The Dolan Company (fka DOLNQ)

[ErnieBilco]

Escrow payout showed up in my Scotty acct this morning - .04276 is what it comes out to.

[UserAlias1]

You #$@%'# *%&, $DOLNQ went up 105% that EXACT day that you sent me this post:

Another run killed by shorts, MM's and manipulators, congrats you fucking pieces of shit

What is wrong with you? $DOLNQ

[CollegeGrad22]

ouch...that sure did happen quick. Glad I pulled out last week. This could have been a great play....

[Renee]

DOLNQ (and DONPQ- Preferred Shares): BK declared effective. All shares cancelled at 1645 (4:45 P.M. EST)

http://www.otcbb.com/asp/dailylist_detail.asp?d=06/12/2014&mkt_ctg=NON-OTCBB

[ZEON1]

All along the argument was that equity is way out-of-the-money, not even close to having any value. Suddenly, it turns out equity is actually in the money, but, pay attention, gets the measly 3.2m, while this cash positive but "bankrupt" company makes 20m $ from operations in one YEAR alone! LOL, what a bunch of crooks!!!

[Doubledown22]

Because they are nutless, corrupt crooks who I'm sure personally got taken care of and that is all that mattered to them.

IMO,

DD22

[ZEON1]

We don't know whether the EC has accepted this. The court order can be appealed after all.

[ErnieBilco]

I can't remember an EC that couldn't fight - but I guess there's a first for everything in a BK. Seems it was wasted money paying for an EC with no balls.

JMO

[everett7]

It wasn't the judge's decision, the Equity Committee didn't have to accept this settlement, they could have chose to litigate, this was going to trial.

[Doubledown22]

There is no integrity, fairness or justice left in the financial markets anymore. Complete ass rape and greed rules the courts and the "system".


DD22

[ErnieBilco]

Very disappointed in yet another BK judge and also those who knew the outcome prior to the PR - they should all be locked up IMO

[everett7]

Why would the EC agree to that settlement??? Might as well roll the dice in a trial here, I thought EC had a great case here.

[ErnieBilco]

The theft of companies thru BK continues - what a fraud.

[Windsortrader519]

It beats the hell out of chapter 7. At least the company stays alive

[everett7]

Yup - Equity Committee agreed to a $3.2 million settlement, WTF

[Windsortrader519]

Chapter 11. Confirmed for Dolan

[UserAlias1]

Well, i bid a .01 for a little lol.

[UserAlias1]

Yea this is insane!

[everett7]

WTF is going on here

[everett7]

Looks like manipulation to me, they will hold this down until July 10.

[UserAlias1]

I know, right? Interesting.

[everett7]

Did I miss a filing or something? Why the PPS drop this AM?

[BG2008]

everett7,

I get your point regarding unlimited upside. However, I think you are too optimistic with how big that upside is. If the equity committee is arguing for $212 million. I would imagine that's the number you should peg total enterprise value. Let's say that they are able to discharge $10 million of the $15mm disputed prepetition lender claims (I used $10mm because the 7th and 8th Amendment occurred after Bayside took over, 6th and earlier happened prior to Bayside involvement).

$212mm - $167mm (177mm claims less $10mm) - $18mm (preferred) = $27mm

At 12.4 cents per share for the common or $3.84mm market cap, this is 7.0x upside versus let's say you have to pay $4 for the preferred, the preferred still represents 6.5x. But the preferred gets paid first. In an outcome where the total firm value is $185 or less, you will be very glad that you owned preferred rather than the common. It's hard for me to imagine that there will be 20-30x upside. For 20-30X upside for the common, you need total enterprise value to be $261mm to $300mm. I am not comfortable with those figures when the equity committee is arguing for a $212mm valuation.

Any sorts of breach of fiduciary? How much is that worth? $10mm? That's another 2.6x return based on a 12.4 share price. We have accounted for the lender claims being thrown out. Any upside in common upon re-org, I think that's a separate trade. You're making a business bet for the long run in that scenarior. As a sanity check, to get 20x upside for the common which equates to a $261mm valuation, you need DiscoverReady to be worth about $165 to $205mm assuming rest of portfolio is about $95mm for Counsel Press, NDEX notes receivable, NOL, Business Information, Real Estate, Minority Stake in Detroit Legal News, and Tax Receivable.

That is too Rich of a valuation for Discover Ready. I think a $120-$150mm valuation for DiscoverReady is more reasonable.

[everett7]

I think you guys are looking at it wrong - I see it as the Preferred having an absolute cap at $25, which is 12x (although try to buy any preferred and you can't, you would have to pay over $3-4 to get any significant chunk). The common on the other hand has unlimited upside - especially if certain of the Bayside claims are thrown out by the judge or if there is some sort of breach of fiduciary duty found. All of that excess goes to the common - and if the common gets an equity stake in the reorganized entity, again there is unlimited upside - common could have value of multiple dollars per share, which is 20-30x.

[ErnieBilco]

I think it has to do with capital outlay and risk aversion.

20 shares of common for a single share of preferred makes more sense to price sensitive gamblers I guess.

I sure as hell wish I didn't sell my .061 around a dollar a while back - that would have been amazing if they paid out in full and I had held..... but I didn't so I'm just hoping for 1 day of badddddd news to buy back into preferreds to go with the commons I hold.

Part of the problem is that the assets that make up the valuation are not in BK - they are trying to steal them while leaving equity and liabilities behind.

[BG2008]

I am surprised that the preferred (DONPQ) is not talked about here. Yes, it is less liquid. But, it is more senior to the common. If common is in the money, then the preferred maybe worth $26 including dividend accrual. It is trading at $2.00 per share. It appears to be the much better instrument to own in this situation. If the equity is arguing that the entire company is worth $212mm, the hurdle is $177mm, then the preferred is made whole with ~$18mm claim which represents 12X upside. With the common trading at $0.124/share representing 3.84mm market cap, there is only 3.42x upside. It confuse me why the prefers trades at such a discount relative to the common shares given that it is the more senior security.

