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Durarock Resources Homepage:
http://www.durarockresources.com/Index.html
Durarock Resources Investor Summary:
http://www.durarockresources.com/Investor/Summary.pdf
Nice summary. Keep up the good work.
DIMEQ Warrant Summary Updated 05.16.10
http://www.scribd.com/full/31453669?access_key=key-18wspnc6xjee400t0e6o
Will try to update further when we get a response from WMI and certainly if we get information coming out of the May 19, 2010 pretrial conference.
DIMEQ Warrant Summary Updated 05/16/2010
http://www.scribd.com/full/31453669?access_key=key-18wspnc6xjee400t0e6o
Chemtura Submits April 2010 Monthly Operating Report
Chemtura Corp released their April 2010 Monthly Operating report (MOR) today. The Debtors in Posession reported an operating loss of $6 million, a net loss of $11 million and EBITDA of $9 million, net of one-time charges. The EBITDA does not consider the effects of the operations of the non-debtor subs which are not consolidated in a court filed MOR. The “investment in sub” asset account decreased by $18 million while the net income of the subs attributable to the parent shown in the “equity in earnings of sub” account came in at a positive $10 million for the month.
The debtors reported a net increase in the “Liabilities Subject to Compromise” of $127 million which was largely attributable to increases in expected allowable tort and environmental claims. The Debtors also reported shareholder’s deficit of $41 million down $167 million from the $126 million in positive shareholder equity reflected in the March 2010 MOR.
http://chemturaresearch.blogspot.com/2010/05/chemtura-submits-april-2010-mor.html
I agree. We have too many unknowns to arrive at a precise value. I just wanted to bring the footnotes to everyone's attention as it does represent another datapoint we can use to determine the value of our LTWs. In the footnotes they did use the terms "in an amount not less than" so that is likely a conservative estimate.
Be on the lookout for WMI's response to Broadbill's complaint. WMI has until tomorrow to respond. The contents of their response will be another side of the story that we can use to assess what we are up against. The first step is to get ourselves entrenched as a WMI claimant, in which case it would appear that we would have a good shot at a full recovery. Failing that, we could pursue JPM.
The simple version I like to use to explain the fiduciary duty that WMI had and JPM now has as successor is that if someone is appointed as a trustee to oversee and administer the proceeds of a trust to a beneficiary they will receive some sort of fee. in this case it is ostensibly the 15% of the 85/15 split. If that trustee voluntarily or necessarily appoints a successor trustee, then the newly appointed successor has no right to take the entire proceeds of the trust from the beneficiary, no matter what the prior trustee might have promised them. When WMI transferred the 100% proceeds of the litigation to JPM it conveyed a right it did not enjoy as prior trustee and that is the 85% portion. If we had to pursue JPM then justice would dictate that JPM pays us in JPM stock and if they don't like it they can sue the FDIC and WMI to file a claim against the WMI estate or the FDIC receivership if they want to claim they are due 100% because someone told them they were getting it. JPM was given something that did not belong to the entity that conveyed it to them. Its as simple as that. Period.
The only thing that gives me pause is that this WMI bankruptcy is one of the most complicated cases in our nations history. There are a lot of injustices that have occurred and will continue to occur. I am betting that the DIMEQ situation is not one of them. I think Broadbill prevails and we benefit alongside of them.
Based on footnote #2 on page 1 of the objection by NCP and Blackwell they estimate their claims to be about $2 per warrant when they state the following:
"Nantahala Capital Partners, LP (“NCP”) owns approximately 1,285,304 LTWs, and Blackwell Partners, LP (“Blackwell”) owns approximately 1,952,500 LTWs. Claimants estimate their claims will be in an amount not less than $2,500,000 for NCP and $4,000,000 for Blackwell."
I think there are only two reasons why someone would pay $130 for bonds that are worth $120 to $125 depending on emergence date and pendency interest rate. It is either a hedge against an equity position or the bonds are worth much more than $120 or even $130 in an equity cramdown.
