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But what is in a name?
you'll see that dumb things happen quite often and this one only has increased odds.
Too bad, kind of figured that might have happened when the price tanked this afternoon. Nice deal. Shareholders get 1/6 of what they should by fair valuation while the management that drove the company into the ground get's 8% of the new equity. Well some might have been able to make some nice profits from 0.14 to 0.20. Still get your 0.13 I guess.
Looks like the EC was denied and the POR was approved. The documents are out on PACER.
Sounds good, pass it along to whom?
Should you have any shares in this company and wish to support the motion for the formation of an equity committee, please email me at ankit.gupta[-at-]me[dot]com and I will pass your information along. It will require your name, number of shares, and whether you support the motion or not.
Interesting the price rise leading up to the confirmation hearing on Friday. Wish I was in the area so I could go the court hearing. (Don't even know if that's possible, never tried before)
Information about case here: http://www.selectedfinancials.com/2010/04/regent-communications-faces-uncertain.html
RGCIQ Case Summary 04.02.10
http://www.scribd.com/doc/29352290
FACTS on this one for those who care to hear and profit:
From the PR announcing bankruptcy:
The company said in a statement Monday that it made the move after reaching an agreement in principal with its lenders for a financial restructuring.
As part of the agreement, current senior debt holders will convert their holdings into new shares of the reorganized company and provide Regent with new debt. According to court papers, the new debt will consist of $95 million in senior secured term loans plus $25 million in payment-in-kind, or PIK, loans.
Regent listed $166.5 million in assets and $211.3 million in debts in its bankruptcy petition filed with the U.S. Bankruptcy Court in Wilmington, Del.
Regent's existing unsecured debt holders, namely lenders with deficiency claims against the company will waive those claims. All other unsecured claims will be paid in full with cash.
Meanwhile, secured lenders will give to current shareholders a "gift," or a distribution from their collateral, of $5.5 million. Once that amount is distributed, Regent's outstanding shares will be canceled.
So the plan already approved with lenders, gives shareholders 5.5 million or 0.13 a share.
Now when have you ever heard of the creditors giving shareholders a "gift". Give me a break. A major shareholder, Resilient Capital, recognized this and filed a motion to form an equity committee. They contend that equity holders are due a much larger amount closer to 83 cents a share.
So at current prices you have the following risk/reward scenario: 0.13 Low, 0.83. From current prices that is a 13% loss if you buy at the ask and the plan goes through vs 5.5 times your money if the equity committee's valuation is correct and is accepted.
Don't waste your time, bankruptcy law is a complicated set of rules and you'll waste more money understanding the situation than you could possibly make. The lawyers are the only ones who get rich off of this.
You're also right that management is a powerful force and if you look at recent transactions like JSDA being bought out by a company smaller than itself, you'll see that dumb things happen quite often and this one only has increased odds.
I hope it wont be too late for your followers, if/when you decide you might be wrong, since you reserved that right, after warning them to stay away.
unfortunately, i won't be an investor here, after perusing the filings, i don't think that this company is worth anything.
i could be wrong and reserve the right to be in this case.
best of luck.
It's probably good advice for anyone to not "blindly buy" anything no matter who they are listening to. The facts are the following:
1: This company has filed a plan with bankruptcy court that states, bare minimum, the company plans to pay shareholders 0.13 per share. Since this plan pays off all creditors in full, there is no reason for them to reject it. So this is truly a bare minimum.
2: A Major shareholder has petitioned the court to provide representation to shareholders and claims that shareholders deserve 0.83 per share.
This is all from documents filed in court. It's all there on record for those who care to look.
As far as "Risky Speculation" goes, everything is a risk, but few investments have everything laid out as well as this does. If the equity committee gets approved, this is at least a quick double.
I think the fact that management has decided to give shareholders "a gift" of 0.13 indicates they should fairly be giving them much more.
You mean when you talk about a stock people just buy it because you talked about it. Wow.
there are people that follow me that i don't want blindly buying this because i'm talking about it.
