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New Monitor reports... unredacted versions...
The idea of shares being worth something were not crazy, just looks like that hope died when Fairwind Farms lost the bid. $20 million raise as a new company might have been what longs were hoping for.
If there is any hope for BIOAQ, I no longer see what that might be..
Considering the nature of the CCAA court, the local judge and the whole purpose of CCAA proceedings what else could justify PWC’s statements about the transaction at the insane discount price for the whole corporation, It actually makes sense that the purchase price was allowed by PWC with no further promises exactly because they would assume the debt. I half expect to see the sealed documents to include the reverse triangular merger as part and parcel to the agreement where the succinct acid production pays off the debts and the new Visolys products raise he profit margin. I can’t see a local judge being willing to turn down the other deal that retained time delayed payoffs... it’s the only thing that makes sense in Canada.
The other half of me expects something that just didn’t occur to me. I’ve been whittling away my position hedging because I don’t know any more but having read nearly everything, the first scenario is what my gut says makes the pieces fit together
Debts can also be converted into shares which is common... it would be one hell of a dilution but there are ways you refuse to consider. We don’t know what arrangements have been made, proposed, planned or signed off on. You may be right in the end but you do not know.
C’mon, admit it. It will feel good. Let it out: “for the love of G-d I just don’t know!”
And if you just can’t stand admitting you just don’t know,... drop that little IMHO bomb there
IMHO
And there is this:
The CCAA was enacted by Parliament in 1933 when the nation and the world were in the grip of an economic depression. When a company became insolvent liquidation followed because that was the consequence of the only insolvency legislation which then existed - the Bankruptcy Act and the Winding-Up Act. Almost inevitably liquidation destroyed the shareholders' investment, yielded little by way of recovery to the creditors, and exacerbated the social evil of devastating levels of unemployment. The government of the day sought, through the CCAA, to create a regime whereby the principals of the company and the creditors could be brought together under the supervision of the court to attempt a reorganization or compromise or arrangement under which the company could continue in business.[1]
Too much here to copy and paste on a phone...
The discretion of priority and who gets paid and what gets canceled and what does not begins at 2.7 on page 9/25
https://www.insolvency.ca/en/resources/IIC_Bankruptcy_Primer.pdf
As best I can tell, as long as the company can claim portions of the restructuring/sale of a business not closing its doors are necessary parts of continuity of business, CCAA does not need to follow super-priority of secured creditors like in US.
There is a flow chart that states the non-conformity to debt repayment prioritization more clearly but I haven’t figured out/remembered which document it belongs to yet.
All True!!! Except for the assumption that the order of payment is set.
It is written clearly in black and white text that CCCA has no set order or any mandatory riprity othere than what is best for continuity of business and community. These are the kinds of priorities that confuse Americans and why Canadians sometimes look at Americans and shake their heads sadly...
I have no way of knowing if the shares will survive. You might end up being right. If you do end up being right, It will not because of that flawed argument.
But Comerica got paid, yeah?
The 1.3 mil shares might not be reassuring enough and is why they put in that objection... not necessarily good news.
As for Taxes, considering the substantial investment the Canadian govt made and the long term revenue from that plant being operational, the tax on debt would be a silly priority imho
Thanks 10k! I think you could be right. The notion that the 4.3 might be for the Canadian portion and PWC still considers it a positive outcome for all stakeholders leads me to believe that they are making Quebec Inc into a fully funded company that can make good use of a stock listing with no wait and NOLs. Otherwise why have a joint venture for such a small purchase price? Why else would a local judge and PWC with Canadian definitions of fiduciary responsibility and reputations to protect among government and community members? Seems to me that with such a token payoff, they must really be financing a serious investment in Sarnia, because that’s what makes CCCA different from ch15 in the US, the survival and thriving of otherwise viable businesses in temporary distress. Thanks for the assist!
You know what? There could be a crazy unexpected twist... what if the shares stick with BioAmber Inc. And the French property through that gets bought out by ADM or the other qualified bidder? Is there a clear trail linking the French property to “the Canadian sale?”
Thanks clock! Also thanks to you and mrt for arlette report details. I’m going to have to re-read it but that is the most reassuring language so far. I gotta admit, this is really forcing me to review the DD so many more times than I have ever done before. If this ends in misery for us believers, it sure won’t be because we didn’t do any homework, it will be because we made a few wrong guesses or assumptions... but that’s the game, low risk, low pay and speaking for myself, I’ve had all the “play it safe” low pay I need for one lifetime.
What a long strange trip...
Where can I find the French sale order? I took a few days away.
