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I think there will be atleast one bidder. I'd expect Siemens to be in there. They are working on what is supposedly a more efficeint flywheel design in a lab environment but there is considerable value to converting a lab design to a manufacturing facility. I've been invested in a battery tech company that in its move from lab to hand production to assembly line tech has taken over a decade. That knowhow is worth something.
Add in simply the inverter and costs to hook up 20MW to the grid. I've seen estimates for the cost of that to be worth $10-20M.
If there were no bidders, which I doubt, the Gov doesn't want another issue of a Solyndra where they extended financing in February 2011 (their second loan) and they still failed 6 months later. To many it was the second loan that was the crime, as the business model had shown by then it was flawed and had failed. In that case they will shut it down. This BK is an example of that thinking, if they really were concerned about getting their money back they could have worked with Beacon to 1) complete finishing the plant and 2)deferred repayment terms out a few years like many banks are doing with commercial loans. Their behavior is of not willing to compromise.
If one was to read the initial plans to sell this business and the fact that BCON initially put lots of provisions so that they could exclude anyone for any reason you should get nervous. The DOJ objected to this so that the highest bidder wins. This should make shareholders cautious as it may appear that Capp and mgmt of BCON want a certain group to win to potentially have them manage it long term (incentive for them) but not for shareholders wanting the largest return.
The fact that with the auction being scheduled tomorrow and we have not heard whispers of even a stalking horse bid should concern shareholders.
Lastly, CRG partners is the key to this case, imo. Back when they initially filed they were brought in to look at restructuring/sale options. They specialize in this and are very, very good. Without them I would have walked away and never looked further. Docket #164 tells the story of what and how they get paid.
They get 15% of the first $10M, 10% of the next $10M and 3% of anything beyond $20M for a risk premium. Those are huge levers. Sell for $10M - they get $1.5M, Sell for 20M they get $2.5M, sell for $30M they get $2.8M. You see they are incentivized to get to $20M and not more. We need them to get to $50M to pay back the STate of Mass and Fed Gov before we are considered.
The second part o
I'm pretty sure I know the name of WallStreet61, and the Grunge. Neither are Benjamin Bush and I believe MrchntofDeath stated he is from Texas.
I'm hoping my post, will cause him to come out either publicly or privately. I still hold out hope that Mr. Bush could somehow work together with Rodney McFadden and WallStreet. Those two are some of the brightest posters around.
Wonder what we can do to reach out to him and support him however. Id gladly contribute some monies to the cause. At this point it's the principle.
Not really. Bering Sea gold is a show of 4 or 5 guys with dive or dig off the coast of Nome, Alaska looking for gold flakes.
Agree with all of it but how does Judge Block rule that way when its not an option for him today.
Here is my problem. What can Judge Block do.
If he affirms for the plantiff (Anchor/JonesDay) that rule 12(b)(1) that the DOJ objected to is incorrect that means that he agrees that JPMorgan is the rightful successor.
If he does not, that means that the FDIC-R did not transfer the rights to JPM.
Therefore reading the documents in doc #329,335,337 and the transcript in 348 it seems that JonesDay has the stronger case (much stronger imo) that JPMorgan did infact purchase it from FDIC-R. (however I was clearly wrong on DIMEQ w/ Judge Mary)
The only mechanism that I see that would be possible is to argue that JPMorgan bought WMB not WMI which is where the asset lies. The problem from my non-legal eye is that doesn't appear to be an option for Judge Block. Can he decide that JPMorgan did in fact purchase the rights but the Judge Mary is wrong and holders of DIMEQ win. (I can't see this happening).
delted.
I've looked at both the WAMU case 08-12229 (which is what you see on KCC) and there is nothing.
I've also looked at Judge Blocks case 95-CV-00039 in PACER but I I doubt anything will get posted there at this time.
Marty asked:
Again I ask...will our wts continue to trade after the stipulation passes? Do they have possible value in future or current suites...if we don't sign away our rights? Any opinions?