If bondholders keep bidding it up they will make our case for us. If "takeout" language starts to surface, they won't trade at $130 any longer. There is much more value right now on the equity side in a bond take-out. In a cramdown/theft/value-suppression scenario, the bonds soar to near or even above $200 given the $400+ Million of back-end equity that exists. The purchasers for value at $130 are trying to get ahead of that trade and in so doing are tipping their hand. In one of CRT Capitals write-us on the bonds they assigned a value to the bonds of 193% when participating in the bondholder's rights offering assuming no equity recovery. I think the landscape for equity recovery has changed dramatically since that time.
I believe the equity is worth as is stated in the valuation portion of the letter. If I didn't, I wouldn't have posted it or I would have provided some disclaimer. I see value in excess of $10 per share using the most ridiculously conservative multiples. The trick here is to unlock that value. That is why we have the equity committee and their financial advisors, Eureka Capital. They should be going out into the financial marketplace to look for a sponsor to backstop a rights offering or other source of funds to contribute to the reorg effort. One of the members of our equity committee runs an organization that specializes in DIP financing and emergence financing and he is a shareholder alongside of us. I believe he is the second largest shareholder. We are in good hands.
I made a couple of posts recently (linked below) on this board regarding MESAQ but they are not necessarily the type that would be welcome on a long-only message board. I haven't looked at their docket recently but I do follow the daily price/volume action with great interest. The stock price has crashed through all key moving average support levels and even the $0.07 level where it formed a brief base in early March. There isn't much of any support on the chart until it retraces to the $0.04 to $0.05 level where the bulls should recapture the momentum if history is any guide. Right now, the stock needs some good news on the fundamental side. The stock still has time value and the Delta lawsuit as potential catalysts. The key issues to watch for on the risk side are the sizes of the lease rejection claims.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49001457&txt2find=mesaq
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49002084&txt2find=mesaq
Interesting. Nice post and link, thanks for sharing.
I saw the DDI write-up and considered the potential for an equity recovery for VSTNQ. The inescapable reality of the situation is that equity must bring enough cash to the table to make up the equity deficiency and satisfy all of the creditors. This amount will be well in excess of the $1.25 BILLION that the Bondholders will have to commit because for equity to recover they would have to make the general unsecureds whole. The best plan on the table right now calls for a 50% haircut for the general unsecureds.
Time is of the essence for equity because there are 2 plans on the table that zero them out. Whether right or wrong, makes no difference. The path of least resistance is cancellation of VSTNQ equity interests because they have no voice. I acknowledge that they are trying to get a voice and we shall see how that turns out come Wednesday. If the EC motion is denied then the time value built in to the current equity price will evaporate. Smart money with eyes and ears in the courtroom will recognize this and head for the exits, post haste. Those who have been through this process, know this all too well.
To my knowledge, no equity constituency has ever had a meaningful recovery without an equity committee. If VSTNQ gets one on Wednesday, they have a fighting chance and I would not want to be caught in a short position. If not, then all of the table pounding and handwringing becomes noise. Cash is king in a reorg situation, those bringing it to the table will enjoy the spoils, no matter who they belong to.
TRXAQ: Blogpost Regarding Tronox Valuation
http://tronoxequity.blogspot.com/2010/05/tronox-valuation-letter.html
Tronox Valuation Letter
http://tronoxequity.blogspot.com/2010/05/tronox-valuation-letter.html
As an example of what it looks like when a "group" fails to comply with 2019(a) see the following order by Judge Gerber, in re Chemtura et al:
http://www.kccllc.net/documents/0911233/0911233090429000000000019.pdf
VSTNQ: Currently, there are several motions on the table that might be of interest to some.
There is a motion for an official equity committee brought by a group called "Various Shareholders" who are represented by Bayard, P.A. This motion will be heard on May 12, 2010. They properly requested a committee through the trustee's office but were denied. Now they seek to bring the issue before the Judge.
There are also motions to both appoint an examiner and to terminate exclusivity brought by the "Ad Hoc Equity Committee" represented by Buchanan,Ingersol & Rooney and Dewey & Leboeuf.
In searching through the docket, I cannot find where these groups have filed the requisite 2019(a) statements to the court. As such, their motions could/should be denied on their face because they all lack standing (as a group) to even bring a motion before the court. They're all spending a lot of money only to be booted on a technicality.