I’m watching to see if there is a mass purchase of shares in the 51% range or a massive exodus of fools like me who are holding on since May and finally losing their nerve.
Update!
insert-text-here
Thank you!
Where can I find the Reverdia STA Agreement court docs? Anyone know off hand?
Right. In bankruptcy law, it is a given. In the US.
This is CCCA in Canada and in this case particularly, CCCA offers really weird contradictions that under CCCA law means there are multiple ways things very possibly could be exceptions to that norm.
You are probably correct. Thing is, there are mechanisms to keep the shares alive or at least with some return and reasons for the new holding company to want to do it. A small investment with insane return potential is pretty hard to ignore. Among us "delusional dreamers," we might be 1000% totally wrong. We very well could be throwing our hard-earned money at a black hole. I find myself in the lunatic fringe. I have also never read so many documents so carefully.
I try to talk myself out of it daily and the documents keep pulling me back in. (I can't imagine having a huge stake in this.) I have also traded to the point where my cash investment is negligible like many of the remaining longs. While I appreciate so many trying to warn us we are driving towards a cliff, I really am kinda fascinated by everyone's commitment on the naysayer fringe. At this point, I would rather lose my remaining stake than to discover I ignored what my brain and gut together told me was worth the risk.
Maybe I am just sucked into the pumping machine that keeps this trading just a few days longer. But seriously, aren't you just a little bit worried that we may have grasped something you missed?
The yahoo description puts the stock in Delaware. Wouldn't that imply they have to purchase at least the important bits from BioAmber, Inc?
There are a few reasons of benefit to not start over with a fresh equity raise.
1) There is clear and numerous legal documentation for Canada that as long as they keep operating for two years, they save a fair amount on taxes.
2) They save months of time using BIOAQ shares rather than the time to file and certify for their new shares
3) There is a ton of interest already and by simply "rebooting" the current shares, the hardest job these days -- getting market attention -- is already a done deal. In an age of social media, this might be the most compelling reason
4) Instead of just lawyers, the hands-on CEO would have to walk through all the setup at the exact same time that they have to restart succinic acid production as well as retool for their "higher return" products referred to in the Visolis statements. That time/manpower issue is actually huge considering they are setting up a holding company and operating their existing companies. Creating a new executive team and rehiring workers, sending new chemists and engineers from Cali to Sarnia... It is a lot, not to mention they already have cranky suppliers who just got stiffed on overdue bills...
And really, my question is why would they set up a holding company rather than just rebuild/rebrand the company they just bought if they didn't want to make that exact purchase: for the books and the shares with an existing stock ticker?
I like this part in particular from that document:
"Generally, interest expense on funds borrowed to acquire shares in a corporation is deductible to the borrower. Accordingly, a non-resident is often advised to set up a Canadian holding company to borrow the funds required to make a share acquisition. Once the acquisition has been completed, it might be possible to have the acquired company wound-up into or merged with the holding company, thus enabling interest expense to be offset against the acquired company’s earnings."
Because that is exactly what they did. And, yeah, it is also what someone would do with two foreign owners as well, but why wouldn't it be enough to buy a Canadian company? What other reasons to start a holding company other than to buy commons for tax reasons or the reverse-merger scenario?
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As for the "secret DD" if that refers to the document I was looking for, I was referring to the signed intent to purchase document that was in a bundle of documents also including the final but not approved by judge offer with the blacked out price.
This DD is Not in the least secret. Just close reading and thoughtful risk/benefit analysis and I know full well that even with a handful of assurances in documented intent that promises gains, it could still go right down the toilet. IMO IMO IMO
Does anyone know where the documents are with the NewCo wording? Those are the ones that refer to the secondary purchase by the new entity regarding US BioAmber, Inc. Not totally sure I recall it correctly and would love to paste it in reply here... I might be out of posts for today, so if someone knows, maybe it could be replied here?
NewCo can't buy the "debt ridden shell" until the rest of the transactions have taken place. That was in the PWC docs from the start that Bioamber Inc USA and the other remainders including the cash and inventory on hand would be purchased by NewCo pending the approval of CCA and Ch15.
They might not buy the NOLs or commons, totally possible, but seems clear to me that was and has been their stated plan.
IMHO... I have no crystal ball but that is the do or die moment as far as Ican tell. What will NewCo do?
That seals the fate of longs or the regret of the sellers... I chose a 50/50 approach myself.
Gee, I sure remember reading somewhere that they intended to have NewCo purchase the rest of the “empty shell”. Was that on PWC? Funny, the little details...
Beware anyone who seems totally certain...
No idea. I assumed that they changed their minds or did not feel it was important to say who.