What's a Bradford follower
Bradford followers stay away
RGCIQ - Bradford followers stay away. This is the definition of Risky Speculation.
i was alerted to this company through a friend.
i guess that an activist investor is going to make an attempt at filibustering on friday, and several activist bloggers are lining up to cover it.
he briefed me that the downside is $0.128 and that the upside is $0.83
so... maybe this is right.. but what are the odds...
you have company management and debtholders against you. management is a powerful force.
Anythings possible....World could end tomorrow also.....probably not going to happen just like commons getting zero probably not going to happen. glty
Not Good....so common could still get zero....plan not accepted then.....ok thanks.
No date set yet, trying to get shareholders more than approx. .13 per share. Saying cash pay out should be closer to 83 cents per share. Asking for one of those shareholder committee's like WAMUQ did. My guess is they settle somewhere around 50 cents per share cash payout to shareholders.
Anytime someone says they're giving you a gift you know they're trying to screw you. Management giving themselves 8% of new company. Judge might see right through this and come through for shareholders and allow the shareholders committee.
Under the proposed plan, general unsecured claims would be paid in full but existing equity would be canceled. Existing equity holders would receive their pro rata share of $5.5 million (approximately 13 cents per share), which is characterized as a "gift" because the debtors assert that existing equity is out of the money.
Utilizing Oppenheimer's valuation of Regent resulted in a net asset value of negative $50 million available for common shareholders. However, Resilient Capital's proposed modifications to Oppenheimer's methodology would result in a net asset value of $36 million (or approximately 83 cents per share).
When do shareholders get 12.8 cent payout and shares cancelled?
is that not the current plan....12.8 cents?
RGCIQ: ...you buy one share for .154 the least you could get is .13 in cash and lose .024 per share. The suit is allowed and you get 83 cents per share but paid .15 you make .68 profit per share which is over 450% on your money...
pay .154 per share 18% downside 500% upside at .83 per share
pay .20 per share 35% downside 500% upside at .83 per share
pay .25 per share 45% downside 500% upside at .83 per share
Great odds imho
Even at .25 per share you are getting 10-1 odds in your favor, 500% upside only 45% downside. Good chance even if you don't get all 83 cents per share they still up the payout to shareholders enough to make money.
RGCIQ-keys: shareholders are supposed to get .13 per share cash and stock gets canceled. So your down side risk is .13......Resilient Capital's proposed valuation numbers get shareholders closer to 83 cents per share
Trying to get shareholders more than .13 per share. Asking for one of those shareholder committee's like WAMUQ did. News was out today didn't hit RGCIQ's ticker so no one found it yet.
Under the proposed plan, general unsecured claims would be paid in full but existing equity would be canceled. Existing equity holders would receive their pro rata share of $5.5 million (approximately 13 cents per share), which is characterized as a "gift" because the debtors assert that existing equity is out of the money.
Utilizing Oppenheimer's valuation of Regent resulted in a net asset value of negative $50 million available for common shareholders. However, Resilient Capital's proposed modifications to Oppenheimer's methodology would result in a net asset value of $36 million (or approximately 83 cents per share).
Up 15% on new motion.
This came out this morning.
Shareholder Seeks Equity Committee in Regent Communications Bankruptcy
Posted by Randall Reese on Thursday, March 25, 2010 Labels: bankruptcy, chapter 11, common stock, equity committee, kevin gross, official committee, regent communications, resilient capital, shareholder, shareholders committee
Resilient Capital Management, LLC, which holds 6.6% of the common stock of Regent Communications, Inc., filed a motion on Tuesday asking the bankruptcy court to direct the appointment of an Official Committee of Equity Security Holders in the company's chapter 11 cases. Regent Communications and its affiliates operate 50 FM and 12 AM radio stations in 13 markets located in nine states. The companies filed for chapter 11 protection on March 1, 2010 and immediately filed a proposed plan of reorganization, which is supported by General Electric Capital Corporation and Oaktree Capital Management, L.P. GE Capital and Oaktree collectively own over 75% of outstanding first lien debt claims against Regent.
