Penn Traffic Co. (fka PTFCQ)

[sliencedogood2010]

The court has not approved of the plan as of yet. It has been rescheduled for September. In the plan it does not say that the Shares will be liquidated. In fact it sheds some light on the operation as a whole.

According to the last 8K dated 30 Jun 2010, Penn traffic has over 28 million dollars in cash (next to the last page). The 87 million dollars from the selling of assets (stores) is being held in escrow for future payment and receiving massive interest.

The total outstanding debt is just over 76 million dollars (going off court records). In each 8K Penn Traffic has been paying down those debts with the operation cash from cointinued operations, not the monies received from selling stores. This is good news. Lets see if there is anymore good news.

Lets go over a few details to this plan.


1. We are in class 4. under the BK plan it states we will not be reimbursed under this plan. Case in point. Shares are the last reference to liqidate to satisfy the debt. Real property (sell of stores) will first be exhausted to satisfy the debt. If this fails to payoff all debt, cash holdings will be next. last will be the liquidation of shares to pay off creditors with claims. Under every Chapter 11 restructuring plan the shareholders are the last if any to get compensated. This is only standard boilerplate lawyer speak in all BK proceedings. Under this plan there is no plan to liquidate the companies but to recombine them back into Penn Traffic PTFC. See below

4.4 Treatment of Equity Interests (Class - 4).
On the Effective Date, the Equity Interests in the Debtors shall be canceled and extinguished, and the holders thereof shall not be entitled to receive any Distributions on account of such Equity Interests. On the Effective Date, the Debtors shall issue a single Equity Interest to the Plan Administrator.

And the consolidation of equities into one debtor

6.2 Substantive Consolidation of the Debtors.
(a) On the Effective Date, the Debtors shall be deemed to be substantively consolidated. Any claim
against one or more of the Debtors shall be treated as a single claim against the consolidated estate of the Debtors
and shall be entitled to a distribution under this Plan by the Plan Administrator only with respect to such single
claim. However, the substantive consolidation provided for herein, shall not affect the obligation of each and every
one of the Debtors under 28 U.S.C. § 1930(a)(6) until that Debtor’s particular Bankruptcy Case is closed or
dismissed.
(b) Unless the Bankruptcy Court has ordered substantive consolidation of the Bankruptcy Cases before the Confirmation Hearing, the Plan will serve as, and will be deemed to be, a motion for entry of an order substantively consolidating the Bankruptcy Cases. If no objection to substantive consolidation is timely filed and served by any holder of an Impaired Claim or Equity Interest on or before the deadline for submitting objections to the Plan or such other date as may be established by the Bankruptcy Court, an order approving substantive
consolidation (which may be the Confirmation Order) may be entered by the Bankruptcy Court. If any suchobjections are timely filed and served, a hearing with respect to the substantive consolidation of the Bankruptcy Cases and the objections thereto will be scheduled by the Bankruptcy Court, which hearing may, but is not required to coincide with the Confirmation Hearing.(c) The Debtors reserve the right at any time up to the conclusion of the Confirmation Hearing to
withdraw their request for substantive consolidation of these Bankruptcy Cases, to seek Confirmation of the Plan as
if there were no substantive consolidation, and to seek Confirmation of the Plan with respect to one Debtor even if
Confirmation with respect to the other Debtors is denied or delayed.

Does this mean when the BK is over in october we start trading? I can only speculate that PTFC will lose the Q and restructure the business plan with the companies they consolidate.

I am e-mailing the litigators to clarify paragraph 4.4. It reads as equity interest is to be cancelled and only one equity interest shall be deemed intact. I believe that if you read the 8K it states penn traffic consolidated as an entity on financials. Since they have consolidated as stated in Paragraph 6.2, it is safe to assume that the single equity interest that will be intact is PTFC. When this single equity interest is handed over to the administrator it can start trading again as long as a 211c is sent to the Market makers and the SEC to resume trading.

In My Opinion, this plan reads as that those with equity interest in the subsidiary companies will lose.

court case Address: http://www.donlinrecano.com/dr201/penn3/Consolidated%20Chapter%2011%20Plan%20of%20the%20Debtors.pdf