while the amended plan gives no value to the nol's, the lazard letter to all interested bidders which was put out as part of the global bidding procedure instructions specifically advised all bidders to include the value of the net operating losses and tax credits as part of any bid.
the $6 billion or so of nol's will be reduced for any cancellation of debt. eddie, as part of his $5.2 billion bid, included somewhat over $1 billion of debt which he cancelled.
that leaves only the nols associated with the cancellation of debt remaining with shc.
additionally, the plan also specifically stated the nols would go to transform holdco unless transform holdco specifically rejected them which it has not done.
also, there is no provision in the plan to adjust the purchase price if transform holdco rejects some/all of the nols which it purchased.
transform holdco is waiting on a private letter ruling from the irs regarding transform holdco's ability to utilize the nols it purchased.
the seeking alpha article seems to be confusing the type of purchase which took place. it was an asset sale to transform holdco, not a stock sale. transform holdco already "gave" stock in transform holdco to shc. it was described in the plan as class b shares (3000) which were to be distributed in accordance with the plan. in a bankruptcy, creditors are considered shareholders and it was the creditors who received or will be receiving those class b shares. not the common shareholders.
the article correctly pointed out that in order for shc to utilize the nols it might retain resulting from the cancellation of debt, it must have retained a significant portion of the assets which generated those nols in the first place. that has not been done since virtually all of the go-forward assets were sold to transform holdco and those assets which shc retained have or are being sold to pay debt. shc is not a going concern so it can't monetize those tax attributes.
agree with chemist. one side is horribly wrong in the analysis of value accruing to shldq stockholders.
i've taken my position and stated my feelings the stock will become worthless and there will be no exchange of stock anywhere down the line.
am not at all persuaded by the seeking alpha article which i believe is a swiss cheese analysis full of holes.
time will tell.