I probably missed other posts about this but the new JV apparently changed their minds about at least one patent contract according to the court docs on PWC. We may never know but while I am going to try and pry myself away from this board, I will probably keep looking too...
I wish I knew anything other than just thinking out loud making as much sense out of this as possible...
And Penman, I totally get that the bahers are bashing. These days particularly, I feel like whatever seems true should be supported and they can keep whatever it earns them. I
Been meaning to say this: I read this thread for months before getting an account and posting, so thanks Clock, Pen, MrPans (cool designs bro!) Sorhay and those really trying to crack this crazy puzzle (cuz there seem to be a lot of cats trying to get this right) and the rest,... thanks for the entertainment.
I keep thinking about that day when folks were estimating font sizes and then to see the Delaware document was USD $4,300,000 (USD)... If that is really what was under the redacted black mark, that seems SUPER DUPER misleading. That was a hand on forehead moment for me.
Among the many "What!!!????" moments, that was a big one for BIOAQ
I really, really, really hate to agree with Bruce and I do not. Still, he may be right.
Depending on how you read the document, it is entirely possible that the purchase of all three BioAmber entities is for 4.3M and the US portion is the anticipated "minimum of 150K" figure. I see some possibility of other documents we have not seen covering the actual plant. Still, I have a hard time imagining they would not disclose the entire transaction to the US courts. As it is, we do not know how many documents we do not know about.
I would feel more certain if I could identify which assets are referred to by the asset serial numbers which I see no reference for... I'm not any good at real cryptography and I am not a research lawyer, so... I dunno.
If it is 4.3M and PWC is saying this is a positive outcome (and is actually saying it with a straight face or without crossing their fingers behind their back like kids do when they fib...) then that means there is another set of more important understandings.
But, if we do have all the documents we need already, then the long-term situation seems brighter IMHO.
In my opinion that means that the real money is going back into a commitment to bring this plant, the NewCo products AND succinic acid production back online and back into the Sarnia community. If 4.3 million seems like a good deal to PWC, then the assurances and financial plans that makes PWC comfortable that NewCo will definitely restart and expand BioAmber, then the JV might include a LOT of capital coming from overseas to make 4.3 mil a great deal for Sarnia and Quebec, en mon avis (IMO).
It might or might not help us longs. Not sure the NOLs argument is really workable but I see several reasons NewCo might keep us around. Just because jerky lenders did not like the equity raise offer does not mean they will cancel that part of their plan. I feel good about my choices and the risk/benefits. Make your own choices based on your DD and what you can afford to lose... The misinformation over what ought to be fairly clear documents makes this feel like a scary clown circus car ride.
all of this is my IMHO and don't mess up your life over a stock that is WAY not a guarantee... I am not a financial professional or trader...
That said, on the outside chance that the shares survive, what a crazy rare opportunity!
Or what a painful (and expensive) lesson.
I really hope most of those employees get rehired however it turns out for us on the sidelines.
Ok, so after posting I went back and re-read a bunch of the documents. I’m not sure about my interpretation exactly but I’m still not at all sure everything we need to know is accounted for in the summary...
Did anyone else notice the section... I think it was 6.1 or something where the vendor will stop using the name BioAmber?
The way that it reads, I don’t see any reason why the new company can’t be named BioAmber.
This has been one super-crazy ride.
I’m glad so many opposing views seem so absolutely certain of the outcome.
That must be really pleasant.
In my opinion, I don’t see anything that tells me one way or the other what will happen to share value because I don’t know how the new owners plan to fund the next phase.
GLTA BIOAQ!
The 4.3Mil is for the American portion only.
Do you think the Canadian govt would ask the courts in Delaware to approve their own CCCA proceedings?
They are asking the court in Delaware to finalize the last piece regarding the American assets in order to make the concluded Canadian sale serve as a clean break from the past. PWC gets their cut from the Canadian sale as best I can tell.
As In my last post, you can see they are making it clear that "The Debtor" is BioAmber, Inc. The US entity
The sale for 4.3 million is describing "The Debtor" the money is for "The Debtor" and not "The Canadian Debtors"
The Canadian debtor sum is not disclosed and Canada is where the factory and all the good stuff is. The sum of the American entity is the only value being disclosed here IMHO
insert general IMHO disclaimer here but this seems like a huge freakout on information only a tangent from the real info: the details of the Canadian transaction.
What?
The way I read the documents is that BioAmber, Inc is purchased for the 4M figure.
I have seen no documents leading me to believe that we know anything about the purchase price of the Canadian Bioa. companies.
The Google Doc refers to just the US portion.
