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I was responding to a statement re: NOL's in general that I understood to be a very oversimplified notion about who and how NOL's get used. Everyone focuses on the 50% change of ownership rule which is huge because it gives the user the most advatageous use of those losses towards any future gains. There are also laws regulating how much of the NOL's are usable when the 50% rule isn't followed. They dont vanish but they do diminish.
As I said at first glance it would appear the NOL's would not be available for Tranfsform Holdco LLC...but I knew there may be ways portions of the NOL's, or maybe even the whole thing, could follow Transform Holdco LLC. I just wasnt prepared to quote book, chapter and verse on the law allowing them to use those NOL's.
This case is a very unique situation. It isnt often when the largest shareholder is also the largest secured creditor. That complicates things xfold.
Good work by the way!
No it was real money. And everything ESL did was legal..he's no retail genius but when it comes to his own money he's nobody's fool.
The thing is Sears Holdings was loaned money by the billion$...sold bonds to the tune of $900m....sold off most of their best asset brands (Craftsman, Allstate Insurance, etc. Etc) just to stay afloat. None of that worked and they finally ran out of people willing to lend them more money or extend the credit. They have gone to the well so many times and the well finally went dry.
Eddie had the right to do everything he did. And like any smart billionaire he prepared places where he would have a "soft" landing when Sears failed. It did and Eddie is none the worse.
I have no beef with Eddie. I wish Sears was back in the good old days as I remember it but things change. I think Eddie missed out on the opportunity of the century by not transitioning the Sears catalog business into what Amazon is today. There was a magnificent window of opportunity for Sears to have done that...but crystal balls are hard to find...and that's true for billionaire's as well.
NOL's cannot be "bought" and there is no "merger".
Its not like I want to see any of you holders lose. I don't. I learned this stuff the hard way just like you are about to years ago..and not just once but multiple times. It took a very smart friend who has an mba in finance and a high level of legal expertise to mentor me.
If you don't learn anything learn this: Bankruptcy is all about the creditors. Period! As an equity holder you are the guy who OWES the debts. As an equity holder when you read those legal documents you are the "Debtor". You are the guy that owes everybody money..you are not the guy that gets the spoils. Creditors have every legal advantage as they should..therefore they call the shots.
Your best bet in most bankruptcies is not to become an equity holder. When you do that you put yourself on the bottom of a very tall totem pole. If possible buy debt and become a creditor. Your odds of winning expand greatly. Buying debt isnt childs play and not all debt is "good" debt.. but when possible in a bankruptcy buy debt.
It sounds harder than it is...the key is knowing what "good" debt looks like.
Its true not ALL of the surviving Sears stores will be paying their rent to SRG. Some have long leases with other landlords typically the mall owner(s).
SRG is the company Warren Buffet recently took a stake in. Why SRG and not SHLDQ? Because that is where the real valuable assets lay. SHLDQ is an emptied out toxic shell..more than likely with NOL's...which does give it some nominal value but no where near what it trades at today. Empty shells with NOL's are a dime a dozen.
ESL doesn't have the option of "taking" any of the NOL's ...its not that simple.. and if it was I'm sure Transform Holdco LLC would be all to happy to have them.
What I'm saying is there may be some legal way I haven't seen used before that could allow him to have access to a portion of those NOL's. My gut tells me he cannot use them but the laws on NOL's are very complex.
Sears Holdings cannot "pay it back" hence the filing for bankruptcy. Yes there are other secured creditors and even a larger boatload of unsecured creditors.
What you have in this Sears bankruptcy is unique. Call it "the story of Eddie".
Eddie cannot pay Eddie ..so Eddie filed bankruptcy. No one wanted to buy Eddies' company so Eddie tried to restructure the debt he owed himself but Eddie was unsuccessful. Eddies' other creditors wanted Eddies' company to be liquidated but Eddie convinced the judge to allow an auction for the assets which would keep a few hundred stores open and thousands of people would keep their jobs. When the auction was held Eddie was the winning bidder albeit the only bidder. Eddie bought the only assets worth taking thru a private company he formed called Transform Holdco LLC. Eddie is one of the stakeholders in what will be the "new" Sears along with some other (very reluctant) secured & unsecured creditors.
The "surviving "New" Sears stores (about 400 in all) will be paying rent for their space to another company Eddie has a controlling interest in called Seritage Growth Properties (ticker: SRG) which is all to say Eddie will be paying Eddie rent for Eddies new Sears stores.
Make sense?
