TMST, Inc., 8% Senior Notes (TMA.GB)

[Olmsted]

Just found the item EI was discussing wrt Credit Suisse's interest in the MSR sale.

http://www.sec.gov/Archives/edgar/data/892535/000119312512077647/0001193125-12-077647-index.htm

From the filing:

In the Decision, the Bankruptcy Court confirmed its prior ruling that the Debtors’ bankruptcy estates hold approximately $16,882,896.95 plus earned interest, representing unpaid servicing fees and advances reimbursed by the purchaser as part of the MSR sale, free and clear of the lien held by Credit Suisse, and additionally determined that the Debtors’ bankruptcy estates are entitled to and hold 5% of the proceeds of the purchase price ($79,302,557.53) of the MSR sale free and clear of the lien held by Credit Suisse, approximately $3,965,127.00, plus earned interest, for a total recovery of approximately $20.8 million.

This tells me that the cash the debtor has which did not come from the MSR sale is the debtor's alone. $75m of the cash from the MSR is Credit Suisse's.

The waterfall looks to me like (based on May Op Report, EPIQ #1603)
Cash: 106.08m
Credit Suisse Lien: 74.8m
Post-petition liabilities: 7.32m
Cash burn: ?
Lawsuit settlements/awards: ?

23.96m + lawsuit proceeds - cash burn

or, for 300,000 notes:

~$80 + lawsuit proceeds - cash burn

Not really a margin of safety unless one expects some good legal wins. To me, valuing this has become a question of estimating proceeds from litigation vs. how fast trustee and legal fees accumulate.

Someone correct me if I have misunderstood something.