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The whole market is reacting to Sessions being Attorney General under Trump and his views on marijuana. However this video shows Trump wanting to leave marijuana legalization up to the states:
I think the committee is well versed in the issues judging from their court filings. They just filed a motion to delay the deadline so they can have more time for discovery and depositions from the company and Platinum and are asking to extend the deadline to late February instead of late December. They just hired a financial advisor to help sort through all of this. All this is a good sign and hopefully the proceedings can be slowed down to get the maximum return here.
Hope you are right RJB, and it is just the weak hands being shaken out. The whole MJ sector seems to be crashing right now, it isn't just VAPE.
VAPE IR did say they would have some news"soon" but were not specific on how soon that would be,
That is fine about the Guiness organization I suppose but it still does not explain all the videos out of Florida. It would have to be a massive conspiracy to have all those videos be part of some hoax. Not to mention several shareholders have posted they were there and witnessed it first hand,
I think Zapata may be the only salvation if the current deal with L3 stands and nothing is done to reduce the debt. In that case the payout to investors will be small. Also it seems the share count for Zapata was based on Platinum converting all their convertible debt to shares. Now it seems that would not happen so Platinum would not have as many shares going forward and the Zapata outstanding share count might not be as high as previously thought. Anyway food for thought.
Cannot believe there are still doubters out there that Zapata is real. I guess everyone in Florida was in on it too when he flew in front of a crowd two days in a row and there are many videos of that out there shot of it by the spectators.
That Dr. Dre rumor came out of nowhere so not sure it is very credible. Also I do not see what big effect that would have but maybe I am missing something. However talking to investor relations they did say they expect to have some news to announce soon, of course were not specific on what the news was or what "soon" means. Would be nice if there was an update on sales of the new Onyx line. They said the launch of it was successful and it is supposed to correct a lot of issues people had with the Hive Ceramics line.
Agreed: IR says there will be news "soon" but gives no specific deadline. Anyone who tried to say there would be news today was wrong and trying to build up expectations for their own agenda.
Thanks for the info, that is very interesting and good observation! Hope that trend continues.
So you said earlier this was churning before it moves up. If it is, it keeps churning lower, so when do you think this is going to end (if it is the market makers are collecting cheap shares, when are they going to have enough)?
So far it just keeps going lower and lower. Doesn't look good to me, I hope I am wrong.
The company continues to operate, that's what the DIP loan is for. So it is not like orders aren't going to get filled while the company is in Chapter 11 proceedings. Otherwise they'd start defaulting on contract commitments and that would open a whole other can of worms.
However, it is a good point that L3 would like to wrap this up sooner than later.
Why would L3 do that? The Chapter 11 process is designed to insure the buyer acquires the assets debt free/liability free. L3 has already proven to drive a hard bargain, from the court filings it is clear they were the ones who forced IMSC into the Chapter 11 process in the first place. They would not agree to the sale otherwise, presumably because then they might be subject to issues with Platinum down the line. Since Chapter 11 guarantees they acquire the assets free of debt/liabilities I don't see them being generous and suddenly agreeing to "purchase the debt" as it were, which is basically what they'd be doing. Any other possible bidder will be bidding on the assets the same way, knowing they too will get the assets debt free/liability free surrounding the debt so it just does not seem at all that would happen, there's no benefit to someone doing that now that it is in Chapter 11.
Not a chance L3 pays $117M plus the debt owed to Platinum. That is not at all what their offer is for and why they forced IMSC into Chapter 11. The whole idea of Chapter 11 is for the buyer to purchase assets without assuming the debt, and have them guaranteed to be free and clear of debt. L3 assuming the debt and paying it off would make their offer nearly $200M and that's not what they offered. The liabilities they are assuming probably are any related to possible liabilities surrounding IMSC's contracts or products.
What people are hoping for is that a higher bidder comes along and/or the debt to Platinum is substantially reduced.
You are right though, lawyers fees continue to add up the longer this process goes on. The challenge to Platinum's debt could take awhile to litigate, even though they are under criminal investigation and there's a lot of shady stuff and they probably made much of the debt back already in stock conversions. I'm sure their lawyers will fight hard on this. No question it is unfair for them to profit so much on this and especially as to the fact they were really an insider but were allowed to convert debt to cheap shares and sell at times that benefited them. Hopefully some more illegal dealings can be uncovered surrounding the IMSC debt (that "insider trading of IMSC notes" for example).
Let's hope the judge is made fully aware of what Platinum did over the years with their loans and conversions of stock. They probably made quite a bit of money off converting and dumping those shares and the judge should take that into account. Indeed the Platinum debt does make this a very complicated Chapter 11 case unlike most others due to Platinum being under criminal investigation and also their own financial issues. They have already profited quite a bit off the IMSC debt, they don't deserve to profit any further.