Let's play devils advocate. If I am one of the parties opposing these equity groups, I let them put all their cards on the table so I see what they have up their sleeve and then if it looks like they are about to prevail I play the ultimate trump card which is the 2019(a) requirement. When/if the facts reflect that they purchased their stake in the low pennies, then I paint them as money hungry vultures attempting to hijack the reorganization process.
The lesson learned here is to follow proper procedure so that you don't give your opposition additional rope to hang you with. As an equity constituency in a bankruptcy process, the deck is stacked against you from the beginning. One need only look to the very recent RGCIQ and SIXFQ cases to see where procedural gaffes by Resilient Capital buried what might have otherwise been salient arguments.
I know the numbers are looking appreciably better but the plans of reorg that are on the table call for bondholders to supply $1 billion to $1.25 million in fresh capital. I doubt very seriously that equity holders as a group would be able to backstop that type of offering. If equity were to have any recovery, they would have to make all creditors whole which is something that neither proposed plan currently provides, despite the large required cash infusion.
It looks like the recent spike in price of the equity is nothing more than rank speculation mixed with a healthy dose of irrational exuberance. The problem with an equity recovery in a company with a lot of debt and no equity (-$400 million for Visteon) is that it takes a mountain of cash to make everyone above you whole. The notion that equityholders could walk in and pay pennies on the dollar for their claims, make no capital contributions to the reorg effort and receive any recovery when creditors are not being paid in-full defies all logic. Whomever is bidding the equity up like that is not paying attention to recent court decisions of similarly situated (and more favorably situated) companies and is ignoring the shifting market conditions. VSTNQ holders are too far out of the money for the stock to trade where it does.
Here is a link to a very recent article that touches on VSTNQ:
http://www.businessweek.com/news/2010-05-07/visteon-general-growth-abitibi-lehman-bankruptcy-update1-.html
GGP: Judge clears General Growth bankruptcy exit plan
LOS ANGELES (AP) -- Simon Property Group Inc. on Friday withdrew its $6.5 billion bid to acquire rival shopping mall owner General Growth Properties Inc., following a bankruptcy court ruling that Simon said would have made the deal too expensive.
The move ends a monthslong campaign by the nation's largest shopping mall owner to take over its closest competitor. It was an unlikely bidding war for a company that just over a year ago had the dubious honor of being the biggest real estate bankruptcy case in U.S. history.
The plan approved by U.S. Bankruptcy Court Judge Allan Gropper in New York would enable General Growth to emerge from Chapter 11 bankruptcy protection as a standalone company. Under the plan, General Growth would receive $6.5 billion from an investor group led by Canadian property manager Brookfield Asset Management Inc.
But the deal also included a provision that would give the Brookfield consortium stock warrants worth potentially more than $500 million if General Growth went with another bidder.
Simon Property said that would make any acquisition too costly, and abandoned its latest offer Thursday of $6.5 billion, or $20 a share. That offer had topped one for $18.25 a share just days earlier.
"We cannot reach a mutually beneficial transaction," Simon Property Group Chairman and CEO David Simon said Friday.
He also blasted the General Growth board of directors, saying it "hastily decided in less than 24 hours to accept substantially less value."
Simon said the Brookfield-led deal values General Growth at least $5 a share less than its own offer when one accounts for the warrants.
General Growth didn't immediately comment on Simon's decision to withdraw its takeover bid.
CEO Adam Metz said late Friday the Brookfield-led plan serves as an "insurance policy" for General Growth because it gives the company the funds it needs to exit bankruptcy while at the same time allowing it to pursue other potential offers.
The company said it will continue to consider offers between now and early July, when it intends to select the best plan to emerge from bankruptcy.
Simon is the largest U.S. shopping mall owner. It popularized the lifestyle center mall design that turned malls into neighborhood-like communities. It owns more than 380 properties, including the Houston Galleria and the Fashion Valley Mall in San Diego.
Chicago-based General Growth is the nation's second-largest mall operator with more than 200 centers in 43 states, including Faneuil Hall in Boston, the Glendale Galleria in Southern California and the South Street Seaport in Manhattan.
