Pre-call prep on Coyote Studios merger structure & cost savings

February 26, 2026 at 11:19 AM|42 min
Neutral

Bottom Line

The team is preparing for a call with a counterparty to present a proposed tax-free reorganization structure for merging Coyote Studios' operations, focusing on validating significant cost savings and operational consolidation.

Key Takeaways

Merger Structure:: The team plans to propose a 721 tax-free contribution of assets/liabilities into a single entity to simplify the merger of transportation and pro-supply operations.

Cost Savings:: Significant personnel savings (~$15M) are projected by consolidating fleet teams and reducing headcount from 316 to 177, with additional savings from insurance and real estate.

Open Issues:: Key items remain unresolved, including the treatment of union agreements, brand IP ownership, and the potential consolidation/shutdown of the Atlanta footprint.

Counterparty Communication:: The team notes a disconnect between what the counterparty's leadership says publicly (downplaying studio business) and what they are privately working on with the team.
Action Items
Finalize and prepare to present the summary dashboard showing the proposed merger structure, combined entity org chart, and projected cost savings ($15M personnel, $800K-$1.2M insurance). — Speaker B
Obtain and review the union white paper (Commercial Services Union agreement) to understand assignment/contribution requirements and potential liabilities.
Analyze the Atlanta footprint (TR vs. counterparty's operation) to decide on a consolidation/shutdown strategy and quantify the potential rent/expense savings.
Clarify and validate the specific list of assets and 'relevant supporting liabilities' (e.g., operating leases, union agreements) to be contributed in the reorganization.
Request the detailed personnel information from the counterparty to validate the $15M payroll savings projection and headcount reduction plan.
Decisions
To present the proposed 721 tax-free reorganization structure and combined cost savings model as the basis for the upcoming call. — Speaker A
To frame the presentation around achievable tax-free mechanics, significant identified savings, and open items requiring further diligence. — Speaker A
Topics
Merger Structure & Tax Reorg Cost Savings Analysis Personnel Consolidation Real Estate & Lease Strategy Counterparty Communication Open Diligence Items

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