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Legal bill for UCC counsel is posted to docket - it's worth reading
http://www.valence.com/sites/default/files/209_-_3-20-2013_brinkmans_2nd_interim_application_for_compensation.pdf
Your welcome. I'll give a good google combo for finding new cases - bankruptcy & files and then hit the news tab on google. It'll mostly only find you new cases...and stale cases are really the best (and the hardest to find...10 years in and still no tried and true method)...those others I mentioned earlier - epic and kccllc - they have many cases available on their websites and best yet - you can look at dockets for free...
Honestly leach342, bk stocks are tricky and diligence intensive - you need to learn how to find them before you start playing around with them too much - I'm not trying to be a jerk saying that - polish your detective skills finding them - because you'll really need those once you get there. I've been doing bk for 10 years now - I didn't find many short cuts along the way and I'm damn glad I didn't. Go look the hard way....put 'bankruptcy' in google and then start tweaking your search terms from there. FWIW.
There are some bankruptcy boards here on IH - search ihub for bankruptcy. You can also use google searches for older cases. There are the public notice outfits like KCCLLC and EPIQ - many sources.
>>pissed, so you think I should give him a big and, and say thank you very much may I have another, for ripping off honest investors of their hard earned money?
I see this has been added to your original post. 'For ripping off honest investors' I'm not quite sure what 'honest investors' means. Using the current context, I'm going to assume that by this term you refer in general to people who thought they were going to make 10 times their money because the best techology always wins or because every car would be electric by the year 2006 - but it doesn't really matter - we could avoid that issue by agreeing that by 'honest investors' you mean people who in general just ignore the expensive GAAP accounting that the companies put out each qtr, and each year in even greater detail - because if honest investing as the term is generally used is about anything - it's pretty close to that. But using that definition - I do not think an honest investor should give him a big hug and/or say thank you very much - neither for a first or second helping.
Hahahaha - You bot before BK and I'm the dum dum. Do you realize how ridiculous you sound?
>>you have no rights in any distribution after bk other than what you can buy or sell for
please elaborate
I don't think you understand bankruptcy very well. I bought at a penny - where did you buy? Who's the irresponsible gambler?
>>they are in BK cause Berg wanted it that way. there were 2 million left in a promisary loan from Berg, valence only needed 1 million more after that to keep the doors open.
I don't mean to nitpik your response - but it's really quiet on here and I think you really did do a good job of pointing out several areas that need flushing out - and I'd love to see a vigorous discussion on many of them. This is a really good one though. Without doubt, this case was thrown into bk purposefully. I think it was Berg's buddy that bought the offending debt just a few months prior at a steep discount. It's a pretty clear sign of the company reaching for a reason to enter. Bankruptcy court - (Chapter 11) as it exists in America is very lenient - for the reason of resuscitating companies - given what was going on in the industry, Valence needed to be in bk court. So there are two reasons to go in to bk in general...both of which are always taken poorly by shareholders....save the company or steal it - really it's both if you are going to steal it. So did Berg throw it in to steal it? To my way of thinking - if that was the case it would have already been over. This case should have been over 3 months ago by all popular accounts - what makes it so truly interesting is that it isn't.
...and toss a juicy probably damn near 500mm NOL in the pot to boot....that wasn't even on the table with A123. :) NOL may be worth more than the IP if it can be salvaged. But I'm just looking at what is in front of me.
>>JCI only bid for part of A1, they couldnt figure out a good way to even win that
I would suggest it is possible to be more blinded by the past. JCI bid up to 240 or 245 mm, just for a part of A123, and they couldn't figure out a good way to even win that. If at first you don't succeed, try harder....as they say. Maybe Berg took notice of that too....selfish corrupt bastard that he is.
>>you dont seem to know much but what is in front of you
You are absolutely right. I got 4 million shares at an average cost of just over a penny - what you got? You should give looking at what is in front of you a try. Seems like you're pissed because Berg didn't keep carrying you. I don't expect Berg to carry me - I only expect him to make choices in his own self interest. I like binary bets. If I'm wrong, I lose roughly $40k, if I'm right, I don't have to be right very often. This is one of those rare bk cases that is not on the radar of the usual suspects. You can bitch and moan about history all you want - Berg is going to do what is best for Berg. I may be the only one who suspects his interests may have realigned with outside equity - all I have is a theory based on what I see before me.
>>what makes you think a company like JCI, who could not get their hooks in A123 at a time that was ripe and had no one bigger than them involved
They were outbid by Wanxiang - they aren't exactly a tiny fish.
