What would need to transpire in order for stockholders to receive any distribution in the SEBC case? (6/29/12)
In order for stockholders to receive any distribution in the SEBC case, SEBC would either (1) need to realize value from its remaining assets in excess of the amount of remaining unpaid post-petition interest due to creditors, or (2) engage in an equity infusion transaction of the type proposed in the Chapter 11 plan.
As noted in previous FAQs ( see #46, #48, #49, #50, #51, #53, #54, #55, #57 and #59), despite the efforts of the Trustee and his professionals since 2009, the Trustee has been unable to locate an investor for an equity infusion transaction. The Trustee believes that the prospect of an equity infusion transaction is very remote and, for that reason, as indicated in response to the immediate prior question, the Trustee will be moving to convert the case to Chapter 7. With respect to the ability to realize value from SEBC’s remaining assets in excess of the amount of remaining unpaid post-petition interest due to creditors, the Trustee believes that the prospect of realizing such value is nil given the amount of post petition interest remaining to be paid to creditors.
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