers prior to the publication of the supplementary bidder’s statement and supplementary target’s statement have the right to withdraw those acceptances (however, nothing in the orders would prevent those shareholders later accepting the CVC offers after having read the supplementary disclosure information);
  3. CVC must ensure that its bid is open for at least a fortnight after the supplementary bidder’s statement is dispatched to Skywest shareholders;
  4. Skywest security holders who sold their securities to CVC under contracts of purchase entered into after 1 December 2003 have the right to void those contracts; and
  5. CVC pay the reasonable costs and expenses of Skywest arising out of the Skywest 03 proceeding (including some of the costs of engaging Ernst & Young) and the further costs of Skywest in engaging Ernst & Young for the Skywest 03R proceedings.

The Review Panel’s orders are similar to those which the Skywest 03 Panel said that it had contemplated if it could have been sure that it had all of the CVC Information (passed by Mr Lovelady to CVC). The Review Panel considers that it is probable that other information concerning the affairs of Skywest was provided to CVC shortly before or during the Bid in such a way that none of CVC, Skywest and the Panel can now ascertain all of that information. However, as CVC provided further information and independently supported assurances to the Review Panel concerning the CVC Information, the Review Panel was faced with a significantly better body of information on which to decide than the Skywest 03 Panel. The Review Panel considers that its better information flowed to a considerable extent from the firm decision of the Skywest 03 Panel.

Review Application

In its application for review, CVC had requested that the Review Panel change the declaration of unacceptable circumstances made by the Skywest 03 Panel and undertake a fresh consideration of the orders that might need to be made following from any amendment to the declaration. CVC also sought interim orders maintaining the status quo during the review.

The Review Panel’s Further Information

The heart of the two Skywest 03 matters was communications between Mr Lovelady of Skywest and Mr Robert Chatfield, Chief Executive Officer and Director of CVC, and other CVC directors or officers. The Skywest 03 Panel was told that at least two confidential documents of Skywest were sent by email from Mr Lovelady to Mr Chatfield.

The Skywest 03 Panel had attempted to establish the scope of communication of information from Mr Lovelady to Mr Chatfield. The parties were offered an opportunity to exchange all information and communications that they knew of which had passed from Mr Lovelady to Mr Chatfield. However, that opportunity was not taken up by CVC at the time. CVC submitted in its application to the Review Panel that it had not taken up the opportunity in the previous proceedings because the time offered to achieve the exchange had been impossibly short. It now offered to cooperate. The Review Panel acknowledges that the time proposed for exchange of information in the Skywest 03 proceedings had been short (as are many times in Panel proceedings), but neither CVC nor its advisers made any attempt to inform either Skywest or the Skywest 03 Panel of its concerns about time, or to seek additional time. CVC merely declined to exchange the information.

The Review Panel commenced its proceedings with the entire information body of the Skywest 03 proceedings as its start. With CVC’s offer to cooperate in exchanging available information, the Panel directed all parties to do that as the first step, and for submissions in response to the Panel’s brief to follow after parties had had time to consider information that had been provided in the exchange.

As explained in the Skywest 03 decision and reasons, much of the information flow between Mr Lovelady and Mr Chatfield had been via a large number of emails over an extended period of time while Mr Lovelady was Chief Financial Officer of Skywest. Skywest submitted in the Skywest 03 proceedings that it was difficult for it to make its case properly because it did not know, and was unable to determine, the full extent and content of those communications. Most of the emails had been sent from Mr Lovelady’s laptop computer, rather than the Skywest main network. Information in some emails had had been hidden by a disguise and encryption software system. Many of the emails had been deleted, many were recoverable only from back-up records, archives and by forensic analysis of computer hard drives. Many were found only in part and many were never found. These were the reasons Skywest had wanted to see what records CVC had of the communications.