>>could do any better with this company where there appears to be greed and corruption at the very top
There is greed everywhere - is it corrupt at the top because they filed for BK? Seems like almost every small company in the green energy sector has filed.
I go back to the original premise - after 7 months in bk, debtor files a motion to raise outside money, and reserves the right to sell itself outright during that process - raise money or sell itself, Berg's vested interest is to maximize value given that he holds almost all the debt and half the equity. JCI, among others, is listed as an 'identified party' in that motion. In a go private transaction where Berg funds the exit - his interests are not aligned with outside equity. Under a scenario where Valence is sold or raises significant new equity - his interests would appear to me to be very much aligned. At the end of the day, all we can do is look at what we know, place our bets accordingly and wait.
Pretty colors! I do believe the Tanzania assets were sold to Red Kite last month.
Credit Suisse is the outfit that finagled one of the worst DIP loans I've ever seen earlier in the case - if they are complaining, they are probably worried about a piece of the assets slipping away from their control. The Nevada bk filing was done to facilitate the auction - if CS is complaining about the bk, then there is likely something about the auction they aren't happy with - for better or worse.
da cheif - can you pm me your email?
It would be if they were privy to the bidding intentions of the bidder - if they weren't, well then they are just in the same boat we are guessing at how high bids will or won't go.
>>I dont see what keeps them from reorganizing?
That's the 64 million dollar question - there aren't many good reasons that this case did not wrap up completely by end of 2012 as originally telegraphed by the company in September of last year. The one scenario that does make a lot of sense to me is external to Valence - namely what happened with Aone. On multiple levels it surely had to change some thinking - for one, JCI tipped it's hand a little in showing that it is indeed very interested in Li-on IP. But with Wanxiang taking the IP, and this would have been true if JCI had one - the competitive landscape that Berg would otherwise emerge Valence back into has also changed. It was tough enough going up against the large AONE - now Valence has to go compete against the infinitely deeper pockets of Wanxiang - that's a tall order. So does JCI now. And the IP game also changes once the IP is in deeper pockets who can afford to litigate. All that I believe makes it far more logical to explore a sale - and that's about the only reason I can see for hiring investment banks 7 months into the case - clearly this was not the original plan, and it's not like Berg is short of cash to fund the original exit plan. I also suspect it may have something to do with preserving the NOLs - there have been changes in the 5% holders - and the NOLs are probably in the neighborhood of 500 million - if Valence can't exit with them largely intact under code section 382 due to ownership changes (the rules under 382 are difficult), a well structured sale might be needed to unlock the value of the NOLS. I noticed on the most recent motion practice between debtor and UCC that they've stipulated to postpone a deposition out to June - there is no hurry to get Valence out and I'm sure there is a very good reason for that.
>>Would it not advantageous to acquire as many shares as possible on the open market in order to reduce the $1 per share pay out
It would be illegal - assuming for a second the scenario you lay out, that would be trading on material non public info by the potential bidder.
>>Until then I think the only thing left to do is wait until March 31st when the bids are in
I don't know that you will see numbers on 3/31. From my read of the BRP's letters - he can't start the process of writing a rescue plan until the bids are in - I have the impression we won't see numbers until the plan is released, and that might take a month. Of course, I wouldn't be surprised if some people know of numbers, so we may see it reflected in the price long before anything is public - who knows. I do think we will see numbers for Hollister by 4/16-17 - auction is on 15th but in my past experience it can take 24 to 48 hours for that info to filter out.
I'm not familiar with Blyvoor. Off the top of my head, factors like grade, geology of the deposit, mine design, mill age/capacity would all be fairly important factors in addition to the size of the resource, or reserve, depending on which you choose to focus on. Still and all - 28 mm is not a comp sale that gives warm fuzzies.
>>reserves/resources
The 'resource' is the total deposit - it's the proved and probably, the measured and indicated and the inferred. The 'reserve' is more or less just as used with wine - it's the best part of the resource (the vintage) - the part that has been infill drilled enough to have very high confidence in it's shape and grade. With the Burnstone - the reserve is around 6 million and the resource is around 20 million.
The problem with the Chinese is that they don't really bid against each other - I've never seen more than one Chinese outfit at any sort of auction or bidding war. They've got the deepest pockets and I can totally envision interest to dump dollars for a golden resource - but how far will they be pushed?
>>Chinese have the deepest pockets.
It's the depth of the pocket of the runner up that generally matters most. fwiw.