RE: the viability of the NOL's
Normally I could say yes or no. But NOL rules are not as black and white as its been portrayed here. Yes, the ownership change rules apply, however Sears Holdings NOL's are enormous and it may be possible that some portion of those NOL's can still be used by Transform Holdco LLC. A change in ownership doesn't "wipe out" NOL's ...it greatly diminishes them. But something is better than nothing and they were substantial.
Keep in mind NOL's are not "tax credits". Transform Holdco LLC (the new Sears) must begin to be profitable again (something Eddie Lampert has a terrible track record doing) in order to use any portion of those NOL's IF they or some portion of the NOL's do indeed go with the new company.
If the NOL's cannot be used by Transform Holdco LLC then congratulations SHLDQ shareholders own an empty toxic shell with NOL's.
Yes.
Here's a more detailed breakdown of Sears Holdings' debt: ESL affiliates are the lender on at least five issuances of Sears loans with a total outstanding balance of more than $1.5 billion. The only loans that aren't clearly held by ESL affiliates in Sears' financials are under a header called domestic credit agreement. The domestic credit agreement loans are lent by a syndicate of lenders, according to the statements, and Sears owes about $2.1 billion to that syndicate as of October. Affiliates of ESL held about $100 million of that $2.1 billion last year and were repaid $36 million when the company sold Craftsman. Overall, this brings Lampert's debt tally to just under $1.6 billion.
No. ESL was far and away the largest secured creditor. In his credit bid he also "forgave" approx $1.2 billion he previously loaned to Sears holdings.
Wrong. NOL's were not of primary importance to ESL here. Recovery of the debt he held claims on was. On a side note NOL's can be very helpful but no longer have the tax allure they once did due to changes in the law passed in 2016.
ESL did not "reorganize" nor "recapitalize" SHLDQ. There is no plan nor any tender offers for SHLDQ common equity.
I have no dog in this fight. I don't really care what happens but the info on this board has been grossly mistaken and it was time to chime in.
In a nutshell - Rather than take Sears into a ch 7 liquidation the court allowed ESL to credit bid $5.2b for the assets...which means the "old" Sears (SHLDQ) no longer has those assets. It is now essentially an empty bankrupt shell.
ESL will be holding those assets (the "new" Sears) in a private company.
SHLDQ and that private company have no relationship.
Marker:
Sears Holdings Corp. (SHLDQ)
1.01 down -0.05 (-4.72%)
Volume: 1,126,507
Marker:
Medley Capital Corp. (MCC)
$3.51 up 0.43 (13.96%)
Volume: 689,675
Marker:
Medley Capital Corp. (MCC)
$3.05 0.0 (0.00%)
Volume: 78,607
*No position..tracking only. This is the pps before the proposed merger happens.
Barring something [bad] we're not privy to yet it's impossible to know for certain why the massive drop.
Setting the possibility someone knows something we don't aside for a moment I can offer you a few thoughts to chew on. I've held this stock for 5 years and in that time I have seen wild shifts in the pps...some [shifts] were explainable. For example; losing the lawsuit with GEL for $30 million doesn't take a Harvard math genius to break it all down. And on the other side of that coin I've seen some massive jumps in pps that were completely baffling.
I've seen 400k shares trade for a nickle each ...and Ive seen BDCO hit highs approaching $10 @ share.
Such is life when you're dealing with an illiquid stock and with very few hands holding the remaining float.
The illiquid situation forces somebody wanting out to accept a ridiculousLy low pps. Some of those sales are what is known as a "negotiated transactions". For example- Im certain the guy that sold almost 400k shares in one transaction about a year ago for a paltry $21k had a pre-arranged buyer waiting in the wings.
So to sum this up...its anybodies guess as to why we're seeing what we're seeing. But I know it's not fun.
Earlier today BDCO was down a whopping 53%. Welcome to the BDCO bus. "
Marker:
Blue Dolphin Energy (BDCO)
$1.05 down -0.05 (-4.55%)
Volume: 1,62
rut-roh!
Blue Dolphin Energy (BDCO)
$1.00 down -0.38 (-27.54%)
Volume: 49,782
The EOD price drop from a new 52 week high earlier in the day was disappointing to be sure but it was the high volume attached to it that is truly alarming.
Marker:
Blue Dolphin Energy (BDCO)
$1.38 up 0.08 (6.15%)
Volume: 465
*52 week high
Marker:
General Electric Com (GE)
$9.10 up 0.2 (2.25%)
Volume: 85,419,829
I posted this recent WSJ article on another O & G stock board but it's worth sharing here too.
