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Hey, Robb, just buy a few K shares, sit back and enjoy the show next week. This is way better than Cirque du Soleil. It's more like a Cirque le Jerque, speaking of Vegas and fun.
I have had lots of entertainment engaging with J.T. and the guys, some pro some con on both Rotech and me, but I learned a lot about really helpful DD sites, pink sheet gamesmanship and MM manipulation at a relatively active and high level. I have gotten a lot more out of this dialog than the condescending censorship on the WAG board when porgie stepped down as mod.
Stay tuned, next week should be interesting and possibly even profitable with even a small position, and I can almost assure you it will be both interesting and FUN, here!
Yank
Until they file a detailed plan with the court I would actually expect a large-cap- player like Exide to post frequent updates to keep their key client business relationships intact. The planning cycle with especially capital equipment o.e.m.'s is lengthy and involves technology choices for things like charging systems that widely vary depending on flooded, gel, absorbed, LI or other technologies and where supplier choices are often made 3 years or more out.
Once the plan is filed I would agree with you that PR is riskier and tends to be more boilerplate than incisive.
If you allow key motive power clients that make forklifts, locomotives and heavy mining equipment to languish in an informational vacuum for too long, I think you risk losing most or all of them due to supplier uncertainty.
Just my opinion.
The laws in Europe do not permit reorganization under bankruptcy where insolvency requires liquidation. That is why the euro-assets have been segregated from the U.S. assets. The company does not want to liquidate.
Exide was and I believe still is involved in a bitter trademark suit with Enersys regarding the brand name. Awhile back there was a $300 million suit pending over the issue, as I recollect. I do not know if this has been resolved, or not, but it could render the brand discussion you raise a sadly moot point.
I think this bankruptcy will linger on for ages before any future direction gains genuine definition. Hey, how does everybody like all the corporate PR updating the status of their investment? LOL!
Sears reminds me of the problems at J.C. Penney, only on steroids. An iconic but archaic brand, fuddy-duddy softlines with no mainstream market appeal, category-killer hardlines competition and a profoundly inferior on-line presence compared to Amazon, Walmart or Target.
Excluding Kenmore appliances with some TV promo, Sears has NO brand support of note as FSI (free standing insert) is a dead medium with declining print readership in both newspapers and magazines. Sears online presence is Neanderthal.
Sears is going to get KILLED this holiday season. Lay-a-way at KMart is NOT a business plan!
Costco and Overstock.com are the better plays.
Robb, the WAG board on Yahoo is a pointless cesspool of trolls and much of the content on the IHub WAG board is dismissive and condescending compared to the lively and constructive content in earlier times. I miss the dialog, but I won't indulge the stupid sniping that nets no gain in investing insight. I have dumped Facebook and Twitter for similar reasons, and even post very sparingly on IHub as I have grown weary of being "played" on many boards when I am just trying to offer an opinion.
I remain primarily interested in Rotech for when it emerges from BK. However, the bankruptcy process, as it has developed, has become truly fascinating and very complex to analyze, anticipate and predict, in terms of outcome. I bought a small, 10,000 share stake, purely for fun. It's sort of like being in the office football pool... makes watching the games somehow more meaningful for just a buck or two.
Regards,
Yank
Looks to me like shares will be cancelled, too. You do the math. Buy 'em for 5 cents. When they are cancelled, you get 10 cents.
Where else do you potentially make 100% by holding a stock for less than a week? Of course, the 10 cent stipend is not guaranteed, so risk exists. Then, again, so does a resurrection from Pennyland exist.
It's all about risk/reward.
This is less like buying a lottery ticket and more like playing Keno in Las Vegas. With lottery, you stand in line in a grubby convenience store and ask a clerk that speaks no English for a ticket. With LV Keno, you go to a great restaurant in most any casino, give a few bucks to a cute casino runner with big tits who may or may not bring you a big payday, later. You tip her a few bucks either way, and enjoy your delicious meal before getting a payoff or going onto a show or walking around Fremont Street for an unmatched sensory experience at no cost, whatsoever.
I prefer keno!
In plain math, every $1 M in liabilities that can be shed or disqualified is a 100% increase in market cap and resultant S/P.
To be fair, the same holds true in reverse as with any CMS settlement for overcharges, as just one example.
This is like the old Johnny Cash Song "I Walk the Line" where a 5 cent share price change can either explode it, geometrically, upwards or see it go to zero, in a heartbeat.
Look on the bright side. It has a potentially large upside, or, it can only lose another 5 cents per share on the downside before it zero's out.
I think we'll know more next Thursday.
