Good Luck
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
THE COURT: Well, here’s what I’m inclined to do with
5 respect to that issue and that is, if the parties agree that I
6 should accept factual evidence aside from the documents that I
7 think the parties agree are relevant, I’ll take them. But, if
8 there is no agreement, then I won’t take anything to which they
9 do not agree.
10 I mean, I guess we could, as an alternative, go
11 through the post hearing exercise of informing the Court on
12 what Georgia law provides with respect to parol evidence, but I
13 don’t know whether the parties or, frankly, the Court have any
14 appetite for that.
THE COURT: Yes. My impression is, both parties
8 think that’s necessary for my decision and, frankly, I do, too.
THE COURT: I’m sorry. Mr. Silverman, repeat that
10 last -- please, that last part.
THE COURT: I’m going to hold the record open and
20 carry this over to June 11th. There’s an Abitibi hearing date,
21 limited matters to be scheduled for that date, for an
22 opportunity for either party to present whatever factual
23 evidence it wishes to present. If, in the interim, the parties
24 agree on what the Court should consider factually, you need not
25 appear. You simply just may inform me of that and make sure
1 I’m provided with the appropriate declarations or documents if
2 that’s all it involves.
3 If there’s to be live testimony, then inform me ahead
4 of time so I know what’s coming.
THE COURT: And, as I advise parties on a regular
11 basis, it’s really much easier to ignore things than you might
12 suppose.
THE COURT: If you can do it in 60 seconds, you may.
THE COURT: I would like to see counsel in chambers.
5 Court is adjourned.
The BCHI Interests fit within the definition of Intercompany Interests in the Plan
and thus would be classified in Class 8. Under the Plan, Intercompany Interests do not receive
any distribution.
NY 240,418,209v1 11
25. Although the Disclosure Statement and Plan are unclear as to what happens to the
common equity in the various subsidiaries of the Debtors, it appears that the Plan leaves the
Debtors significant flexibility to retain Intercompany Interests (such as the BCHI Interests).Plan, §§ 2.15, 6.17.
26. In addition, the Plan provides that the Debtors may engage in certain as-yet unidentified
“Restructuring Transactions,” which could include the retention by the Debtors of
their equity interests in the assets of certain Canadian subsidiaries or the transfer of assets of one
subsidiary to another subsidiary. The Disclosure Statement fails to disclose the specifics of these
Restructuring Transactions or the impact of such Restructuring Transactions on creditors.
Some comments made by the Hon. Judge Carey over last few months
THE COURT: Well, let me stop you and deal with what
18 I think is a threshold matter. That is the argument that the
19 debtor raises that procedurally, what you should have filed is
20 a motion for an order requiring the debtor to assume or reject,
21 but let’s assume, even assuming the debtor is right about that,
22 let’s assume I would be willing to treat your motion in that
23 fashion. But, even if I were to do that, tell me why I would
24 require the debtor to assume -- move to assume or reject, prior
25 to confirmation.
THE COURT: So, unlike what I’ll call round one, at
13 least in front of me, of the battle between Woodbridge and the
14 debtor, you don’t think it’s necessary for me to take any
15 evidence in connection with the respective agreements or the
16 provisions in the agreements that the parties argue are or are
17 not applicable and what the parties meant when they entered
18 into them?
THE COURT: I hear noise coming from the telephone
18 connection. Let me please ask the telephone participants to
19 keep their phones on mute, until such time, if any, as it
20 becomes their turn to speak. Thank you.
Even though I don't like some of the comments made by him,it seems to me so far, The Hon. Judge Carey is very reasonable and diligent of all the judges at 824 market street. He uses his anger, wit and observations to move parties to settle and move forward the process. If he shuts up someone who had no right to be heard in the first place, is not wrong and unfair.
Having said this, we will see how he does on Nov 18th and forward.
I do reserve my right to change my opinion about him, but I am praying him to do the right thing.
Following is before they announced special divident of $26/share...