CVC had declined to exchange information with Skywest in the Skywest 03 proceedings. It had also declined an opportunity that the Skywest 03 Panel gave it to affirm that the Skywest 03 Panel had copies of all material information concerning Skywest that CVC had received from Mr Lovelady. CVC submitted in its application for review that if it had properly understood the Skywest 03 Panel’s offer, it would have accepted it and provided the statement. However, it did not do so, and the Skywest 03 Panel made its decision in part based on not having been given that affirmation.

In the review application, both parties commissioned independent experts to examine the hard drives and back up records of various laptop and server computers. The experts were asked to look for and report on, all email communications from officers of Skywest to CVC, Advent, and any of CVC or Advent’s officers and advisers. The parties exchanged records of, and copies where available, of those emails.

Once that review and exchange had taken place, and the Review Panel had received submissions from the parties based on the exchanged information, the Review Panel considered that it had a reasonably sufficient basis to assess the information which CVC had had when it made its bid. It therefore considered that it was in a position, which the Skywest 03 Panel had not been in, to determine what supplementary disclosure it required to allow the CVC Bid to proceed.

The CVC Information

The Skywest 03 Panel described most of the non-public, information which Mr Lovelady had provided to CVC. The Review Panel agrees with the Skywest 03 Panel that it is reasonable to believe that at the time of CVC making its bid, the CVC Information at least in so far as it related to 2005 financial year forecast information pertaining to Skywest was material, and should have been disclosed. In relation to the Initial Public Offering (IPO) proposed by Skywest, the Review Panel considers that the fact that Skywest was endeavouring to pursue an IPO was material and should have been disclosed by CVC. The Review Panel agrees with the Skywest 03 Panel that it constituted unacceptable circumstances for CVC not to have disclosed that information described above in its bidder’s statement.

However, significant time has now passed since CVC’s bidder’s statement was published, and Skywest has itself published significant further information about its performance and prospects. The Review Panel considers that the passage of time, and Skywest’s own further disclosures have rendered much of the CVC Information no longer material. The Review Panel considers that Skywest shareholders should not be deprived of the opportunity to consider the CVC Bid, if they are given appropriate supplementary information. This is also consistent with the Skywest 03 Panel’s view of the appropriate course of action if it had been able to be reasonably confident that it knew what the CVC Information consisted of.

The Review Panel is not persuaded by Skywest’s submissions that CVC should be prevented from continuing its bid. Given that the Review Panel considers it has a reasonable basis for assessing what supplementary disclosure is required, preventing CVC from continuing its bid would constitute a punitive response by the Panel for CVC and Mr Lovelady’s conduct and deprive Skywest shareholders of an opportunity to consider the CVC Bid. That is not the Panel’s role. It is for other regulatory bodies to consider and determine whether or not any punitive regulatory action is appropriate.

The Lovelady – CVC Relationship

The Review Panel considers that the content and volume of information passed from Mr Lovelady to CVC, the nature of Mr Lovelady’s relationship with CVC while he was an officer of Skywest and the discussions between Mr Lovelady and Mr Chatfield, were extremely unusual and aspects of it were inappropriate. The Review Panel considers it appropriate that CVC describe in its supplementary bidder’s statement the CVC Information and the relationship between Mr Lovelady and CVC while Mr Lovelady was an officer of Skywest, for the information of the Skywest shareholders.

Skywest IPO and 2005 Forecast

One of the primary pieces of information disclosed by Mr Lovelady to CVC was a forecast of Skywest’s profit for its 2005 financial year. Since the time of that disclosure much has happened to Skywest, its operations and its operating environment. The Review Panel considers that the 2005 profit forecast given to CVC is now very likely well stale. However, the Review Panel considers that some information about Skywest’s internal projections for its performance in 2005 having been disclosed (at least to CVC), it is appropriate for the Directors of Skywest to make some statement to Skywest shareholders concerning their view of Skywest’s prospects in the near future.

The Review Panel acknowledges the difficulties facing directors of a company such as Skywest in turbulent times. Therefore, any forward looking statement by Skywest directors will need to be appropriately cautioned and the necessary uncertainties explained in terms of the assumptions used and the risks which the forward looking statement faces. However, the Review Panel considers that Skywest shareholders need such information under the circumstances of these proceedings and the partial disclosures that they have caused.

