Evaluation Hearing, Day One, pt 5
by: shallow_explorer 04/18/05 10:56 pm
Msg: 56103 of 56342
Sorry so wordy...
Now it’s the shareholders committee’s turn. Mr. Weisfelner begins that equity participants firmly believe that the debtors EV, enterprise value, is high enough to provide meaningful recovery to the shareholders. Additionally, the EV is extremely sensitive to minor changes in the underlying assumptions.
While planning on a typical opening statement as he learned in school, one where you summarized your case, while saving disparaging comments with respect to the other side’s witnesses, until the closing – Mr. Weisfelner felt he couldn’t leave Mr. Kurtz? accusations w/respect to the SHC experts’ motivation for making “wildly” high estimates. First he referred to Mr. Kurtz’ worry about having to renegotiate the valuation if the SH have value. He pointed out that this would be the FIRST NEGOTIATION since the debtors had refused systematically to meet with the equity committee even once. He pointed out that the senior creditors and Mirant management are aligned and have similar self-serving motivations. He brought up the National Gypsum and K-Mart bankruptcy travesties. He said, rather than being angels, isn’t it unseemly when so called experts sell their wares to management and that by underestimating the valuation, these so called “experts” can enrich management. It was here that Judge Lynn interjected his “crystal ball” comment.
Mr. Weisfelner said Debtor in 2003 was on the verge of an out of court restructuring using the same Blackstone advisors that would have left the equity intact, but now, 2 years later after the biggest uptick in the Merchant industry in recent memory, an uptick that has added $10 Billion in market cap to the industry, Mirant is ready to decimate its shareholders. Enough on motivations, Mr. W said, lets move onto the case.
