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Curious to get the boards thoughts on how difficult it will be to repatriate the money into the U.S. from China. My understanding is that the assets in the U.S. are not sufficient to clear the claims hurdle so in order to get an equity recovery the company will have to repatriate the money from China to the U.S.
One of the reasons we have not been paid in full from the Trident Resources case, formerly(TRIDQ), is because a small portion of the assets are still trapped in the subsidiaries in the Cayman Islands. While there is little concern over the ability to get to that money, the timing of the wind-down and repatriation has been extremely slow, the weeks have stretched to months and the months are soon to give way to over a year after the plan confirmation waiting around to get paid from what was a simple liquidation.
Now return the discussion back to Agfeed, my question is how do you get the money out of mainland China back into the U.S? My understanding is that getting money into mainland China is not a problem but that getting the money out of China and back into the U.S. is risk factor that needs to be considered and if it is possible to repatriate the money it may be an expensive proposition that diminishes the equity recovery.
Anyone know anything that would alleviate those concerns?
Any way this issue could be addressed on this board and in the shareholder FAQ?
Here is an interesting filing. This looks like something that the DOJ's U.S. Trustee's Office would certainly be scrutinizing very closely because it falls squarely within the ambit of their jurisdiction and mandate. If this information is indeed correct, then there could be large fee disgorgements coupled with other administrative actions. The filing presents a disquieting tale about the circumstances leading to the hiring of EC counsel through what amounts to an ambulance chasing webinar which sounds more like a collection of sycophants in a boiler room than any professional presentation one might expect from a professional services firm. The filing also hints at possible fraud in the inducement stemming from comments made at this webinar. It will be interesting to see whether any response is filed.
http://bmcgroup.com/restructuring/DocView.aspx?ClientID=323&DocNumber=571&CaseNo=1-13-bk-11761
Hard to tell whether Berg is a dummy or not. In one sense he did rise to billionaire status but then pissed away hundreds and hundreds and even more hundreds of millions of dollars down the black hole that has been Valence. He purchases or exercises stock at prices near $1.00 per share and in just a few months throws the company into bankruptcy just after his close personal friend curiously purchases substantially all of the debt that he didnt already own so Berg can control the the Debtor and its Board and the Creditor's Committee and the shareholder vote. Then after all of his brilliant moves to wrest complete control of the process inside or outside of bankruptcy he learns that it was all for naught because he is going to get his clock cleaned either way by competitors with superior finances, superior business acumen and superior anatomical endowments. Now he is looking for someone to bail him out since his plan to screw everyone else has failed despite its success. A Pyrrhic Victory of sorts.
I hope that if there is an auction it is successful for the sake of the non-insider shareholders but I won't shed any tears for the billionaire.
I remain optimistic that the Global Settlement gets approved by the DOJ. The next Global Settlement conference is May 15th.
The MMs aren't up to anything other than filling customer orders. They aren't carrying this stock in their proprietary accounts so they are just matching up buyers and sellers. This theory of "MM games" that gets propagated on message boards is without merit. In fact, the only time message board posters pull out the MM games card is when the stocks are moving against them. You don't see such allegations when the stocks are running. If this stock is trending downward then it is simply because sellers outnumber buyers in terms of dollar volume.
The Global Settlement conference was moved to May 15th.
It is usually better to let them wonder whether you are vacuous than to open your mouth and remove all doubt.
Last I checked this is a CCAA proceeding which means the case has a Monitor who has a fiduciary duty to all constituencies, including shareholders. If the assets were to be sold in an amount that exceeds the aggregate of the admin claims plus pre and post-filing claims plus pendency interest applied at the statutory rate then the residual balance would be distributed pro rata to shareholders. If they get less, then shareholders get nothing and creditors take a haircut but if they get more than the outstanding claims then it would be a breach of fiduciary duty on the part of the Monitor to distribute the proceeds in any other manner. For you to suggest otherwise is tantamount to an attempt on your part to misinform the public regarding a publicly traded security.
Govern yourself accordingly.
When people intend to pvmp or pr0mote a stock then the purchases are patient, calculated and the market looks quite orderly because there's usually no hurry. When these same people sell it is impatient and indiscriminate because they need to get out before their followers and other hoopleheads catch on. This event leaves a nasty scar on the chart. Kinda like the one we appear to be receiving today.