Yes - the Plan states the LTWs will be cancelled upon the Effective Date if the POR is approved.
A few questions for the group.
1. If Art has filed an appeal, can I read it? Or at this point is it simply a note that says I'm going to file by the 26th?
2. Do you have the case # for Judge Block's piece so that I can look it up on Pacer? Thanks.
3. Anybody have any news of what either MrchantofDeath is up? or WallStreet61? If WallStreet does appeal I hope that its similar to how he writes on here. It should atleast be fun reading.
That said, is it safe to assume that any appeal would wait to file up to the 26th.
The other option for the price being what is below the current proposed share price is the Time Value of Money. Quite often you can see stocks that have agreed to a merger sell for 5% or so off a deal even if the deal has closed as you don't know when you will get paid.
Which hearing are you talking about. A recent one or one from the summer. That is when we heard about Broadbill leaving explaining the share price decline from $.90 to $.60 but we also had 4 HFs step up to take its place. If its that one its not really relevant.
I have not listened to the last hearing so if it was then I could understand your point.
Beyond the 700k shares sold in the last few days leading up to the judgement there was a 1.2M share day a week before Christmas. Anyway it doesn't really matter. If a HF wanted to withdraw a month out and that Art knew his funding was getting cut I would guess he would have settled when he and Rosen were sent to mediation.
How do you know what this HF wanted to do?
Speculation on your part or do you know someone.
The two days before the announcement there were 700k shares traded. Above average but this stock traded in very lumpy amounts. I would assume that these funds had more shares than that based on what they were paying in Legal Fees.
We know this summer that 1 of the 2 main original plantiffs sold out and was replaced by 4 other HFs who continued to fund Art. If you assume that the HF selling was 2/3 of the volume they probably were selling 5M+ shares.
It may or may not. (Stupid answer I know)
At the end of the day we have two issues:
AICI is the holding co.
The only real asset of the holding co is AIC. AIC on a statutory basis has value A>L. However, the majority of the assets are pledged against liabilities in the idea that there may be addt'l/continuing claim. The major business was Worker's Comp which have very long tails. In fact they have not written any business since 2001. Each year that goes by should determine if there are payouts more that has been set aside (bad) or that we release reserves (good).
I expect that the trustee wants to sell the runoff business. There are plenty of insurance firms who will do this as they will buy the book at a discount and hope they can manage it better than the other company by being more efficient (duplication of staff), etc. If you look at the Trustee's history this is what he has done once before. From my limited fact checking (one public company I could find) these companies that buy the runoff pay 70-75% of the book. Think of it this way. Say you have assets of $29M (in cash and bonds) and liabilities of $20M based on what your actuarian tells you that you need to reseve for future payouts. That is a positive book value of $9M so they will give you $6.3M for it. This is what I am hoping for however there are two thing that I think is delaying this from happening.
Chevy mentioned the big one. Granite Re has a claim worth $16M against us yet they are bankrupt and owe a bunch of people. I would expect that their creditor want some money so they would agree to a lower amount. My guess is that the problem is do the creditors of Granite do they want to wait 10 years to see if they can get 100% of the $16M claim or do they settle for less to get something now. Time is money but for a trustee they may not have the same incentive to get something done now as they get paid irregardless of how long it takes. In fact they may want to simply stretch it out to get paid more.
The smaller part is that in AIC's books there are two transactions accounted for where part of the business was sold to someone else and they have assets pledged against potential liabilities. Again, just like above but the difficult part is if you sell the business you will need to get the other company to sign off. This may be nothing but who knows.
Insurance is a slow, glacial process. I think if we see news of a settlement with Granite Re the rest will go quick. Hopefully 2012 is the year but I said that last year too.
Simple deal. They own $41M to the Feds, $5M to state of Mass.
My guess is the entire business will be sold, not just the Stevenstown 20MW facility as they will need somebody to manage the facility, improve it and a buyer who buys it will probably be looking to expand the facility.