The company seized on cheap lending to bankroll acquisitions at the height of the real estate boom, but racked up $27 billion in debt by the time it sought bankruptcy protection in April 2009.
It has since restructured nearly all of its secured debt and is now in a position to emerge from bankruptcy and pay off creditors in full.
Under terms of Friday's deal, General Growth would exit bankruptcy as two separate companies. The new General Growth Properties would own traditional shopping mall properties. The second company, called General Growth Opportunities, would own a diverse asset portfolio.
In addition to Brookfield, the main financial backers include Fairholme Capital Management and Pershing Square Capital Management Inc. Fairholme is one of General Growth's largest unsecured creditors, while Pershing Square is one of its largest shareholders.
General Growth shares tumbled $1.77, or more than 11 percent, to $14.07 on Friday. The stock added 3 cents in aftermarket trading.
On Friday, shares in Simon Property added 80 cents to $85.68, while shares in Brookfield rose 95 cents, or nearly 4 percent, to $24.76.
http://finance.yahoo.com/news/Judge-clears-General-Growth-apf-3148985938.html?x=0&sec=topStories&pos=1&asset=&ccode=
Chemtura Reports 2010 First Quarter Results
http://chemturaresearch.blogspot.com/2010/05/chemtura-reports-2010-first-quarter.html
For the first quarter of 2010, the Company recorded net loss from continuing operations on a GAAP basis of $177 million, or $0.73 per share, and net earnings on a managed basis of $1 million, or $0.01 per share. The $603 million in sales represented 30% top-line growth YOY and the $16 million operating profit on a managed basis represented a $31 million change YOY. EBITDA came in at $49 million on a GAAP basis and $54 million on a managed basis.
Substantially all ($136 million) of the $139 million in YOY sales growth came from increased volume and the other $3 million resulted from the net of price changes and currency translation adjustments. The biggest boost to the rise in sales resulted from the Industrial Performance and Industrial Engineered business segments which experienced sales increases of 39% and 54% respectively. $122 million of the $177 million net loss came from changes in estimates related to expected allowable claims.
The release of the statement of financial position and results of operations as of and for the 3 months ended March 31, 2010 showing an increase in estimated claims of $122 million (some of which may be offset by insurance coverage) comes as a bit of a surprise since it is a break from prior estimations and disclosures within previously filed SEC statements.
Some key dates to be aware of going forward include June 11, 2010 which is the date that the exclusivity period lapses and July 19, 2010 which is the date that a hearing will be held for estimation of the Diacetyl claims.
See the link below for the full release.
http://phoenix.corporate-ir.net/phoenix.zhtml?c=68079&p=irol-newsArticle&ID=1424309&highlight=
Jax, how did you guess? You just blew my cover. Lol.
I've experienced the same issues in buying Tronox over past 2 days, slow fills at the ask.
I had a limit order in to unwind the GGP buy/write for a nice profit yesterday but missed the spread by $0.05. It was in the money by a good margin yesterday. Looks like I will have to be content with my original plan. Also looks like the call options have a good shot of expiring worthless so we may get to keep the stock at our low cost basis.
Very interesting. Thanks for the link.
I will be watching it but first I need to get a handle on the lease rejections and the viability of the product going forward in order to put any real capital to work. Anything is good for a bounce at the right prices though. It is showing some strength in the current range but I am a very patient buyer. If I miss the run I will console myself by adding more Tronox ;)
Correct. Based on the financial position of the company and the results of operations as per the SEC filings in addition to the pricing of the bonds and the equity, any effort to form an equity committee will meet stiff headwinds. At this point in the case, an EC movant would have to prove that a "substantial recovery" is in the offing. I just don't see it happening.
I have not done any work on MMPIQ.
April Monthly Share Volume Reports:
TRXAQ:
http://www.otcbb.com/asp/tradeact_mv.asp?SearchBy=issue&Issue=trxaq&SortBy=volume&Month=4-1-2010&IMAGE1.x=9&IMAGE1.y=5
Look at BTIG, SBSH, FBCO, CANT, STXG. The volume of trades through these market makers in April represents all or substantially all of their Year to Date volume.