Look at it this way, for the creditor who lent money prior to the bankruptcy the best they can hope for is to break even. And they are supposedly the smart and sophisticated ones, so myth #1 is debunked already. For our resident creditor he believes it is pie in the sky to have a shareholder recovery which is tantamount to an admission that he needs a miracle to break even as a prepetition creditor. To make himself feel better he needs to find someone lower in the priority scheme to cast fear and doubt upon. For those of us buying stock in the current context our upside has somewhat of a blue sky effect to it, at the very least we could make many multiples of the price being paid. So one set of market participants (creditors) have a long shot opportunity of simply breaking even (with almost no liquidity without taking a huge haircut) while another set (shareholders) have a long shot of making multiples of their money in a market with good liquidity relative to the size positions being placed. Which situation would you rather be in and who is kibitzing on whose message board?
And just for good measure in case someone wants to posit that Dombrowski and co will deliver this company into the hands of creditors; that may be the plan but rest assured it won't be delivered into the hands of creditors who spend time grousing on message boards, it will be into the hands of the people in the good old boy network who are invited to bring in fresh capital to inject at a discount to an already reduced valuation. Those would be the ones to benefit. Like say a York Capital on the high end or if you wanted to go lower than whale sh!t you could find a bottom feeding, scum sucking, self-dealing sycophant, fiduciary-duty breaching outfit like Strategic Value Partners, Canyon Partners, Prescott Group or Privet Fund. Hell, for that matter just bring in that fat, pink umbrella toting, pompous windbag from Lazard and get the whole band back together again.
I remember it fondly. 2008 thru 2010 and even into 2011 provided some life changing opportunities for the value investor sitting on cash. I can't wait for the next credit crisis. Good assets in the hands of poor managers or in the hands of liquidity strained managers are what you want to look for in the distressed markets. As long as they move to liquidate before the equity cushion is evaporated then there is opportunity. Just like the rest of this board I see this opportunity here and Van Eck and others are helping to keep the window open longer.
Upcoming dates:
02/21/13 - Creditor Meeting to vote on the Plan
02/25/13 - OQI expected to file Motion to approve the Plan
03/01/13 - Proposed Plan Implementation date
Awesome diligence. Thanks for your contributions to the board. Way over and above the norm. Rather than spouting mindless garbage in broken English you have provided a valuable service and tracking mechanism that can be used over and again. Boardmark for your efforts.
I hear what you're saying but going sub penny doesn't always have to mean anything when you have a forced seller with a huge inventory to unload in a bankrupt stock that is otherwise relatively illiquid and a situation that is under followed. This creates inefficiency which leads to the perfect storm for opportunity. Like I mentioned before, OBQI is a very similar example of another recent Canadian bankruptcy liquidation where price became totally dislocated from reality.
Really nice volume and price action on Oilsands Quest (OBQI). The market is finally waking up and realizing the value there. Apparently the Monitors office is telling people the distribution will be around $0.02 per share and they have historically been fairly cautious and conservative in their estimates. In prior weeks and months they were saying $0.01 so apparently there have been some favorable settlements with creditors.
That would be a good start anyway. I just can't justify buying into the teeth of a massive fund distribution no matter what I think of the value we might get at the upcoming auctions. Anyone trying to do a quick flip or p&d promotion in the midst of the 40+ million share divestiture is basically crawling around picking up nickels in front of a steamroller.
These are on the ask
MAXM - 0.0165
CSTI- 0.0165
NITE- 0.018
RAFF- 0.06
I think Captain Schettino may be about to disembark. Doesn't want to schedule a tee time with Captain Edward Smith.
You have a good point.
Well, when the tide goes out we shall see who is swimming naked. Not a sight I'd care to see in real life though.
What should we be watching for?
These situations are just ripe for the quick pump and dump where the Operating Company (Bank) is being acquired and new money is being injected into the newly acquired entity but the shares and debt were issued at the holding company and the receipt of funds by the holdco isn't enough to reach the shareholders. The headlines look real good and it is easy for the savvy pumper to confuse the unsuspecting public by twisting the wording or leaving out the important details and telling them that "our shares!!!!!! are being bought out !!!!!! Wowza!!!!!!". Then the effective date of the sale passes and the shareholder who just got duped is left wondering why they haven't yet been paid for their shares. By that time the pumper is long gone. In fact when they are telling you to back up the truck and that it is going "to da moon" they are already in the liquidation phase.