I looked at all of Weyerhaeuser’s (WY) assets except for its most valuable ones - the timberlands. The 5.7 million acres of timberlands that Weyerhaeuser directly owns constitutes the company’s most valuable asset, and changes in tax law notwithstanding, Weyerhaeuser is going to have to take some serious restructuring action if it wants to boost its stock price anytime soon. That leaves two major options: selling the timberlands to a timberland investment management organization (TIMO) or converting into a tax-advantaged REIT structure.
A sale of timberland assets to a TIMO has been seen as plausible by Deutsche Bank contacts as recently as mid-December, despite the possible transaction size. How big would such a deal have to be? Pre-tax, earnings from Weyerhaeuser’s Timberlands segment have averaged $700 million in the last two years - an amount that looks to be approximately in-line with long-term averages when one-time events are excluded. With the style of TIMOs, these earnings should essentially be treated as a perpetuity - and industry returns (the discount for this valuation) seem to be in the range of 4-5%. That suggests a pre-tax value somewhere between $14 billion and $17.5 billion for the timberland assets, however, this excludes the holdings Weyerhaeuser includes under the “corporate and related” heading - namely, the 50% interests the company has in two partnerships that operate plantations in Uruguay. While I can’t find any clear breakout of those in Weyerhaeuser’s financial reports, Note 7 of the 2006 10-K indicates $64 million in operating income from (what I believe to be) those assets. This seems like a reasonable number to progress with, and on a lower discount of 3% to reflect the higher forest growth rates and lower cost of those assets, it suggests another $2.1 billion in value for a combined pre-tax sum of $16.1 billion.
We should just stick to one point...NO Valuation-NO Confirmation
It would have saved time not the MONEY. Atlease Judge saved Abitibi $7.5 million by not granting us EC. In Smurfit, even though they didn't have EC, company had to pay $7.5 million to lawyers representing equity.
Disclosure Statement says they will only have $50 to $80 millions of NOLs. How can judge believe that?
The impact of the Net Operating Losses (NOLs) to the positive equity of the Debtors has not been included within the Debtors’ Disclosure Statement. Currently the Debtors have not disclosed the NOLs, but they must be worth at least hundreds of millions to the Debtors. In the CIBC World Market Report, the Net Operating Loss Carryforwards for the Debtors was $350,000,000 based upon $1 billion of net operating loss carryforwards at a 35% tax rate [The Merger Between Abitibi & Bowater: Necessary, But Not Sufficient - November 19, 2007]. The distribution of this value needs to be assessed inside the Plan Disclosure Statement or it cannot be considered to have adequate information.
If you add next 5 years NET EARNING (NOT EBITDA) and take 35% of that you still come up with more then $350 million...
You should. You can make decent living....
Ms. Ruth R. Harkin
Director
AbitibiBowater, Inc.
1155 Metcalfe Street, Suite 800
Montréal, Québec H3B 5H2 Canada
Re: Directors Fees and Chapter 11.
Dear Ms. Harkin
I am a shareholder of AbitibiBowater, Inc.
It has come to my attention that you have claim of about $185086 as directors’ fees in regards to your services at AbitibiBowater, Inc (Court Docket # 2568). As you know this company has filed for chapter 11 bankruptcy and shareholders have lost vast sums of money. In light of this, I request you not to take any fees and take back your claim. This is a moral and ethical issue and right thing to do. I am sure you are empathizing with shareholders. I also request you to find some equity for shareholders and not to wipe them out completely. All this will go long way in your favor in future.
I thank you for your understanding and service.
Sincerely,
The forestry industry of the future
http://www.timberlandstrategies.com/portals/0/forest%20industry%20of%20the%20future.htm
Judge in this case wants easy way out....He is doing his job. He says 2008 was an unusual time in history and so fraudulent transfer claim or any other wrongdoings by management doesn't really matter..He says all these and then he finds equity to be wiped out...in 2007 it was this govt. dept took 8 months to approve merger (and hence slowed Abi down to realize merger..also no uptick rule) Govt. doesn't want to take any responsibility and finds OK to kill equity (while Bernanke is talking of raising equity prices)....How ironic is this Abitibi saga?