The other primary piece of information given to CVC was a document discussing Skywest’s consideration in early 2004 of conducting an IPO. It was agreed within both the Skywest 03 and Skywest 03(R) proceedings that Skywest had previously made public mention of the possibilities, at some stage, of it making an IPO. The world and the marketplace have changed significantly since Skywest prepared the document which was given to CVC, and like the 2005 forecast, the Review Panel considers that the information in the IPO document given to CVC is very likely well stale. However, like the forecast information, the Review Panel considers that Skywest should tell its shareholders whatever information it may properly tell them now about its plans for an IPO (if any and subject to any necessary ASIC consent).

Current acceptances and previous acquisitions

The Review Panel agrees with the Skywest 03 Panel that acceptances into the CVC Bid made in an uninformed market should be open to withdrawal at the choice of the Skywest shareholders. Similarly, persons who sold Skywest securities to CVC while CVC was in possession of some or all of the CVC Information should have the right to rescind those sale contracts if they choose. The Review Panel has therefore made similar orders to those made by the Skywest 03 Panel in relation to these issues.

Costs

The Review Panel has confirmed the decision of the Skywest 03 Panel to make a costs order against CVC in relation to the Skywest 03 proceedings, and has ordered that CVC:

  • pay Skywest’s costs in the Skywest 03 proceedings on a party-party basis, including at least some of the costs incurred by Skywest in retaining Ernst & Young to provide its independent forensic IT investigation in relation to the initial Skywest 03 proceedings (in other words, the same costs order made by the Skywest 03 Panel).

In addition, in relation to the Skywest 03(R) proceedings, the Review Panel has ordered that CVC:

  • pay the costs incurred by Skywest in retaining Ernst & Young to provide its independent forensic IT investigation in relation to the Skywest 03(R) proceedings.

The Review Panel acknowledges that the costs order departs from the policy set out in the Panel’s Guidance Note 9 “Costs Orders” which envisages a narrow set of circumstances in which a costs order may be made. However, the Review Panel agrees with the Skywest 03 Panel’s views that the circumstances with which Skywest was confronted in the Skywest 03 and Skywest 03(R) proceedings were quite unusual and that the need for Skywest to engage in the type of investigation that it undertook was as a result of CVC engaging in a completely inappropriate course of behaviour. On that basis, the costs orders are warranted.

Skywest 03(R) and Skywest 03 Decisions

The Review Panel does not consider its decision to be inconsistent with the decision or policy considerations of the Skywest 03 Panel. In fact, the Review Panel agreed with the Skywest 03 Panel’s decision considering the scope of information which was made available to the Skywest 03 Panel at the time the Skywest 03 Panel made its decision.

As set out in the Panel’s media release TP04/69 dated 30 July 2004, the Skywest 03 Panel first sought to formulate orders that might have allowed the Bid to proceed, as it was reluctant to deny Skywest shareholders an opportunity to consider the merits of the Bid for themselves. However, the Skywest 03 Panel could not be satisfied that it could make a complete assessment of at least the scope of all the information which Mr Lovelady provided to CVC throughout the period of his engagement by Skywest and which should have been disclosed to shareholders. In particular, the Skywest 03 Panel was concerned that CVC declined an offer by Skywest to exchange documents retrieved from their respective computer systems, did not provide any further evidence of correspondence between it and Mr Lovelady at any time during the initial proceeding and did not take advantage in its submissions of the opportunity that the Panel afforded to it to address this issue. Accordingly, the Skywest 03 Panel could not be certain that the unacceptable circumstances identified by it could be remedied by additional disclosure by CVC. On this basis, the Skywest 03 Panel was unable to formulate orders of the kind that might allow the Bid to proceed.

