Americas Energy Company, Inc.(fka AENYQ)

[LouisDesyjr]

Unfortunately, the company looks like a disaster and possibly it may even be as bad as a scam. I can understand, and have seen, companies where things just did not work out as planned, but this seems to be a level worse than that.

I came across Evan Coal (and Amiercas Energy) when an article about Vringo had comments about Evans Coal.

I have had profitable investments in other companies (Sterling Energy Resources and Rancher Energy) that went through and came out of the Chapter 11 bankruptcy process. In those cases, the stock was trading at times for below its net cash value. While one had to wait a while to release their payday, at least they knew that their stock was backed with cash and did not have to worry.

I was considering buying some Americas Energy common stock, but decided not based upon what I have found.

The situation (and problems) with the company are:

1: No SEC filings since last year. The last SEC filing is an 8K on December 13, 2011.

2: The SEC filed an objection to the reorganization plan:
http://www.knoxnews.com/news/2012/apr/02/sec-weighs-in-on-americas-energy-bankruptcy/
It is unusual for the SEC to file an objection to a reorganization plan.

3: Schedule B of the chapter 11 filing list things that look like the company was being used to pay for all kinds of personal items and not being used as I would normal expect a business to have.
Examples of what I considered unusual items from the Schedule B – Personal Property (document #26 on the pacer system with the filing) are:

ITEM 4. Household goods and furnishings, 5 televisions $500 $670.00
Including audio, video and computer 1 stove $50
Equipment. 1 dishwasher $50
1 microwave $10
1 refrigerator $50
1 mirror $10
(Why does a company own these items? When I saw this, I thought I had accidently pulled up the filing of a person and not a company.)

ITEM 1 - cash on hand - none
ITEM 2 - bank accounts – There is a bank account listed but it is listed as having zero.
(How did the company operate if it had no cash in the bank?
If there is value to the coal leases, why does company have no cash?)

5. Plan of reorganization, pacer document #89, lists shareholders as getting 1 share in the reorganized company for every 20 shares held before the filing. To me this implies that existing shareholders will only have 5% of the reformed company.

6: Negative article posted online with Forbes:
http://www.forbes.com/sites/williampbarrett/2011/12/12/public-company-files-for-bankruptcy-very-quietly/
That article questioned the ability of the company to complete any deal and noted that its stock had dropped to $0.03 at the time of the article. That article noted past problems with company officials.

7: The company appears to have no operations and no cash. The operating reports that the trustee had requested to be filed by the company are not being filed. Normally, these reports would have shown at least what was going on and what the balances were in the bank accounts. The trustee also filed a report, on pacer as document #145, listing that as of Feb 29, 2012, the company had no employees or operations.

8: The filing does list a value on Evan’s Coal of $17.7 million but I question this valuation since there appears to be no planned sale of this interest, except for the one foreign based company that appears to have been canceled nor do there appear to be any other buyers. While the summary of schedules, pacer document #33, do list the company as having value there appears to be no way to realize that value. That document lists $19,889,656.00 in assets and $5,366,464.56 in liabilities for a net value of $14,523,191.44; $17,700,000 of the assets are Evans Coal Corp (pacer document #26).

In summary, I do not expect the shareholders to realize any value and would not be surprised if the company gets converted to a chapter 7 liquidation at some point.

Louis J. Desy Jr.
[e-mail]

Disclosure: I do NOT own any shares in this company.