If you call or email the monitor for OBQI and ask them how much per share the shareholders will get, they say about $0.01 because they are trying to be overly cautious so as not to set high expectations. If you ask the right questions you find that the cash on hand is about $12.7 million and the allowed claims are likely less than $6 million. Doing the math leaves a recovery closer to $0.02 for OBQI. Now, if one were to have been buying when the stock was down in the $0.002 to $0.003 range one could be sitting on a recovery of 7x to 10x like I mentioned before. It doesn't matter to me how overvalued the assets were when OBQI management overstated them and ran it into the ground. What mattered to me is that when it was trading at $0.002 I could read the monitor's reports and see value in the $0.015 to $0.02 range. It now trades at about $0.01 so it is 5x where it used to trade and the information needed to make the value assessment hasn't changed in the interim. There were forced sellers that created the opportunity and it lasted and lasted and lasted because they had to work off all that inventory. It was also a BK that was and is still is way off the radar so the market was totally inefficient for months on end.
Bringing the discussion around to GBGLF so as to be on topic, I see the same possibility here where there are good assets and forced sellers. This company has great assets that are likely to be highly desirable at auction. It only takes 2 bidders to have a robust auction. One bidder can steal the assets but two or more bidders in a court supervised setting with KPMG having fiduciary duties to all parties ensures that the process will generate the most value for the assets.
MAXM backed off to $0.0288
That's what I'm saying. Why bail out Van Eck? do you guys think they would bail you out? Either way, I'm cool with it. I've picked up a few million shares since it resumed trading so if it runs then great. If it goes sub penny then great, I get to buy the stock at a ridiculously low valuation from funds who are forced sellers that have to ignore valuation because they have ownership restrictions. Same thing has happened with OBQI, another ongoing Canadian BK situation. Forced sellers sold at prices in mid to late 2012 that will be 7x to 10x below the amount that shareholders will receive from distributions.
Thanks for mentioning these. I think GBGLF and SCHS both look really interesting. I haven't done a lot of investing in Canadian bankruptcies like GBGLF but I have gotten much more comfortable in the last year because AGUNF and OBQI have both been incredible and OBQI definitely has more room to run given the Monitor's estimates of the claims numbers compared to the amount of cash remaining for distribution. That is one you might want to look at.
OBQI is a Canadian company liquidating in bankruptcy under the CCAA. They have sold all their assets at this point and should be making final creditor distributions in February and will apply to the court to make distributions to shareholders after that. The price has been going up lately after months of distribution so I guess people are starting to figure out that equity is in the money and that we are getting closer to getting our distributions. The prepetition claims vetting process is complete and the post filing claims bar date lapsed on January 11th. We should see the next Monitors report in a few weeks.
We are not likely to get any details just yet. The event today was a Conference not a hearing so I am pretty certain it was only open to counsel and to the Magistrate Judge. Since the respective counsel were supposed to submit their positions on the Global Settlement via fax by Dec. 27th as opposed to filing them on the docket, it is safe to assume that the meeting today is private. Right now all Forfeiture proceedings are stayed in the Criminal Court to allow the parties to focus their attention squarely on the Global Settlement. Why this was not done many many months ago is just beyond me. We should see a status report in about a month when the stay lapses but until then it may be all quiet unless someone files something in the criminal case making an off-hand reference to the progress of discussions. All of the other litigation stuff is stayed until the March/April timeframe so hopefully that is enough time to get this Global Settlement approved by the DOJ and put in front of all the various courts for approval.
You and Mr. Holty can feel free to email me and we can discuss this case and other litigation/liquidation cases I am following.
There hasn't been anything lately to discuss. The most exciting thing on the Evergreen Energy docket lately was an MOR that someone misfiled under the wrong case. If or when we see a 363 motion then it might get exciting. In the adversary case vs Khan, it has just been complaints, motions to dismiss, amended complaints, motion to dismiss amended complaint. One side says all these nasty things were done and the other side says it didn't happen that way, it happened some other way. Until it comes to court for an evidentiary hearing we won't know anything for sure on how the litigation will shake out.
