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what was spun into seritage a long time ago is not necessarily what has been announced to be closed since the beginning of 2018. seritage was formed in june 2018. not saying that some of the announced closures since the beginning of 2018 were not part of the seritage portfolio, but they weren't all.
the properties placed into the seritage portfolio were properties shc sold for a couple of billion $ + and then leased back from seritage. to the extent shc defaulted or asked the bk court for approval to reject those leases, shc would still have to deal with closing the stores before turning them over to seritage.
yes, sears home improvement was purchased by a michigan company and that purchase was approved by the bk court.
if you have read the apa and accompanying documents, you will see that esl made provisions within those documents to acquire ship in the event the above referenced sale fails to close prior to some date certain mentioned in those docs.
additionally, there have been a number of docket entries authorizing the sale of various deminimis assets.
additionally, shc either before bk in october or after bk, but in both instances before esl bid on the 425 stores, closed and/or received permission from the bk judge to close additional stores which are currently being dealt with outside the esl bid structure.
what eddie will purchase, if his bid is ok'd by judge, will be purchased in the name of transform holdco.
i believe that what will then be left of shldq will be converted from a chapt 11 bankruptcy case to a chapt 7 liquidation and there will probably be a trustee appointed to oversee that mess.
it's my bet the common shareholders will not be wiped out but i do believe the existing shares will be cancelled and new shares issued in whatever name transform holdco becomes.
it sounds like we both are of the opinion the common shareholders will survive in some way.
lg,
don't see how shc is going to be "purchased out of bankruptcy".
esl has purchased very specific assets which are the "go forward" assets.
what happens to the 300 +/- stores sears has closed since the beginning of 2018? esl did not purchase those. they are currently being liquidated in one form or another including going out of business sales.
am sure a number of those stores are leased. have those leases been rejected by shc? have landlords objected to attempts by shc to reject leases? if any of the stores were owned, have they been sold?
if esl's bid is approved, lampert wants to be off and running so that he can do whatever it is he is planning to do with the purchased assets. he is not the one who will be dealing with the detritus left behind. that will be sears holdings' mess to handle which is why i don't see it that slddq will be purchased out of bankruptcy.
linda,
posted this earlier from that section "Y" we have been discussing.
section Y had a provision which stated the por did
not propose to (iv) classify claims or equity interests or extend
debt maturities
although is seems like various claims and interests would be classified, the proposed order language doesn't indicate that.
don't know what to make of that other than what it says
“ The Sale Transaction does not constitute a de facto
plan of reorganization or liquidation as it does not propose
to (i) impair or restructure existing debt of, or equity
interests in the Debtors, ......”
but the good news is there is even more from that section.
first thing is to address what is meant by a de facto por.
a de facto plan of reorg. has sometimes been referred to
as a sub rosa (i.e. under the table) plan or a creeping plan
of reorg. by that is meant a plan in which some type of
agreement outside of the bankruptcy plan is sought which
could have a significant impact on the bankruptcy case and
the bankruptcy estate.
in other words, they are saying there are no shenanigans
going on. that this is NOT a de facto or sub rosa por.
one of the criticisms of the unsec. creds. it that esl used money loaned to the company to buy back shares which served to lower the outstanding shares and increase his % of the company common stock which he either owned or controlled.
little doubt that as president and ceo lamert knew in advance of the bk filing and established holdco prior to that just ti let him hit the decks running.
agree with linda's comment that judge drain seems to be leaning toward approving a going concern proposal as opposed to an outright liquidation.
included in the unsecured creditor base would be mall owners like simon properties who have more to gain via liquidation than possibly having to be forced to accept less on a go forward basis.
these mall owners never seem to be around when a troubled retail tenant seeks concessions but then always have an answer once bk occurs. they are as self-serving as the other side.
expect the 4th to be contentious but that drain will ultimately rule for esl's go forward bid.
i can explain it to you but unfortunately i can not understand it for you
go onto the sec site, pull up shld, the go back to aournd 2005 entries and pull the docs.
linda,
additionally, when kmart and sears merged, that's when "sears holdings corp." was born. old kmart and sears roebuck shares were exchanged to shares of shc.
that's one reason why i do not think shc will survive as a name esl will use, but as you can see, there are many variations of "sears" which will be available for holdco to use if they choose to.