Yes, higher bids along with reducing Platinum's debt is what is needed. I am not sure how probable either really are. However I hope those on here predicting something will be done with the Platinum debt turn out to be correct even though the Chapter 11 process has a short timeframe.
Part of the Zapata deal was that Platinum Partners would be a major shareholder. Unless the deal changes, that is a major concern I think to most people. Although Platinum's situation has changed since the Zapata deal was announced so who knows how they will factor in if the deal goes forward. Also with the Chapter 11 proceedings and if the sale price is $117.5M it seems like there would not be $35M in cash left over after paying off the debt. It would seem the terms of the deal would need to change if the sale price ends up at $117.5M.
Further confirmation Christie will not be Attorney General: http://nypost.com/2016/11/13/trump-is-dumping-christie-over-bridgegate-insiders/
I would agree that this is more complicated than normal due to the criminal issues with Platinum. Unfortunately the bankruptcy is still on a very fast track with the sale around mid December. It is hard to imagine how all the problems surrounding Platinum can be resolved in such a short time and whether the judge would consider anything when Platinum is under investigation without them as of yet been found guilty(even though they will be but who knows how long that will take). All the bankruptcy judge may care is that from the sale there is enough money to pay off the creditors. It may be that any attempt to reduce Platinum's debt may have to be done separate from the bankruptcy case. I do not think it is at all fair that Platimum gets their debt paid in full given that for one thing they made a lot of money converting 8 cent shares not to mention how they were really insiders in the company but not held to any rules regarding insiders. I sure hope in the end the debt to Platinum is substantially reduced but I worry about the fast pace of the Chapter 11 proceeding.
I hope in the end you are right and the debt to them gets substantially reduced or wiped out. It just seems it would be hard to litigate this in the fast track Chapter 11 proceeding since even though they are under investigation they haven't yet been found guilty.
Christie is tainted by legal issues over the Bridgegate fiasco, two of his senior staff were just convicted over it. Also he and Trump's relationship has deteriorated. Very doubtful he would become Attorney General. As you say he just got demoted on the transition team too.
The thing is there is enough money to pay off all the creditors. I hope I am wrong but it does not seem then that any of the debt to then can be reduced, as it would be if there was not enough money to pay all the debt from the sale,
I also think L3 would have paid more if they had to, but they were smart and made a low offer for it. I suppose they figured they could offer more if other offers were made, and of course there weren't any others with the exception of the one that was even less than theirs.
Unexpected and negative has been the norm here. I too wonder why now bidders would emerge when they did not before. It also sounded like the 2nd offer was much lower than L3's. Hard to figure why now someone would be willing to offer more than L3 or make a bid when they didn't before.
Actually there is only an auction if there is another bidder. If no other bidders make qualified bids before the deadline, no auction is held and the sale goes to L3.
It is nothing that exciting, everyone knew there would be an auction if other bidders came along. In fact this is pretty old news and known since the bankruptcy filing.
What news? The bankruptcy process timeline is well defined, we won't know if there are any other bidders until the auction in mid December. Between now and then seems unlikely there would be any other news. Of course you said news would be out soon back on 9/19 and the only news that came out after that was Chapter 11. Hope this time you are right and it is good news but doubt any is forthcoming.
Management never risked any money before, doubt any will in the future either.
I would not trust anything nvolvimg PP. The fact they are mixed up in the Zapata deal worries me a great bit.
Liquidators seeks U.S. bankruptcy for Platinum Partners' funds
Two Platinum Partners hedge funds have sought U.S. Chapter 15 bankruptcy protection as part of an ongoing liquidation effort, according to court documents filed in New York federal court Tuesday.
In August, a Cayman Islands court ordered that an outside expert unwind the so-called offshore versions of its flagship hedge fund, Platinum Partners Value Arbitrage, which, along with the firm, is also being investigated by U.S. authorities.
That liquidator, RHSW Caribbean, filed the Chapter 15 bankruptcy petition which seeks to protect Platinum's U.S. assets from creditors while an insolvency proceeding is underway in the Cayman Islands.
An outside spokesman for Platinum declined to comment.
Mark Nordlicht founded Platinum more than a decade ago and generated years of double-digit percentage returns by investing in often controversial businesses, a Reuters special report revealed.
New York-based Platinum has been caught up in federal investigation by the U.S. Securities and Exchange Commission and the U.S. Attorney's offices in Manhattan and Brooklyn.
In June a longtime associate was arrested on charges of bribing a union official to invest in Platinum, charges he has denied.
RHSW notes it is in ongoing contact with the SEC and the Department of Justice and that Platinum is the subject of “allegations of asset overvaluation” of its investments in mostly difficult-to-value fledgling companies.
