Penn Traffic Co. (fka PTFCQ)

[speckulater]

Pension Benefit Guaranty Corporation



Do not forget guys, those 1.9 million shares, or 21.4 % of PTFC stock are not owned by JP Morgan. They are just holding the shares for the PBGC.

The Pension Benefit Guaranty Corporation is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of more than 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans.

PBGC is headed by a Director who reports to a Board of Directors consisting of the Secretaries of Labor, Commerce and Treasury, with the Secretary of Labor as Chair. The Corporation is aided by a seven-member Advisory Committee appointed by the President of the United States to represent the interests of labor, employers, and the general public.
Pension Benefit Guaranty Corporation

This is the 3rd time Penn Traffic went Bankrupt in the last 10 years. Penn defaulted on some Pension money owed, so the Judge in the previous cases awarded PBGC those shares in PTFC stock. Tops has agreed to take on all pensions well into the future, so the PBGC is owed nothing new. However, I am sure they would like some value for the 1.9 million shares they already own (through JP Morgan). The PBGC was well represented in the Court of the Penn Bankruptcy.

This is where it gets interesting.

That chart listing the 1.9 million PBGC shares, says they have a value of $4,685,335. But 1.9 million shares times todays generous bid price of .03, gives a value to PBGC of only $57,000. Ouch.
PTFC Top Institutional Holders Chart

I just have a hard time believing the Court will allow the shares of PGBC, plus 100 or 200 companies, and the other investors here become worthless, especially when it is easily avoidable.

Over 2 years ago, Morgan Private Equity paid $310 million for 76 Tops stores. Tops just paid $85 million for 79 Penn Traffic stores, a heckuva bargain even at bankruptcy prices. What else did Tops agree to, so as to complete the deal?

Penn's employees Union (UFWC) forgave I think $25 to $60 million in pension money owed. Why in the world did they do that? For 2 reasons. First, Penn is bankrupt, the union knew they would receive pennies on the dollar, if that. Second, Tops agree to take over the pensions and keep them and future pensions paid well into the future.

Makes you wonder what else Tops agreed with to complete the Penn deal. Did Tops also agree with the Court to assure to provide Penn stock with value, by rolling Tops into the shell, or another company of similar value? $60 million in NOL's would also sweeten the deal.

The new Tops has the potential with conservative Revenue numbers to become a $15 to $30 stock. That would make PBGC very happy.

Just putting some thoughts on paper.

My next post, will give over 100 more reasons for the Court to want Penn stock to stay whole and with lots of value.



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