Copart Announces Pursuit of IRS Ruling for Planned Tax-free Spin-off
17 December 1999
Copart Announces Pursuit of IRS Ruling for Planned Tax-free Spin-off
BENICIA, Calif.--Dec. 17, 1999--Copart, Inc. , today announced that its Board of Directors has approved the creation of a subsidiary to operate and expand Copart's Internet businesses which provide quotes of salvage vehicle values (Copart ProQuote) and locate used automobile parts (CoPartfinder). Copart has initiated the process of seeking a private letter ruling from the Internal Revenue Service as to whether it can distribute shares of the subsidiary to its shareholders as a tax-free dividend. IRS approval may take from four to nine months and there can be no assurance that such approval will be received or will be issued on terms acceptable to the Company. The proposed transaction will be subject to receiving IRS approval and the business operating and market conditions at the actual time of the spin-off. Copart is also considering obtaining separate funding for these businesses.Founded in 1982, Copart provides vehicle suppliers -- primarily insurance companies -- with a full menu of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Salvage vehicles are either damaged vehicles deemed a total loss for insurance or business purposes, or recovered stolen vehicles for which an insurance settlement with the vehicle's owner has been made. Operating 70 facilities in 34 states, Copart also provides services to other geographic areas through its national network of independent salvage vehicle suppliers.
NOTE: Certain statements in this release may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements as a result of risk factors and/or factors affecting future results detailed in the Company's Securities and Exchange Commission reports, including variations in the company's operating results, the inability to continue to increase service fees, slowdowns in the timing or reduced size of future acquisitions and facility openings, the loss of vehicle suppliers or buyers, the announcement of new vehicle supply agreements by the Company or its competitors, changes in regulations governing the Company's operations or its vehicle suppliers, environmental problems or litigation.
