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Sorry to stalk you again but I didn't want to let Pray see it.
A plan and DS were filed last night on the Omniboard for FEEDQ. It looks like they are setting up a liquidating trust. As that takes quite a bit of time I sold the rest of my shares this morning and have moved on to something a little more risky.
Did CRMB really hit $.05? I see a low of $.75. I got one that I am interested in GMET, a liquidating gas play where I like the risk/reward. Down 99% from IPO about 10 years ago. I'm a risky buyer under $.10.
They sold both their US and China operations. Once these deals are done and they basically are the only question left is how much are the liabilities, is there a class action amount due, etc?
BTW, I think traffic will be picking up here. The yahoo board seems to be wiped out for me.
Anybody else?
Wall- I had a long response written up that got rejected.
Why do you use the claims register? I had the register @ $127M.
I have been using what they had used when they filed which had $22M at the parent company, and $63M at the subsidiary. Assuming the cash on hand $4.5M pays for professional fees and I assume that $8M in cash from China will pay for some Chinese debtors and nothing else. The whole issue at this point is the claims.
I am starting to lean toward your assumption in the fact that originally AF Sellco was $8.2M and in the claims register it was $8.6M and I had a note that Farm Credit was $58M not the $69.6M in the claims register. Even assuming most of the small claims are for stockholders which will be denied.
Since you've been at the table let me ask a question. Who reviews the claims in detail (math, leases, etc)?
Absolutely. To buy a couple thousand shares it costs you a couple bucks.
EI-
Did your shares that were given as restricted ever get lifted? I still have the restricted shares but cannot do anything with them.
Other than having a baker on your board? Sounds delicious.
Just kidding. That is Duncan Hines. Not Duncan Hennes.
For those unaware. He is currently on the board of Syncora.
http://www.syncora.com/?page_id=27
Nice find.
Thanks for that.
Something I have been thinking about. In both the Lehman and what I understand of the Madoff repayment investors are getting any assets returned to them before the governemnt takes a cut for forfeiture.
Why wouldn't the government do the same here? In theory the IRS already collected taxes on gains that shouldn't have existed. Shouldn't the determination of restitution (at whatever $ are determined) be paid out first and then anything left over go to forfeiture to the USG.
Last question for any accounts out there and trying to stimulte any discussion on here other that WallStreet and I.
In the company MOR there is a ($16M) in the income tax payable amount which reduces their liabilities. Is this just accounting noise or are they really expecting a refund of $16M? This account is usually to used to estimate the amount that they need to submit to a government, I'm not used to seeing an entry like this.
Does anyone else see anything out there which explains the 350k+ shares traded in the last 10 minutes of the day?
If someone wants to privately send an email at mrholty at hotmail dot com. I don't see anything.
I would agree that the Global Settlement is dead.
Hell, I want to strangle Mr. Park along with Brooks. Its too bad they just got fired now. That said why would any law firm want to work with Brooks, none of them are getting paid. (How will these guys get paid?)
If you look in the BK docket, 2535 you see that the debtors attorney and others were still looking at a global settlement as late as 8/21 with judgement on 8/22. Aargh.
I saw the thing from Mr. Goldstein that you mention below. I'm not knowledgeable about what Rule 38 really is and my google skills are limited. However, isn't point 3 in the same document argues that any restitution should occur before the $65M of forfeiture assets already collected. If correct (and I don't know if they are right) then that means that in theory the company and former shareholders should have first rights to the $160M that is seized before the $65M taken by the gov. This seems to be a positive for the company as increases the size of the potentail available funds especially since the gov agrees with over $100M to the company.
I agree that this is going to take a while. Hell, the 12/16 hearing which was originally scheduled for Sep in now mid-Jan and I bet get pushed again.
Spent a little time thinking about this while I should have been working today.
According to a Deloitte website the tax treaty between the US and China for dividends is 10% not 35% like I initially assumed.
That said I still believe the issue is two-fold. First the Ag-Feed subsidiary which owned the Chinese assets are Cayman based. They would have to transfer that money out and I cannot find anything on a tax treaty between the Caymans and China. Anybody else or would it not matter?
