Thanks for always providing good analyses. But, my question and curiosity is that, if CPI has to go through a BK or a liquidation, the BOD of CPI should have a shareholer meeting for approval on its plan. If there are some companies, which are holding (or have been accumulating the shares at this low price), they can sue the BOD and management for its illegal actitivieis.

I coul be wrong, but I have a feeling that some investors have been buying the shares during the last few months. The reason I am saying is that the number of traded shares during the last three months is less than 3M shares, which is much less than the total number of 7M CPI shares. Otherwise, they would have dumped out their shares long time ago. How do you think?

Thank you for your reply. One clarification: In your message, "... studios were closed in early 2012... ", are you saying that the studio is completely closed now since early 2012 or was just partialy closed for the holidays and is now open?

Based on the holsh's message at #2077, I wonder whether the mangers and employees at studio level got a same furlough notice or not.

Note to downsideup or any others:

Based on the information provided by a few CPI associates here, CPI would be sold to someone within 2 to 3 weeks. If it will be sold, is it consiedered to be a liquidation? I would think not. Definitely, it is not a BK.

Now if CPI will be sold, what about the CPI stocks? Will the buyer honor/carry over the stocks? If yes, then I think the price of the CPI stock would move higher. A real question is: Is it time to buy??? How do you think?

Intersting observation is that no one sold and/or bought the major amount of the CPI stocks during the last 2 to 3 weeks, even though the news for a sale would have been leaked out. Very interesting!!

Thanks. I don't know, but my guess, based on the observation of the downsiding process, is that the lenders are restructing the company to sell it to others or to make it healthy to grow. Time will tell. Hope you secure your position during the resturcting.

Note to downsideup - You are so quiet. How do you think about the development of CPI? It looks to me that the lenders and CPI may not file a BK nor go through a complete liquidation yet. How do you think?

Very interesting process. If the business halt (like stop taking photos, etc.) is limited in your area, I still believe that a BK may not be part of the big plan. However, the busnitess halt is for the entire regions, then I think it is over. Do you know anything about whether the halt is limited for certain regions?

I don't know how many total district managers in the CPI company, but, if 50 or so fired mangers are about 50% of the total managers at CPI, then I can guess that a half of the company will be sold to other company or investors??? It is like CPI purchased studios at Wal-Mart a few years ago, and now it is selling some studios (like the studios at Wal-Mart or the studios at Sears) back to others. But, what do I know??? Our expert, downsideup, can shed a light on this along with Form 8-K filed by CPI today.

By reading your post and today's Form 8-K filed about a Forbearance Agreement, it seems that a BK may not be in the hidden cards. I don't know what plans the lenders and CPI have, but I am carefully watch and would be ready to buy shares next week if a clearer and better plan is announced. Who knows $0.06 per share may become $0.60, and $0.60 may become $6.00 later.

Based on the today's CPIC announcement, I think your prediction (in your message dated on 10/17/12) would be right. By coming February or March, the creditors may own this company through an orderly liquidation. But, as you suspected, if the creditors will suddenly discover that there is indeed considerable value left in the company they own, which only needs a bit of new $ to enable them to get back to promoting the business properly, the share price may start to go higher? How do you think? If that plan is possible and feasible, isn’t it a good time to accumulate shares at this low price? I am ready to buy these cheap shares, unless the creditors’ plan to completely cancel the shares as part of their liquidation process.

Good points!! But, my curiosity always has been why not these stupid Board of Directors including the Chairman do not declare/file a BK to protect the company and the shareholders? Are there any incentives for not doing so? Otherwise, they could be sued and may go to jails. How do you think?

In any events, have a Happy Thanksgiving!!

How do you like the new Amendment? It reads:

"CPI Corp. (the "Company") entered into the Fourth Amendment to Credit Agreement (the "Amendment") with Bank of America, N.A., as Administrative Agent for the various financial institution parties identified as Lenders in the Credit Agreement, dated as of November 9, 2012 . The Amendment increases the "Revolving Commitment", as defined in Section 1.1 of the Credit Agreement, to $91,200,000 from November 13, 2012 to and including November 20, 2012. By its terms, the Amendment was effective upon delivery of signature from all of the parties. The final signature was delivered on November 20, 2012. The foregoing summary of the Amendment is not complete and is qualified in its entirety by a copy of the Amendment filed as Exhibit 10.1 to this Form 8-K, which exhibit is incorporated by reference to this Item 1.01."

Does the total debt become from $76.2M to $91M, which is about $14.8M more? Will it be used as a cash flow? Does that mean no more BK issue with CPIC???

Thanks. I konw you linked the article, but I din't know about the implication of "write offs" and asked about it. Basically, my question was: is it good or bad good? And is it a right action and is on a right track to do?

Gee, anotehr question is how CPIC going to pay off $153 million liabilities without making any profit?

Can you explain "...$22 million in write offs ..." with some examples? What is the definition of "write offs"? Thanks.

Frankly, it is a bit surprise that you didn't expect to see a lease back arrangement after the sale.

You have a good story, but I am wondering life is that much simple. If there are bond holders, I am sure they like to get some pies form CPI, and they wouldn't let it go that much easily. If there is no fomal BK, that could mean CPI shares can be survived? Time will tell.

With respect to the statement, "In addition, under the Forbearance Agreement, the Company agreed to use commercially reasonable efforts to deliver collateral assignments to the Lenders of its agreements with its host stores", I wonder what that means?

Why forebearance only through July 21, 2012??? Does that mean the lenders just want to see the result of 2nd QTR of 2012? Or is there any potential sale of CPI by then??? Very curious and interesting.

How do you like this?

