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Does that mean if the R/S goes through tomorrow, we can safely assume that bankruptcy proceedings are finished and the judge has made his decision?
On that note, all the filings are suggesting CH 11, not 7, and if the R/S goes through, wouldn't that make the 11 official?
Definitely a learning curve here.
Isn't it possible that the R/S was filed as part of a negotiation strategy with Horizon? i.e. CERP filed the split to tell Horizon they would get paid by means of further dilution after R/S. Horizon decides it's not good enough, goes forward with the auction under their rights, and CERP moves to CH 11 to stop the auction.
That fits the timeline and series of events, I believe. If this is the case, the judge needs to decide whether the R/S and subsequential dilution amounts to enough operating capital for a proper CH 11.
In truth, I doubt the MammaCangura contract will bring enough revenue to float the company on its own.
This is what I believe the RS was really for.
I could be wrong here, but I see no reason why a creditor wouldn't have legal access to the books of a company they gave a loan to.
Maybe I'm wrong. I kinda hope I'm wrong. If I'm not, then Horizon has all the access they need to CERP's inner workings and knows for sure CERP has fired everybody, the plant is shut down, and there is no "discernible operating capital".
The only remote chances CERP has out of this mess, as I see it, are 2 fold:
1.) A combination of the R/S and subsequent dilution with the MammaCangura contract is enough to sway the judge that there at least WILL BE operating capital in the near future, even though there is none now.
2.) Horizon wins and CERP disappears as we know it, either completely, or taken over by another set of management.
IMHO, the chances of CERP getting new financing is dismally small. A significant feature of bankruptcy is the ruin of one's credit standing. They'd have to find a super risk taking creditor, and any creditor like that is bound to trap them in something similar to or worse than what Magna, Horizon, Ironridge et al had offered.
The knife is about 2 milimeters from CERP's throat right now. This is better than soap operas!
Wow that was a fascinating read! A thousand thanks for following through and posting it here.
Horizon clearly believes CERP has no revenue and seems to be making an excellent case towards exercising the rights given to it under the loan agreements.
I guess it's a race against time at this point. MammaCangura sales don't start til April, though we can assume CERP would be earning as early as March to fill the preorders so the launch goes smoothly. The question is whether CERP has proof of near-term, inevitable income that defeats Horizon's statement of no operating capital.
If not, that's all she wrote folks! To be honest, I wouldn't mind seeing the Seymour facility taken over by someone else that stays in the bioplastics business. A new set of management may be just what CERP needs. I'd be willing to buy if that were the case.
Thanks again.
Sure, the BK postponed the auction, and if that was the intent, it was a clever move. The question remains though; how do you expect CERP to pay Horizon? With an R/S and more dilution as you originally stated, or with new financing from another vulture? Which will come first in your mind?
This is of course assuming Horizon doesn't win Chapter 7 in court, in which case it's all irrelevant and CERP is a case closed.
Great write up and reasonable analysis based on available facts. But I see one major problem.
A lot of the folks in your camp, Sky, with all due respect to them, are championing a buy signal right now expecting a major run should CERP announce new financing after getting rid of the vultures.
However, if you guys also believe Horizon will be paid by means of R/S, the inevitable result will be further dilution as they dump more shares into the market to pay off the creditor. Effectively, that means anyone buying now or post R/S will be paying off CERP's debts for them.
Simply put, according to your own words, any shares bought now will be split, and then diluted to pay the Horizon debt.
So why on earth are you buying now? Are you expecting some incredible run based on financing news, then going to sell just before the R/S takes place? That would be the only possible strategy that makes sense, and I can see why you might imagine there will be a huge pop given what happened last year around this time, but it strikes me as incredibly risky. What happens if the R/S hits before new financing is announced, and you get eaten alive by the R/S and dilution before this incredible pop? Or even if Horizon wins in court and CERP gets liquidated?
I'd much rather STFA (stay away), instead of buy, hold or even sell right now. Let the dust settle, and see who is left standing.
True, but the assets for sale were listed in the 10m - 50m category, meaning not only Horizon could get paid, but also the others, at least to some extent if not fully.
I wouldn't bank on vultures fighting each other to keep a piece of meat alive. They'd sooner all eat it if they could, assuming there's enough meat to go around.
