Bankrupt and Distressed (BAD) Research and Due Diligence

[Madclown]

In looking at the last 2 MORs, MESAQ looks to have EBITDA of $9.8 million for those 2 months. This would project out to be $58.6 million on an annualized basis. Now apply a generous multiple of 8 times (current multiple for non bankrupt competitor RJET) and the EV would be $469 million. This also happens to be the reported EV on Yahoo finance as of 04/15/10.

With total liabilities of $850 million which includes liabilities subject to compromise of $536 million, the EV of $469 million just doesn't quite get there even with a generous multiple. Keep in mind that these numbers don’t reflect the lease rejections claims that are currently “off balance sheet”. Still worth watching to see how the future MORs might shape up but I don’t think the prospects are as favorable as a PGPDQ, GGP, CEMJQ, or TRXAQ situation.