Logically, I would agree with you on the spending. However... does that include a settlement with CMS for possible overbilling, or the cost of new hires and new Distribution Centers like what J.T. dug up from the cafepharma link? I can't say, for sure. I think there was also something like a 6% penalty for premature retirement of debt or failure to use drawdown facilities which could, possibly, be in there as well. Hard to say. Also remember that there was a truly bizarre "Confidentiality" SEC filing regarding the deal with SilverPoint where a lot of the detail was "omitted"; who knows what was in that stuff which all of us were barred from seeing?
I suspect that we will see a mini-run between Monday and Wednesday as the hearing date draws near, subject to changes as/if the court grants a stay as petitioned. The sheer coincidental judicial agenda which has 2pm hearings on new counsels of record to represent the Equity Committee tells me that Judge Walsh has already decided how he wants to rule... the rest is just theatre-of-the-law, Gilbert & Sullivan style.
Arbitrageurs love this Twilight Zone period where BK companies near their Decision Day from the court. GM stock was INSANE in trading action for a few days before the slate got wiped clean and the Little Rascals of novice BK investing got unlubricatedly fleeced when their sure thing got cancelled.
I just hope we still get a dime!
investor2004, I think the difference IS the "make whole" payment which seems to be the interest on the principle that they cede by accepting the equity in a swap. I could be way off base, however.
I do seem to recall some dialog in one of the filings about the post-BK financing or the DIP financing that had some "make whole" discussion, as well.
NONE of these guys make this very easy for an ordinary person to comprehend which is why a lot of small investors have just given up on stocks and alternatively buy a Tesla or a Carnival Cruise with a balcony on an upper deck. The latter category would include ME, though I still dabble because I like the challenge of figuring out and beating the Ackman/Soros/Icahn/Buffet 1%, at least on occasion. Now if I could just find access to the high frequency trading club!
Next week should be an interesting one for Rotech. Good luck!
Hey, it's always 5 o'clock somewhere, right? I am surely opinionated, but I hope that I am not arrogant and I have never said with 100% certainty that I'm right or KNOW what will happen and everyone else is wrong.
I actually do think the shares will be cancelled. If I'm wrong, I'll surely get more than I risked. If the judge cancels the shares but decides the dime/share award should still be paid since both sides incurred offsetting legal expenses (meaning Rotech's threats to apply the $2.6M solely to their own costs is unfairly one-sided), then I double my money. I actually think that this is the most likely outcome. Or we could all just get 100% wiped out.
The entertainment value of the dialog on this board has been worth a whole lot more than a small loss, if that occurs. Thanks guys, it has made the summer doldrums of investing worthwhile by exchanging thoughts/opinions/barbs/humor with all of you.
Regards,
Yank
J.T., I think you misread today's filing regarding "make whole" which was a topic in several earlier filings, as well. It is the Equity Committee who is objecting to a claim that the liabilities claimed by Rotech include the cost of a "make whole" provision that allows Tier2 lienholders to recover the full value of their original, contractual indebtedness when originally providing the financing long before any of these BK discussions commenced. At least the gist of what I got out of it.
This has nothing to do with enriching Rotech. It's just a debate over how much the lienholders claim as the value of the debt they have agreed to swap for the common shares.
The share cancellation is clearly stated on page 21 of the 67 page BK filing of April 8, item #15 on your docket listing if you arrow back to the first page or two of docket filings.
It is ALL very confusing, for sure.
J.T., check your L2. The buy order for 10,000 shares at $.045 is my lottery purchase. It's like lighting a cigar with a $100 bill.
I will lose it next week, but I can always use the loss on my taxes due Uncle at year's end.
Just having some fun!
Yank
The "fly in the ointment" with the pre-arranged bankruptcy argument is that NOTHING was pre-arranged with Wynnefield and the other common share holders who are fighting, fighting, fighting with every legal option known to attorneys to disrupt the "pre-arranged" deal which potentially cancels their shares, except possibly a dime "gift" that I suspect has also evaporated due to the legal meter running. In fact, some of the wrangling before the court is precisely because the Equity Committee is alleging that a cozier than proper arrangement was made between management, noteholders, and SilverPoint that didn't include them or fairly recognize their interests. There is no Kumbaya pre-arranged deal that everyone bought into. That's just being truthful.
You say this is a slam dunk. I think some better deal for equityholders is still possible, but each day that goes by with no PR regarding a third party buyout reduces the likelihood of a deal. Don't let my disagreement rain on your parade or spoil your day.
