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Only for super preferred
The common shares have no control over the company. Control of the company is with the super preferred.
The only thing the common shares are good for is as a trading vehicle with the hope that people in the retail market, who do not read SEC reports, buy the shares and have no idea they own 'decorative common shares'.
Even this playbook seems to be failing for some reason, with the stock dropping, and that is before any conversions taking place.
Louis J. Desy Jr.
Debt being converted into common shares?
The stock seems to be down a lot for just 'normal trading'. Is it possible that someone is converting into common shares and dumping them onto the market?
I do not see any 8K reports showing this and I do not think the outstanding shares have increased within the last few months.
If common shares are not being dumped onto the market, I think the stock is in 'real trouble', since what will happen will a few hundred million more shares are unloaded into this trading?
If that happens I think it is possible the stop might go back to 'no bid' at $0.0001 like it was several months ago.
Louis J. Desy Jr.
Gas/Oil prices near low
Recently, within the last several weeks I have noticed that teh prices at the local gas station have dropped from $2.09 to $2.06 to $1.99 and now to $1.94.
Earlier this year there were some stories about potential of oil storage being 'operationally fully' at 85% or more of capacity, and I think this recent drop in oil prices is showing that.
After the big drop earlier this year, I had expected prices would recover a little, instead prices are dropping again.
If gas prices drop to $1.90 or lower then it will be like a new low for the past few years.
Louis J. Desy Jr.
Cost to move oil
I took a look at a few sources on the cost of moving oil per barrel.
The general consensus seemed to be that trucking it was about $20 per barrel, rail was $10 to $15 per barrel and a pipeline was $5 per barrel to transport oil.
So there is a big cost savings to moving it by pipeline, but not enough to over come the big drop in oil prices.
It also does not seem to make any sense to build a pipeline, since there is only 9,300 acres of leases bought in Sept 2014. It looks like no wells were drilled and I would expect with the drop in oil prices, it would cost more to drill a well than they would get from oil sales.
Louis J. Desy Jr.
Pipeline project
Assuming there is a pipeline being built, it would only make sense if there was some oil wells to connect it up to.
From the last 10Q/K reports filed, it looks like the company had almost no land to drill on and mostly just residual royalty rights that were not paying that much, and that was prior to the drop in the price of oil. It is possible that a lot of those oil royalty payments are almost nothing or may have even stopped depending on the well they were part of.
I can't see anyone even attempting a hostile takeover when no one can tell what the company really has for assets or liabilities plus the uncertainty with the lawsuit going on.
louis J. Desy Jr.
Meaning of "Need to File Claims" document
The reason this was issued by the trustee, is that they are expecting there are going to be some assets available to distribute to unsecured creditors, so that means that anyone who has a claim against the company, needs to file a claim with the court.
Common shares are automatically assumed to file a claim since they will be one of the classes in the bankruptcy, but since they are last in priority, the common shares will get nothing.
The problem is that the assets are far short of covering all of the claims, so the unsecured claims with only get a percentage of their amount, and the common shares will get nothing.
At the moment, it is not clear what percent of the assets are going to secured verses unsecured claims, so we can't tell what the percentage of recovery will be for the unsecured claims, but we can tell what the best possible result will be. If all of the assets went to unsecured claims (which it won't since there are secured claims) the recovery would be $77/$129 or 59%, but it will be a lot less since most of the assets are going to the secured claims first and then share in the distribution with the unsecured claims.
Louis J. Desy Jr.
Value of receivable
I am expecting that once they try to collect on the receivable that FEECQ is going to find a large part of it is uncollectible. It would not surprise me if the company that the receivable is with also ends up filing for bankruptcy at some point.
I can see where the value of the assets was 'worth something' one day, and then almost worthless when the license expired or was revoked for some reason. I have not looked too much into that part of the filing since it looks like that no matter what happened, the assets are gone.
Louis J. Desy Jr.
This is worse than I thought
So for $600,000, Eagle now has complete control of the company and control of the several million in cash? (assuming the cash the company reported really exists)
It makes the deal that Eagle arranged with the company look even worse and stranger for the existing common shares.
Why would the company give up operational control of the company for only $600K?