As set out in the Panel’s Guidance Note 2 “Reviewing Decisions”, review proceedings are de novo considerations on the merits of the facts as they stand at the time the Review Panel makes its decision and are not limited to the facts found by the Skywest 03 Panel. In accordance with this policy, the Review Panel considered that the factual circumstances had sufficiently changed to warrant new orders being made that the Bid be allowed to proceed. These circumstances included:

  • the thorough independent investigations conducted on behalf of Skywest, CVC and Advent in relation to the email communication between any employee of Skywest to each of CVC and Advent (and each of their officers and advisers);
  • the exchange between the parties of all emails retrieved as a result of the investigations into the email communication; and
  • various signed statements being provided to the Review Panel by the CFO and directors of CVC in accordance with section 199 of the Australian Securities and Investments Commission 2001 (Cth).

In considering the orders which it should make to remedy the unacceptable circumstances, the Review Panel considered whether the Bid could be put back on track by orders which related to further disclosure and whether, if this were done, the interests of those affected by those unacceptable circumstances would be protected. Having the benefit of the additional information provided by the parties in the review proceeding, the Review Panel was satisfied that the Bid could be put back on track and that the interests of shareholders affected by the unacceptable circumstances would be adequately protected following the dispatch of the supplementary statements by CVC and Skywest (which are to be pre-approved by the Review Panel).

Timing

CVC has been required to provide its proposed supplementary bidder’s statement to the Review Panel by Friday 03 September. Skywest has been required to provide its supplementary target’s statement to the Review Panel by Friday 10 September. It will then take a number of business days for the Review Panel to consider the documents, give the other parties time to comment on the draft documents, settle changes (if any) with the party, and for the party to publish and print the documents.

The Skywest 03(R) Panel and Process

The President of the Panel appointed Simon McKeon (Sitting President), Meredith Hellicar (Deputy President) and Teresa Handicott as the sitting Review Panel.

A copy of the declaration and orders will be available on the Panel’s website, attached to this media release: Media Releases.

In due course, the Panel will publish the reasons for its decision in the Skywest 03R proceedings on its website at: Decisions

Nigel Morris
Director, Takeovers Panel
Level 47, 80 Collins Street
Melbourne, VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au

Takeovers Panel
Corporations Act 2001

Sections 657A and 657D

Declaration and Orders

In the matter of Skywest Limited 03(R):

PURSUANT to section 657EA, the Panel revokes the declaration of unacceptable circumstances and the orders made on 30 July 2004 in the matter of Skywest Limited 03 and makes the following declaration and orders.

WHEREAS:

  1. CaptiveVision Capital Ltd (CVC) (a company incorporated in Singapore, which is a subsidiary of Advent Television Ltd (Advent)) has made a takeover bid (the Bid) for all of the ordinary shares (Skywest Shares) in Skywest Limited (Skywest), an unlisted public company with more than 50 shareholders;
  2. CVC obtained and possessed certain information concerning the affairs of Skywest (the Information) from the chief financial officer of Skywest (the CFO) during the period in which CVC acquired its pre-bid stake and when it lodged its bidder’s statement;
  3. The Information included:
    1. management accounts for parts of the financial year ended 30 June 2004;
    2. details of the banking arrangements entered into by Skywest;
    3. the CFO’s estimated projected profit and earnings before interest and tax, depreciation and amortisation for Skywest for the financial year ending 30 June 2005;
    4. the CFO’s opinion, based on advice received from stockbrokers, as to the value of Skywest Shares on a proposed listing of Skywest; and
    5. the price at which Skywest proposed to offer shares under a prospectus and the structure of the proposed offer;
  4. Some of the Information was material:
    1. to a decision by a Skywest shareholder whether to sell their Skywest Shares to CVC during the acquisition by CVC of its pre-bid stake; and
    2. to a decision by a Skywest shareholder whether to accept an offer under the Bid, or was information which such a holder would reasonably require in order to make an informed assessment whether to accept such an offer;
  5. The Information had not previously been provided to Skywest shareholders and was not included in the bidder’s statement issued by CVC or the target’s statement issued by Skywest in relation to the Bid; and
  6. The bidder’s statement failed to disclose information concerning the relationship between the CFO with CVC and Advent, the extent of the information and the circumstances of the assistance provided by the CFO to CVC (and its advisers) in connection with the acquisition of CVC’s pre-bid stake and the Bid,

    PURSUANT to section 657A of the Corporations Act, the Takeovers Panel HEREBY DECLARES that the circumstances described in recitals B to F are unacceptable circumstances in relation to the affairs of Skywest because of the effect of those circumstances on the Bid.