An Unfiled Objection to the Confirmed Rancher Energy Plan
http://thediligentinvestor.blogspot.com/2012/11/an-unfiled-objection-to-confirmed.html
"At one point I had thought about objecting to the Plan of Reorganization for Rancher Energy (RNCH formerly RNCHQ) which recently emerged from bankruptcy protection. However, it just wasn’t worth the Return on Invested Brain Damage and given the market cap of the entity, the travel costs alone weren’t economically feasible. Just for fun, I put together an objection anyway and I have posted it here for the readers of this blog as a potential reference in case the situation arises in another case. I had favored the idea of a liquidation over reorganization (despite the survival of the NOLs) because the insiders will be siphoning off at least $180,000 per year in salary and board fees for a company that emerged with around $2.65 million in cash and no other assets. That cash burn doesn’t even account for bonuses which shareholders would likely have little, if any, control over. Had I known a priori that shareholders in Class 5 would ultimately vote to reject the Plan, as they did, I might have offered the following for the Court’s consideration. Leave a comment and let me know what you think: good, bad or indifferent.
If Class 5 Common Equity votes to reject the POR then the POR is unconfirmable for the following reasons..."
Follow the link above for full article.
Nice use of exclamation points, caps lock and repetitive posts. Did you perchance go to the H.T. Drought, Jr. school of pvmping.
Motion to Compel Appointment of Equity Committee has been filed. See Docket Number 208. The Motion will come before the Court on December 13th at 1:30 PM in Austin, TX.
The Trustee just formed a 7 member equity committee.
http://www.kccllc.net/documents/1236187/1236187121107000000000003.pdf
I don't believe they have filed the motion yet. The shareholders have a private board on Yahoo and they indicated that the attorney is taking names and share counts from shareholders interested in serving on any committee that may be formed. Just have to wait to see their filing. Hopefully their attorneys can put together a coherent argument to persuade the judge to direct the Office of the US Trustee to form the shareholder committee.
Once they file their motion then other shareholders should submit letters to the court supporting the idea of a shareholder committee.
There is a group of investors that are motioning the court for an Equity Committee. Their attorney filed a notice of appearance recently in rge case so I guess the buying is in response to the prospect of getting shareholder representation in the case soon. This is being discussed on a Yahoo board called Valence Complaint 2012. Historically the Texas courts have been much more likely to approve motions to direct the Office of the US Trustee to establish an equity committee.
http://finance.groups.yahoo.com/group/ValenceComplaint2012/messages
Everyone will have to draw their own conclusions and you may read the tea leaves different than I do but with respect to whether the stock will have value under the Global Settlement, consider the following:
1. Based on a reading of the fee applications in the bankruptcy court from the past year and drawing on a general knowledge of how these negotiations and settlements work, the Equity Committee was involved in the negotiations of the deal and had direct knowledge of and likely had direct input concerning the contents of the Term Sheets to the Global Settlement. The EC apparently liked the terms enough that it was ultimately a signatory to the deal. One has to assume they wouldn’t agree to a deal that was unfavorable to their constituency or one that provided no value. I speak of course to the current iteration of the Equity Committee that does not include Privet and Prescott. Under the old EC with its prior, conflicted counsel it would have been just the opposite, anything that left any value in the hands of anyone other than Privet and Prescott would have been unacceptable to them as evidenced by what transpired between December 2010 and April 2011. As it stands, the current EC and its highly competent counsel (Baker & McKenzie) understands, honors and seeks to fully discharge its fiduciary duty to its fellow shareholders.
2. Looking to the Criminal Court docket, Brooks’ ex-wife Terry has filed many papers over the last few weeks and months asserting direct claims to, among other things, the 8.26 million PBSOQ shares that she was given in the Divorce Settlement including the 6.7 million shares that were seized by the government before they could be officially transferred to her. If one goes back several years into the SEC filings one will see that she filed her last 13D on 06/26/2008 asserting ownership of over 11 million shares or 22% of the stock, including the stock she was given in the Divorce settlement. Those 6.7 million shares are the subject of much debate between Terry Brooks and the DOJ because Terry says “they’re mine” and the DOJ says “we’re liquidating them”. This matter is currently being adjudicated in the Criminal Court.
3. Terry Brooks is a signatory to the Global Settlement and ostensibly she would have direct knowledge of how much in total is to be distributed to the parties and more importantly, likely has clear knowledge of “who gets what” but certainly knows how much her end of the bargain is. Terry has repeatedly objected to the DOJ’s efforts to convert the 6.7 million PBSOQ shares into cash. It is important to note that the PBSOQ Debtors have also objected to the liquidation of certain of the seized assets. One might then ask, if the stock were to be completely worthless under the contours of the Global Settlement, why then wouldn’t she be indifferent if not altogether sanguine towards an immediate liquidation of the stock while there is some value to be had selling it into the open market? Stated another way, why pay for expensive and top notch legal counsel (the Fried, Frank law firm) to fight for something that has no value.