Why would the company allow Eagle to take control of the company when the company does not even have enough projects for the cash it claims to have on hand?
Why is the company not buying anything even though oil prices and oil rights are near a decade low?
Louis J. Desy Jr.
Schedule B lists current value of assets
The bankruptcy schedule B lists the current value of the assets:
www.plainsite.org/dockets/download.html?id=217538306&z=7b63a2e5
These documents are filed under oath, and it is a requirement that the numbers be correct.
People will also note that there is only about $10,000 in cash, $14,000 in office equipment and the rest is a receivable from another company.
All together, the assets are not enough to pay off the liabilities.
Louis J. Desy Jr.
chart]investorshub.advfn.com/uimage/uploads/2016/8/3/nnn[pFEECQ-doc10_Page_2.jpg[/chart]
$0.05/$0.07 at the moment
It looks like the bid/ask is staying where it was and not going anywhere. A few months ago it looked like there were a few blocks sold off into the market, but it looks like that selling is over now.
As a side note, it looks like oil prices are backsliding.
Louis J. Desy Jr.
High and low over past year
It looks like the stock has ranged from $0.0008 to $0.04 but no idea why or what is going on.
Since the company filed to delist years ago, there are no more reports being filed, and the last SEC reports filed seemed to indicate that all of the money, except a small amount to 'wind down' was paid out as a special liquidating dividend.
The company still files the annual reports with the state of MD corporations division, but it is not clear why the bother since there are little assets and no operations.
Louis J. Desy Jr.
Common shares to get nothing
This has already been covered several times, in detail:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124240040
Liabilities exceed assets by over $50 million.
There will be nothing for the common shares to get when the company is finally liquidated.
Louis J. Desy Jr.
Preferred shares issued
8K report showing the initial issuing of preferred shares:
http://ih.advfn.com/p.php?pid=nmona&article=72107039
It looks like $600,000 worth of preferred shares were issued. It is not clear how many shares this represents since the amount listed is a dollar amount and not the number of shares.
The problem is that even if the preferred shares were issued at $10/share or 60,000 shares; the preferred shares each have 100 votes, meaning this initial issuing of shares would control 6,000,000 more than 10% of the outstanding votes. (BKKN only has a total of 56 million common shares outstanding).
If the preferred shares were issued at $1/share of less, then the preferred shares would control more than 50% of the company.
Louis J. Desy Jr.
There is no lawsuit!
I think you are thinking about the wrong company.
No where in the schedules or statements of financial affairs is there any lawsuit listed, either by the company or against the company.
Louis J. Desy Jr.
Company stopped all operations
Far East Energy Ceases All Operations; Files Voluntary Chapter 7 Petition:
http://www.prnewswire.com/news-releases/far-east-energy-ceases-all-operations-files-voluntary-chapter-7-petition-300176301.html
Far East Energy Corporation (OTC:FEEC), the U.S. listed company that operates the Shouyang Coalbed Methane Production Sharing Contract in Shanxi Province, People's Republic of China, today announced it has ceased operations and commenced bankruptcy proceedings (the "Chapter 7 Case") by filing a voluntary petition for relief under provisions of Chapter 7 of Title 11 of the United States Code to initiate an orderly liquidation of the assets of the Company.
What lawsuit?
I do not see any lawsuit. Can you provide a link?
Even if there is a lawsuit somewhere involving the company, the instant the bankruptcy was filed, there is an automatic stay on the lawsuit, and it becomes part of the bankruptcy case.
If it was a lawsuit the company has against someone else, then it would be listed in the schedule of assets.
I do not see anything like that.
If the lawsuit was against the company, then it would be listed as a contingent liability on one of the schedules. I do not see anything like that either on the schedules.
I do see that in document #28 a lawyer has filed to get a copy of notices on behalf of a number of shareholders, but nothing else has happened so far and there appears to be no other court action taking place:
www.plainsite.org/dockets/download.html?id=237140617&z=4362b883
Louis J. Desy Jr.
Common shares are last in priority
No they can not sue to get the cash.
Common shares are last in the order of priority in a bankruptcy.