Second would a 351 exchange work? I would assume it would between the Chinese assets and Cayman company as the transfer is assets via a stock exchange?
https://vcexperts.com/buzz_articles/1110
Could the company then do a second 351 exchange between the Cayman entity and the US? Then it would be treated as income in the US but offset by NOLs? Or maybe then paid as a dividend to the parent compnay so the amount is less 10-15% instead of 35%.
http://intltax.typepad.com/intltax_blog/2013/05/barnes-group-structured-repatriation-was-a-dividend.html
WallStreet or others - Wasn't there an issue early on in the Kodak BK that there was a couple hundred million $ in China that the company needed to pay creditors. I think the Chinese business had a loss so it wasn't a tax issue as much as actually being able to get the money back. I think the same thing could be argued here. We have losses (large losses) in China.
The meeting was at 11:30 EST this morning.
I'd guess that maybe there would be a short press release if the judge approved the order.
One could have listened to the courtcall today (I didn't) and will wait for the transcript which will probably be available in a few days.
This has been my biggest concern since late September when Wall Street had brought it up in response to a question I had asked. I had completely whiffed on it.
Minor quibble: Isn't the concern really of how to get the monies from the Caymans to the US? The Chinese assets were 100% owned by AgFeed sub in the Caymans, correct. Therefore the payment from the new owners would go to the Caymans.
I'd love to see the example from Lixh. The only case I know of personally was from my involvement with LSRAF (LaSalle Re). In that case there was a chapter 11 filing and the entity was based in Bahamas, not the Caymans but tax code should be similar (haven't checked). The problem is that none of the filings explained the tax details and I never asked about it when I spoke with the guys managing the liquidating trust in Britain.
I have a six sigma greenbelt as well. Yippee. I took a few hour class and almost completed my blackbelt training. Six Sigma is about process improvement. What is the relevance to anything here?
I used to ski jump as a kid. Does that make me an expert of Olympic Figure Skating judging. (Actually don't answer that)
Agreed on all your thoughts. Why do you think it will drag on? Assuming the judge makes her decision around 12/20 similar to what she did this summer why wouldn't it be wrapped up early next year. Do you assume appeals that will drag this out?
I am shocked that the debtors of PBSOQ are simply sitting quietly for so long. I guess they assume (rightly) they would get nothing today and may get paid in full in the future. However, I don't see anybody buying up their claims in the BK docket. Wonder what % those guys are looking for?
Last, the vast majority of the money seized was in various brokerage accounts. IIRC the $185M was calculated as of some time in 2010. If these were in equities the general market is up 55% since Jan 1, 2010. At the time of the seizure would they liquidate the positions or do you think that there is really more in these accounts?
Nope. Main Meeting isn't until mid-December (12/16).
Anybody have any thoughts/comments that Mr. Brooks lawyers (Tai Park) asking to resign as they were probably the reason for a non-global settlement and what the future really holds.
Anybody have any thoughts on Docket #1750 from 11/8 by the Class Action Lead Plantiffs?
My random/wild guess:
Government keeps the $60M from the insider trading.
My guess is that the current business gets $30M to pay off creditors leaving current shareholders nothing and class action gets $90M up from $40M. No facts to justify it but my guess.
He, it looks like the read the complaint. There is now a document when you click on the FAQ website.
Fascinating
I really hope they do. I saw that filing today.
How does the DOJ find these 4 people? I'll gladly submit my name in the future as I am a shareholder and I'll do it for a steak dinner and a bed at the Hotel du Pont if I need to go to Delaware.
Why do you think the assets of the American Roads are worth $200M. We see what the current revenues are bringing in annually.
The Ambassador Bridge already controls 60-70% of the traffic on the Detroit-Windsor route. The new International Trade Crossing Bridge will steal a bunch of what is left.
The Ambassador Bridge links up directly to interstates on both sides, major construction truck traffic such that supplies automotive plants will not take the tunnel.
My understanding of where Matty Mouron makes his money on the Ambassador Bridge is the gas stations on the ends, the bridge breaks even from the tolls on the operating costs/maintenance. The tunnel doesn't have that and opens both into regular streets on both ends.