TRXBQ:
http://www.otcbb.com/asp/tradeact_mv.asp?SearchBy=issue&Issue=TRXBQ&SortBy=volume&Month=4-1-2010&IMAGE1.x=28&IMAGE1.y=5
Same scenario here for SBSH and CANT
TRXAQ: bonds trading over $130. In case anyone is scoring along at home, that's quite a bit more than par plus accrued; even in the most generous of circumstances.
Link to FGOCQ March 2010 MOR
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49694009
FGOCQ March 2010 MOR is out.
The March MOR shows assets of $105 Million and liabilities of $32 million leaving equity of $73 million. While I am not typically a proponent of looking at balance sheets on MORs I make an exception here for 2 reasons. First, it is all we have to go on and second, this one is allegedly prepared based on market value of assets and debt. The largest asset is leasehold improvements of $86 million valued based on discounted cash flows of ore deposits. We are not given any info on the discount rate or the number of years the DCF was based on. The largest liability is secured claims of $20 million.
The unrestricted cash as of March 31, 2010 was only $6,000 with restricted cash of $2.85 million. They had negative cash flow for the month of $43,000. Net loss for the period was just north of $1 million. The largest expense groups were Interest of $570k, Officer Compensation of $150k and depreciation of 220k. I am fascinated by the $73 million equity number in light of the “I declare under penalty of perjury…” statement resting just above the preparer’s signature.
It will be interesting to see what the reconstituted balance sheet looks like when the secured parties take their property back. This one is very tough to value. I try to take clues from all different types of data points, including the volume that the stock trades. I find it interesting that this stock has not had a true capitulation where massive blocks of the equity turn over. Last week we had a 14 million and a 7 million volume day following the announcement that the secured lenders would be reclaiming their assets, but the total of those 2 days only represents just north of 10% of the o/s. Leaves me wondering whether those holding the stock know something that keeps them from selling or whether it possibly signals that the amount received from the sale would be insignificant to them.
Link to MOR:
http://www.scribd.com/doc/30832353
Tronox Blog post re: Settlement with DOE
Tronox Reaches Settlement with the DOE on Kress Creek Properties
http://tronoxequity.blogspot.com/2010/04/tronox-reaches-settlement-with-doe-on.html
According to an April 30, 2010 bankruptcy court filing, Tronox is seeking approval of a Settlement Agreement with the United States regarding the scope of remediation work at certain sites in and around West Chicago, Illinois. In addition, it also seeks to end a longstanding dispute over Tronox’s right to reimbursement from the Department of Energy (DOE) for past remediation expenditures at the West Chicago sites. Under the terms of the proposed Settlement Agreement, the United States will release into an escrow account, over $25 million in past due reimbursement for remediation costs incurred by Tronox at the West Chicago sites prior to 2009. These funds had been placed on administrative hold by the DOE because it had taken the stance that it could setoff the $25 million against the pre-petition amounts owed them by Tronox.
In short, under the terms of the settlement, Tronox gains access to a pool of funds it was uncertain to receive that are now available to cover costs it is required to incur in the immediate term. The settlement allows the Company to continue required remediation efforts without impairing its liquidity position or impacting upon its working capital.
Also as part of the settlement, the United States has directed Tronox to begin costly remediation work at the West Chicago sites. Under the terms, Tronox would undertake remediation efforts without any guarantee of DOE reimbursement for past or future work at the sites.
Any part of the $25 million remaining in the escrow account following Tronox’s emergence from bankruptcy will be turned over to a trust, to be formed pursuant to Tronox’s plan of reorganization, which will perform, manage and implement remediation activities at the West Chicago sites going forward. Tronox will also transfer to that trust all right, title and interest in any future DOE reimbursements to which Tronox may be entitled for remediation work performed at the West Chicago sites during and after 2009, including pursuant to the Settlement Agreement.
According to the related court filing (linked below) the bankruptcy plan term sheet calls for Tronox to contribute $115 million to certain custodial trusts, which will be allocated by the United States to fund urgent remediation at sites across the country. The $25 million obtained through the above referenced Settlement Agreement is supplemental and will not reduce the $115 million allocable to the custodial trusts pursuant to the plan term sheet.