>>So for say 2.77 million dollars you own a mine with 6 million ozs???
For 2.7 million, you own a company with around 600 mm of claims....you still need another 600 mm to own the mines.
Are you referencing the Chemtura case? While Chemtura did pay out for equity, from what I've heard (and that was not a case I followed) - the payout was due to the yeoman work of the EC countering what was an equity hostile mgmt team....or let me be more diplomatic and say a mgmt team that was widely viewed as hostile to equity.
At the end of the day, you need two deep pocketed bidders to make a good auction. Deep pocketed bidders don't generally mess around with Stalking Horse bids - the breakup fees just don't move their needle and being the SH tips your hand in terms of showing interest well in advance of the auction date. I'd say Hollister has a lot more value add for someone who already has a mill in the vicinity of Elko - and there are more than two of those. There is still potential for upside surprise at auction - but a solid stalking horse would have been nice.
Having three bidders submit stalking horse offers is bullish - not having any of the three meet an acceptable threshold not so bullish. Not the end of the world - one, we don't know what they considered to be an acceptable threshold, and two, we know in general that many potential bidders prefer anonymity going into an auction. I'm disappointed in the sense it would have been fantastic to see a 150 mm stalking horse offer on the table - personally, I've always been more focused on the value in the Burnstone - it's as close to turnkey as it gets - Hollister isn't - that probably wouldn't have mattered two or three years ago - but I do think it matters alot now - damn damn hard to get the money to do development work/build a real mill that isn't hundreds of miles away.
>>so we are just having an auction with out the SH bid? Makes me more confident we will hold onto the property if burnstone bids are good.
But Hollister auction is scheduled prior to end of Burnstone BRP process - I honestly don't see any indication that Hollister is on a trajectory for anything other than a sale in approximately 6 weeks.
>>The first bids were low-balled. Of course. Ever watch the bidding on Ebay? lol
There is a defnitely a poker element to stalking horse bidding - and usually the more established players won't even bother dickering around to be SH - they just show up at auction if they intend to bid.....but, not getting any acceptable bids isn't great.
So here is a bit of news....from the newly filed bankruptcy case in Nevada concerning the auction. Not the best of news.
SALE BACKGROUND AND THE DEBTORS’ PREPETITION EFFORTS
8. In early summer of 2012, the GBG Group began exploring a sale of
substantially all of its assets, including the Nevada Operations. At such time, GBGL engaged
CIBC World Markets, Inc. (“CIBC”) to evaluate a potential sale of some or all of the assets of
GBGL’s international mining company. In connection with these initial efforts, CIBC contacted
seventy-one (71) parties concerning the Nevada Operations, with twenty-six (26) of these parties
signing confidentiality agreements. Although these efforts resulted in a few indications of
interest for the Nevada Operations, the GBG Group ultimately placed the sale process on hold to
address severe liquidity issues. These liquidity issues culminated in GBGL filing an application
for protection from its creditors in Canada (commencing the “CCAA Proceedings”) pursuant to
the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 or other insolvency laws in the
Supreme Court of British Columbia Vancouver Registry (the “CCAA Court”) on September 19,
2012. The CCAA proceedings were commenced, among other reasons, in order to obtain the necessary financing to continue operations while the GBG Group continued to investigate and
explore strategic options.
9. Upon the commencement of the CCAA Proceedings, GBGL worked to
stabilize its business and garner support from GBGL’s creditor constituencies for a sale process
for the Nevada Operations and separately for the GBGL Group’s assets in South Africa. In
connection with GBGL’s efforts to sell the Nevada Operations, on October 25, 2012, the CCAA
Court approved CIBC’s engagement to act as financial advisor in connection with the sale of the
Nevada Operations, among other things.
10. The Debtors, through their advisors and CIBC, had numerous discussions
with representatives of their key creditor constituencies regarding the potential sale of their
Nevada Operations, and the optimal process for maximizing value for such assets. To that end,
in late December 2012, CIBC launched a pre-marketing process for the sale of the Nevada
Operations. Based upon early favorable feedback from certain key potential acquirers, in early January, CIBC commenced a broader and more formal process to identify a stalking horse bidder
for the Nevada Operations.
