At a glance, it doesn't appear they misrepresented anything back in 2007. They have the defense that they were like any number of people and didn't see the financial crisis coming; and they are in an industry right at the eye of that storm. But y'know people can sue anyway. It's hard with them being in CH 11, and having such a big excuse that external factors were a bigger factor than management's own incompetence.
As for some other posts the last couple of days, first, all I can say is calling the reading of a PR "Due Diligence" is as risky as unprotected sex with a total stranger you met at some sleazy bar. The condom, in this case, is reading the actual documents that the PR is based on. These reveal that the stockholders, not to mention the $200 million in unsecured creditors which stand in line in front of them, get the big hose-ola in this deal.
Tomorrow's "auction" is a mere formality. As expected, no other bidders came forward. The next step s for the judge to approve the sale on Tuesday. Will he give the unsecured creditors a bone? Unlikely, but nothing is impossible. There may be a rehearing delay if he orders the parties to try and make nice with each other, but since he has already approved the Asset Purchase Agreement it is slightly unlikely. It is moot as far as stockholders are concerned, because they are so far underwater, to the tune of over $200,000,000, it's not even a point of discussion.
The EC is a non-starter for many reasons. Among them, they were late, they did not articulate any analysis that made the business case there was any equity value in the company, they evidenced ignorance of the facts of the case (availability of financials, existence of a trustee, structure of the post bankruptcy company), and didn't even bother to retain counsel. Plus, as noted above, they are so far under water Captain Nemo couldn't find them.
There is a good discussion as to why equitable subordination is irrelevant in this case in the Buyers' (secured creditors') rebuttal to the unsecured creditors objection.
Yes there may be some legal fireworks yet in this case. But they won't change one basic fact: this stock is fundamentally worthless. Many of you understand this, but see it as a trading vehicle. My question is, at this point what might lure buyers to bid this thing up? I am genuinely curious as to what you think the play is here. I have seen stocks with up ticks AFTER a judge has confirmed a plan that included cancellation, so it does happen!
You guys can beat me up and hurl insults all you want. In response I can only use that old pumper's phrase: Watch and Learn.
AI