The money is for "The Debtor" not "The Canadian Debtors" as in below.
Chill y'all.
Yep, #2 does have some of the right elements. Might even explain some of PWCs errors as they try to pull all the different parts together while trying to keep everything on the DL.
If PWC really is trying to stick to a deal that really does the best for all stakeholders, maybe the contingent future payments include suppliers and services they will need when they resume operations. Even with a higher return product alongside BA succinic acid, they might need to recover some goodwill.
I still don't see anything to account for reviving the shares other than that they are part of BioAmberInc and happens independent of the CCCA. Otherwise, i don't see how it can be done legally with the paper trail the DD this board has generated.
Cool synthesis of possible scenarios! This is quite possible although I imagine it was more lucky timing than diabolical schemery. Much more fun your way, to be sure.
One thought won’t leave me be, however. While many of the patents might not be useful, a stable and effective chemical process takes a TON of innovation to make obsolete. There are a ton of cleaning products out there that still can’t beat vinegar and baking soda with a chaser of hydrogen peroxide. Ask a room full of French chefs what to add to a good cut of steak other than butter and a pinch of salt and all you will get is an argument over whether a pinch of parsley or French tarragon is better infused into the butter ahead of time.
It will be loud and there will be creative swearing and familial insults involved.
From what little I understand of biochemistry, it takes a ton of fancy to beat a solid basic concept and BioAmber’s product is among the best for a reason. Ok, I’ll put the metaphors aside...
My point is, Sarnia with BioAmber may not be immediately most profitable but it is a fundamental proof of concept of high quality. It should continue to operate, the community needs the jobs and regardless of who runs it, the crown just wants Ontario to be small town sci-fi awesome. Thanks to PWC, that seems accomplished. Wreckage cleared, highway open.
Now, the million dollar question for us clowns still holding shares in our cold dead hands, does anyone value our contributions as shareholders? We can be proud of our contribution either way.
I can only think the little personal destiny we control is in figuring out by what mechanism the shares can be kept alive and then seeing if there is a pattern in the filings that supports it. It would SUCK to sell for pennies only to find out we were holding still relevant shares.
About 36 hours on the clock to figure it out before this becomes an expensive thought experiment with an emotional hangover...
All IMHO, but It. Just. Keeps. Bugging. Me.
That keeps crossing my mind as well.
150k is a strange number unless they are buying everyone’s office supplies...
Truth is, there are a couple spots where it is difficult to see the whole picture without spreading all the documents on a big table... and we don’t have the supporting documents, so it’s like a puzzle without the picture on the box. I keep wondering what Sorhay’s sticky (where NewCo might choose to use BIOA ticker instead of the delay in reloading) and what it would look like in the documents.
What would be the legal mechanism to keep the listing ticker? And while there is no money left over from the sale, what prevents them from refinancing the shares themselves?
Again, what would that look like in legalese and what kind of court filing would it show up in?
Bruce, dude, I enjoy your sardonic comedy. Again, this is a cool puzzle. This is an unorthodox non bankruptcy Q stock across borders and a weirdly complete purchase in "liquidation."
This is an interesting statement as it implies that Bioamber, Inc won't be the completely "empty shell" you are so fond of describing. Will it evaporate after the next court hearing? Probably? Maybe? I'm trying to understand what they might be up to setting up NewCo in this way that seems,... weird.
Sounds about right. Thing is, at least in Canada, for the entities being "erased" the bankruptcy was dismissed. Also, is it possible to purchase the US entity, "BioAmber, Inc." along with shares as a separate transaction after the onus of the debts have already been dismissed? Could NewCo buy "Inc" to get the ticker?
Ok, I'm trying to imagine this... The buyout pays two debts, mostly, the US property remains with BioAmber Inc but the other two entities disappear. Would the buyout of shares for any of the reasons proposed in previous posts (such as NOLs or to immediately relist) be a separate transaction like the purchase of intellectual property?
I get that those details are likely under seal. Maybe the thought is pure fantasy except the language that includes intellectual property is extremely general. Links have been posted that give some reason to think NOLs and relisting could be motivations along with reverse mergers and whatever else I have missed in unread posts, so it is not PURE fantasy, but I don't understand the mechanism by which shares might survive and why that would be of undeniable strategic benefit to NewCo
I've read a bunch of the stickies and been on this since April. I'm very clear that I have no idea how this will turn out but trying to figure it out is an addictive puzzle.
Are commons always "The Petitioners?" Is there really a way for NewCo to buy the commons (whether to get the NOLs, the listing, or just to keep their investor credibility and do that legally but not pay the rest of the debts?