The Going Concern Transaction was approved on behalf of the Company by the independent Restructuring Committee of the Board. The Bankruptcy Court hearing to consider the approval of the Going Concern Transaction is scheduled to commence on February 4, 2019 at 10:00 a.m. (Eastern Time) and the Company understands that the Official Committee of Unsecured Creditors intends to object to the approval at such hearing.
No Assurance
There can be no assurance that the Bankruptcy Court will approve the Debtors’ entry into the Purchase Agreement, that the conditions to Buyers’ and the Sellers’ obligations to consummate the Going Concern Transaction under the Purchase Agreement, will be satisfied prior to the Outside Date or that any of the transactions comprising the Going Concern Transaction will be consummated on the terms set forth in the Purchase Agreement or at all.
The foregoing description of the Purchase Agreement and the Going Concern Transaction does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Form 8-K and incorporated by reference herein. The Purchase Agreement has been included to provide investors with information regarding its terms and is not intended to provide any other factual information about the Sellers, Buyer or ESL. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement as of the specific dates therein, were solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. For the foregoing reasons, the representations, warranties and covenants should not be relied upon as statements of factual information.
linda,
as part of esl's apa, they will acquire the "sears marks" as noted below if their bid is approved by the court.
“Sears Marks” shall mean the name “SEARS” and any name consisting of, containing or incorporating “SEARS”, and all designs and logos associated therewith, in each case, together with all variations thereof; and all Trademarks, Business Names, Domain Names and Media Accounts consisting of, containing or incorporating any of the foregoing
potential roadmap of sorts:
Am not attempting to make any comparative similarities between parker drilling and shc. The following is provided to give a flavor of what the process might look like if esl prevails, commons are not wiped out, a por is approved, and how it is implemented.
Notice the mechanics contained in the last paragraph: existing common shares are cancelled and if no further force and effect and each holder of the cancelled shares will receive a pro rata amount of new shares, subject to dilution.
Again, NO COMPARISON OR EQUIVALENCE being made, just info as to how the shldq case may move forward.
Also for those who want to dig deeper, please note the por was approved yesterday but today the company is still trading with the “q” symbol as pkdsq
https://cases.primeclerk.com/parkerdrilling/Home-Index
The following dates are hereby established (subject to modification, as necessary)
with respect to the solicitation of votes to accept, and voting on, the Plan and confirming the Plan
(all times prevailing Central Time):
Event Date
Voting Record Date January 22, 2019 (or the date that is the first day
of the Disclosure Statement Hearing)
Solicitation Distribution Deadline January 25, 2019
Publication Deadline January 28, 2019
Voting Deadline February 22, 2019
Confirmation Objection Deadline February 22, 2019
Deadline to File Confirmation Brief February 28, 2019, at 4:00 p.m., prevailing
Central Time
Deadline to File Voting Report February 28, 2019, at 4:00 p.m., prevailing
Central Time
Existing Common Interests On the Effective Date, each Existing Common Interest in Parker shall be canceled and shall be of no further force and effect. Each Holder thereof shall receive its Pro Rata share of: (i) 1.65% of the New Common Stock, subject to dilution by New Common Stock issued in connection with the Management Incentive Plan, the Rights Offering, the Put Option Equity Premium, and the exercise of the New Warrants; (ii) the Existing Common Stockholder Subscription Rights; and (iii) 60.0% of the New Warrants
• February 4, 2019 (10:00 a.m. ET): Commencement of the Sale Hearing
above from the prime clerk court info
you say insiders have bought more common stock, but there is no evidence of that. there have been NO sec form 4's filed showing any recent insider purchases.
we already have a partial liquidation going on. sears had already closed a few hundred stores in 2018. that process will be handled by shc and go on well after feb 4th when hopefully judge drain will approve esl's bid.
linda,
this was from the proposed order:
Z. Valid and Binding Release.
The proposed compromise and resolution embodied in the Credit Bid Release (as defined below and as reflected in Section 9.13 of the Asset
Purchase Agreement) is reasonable and appropriate and a valid exercise of the Debtors’ business judgment, and the consideration provided for in the Asset Purchase Agreement, including the Credit Bid Release Consideration and other good and valuable consideration provided to the
Debtors and their Estates in connection with the Sale Transaction, constitutes fair and appropriate consideration for the Credit Bid Release. The Credit Bid Release is required by the Buyer in order to enter into and perform in accordance with the Sale Transaction and providing such release is in the best interests of the Debtors, their estates, creditors and other parties in interest. The Claims and causes of action released through the Credit Bid Release are complex and in the absence of the release would involve extended and expensive litigation, the outcome of which would be uncertain.