"Entry into a Material Definitive Agreement, Triggering Events That Accelerate or Increase"

http://biz.yahoo.com/e/120530/cpic.pk8-k.html

Your analyses make good points. Particularly, your point of CPI's adopted leveraged model is a good one. Hope the market supports it, so that CPI can generates cash and profits. Since it has closed more than 500 stores, and is still laying off the middle managers (field managers), it may be able to generate some profits in the coming quaters. Time will tell. The bottom line is that it is a much more responsible and better way than a irresponsible BK.

By the way, do you know who are the bond holders of CPI? And do you know what is the symbol is being used for bond trades of CPI in FNRA? TIA.

The data shows that all institutions are completely out:

http://www.nasdaq.com/symbol/cpic/institutional-holdings?page=3

I am wondering who bought and are holding 7 million shares? Insiders??? Or debt holders??? I am very curious.

Downsideup,

It looks that most of the institution holders have sold CPIC common stocks, and they are gone.

http://www.nasdaq.com/symbol/cpic/institutional-holdings

My question is: Did they sell them because CPIC is in a OTC Pink market and/or a BK is approaching?

Then, my another question is who have been buying and/or accumulating those about 7 million shares? Just retailers or day-traders???

Thanks, Downsideup. It is always good to read your write-ups and and share your thoughts. I could have sent you a private mail, so that we could have more frank conversations, but I recently cancelled my i-Hub subsctiption to save a few bucks. :)

Wish you the best luck in your investment!!

Traders [day-traders(?) who were looking for a big jump for good financial news] are dumping at $0.701, but other traders [Big Fishes(?)] keep buying/accumulating the shares without price drops. That is quite interesting. Well, after all, it is still less than 50,000 shares of BUY/SELL, which is meaningless.

Thank you for your time and sharing your thoughts. And it is always pleasure to read your write-ups.

Some of your arguments make good sense, and I am with you. But, I still don't understand one big thing, that is "what is going on the behind scene?”.

Perhaps CPI is trying to please the lenders and is coopering with them, but, same time, it is playing a hard ball with them by making a large net loss for the fiscal year ended, which included significant impairment, restructuring and other related expenses. Same time, CPI makes a smaller asset, so that it puts the lenders at the corner (indirect indication of threat of a BK?).

Same time, we do see someone is (are) accumulating CPI stocks around $0.7 to $1.00 (while others are dumping by big fishes??? or small day-traders???)). In addition, the lenders could have unplugged and cut off the line this week, so CPI would have defaulted. But, rather, we witnessed that the lenders are still silent, and CPI filed 8K this week, which was unpredictable by common sense people like me. I feel like there is a big "plan" going on, but I just cannot guess anything. Since you are in a financial market and may have some experience in this area, share your thoughts with us on these issues when you have a time and a chance. Thanks.

Thanks. I don't know the chart stuffs, but I agree with you that it would be meaningless to read something out of such a small volume trade.

I don't know how to read stock charts. How do you read the CPI chart now? Is it looking stronger each day and weekly pincher starting to open up again? Thanks.

One of the good news is that the 2011 adjusted EBITDA 2011 is still positive. ($14.0 million). It is lower than 2010 EBITDA of $41.5 million, but considering the fact that CPI has closed about 480 unprofitable stores this year, the 2012 EBITDA should be better than $14.0 million.

Tomorrow is the day. Can CPI Co. renegotiate the terms of the credit facility or obtain a waiver of the covenant? Or can it obtain a waiver, refinance or replace the loan? It is very curious.

I could be wrong, but it would be a pretty much non-event, and just paper work is remained. My guess is that the announcement of additional closing stores made on April 9 was part of financial negotiation. It is interesting to see how it will be unfold, and time will tell. By the way, $107M revenue in Q4 is better than expected, which is good by all means.

Thanks for sharing your thoughts. Always enjoy to read your write-ups.

So, given two extreme scenarios, Best (B) and Worst (W) cases, is it 60-40, 50-50 or 40-60? Based on my reading, I predict a chance of 60(B)-40(W).

downsideup,

What is your reading of the today's SEC filing? Damn, it is not easy for me to understand. Is it going to be able to refinance? What about all those write-offs and tax stuffs that Dale Heins is talking about in the filing? Are they all good for a refinance or not? It sounds that the filing date of May 4 is somewhat determined, which may indicate that there is no BK filing. How do you think?

I am concerned about whether CPIC is going to refinance or replace its indebtedness. Hope it is going to.

http://www.sec.gov/Archives/edgar/data/25354/000002535412000018/a12b-25for10xkfy2011.htm

Friends,

I just let you know that I just got the distributions on my TD Ameritrade account. However, my accounts at E-Trade and Scott Trade do not show any distributions yet. Those additional distributions are better than nothing, but still feel bad about the BK process we went through. Wish you all the best luck!!

Thanks for sharing the information.

Yeap, the profit is the bottom line. And I think the decision was a good move, and CPI is in a right direction. Again, if CPI shows financial stability and business profit, we will be up beyond $12.00.

I am looking for a 200-days moving average PPS, which is about $12.75. I know it is too early to expect, but it is possible once CPI shows financial stability and business profit.

Yes, indeed. CPI had spent about $6 to 7 million dollars for dividends during the last one year(4 quters). Now that aomunt will be saved, and it will help the CPI's financial stability.

If CPI gets a new financial arrangement, I can see it goes beyond $2 easily. I searched all over places regarding any news about CPI's effort on financial arrangement, but nothing has been found. Hope Chairman (David M. Meyer) and CEO (James J. Abel) come up with a new arrangement soon.

Thanks for your DD. It is definitely a positive sign. Great work!!

Once CPIC secures a good financial arrangement, we will be in a good shape. Smooth saling from there on!!

Do your DD, rather than speculation. Keep counting. Who knows you may have your day. Wish you a luck!!