Houston-based Boots & Coots International Well Control Inc. announced it received a payment of approximately $3.88 million from The Prudential Insurance Company of America on August 8. The payment was for short-swing liability under Section 16(b) of the Securities Exchange Act of 1934 that Prudential had inadvertently incurred in connection with certain sales of Boots & Coots’ common stock and conversions of Boots & Coots’ preferred stock effected by Prudential in March and July of this year.
Prudential voluntarily notified Boots & Coots of the liability and simultaneously tendered payment in the full amount of the liability. Section 16(b) is a law that imposes strict liability for profits realized by, among others, 10 percent stockholders who purchase and sell, or sell and purchase the company’s stock within any six-month period.
Jerry Winchester, the company’s CEO stated: “While it is unfortunate that Prudential inadvertently incurred this liability, we are impressed with Prudential’s candor and prompt payment. Obviously, this is a significant unanticipated benefit to the Company.”
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