The best chance from an owner/operator side would be if they could agree with the Ambassador Bridge to charge only on one way. However, without an agreement from Matty Mouron customers would cross via the tunnel the free way and go back on the pay way. You could go from $4.75 one-way to say $9.00 but only pay once saving on staffing. The space gained would allow you to invest in a gas station collecting revenues like Ambassador Bridge as they get tax-free gas due to the duty free nature as a cross-border transaction. My concern is that insurance companies are usually poor owner operators.
I agree. It was a good read. I hope that something comes from it. For psedonyms I prefer Harvey Mushman (Steve McQueen) over Bill Carson but both work equally well.
Well done, Mr. Carson well done.
Is it sad that I fully expect nothing to be done by the DOJ, and watch as someone @ EG pay to post even more on here, bill for it and get the money approved.
Thanks for the find. I'll take a look.
Nice to see you Jax.
I'll waiting patiently for any new filing on these guys. I just realized the article from Bloomberg was from 2010. I recognized Ms. Walrath from DIME.
I'd love to give my thoughts but I don't want to cost the estate a $1k. Nice post WallStreet.
My understanding of this from a securities lawyer friend is that if a board or executive has information that activley would be a material change to the company he/she could open themselves and the company to a lawsuit for trading on non-public information. The threshold is generally about 10% of revenues. For a company like Coke or JPM it doesn't hit that threshold even if its important. For small startups or companies like Syncora it would be hard to state they were not aware. Correct or not but I'd bet their legal council has advised them not to unless its part of a plan bought monthly by a trust not managed by them.
Is this always done. Absolutely not but when part of your cases against the big boys is that you are pious it could be used against you. Secondly, psycologically its hard when your income is 100% from the company and then you are spending that money to increase your exposure. Many people even if they are 100% confident have trouble with that lack of diversification.
Exactly. Its mereely professional courtesy. In the scheme of things an extra week is immaterial in a case of a few years. I'd bet both sides feel that way.
If I am JPM I try to end this on the same day as I pay the $11B fine. It will get lost in the size of that fine instead of being a second run at the same basic story a month later where they can rehash the $11B fine again.
Or it could simply be that these high paid lawyers all know each other so if they ask for an extension the other allows it so they both can bill more hours.
Lawyers for both sides are hired guns who swim in the same circles and therefore will probably work together in some fashion in the future so a simple one week extension isn't worth complaining about when its been years.
Thx. Done for the day.
Sorry to be stalking you but I enjoy reading what you post.
Do you have any idea of how to fix this?
Also, if these deals are offensive for shareholders why do you invest in this area? There has to be easier pickings for you? Do you ever invest further up the chain in the debt?
Thanks. What recent case law are you referring to? Since last year the judge has basically been stuck in this $60M range based on the testimony from what two years ago now.
I've read basically all the documents before sentencing and feel comfortable with what the gov't position was but is there a specific Pre-sentencing report you are referring to? The PSR was refernced in #1588 (10.03.2012) as being filed on Sept 25th but I have never been able to find a docket with that information available.
At this point I really struggle with what is next for all parties. You are way more versed in this than I. Lets assume that the restitution settlement actually happens in November. Since I have never seen the PSR lets assume that the judge sets the restitution equal to the claim amounts for original shareholders (set by Gilardi) and what PBSOQ claims they were damaged as a company. Is this reasonable? For current PBSOQ shareholders it basically all they have left as an option. Then all that would be left for Brooks are civil proceedings against Brooks and his family.
I see you are right that there will be more delays in that the restitution hearing has been moved from 10/15 to 11/15.
Anybody have any idea on why the US would appeal the sentencing that was handed down (docket #1729)?
As an outsider and not a lawyer I think the only reason would be that the lenght of the sentencing was more than they were expecting which ruined Brooks attempt to a Global Settlement. Any other thoughts on this?