Under the proposed plan, general unsecured claims would be paid in full but existing equity would be canceled. Existing equity holders would receive their pro rata share of $5.5 million (approximately 13 cents per share), which is characterized as a "gift" because the debtors assert that existing equity is out of the money. The debtors' assertion regarding the value of existing equity is supported by a valuation prepared by Oppenheimer & Co. Inc. In Tuesday's motion, Resilient Capital challenges the conclusions in Oppenheimer's report. Specifically, Resilient claims that Oppenheimer's valuation is "artificially depressed" due to several aspects of Oppenheimer's valuation methodology. According to Resilient, Oppenheimer's valuation contains the following weaknesses:
Oppenheimer's valuation "relied on only five out of the eight comparable companies in the radio industry identified by Oppenheimer."
"Oppenheimer utilized a multiple range of seven to eight times the latest twelve month EBITDA based upon those five comparable companies. However, these five companies trade at lower multiples than would be warranted for [the] Debtors [and, in] addition, the last twelve month average EBITDA multiple for those five companies was 9.36 times EBITDA."
The "three companies eliminated from Oppenheimer's valuation were the three companies with the highest, latest twelve month EBITDA multiples. These were also the three of the companies closest in size to Regent."
"If Oppenheimer had derived its EBITDA multiple from the full set of comparable company data, the EBITDA multiple would have - and should have - been 11.02 times the latest twelve months of EBITDA."
Utilizing Oppenheimer's valuation of Regent resulted in a net asset value of negative $50 million available for common shareholders. However, Resilient Capital's proposed modifications to Oppenheimer's methodology would result in a net asset value of $36 million (or approximately 83 cents per share). Resilient also performed a discounted cash flow (DCF) valuation, which it asserts results in $57 million of net asset value available to common shareholders (or $1.32 per share). The DCF valuation is based, according to the motion, "on taxing unlevered income at a 40% tax rate and discounted cash flows at an 11% rate, a discount rate utilized by Oppenheimer in its own analysis." All calculations of shareholder value assume $206.7 million in pre-petition liabilities and $3.9 million in restructuring costs.
As a result, Resilient claims that "there is a substantial likelihood that there is sufficient equity value in the Debtors to distribute to the common equity holders." Appointment of an equity committee is necessary, according to the motion, because common shareholders "will not be adequately represented in these cases without the appointment of an official committee." Resilient asserts that management of Regent has an incentive to support the existing proposed plan of reorganization because the plan reserves 8% of the equity in the reorganized company for management. The motion also alleges that an official committee is necessary because individual shareholders lack the resources to play a meaningful role in the plan negotiations. Moreover, existing large shareholders are "inhibit[ed from getting] economies of scale out of working with others or increasing the size of their position" by Section 13(d) of the Securities and Exchange Act of 1934 and a court order limiting equity transfers to protect Regent's net operating loss carryforwards for tax purposes.
Of particular interest, Regent Communications, Inc.'s bankruptcy cases are assigned to Judge Kevin Gross. On the same day that Resilient filed its motion seeking an equity committee, Judge Gross entered an order in the TLC Vision (USA) Corporation bankruptcy cases denying a similar request for appointment of an equity committee in those cases. Information regarding that order can be found in an earlier blog post, available here.
About netDockets:
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http://www.netdocketsblog.com/2010/03/shareholder-seeks-equity-committee-in.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+Netdockets+(netDockets+Corporate+Restructuring+and+Bankruptcy+Blog)
Since its gone bankrupt and as you say will go private, it would not be wise to still have money invested here. IMHO.
Man chart looked so good on this and then poof they go BK. and i almost bought it for a chatr play... man o man i feel bad for holders but in reality it was already priced at BK.
It looks like 100% of company is being taken over and will become a privately owned company. Nothing here. from SEC filing3/1/2010.
From 8-K:
The Reorganized Parent would not be listed on a national securities exchange or be an SEC-reporting company.
http://www.sec.gov/Archives/edgar/data/913015/000095012310019481/l39004exv10w1.htm
If you don't mind me asking what was your bases? I appreciate your input and will let you know if I find anything that is of value.
When I lost half of my investment I sold everything and left that stock. To me it seems like a bad investment and I regret listening to a socalled penny stock prophet for guidance in choosing this stock.
I saw your post and since I just started some dd on Regent I wondered if you had some information on them?
I just started some dd on this company and wondered if you had any information that might be helpful?
When do earnings come out next?
This is a great NASDAQ company but the NASDAQ potential delisting is hurting its PPS!
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