When Good Stocks Go Bankrupt:
http://www.fool.com/foolu/askfoolu/2001/askfoolu011024.htm
In Chapter 7 a trustee is appointed to oversee the liquidation (sale) of all of the company's assets and the distribution of the proceeds to the company's creditors.
There are strict rules about how the money is distributed. As a shareholder you are the owner of the company and entitled to any value left over after all other debts have been discharged. That's usually not much. In fact, it's usually not anything. Secured creditors get paid first(banks, mortgages, etc.). Unsecured creditors, including bondholders, are next. Shareholders are last on the list. They stood to make the most if the company were successful, so they lose the most when it is not.
In a Chapter 7 bankruptcy, the company will be liquidated, its assets (which can be entire divisions, still operating – mind this) will be sold, and the proceeds divided between the stakeholders obeying to a scale of seniority, in which shareholders are the lowest rung – the last to get paid.
Regardless of the type of bankruptcy a company files under, any common stock in a bankrupt company is likely to be worthless. That is because the common stock (that is, “equity”) is the last in line to receive what’s available to be distributed in a bankruptcy proceeding. Creditors, including bondholders, suppliers and employees, all come before holders of the company’s common stock. And, even if a company successfully reorganizes, its plan of reorganization often cancels the existing shares of common stock.
Where is $0.0001?
Give it a little time. As soon as the retail market understands that there is nothing left for the common shares, no one will put in a bid order, except someone looking to make a trade at the expense of the 'muppets'.
I am surprised this even still trades.
Louis J. Desy Jr.
Common sue the company? Not in this case.
No, they can't, not while the company is in bankruptcy.
The Chapter 7 bankruptcy puts an automatic stay on all lawsuits. any court action has to be done within the bankruptcy, in the bankruptcy court.
The common shares can not do anything while the company is in bankruptcy. In order to do anything while the company is in bankruptcy, the common shareholders would need to organize and have formally recognized by the bankruptcy court, an equity committee.
As you will notice on the docket, there is no equity committee. I doubt that the court would allow one to be established since there is nothing for the common shares to recover.
Louis J. Desy Jr.
Ruling
It looks like it is impossible to enforce a patent anymore. New trials, after already having a trial?
Louis J. Desy Jr.
$0.0029 per share?
Then why is no one buying?
AND
Why is it dropping to $0.0001?
Answer: Because even the muppets realize that the common shares are worthless and the stock will have no distribution in Chapter 7.
Louis J. Desy Jr.
What happened?
I didn't even get a chance to do anything and the shares are down to like a new recent low. What happened?
I don't see that the company is issuing all kinds of shares, at least not yet.
Louis J. Desy Jr.
Maybe no bid today?
With a little but of luck, maybe the ask will fall to $0.0001 today and the bid to zero.
The joke is that anyone would buy any shares at any price. Except for trading the shares to someone that does not know any better, the shares are worthless. Lottery tickets have a better chance of having value than the common shares.
Louis J. Desy Jr.
License?
I tried to find out what this 'license' thing is, but have not found anything yet. There is a lot of information to go through so I could have easily missed what.
The problem is that it does not really matter what happened at this point. The fact is that liabilities are greater than assets in the order of something like over $50 million. There is no way to close the gap for the common shares to have any value.
That is the 'real problem' and there is no way around it.
The common shares are dead and will stop trading the minute the liquidation is completed.
Louis J. Desy Jr.
Difference between assets and value
The company does have assets in the order of $77 million. The problem is that the company also has liabilities of $129 million; so the VALUE of the company is $77 million minus $129 million or a negative 52 million.
This is why the company is being liquidated.
Looking at the assets, they are all what I would call 'fixed value items'. The largest asset is a receivable from another company, so at best, that asset will be realized at 100% and not for anything more than that amount. It is also probably that the asset will not be realized at 100% and the losses for the creditors will be a lot more than the $52 million the company is 'in the hole' for now.
Louis J. Desy Jr.
How the assets will be distributed for FEECQ
Part 2
Here is how the case will be done and the assets will be distributed in this Chapter 7 bankruptcy case.
The classes. The Summary of Schedules shows us that there are three classes of liabilities, plus there will a clas for the common shares; so there are a total of four classes in the case.