_____________________________________________________________
esl/lampert obviously realized the impact of neverending stream of litigation over his management of sears and is attempting to put an end to it with this release language.
the judge will have to weigh the "merits" of the unsecured creditor's claims against the "damage" it would do to esl's ability to take over and operate the assets purchased by esl. if esl has to get mired down in endless litigation, the judge might view that as a situation which could force esl/sears back into bk court.
the unsecured creditors did nothing at the time to mitigate the damages they now claim and i think the judge will not look favorably on that.
_________________________________________________________________
re: an earlier post on debt swap and the impact on commons, it seems that esl/lampert have no debt to swap since they have cancelled that debt as part of their bid (a credit bid). they didn't cancel the debt in exchange for equity, they just cancelled it. that leaves esl and its controlled entities still holding common stock.
still doesn't seem like they would cancel the only equity interest they have given it is a majority position.
conversely, guess esl could prevail in its bid, say what they have is privately controlled and there is NO equity position, including their own. however, given the language in the proposed order, that certainly would not fit the description given of no restructuring along those lines.
still a lot of uncertainty which is why the stock will probably trade like yesterday until we hear something from the hearing on the 4th. possible the judge will say he will take everything he heard on the 4th under consideration and make a ruling at a later date.
from docket #1598
Shortly after 3 a.m. this morning, the Debtors officially closed the auction for the sale of substantially all of the Debtors’ assets with an announcement that ESL Investments, Inc. was the successful bidder. For myriad reasons that will be set forth fully before this Court in the coming days, the Creditors’ Committee opposes the proposed sale. At this critical juncture of the Debtors’ Chapter 11 Cases2, the Creditors’ Committee seeks to file the Standing Motion and Proposed Complaint seeking standing to assert causes of action on behalf of the Debtors’ estates 2 Capitalized terms not defined herein have the same meaning given in the Standing Motion. 18-23538-rdd Doc 1598 Filed 01/17/19 Entered 01/17/19 13:52:42 Main Document Pg 2 of 14 3 against Edward S. Lampert (“Lampert”) (Chairman of the Board and former CEO of Holdings, ESL3 (Lampert’s investment firm and, with Lampert, Holdings’s controlling shareholder), and Kunal S. Kamlani (“Kamlani”) (ESL’s President and a director of Holdings). The Creditors’ Committee believes that these causes of action should be litigated in open court but is complying with its obligations under the Amended Stipulated Protective Order to file the Standing Motion and Proposed Complaint under seal because certain materials relied on or cited to in the Sealed Documents were designated by producing parties as “Confidential” or “Highly Confidential.”
linda,
look at docket #1598
since gabelli owns seritage, he in essence has a piece of sears, like it or not.
that's one reason why i think some type of reit structure might be done.
if he can not find a retail solution for the 425 stores, there would be a distinct risk of slipping back into some type of bk again.
if that were to happen, why leave valuable assets unprotected?
part of esl's bid was the 2.2 million sq ft of corporate office buildings in hoffman estates together with over 200 acres of land. why leave that in newco subject to future risks?
same thing applies to the warehouses.
while subject to much criticism and possible future litigation, lampert created the seritage reit so he knows how to do that.
there's been a lot of discussion about the amazon/sears auto center relationship. spin off the tire stores.
there's a lot of possibility and if esl gets approved to go forward, there will probably be a lot of movement in a very short time, relatively speaking.
no, sears as a name could survive. it is the official name "sears holding corp" which appears on sec filings and is most likely how the stock is actually titled that i think will change.