Saudis Plan New Export Cuts in Hopes of Lifting Oil to $80 a Barrel
Saudi Arabia to reduce crude exports by up to 800,000 barrels a day from November levels
Jan. 7, 2019 1:12 p.m. ET
Saudi Arabia is planning to cut crude exports to around 7.1 million barrels a day by the end of January in hopes of lifting oil prices above $80 a barrel, according to OPEC officials.
The new strategy comes as the kingdom seeks to cover a large government spending boost. It said last month that it planned to increase its expenditures by 7% in 2019—the equivalent of about $20 billion—as the country struggles to fund ambitious plans to diversify its economy beyond petroleum products.
Crown Prince Mohammed bin Salman, the de facto Saudi ruler, has faced a sharp decrease in oil prices since October amid a supply glut. The brutal killing of journalist Jamal Khashoggi by Saudi operatives in October has also deterred foreign companies from working in the kingdom and investing in its economic development plans.
The new Saudi budget requires oil prices to rise to as much as $95 a barrel, according to an official with the Organization of the Petroleum Exporting Countries. But the kingdom would be satisfied with prices at $80 to $85 a barrel, a range that would limit its need to dip it into its financial reserves, according to people familiar with its thinking.
To cover proposed expenditures, Riyadh is set to reduce crude exports by up to 800,000 barrels a day from November levels.
Source:
https://www.wsj.com/articles/saudis-plan-to-cut-crude-exports-to-7-1-million-barrels-a-day-say-opec-officials-11546877089
Marker:
Texas Pacific Land T (TPL)
$609.82 down -17.68 (-2.82%)
Volume: 68,952
* The price of WTI has been rising this week and currently sits at $52.06 @ bbl.
Saudis Plan New Export Cuts in Hopes of Lifting Oil to $80 a Barrel
Saudi Arabia to reduce crude exports by up to 800,000 barrels a day from November levels
Updated Jan. 7, 2019 1:12 p.m. ET
Saudi Arabia is planning to cut crude exports to around 7.1 million barrels a day by the end of January in hopes of lifting oil prices above $80 a barrel, according to OPEC officials.
The new strategy comes as the kingdom seeks to cover a large government spending boost. It said last month that it planned to increase its expenditures by 7% in 2019—the equivalent of about $20 billion—as the country struggles to fund ambitious plans to diversify its economy beyond petroleum products.
Crown Prince Mohammed bin Salman, the de facto Saudi ruler, has faced a sharp decrease in oil prices since October amid a supply glut. The brutal killing of journalist Jamal Khashoggi by Saudi operatives in October has also deterred foreign companies from working in the kingdom and investing in its economic development plans.
The new Saudi budget requires oil prices to rise to as much as $95 a barrel, according to an official with the Organization of the Petroleum Exporting Countries. But the kingdom would be satisfied with prices at $80 to $85 a barrel, a range that would limit its need to dip it into its financial reserves, according to people familiar with its thinking.
To cover proposed expenditures, Riyadh is set to reduce crude exports by up to 800,000 barrels a day from November levels.
Source:
https://www.wsj.com/articles/saudis-plan-to-cut-crude-exports-to-7-1-million-barrels-a-day-say-opec-officials-11546877089
Marker:
Hi-Crush Partners LP (HCLP)
$3.70 down -0.64 (-14.75%)
Volume: 4,149,194
*Price of WTI crude currently at $49.15 @ bbl.
Permian basin crude although arguably the best and largest resource in the US and possibly even in the world has been selling at a discount to the WTI price's we see every day. Why? They can get it out of the ground no problem but are limited because of a shortage in pipeline capacities to the refineries in south Texas or over to Cushing, OK. The pipelines (or the lack of) are a choke point and because of that Permian oil producers have to sell the oil at a discount. How much of a discount? It's gone as high as $18 @ bbl but I think currently that has been reduced to $11.
Todays price for WTI is $47.96 @ bbl which means Permian producers are only getting in the neighborhood of $36 ~ $40 @ bbl.
With prices like that nobody is calling for proppant sand. Its cheaper to drill but not frac the well. No fracking means no demand for sand no matter who is selling it.
The good news is there are a couple large pipeline projects that were started in late 2017 early 2018 that will be completed in 2019.
Marker:
Hi-Crush Partners LP (HCLP)
$3.30 down -0.29 (-8.08%)
Volume: 1,963,282
Because of the nature of their business auditing firms do have an ass covering instrument aka the engagement letter.
