Tuesday, June 22, 2010 2:03:02 PM
#105, oh boy. Such fun...
The only entity in this case that has had an opportunity to investigate if all these obstacles can be overcome – within the price tags proposed in the DIP – is the DIP lender. No other party in this case has any informed idea whether the DIP is more likely to result in an increase in the value of the Debtor’s estate or a forfeiture of all the properties of its estate to the DIP lender. Given the Debtor’s track record to date, the latter appears substantially more likely. This Debtor has nearly $60 million of undisputed secured debt, over $14 million of undisputed unsecured claims, and it has raised and expended untold additional sums in equity investments. At best, it has produced just over $1 million in revenues. And currently, the Debtor’s operations are shuttered. Its mineral reserves are unknown. Those reserves are on lands embroiled in ownership disputes. Its mining capacity is iffy. Its former employees are disgruntled. Its woefully inefficient mill is falling into “an irreversible state of disrepair.” Its leaching process is subpar. It is out of compliance under some of its regulatory permits, and yet it expects to qualify for new permits that will need to operate. It proposes to hire an army of experts and lawyers just to probe the feasibility of its business plan.
This Debtor is in no position to provide adequate protection to its secured lenders, and its unsecured creditors are presently slated to receive nothing, not even under the rosiest available analysis. This Debtor presents a profile of a debtor whose bankruptcy case is on the verge of a conversion. If its best-case projection predicts nothing for unsecured creditors, then it is the secured lenders who should be making decisions about how to maximize the value of their collateral. If the Utah Lawsuit results in a judgment that NSRC is the rightful owner of the Properties, then it is NSRC who should be making those decisions. In either event, this Debtor does not present a profile that recommends another $15 million of secured debt, especially when the substantial financial risk of forfeiture is being borne entirely by others.
....
So this is basically every good reason Nevada Star could put on paper against... well, CPRK?
I mean, it's not like it's THAT bad... hahaha ...
The only entity in this case that has had an opportunity to investigate if all these obstacles can be overcome – within the price tags proposed in the DIP – is the DIP lender. No other party in this case has any informed idea whether the DIP is more likely to result in an increase in the value of the Debtor’s estate or a forfeiture of all the properties of its estate to the DIP lender. Given the Debtor’s track record to date, the latter appears substantially more likely. This Debtor has nearly $60 million of undisputed secured debt, over $14 million of undisputed unsecured claims, and it has raised and expended untold additional sums in equity investments. At best, it has produced just over $1 million in revenues. And currently, the Debtor’s operations are shuttered. Its mineral reserves are unknown. Those reserves are on lands embroiled in ownership disputes. Its mining capacity is iffy. Its former employees are disgruntled. Its woefully inefficient mill is falling into “an irreversible state of disrepair.” Its leaching process is subpar. It is out of compliance under some of its regulatory permits, and yet it expects to qualify for new permits that will need to operate. It proposes to hire an army of experts and lawyers just to probe the feasibility of its business plan.
This Debtor is in no position to provide adequate protection to its secured lenders, and its unsecured creditors are presently slated to receive nothing, not even under the rosiest available analysis. This Debtor presents a profile of a debtor whose bankruptcy case is on the verge of a conversion. If its best-case projection predicts nothing for unsecured creditors, then it is the secured lenders who should be making decisions about how to maximize the value of their collateral. If the Utah Lawsuit results in a judgment that NSRC is the rightful owner of the Properties, then it is NSRC who should be making those decisions. In either event, this Debtor does not present a profile that recommends another $15 million of secured debt, especially when the substantial financial risk of forfeiture is being borne entirely by others.
....
So this is basically every good reason Nevada Star could put on paper against... well, CPRK?
I mean, it's not like it's THAT bad... hahaha ...
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