The classes, in order of priority, from highest to lowest along with amounts:
1: Secured Debt $112 million
2: Unsecured Priority claims $2.5 million (This would be things like taxes or payroll withholding, while an unsecured debt, it has priority over other unsecured liabilities)
3: Unsecured claims non priority - $14.5 million (Usually vendors)
4: Common shares - The common stock FEECQ, whatever is left over
Against the liabilities are the assets in the amount of $77.8 million.
Now we assign the assets to liabilities. The assets of $77 million are not enough to pay off the secured debt of $112 million, so all of the assets go to the secured debt; leaving nothing for the unsecured claims, meaning there is nothing for the common shares.
Once the assets are distributed and the case closed, the shares will stop trading once the market maker receives word of the case ending.
There will be no payout for the common shares.
Louis J. Desy Jr.
As one technical point on the secured liabilities. They get the value of the asset that the debt was secured by, and then if not enough to satisfy the liability the remainder becomes part of the unsecured claims. Because of this mechanic on how the distribution of assets is done, it is possible that the unsecured liabilities will recover something, but does not matter for our discussion here for the common shares, since there is not enough to pay all of the liabilities off.
Louis J. Desy Jr.
A general overview of the bankruptcy process
Part one of two parts
I will explain in a simple form, how a chapter 7 bankruptcy works for a public company.
Source for explanation:
SEC - What every investors should know about bankruptcy
When the bankruptcy is filed, at that instant of the filing, a bankruptcy estate is created. All of the company assets and liabilities are collected and totaled. A trustee is assigned to the case that has control over the estate, with the oversight of the court.
Then the liabilities are separated into classes and an order of priority established.
Liabilities, order of priority, highest to lowest priority:
1: Secured debts against the assets the debt is secured by.
2: Bonds.
3: Unsecured liabilities, usually vendors
4: Preferred Shares
5: Common shares.
Then the assets are distributed to the classes, in order of priority. Common shares will only have any value or rights only after all other liabilities are paid off, usually in full.
Here the company is being liquidated, so the common shares will only get a liquidation dividend only if all other liabilities are paid off in full.
Louis J. Desy Jr.
It is the latest court document
Full listing of court document for Far East Energy Corp:
court docket for Far East Energy
This is the full listing for the court docket. I also have pacer access so I can look at the other documents that are not showing here. I have an addin, Recap, that should make the other documents in the case available after a few weeks, but the schedules and statements of financial affairs are already there.
Document #17 is the 'Summary of Schedules'. This is only one filed in a bankruptcy case and the only one that will get filed. It does NOT get 'updated' later in the case because it is a requirement as part of the initial filing. Unless an extension of the initial deadline is filed, it must be filed within a short period of time after the case is filed.
Louis J. Desy Jr.
Louis J. Desy Jr.
Proof of no value for common shares
1: This is a chapter 7 filing. A chapter 7 filing is a liquidation. When the bankruptcy is over, there will be no more company, the company shares will stop trading and be canceled.
2: Document #7 on the docket, Statement of Financial Affairs
www.plainsite.org/dockets/download.html?id=217538303&z=0fb9e229
3: Document #17, 'Summary of Schedules':
www.plainsite.org/dockets/download.html?id=217538313&z=5b3f927d
Also see end of this posting for image of summary of Schedules
Clearly shows assets do not cover liabilities.
When this is over, the assets will be distributed, in order of priority, to the claim holders (liabilities).
Since liabilities are greater than assets, there will be nothing left over for the common shares.
When all of the assets have been distributed, the case will be over, the company closed, the common shares delisted and cancelled.
The common shares are worth zero and will be dead the instant the case ends.
Louis J. Desy Jr.
Lights out
The company is in Chapter 7 and being liquidated. There are secured debts of $112 million and only $77 million of assets listed which are mostly a receivable from another company.
In additional to the common shares being in line for zero, it looks like the unsecured creditors will be wiped out also.
Even the secured creditors look like they are going to take a large hit, since there is no telling how much of the receivable will be not paid. Even at the book values, the secured creditors are going to take a 32% loss ( 77 / 112 ) and it will probably end up being much larger.
At some point, once the final report is issued, the distributions made, and an order entered by the court to approve the distributions, the shares will be canceled and will stop trading the instant that happens.
