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If they haven't been forced BK by now, then they have as good a chance to build a company as anyone in this financial market.
If ARCO has left the board they may also wait to use the warrants till they better know what the future will be. So the stock should be worth twice as much now, since the warrants are for 49% of the company, and the have been built into the current price of the stock.
This is gambling at this point, but each chip is worth far to little to bother removing them from the table...
Let's have a good week! IMHO
something to think about, if company file chapter 11 and seek help from court to get some breathing room, it could come out and survive.
Note:Upon change of control of the company the stock becomes fully vested............I believe that's a new element to these latest agreements.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement with Mr. Weiss
On July 10, 2008, we executed an employment agreement with Barry Weiss, our Chief Investment Officer, effective as of June 30, 2008:
• Base Salary. Mr. Weiss' employment agreement provides for a base salary at the annual rate of $240,000.
• Annual Bonus. Mr. Weiss' employment agreement provides that he shall be eligible to receive an annual bonus, in accordance with our applicable policies relating to incentive compensation for our executive officers, in an amount as may be determined in the sole discretion of our board based upon our senior management bonus plan.
• Restricted Stock Awards. Mr. Weiss' employment agreement provides that he shall receive annual restricted stock awards of a number of shares of our common stock as may be fixed in the discretion of our board of directors. Each annual award vests over three years at the rate of one-third each year on the anniversary date of each award. We granted Mr. Weiss a restricted stock award of 750,000 shares of our common stock that will vest in equal annual installments of one-third each on June 30, 2009, 2010 and 2011, respectively.
• Change of Control. Our employment agreement with Mr. Weiss provides that, upon a change of control, any then unvested restricted stock awards held by Mr. Weiss automatically become fully vested.
• Employment Term; Severance. Our employment agreement with Mr. Weiss provides for a term that expires on June 30, 2009. If we terminate Mr. Weiss' employment other than for cause, we will:
• pay him an amount equal to his annual base salary and any incentive bonus accrued through the effective date of termination and any amount in respect of excise taxes required to be paid under the agreement;
• pay him an amount equal to the aggregate premiums that would be payable by him to maintain in effect for the severance period, defined below, the same medical, health, disability and life insurance coverage that we provided to him immediately prior to the date of termination;
• as a severance payment, pay him an amount equal to his annual base salary as of the effective date of termination that would have been paid to him during the severance period had he remained employed during the severance period. For purposes of the agreement, the severance period means the period from the effective date of the termination through the last day of the term of his employment under the agreement.
This is truly very sad. Many have read these posts with a great deal of hope that they were going to pull this off. A lot of money has gone down the tube if they can't!!
I called and talked to Karen tonight around 6:30PM. I started about asking when the shareholder meetings would be, and she said it hadn't been scheduled yet. She seems slightly upbeat, but has a bit different tone. The 'financial' condition of the company has deteriorated, the SEC is looking into their request for the new LLC, and the best way to keep in touch with what is going on, is to register for email alerts from LUMC. Any questions about ARCO, were "cannot comment", but she did say they had 'left the building'. With all the potential legal ramifications, she can't really tell us anything. I have spoken with her around 4 times in the last 6 months, and she is more reserved this time around. Oh well.....nobody is selling at 6 cents anyway.
It's pretty obvious that when you suspend payments to unsecured creditors, there will be a Chapter 11 bankruptcy petition filed within a matter of days.
When that happens, the pps will drop from the 7 cent level, probably to under a penny.
But then it will rise like the Phoenix and soar to great heights.
wonder why no shares are trading hands.
They filed it today........425/8k
LUMC no longer on the naked short list!
http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold
On the 10th we should know the latest short numbers.
Yes they did!
4 th M M just came aboard
Pert.... Pershing LLC
SEC, There was no report to them,
That would be a wonderful goal for America.
You too Lee - any everyone else - Happy 4th. As we celebrate Independence Day, I will be thinking about a future Energy Indepenence Day
Here's wishing everyone a "happy" "safe" and of course "FREE" 4th of July.
Competition would be helpful. LOL.........:)
Interesting catch - Can we summise anything from that?
What do you mean? Reportable to who? Sec/shareholders etc.
Was the decision not to pay on the notes a reportable event?
Let's hope it's already baked in.
This can't be good- unless you are looking for much cheaper shares tomorrow.