In your opinion would that not have been sufficient to have started the audit process long before now?
Im just thinking if auditors in general stood down every time there was the possibility that fraud may have played a role they wouldnt have jobs. UDF is a mess but its not Chernobyl. All I'm saying is surely the auditing industry has legal protections they routinely use that allow them to start their investigative work regardless of what the SEC is doing or in concert with them. In the end they actually share in the same mission.
The longer something like this gets delayed the greater risk documents get "lost"...material memories become fuzzy...God forbid principal players become ill or die. Things happen. Time is not an auditors friend.
Quickly approaching a 3 year low. Ouch!
Marker:
Hi-Crush Partners LP (HCLP)
$3.91 down -0.25 (-6.01%)
Volume: 2,955,323
* current price for wti crude $46.61 @ bbl.
The short answer for me jh is I knew of UMT but did little digging into their history/story.
I did know UMT was the entity that initiated Hayman Capitals' probe into how UDF was making sausage...which in turn was Bass' impetus to short UDF IV.
UDF IV's story is a mirror image of the UMT story in that the fall of 2015 is when the wheels began to come off and all financials stopped. UMT was publically traded. Ihub had a UMT board for a short time which is where I first saw (via an SEC filing in early 2016) that McKenzie Capital (a name familiar to UDF IV holders) had made the UMT shareholders a tender offer. (FWIW they were looking to pick up 600,000 shares of UMT for $6.50 each. I have no idea how successful they were. Greenlaw & co at that time was claiming UMT had a NAV of just over $14 ..but just like the UDF IV people had no way to judge that and my guess is some no doubt took McKenzie Capital's offer.)
This link gives some detail and also includes an entity flow chart on the UDF web of companies.
https://www.gurufocus.com/news/393515/lessons-learned-from-kyle-bass-shorting-united-development-funding
Here is a link to the now defunct UMT (fka UDMG) ihub board.
https://investorshub.advfn.com/United-Mortgage-Trust-(fka-UDMG)-27348/
* not sure how much help any of this is to our UDFI predicament jh...it hindges on nothing more than gossip really.... but it does reveal an unsettling pattern by our fearlsss leadership ":^[
Marker:
United Development F (UDFI)
3.79 up 0.04 (1.07%)
Volume: 4,598
Marker:
Phillips 66 Partners (PSXP)
$47.31 up 0.25 (0.53%)
Volume: 928,779
Enbridge buys stake in Permian, Eagle Ford pipeline
https://www.chron.com/business/energy/article/Enbridge-exercises-option-to-buy-stake-in-Permian-13464979.php
Marker:
Blue Dolphin Energy (BDCO)
$1.27 up 0.17 (15.45%)
Volume: 21,099
"Yikes" is not the word I used.. but ok.
Nothing like going over Niagra Falls in a barrel ":^[
Marker:
Hi-Crush Partners LP (HCLP)
$4.495 down -0.515 (-10.28%)
Volume: 2,386,460
Gains for all of 2018 have been wiped out in a matter of a few weeks as the year draws to an end.
SVB Financial Grp. (SIVB)
$210.9037 down -29.5263 (-12.28%)
Volume: 935,614
No..the CEO was not "adding".
The main purpose of a Form 4 is to indicate the number and how the insider either attained or disposed of those shares.
In this case the 159,574 ESL acquired were contractually "granted" according to a previous stock plan.
Voting is a privilege and a right to be taken seriously however in this case BDCO'S CEO owns 82% of the OS. Needless to say whomever he wants in office is a shoo-in.
Marker:
Blue Dolphin Energy (BDCO)
$1.12 up 0.03 (2.75%)
Volume: 2,228
Current Report Filing (8-k)
Date : 11/23/2018 @ 4:48PM
Source : Edgar (US Regulatory)
Stock : Blue Dolphin Energy Co. (QX) (BDCO)
Quote : $1.09 0.0 (0.00%) @ 8:15AM
[....]
On November 15, 2018, the Lazarus Parties and GEL entered into a Second Amendment to the Settlement Agreement (the “Second Amendment”). The Second Amendment (i) extended the Settlement Payment Deadline from December 31, 2018 to January 31, 2019 (unless extended in writing by GEL) and (ii) extended the dates for achievement of certain milestones related to the Settlement Financing.
Blue Dolphin can provide no assurance that the conditions to the consummation of the Settlement will be met. If any of the conditions are not met or the Settlement Agreement is terminated, GEL may seek to enforce the final award in the arbitration proceedings against the Lazarus Parties, in which case, Blue Dolphin and its affiliates would likely be required to seek protection under bankruptcy laws.
