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You're not doing the math on this like so many others here. Even if AMZN offers $5 billion (all cash/ cash + stock /all stock) for JCPNQ, that along with the $500 million cash on hand barely offsets the $4.95 billion in unsecured liabilities. Say that were to happen (though its highly doubtful anyone will offer it when their market cap is barely 50 million), it just leaves $550 million for common that equates to $1.70-1.75 per share.
This assumes many things like DIP superpriority being set aside by the court, bondholders agreeing to full or partial recovery if thats what entails, and any Preferred being diluted regardless of their voting seniority. Too many ifs and buts... but you get the picture. JCP capital structure has been in the crapper for a VERY long time, makes it harder for anyone to place fair value on its distressed assets however notional value they may have. Brand value, distribution network, warehouses, inventory all that is great but can't ignore the disastrous amount of baggage and failed strategies JCP carries.
Wonder how many here can read a balance sheet... sad.
How much debt does JCP have on its books as of filing? $5B? Or is it $8B as claimed by the morons at MF??
TIA
Yes, I remember the Van Deelen objection and read it fully. Jones didn't allow a hearing for that stockholder and just brushed aside everyone's objections, including UST. He's got no moral fiber, just a plain lousy idiot when it comes to rulings because "he can".
In my view, the USDNY and east coast judges are more reasonable and fair in their application of Ch. 11 statutes. Sontchi, Marvin Isgur and others have not only allowed Equity committees but often ruled favorably in some of their cases. One has to take a holistic view, not just outright reject the notion that shareholders are also EQUAL stakeholders in the bankruptcy process.
Someone should move the court to kick him off the JCP case.
Agree with StihlsawsRule, great post. Just the bad luck of JCP stock holders they got Jones as the BK judge. Absolutely the most horrible judge for Ch 11 cases. Not even a US Trustee, DOJ or SEC attorney can sway this dude (if you think judges/lawyers are not asinine + corrupt + supremely ignorant, think again and then check yourself into an asylum).
This dodo judge screwed shareholders in all these recent cases:
Weatherford International
Bristow Group Inc
McDermott Corp
Dean Foods Corp/DFA
and many others in the prior years. Go check it out. You guys if you can't get an EC appointed, there will be '0' chance of ANY recovery and even with EC its not a guarantee, but a fighting chance. Can't understand why JCP didn't file it in a Dallas metroplex court maybe something to do with the District court system.
This board is hilarious with great entertainment value during these strange days of lockdown (did I mention FREE entertainment?).
Amazon will never acquire JCP. It may buy some of the locations for the RE value but not the company, or its $4.95 Billion debt nor its 86000 employees with bloated pay structures. AMZN is a sweatshop that pays its "workers" $4.05 an hour no benefits no unions no nothing. Plus they pay no taxes, which may sit well with the state of TX but won't fly with the street.
But thanks for all the laughs and dream on!!!!!
When is the reverse split going into effect? Is it 1:200 or 1:100?
The stock is worthless but may continue trading by pumping it above $1 for a few more months.
Wonderful, the crooks prepaid themselves $25 million with impending bankruptcy of this garbage dump. Of course, they generously agreed to forego their equity awards knowing full well the equity is TRASH anyway!!! That's how organized crime goes down in America these days, boys and girls. Live and learn. Can't beat these dodos i.e. C-suite chums at their own game, you gotta join them.
No problem, good luck. Bankrupt companies generally don't survive in the long run, from what I've seen. Nor do they pay their bills
EPS is -$8 per share and drilling activity has come to a standstill. In typical Ch. 11, shareholders lose everything and this will be no exception. Wrong company, wrong industry, wrong time to be in oil.
No one said it is, not yet anyway. Rev. may be $3 billion but don't forget the $9 billion debt, and the idled rigs. Drilling activity in GOM , N. Sea and elsewhere has gone to zero.
There's no gap between $1.16 and $8, hasn't dropped that much and it traded at various prices in between. Maybe you're looking at the wrong chart...?
Its a DOUBLE scam. Double trouble. R/S + Ch. 11 means squeeze and then screw the living daylights out of the longs. But seriously WHO would even go long this??? Been in the crapper 10 years straight.