11. During this formal sale process, CIBC reached out to twenty two (22)
potential acquirers that it believed might have a legitimate interest in purchasing, and the ability
to purchase, the Nevada Operations. As a result of CIBC’s efforts, the Debtors entered into
confidentiality agreements with fifteen (15) potential purchasers. The potential purchasers
conducted varying levels of due diligence. As a key component of this diligence process, each of
the parties that entered into confidentiality agreements were given access, over a period of
approximately a month and a half, to an electronic data room containing various financial data
and other relevant and confidential information. On top of reviewing the Debtors’ data, seven
(7) of such potential purchasers conducted site visits. Upon information and belief, certain of the
potential purchasers also hired legal advisors and other advisors.
12. Firm, binding bids for the stalking horse bidder position were due on
February 15, 2013. Although multiple bids were received by the deadline, neither the Debtors
nor Credit Suisse AG (“Credit Suisse”) – the agent for the Existing Hollister Facility and the Canadian DIP Facility (both as defined in the Dombrowski Declaration) believed that the bids
were sufficient to warrant a stalking horse designation and related stalking horse bid protections.
For example, certain of the bids were contingent upon the prospective bidder being afforded
more time to conduct additional due diligence. The Debtors did not believe they had sufficient
liquidity outside of a chapter 11 filing to afford these bidders such additional time. The Debtors,
in consultation with Credit Suisse, therefore decided to proceed with an open auction of the
Nevada Operations.
13. The Debtors commenced these Chapter 11 Cases in order to access
sufficient liquidity and stabilize their business while they pursued the sale of the Nevada
Operations.
Check your email - let me know if it doesn't come through - it's a large data file
NEWS OUT!
Two back to back solid weekly pours - this is a near 50k annualized run rate (if you ignore the pitfalls of attempting to annualize two data points - but they are and should continue heading north, and coming out of the colder winter months will only help)
Metanor Pours New Record Weekly Gold Bar of 917 Oz
Font size: A | A | A
8:53 AM ET 2/27/13 | Marketwire
Metanor Resources Inc. ('Metanor') (TSX VENTURE: MTO) is pleased to announce that it recently poured a new record 917 oz. gold bar at its 100% owned Bachelor Mill. The ore comes from the very promising Bachelor underground gold mine.
Ghislain Morin, President and CEO stated that "This gold bar is now the largest weekly bar in the history of the company thus far, and represents a significant milestone in the company's progress over the last years. We recognize and thank our underground miners for their efforts and hard work which has enabled the company to accelerate the development and ramp up of the project. The increase in quantity of gold is not only because of the mill capacity increase but also the better grade control (less dilution) with now more work areas (stopes) being mined. We are very pleased with the continued performance of the mill since the beginning of its commissioning, the recoveries of 96-98% are exceptional and our mill team is doing a great job of monitoring the process of slowly increasing the mill's capacity to its full potential."
The motions to retain KPMG and Roth both have 3 month terms, so I don't necessarily expect to see anything anytime soon. There is the clause that Valence can sell itself at any point during the term of the engagement and simply pay both KPMG and Roth a 500k flat fee. So we may be waiting 3 months to see something, we may see something sooner, or at the end of the three months, it could just go the way it was supposed to 5 months ago with Berg funding the exit. Valence does have one major asset besides the IP - that would be the NOLS. Based on the accumulated deficit - I'd guess the NOLS are in the neighborhood of 500 mm - those have significant value to a profitable buyer, like JCI, if a deal can be structured such that the NOLs are limited - and that is much easier in BK due to the IRC code section 382 'bankruptcy exception' - which may very well be another good reason that Valence is still sitting in court, motioning for 3 month engagements to look for exit financing, all in complete contradiction to the originally announced plan to be out of bk by end of 2012.
