OT:
Look what happened to the common shareholders at K-Mart how they got screwed when K-mart reorganized and had a ton of real estate assets hidden away.
The problem wasn't that there were abundant assets; the problem was that there were even more abundant liabilities. I don't understand how anyone could have invested in KMart without bothering to familiarize themselves with the retail business and subsequently with bankruptcy law. The common stock was obviously a goner, as was apparent to even the most casual of observers (though I grant that there WAS one fund who was buying up the common--and no one could figure out what the hell they were doing).
Nor were KMart's assets hidden. Marty Whitman had been crowing about them for years. He laid out exactly the right way to play this long before--when they were still solvent--and everyone had abundant time to follow his instructions. He might have cornered the market in trade claims, but you could have bought the bank debt or bonds. Or you could have taken the easy route and just invested in Third Avenue (or even better, Eddie Lampert's fund).
Per your post it seems to me that many people here are extremely interested in seeing the agony of short-selling hedge funds getting burned. In fact, this seems to be one of the major themes of this board and of similar ones on other web sites. For them KMart ought to be a frequently cited heart-warming story rather than a frequently cited heart-wrenching story. More money has been lost shorting the post-bankruptcy KMart than was ever made shorting the pre-bankruptcy KMart. I'd say the ratio is something like five to one.
On topic: This naked shorting story on CMKX still has me confused. My understanding is that CMKX issued a cert dividend in CIM. Everyone got certs, correct? (I'm not a shareholder, so I'm not that familiar with what they've done.) And there were not a lot of complaints from shareholders about not getting the CIM certs, right? If there's a big short position, how do you get the certs to the shareholders without a lot of fails? I would be indebted to anyone who could explain to me how such a thing works. TIA.
AI