I too initially thought there was a slim chance of a good outcome here, given the strong balance sheet, milk being an essential staple and all that. But looking at how INEPT their management is, complete lack of foresight on how to strategically position themselves due to the demographic changes in consumption, I concluded that neither can anyone save this sorry excuse of a company nor do they deserve to be saved. Recall that Saputo passed on Deans last May, stating that it was a "volume" play not a value play.
Completely idiotic management, CEO after CEO just in it for the $$$ and then there was DFA, hell bent on destroying value. They were owed $173 M by Deans and so basically said, "hey dudes, we're now gonna take over the farm, chickens, goats, tractor and your grandma but you can't say a word cause you're too dumb, so just shut up and get out". So they did. In the end, no one wants to deal with legacy plants, underfunded pensions, union labor and what not. As was correctly predicted by analysts early last year, NOT A SINGLE DAIRY or other company expressed interest in acquiring all of Dean Foods so they have no choice but to sell assets to pay off their debts.
Not company, just the assets sold to various parties. Stock will eventually head to zero once its all done.
You need to realize that DFODQ management is LEAST interested in a successful restructuring of the company. Forget about return to profitability, that's never going to happen with these idiots in charge. DFA has a complete stranglehold on them, plus they're aided in their effort by a totally useless judge who's happy to give it all away to the lenders.
In all his past cases, the judge ruled against equity stockholders making sure that Equity Committees were NOT appointed, and if ever allowed they could not plead nor prove their case for favorable outcome. Even US Trustee is asleep at the wheel so barring a miracle you will likely lose your investment. Thats the current scenario, very different from what it looked like in Jan.
It appears you got your answer today. This is a totaly shady company being bought out by an even shadier outfit, all with the apprent collusion of the ch. 11 courts. Good luck if you're still in this.
Both these companies have been sued multiple times by many parties over the years, and have paid out 100s of millions to settle out of court.
Not sure it will rebound. Bonds are 11c on the dollar today, if they won't be made whole, how can equity do better? Bondholders tried to oppose DFA deal and are working on Ch. 11 plan to submit to court. If no better offer emerges and lenders/DOJ continue to oppose DFA in April, judge may cram down his own decision (which will probably be the worst decision) on all. Judge is infamous for being anti-stockholder in all his past cases.
DFA's $425 M bid hardly values the assets fairly. And its really puzzling why Rabobank would lend them $850 M when DF debts were already over $890 M (1.1 billion if AR facility is included). Its as crooked as it gets and only lawyers make money in such "deals".
There was no press release... you need to go to the Epiq website for DFODQ and click on the relevant docket to read it.
Read docket #990 filed yesterday - judge has threatened sanctions on Ad Hoc group and their lawyer.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Under threat of sanction by the court, the Ad Hoc Group of Equity
Shareholders hereby WITHDRAWS its motion for appointment of an equity
committee (Docket Entry 896) and WAIVES all right to hearing thereon.
Dated: February 24, 2020
Looks like its over for Deans. Stock has been bleeding red for 7 straight days with that virus just making it worse. Longs who purchased at 0.25 or higher are now stuck with this.
David Jobes the judge in this case, has thrown out the equityholders request for an Ad Hoc equity committee to be formed. WOnder what happens now?? Not expecting a good outcome any longer unless some other bidder emerges. Thoughts?
I see stockholders making a mad scramble to the exits, as this will go to 0.0 once they emerge from bankruptcy and all assets have ben transferred over to DFA.
Market drop today. Looks like DFODQ will also take a severe beating going by how its been trading the last few days. Damn noCV and the Chinese.
Si si, you give me 20 milllllion lirra.. si. Kapeeesh. Agreed, if one got in at 5-6-7 cents then this would be a great opportunity to make some fast cash.
Let me challenge my own view - it would be hard if not impossible to find retail investors to buy 90-100 million shares of a bankrupt company, that too a milk processor. Even if the price is a quarter. Not when the broader market itself is doing great. People doubled their money in less than a year with Tesla, Apple and many others. Why would anyone ever buy DFODQ?
The market makers (if any MMs support OTC stocks that is) in DFODQ seem to be dumping the inventory they had absorbed after Ch. 11 was filed. 170 million shares were dumped at or below 10 cents in the 8 days since filing BK.
