Can or will this happen to HL? Can anyone point out the differences bewteen the two?
Apex Silver Files for Reorganization Under Chapter 11 of the U.S. Bankruptcy Code
2009-01-13 12:26 ET - News Release
DENVER, CO -- (MARKET WIRE) -- 01/13/09
Apex Silver Mines Limited (AMEX: SIL) (the "Company") and its wholly-owned subsidiary, Apex Silver Mines Corporation ("ASMC"), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York ("Bankruptcy Court") on January 12, 2009. The Company and ASMC will continue to manage their properties and operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court.
Plan Support Agreement
On January 12, 2009, the Company and ASMC entered into a Plan Support Agreement (the "Plan Support Agreement") with Sumitomo Corporation ("Sumitomo"), eleven of the twelve lenders under the San Cristobal project finance facility (the "Senior Lenders"), and the holders of approximately 65% of the outstanding principal amount of the Company's 2.875% and 4.0% Convertible Senior Subordinated Notes due 2024 (together, the "Subordinated Noteholders"). Under the terms of the Plan Support Agreement, each of the parties thereto has agreed, following receipt of a Bankruptcy Court-approved disclosure statement, to vote in favor of a joint plan of reorganization of the Company and ASMC on the terms and conditions set forth in the Plan Term Sheet attached as part of the Plan Support Agreement.
Under the proposed plan of reorganization contemplated by the Plan Term Sheet, if the class of Subordinated Noteholders accepts the plan, the Senior Lenders will waive and release their senior claims and Subordinated Noteholders will receive a pro rata share of approximately $45 million in cash plus common stock in the reorganized Company. However, if the class of Subordinated Noteholders rejects the proposed plan, the class would receive an allocation of cash only after payment in full under the project financing facility of Sumitomo and the Senior Lenders. In such circumstances, the Subordinated Noteholders would receive common stock of the reorganized company, but might not receive any cash distributions under the proposed plan. The Company's existing shareholders would receive no distributions under the proposed plan. >>>>>>>>
This statement from 10-16-08 does provide some comfort:
<Hecla Mining Company President and Chief Executive Officer Phillips S. Baker, Jr., said, “While we had sufficient cash on our balance sheet at quarter end to repay the entire bridge loan, in these times of tight credit we elected to extend the maturity of the bridge loan to maintain additional liquidity.>
From Vicki:
<Hello Tom:
The $79 million available on the balance sheet was as of September 30 (which is the required reporting form). That’s why in the verbiage of the release we pointed out that the additional $37 million was paid after that, in the fourth quarter. We need a considerable amount of working capital and at these metals prices have been using ca sh as well, until our budget cuts are fully implemented. Hence, our emphasis on liquidity, especially since we are facing the payments on the loans in December and February of a total of $58 million.
Regards,
Vicki>>>>>>>>>>>>>>>
They are close I think if we can get over this hurdle the stock should rally.