Ambac was heavily insider-owned and still cancelled shares. So was Enron. So was Conseco. And don't forget the scantly mentioned reality that Alsene and management gets cut in for shares in New Rotech, 5% by recollection. The majority of executive and board shares held were non-open-market awards (a few exceptions but not many) and a bunch were cashed out in 2012, the point being that the "owners" had no skin in the game in terms of out of pocket money invested.
Let's just logically sculpt the math of the New Rotech. The float is 26 million shares. Today they are worth 5 cents for a market cap of $1M. On the 26th if the plan is court approved, the Tier2 noteholders exchange their debt for that equity. Management gets 5% reserved for their bonuses or 1.3M shares.
We all agree that those shares likely are worth a range of $11 to $14/share with about 60% of ROHI's debt retired. That means the noteholders get from $275M to $350M in revised market cap. That is NOT much reward for the sure thing they get in a liquidation since noteholders come first in a BK hierarchy of payment priorities. The only way the noteholders or management, for that matter, really comes out ahead is if Rotech prospers as a going concern and its value rises a lot more than what we anticipate its immediate value to be after emergence. This said, there is NO ROOM economically for a forward split that would be purely dilutive.
Notwithstanding, what would Rotech say to Judge Walsh after all this wrangling... "just kidding?" I think not. All the body language leads inevitably to a courtroom showdown and my sense is that unless Judge Walsh has an Epiphany regarding the Equityholder's entitlement that showdown results in the now twice-amended bankruptcy plan being court approved and implemented without further delay.
Just my opinion.
Hey, good luck!
Nope, Joey, I am hanging firm and waiting for the new shares after emergence. Depending on the deal, I am planning on buying around $50K worth in the New Rotech. If I miss a big windfall that you guys catch, I'll drink a toast to you "degenerates" and thank you guys for enriching my investor lexicon. Why, just a few weeks ago, if asked, I would have told you that a stinky pinkie was an old date I had in High School.
Yank
After all the problems at Knight Capital Group, I think those guys probably have the Johnny Walker with breakfast.
I think today's buys were arbitrageurs who love to zoom in on Q's nearing a dropdead date for common shares, just as happened at EKDKQ yesterday. They will vaporize as the 26th hearing date gets nearer, IMO. Not a surprise. What IS a surprise is who was selling with so much of the float so narrowly held. There were no Form 4's the last time this happened so I would conclude some hedgie took a position during the S/P meltdown and is playing games with big bids. Wish I knew why... Someone wanted the S/P to go up and was willing to spend more than pocket money for 750K shares to do so.
Care to reconsider? Looks like Eddie Lampert has lost his mojo.
This company began dying with the KMart fiasco.
I was reviewing the ABKFQ (Ambac) bankruptcy case where all common shares are being cancelled (yes, I know it is a larger cap company). Interesting to note that NASDAQ has granted them a new listing the self-same day that their new shares are issued. I really did not think relisting could be accomplished that fast except on OTC Markets. If this happens with Rotech it could be the buy of a lifetime since I think intro'ing the shares at any significant premium to the swap price, 3 cents at present, would surely look fishy and signal impropriety during the BK adjudication.
I remain of the opinion that shares in the New Rotech are the road to huge gains, not arbitraging the extreme risk of potential or even likely common cancellation.
We will all know, shortly, as the soap opera likely concludes with no 10 day stay extension as the objections rolled in yesterday with anticipated vigorous defiance.
The objections are precisely what I anticipated in my post earlier in the day.
This is going to degenerate into a steel cage match with the referee, Judge Walsh, begging the ring announcer to step in and ask the participants: "Are you ready to STOP the ruuuuuuuuuuummmmmmmmmmmmble?"
J.T., there are rarely any winners in conflicts like this, big board, pinkies or bulletin board casualty cases. JMHO.
Yank
J.T., you could help me understand your position tremendously if you could just answer the question regarding who pays off the debt.
I just do not see how Rotech can ever make money without the debt being discharged. If the common shares are cancelled and swapped for all the equity, I see how that happens. In your scenario where you and other common shareholders like Wynnefield make exorbitant gains in a debt-free Rotech, how does the company discharge the debt?
Seriously, dude. Who eats the debt, Godzilla?
I agree with you, and you and I have previously agreed on the analogous connection between Rotech and Apria and Lincare. In my experience, these "winner take all" showdowns almost inevitably harm both sides who wind up getting a lot less than a simple, shared accord would have netted everybody.
There is plenty of greed to go around, here, IMO. Management wants to give everything to the noteholders because management gets cut in for a big chunk of shares in the New Rotech, unencumbered of debt. Nice. And Wynnefield who bought most of its equity for under fifteen cents wants some huge payday because the shares are undervalued, even though they were told they would get ten cents before they went on their share buying binge. Nice.