I'm not as optomistic here as I originally was as the FR market is much smaller than I originally thought. The key will be if there are multiple bidders and that these bidders will require to have vision of the US and World grid markets that see the value. If so who knows what the business would sell for. If you are a long suffering shareholder I would hold at the current shareprice as if they don't get enough to pay back the bondholders shareholders get $0 but you could get a decent return if there is a bidding war.
I'm not buying but I am watching/learning.
see Wall Streets post #39.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=70766276
WallStreet - You really think they've got 2 years from now in BK. Initial filings were for 12 -18 months. What I've heard from rumors is that they are taking a long time in A/C leases right now (poorly organized is being chartiable) so I could see it going out beyond their timeframe.
Loved the report last night that DL was looking to buy them. That will not happen. Maybe some slots. Hell, knowing the asshole that is Richard Anderson he may want to buy the junk that is AMRs Super80 fleet (MD-83s) and use them to replace the DL DC-9s (ex NW, before that Wisconsin Central). My first time I was presenting to the board making Capital decisions @ NW he came in and picked apart my NPV stating my fuel cost sensitivity was to pessimistic. I was using $.80 as my midpoint, current spot @ the time was $.83 and he wanted to use $.40. Ugh, that delay cost the company an extra $1M in direct costs and estimate $3M in cancellation costs as it screwed the maintenance schedule.
Wall Street -
I believe you are a lawyer by day, crusader for justice by night is there any way we can help you out. (say pay your hourly fees like any lawyer, bake you a cake)
At this point I've written if off as a zero and an important lesson on a)court system (specifically the BK system) and b)money and risk mgt.
Also, will your appeal be to her or to Judge Block. I just want to read it!
My guess is the HFs that represented Art may have a dispute internally and therefore he may not get paid so they settle just to get out. They've done an admirable job representing us on their own and they want to atleast get their legal fees paid plus the current shareprice.
I don't like it but I haven't been paying art for the last couple of years.
My reading of the stipulation is that we are screwed but I also know Wall Street has said that you file something at anytime. I'd love to get his take at some point.
Ugh. If this is agreed to and get approved does this mean any thing from Judge Blocks court is done.
Assuming the legal fees are $3.2M for Art and that shareholders actually get the $9M and that they used the $3.2M in negotiations as its what actually paid.
Class 12:$9M/113M shares = .079
Class 18 = $10M - I'm assigning a value of $0
Class 21 = .087% of FV of NewCo ($190M) = $16.53M/113M shares = .146
My total = .079 + .0 + .146 = .226
where do you see that. If 8.77% of the reorganized stake of $190M then FV is about $.145 plus whatever cash doesn't go to lawyer fees (conservatively $0).
I think WallStreets earlier post still stands. I cannot find any notes that show a new symbol.
We know it moved to the OTC so we should be able to see it here.
http://www.otcbb.com/dailylist/
Unfortunately you see the AMR common on the 1/4/2012 daily list but not AAR. At this point, patience.
I doubt that we will hear what companies have expressed interest from the courts. Hopefully something will leak out who has submitted paperwork for financial able to bid but I am not hopeful.
I consider that to be minor in the scheme of things as Beacon's flywheels have some pretty unique materials.
The better advantage that I see vs batteries in short term regulation is that batteries can only discharge to the grid because if they pull too much to quickly they can damage the batteries where flywheels can both discharge energy to and remove energy from the grid.
I would agree. I looked at this last year as I had bought and sold them a few years ago and I know their business very well.
I felt all along that they would prevail but the problem is even if they get a few million there is not catalyst for the underlying business as its still losing money, they still have a contract with the WB, which no one watches and no new business lines that will become a hit tv show/toy. Instead they just recycle the same tired lines to squeeze out a little bit of money.
I view the business as a nice salary for the operators as it just kind of struggles around and recycles old concepts. A nice cigar butt type of business that could be good for shareholders but the cash never makes it to bottom line and therefore shareholders as their cost structure seems to high. Excluding depreciation they have been CFFO negative the past few years.