The foregoing description of the terms of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to the Second Amendment, which has been filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 5.02. Departure of Directors or Certain Officers
On November 23, 2018, Mr. Tommy L. Byrd notified Blue Dolphin that he intends to resign as Chief Financial Officer of Blue Dolphin, effective December 31, 2018. Blue Dolphin will conduct a search for a Chief Financial Officer and name a successor or interim Chief Financial Officer prior to Mr. Byrd’s departure.
https://ih.advfn.com/p.php?pid=nmona&article=78751774
* It always makes me nervous and highly suspicious when I see Directors and or Officers suddenly leave a financially troubled company. That goes double when it's the CFO and no explanations of why or under what circumstances the resignation was put forth. People don't just up and quit going into the Christmas Holiday season...and if it was a retirement it would have been announced with more than a month's notice to allow ample time to find a replacement. This was not at all what I was hoping to see as we approached the deadlines for the [GEL] $10M settlement solution.
Business
Texas Is About to Create OPEC's Worst Nightmare
By Javier Blas
November 21, 2018, 12:00 AM EST
· Total U.S. production rising at fastest pace in 98 years
· Pipeline bottleneck in Texas set to ease by end of 2019
[....]
“The narrative has shifted significantly,’’ said John Coleman, a Houston-based oil consultant at Wood Mackenzie Ltd. “Six months ago, the market expected the bottleneck to ease in the first quarter of 2020. Now, it expects it in the second to third quarter of 2019.’Knowing that more transportation would be available next year, Permian companies are drilling wells but, for now, aren’t fracking many of them. Those wells are becoming a reservoir of ready-to-tap production once the new pipelines -- Gray Oak, Cactus II and Epic -- come online.
“We’re going to see a re-acceleration of well completions in the Permian in the second half of 2019,’’ said Corey Prologo, head of oil trading in Houston at commodity merchant Trafigura Group Ltd. “The pipelines are going to fill up very quickly.’’
The only obstacle for another surge is export capacity, as most of the incremental output will need to ship overseas. With terminals nearly full, Permian barrels could end piling up in the ports of Corpus Christi and Houston.
Transportation Bottlenecks
Even so, few in Houston, or in Midland, Texas, the hub of the Permian region, believe that growth will be anything but gangbusters next year because of the clearing of transportation bottlenecks.
“It will be a series of events throughout 2019 that occur,’’ said Jeff Miller, chief executive officer of Halliburton Co., the world’s biggest provider of fracking services. “But it’d be easy to see, as we finish the year, things being perfectly normal.”
[....]
Source:
https://www.bloomberg.com/amp/news/articles/2018-11-21/opec-s-worst-nightmare-the-permian-is-about-to-pump-a-lot-more
Marker:
Texas Pacific Land T (TPL)
$585.6 up 24.52 (4.37%)
Volume: 8,266
I will be in the DFW area over Christmas. I may get a chance while there to take the 4 hour ride down I-45 and attend. If I do I will let the BDCO board know how it went.
Marker:
Blue Dolphin Energy (BDCO)
$1.15 up 0.1 (9.52%)
Volume: 1,664
To Our Stockholders:
Notice is hereby given that an Annual Meeting of Stockholders (the “Annual Meeting”) of Blue Dolphin Energy Company, a Delaware corporation (referred to herein as “Blue Dolphin,” “we,” “us” and “our”), will be held on Thursday, December 27, 2018 at 10:00 a.m. Central Time at Blue Dolphin’s principal office located at 801 Travis Street, 21 st Floor, Houston, Texas 77002.
[....]
http://ih.advfn.com/p.php?pid=nmona&article=78703200
Well maybe. But knowing what we know now I wouldn't be too quick to take that bet.
I think it's safe to say most guys here didn't get in this for this UDF vs Hayman Capital sideshow. They're in this because of the upside potential in the loan portfolio. Period.
The problem is its going to be a while before the financials trot out under tbe big tent and take center ring. So in the meantime the bearded lady sideshow is all we have ":¬/
This should work:
http://search.txcourts.gov/Case.aspx?cn=05-18-00752-CV&coa=coa05
Case: 05-18-00752-CV
Marker:
First Internet Banco (INBK)
$25.64 up 0.81 (3.26%)
Volume: 22,140
*After a year long slide the bank imo is once again back on the bargain rack.