PHILADELPHIA and NEW YORK, May 10, 2013 (GLOBE NEWSWIRE) -- Institutional Financial Markets, Inc. (NYSE MKT:IFMI), a financial services firm specializing in credit-related fixed income investments, today announced that its Board of Directors has approved the adoption of a stockholder rights plan (the "Rights Plan") to help preserve the value of the Company's deferred tax assets, by reducing the risk of limitation of net operating loss and net capital loss carry forwards and certain other tax benefits under Section 382 of the Internal Revenue Code. The Company intends to seek stockholder approval of the Rights Plan at its next annual meeting. The terms of the Rights Plan are substantially the same as those of the Company's prior stockholder rights plan, which expired in December 2012.
Under Section 382, the Company's ability to realize the value of its deferred tax assets would be substantially limited if an "ownership change" occurred over a defined period of time. In general, an "ownership change" occurs where there is a greater than 50-percentage point change in ownership of a company's stock by stockholders owning (or deemed to own under Section 382) 5% or more of such company's stock.
In connection with the Rights Plan, IFMI has declared a dividend of one right for each share of common stock outstanding as of the close of business on May 20, 2013. After the Rights Plan takes effect today, any stockholder or group that acquires beneficial ownership of 4.95% or more of IFMI's outstanding common stock (an "acquiring person"), without the approval of the Company's Board of Directors, could be subject to significant dilution in its holdings through the exercise of the rights by stockholders other than the acquiring person. Under the Rights Plan, rights held by an acquiring person are not exercisable. Daniel G. Cohen, the Company's Chairman and Chief Executive Officer, and existing stockholders holding 4.95% or more of the Company's common stock will not be considered acquiring persons unless they acquire additional shares, subject to certain exceptions described in the Rights Plan. In addition, in its discretion, the Board of Directors may exempt certain transactions and certain persons whose acquisition of securities is determined by the Board of Directors not to jeopardize the Company's deferred tax assets.
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