However an asset light business such as this is a leveraged play on a new hit toy which can make tons of money.
Add in the fact that longer term this lawsuit has probably done enough damage that when the contract expires (2013 IIRC - I haven't looked since last summer) the Japanese will probably move this licensing business to whomever they wanted to when this started. While these guys have licensed stuff from other places all the hits come from these guys and when you think of the hit stuff from overseas you think of Pokemon, DragonBall, Avatar (not the movie), Power Rangers and going back further Teenage Mutant Ninja Turtles, they are all from Japan. I thought the Tintin movie was great and has been a hit in Europe for a while but box office sales aren't great here. These guys also seem unwilling to risk and create their own content so while there may be more upside with a cash ruling the stock may hit $1.00 which is a great return but its not like this stock was trading over $.75 before the lawsuit and BK filing.
I wish I would have bought some but I was too focused on DIMEQ to notice it dropped sub $.10. (I need to set up price alerts that hit me in the face).
Lastly, I've seen others to comment that the business has tons of hidden assets. I have no idea what these are. Their actual physical assets are meager (vehicles, some tech equipment), I don't see a NY Office building that they own that they have on the books for $100k unless I am missing something. Their asset is the relationships they have to get to Japanese TV shows to the US, an agreeement with WB that used to be a cost them nothing that changed to them buying the block of programming and them selling and getting the ad revenues. This has been a money loser for them. Again its another form of leverage if they had a hit show but they don't.
Toonzai's current lineup is:
Magi-Nation
Sonic X
Yu-Gi-Oh!
Yu-Gi-Oh! Zexal
Dragon Ball Z Kai
Tai Chi Chasers
Sonic and Yu-Gi-Oh are owned by TV Toyko who I would expect that they will take their business elsewhere when their contract is up. Magi-Nation in Canadian/South Korean, Tai Chi Chasers is South Korean and Dragon Ball is Japanese but from Fuji and not TV Toyko so that could continue.
So of the 6 current shows that make up 5 hours of programming, half will probably go away in a few years. What replaces the business and do I trust mgmt to not waste anything. I don't. Someone convince me I am wrong.
He is stating that its old tech as there are other flywheels that are 90-95% efficient. However it appears that those are still in labs not in commercial production. I would assume Beacon has ideas of how to get to 90% also as they have more expertice in the real world which is where the real learning is.
For me the cost for me isn't how efficient it is, its how much it costs provide demand response for 1MW of power. By all accounts it cost $70M for the construction of the Stephenstown plant and they think they can do future ones for $53M. The company has a history of overpromising both on expenses and potential revenues so lets cut in half and say that the next install for 20 MW is $60M or approximately $3M/MW.
My understanding of Lithium battery tech is that its about 50% higher than flywheels for short term storage. There are some other potential battery tech out there (Axion Power) that are supposedly 1/3 as much as Lith Ion that just came out with a 100kw test plant that is supposed to scale up to 500kw in the near term that supposedly will be about $2M for a 1MW which has some other benefits but who knows if it will scale properly. Even if upfront Axion is cheaper the battery life may be 10 years where I've estimated flywheels tech to hopefully be 20 years and hopefully longer.
Unfortunately for Beacon, next day pricing has declined sharply in the recession with the NYISO as having the lowest prices around due to excess supply. For some bean counter crunching NPV this makes the tech seemingly worth less and may mute offers.
FD: I have no position but may initiate one before the sale especially if we get reports that there are multiple pre-qualified bids.
If you do decide to appeal your own interests if the HFs don't or won't I have a feeling that a bunch of people could agree that you or Rodney could speak for many of us on this board and we could round up a decent amount of shares (my guess).
I know when I'm overmatched and I am in the court system and I realize the value of experience and expertise. We've got a pretty good core group of people on this board (pretty rare imo) that would be willing to do whatever work we could.