Volume since 3rd Jan 2020 has reached 90 Mil shares (almost) with most trades in the 20 and 30 cent range to retail investors. Lot of churn, no real price increase, MM still made a profit of 15 c/share ($25 mil + fees for holding the entire lot of 170 mil for 2 months) and now retail is left holding the bag if this "run" is complete.
Anyone wants to challenge this view?
People are selling as few as 100 or even 40-50 shares and bringing the price down. DF stock is not in good hands obviously, strongly suggesting extreme manipulation of daily volume and price.
Whys the general market tanking today? Some new flu from China?
Must say for its part DF is not a well-run company -- too many false statements by the new CEO hoodwinking investors. He said planning a turnaround and then went and declared BK. Same goes for the other guys before him, each one lining his own pocket starting with Greg Engles, the guy who got rid of WhiteWave, biggest mistake by Deans
Whats keeping it down today? Chart not looking good to me but I'm no technical expert and its an OTC stock, TA might not work
Thats so true. This is heavily manipulated and also shorted like crazy even though small cap, Ch. 11 company. Seems like 50% of volume yesterday was shorts, over 3.4 million shares. Where do they get inventory for all this shorting? Isn't it illegal??
While it seems like DFA plans to absorb all of Deans liabilities, not sure thats a $2.5 B offer. To put it in context, Saputo looked at Deans books last May. Dean apparently wanted 18-20 mil per plant which would put the price at 66 x 20 = $1.32 B plus another ~80 mil for equipment, trucks etc. i.e. at least $1.4 B *AND* assumption of 700-800 mil debts.
Saputo would need to pay >$2.1 B so they passed probably. Problem is that Dean was trading at $3-4 at that time, and not in a position to command "normal" valuation due to many prior missteps. Most analysts pegged Deans enterprise value at 300-500 million, not $2+ billion -- poorly maintained plants, antiquated tech, union labor, lower demand etc. Normal valuation would be 92 Mil shares x $22-25 PPS = $2.1-2.3 B EV if all was well but it isn't obviously. My 2c....
Where did you read that DFA will assume ALL of Deans' liabilities? I went thru the APA docket but can't remember seeing that explicitly mentioned. Its rather unclear on the liabilities. They do however, plan to forgive $165 M of claims and milk contract obligations that likely are the full/partial $173 M they're owed by Deans.
Today's action seems to indicate that market is reading this with great skepticism i.e. Deans is giving itself away, and its overall a bad deal for everyone including shareholders. Hence the stock did not go up. If you remember SHLDQ last year, it went from 55 cents to over $2.75 in just a few days. Sears assets had real value that was transferable to other parties. Deans plants apparently have no value except to another milk producer. So this is not going to end well in my revised view.
Not sure anymore if this will have a good outcome. Historically DF has been entangled in lots of lawsuits for unfair trade practices, some in collusion with DFA. So they're not viewed as a good player by other industry participants and by farmers, consumers, DOJ etc. I wonder if the judge will see through all that and rule unfavorably against DF management, and of course, shareholders who are last in line on anyone's radar.
Not sure why it posted twice....
Stock is wanting to go up but looks like there's some overhang pressure. It may test resistance at 0.34 and 0.60 in the next few days after which has a clear path to 1.50 and beyond. Has everyone on this board sold and moved on? My view is that they were forced into BK by DFA whom are owed $173 M by the company. Pensions were just an excuse. Once these 2 items are cleared by the court, it can move onto profitability.
OK, thanks. Looks like Dimensional Fund Advisers sold its position today, there's new 8-K filed in the sticky notes. Amended Statement of Ownership. Maybe thats why the price drop.
Thanks for the info. What makes you believe the Equity Committee will get approved by this judge? The filing mentions that US Trustee denied Equity committee back in Dec., if I read that correctly.
It could be $1.50 or more by Feb. end, just a hunch. DF in play and for some reason everyone wants a piece of it. If it was really bad and assets were worthless, why would Rabobank extend 850 million in DIP loans to them? In my view, equity has more than a passing shot. Just the massive infrastructure needed to supply 30% of the nation's PROCESSED milk will force DFA, lenders, DOJ and others to reckon with this company.
Thanks, same for you. Do you think it crawls back into low 0.30s in the afternoon today?