Luminent Suspends All Payments to Unsecured Creditors While Analyzing Restructuring Options
PHILADELPHIA, July 1 /PRNewswire-FirstCall/ -- Luminent Mortgage Capital, Inc. (OTC:LUMC) (BULLETIN BOARD: LUMC) announced on June 24, 2008 that the company is faced with the necessity of restructuring and recapitalizing its balance sheet to place the company on solid ground for future growth. Today, the company announced that as it analyzes its restructuring options, it will suspend all payments to unsecured creditors.
This news release and Luminent's filings with the Securities and Exchange Commission contain forward-looking statements that predict or describe future events or trends. The matters described in these forward-looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond Luminent's control and are based on the information currently available to Luminent's management. Luminent faces many risks that could cause its actual performance to differ materially from the results expressed or implied by its forward-looking statements, including, without limitation, the possibilities that interest rates may change, that principal payment rates may change, that Luminent may experience unanticipated margin calls, that the collateral securing its indebtedness may become illiquid with a resulting drop in value, that Luminent may not be able to maintain its qualification as a REIT for federal income tax purposes, that Luminent may experience the risks associated with investing in mortgage related securities, including changes in business conditions and the general economy, and that Luminent's strategies may not be effective (including portfolio management and hedging strategies and strategy to protect net interest spreads). Luminent's filings with the Securities and Exchange Commission contain a more complete description of these and many other risks to which Luminent is subject. Because of those risks, Luminent's actual results, performance or financial condition may differ materially from the results, performance or financial condition contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. Luminent assumes no responsibility to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. The content of this press release is qualified in its entirety to the appropriate documents filed with the SEC on Form 8-K.
ADDITIONAL INFORMATION
Luminent Suspends All Payments to Unsecured Creditors While Analyzing Restructuring Options
Tuesday July 1, 5:46 pm ET
PHILADELPHIA, July 1 /PRNewswire-FirstCall/ -- Luminent Mortgage Capital, Inc. (OTC Bulletin Board: LUMC - News) announced on June 24, 2008 that the company is faced with the necessity of restructuring and recapitalizing its balance sheet to place the company on solid ground for future growth. Today, the company announced that as it analyzes its restructuring options, it will suspend all payments to unsecured creditors.
ADVERTISEMENT
This news release and Luminent's filings with the Securities and Exchange Commission contain forward-looking statements that predict or describe future events or trends. The matters described in these forward-looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond Luminent's control and are based on the information currently available to Luminent's management. Luminent faces many risks that could cause its actual performance to differ materially from the results expressed or implied by its forward-looking statements, including, without limitation, the possibilities that interest rates may change, that principal payment rates may change, that Luminent may experience unanticipated margin calls, that the collateral securing its indebtedness may become illiquid with a resulting drop in value, that Luminent may not be able to maintain its qualification as a REIT for federal income tax purposes, that Luminent may experience the risks associated with investing in mortgage related securities, including changes in business conditions and the general economy, and that Luminent's strategies may not be effective (including portfolio management and hedging strategies and strategy to protect net interest spreads). Luminent's filings with the Securities and Exchange Commission contain a more complete description of these and many other risks to which Luminent is subject. Because of those risks, Luminent's actual results, performance or financial condition may differ materially from the results, performance or financial condition contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. Luminent assumes no responsibility to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. The content of this press release is qualified in its entirety to the appropriate documents filed with the SEC on Form 8-K.
ADDITIONAL INFORMATION
Luminent LLC, an affiliate of the Company, has filed a Form S-4 registration statement with the SEC, which contains a preliminary proxy statement/prospectus relating to the Company's 2008 annual meeting of stockholders and other relevant documents in connection with the proposed restructuring. The definitive proxy statement/prospectus will be mailed to the stockholders of the Company when it becomes available. STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
The proxy statement/prospectus and other relevant materials, when they become available, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and stockholders may obtain free copies of the documents by contacting Karen Chang, Luminent Mortgage Capital, Inc., 1515 Market Street, Suite 2000, Philadelphia, PA 19102; telephone: (215) 564-5900.
The Company and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information concerning such participants' ownership of the Company's common stock will be set forth in the proxy statement/prospectus when it becomes available. This communication does not constitute an offer of any securities for sale.
Contact:
Karen Chang
Senior Vice President &
Chief Financial Officer
Phone: (215) 564-5900
Email: ir@luminentcapital.com
--------------------------------------------------------------------------------
Source: Luminent Mortgage Capital, Inc
Opportunity to purchase at Arco's price or below. Try a bid at .16 or .17 to pick some up.