Fed, would you mind posting the whole document? Maybe just copy and paste the text? It seems you've only got the top portion here. I imagine you have a PACER account and are paying for this DD out of pocket; know that it does not go unappreciated.
There are a lot of folks here so deep into CERP that they can't allow themselves anything but a positive spin on whatever news comes out. This looks to me like the final blow for CERP if the judge moves forward with Chapter 7.
The plot thickens!
I think most of your compatriots know bad analysis when they see it, and haven't deigned to respond.
Good man for doing it anyway though, for those who wouldn't recognize the fallacies in his argument.
I still feel like buying now is a bad idea. However, after this episode blows over and CERP is effectively reborn, sometime before April when Mama Cangura sales pick up, I expect a phoenix from the ashes.
"vulture victim association"
Nice.
Straight from the SEC website, copied and pasted as is (emphasis is theirs).
Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.
This explains why the litigation is in consideration. CERP didn't invest the 12M euros to fund the plant, they got it elsewhere, and now those people are pissed:
"The plant will be owned and run by Cereplast Italia SPA, a wholly owned subsidiary of Cereplast, Inc. This venture will be financed through local and regional financing with Italian institutions and is expected to receive subsidies from various state and local agencies. The initial investment is estimated to be about €10 million to €12 million."
http://www.businesswire.com/news/home/20110502005786/en/Cereplast-Establish-Italy-Based-Bioplastic-Manufacturing-Plant
Correction: the person considering the lawsuit against Cereplast is the "Vice President of the Province, Aviano Rossi".
The town is called Cannara, in a province situated between Florence and Rome. It's a small town.
Run the original Italian article through google translate.
This story is referring to the plant Cereplast had purchased in Italy in 2011. Its built on the site of an old iron company that went out of business after the economic crisis. Cereplast had agreed to hire 150 local workers to populate the plant for distributing their products into Italy, but the opportunity never materialized and now they (either an investment group or the local government, not clear which)are considering suing Cereplast.
This is actually quite negative news. It looks like litigation may be forthcoming against Cereplast for failing to keep up to its original agreement in 2011. 100+ workers were promised jobs that never materialized, despite the 12 million euro investment (again, not sure if Cereplast invested this or another group did, and hence the possible litigation).
This article (also in Italian) details the original agreement that Cereplast failed to keep up, resulting in the potential new litigation against them:
http://www.umbria24.it/ex-ferro-di-cannara-allamericana-cereplast-che-promette-di-dare-lavoro-a-150-persone/38841.html
Add what that 2011 article says to the article you posted Hi_Lo, and things clear up pretty quickly.
Here's the Dugar Group website:
http://www.dugars.com/home.php
It doesn't work on mobile very well, so I recommend a desktop or laptop.
Careful there ajh. You might hurt his feelings like I did.
Would it be possible to just upload the pictures to Imgur or a similar website, then create a post that the mods can sticky with the link? I have a feeling just about everyone here would like to see those pics, but most of us have basic accounts and can't PM you with email requests.
Also, could you provide the name of the person you spoke to that quoted they were getting g ready for 24/7 production?
Many thanks in advance for you hard work.
I'd like to second this request. What you've said sounds great Indy, but without pictures no one can take you seriously. How about a picture of the parking lot and a picture of the manager you spoke to, both with you in them?
Alas, without these, your research efforts are meaningless to the rest of us. Hopefully you'll go just one step further for the sake of us all.
This is a little disconcerting :
'Are Member States now free to ban plastic bags on their territory?
Yes, provided that certain conditions are met – the ban can't be discriminatory to a certain type of lightweight plastic bag over another, and it mustn't be a disguised restriction on trade between Member States.'
That's taken from the Q&A section of the European commission website detailing the directive. The only language I could find that might pertain to bioplastics is here. To me, this sounds like bioplastics would not be an acceptable replacement for regular plastic bags in the instance a member state goes with the full ban option. On the other hand, if the state just chooses to levy a tax or charge per bag, , it is unclear if bioplastics would also be charged.
Thoughts? No hopeless pumping or bashing please. Far too much of that on this board already. Some honest intelligent analysis would be nice.
Except that none of them are new whatsoever. Those are all things he's said before in previous PRs over the past few months. Hence, nothing new, and just a rehash.
