See below. Am I missing anything here that suggests I should continue to hold?
I reviewed the latest Monthly Operating Report available, which is the August report. The report lists cash of $18.3 mm, post-petition liabilities of $1.8 mm, and pre-petition liabilities of $8.3 mm, not including the Par liability. Since August, the estate incurred expenses for September. Let’s assume those expenses consist only of payroll, rent and professional fees. So, let’s modestly assume these expenses are $173k, $33k, and $200k, respectively, for September. If you check the historical monthlies, payroll and professional fees have never been lower in previous months than what I’m assuming for September. Putting all this together, I get $18.3 mm - $1.8 mm $8.3 mm - $406k = $7.9 mm. Let’s assume $0 for Par’s claim. Based on this recovery to equity, the MIP will pay management $750k, leaving $7.1 mm for equity, which implies $8.3 cents. The best case scenario recovery is below $8.3 cents given that the estate will continue to incur expenses at least through January 2011, the date when the arbitrators will rule on the Par claim. If Par wins its claim, the recovery is reduced by another $3.5 mm, leaving $4.4 mm for equity, or 5.1 cents. The equity price closed today at 8 cents on 154k volume.
From these levels, it seems there's no upside and significant downside to Middlebrook equity.
News 
Market Data 
Discover 
