Yahoo Board Info, Interesting perspective
I was having lunch with my friend last week and he is a civil lawyer. So we were talking about the stock market. He, like many others, took a hit in his 401k and several other funds he held (college funds for kids, etc.). So he was interested in the speculation stocks I held. He wasn't very interested in the bio-techs, but he was very interested in this one. After doing his own DD, through his legal avenues (he has several paralegals doing the legwork of the research) he came up with an interesting theory. And also took in around 500k shares over the last week to make it interesting.
His theory:
The "dirty hands" charges, the sub lawyers brought up against LUM and ARCO are VERY serious. Much more serious than I thought. The court system works through precedence. There is precedence in similiar cases, where if the judge finds that these charges are valid, the sub lawyers will be able to go after ARCO directly. They can go after LUM management, but they don't have much. Arco is a company with very deep pockets.
So ARCO, who already lost $10+ million in stock value, is in danger of losing the $28 million that they loaned LUM (to cover margin calls as I remember) and could be further liable for part of the $300+ million that is owed to the Sub-debt holders. There is a further chance that case will be reviewed by Justice Dept and criminal charges will follow. These lawyers, the sub's hired, are no joke. This law firm is also used by some large institutional investors to lobby congress and senate.
Now, my friend specializes in civil law, not corporate law. So not sure how much water his theory holds. But now we have an interesting subject to talk about, since we both hold common in this company.