My thought about the debtor/lender valuation by Peter J. Solomon is "really?". For example, they discount the $17.3mm notes receivable at 22%, the NOL at 24%, and they are valuing that Bayside's debt recovery is about 56-67 cents on the dollar. See link Pg. 36, 37, and 39. From the court hearing, Bayside bought the debts at 80-85 cents on the dollar. As a sanity check, Bayside is too smart to enter into a trade to be down 30-40% from the beginning. The judge even took the time to ask Bayside if there was a deal to pay off the debt at par, would Bayside take it. It is rather clear from the calls that Bayside wanted the operating business from the get go.

http://www.kccllc.net/dolan/document/1410614140603000000000010

[dkguyinvest]

Here are the website where all the dockets are
http://www.kccllc.net/dolan/document/list/3816

[bumblebee8]

Where do they post these dockets. Is there a website for the court?

[everett7]

Docket #410: Company had a bid for a buyout in middle of January, $165M for company, full payment of preferred and .32 cents a share to common, but they could not accept because Bayside had already forced them into bankruptcy. If this isn't a clear indication of valuation, then I don't know what is.

[everett7]

Silence, no volume. What's happening in court??

[Liam_S]

Looks like the judge did not overrule the EC motion to deny the BAC testimony afterall (Docket #397). Well, I guess I was misinformed then. That's one up for equity, one down for Dolan and Bayside.

[Liam_S]

No

[everett7]

Were you at the hearing?

[Liam_S]

Yesterday, there were testimonies as to the valuation of the company. The EC had earlier petitioned the judge to deny testimony regarding the company's future relationship with BAC which one of Dolan employees had discussed with a BAC rep. Unfortunately the judge over-ruled the EC objection and allowed that testimony. What does that mean for equity? no one knows yet. I personally found it puzzling that the EC counsel never got to perform any discovery wrt BAC considering that BAC is DiscoverReady's largest client.

My understanding is that the testimonies about valuation will continue Friday and might even extend beyond that. So basically, there was nothing material coming out of yesterday's hearings and I suspect that's the reason we don't see much activity one way or the other. If materially positive info comes out of Friday's hearing, then we'll see massive buying. Otherwise we'll see a massive sell off. We just have to wait and see at this point.

If I were the judge, I'll just put this whole thing up for sale to determine real value. What's the point sitting in on lengthy sessions when we can let the market determine value and lay this whole thing to rest once and for all?

[everett7]

I've heard (and seen) that this particular bankruptcy judge, Shannon, is extremely fair and equitable. He also has the US Trustee on his back. I think they turn down the plan in its current form and force some sort of settlement - my best guess that it is a stake of ownership in the newly organized company, because that's easier to give away than cash.

[ErnieBilco]

I have yet to find one that isn't, but there should be value for equity - will we get it? Who knows?

[everett7]

You're assuming that these lawyers are corrupt and will trade on this information or inform their friends to. I think there will be some sort of settlement.

[ErnieBilco]

The lack of buying indicates the lawyers don't like what they heard yesterday. I've never seen a good hearing result in no interest.

Now I'm nervous but hopeful

[ZEON1]

I wonder why Bayside have not published the Monthly performance statements yet and asked for an extension and what they have to hide. The company made 20 mil USD in free cashflow over the last year. If it shows similar performance it is going to be very difficult for these crooks to make their case that it is "bankrupt"

[Liam_S]

Anyone at the hearing today? please provide a debrief. TIA

[CollegeGrad22]

Looks like they might try and smash this back to the .06-.07 range before any new developments come out......

I will be loading in that range if it happens......

[everett7]

I had a feeling the market makers would try some BS manipulation nonsense today, let's see what the court has to say

[Dean9690]

Hey Guys,

new investor here could someone give me a quick summary of what this hearing means for the company and future pps?

Thanks

[Liam_S]

Docket #366, page 17:

The cumulative result of Goldin’s flaws is a valuation that is nearly $100 million greater than that derived by PJSC?: $212 million as compared to PJSC’s valuation of $118.5 million. Goldin’s results-oriented approach should be rejected, in favor of the careful, reasoned approach of PJSC.

[everett7]

Where did you see the $212M valuation from the EC?

[Liam_S]

The items kicked to June are really non-issues. The two main issues are a) the validity of Bayside's claim and b) the company valuation. Those two are what will get kicked to Friday if the hearing cannot be concluded today.

Valuation is the bigger deal of the two. The debtor is claiming it's worth $118M while the EC is claiming the value is worth $212M. Equity needs a value of greater than $177M to be in the money. We'll see how this plays out.

[everett7]

May 30 is supposed to be the continuation date if they don't resolve everything today, the June 20 date I thought was only for stock transfers?

[ErnieBilco]

Looks like they kicked the can to Friday and all the way into June on others.

[everett7]

I agree 100%, I think common PPS should be much higher right now

[Liam_S]

The fact that we don't see mass sale or purchase activity tells me that no major decision has been made yet. The good thing about this whole saga is that the outcome is binary -- either settlement, in which case we'll see massive buys or the POR gets approved in which case the share price will tank faster than anyone can push the sell button. No activity on the preferreds at least tells me things are still in equity's favor so far.

Based on my reading of the documents on the court docket, the likelihood of Bayside winning this one is a lot less than the likelihood of Bayside losing. I predict a settlement at the end of it all... either that or the entire company is put up for sale, which will see this BK getting dragged out for another few months.