    PURSUANT to section 657D of the Corporations Act, the Panel HEREBY ORDERS that:

  1. CVC must prepare and dispatch in accordance with sections 643, 645 and 647 of the Corporations Act and Order (f) a supplementary bidder’s statement in relation to the Bid, in which it discloses that:
    1. CVC has obtained the Information which has not previously been provided to shareholders in Skywest and which was not included in the bidder’s statement issued by CVC or the target’s statement issued by Skywest in relation to the Bid, including details of the nature and extent of the relationship between the CFO and CVC and Advent, how the Information was provided to CVC and over what period of time;
    2. the Information included:
      • management accounts for parts of the financial year ended 30 June 2004;
      • details of the banking arrangements entered into by Skywest;
      • the CFO’s estimated projected profit and earnings before interest and tax, depreciation and amortisation for Skywest for the financial year ending 30 June 2005;
      • the CFO’s opinion, based on advice received from stockbrokers, as to the value of Skywest Shares on a proposed listing of Skywest; and
      • the price at which Skywest proposed to offer shares under a prospectus and the structure of the proposed offer;
    3. some of the Information was material to a decision by a shareholder in Skywest whether to accept an offer under the Bid, or was information which such a holder would reasonably require in order to make an informed assessment whether to accept such an offer;
    4. it is probable that other information concerning the affairs of Skywest was provided to CVC shortly before or during the Bid in such a way that none of CVC, Skywest and the Panel can now ascertain all of that information; and
    5. each person who has accepted an offer under the Bid has until the end of the offer period under the Bid a right to withdraw that acceptance which is equivalent to the right conferred by section 650E of the Corporations Act, where it applies. This information must be disclosed prominently on the cover of the supplementary bidder’s statement.
  2. Skywest must prepare and dispatch in accordance with sections 644, 645 and 647 of the Corporations Act and Order (f) a supplementary target’s statement in relation to the Bid, in which it discloses:
    1. subject to obtaining any necessary exemption from ASIC, the present status of its proposals to issue shares under a prospectus and become a listed entity; and
    2. its expectation as to its financial performance during the financial year ending on 30 June 2005 and as to its financial position on 30 June 2005. This forecast is not necessarily required to contain numerical estimates, should contain all and only the details for which Skywest believes it has a reasonable basis, and should be accompanied by a statement of any risks and contingencies thought appropriate by Skywest.
  3. If its supplementary bidder’s statement mentioned in Order (a) is dispatched to offerees under the Bid after 16 September 2004, CVC must, at the same time as it dispatches the supplementary bidder’s statement, extend the offer period under the Bid to end no earlier than 14 days after that day.
  4. CVC must ensure that each person who has accepted an offer under the Bid (an accepting offeree) has for at least one month after the date of dispatch of the supplementary bidder's statement a right to withdraw that acceptance which is equivalent to the right conferred by section 650E of the Corporations Act, where it applies. CVC may not declare offers under the Bid free of a defeating condition if that declaration deprives any accepting offeree of that right or cuts short the period for which the right exists.
  5. Each contract of purchase of Skywest Shares or other securities issued by Skywest (Skywest Securities) to which CVC is a party as purchaser entered into after 1 December 2003 (other than takeover contracts relating to the Bid) (each, a Purchase Contract) is voidable at the instance of the vendor under that Purchase Contract (each, a Vendor), and to give effect to this Order:
    1. CVC must send to each Vendor in accordance with Order (f) a notice which:
      1. identifies the Purchase Contract and the Skywest Securities the subject of that Purchase Contract; and