If repatriation comes into play for the BVI assets, which I don't discount as not being a problem, there may be an approximate 35% reduction in proceeds from the sales as a tax liability. I seriously doubt you see a plan before tax liabilities/IRS claims are dealt with, along with the SEC, and the class action.
Thanks. I completely forgot about this and this makes sense. Normally with microcaps you don't have these issues as there is no cross border issues.
I'm happy to know that I wasn't crazy in the additional council + the FA. It just stinks to me.
I'm struggling to figure out a range for the risk of the Wells notice and class action. While old shareholders may be happy about it, current shareholders who want to maximize whatever recovery there could be should want these to go away even if justice isn't served.
I agree with you on the D&O. However I think that will take a long time to play out. I plan to be gone once the final plan has been filed.
If my math was right the stock should have moved up more. I can see it getting close to what my math did with a discount for the deal not happening say (75% close/25% not close - you choose) but that should be the floor with more for a higher auction.
I feel like I'm either missing some debt, the cash value of the China bid isn't really cash or something else.
That is my understanding as well. I think they had a value in the bid sheet of $1.7M if I read the transcript properly. (I will admit I skimmed it)
I just don't trust many sets. What the hell are they doing? Nothing of value. The US assets have been sold. The only thing left is China and none of them are over there.
Many on here don't like WallStreet but hes been on an EC and from what I have watched of BKs the lawyers do well irregardless of the company/debtors/everybody. This feels like they are doing a turn for their friends.
Auction of China assets - mid November.
Confirmation early December -
POR or conversion from Chapter 11 to 7 - mid January?
I bet these guys bill + debtors attny bill $5M bucks among them all for this case which is disgusting. Add in the amount for the exec's to get paid $.5M in bonuses on selling their failing business and its damn criminal.
I actually think that the Oklahoma Assets may have been sold as part of the Agfeed USA sale but I cannot be sure.
My rough calculations:
Sale of AgFeed USA - $79M
Sale of AgFeed International (China) - $50.5M
Total proceeds $129.9M
Assets:
Parent Assets - I'm valueing at $0 - Filing states $4.0M of assets at parent company (no idea what that is)
China Cash - Value of $0 - Sale agreements shows $8.5 in cash that do not appear to be part of sales
Liabilities:
Secured Claims USA - $57.9M
Unsecured USA - $5.2M
Parent Liabilities - $13.7M (mostly for Financial Restatements)
Post Petition $6M
Additional post petition - $4M (guess)
Total Liabilities - $86.8M
Difference - $43.1M / 63.9M shares puts valuation at $.67.
I excluded the supposed $8.3M of debt at the parent as they supposedly have a counterclaim (AF Sellco) if I am interpreting it correctly. Even if you count that still puts the value at $.55.
What am I missing?
There doesn't seem to be any debt in China and the working capital adjustment should net out and liabilities and receivables in China.
And yes I know the cash is less on the AgFeed deal but that it allows them to sell the pigs to Hormel through the rest of the year so that is worth $36M. Simple.
Oink, Oink
I must have missed it while skimming this board but I think WallStreet was right about the Equity Council.
Why the hell did OEC need to hire additional lawyers as in Dockets 263-265?
263 - Application to Employ/Retain Elliott Greenleaf as Co-Counsel Filed by Official Committee of Equity Security Holders
264 - Application to Employ/Retain Gavin/Solmonese LLC as Financial Advisor Filed by Official Committee of Equity Security Holders
265 - Application to Employ/Retain Sugar Felsenthal Grais & Hammer LLP as Co-Counsel Filed by Official Committee of Equity Security Holders.
So we need 3 law firms and one financial advisor and this was filed after the sale already occured of the US assets?
OINK, OINK indeed.
In my experience what will happen once the sales are done. The Oklohoma asset still has to be sold. Once that is done a Plan will be filed with the courts that will show what the total distirbution to shareholders will be (with a few adjustments). These are usually pretty close and maybe conservative by a few pennies/share and will usually close in something like 90 days for objections and then distribution. The stock will usually run up at that point close to that full amount (I will usually sell at that point as the few pennies are not worth it for me).
Did the auction date change?
I thought it was for the 29th not the 26th. Crap.