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Re: vics picks post# 13

Friday, 11/23/2012 2:35:33 PM

Friday, November 23, 2012 2:35:33 PM

Post# of 52
Sure. Clipper Wells is a bit of a gamble so naturally any added expenses that ends up a "bust" hurts all classes and diminishes the estate.

But what a diminished estate more than likely means come confirmation time is it will effect how the Bondholders are paid back. What does that mean? The first preference in recovery for bondholders in any BK is a 100% cash recovery. They want to be made whole and they'd like it in cold hard cash. period. But if that's not possible then it opens the options up to any number of possibilities such as they may have to accept a combination of cash + new shares...or maybe another possibility would be they renegotiate the terms of the bonds at a lower interest rate and extend the due date + some cash + new shares. *And last on their list of preferences would be exchanging their entire claim for shares of newco.

Any time you can climb up the "waterfall" in a BK you're gaining a higher level of safety & success. The higher...the better.

*Sometimes this last option is exactly what some groups intend to make happen. They want to take control of a company and we may have just such a group here in the ATPG BK.

The group filed a 2019...which doesn't mean conclusively they intend to "take control" ...but they are working together which usually means that's the intent if possible.

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