The guys getting the shaft are the equity holders that have been in the game for some time and held shares as they rode down during the bizzaro era after Alsene took over. Those are the guys I have the most regret for, and who, likely, will wind up with the least. Your comments the other day mirror much of my own thinking regarding the rewards to big money at the expense of the little fish which surely includes me.
Yup, all that is fully plausible. In most business deals you look for a "win/win" where a reasonable settlement addresses at least some or most needs of opposing parties. This one strikes me as having gone WAY too far and looks like it is headed for the rocks with more and more suffering getting spread around to more and more stakeholders which is NOT the spirit of reorganization under BK.
Okay, I'll bite. In your scenario where common shareholders retain a stake in the new Rotech with reduced debt, where does that debt go? The Tier2 noteholders come FIRST in BK proceedings and they are the holders of the debt. Do you seriously think that they will just walk away and gift Rotech to the shareholders who rank LAST in the BK hierarchy of who gets paid?
Please explain.
LOL. Thanks, investor2004, I needed that!
My prediction... IF this gets much closer to the precipice of unraveling and the pre-arranged Gent's Agreement starts falling apart due to too much elapsed time, look for Rotech to make a shareholder's rights offering where common stock owners can match the Tier2 lienholders $137 M deal and get half the equity. That would be around $6/share as a buy-in to retain an equity position.
Think this is far-fetched? Read the detail on Kodak's emergence deal. Courts LOVE this kind of deal because the court doesn't pull the plug, the equity-holders are given a choice and THEY get the blame if it just doesn't work out too well for them.
Remember that Rotech has around 24 M in charter-authorized common shares that it has never issued. Obus could come up with this much cash, though I question why he would want to do so. Could you? What you would wind up with is 50% diluted shares in a new Rotech with no published/audited financials since the quarter ending last October and facing a dispute with the Feds that could be vacated, but also did cost Rotech around $7M, the last time around when seized records resulted in the company re-paying overcharges to Medicare or facing the Hindenberg Omen of being banned by CMS from further contracts.
All JMHO. J.T., I'm thinking that you might want to quit reading my messages; I don't want your brain to explode :<)
This is quickly becoming Gonad City!
Who is the legal team chosen by the Equity Committee?
http://www.cooley.com/bankruptcy?Cases=True
Lots of big deal credentials at big deal costs. I expect Rotech to challenge the appointment since they have previously challenged even the rationale for the Equity Committee, itself.
I may not be much of an expert on pink sheet Q's but this type of counsel doesn't look to me like anything even remotely close to a "stinky pinky" law firm, if you get my drift.
Now the Equity Committee is seeking approval of a new legal team, and a stay to prepare for upcoming court appearances. I said it before... this is like watching a soap opera play out, and IMO it is FAR from over in any definitive way. Each day that this drags on puts crucial pre-arranged elements of this BK at risk, not the least of which are the creditors agreement, the lienholders agreement, DIP financing and Emergent financing. The meter runs for each filing "on the docket" and the costs of all this paper-shuffling come out of the proceeds available to compensate any and all stakeholders.
I doubt that the judge will allow this to devolve into a CH VII liquidation, but this is not looking like any cozy and quick conclusion, either.
Good luck, guys. I am glad to be sitting this one out!
Kodak BK plan was court-approved, yesterday. All common shares will be cancelled. The criteria used by the court was that equity holders could not prove solvency in any conclusive way. "Woulda/coulda/shouda" analysis is not proof.
I am just saying...
EKDKQ for details, if you wish.
Yank King sounds like the name of a great Chinese food restaurant. That's it. I'm celebrating with some Mandarin Beef, Mei Fun noodles and some Crab Rangoon, tonight.
If my fortune cookie has any insight relevant to Rotech, I'll post it later, after the effect of the umbrella drinks wears off.
P.F. Chang's is now passe', I'm only dining at Yank King in the future! Just remember the teaching of Confucious who said too much Yank King can make man go blind.
LOL.
Yup, that IS my post-BK valuation and I am sticking with it. But it will be the shares in the New Rotech after the debt-for-equity swap that are worth that much, over a span of time, and those shares will be held by Tier2 noteholders, not you.
My interest, as I have stated several times including last weekend, is to buy shares in the New Rotech if they remain publically traded after the company sheds its Q status and moves forward. Since it takes considerable time to refile for NASDAQ listing AND I think Alsene would be insane to allow the share price to rise too much/too fast for all those reasons investor2004 has raised, I think a huge buying opportunity may be there for INVESTORS willing to roll the dice and hold the New Rotech for a few years.