      2. informs the Vendor that the Vendor has the right by reason of this Order to give notice to CVC, accompanied by a cheque for the amount of the consideration received by the Vendor under the Purchase Contract and an instrument of transfer to the vendor of the relevant Skywest Securities, to cancel the Purchase Contract (Cancellation Notice) but only if that notice is given to CVC at an address in Australia specified in the notice not later than 1 month after the Vendor receives the notice;
    2. the notice must be accompanied by a copy of each of:
      1. CVC’s bidder’s statement in relation to the Bid (together with any supplementary bidder’s statement);
      2. Skywest’s target’s statement in relation to the Bid (together with any supplementary target’s statement); and
      3. the Panel’s Media Release announcing the making of this Declaration and these Orders;
    3. When it has complied with sub-paragraph (ii), CVC must immediately give notice to the Panel, each party and ASIC that it has sent all the Notices and accompanying documents to all the Vendors;
    4. CVC must give the Panel, each party and ASIC a copy of each purported Cancellation Notice and any accompanying documents received by it before the 30th business day after it has given notice under sub-paragraph (iii);
    5. CVC must execute the instruments of transfer re-transferring to each Vendor who gives a valid Cancellation Notice the relevant Skywest Securities; and
    6. CVC must pay any stamp duty on any instrument of transfer executed under sub-paragraph (v) and present the stamped transfers to Skywest for registration.
  6. The supplementary bidder’s statement mentioned in Order (a) and the notice required by order (e) must be submitted to the Panel in draft by 5.00 p.m (AEST) on Friday 03 September 2004. The supplementary target’s statement mentioned in Order (b) must be submitted to the Panel in draft by 5.00 p.m (AEST) on Friday 10 September 2004. The Panel may require the relevant party to amend the draft, and then to submit it to each other party and ASIC for one business day to enable them to make comments which the Panel will take into account before approving the draft as complying with the relevant Order. The relevant document must be lodged with ASIC and dispatched to all offerees, whether or not they have accepted, within 2 business days after the Panel approves the draft.
  7. CVC must pay Skywest the following amounts:
    1. the costs and expenses of Skywest (on a party-party basis, in accordance with the Federal Court scale) arising out of, or connected with the Skywest 03 proceeding (that is, the proceeding at first instance, not including this review proceeding); and
    2. the costs incurred by Skywest in engaging Ernst & Young in relation to both the Skywest 03 proceeding from 18 June 2004 until and including 8 July 2004 and this review proceeding from 3 August 2004 until and including 23 August 2004.
  8. If CVC and Skywest do not agree on the amount of costs and expenses under Order (g), the following procedure is to be used:
    1. Skywest must provide CVC with an itemised bill of its costs in relation to this proceeding;
    2. if CVC objects to the amount claimed by Skywest, Skywest must provide either:
      1. (i) a bill of costs in taxable form, or
      2. (ii) the itemised bill of costs and to make their file available, to an independent cost consultant, approved by the Panel Executive;
    3. the independent cost consultant will then assess the costs to be paid by CVC in respect of Skywest;
    4. if the independent cost consultant determines that the costs proposed by Skywest are to be reduced by 10% or more, the costs of employing the independent cost consultant to assess costs are deducted from the costs payable to Skywest. Otherwise, those costs are to be part of the costs paid by CVC; and
    5. CVC must not transfer or dispose of any shares (or any unit of them) which it holds in Skywest and Skywest must not register a transfer of those shares until the Panel receives confirmation from Skywest that it has received payment of its costs from CVC (with such confirmation to be provided by Skywest to the Panel immediately after it has received payment of its costs).
      1. Any party may apply in accordance with Procedural Rule 9.5 and Part 6 of the Procedural Rules for an order consequential or ancillary to these orders, or varying these orders.

Simon McKeon
President of the Sitting Panel
Dated 31 August 2004

 

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