The matter of the existence of intercompany obligations should not be confused
with what I regard as separate issues: whether intercompany obligations should be avoided;
whether they should be pari passu with other obligations, subordinated to other obligations,
or some other possibility; or whether they should be recharacterized to be deemed to be
contributions of equity and not debt.
Section 362/Section 549 Contentions
What is BIA? Counsel says they will let BCFC be in BIA in Canada...
I tried to ask him about distribution date...I should have been more clear
Merger at any cost...Where is the DOJ now?
On January 29th 2007, Abitibi Consolidated and Bowater announced a stock merger of the two companies, in order to counter the decreasing demand of newsprint and to reduce annual costs by about $250 million1. On October 24th 2007, to get approval for merger from the United States Department of Justice, they agreed to divest “Crown Jewel”, one of the largest and most profitable mills in the US (located in Snowflakes, Arizona). The merger was completed at the end of October 2007.
Thanks! I am invloved in AbitibiBowater and will come back to this later...
Are they in Courts in New York or Delaware?
When are they going to get $700 million tax refund?
Agreed. 8.5% is for high tech or pharmaceutical or some special company where you need special qualification to run the company. Like GD says...8.5% for Forest Product Company...it is out of line
The recent run-up in pulp prices in 2010 to in excess of $1,000 highlights the long-term story for pulp, as consumption per-capita increases in the developed world, as more and more people in emerging market use tissues, toilet-paper, diapers, etc. and and areas of North America are the only place in the world that produce long-fiber NBSK ( northern bleached softwood kraft) pulp. Also recent industry pulp data has indicated no decline, as demand in China continues to support pricing. In addition, current prices are in excess of the Plan assumptions.
As a result, North American producers currently have over $150 cash cost per ton advantage over Asian producers. Meanwhile, European producers would not be competitive until the Euro was sub $1.20, a situation which seems less likely every day. All of the aforementioned factors have created a huge export story (ABH is currently exporting over 50% of its production and is turning down export orders) allowing North American producers to operate at 100% utilization ratios and thus, creating pricing momentum.
ACH sale: ABH is in the regulatory process of selling its one of the Hydro Power Asset. This asset have 230 million of non recourse debt associated with them (Over $220 million in equity value). I expect the asset will be sold for in excess of $450 million by first quarter of 2011.
The wood products division is currently generating virtually no EBITDA. This division of ABH has generated as high as $110mm of EBITDA in the past and I believe for next the 5 years EBITDA for this business will be $100mm/year. Assuming 6x, this business could be worth $600 million alone and is not reflected in the Plan.
Confirmation Is Not
the End of the Case
after entry of the confirmation order. One
reason for this is that a party can appeal a
confirmation order until 10 days after
confirmation, and, absent an order to the
contrary, the confirmation order is stayed for 10 days pursuant to Bankruptcy Rule 3020(e). Sometimes, however, the plan
dictates that the effective date is the
confirmation date. In yet other situations, it
is the date on which certain specified
conditions have been satisfied.
http://www.kirkland.com/siteFiles/kirkexp/publications/2339/Document1/Confirmation%20Is%20Not%20the%20End%20of%20the%20Case.pdf
The NAFTA Agreement asserts that the settlement award will only be granted if, and when, AbitibiBowater rises out of bankruptcy under a new corporate structure in Canada1 (the “New Company”). This despite the fact that the resources expropriated from AbitibiBowater (in Dec 2008) was before it filed for bankruptcy protection (Apr 2009). This term in the Agreement is highly controversial given the core dispute whereby the stakeholders of the current Company, and not the New Company, were denied their rights.