certainly esl has obtained the trademark names such as kenmore, diehard, and just plain old "sears". calling something just sears is legally different that calling it sears holding corp.
again, just my thought
don't doubt it will be called "sears something", just have a hard time believing calling it sears holding corp will happen.
despite the problems, still believe there is goodwill in parts of it like kenmore, diehard, what they can still do with craftsman (think sears retained ability to use their prior base for a period of years if a prior post to that effect was accurate).
also don't discount the possibility of esl creating some type of reit structure if their apa is approved. could spin off things like the corporate office real estate and property to shareholders and continue with whatever they are going to do with the retail base, whether it be downsizing stores and repurposing excess sq ft.
linda,
guess my take is the apa will serve to reorganize a portion of what was once shc. even if shc were a sub of holdco, can it be firewalled off sufficiently to keep esl out of their problems?
that begs the question, is an approved apa sufficient to permit esl to go forward or do the provisions of an approved apa have to be incorporated into a por which provides for the spinoff of the transform holdco assets leaving the remaining mess with shc to plod through?
if shc is a subsidiary of holdco, then it seems that shld stock is associated with shc, a bankrupt entity. NO?
it's that confusion which makes me think/prefer for a new stock to be issued with a portion of that new stock exchanged for shares of shldq stock.
i just have trouble understanding how the existing shares can be separated from shc. seems like that would require more than a pen stroke and if the sec had to be involved, why not a new share issue?
all beyond my paygrade but those are my thoughts at any rate.
regardless of how it is cut, my gut is that current shares will survive in some way.
linda,
i would find it surprising if shc became a subsidiary of transform holdco. it seems like esl would want to sever that tie and move on with whatever it is going to do and leave shc to do the same.
i really don't know, but that is my take on this.
st, think you mis read my post. i was quoting another poster and questioning that poster's assumption the commons would be wiped.
i then pointed to the "draft order" indicating no classification of claims and interests as support the commons would survive.
"The common Shareholders is the lowest in the totem pole & usually wiped out in a reorganization from a bankruptcy."
but notice from the draft order there is a provision which states there will be no classification of the claims. that seems to suggest the commons will not be wiped out
sears has closed a boat load of stores and is currently conducting gob sales. those things need to be wrapped up by sears and things such as that will most likely go on for a very long time.
at the time of the bk filing, there were over 700 stores in sears' portfolio and by the time esl made its qualifying bid, he was only acquiring 425.
shc still has a nightmare on its hands wrapping up things which are not part of esl's bid.
this is where i am uncertain about what happens. it is my understanding that the entity filing for bk is the entity putting forth the por. now, will that por include provisions for spinning off what esl purchased and then provide a roadmap for liquidating the rest? i don't know.
the asset purchase agreement was an agreement by and among transform holdco, shc, and its subsidiaries.
seems any por would also be drafted with all of those entities addressed.
again, i don't know but those are my thoughts.
linda,
you are correct and i misstated that as being part of the apa.
the section/paragraph labeled "Y" (i) through (iv) discussed is from the draft order asking the judge to make a finding and determination about various things including the "Y" issues discussed.
pages 18 and 19 of that draft order correspond to pages 279-280 of docket 1730 which contains the apa, various assignments/assumptions, poa, draft order approving the apa (among other things).
if the judge approves the draft order on the 4th, then a number of things will still need to be done.
will he approve waiving the "waiting period" and let esl get on with it? if he does, to me that means that shc will carry on as long as it takes to wrap up the bankruptcy issues not resolved by the esl bid. if shc carries on, it will most certainly be in shc's name which supports my feeling there will be a name change for whatever concern esl takes forward.
the por has to be submitted and approved.
if there is a name change and the common stockholders survive, then there will be a new stock issued for "newco" at which time, if the current common stock survives, an exchange will occur.
the new stock would trade on a "when issued" basis
a lot of moving parts ahead, the "q" will not disappear on the 4th if the judge approves esl's bid.
thanks for that correction
left sears employment in the early 90's. well before retirement age but with a small benefit which i could draw at 65. am well aware of the pension problems. it has been underfunded for years. anything made off this stock play would be sweet. have no illusions about sears' problems past, present, and most probably in the future.