Louis J. Desy Jr.
TUSA and TPLM
It looks like TUSA is most, if not all, of the oil producing assets of TPLM. If you look at document #1, you will see an organization chart on page 11 of the PDF file that shows what parts of TPLM are in chapter 11.
The schedules have not been filed yet, so we can't tell how much they are expected to lose or if anything will be left over for the parent company, TPLM.
Louis J. Desy Jr.
Shareholder derivative action
It looks like Val Holms is the only one left as a defendant.
One possibility is that the others turned over the information requested or are co operating with discovery for the plaintiff.
Louis J. Desy Jr.
Ask seems to be rising
I also noticed that the selling pressure seems to be drying up. Where over the last several weeks the ask was at $0.06, it has now backed up to $0.07.
Louis J. Desy Jr.
Thin buying support
I did notice on the few blocks that I was able to buy, that if my order got filled at the bid, that the bid then fell to $0.021 for a few seconds, then would go back to $0.047. I think there is not much else or anyone holding back below the current high bid waiting to see if they can get any cheap shares.
In the past, once in a while, someone would sit below the high bid with an order in for a few tens of thousands of shares order in the hope that maybe someone would dump a large block on the market and crash the price, allowing them to get cheap shares.
Louis J. Desy Jr.
Bid/ask $0.05/$0.07
It looks like the bid/ask spread improved a little from $0.047/$0.07 to $0.05/$0.07.
Louis J. Desy Jr.
Web site not up http://www.SterlingEnergyResources.com
It looks like the web site is not running at the moment.
Louis J. Desy Jr.
Anyone here still holding MAHI shares?
It looks like the corporate charter is still active and being filed each year.
Louis J. Desy Jr.
Dilution look like is about to happen
I am concerned that the company allegedly several million in cash and no real projects going on, but all of a sudden they need to borrow another $1 million?
Plus there appears to be a provision to convert the loan in preferred shares that convert into common shares.
It looks like the start of a pump and dump routine, especially with the additional problem that it is over one year since any 10Q or 10K reports have been filed.
Louis J. Desy Jr.
Start of dilution? Where are the 10Q/K reports?
8K report of May 6, 2016
http://ih.advfn.com/p.php?pid=nmona&article=71427812
This whole financing line does not make any sense to me. Allegedly the company has several million in cash, and no real projects going on, but for some reason the company needs more money? To do what? Plus the reports are months behind when the only main asset to report is supposed to be cash in the bank. Either the money is really there or it is not there, the SEC reports should only take less than a day to produce. It has been months now. There is something wrong here.
I hate to say this, but considering the loan is convertible into preferred shares that are then convertible into shares of common stock, at the rate of 100 share of common per preferred share, it looks like the setup for a 'pump and dump' routine. We can't even tell if the financing company will even remit the $1 million in cash to the company.
Louis J. Desy Jr.
I think Barnett is going to take a plea deal
I took a look at the docket. I noticed that after a video deposition in Feb 2016, that he started to want the case to move forward.
I think what has happened is that the video deposition was allowed into evidence. Once that happened, the case was 'all over' for Barnett and he got or was offered a reduced sentenced in exchange for a plea deal.
But, I do not expect him to be out in a few months. I would not be surprised, even with the plea deal, for him to still get at least five years in jail; which is a lot better than 10 to 20 years he could have gotten with all of the charges against him.
As I recall from some other postings, I think Barnett is somewhere around 40, so even a relatively small amount of jail time of five years will probably have a large effect on the rest of his life.
At 40, five years of jail time will put him at 45, and he will be out of jail, with no friends, no money and no support or help from anyone when he finally gets out.
While in his younger days he might have been able to use 'looks and charm' to get people to do what he wanted, especially the women he dated, I would expect that once he is in his mid to late
40s with literally nothing, that this ability will be gone.
I think the tragedy here is that he seemed to have an ability to sell, and if he just used that to promote opportunities that would make money, and not rip people off, he could have done very well for himself in life. Instead, he choose to 'steal everything that was not nailed down' and now is going to spend a large part of what remains of his life in jail, and have absolutely nothing when he gets out.
Louis J. Desy Jr.