Debtor’s Averment 21 (Page 7)
AbitibiBowater’s involvement in the Province dates back to January 7, 1905, when its predecessor the Anglo-Newfoundland Development Company, Limited (hereinafter “ANDC”) was incorporated as a Newfoundland corporation. ANDC was incorporated with a listed capital of CDN $5 million, a vast sum at the turn of the 20th century, equivalent to approximately US $100 million in today’s currency. Its formation was the result of a confluence of events and forces. The colonial Government of Newfoundland was determined to attract industrial enterprises to the island, to expand the region’s economic base as its fishery industry collapsed and in the wake of a major fire causing losses above CDN $20 million. Newfoundland heavily promoted its development efforts in the United Kingdom, eventually catching the attention of the Harmsworth Brothers, publishers of the Daily Mail and several other leading newspapers. Traditionally, the Harmsworths had obtained pulp and newsprint from Scandinavia, but increasing worries about German expansionism led them to look westward to North America for alternative supplies.
Conclusion: Over the last the century, the Debtor has invested billions of dollars in terms of today’s currency ($100 million just in this case).
Debtor’s Averment 18 Page (6)
In Newfoundland and Labrador, AbitibiBowater holds a broad range of rights that can be traced in part back to grants in various forms by the provincial government and its predecessors and agents (such as the January 12, 1905 Charter Lease), but also in part to other arm’s length agreements made with private third parties, for which valuable consideration was likewise given. These transactions provided AbitibiBowater with extensive land rights, timber rights, water use rights and various other related rights, established through a wide array of deeds, leases, easements and other contractual agreements. AbitibiBowater’s various rights are described in Section VI.A(1) below.
Conclusion: The Debtor has extensive land rights, timber rights, water use rights and various other real property rights.
AVERMENTS AND CONCLUSIONS
Source of Averments: SE-1
1. Debtor’s Averment 17 (Page 6)
AbitibiBowater has been operating in Canada for over a century, through its Canadian subsidiaries (the AbitibiBowater Canadian Entities) and their predecessors. Aside from its activities in Newfoundland and Labrador, AbitibiBowater also owns and/or operates enterprises in other parts of Canada, including British Columbia, New Brunswick, Nova Scotia, Ontario and Quebec.
Conclusion: The Debtor operates similarly in many parts of Canada.
Question was to Mr.Zelin....
Q. And given the amount of the timber land holdings, it’s your testimony today that those were not significant as for the value of the debtors?
A. Well, what we cut goes and gets run through the debtors’ wood products division and that’s draws from the acreage that we own. So there’s value attributable to the timber lands that’s feed stock for our wood products operation. So there is value of those rights embedded but in the wood products division. In terms of the actual timber lands that might not feed into because they’re not being cut or might be excess, I don’t recall what the value is.
My Finding of Facts and Conclusion of Law:AbitibiBowater enterprise value $3.6 billion , Smurfit Stone was also given enterprise value of $3.6 billion. Coincident?
Management owns about 2% of total outstanding shares (For 50 year old publicly traded companies, Bowater and Abitibi Consolidated, this is very low number. Management never wanted to put their money were their mouth is. What does this tell you about management? If you take one manager (David Paterson) out of this, management shareholding will go down to less then 1 %. Mr. Paterson happens to hold shares because of stock incentive plan. Did any manager or any board of director at any time buy stock in open market? Answer is NO.
You can also email this to him....
