July 2015 operating report Doc #471
From looking at it, the most important part is the balance sheet on page 3.
1: Stockholder equity is negative $116 million. Even if the $50 million lawsuit against the directors wins, and the insurance pays off, the stockholders equity would still be negative $56 million. The common shares are wiped out.
2: The unsecured are on track to recover zero because there is not enough to pay off the secured creditors.
3: The secured creditors are on track to recover only around 11% percent. There are $15 million in assets to pay off $114 million in secured debt. Even if the $50 million in in insurance pays off, the unsecured is still left with zero, and the secured only a little over 50% recovery.
I expect these recovery percentages will go down as the expenses from the bankruptcy continue to pile up, but this is the best they they are going to do.
If the lawsuit can go on to the end, then the secured will end up with the amount, but still be out a large amount, considering that what they loaned to the company was suppose to be safe.
Louis J. Desy Jr.