Link to related court filing:
http://www.kccllc.net/documents/0910156/0910156100430000000000005.pdf
Tronox Reaches Settlement with the DOE on Kress Creek Properties
http://tronoxequity.blogspot.com/2010/04/tronox-reaches-settlement-with-doe-on.html
According to an April 30, 2010 bankruptcy court filing, Tronox is seeking approval of a Settlement Agreement with the United States regarding the scope of remediation work at certain sites in and around West Chicago, Illinois. In addition, it also seeks to end a longstanding dispute over Tronox’s right to reimbursement from the Department of Energy (DOE) for past remediation expenditures at the West Chicago sites. Under the terms of the proposed Settlement Agreement, the United States will release into an escrow account, over $25 million in past due reimbursement for remediation costs incurred by Tronox at the West Chicago sites prior to 2009. These funds had been placed on administrative hold by the DOE because it had taken the stance that it could setoff the $25 million against the pre-petition amounts owed them by Tronox.
In short, under the terms of the settlement, Tronox gains access to a pool of funds it was uncertain to receive that are now available to cover costs it is required to incur in the immediate term. The settlement allows the Company to continue required remediation efforts without impairing its liquidity position or impacting upon its working capital.
Also as part of the settlement, the United States has directed Tronox to begin costly remediation work at the West Chicago sites. Under the terms, Tronox would undertake remediation efforts without any guarantee of DOE reimbursement for past or future work at the sites.
Any part of the $25 million remaining in the escrow account following Tronox’s emergence from bankruptcy will be turned over to a trust, to be formed pursuant to Tronox’s plan of reorganization, which will perform, manage and implement remediation activities at the West Chicago sites going forward. Tronox will also transfer to that trust all right, title and interest in any future DOE reimbursements to which Tronox may be entitled for remediation work performed at the West Chicago sites during and after 2009, including pursuant to the Settlement Agreement.
According to the related court filing (linked below) the bankruptcy plan term sheet calls for Tronox to contribute $115 million to certain custodial trusts, which will be allocated by the United States to fund urgent remediation at sites across the country. The $25 million obtained through the above referenced Settlement Agreement is supplemental and will not reduce the $115 million allocable to the custodial trusts pursuant to the plan term sheet.
Link to related court filing:
http://www.kccllc.net/documents/0910156/0910156100430000000000005.pdf
SEC Attorney: Scrutiny Of Chapter 11 Cases Increasing
The U.S. Securities and Exchange Commission is taking a closer look at Chapter 11 cases and the restructuring plans that emerge from them, the agency’s chief bankruptcy counsel said Friday.
The SEC has traditionally looked at issues of corporate fraud and proper disclosure in bankruptcy cases, but it’s now forced to take a wider view in light of historic Chapter 11 filings such as those of General Motors and Lehman Brothers, SEC attorney Alistaire Bambach said at the American Bankruptcy Institute’s spring meeting outside Washington, D.C.
“Dealing with the era of too big to fail and bailouts, we spend more time reviewing plan proposals than we ever had in the recent past,” she said “You might not see us, but we are in there longer than you might expect.”
Bambach cautioned that she was speaking for herself and not necessarily representing the agency’s views.
Fast-moving Chapter 11 sales are of particular concern to the SEC, she said. In the past six months, three of the four companies that were publicly traded when they entered Chapter 11 exited by means of a sale rather than a traditional plan process, Bambach said.
Economic conditions often necessitate quick sales, but protecting creditors’ and investors’ rights must also be on the mind of regulators, she said.
“You want to make sure the ability for other parties to bid and the ability to generate value is not destroyed,” Bambach said.
From an enforcement prospective, Bambach said the SEC is carefully looking at unsecured creditors committees. She said the agency is currently prosecuting a case in which an unsecured creditor allegedly made trades based on information obtained from his position on the committee.
“The danger of potential insider trading is something we are very conscious of in these cases,” Bambach said.
http://blogs.wsj.com/bankruptcy/2010/04/30/sec-attorney-scrutiny-of-chapter-11-cases-increasing/
Thanks for the response.