Everything OK? You still with us?
Did NJP go MIA? He hasn't posted in almost 1 month.
Lets just hope it keeps going- If they can get the shipped turned around this will be a great buy!
lovely and crazy stuff
We just went positive...how about that!!
Wednesday. Sorry about that.
Yesterday or Wednesday? Only 139,000 traded yesterday!
I bought 100,000 yesterday at .15
Why? Only the future really knows!!!
I'm trying to figure out how these two events are connected or if they are. On the 23rd they hire two new executives. On the 24th they mention recapitalizing their balance sheet. No need to hire a CIO if you have no capital to invest. So, what is the plan? Is Arco planning to make a major capital investment in Luminent? Do they have another fund willing to throw out some capital or is this just their wishful thinking?
These two items keep coming up in my mind. What would happen if they announced a 200/300/400 million dollar investment by some firm? Is Arco willing to be that fund? Don't know except they said, "they needed to recapitalize there balance sheet."
June 24th 2008
The investment opportunities that exist for Luminent today are numerous, but we are faced with the necessity to restructure and recapitalize our balance sheet to place our company on solid ground for future growth plans."
June 23rd 2008
Luminent Mortgage Capital, Inc. (OTC Bulletin Board: LUMC) announces the appointment of Barry D. Weiss, CFA, as its new Chief Investment Officer and Eric Richter, CFA, as a Portfolio Manager, effective June 30, 2008.
"I am pleased to announce the addition of Mr. Weiss and Mr. Richter to our team," said Zachary H Pashel, Chief Executive Officer. "Both Mr. Weiss and Mr. Richter are proven portfolio managers each with over 12 years experience investing in structured products, primarily focused on both agency and non-agency mortgage-backed securities. Their expertise, coupled with our existing credit analysis infrastructure, is integral to building a successful asset management platform."
No - but it is VERY VERY tempting to avg down
Page 2
Q. What is the U.S. federal income tax treatment of the merger?
A. We intend to treat the merger for U.S. federal income tax purposes as a taxable liquidating distribution of all of our assets to our stockholders, followed by a contribution by our stockholders of those assets to LLC in exchange for LLC shares.
Assuming that the Internal Revenue Service, or IRS, respects our treatment of the merger for U.S. federal income tax purposes and if we continue to qualify as a REIT for U.S. federal income tax purposes for our taxable year ended December 31, 2007 and our taxable year ending on the effective date of the merger, we will recognize gain or loss upon such distribution as if we had sold our assets at fair market value and we will receive a dividends paid deduction equal to the amount by which the fair market value of our assets exceeds our liabilities. The starting point for determining the fair market value of our assets distributed will likely be the trading price of the LLC shares immediately after the merger. However, in light of current market conditions, we believe that the trading price of our common stock may not accurately reflect the fair market value of our net assets. Accordingly, we may obtain an appraisal or other valuation of our assets, net of our liabilities, from an independent valuation expert to help us in determining whether the trading price of our shares at the time of the merger will accurately reflect the value of our net assets. It is possible that we will not be able to meet the REIT distribution requirements or otherwise maintain our REIT status for our taxable year ended December 31, 2007 and our taxable year ending on the effective date of the merger. In that event, we would be treated as a regular taxable corporation and our taxable income for the applicable year or years would be subject to U.S. federal and state income tax. The amount of any such liabilities likely would be material.
http://www.sec.gov/Archives/edgar/data/1430972/000089322008001779/w60131a1sv4za.htm
Page 16
Ownership by Directors and Officers. As of June 1, 2008, our directors and executive officers as a group beneficially owned 40,957,617 shares of our common stock, or approximately 49.6% of our outstanding common stock. This total includes 37,719,296 shares, or approximately 45.7% of our outstanding common stock, issuable upon the exercise of a currently exercisable warrant held by Arco. All of our directors and executive officers have advised us that they intend to vote in favor of the merger proposal. Arco has advised us that it will vote any voting shares that it acquires upon exercise of the warrant prior to the record date in favor of the merger proposal.
lol, 270 shares @.12.........someone working hard to keep red on the screen.
OOOPs someone bought .16 not many in the way up.....I guess!
Yes, I have looked over some of this after june 10th when it was filed. This was a new piece. Cash vs cashless. I did an example of this in a post and explained it to the best of my understanding. Cashless option doesn't work unless the price is above the warrant price. I must say I did miss the links you provided as I did not scroll down far enough.
