mCloud Technologies Corp (MCLD)

[Tickbomb]

So there is an order debts obviously in bankruptcies. I'm no lawyer, but my understanding is that secured debt is treated differently than non-secured debt. They placed CR 1st, secured against the EV dealerships. So I don't know, but if that asset goes to 0, I'm not actually sure you have a right to part of the company, proportional to the debt. At the very least you wouldn't get full control. Especially if all the rest of the debt was called, which they all could because we are way beyond the covanents.

I think generally secured debt is like a mortage, that is only secured against a particular asset. Like you can call the debt on the asset and take control of the asset, not the company... but you would have to read the details of the deals...

But here is the likely Scenario:

Carbon gets full control, then fiera becomes #1 debt holder... calls their debt from CR... and so on. So what ends up happening is a restructuring of all the debt... it becomes a mess. There are people who invest in Bankruptcies and buy undervalued rights, but it is a very specialized art. Howard Marks does this stuff. So if all the debt is called, then it would be sorted out in court. But in the mean time, the company would lose all its staff, because the ops isn't cash flow positive. It would really screw the bond holders too.

Plus a lot of bond funds don't actually want or have the mandate to hold common rights, so they would just sell the entire company. I believe the fiera debt is in a bond fund (fiera private debt fund VI). So you would have to read their mandates...