Article: TRONOX Achieves Stability During Insolvency Process
Here is another article from nearly 2 months ago about the german sub running at full capacity and that there is no need to rush a sale. Might have been nice for the company to let us in on the little secret.
http://www.pcimag.com/Articles/Breaking_News/BNP_GUID_9-5-2006_A_10000000000000757828
February 14, 2010
KREFELD, Germany - The titanium dioxide producer TRONOX Pigments GmbH, Uerdingen, Germany, has used the insolvency process, brought on by its March 2009 bankruptcy filing, for a strategic reorientation. According to the administrator of the company, Eberhard Stock, TRONOX will invest millions to gain access to new market segments and customer groups. “We will pay special attention to reinforcing our development efforts in order to optimize the participation in high-tech market segments, said Stock.
The company had filed for bankruptcy in March 2009 and has since continued operating successfully under administration. TRONOX Pigments GmbH, with a turnover of around EUR 120 million in 2009, currently employs around 550 people. A double-digit growth in turnover is expected for 2009.
Stock has succeeded in stabilizing the business in the 10 months since insolvency was filed. The company’s production facility is running at capacity, and 40 additional people were employed to ensure that demand can be met.
Stock intends to sell the business to a suitable investor. However, he indicated that the company has attained enough stability that it can wait until economic conditions improve before selling the business.
No apology necessary. We are all big boys and girls who make our own decisions. The catalysts were there especially the unjust enrichment of management but Resilient didn't timely file its motion to be heard at confirmation. This is the second consecutive case in which they have made huge procedural mistakes. You do not circumvent the Trustee in an original attempt to form an equity committee (as in RGCIQ) and you do not file vitally important motions "out of time" (SIXOQ).
Re: What is the difference between Tronox’s Class A (TRXAQ) and Class B (TRXBQ) common stock?
The holders of Class A common stock and Class B common stock have identical rights, except that holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to six votes per share on all matters to be voted on by stockholders.
See the third entry of the FAQ linked below
http://www.tronox.com/ir/faq_ir.htm
Thanks for the post. I haven't heard of CLSC and am not up to speed so I can't speak to the reorg value and whether there is a good trade there. If I get a chance to look into it I will post back on it, hopefully others will do the same.
Ankit, are you hearing anything on SIXOQ lately. I am long quite a bit of SIXOQ in the anticipation that at some point in time, a Judge will stand up and say no to management and directors taking a debt strapped company that they own only a very small stake in and drive it into bankruptcy and then emerging on the other side of BK as a 15% owner in a healthy, delevered company. Defies logic. At some point, someone has to step back and take a look at things and ask themselves "does this make sense".
Hopefully Judge Sontchi will be the one. I feel certain of one thing though, these clowns are lucky that they didn't draw a Judge like Robert Gerber who presides over the CEMJQ case. He holds management's feet to the fire on the issue of management incentives and compensation. I cannot imagine what would happen if CEMJQ management proposed to give themselves 15% of the company but I might invest in a plane ticket to fly to NY to watch the fireworks at that court hearing.
I don't know that Resilient will be able to convince anyone to pay SIXOQ at 100% of face but they may be successful in getting some of what management has procured for themselves. With SIXOQ trading at about one-half of 1% of face there is a lot of room to run to the upside. The drawback is that we are on a compressed time schedule. It should be interesting to watch.
GGP: I think the Brookfield offer would result in shareholders receiving $15 per share as opposed to $9. Here are a couple of related articles detailing the brookfield offer. That is why I liked selling the covered calls. Certainly there is risk that both offers could vanish under certain circumstances, but that is the risk I am willing to take. One potential outcome is that the calls will expire worthless because if the $15 per share is the only option on the table then the price will likely settle just below that dollar threshold. In that case, you keep the premium paid and you own the stock at a price well below the current market price. The reason the stock trades at a premium to the $15 offer right now is because of the possibility of better offers. this creates volatility and volatility creates higher premiums in options which in turn gives us an opportunity to put on covered call trades at a lower "net debit".
http://cincinnati.bizjournals.com/cincinnati/stories/2010/02/22/daily39.html
http://online.wsj.com/article/SB10001424052748704448304575196193338670412.html