Equity is now in very good shape. I was upbeat the past few months under an incorrect assumption that the discharged happened on the effective date and the CTs survived the discharge. Since, I have learned the discharge will happen right before the closing date of the Bankruptcy thus releasing Lehman from all the 358 billion in liability and allowing it to be a healthier and leaner company.
I since discovered the CTs are lumped with the liability subject to compromise line item. I can only prove with hard facts CTs are 10B and are debt instruments. I cannot prove my phone call with Lehman talking to a person telling me Lehman was quasi debt. The POR states CTs are debt. That is a fact so, i will proceed with saying CTs are debt only. *(I will say, I could not find anywhere in teh class 12 section listing the CUSIPs of Equities in that one big share....maybe its there too I dont know...that is the only hope left)*
With that said, IMO Lehman will do a discharage to get rid of over 350 billion in debts which includes CTs. They will be foolish not to. I hold CTs and a lot of them too. It is sad for me to come to this conclusion as I DD more and more and learn more as we get more info. It will be foolish to think they will not take a discharge just to preserve NOLs for CTs. That was Heistheman's case not to say he said to preserve the NOLs only by not taking a discharge but to say they have no reason to preserve the debts on the line item just to give it shares of a new company. Under IRS code, and I finally read all sections including 108, LEHMAN can use the remaining debt and equity to preserve the NOLs. The CTs are not needed. If I am wrong please tell me where I am wrong. I made mistakes in the past and I owned up to it and will be glad to own up to this one too......
With that said, once the 65 billion is paid and they can exit default, the will discharge and close out the BK. Making Lehman an unrestricted company again. Now they have equity to and remainng debts to fully utilize NOLs as a reorganized comapny and they can then proceed with a merger/sale/IPO or continue and grow operations....All this is from my DD and my opinion now. Until proven wrong, I think Equity is now in very good shape. We probably will not know this until the very end but will say Equity is now as good of a play as CTs if not better.
They will either dicharge the massive debt under liab sub to compromise or equity BUT NOT BOTH. The most prudent way is to keep equity IMO. It will be the worst management decision on the face of the earth to not discharge 350 billion plus billion in debt....Thats all folks...good luck...and go figure..IMO for what its worth....devil
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