I actually harm my own position by sharing this strategy with you and revealing it to others but I am trying to explain to you where my interests lie which is NOT what you presume.
You are a trader. I am an investor. We do not share common tactics or perceptions and that, frankly, is a GOOD thing that leads to healthy exchanges of info and views that can benefit all board readers with an open mind and a goal of making money.
Yank
Well, J.T., it is ALL in the same 67 page filing of April 8, 2013. The entire plan, as envisioned by Rotech, and covers every creditor, every noteholder and every stakeholder.
I have never owned this stock and I have no axe to grind with you or anyone else. If it goes to $14 and little guys like you and Joey got in for a pittance, I'll be the first to send up a cheer for you.
Yank
Section 3.3.8 on page 21 of the 67 page docket item #15, filed 4/8/13, clearly and specifically addresses the cancellation of common shares as put before the court. Glad to clear up the confusion that somehow this event might have been somehow overlooked in all Rotech's filings.
I have been following your board and you have some great picks for a S/T gain. But I think you are going to eat a bunch more crow on this one in a day or two.
Hey, good luck. I have no skin in this game, just an interest in shares in the emerging company when the shares become available after BK exit.
Good luck.
Joey, I try hard to win on every trade. I only come out ahead about 70% of the time, but I am always trying to do better. I am not a gambler. I really DO think that J.T.'s DD mantra is the secret to making money on stocks... something I do pretty well at as my only source of income. I live well, by the way. But you must do more than just find the info (e.g., like the docket listing Rotech's court activity)... you also have to have the patience to dig down and actually read the detail where the real "dirt" reposes, within the docket.
If the current 26 M common shares aren't cancelled and exchanged for the Tier2 notes, there is NO exit financing deal. Read the filing. This is not a bankruptcy smorgasboard where you can just pick and choose the items on the buffet that you want and disregard the rest, skipping on the tab at the end of the meal because you didn't find everything on the table palatable.
C'mon, J.T., you are smarter than that.
Shares get cancelled in most bankruptcies. The exceptions are few and far between. That's just reality, not a delusion. The debt-for-equity swap that cancels the common shares is clearly stated in the original bankruptcy filing with the court. Where do you come up with the idea that this is some last-minute gambit?
Sorry, J.T. but I won't attempt to argue with delusion.
You read what you WANT to read and see what you WANT to see. I just look at the reality as I perceive it, which varies markedly from your interpretation.
"No Equity Committee" is good, you are correct, but only if you are a noteholder or Rotech management that has favored a settlement in reorganization where all the common stock, including what YOU own, gets cancelled and exchanged for Tier2 debt.
If I am wrong, I will "man up" and admit it, with all due props for your uncanny wisdom that I just could not grasp. But I still feel strongly that you are headed for a collision with share cancellation that will wipe out the equity holders.
Won't be long, now...
Good luck.
It's HAMMER time for mReits, today.
OUCH! This could close <$20 tomorrow at a divvy return of 25% and yet nobody wants to own it.
I wonder if Al would like to change his opinion on hanging on at $28 to cash in on the dividend? LOL.
So what??? The counsel for the Equity Committee has withdrawn from procedings as approved by Judge Walsh. Why does this matter to anyone???
If this is news AT ALL, I would think that it is BAD NEWS for shareholders whose Equity Committee now has no representation while Rotech and the Creditors retain counsel to look after their interests which seem to be at odds with shareholders including Obus/Wynnefield.
Actually, Exide traded as a pink sheet Q during its first BK. I would welcome your input on that board and you might find that there are some elements common with Rotech, not the least of which being why they filed BK in the first place, especially as Exide lists far more assets than liabilities and has HUGE Euro-assets that are set aside as bankruptcy laws in Europe require liquidation, not reorganization, in such a filing if the Euro-enterprise is included in the filing.
Rotech's BK was "pre-arranged" to serve one purpose only, and that purpose will only be fulfilled when the Tier2 noteholders get assigned 100% of the common share equity. Only then will the company rid itself of 60% of its legacy debt and become highly profitable. The difference between my scenario and yours is who gets the certain wealth? In my opinion, that will be the Tier2 noteholders. In your opinion, that will be you.
I think that you are headed for a bagholding event of enormous dimension if you hold and accumulate shares.
Good luck!
I have played several Q's over time and I am playing XIDEQ at the moment, thank you very much.
There are several items on the docket that deal with Rotech being insolvent, making its BK petition likely to gain approval... including the cancellation of shares in a debt for equity swap where Tier 2 lienholders will gain 100% equity ownership of the company.