Hahaha if I could sway an entire stock's PPS with just one single post on a website like this, I would be painfully rich already
I'm just as long as most people here actually, averaging .022 But I sure haven't bet the house on CERP yet, for the reasons stated previously.
Continue to abide, Dude.
Right on.
If my interpretation is correct, then this PR certainly should not warrant a 14% pop. Furthermore, if I am right and it's just going to take others a little longer to realize it, there's no way the stock will hold at .017 under the continuing dilution.
It seems to me the only real catalyst here is the Italian legislation finally getting some enforcement. On the day that news is released, I would expect a sustainable and merited pop.
Is it just me or was there absolutely nothing new reported in the PR today? It seems like a rehash/summary of all the previous PRs we've seen in the past few months.
I found zero new info there, just a positive spin on the future.
What am I missing?
Here's an article that states it cleanly; Italy will only be able to impose fines with EU approval, and the UK is blocking that. The ban itself has been in effect since 2011, but the issue at hand is fining perpetrators. The UK won't have it, and the EU has yet to make any decision on the UK's opposition.
http://www.packagingnews.co.uk/news/italy-angered-as-uk-blocks-ban-on-plastic-bags/
The author/editor of this article, and the other one in Plastics News saying exactly the same thing, need to be fired. The tile is EXTREMELY misleading and I've seen both articles quoted as brilliant news for CERP both here and YMB.
The Italian plastic bag ban has been in effect since 2011. It is absolutely nothing new. What was proposed a few months ago WAS NOT THE BAN. It was a set of fines to give the ban some actual teeth so that it might be enforced. As it stands, the ban is just a suggestion; there is no law in place to actually enforce it, such as fining grocers who still use traditional plastics. It is simply words on paper.
What the UK blocked, despite what this article would have you believe, was not the ban itself. The UK blocked the measure to enforce fines upon those who breach the ban's laws. Basically, the UK prevented the law from having any muscle behind it and has left it as nothing other than words on paper instead of law in action.
If I see another article touting Italy's passing of a ban despite UK resistance, and another person posting it on these message boards like it actually means something, I'm going to explode.
Italy hasn't done sh*t depite the UK. In fact, the UK has been very effective in plugging Italy's efforts and preventing any opportunities in Italy from coming CERP's way. That "tsunami" of orders isn't coming anytime soon until the Italians are finally allowed to actually enforce their own ban.
On a separate but related note, the LA ban is no good news for CERP either. It bans ALL types of plastic bags, including bioplastic, and only allows reusable cloth bags or paper bags at a charge to the customer. CERP will have no market in LA. Once again, another article being misinterpreted and trumpeted as good news for this company.
Folks need to read a little more carefully when doing their DD.
End rant. Bashers respond at will.
So it seems both the RS and AS increase were approved by shareholders.
Any educated guesses as to what direction management will go with this? I'm a bit of a newb, but I can't imagine they would do both, and would simply choose one or the other.
I'm leaning towards the RS, as it at least confers the advantage of maybe getting relisted on Nasdaq.
Thoughts?
Some poor cat on YMB says he's now $930,000 in debt. I guess he bought a lot of shares on margin and lost it all. He says he doesn't know how he's going to go home and tell his wife and kids. He was asking people for advice (get a lawyer? file bankruptcy? etc.)
Goddamn. I, like everybody else, lost my ass today, but at least I didn't bet money I didn't actually have.
None of this even gives a nod to the cancer patients who were probably riding their entire ability to live on the success of this treatment. Longs might have taken a hard hit, but at least we will continue to live.
Liver cancer wins another round.
Posted on YMB by the now famous Davis Cupper.
If that doesn't settle the issue, I don't know what does.
Pretty much. I've tried scheduling board meetings between extremely busy executives before. It is not an easy task. If whatever the topic for that board meeting is happens to be extremely important, it wouldn't surprise me at all to consider it a priority over a conference.
Think about it.
1.) By March, the data will be out an extremely well reviewed. Basically, everyone who cares will know about it already.
2.) If data is positive, there will be an incredible amount of work to do dealing with buyouts and FDA approval processes.
3.)There are tons of other conferences throughout the year for them to present at. They don't need Cowen.
and therefore...
4.) Let the CLSN data release week party continue!!! WHERE'S MY BEER??!
Well sh*t I guess that answers that question! It's interesting to think a board meeting holds precedence over a national conference.