Q. Will Arco have a vote? If so, how will Arco vote?
A. In 2007, we issued a warrant to Arco Capital Corporation, Ltd., or Arco. Arco may, at any time and in its sole discretion, exercise this warrant to acquire 49% of our voting power. Arco may elect to exercise the warrant by either paying the exercise price of $0.18 per share multiplied by the number of shares for which Arco is then exercising the warrant or by surrendering for cancellation warrants to acquire a number of shares equal to the aggregate exercise price divided by the fair market value of one share, otherwise known as a cashless exercise. If Arco exercises all of its warrant in full and does not elect a cashless exercise, we would receive cash proceeds of $9.2 million. If Arco exercises the warrant and votes to approve the merger proposal, the merger proposal is likely to be approved even if substantially all of our stockholders other than Arco vote against the approval of the merger proposal.
I understand...did you get any new info from the LLC's S-4 I posted yesterday, or was it old news? I didn't see it prior, so to me it was new.
just venting a little frustration. It's good now and then. I'm here for the duration. Always looking for truth and will express my personal (true) feelings as well.
Lee - are you feeling better today? You didn't sound that good on yahoo yesterday afternoon?
I understand she's on the road, doing what I haven't the foggiest.
LUMC needs a miracle to separate from problematic corps out there tied to mortage fraud such as this article dictates. Then LUMC will shine as it should from all they have tried to orchestrate to get out from under this cloud over anything mortgage, housing or lending...: READ-
NPR.org, June 20, 2008 · The Justice Department appears to have officially opened the penalty phase of the mortgage debacle in this country.
On Thursday, the FBI paraded two indicted Wall Street executives before TV cameras. That same day, the bureau announced the arrests of hundreds of people who allegedly perpetrated mortgage scams nationwide.
The arrests came as part of the FBI's sweeping Operation Malicious Mortgage. In this phase alone, FBI officials said they arrested more than 400 real estate agents, brokers, appraisers and developers. People from just about every aspect of a real estate transaction ended up in the FBI's cross hairs.
The 406 people arrested between March 1 and June 18 included everyone from alleged straw buyers — who allow scammers to use their names and credit histories on mortgage applications — to run-of-the-mill real estate agents, mortgage brokers, appraisers and developers.
While the word "mortgage" appears in some form on all these sketchy transactions, FBI officials said that mortgage fraud was just like any kind of bank fraud: People are after money and have thought of ingenious ways to get it.
Recently, for example, officials have started arresting people for scams tied to home equity lines of credit. It is identity theft with a real estate twist.
Instead of stealing an identity to secure a credit card, scammers have been zeroing in on people they think have a lot of equity in their homes. They steal their identities, then go online and get a home equity line of credit on that person's house and take the money. The FBI said the possibilities seem to be endless, and even in a down market, there are many opportunities for scam artists.
Many of the recent arrests have been related to something called a Foreclosure Rescue Scam. The schemers prey upon people who are about be foreclosed on. They promise the homeowners that they can live in their houses mortgage-free, and then buy their houses back after a year if they just sign a few papers. What their victims don't know is that the scammers work with straw buyers to take out a bigger mortgage that essentially cashes out any equity in the house. In many instances, the homeowners end up losing their homes anyway.
These kinds of scams involve plenty of players: from bogus mortgage brokers to appraisers who are on the take. Even lawyers may be in on the scam, encouraging people to sign the papers, misrepresenting what the papers actually say. Those are the types of people arrested under Operation Malicious Mortgage.
The operation was a massive one. The FBI said more than 80 percent of their offices were involved. In all, more than 406 defendants were charged. A little less than half of those have been convicted so far, and more than 80 of them are already serving sentences.
The FBI conducted a similar operation — Quick Flip — two years ago. Many of the people arrested under that operation were appraisers on the take: They were inflating their assessments of property values, so that phony buyers could make a fast buck by flipping houses in a then-hot market.
It is no coincidence that the arrest and indictment of two Wall Street executives — hedge fund managers Ralph Cioffi and Matthew Tannin — came on the same day that the FBI announced the results of Operation Malicious Mortgage.
The FBI is sending a specific message: If you are involved with mortgage fraud — whether on Wall Street with high-level investors, or on Main Street with ordinary homeowners — the bureau intends to catch and prosecute you.
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