The Debtors' estates must be valued as a going concern using recognized valuation methods. In re Bush Indus. 315 B.R. 292, 299 (W.D.N.Y.) “For purposes of the cram down provisions of 11 U.S.C § 1129(b), the debtor must demonstrate its present value as reorganized entity”. To determine debtor's total enterprise value (TEV) courts must determine what is a hypothetical willing buyer would pay for the debtor's assets. Absent compulsion or distress. In re United States V. Cartwright 411 U.S. 546,551 (1973) (“The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts”)(From Treas. Reg.§ 20-2013-1 (b). Additionally, the valuation of the Debtors for purposes of confirmation must include “all assets, even those a buyer may not value ” In re Coram Healthcare Corp., 315 B.R. 321, 341 (Bankr D. Del 2004)( finding that inclusion of net operating losses (NOLs) was proper since their value was preserved for the reorganized debtor under the plan)(emphasis added)
The currently low long term interest rates will generate substantial savings for the Company and should be factored into [/b]Valuation. “In determining debtor's value, for plan confirmation purposes, bankruptcy court should objectively assess debtor's creditworthiness and attractiveness as investment as of prospective effective date of plan by taking a market-accepted risk-free interest rate or rate of return and adding to that a risk premium determined by court based on specific risks shown by evidence, a process under which court may look to the market at most as an item of evidence, and not as dispositive gauge of interest rates debtor ought to pay or investment return that debtor ought to provide”. In re Mirant 334 B.R. 800, 824 (Bankr. N.D. Tex. 2005)
It is abundantly clear that the Debtors' valuation modeling process was severely flawed and demonstrate the Debtors' utter inability to forecast performance. The Blackstone valuation team or actually Microsoft Excel ( which only tabulated numbers and never tested them) faced substantial challenged putting together the “Blackstone Valuation” because of the poor quality data provided by the Debtor. Despite this Blackstone never ventured to audit or to confirm the numbers fed by the Debtors in to Blackstone Valuation and thus Blackstone had no qualitative input into the projected ABH numbers.
The Debtors bear the burden to prove that the Plan complies with section 1129 of the Bankruptcy Code. In re Adelphia Communications Corp., 368 B.R. 140, n. 247 (Bankr. S.D.N.Y. 2007); In re Bally Total Fitness of Greater N.Y., Inc., No. 07-12395 (BRL), 2007 Bankr. LEXIS 4729 at 12 (Bankr. S.D.N.Y. Sept. 17, 2007). In order to prove compliance with section 1129 in the current context, the Debtors have the burden of proving by a preponderance of the evidence that the Projections and the Blackstone Plan Valuation do not allow for a distribution to the Lenders of a value greater than their secured claims. See generally In re Gramercy Twins Assoc., 187 B.R. 112, 122 (Bankr. S.D.N.Y. 1995) (burden of proof). The Debtors cannot meet that burden with respect to the Plan, the Projections, or the valuation, and thus the Plan cannot be confirmed.
Fundamentally the Plan cannot be confirmed unless each impaired class votes to accept 11 U.S.C. § 1129(a)(8). Here, the proposed Plan extinguishes Common Stock, deeming that class to reject the proposed Plan. 11 U.S.C. § 1126(g). Accordingly, the Court can only confirm the proposed Plan if the Debtors prove, among other things, that the proposed Plan is “fair and equitable” by adhering to the absolute-priority rules and that the proposed Plan does not unfairly discriminate against the holders of Common Stock.
Docket 3813 in regards to Rule 2015.3
8. For purpose of Rule 2015.3, the monthly operating reports of Bowater Canadian Forest Products Inc and Bowater Incorporated adequately account for the opeartions of Bowater Europe Limited, Bowater Asia Pte. Ltd.,Bowater S. Amearica Ltd.,Bowater-Korea Limited.,and accordingly, the Debtors do not need to submit any additional or further reporting under Rule 2015.3 with respect to these entities.
Order Signed by THJKJC. Nov 09 2010
Smurfit-Stone Container Corporation (Nasdaq: SSCC - News) is one of the industry's leading integrated containerboard and corrugated packaging producer and is one of the world's largest paper recyclers. The company is a member of the World Business Council for Sustainable Development, the Sustainable Forestry Initiative®, and the Chicago Climate Exchange. Smurfit-Stone generated revenue of $7.4 billion in 2007, has led the industry in safety every year since 2001, and conducts its business in compliance with the environmental, health, and safety principles of the American Forest & Paper Association.