Did you get than in an email Kris? Or over the phone?
BioRunner59 has hundreds of followers on Twitter. Not sure what his position is, either short or long. FWIW, he also said CBRX cancelled as well.
Jeff has been in a meeting evidently for the past hour or so. Folks can't seem to reach him directly yet. It seems a lot have already contacted him. With that much pressure, I'm sure he'll have to come out and say something towards the issue.
CLSN has presented at Cowen at least the past several years in a row. I can only think of two reasons not to present at this conference this year:
1.) Failed data and nothing worth presenting
2.) Buyout before conference, meaning they couldn't legally present as CLSN anyway.
Those are two radically different scenarios. Any other possibilities I'm overlooking?
According to BioRunner59 on Twitter, CLSN cancelled the Cowen conference this March.
He says the info came from a conference update email sent to him by Cowen.
Some folks on YMB have already contacted CLSN IR about this.
Thoughts? Is this more meaningless crap? Or what?
haha no worries. It's an intense party. So many have so much riding on this, nerves crack pretty easily. Mine included.
Somebody get me a drink! I feel like I'm gonna need a few until this is all finally over.
Thanks buc.
Ya, I'm not so sure anymore. I'm still long the stock, but may not be as long as I originally planned. I'm not selling before data, no question there. The question now is how long to hold after, given the sudden doubt I have about CLSN's management decisions.
I'll have to mull it over. Your input is appreciated.
Read my post Kris. I clearly stated I remain bullish. Read before you respond, thanks.
This is true. Sh*t, I've even got a criminal history as a teenager and I didn't turn out to be a terrible person.
He may have turned around. I did after I had my dark period.
My concerns still aren't completely ablated though... (pun partially intended)
I don't think he fudged the P3 trials, or forged the Hisun deal. Of course not. In fact, he doesn't even own any shares, probably because he can't under SEC regulations as someone convicted of insider trading.
Rather, what bothers me is that CLSN management decided to hire the guy anyway. It makes me doubt their judgment. There's no question they knew about his past before they hired him. What makes me wonder is if his pedigree was of such a quality that they decided to overlook his history completely.
Personally, his history would be a deal breaker for me as a CEO. I would much sooner look for other candidates with similar pedigrees, which were no doubt available. I can't imagine that he was the only applicant at the time with good qualifications for his initial position. This only leaves a few possible scenarios:
1.) They didn't know about his history, for whatever unfathomably ridiculous reason.
2.) They knew about his history, but there were just no other candidates at the time with qualifications nearly as good as his.
3.) They knew about his history, and there were other similarly qualified candidates at the time, and yet he was hired anyway, perhaps due to a stellar interview process or personal recommendation (networking).
The only ones that really seem plausible are 2 and 3.
In the end, I recognize that Raj's history will have no material effect on whether Tdox as a technology works. The tech is the tech, whether there are previous criminals working in the company or not. All signs point towards the tech working, so I remain bullish.
However, given that IMHO I consider hiring Raj a bad judgment call, it makes me wonder what other bad judgment calls management has made or will make in the future. Unless I discover some incredibly good reason for hiring him (i.e. there was just no one else available with a similar pedigree), my concerns will remain.
I think I'll be exiting CLSN on the pop, and that's it. My original intent was to go super long (2+ years), but now I am not so sure.
I wonder if Jeff Church would speak to why he was hired...?
I thought the same thing, except that the Raj indicted here got his contacts while at MIT. I can't imagine there are too many people name Raj Prabhakar at MIT at the time this happened. That would be a little too much coincidence.
Definitely concerned.
In situps' moderate defense, Raj actually does have a criminal background.
http://www.prnewswire.com/news-releases/former-investment-banking-firm-employee-pleads-guilty-to-securities-fraud-reports-us-attorney-74348912.html
It seems he got hired at CLSN right after his sentence was up. To be frank, I'm not sure how he got a job at CLSN either. His pedigree is top notch (2 BS from MIT, MBA from Harvard) and he brought a lot of experience to the table, but he was successfully convicted of securities fraud and insider trading (plead guilty).
I'm still long CLSN, but this is troublesome. One of the essential rules of investing is to invest in the people first, and their ideas/products second. Thoughts?
Give us more detail on what exactly she said. I can't imagine she's that stupid.