don't view this as any type of long term hold like i did with ggp. if esl gets approved by the court, the reorganization "saves" the commons and the stock resumes trading off the pink sheets, i will be looking to exit.
anybody in this stock will be making their own decision regarding when/if they want to get out. i believe things are set up for the commons to survive but if not, my position is not such that i lose sleep thinking about it. if on the other hand it becomes a good play then i have enough to make an impact.
linda gleaned the following from the purchase agreement:
“ The Sale Transaction does not constitute a de facto
plan of reorganization or liquidation as it does not propose
to (i) impair or restructure existing debt of, or equity
interests in the Debtors, ......”
but the good news is there is even more from that section.
first thing is to address what is meant by a de facto por.
a de facto plan of reorg. has sometimes been referred to
as a sub rosa (i.e. under the table) plan or a creeping plan
of reorg. by that is meant a plan in which some type of
agreement outside of the bankruptcy plan is sought which
could have a significant impact on the bankruptcy case and
the bankruptcy estate.
in other words, they are saying there are no shenanigans
going on. that this is NOT a de facto or sub rosa por.
also included in section Y was a provision which stated the
purchase agreement did not propose to (ii) impair or circumvent
voting rights with respect to any plan proposed by the Debtors.
in other words, the stockholders will be able to vote on the por
important to remember it is sears which filed for bankruptcy and
it is sears which will file the plan of reorganization. that is why
the Debtors are always referenced in the agreement.
additionally, section Y had a provision which stated the por did
not propose to (iii) circumvent chapter 11 safeguards, such as
those set forth in sections 1125 and 1129 of the Bankruptcy Code
bankruptcy code section 1125 deals with disclosures and
solicitations and section 1129 describes the parameters of
plan confirmation
finally, section Y had a provision which stated the por did
not propose to (iv) classify claims or equity interests or extend
debt maturities
this final section seems to say there will not be any attempt to
prioritize claims or equity (i.e. stockholder) interests. that kind
of sounds like remaining creditors will be satisfactorily taken
care of, which in and of itself indicates stockholders will not
be wiped out. this seems to be further supported by the fact
debt maturities will not be extended which means interest
and principal will be paid on time.
so, unless this is all boilerplate smoke and mirrors while
singing "don't worry be happy" it would seem to strongly
suggest common stockholders will survive. the question
is, in what manner?
i believe there will be a name change if the esl bid is
approved by the court. if that is the case, then the existing
shares will be cancelled and if Section Y (i) stands, the
existing shareholders will have their shares exchanged
for shares in newco 1 for 1 given the language which says
no impairment or restructuring.
obviously we will know more as time goes on. in the
meantime, until feb 4th, the stock will move up and down
unless some real information is provided.
even if the 4th provides approval for the esl bid, the last
bit of uncertainty re: stockholders will not be absolutely
finalized until the por is put forth, approved by the judge,
and voted on.
because there is still uncertainty. the judge still has to approve esl's bid over the objections of various creditors.
don't forget that part of esl's bid was a credit bid. he is agreeing to cancel his $1 billion + debt which shc owes him as part of the purchase agreement.
that means what he has left to "control" the company is the 50% + common stock position that esl's and the other entities he controls have.
other than the 1+million shares he returned to the company, he has not agreed to relinquish any of his stock.
certainly seems reasonable the common stock will not become worthless.
nice find!
"Why would the Debtors link Holdings Common Stock to a January 5, 2019 deal, if Holdings Common Stock did not have a future with Holdings?"
why would warrant holders accept the deal with a $28.41 conversion price?
lg,
somebody inserted that language.
i pulled up the purchase agreement. used the "find" feature and searched for "share structure intact" and those words had no "hits".
i then did a "find" feature on only the word "intact" and that word did not appear anywhere in the document.
like much of what is "put up" on this board, factual commenting seems to be lacking in a lot of instances.
https://restructuring.primeclerk.com/sears/Home-Index
if it doesn't open up to the case info page just click on that. scroll down to about mid-page and then click the "notice of auction results and sale" link.
the asset purchase agreement is exhibit b which starts on page 14 of 315
even though esl may have purchased the name "sears holdings corp.", if the new company does not have that exact name, what stock are you holding?