Platinum reported assets of $1.09 billion for its flagship funds as of June 30, according to RHSW. The same filing notes potential liabilities of at least $468.7 million on May 31.
The Cayman liquidators have began examining allegations that assets were overvalued and are examining the cause of the funds failure, according to the Chapter 15 filing.
One of the liquidators' investigation involved the potential sale of Implant Sciences Corp notes to Platinum insiders, according the bankruptcy filing. The liquidators were also probing an investment by Platinum's master fund into Northstar Offshore Group LLC, according to the Chapter 15 filing.
Creditors of Northstar tried to force Northstar into an involuntary bankruptcy in Texas and the liquidators are trying to arrange financing for the company, according to Tuesday's filing. Northstar had taken over the assets of another Platinum-owned energy company, Black Elk Energy Offshore Operations LLC, just before it went too went bankrupt.
Northstar investments account for 22 percent of the two Platinum funds, according to the bankruptcy filing.
The liquidators said a Northstar bankruptcy would result in a significant devaluation of Platinum's holdings.
At this point what can Zapata really do. They more or less have to wait for the Chapter 11 proceedings to play out.
OSI Systems had a representative dialed into the court hearing yesterday.
I saw that too if one goes through everything that has been filed,very carefully they will find it. It is quite interesting who the other possible suitor is.
Agreed on why they filed Chapter 11. At this point they needed to guarantee they had enough operating capital to complete the transaction (which the $5.7M loan takes care of), and with the Oct 31 deadline on the debt they had to protect their assets too. For sure the PP investigation put a wrench in the sale being completed in a timely manner. Back in July they obviously anticipated it could be completed by now but things with PP got worse after that.
It also is a way to see if a higher bidder will emerge now that L3's bid is known. Anyway the Chapter 11 filing is not to screw investors.
They did accomplish what they said they would as you outlined. The Morpho protest really hurt them as well as the competition really bidding low prices on the TSA contracts. Whether or not that is something anyone could have antcipated would happen is up for debate.
Oct 15 was the date when Zapata could solicit other offers. I do not think there was really an end date where it had to be completed.
Seems to me Smiths might consider bidding in the Chapter 11 auction now that they know the amount of L3's bid. There is an awful lot of money at stake in TSA's tunnel of truth so I imagine the competition won't stop now that IMSC is out of the picture and Morpho is part of Smiths. So anything is possible, given what went on in the past. We know L3 was the highest offer so whoever came in 2nd might consider bidding, if it was not Smiths, now that the amount of L3's offer is known.
I just reviewed the SEC filing for Zapata, the exact wording is:
"The LOI provides that Zapata may not solicit, initiate or enter into discussions, negotiations or transactions with any other party concerning the disposition of Zapata or any similar transaction until October 15, 2016. "
So there is nothing about what date it has to be completed by, but he can go out and solicit other offers after Oct 15.
It does seem like the CIC payout cannot happen. What happens with the PP debt is another question, but it would be nice to see them get less than the total currently owed to them. How much the judge will be influenced by their legal issues is another question. The court docs don't seem to ask for any debt relief but that might be implied in the Chapter 11 filing. They seem focused on the auction of the assets with an attempt to get a better bid than what L3 is offering.
The irony here is L3 took advantage of the situation with PP and knew the clock was ticking. I think their offer of $117M was in place for awhile and doesn't take into account the new TSA contract.
This is a good point and makes sense, that up until now the highest offer would not be known. Also it seems offers made previously might not take into account the new TSA contract. Hopefully this will translate into a better offer during the auction.
I like the theory the Chapter 11 proceeding is to force a higher bid. It seems like L3's bid doesn't take into account the recent TSA win and came in before that. It is odd they scheduled the earnings CC and then now are canceling it, as if something unexpected has come up. They wouldn't have scheduled it in the first place recently if this had been the plan.
Is there any precedent for a lender being forced to accept the principal and no interest payments because they are under investigation by the feds? It would be great if that is the case. I think at this point it is up to the bankruptcy court to decide that, and maybe this is why they filed to gain some leverage over PP. You are right, there's more than enough to pay off the debt from the $117M so that is not the reason they filed. They needed protection from Platinum seizing assets after October 31 when they would be in default, and needed operating capital which that loan for $5.7M through the bankruptcy court provides, so that's probably why they filed. It also seems like an auction gets set up where bids over L3's $117M may be solicited
In any event it seems that the sale price Is enough to pay off the debt with some money left over. So in that case the question is: what is the reason for filing Chapter 11? Is it to try and get a better sale price for the assets or is it to renegotiate the debt lower or some combination? It seems to add delay to the Zapata deal as it seems like there is no way that could be completed without reemerging from Chapter 11.