So what is the next step?
I assume that we have to first wait to see if the HFs who are funding Art decides to appeal. If not we get whatever comes out as class 21 range (from $.10 to $.30 (Mr. McFadden's analysis)).
If this POR gets pushed through, is there any appeal possible and is D&O still an option? Currently sitting at 21 has me confused of what is next.
So if Judge Mary didn't approve summary judgement a year ago that means that she had some concerns initially but in her mind Art and Co. clearly didn't sway her enough.
Ugh. Sick to my stomach.
Two questions.
1. Who writes and does the research on this. Does judge Mary have a team, or just one guy/gal. Does the judge do most of the work. Her writing style simply seemed different, but that could be through angry eyes.
2. What are the next steps.
Merchant - I agree with you. The part that stings for us is the fact that DIMEQ is not part of the estate. Art's bills have been paid by HFs generocity. Lets say that 2 or them walk away as they have a double whammy of legal fees plus this loss. What do we do?
I have never been so surprised as I was when reading her report.
yes. The judge ruled we are equity (class 21). The first question is to see how we sit in the current POR.
Then the question is a) how does the appeal work.
b) Who will fund it?
This is where the request to make DIMEQ paid for out of the estate as this may be ballgame if the HFs who have funding this pull the plug.
If I could +1 a post on here I would.
Edit:
I wonder what the next step is. With this many shares sold, at least one of the HFs has got to have sold out.
Ugh. Today is worse than yesterday.
This sucks. I knew the risks of running a concentrated portfolio but this one stings more than most. Trying to figure out who is buying down here.
After watching my badgers lose in a classic rose bowl game this evening I hope Tuesday is better than today.
Yep, still too expensive. In my research on their fleet most of their md-80s are now leased through a sale-leaseback which were mostly done in 2009 -2010. Just wait for the fireworks when they dump 30-40 of these. The subordination to aa and eagle creditors sucks for this asset.
Interesting research that I came up with.
UAL in BK in 2003 paid 5% to its general unsecured creditors which this would be.
DAL paid between 62-70% to general unsecured creditors.
However in the prosepectus this concerns me:
Because AMR is a holding company, the Debt Securities are effectively
subordinated to all existing and future liabilities of AMR's subsidiaries. This
means that upon the liquidation, reorganization or insolvency of American or any
other subsidiary, the claims of creditors and preferred stockholders of such
subsidiary will generally take priority over AMR's right to participate as a
stockholder in any distribution of the assets of such subsidiary. Even if AMR is
itself a creditor of such subsidiary, and its claims against such subsidiary are
recognized, AMR's claims would still be subordinate to any third-party security
interests in such subsidiary's assets and any senior indebtedness of such
subsidiary.
The Debt Securities will be unsecured obligations but will constitute
"senior debt" of AMR. That is, the Debt Securities will not be subordinated to
any other existing or future unsecured indebtedness of AMR. The Indenture does
not limit the total amount of Debt Securities that we can issue under it, nor
does it limit us from incurring or issuing other unsecured or secured debt. The
Indenture moreover does not contain any provisions that protect you in the event
we issue a large amount of debt or are acquired by another entity.
Just checked and I can add to my position through TD Ameritrade. I was upset with TD Ameritrade a few years back and switched to Think or Swim and now TD Ameritrade bought them. I was planning on moving that it to Interactive Brokers but MF Global has slowed my movement on that. Maybe my Fido account goes to Int Brokers and I keep TD Ameritrade.
Does anyone know of a good platform to get quotes/buy secondary bonds? I know as a private investors I'm going to get screwed but looking for any advice. Zions has been recommmended to me and I have an account there and they have been adequate but not great and looking for other options.
Thanks for the amazingly fast answer. I own it in a different account that I don't wish to make a larger % of that portfolio and would like to own it in these accounts.
Wonder if I could get a list of other stocks Fido has on the same list and see if there are any other mispricings out there to take advantage of.