I am in the camp that says the stock continues to have value. In summary, my assumption is that the EC would not agree to a deal that wipes out its constituency and the Brooks family (Terry and her grown children) would not fight to retain ownership of the PBSOQ stock if it were to be somehow rendered worthless by the very Global Settlement that they are signatories to. If she is not deficient in her SEC filings, she is still a 22% owner of the stock and agreeing to a deal that wipes it all out and simultaneously fighting to keep the 6.7 million shares that the DOJ is trying to take away from her, just makes little sense if one assumes the stock has no value under the Global Settlement.
ok. Just wanted to be sure. As to your previous question about whether Compass Point was the party responsible for the destruction of shareholder value in the other case, the answer is a resounding "NO".
However, you can follow the link below to find the hedgefunds listed therein and thus narrow the list of candidates down just a bit. One of the hedgefunds listed on that document sent the other an email in which they admitted to "hijacking" the committee and in an example of sheer and utter pomposity boasted "it's what I do best". That email was uncovered by the Creditor's Committee during discovery and later attached as an exhibit to one of their publicly filed documents. Fiduciary Duty at its finest...
http://www.kccllc.net/documents/0911233/0911233091229000000000011.pdf
What other company are you referring to?
Too many unknowns to even begin putting any potential value ranges together in a public forum. We know that there is an ongoing effort to sell substantially all of the assets which hopefully yields a competitive auction process and we know that there is ongoing litigation against the former Board Chairman and his affiliated companies.
One of the defenses proffered by the Defendant is that he didn't breach his “duty of care” but even if he did, he has a contract that specifically indemnifies him from said breach. At present, we cannot know whether the Plaintiff’s arguments are meritorious but assuming arguendo, a breach occurred but the corporate documents indemnify Directors from the “Duty of Care” and this document suffices as the only remaining line of defense. This defense would be rendered nothing more than specious and threadbare and would, in effect, “miss the mark” entirely because it ignores, quite conveniently, the fact that he is also being called to answer for a breach of “Duty of Loyalty”.
Here’s what the Delaware case law says: (credit for this compilation goes to the Quinn Emmanuel lawfirm) see In re Trident Microsystems, Inc., et al 12-10069 (CSS) [Dkt. No. 866 at ¶15]
“…Although Delaware law “permits a waiver of liability for a breach of the common law duty of care that directors owe to a corporation and its stockholders by including a clear and unambiguous provision in the certificate of incorporation, it does not allow for a waiver of the directors’ duty of loyalty.” Schock v. Nash, 732 A.2d 217, 225 n. 21 (Del. 1999) (emphasis added); see also Sutherland v. Sutherland, 2009 Del. Ch. LEXIS 46 (Del. Ch. Mar. 23, 2009) (holding that an exculpatory charter provision that would treat interested directors as disinterested for purposes of approving corporate transactions would be “expressly forbidden by the DGCL [and] would therefore be void as ‘contrary to the laws of this State’ and against public policy”); Sample v. Morgan, 914 A.2d 647, 664 (Del. Ch. 2007) (rejecting directors’ argument that by approving the charter amendment and incentive plan, stockholders ratified any future action by the board, as long as that action was compliant with the literal terms of the contracts, noting that stockholders “can entrust directors with broad legal authority precisely because they know that the authority must be exercised consistently with equitable principles of fiduciary duty”). Cf. Brown v. Calamos, 664 F.3d 123, 126-27 (7th Cir. 2011) (“These disclosures would be ineffectual against a claim of breach of the duty of loyalty because that duty is not dissolved by disclosure (‘we are disloyal — caveat emptor !’)”); Schnell v. Chris-Craft Indus., Inc., 285 A.2d 437, 439 (Del. 1971) (“inequitable action does not become legally permissible simply because it is legally possible”).”
Delaware law is unflinching in the application of very rigorous standards for persons who enter into a fiduciary capacity with respect to companies incorporated in the state. As such, one cannot abrogate their fiduciary duty by simply “papering over” that to which the law has otherwise made them subject.
It has been trading with a big spread. For months it was $0.015 x 0.022 or something very close. Now it is $0.03 x $0.044. The spread itself is wider but on a percentage basis it is virtually the same. It has been thinly traded for a long time. The number of people following it is probably even thinner.
The Trustee handling this case is very good and administering bankruptcy estates is what he does for a living.