also believe in the asset purchase agreement, securities in shld were not being transferred to esl unless specifically provided for in the asset purchase agreement. there was no provision to transfer the treasury securities to esl which leads me to believe the existing common stock will be cancelled and the outstanding shares of shldq will be exchanged for shares of a newco.
if esl does not have the unissued treasury shares, he has no way to go to the market to raise any money unless/until he files some type of prospectus for new debt or shares.
why not just create a new share structure with enough authorized but not issued shares to give the flexibility down the road. if an ipo is part of the equation, then ipo with a new stock and not have any baggage associated with the old stock name?
the "q" is not going to magically disappear come february when/if the judge approves esl's bid
while they may not "need to", i believe they will. clean start, cancel old shares and exchange them for new shares, possibly have more than 500 mil authorized when doing so. below is from an sec info site:
A company's securities may continue to trade even after the company has filed for bankruptcy under Chapter 11. In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange. However, even when a company is delisted from one of these major stock exchanges, their shares may continue to trade on either the OTCBB or the Pink Sheets. There is no federal law that prohibits trading of securities of companies in bankruptcy.
Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.
If the company does come out of bankruptcy, there may be two different types of common stock, with different ticker symbols, trading for the same company. One is the old common stock (the stock that was on the market when the company went into bankruptcy), and the second is the new common stock that the company issued as part of its reorganization plan. If the old common stock is traded on the OTCBB or on the Pink Sheets, it will have a five-letter ticker symbol that ends in "Q," indicating that the stock was involved with bankruptcy proceedings. The ticker symbol for the new common stock will not end in "Q". Sometimes the new stock may not have been issued by the company, although it has been authorized. In that situation, the stock is said to be trading "when issued," which is shorthand for "when, as, and if issued." The ticker symbol of stock that is trading "when issued" will end with a "V". Once the company actually issues the newly authorized stock, the "V" will no longer appear at the end of the ticker symbol. Be sure you know which shares you are purchasing, because the old shares that were issued before the company filed for bankruptcy may be worthless if the company has emerged from bankruptcy and has issued new common stock.
During bankruptcy, bondholders will stop receiving interest and principal payments, and stockholders will stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds, or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your old stock in exchange for new shares in the reorganized company. The new shares may be fewer in number and may be worth less than your old shares. The reorganization plan will spell out your rights as an investor, and what you can expect to receive, if anything, from the company.
The bankruptcy court may determine that stockholders don't get anything because the debtor is insolvent. (A debtor's solvency is determined by the difference between the value of its assets and its liabilities.) If the company's liabilities are greater than its assets, your stock may be worthless. Contact your local Internal Revenue Service (IRS) office or call 1-800-829-1040 for information about how to report worthless securities as a loss on your income tax return. If you don't know whether your stock has value, and you can't find a stock or bond price in the newspaper, ask your broker or the company for information.
Your statement that there is “SEC filing proof that Holdings Common Stock will be used in the near future: Conversion price: $5 for 200 shares in exchange for $1000 of debt” is not only misleading, but inaccurate.
You have chosen to make a mathematical calculation as to what the breakeven share price would need to be but that is not what the filing says. Instead the sec filing clearly states:
_________________________________________________________________
Loan may be converted into shares of Holdings Common Stock at the option of an eligible holder at a conversion rate of 200 shares of Holdings Common Stock per $1,000 in principal amount of indebtedness outstanding under the Second Lien Term Loan (subject to adjustment)
____________________________________________________________________
That indebtedness could be converted now and $1000 of indebtedness could be exchanged for 200 shares of shldq which at Friday’s closing price of $0.5801 would mean receiving stock worth slightly over $116 in exchange for giving up $1000 of a debt instrument.
Now, maybe it is possible that esl is making nice with these debtholders and indicating there could be an ipo of newco which could be exchanged for debt and it is possible that ipo would be priced at or in excess of $5/share which would make going along with esl’s bid a better bet for debtholders than challenging his offer in court and pushing for liquidation.
since part of esl's bid is extinguishing the debt owed to esl by shc, he needs to get those other debtholders on board. even extinguishing his debt allows esl to keep firm control of common shares.