Top 20 list of Deposits - from page 8 http://www.nrh.co.il/i/pdf/NRH_Research_OneMillionOunceGoldDepositsMay2011.pdf
Deposit Name Contained Oz Location Ownership Producing
1
Pebble Deposit
104,000,000
USA, Alaska
Northern Dynasty / Anglo
2
KSM Deposit
59,793,000
Canada, BC
Seabridge Gold
3
Snowfield / BruceJack
55,688,000
Canada, BC
Pretium Resources
4
Obuasi
48,000,000
Ghana
AGC
Producing
5
Oyu Tolgoi
46,000,000
Mongolia
Ivanhoe
6
Donlin Creek
38,714,000
USA, Alaska
Barrick / NovaGold
7
Pueblo Viejo
33,116,000
Dominican Republic
Barrick / Goldcorp
8
Las Cristinas
32,000,000
Venezuela
Government
9
Boddington
28,519,000
Australia
Newmont
Producing
10
Caspiche
26,400,000
Chile
Exeter Gold
11
Cerro Cassale
26,337,333
Chile
Barrick / Kinross
12
Pascua-Lama
24,105,000
Chile
Barrick
13
Paracatu
23,839,000
Brazil
Kinross
Producing
14
Detour Lake Mine
23,631,000
Canada, Ontario
Detour Gold
15
Penasquito
21,220,000
Mexico
Goldcorp
16
Livengood
20,600,000
USA, Alaska
Int'l Tower Hill Mines
17
Burnstone
20,474,000
South Africa
Great Basin Gold
18
Carlin
19,832,000
USA, Nevada
Newmont
Producing
19
Metates
19,800,000
Mexico
Chesapeake
20
Kumtor
19,000,000
Krygz Republic
Centerra
Producing
If you go back to post 3194 Tamaman you will see me original post on Pascua Lama - "Barrick has spent decades bringing that up to the point where it is still not in production, and the resource is 17 mm oz thereabouts (granted that is all proved and probable category with huge silver byproduct credits). But, my point remains, decades and billions for a very remote and technically demanding project."
I did make the distinction on PL that the resource is mostly in the reserve category of proven and probable - which in large part means that the ore body there has been extensively infill drilled, and it has not been at Burnstone. They are not comparable on a P&P basis - but they are on a total resource basis - ignoring the silver component which I also noted - and it's the relative extreme rarity of a 20 mm ounce ore body that leads me to believe Burnstone could attract serious bidding - there just aren't that many sites that of that size - to wit Barrick had to go to a very remote location for PL. And Burnstone, unlike Hollister, has a 5000 TPD mill already in place.
I'd say in every case of a bidding war, the winner always paid more than they wanted to....but so long as they didn't pay more than it's true worth in their hands, they didn't lose.
They filed now because it's time to schedule the auction and go through the 363 motion practice. Google '363 sale' and it will make more sense.
>>I read an article early in this which put the overall success rate for chapter 11 at a little less than ten percent
Bear in mind, no two bankruptcies are created equal. One shouldn't be expecting a high success rate given the assets that most companies enter bankruptcy with. If you measure the entire universe of filers - I think the success rate is probably lower than 10% as measured by equity. But if instead, you look only at the cases that are not 'hopelessly insolvent' - you'd get a far better number. You can't do an auction outside of Chapter 11 in the States - potential buyers insist on it because code section 363, the part of the bk code that lays out the rules for auctions - provides the buyer with certain protections that are impossible outside bk - namely under 363 a buyer cannot be held liable for anything that transpired with the company or with the assets prior to the sale date.
It's interesting to look back at the discussions within the battery sector late last year - when the market was trying to digest JCI's bid for A123.
http://seekingalpha.com/article/1031251-will-johnson-controls-win-a123-s-auto-assets-in-the-auction
Looking back a little further - first half of '12 before the wheels really came off both Valence and A123
http://seekingalpha.com/article/709211-lithium-phosphate-a-lead-acid-replacement .....one part in particular caught my eye - and the guy was half right so far - JCI did make the move on A123...and their name shows up in VLNCQ court docs right after that attempt definitively failed. "This summer, I will be keeping an eye on activity at the lead acid battery companies such as Johnson Controls (JCI) and Exide (XIDE). Will executives and sales reps from the lead acid companies make a move, along with their extensive customer contacts to the faster growing lithium phosphate companies? I have heard that lithium phosphate companies are targeting their competitor's employees in their battle for market share. Why send in a new rep to sell a new battery, when they can send in the existing rep who will just be selling a better battery. It is also entirely plausible that JCI or XIDE sensing a threat to their markets could buyout a lithium phosphate company in order to get their hands on the technology and patents. The threat to them is very real! I have isolated two companies that trade on the Nasdaq that have their core competencies in the production of lithium phosphate batteries and trade at basement levels. The two companies are A123 (AONE) and Valence Technologies (VLNC)."
Hard to believe the relative lack of interest here. Bueller? Bueller? Bueller?
I think that makes a lot of sense here just given what happened with A123, and the direction of the Valence case within the bk court would seem to corroborate my speculation. I suspect too that Berg may have realized after A123 went to Wanxiang that the industry has changed - the uphill battle that Valence always had competing against larger but still relatively small players like A123 just got much steeper. He's not going the auction route - but he seems to be sending a signal that the big boys can fight for the IP here if they want - Berg is a very smart man - I'd say he also senses some vulnerability at JCI, and probably that JCI's competitors see the same.