I feel that the Judge will set a date to hear more arguments. I cannot see how he can rule against them on everything. Bankruptcy Judges have authority to rule on all of these matters, obviously. The Judge may try to pass the buck to someone else, but either way, Palm Beach Capital is in it until they have their day in court.
At some point, if it is determined that the Senior lenders shorted shares while having inside information, then that shows unclean hands, and that is also illegal, which could lead to some sort of settlement or verdict.
Not only that, but Palm Beach Capital's argument that the Senior Lenders should have their debt converted to equity argument certainly has merit. I think the key is to somehow get to trial, either in BK court or elsewhere.
Unless the Judge denies every motion and doesn't set any future dates for arguments, or denies Palm Beach Capital a chance in the future to contest the Final DIP order and Make Whole Penalty, then I see next week a s a big win for shareholders.
The three big issues are:
1)Whether the Make Whole Penalty is enforceable
2)Whether Senior Lenders actually intended their investment to be equity in nature and not debt.
3)Whether they shorted based on inside info.
We also have auctions/asset sales starting Wednesday.
Nobody can predict short term price moves. But if we get some good news I could easily see 10 cents or more. If we somehow get some really good news, and the Judge either tips his hand in our favor, or renders some sort of favorable verdict, then I can see 20 cents or more, as that would set the stage for some sort of settlement, which would have to include shareholders, since that is what Palm Beach is fighting for, as they own 37 percent of the shares, while only owning 5 million in debt.
The only way Palm Beach Capital doesn't get destroyed here is if equity/shares come out with something.
Bids have been strong the last few days. As strong as they have been in three weeks. There looked to be endless bidding at 4.9 for the last two days, as every time shares would go off at that price the bid amounts remained the same.
Someone is buying, or covering, or the market maker is creating action. Either way, we have a real shot at a nice spike this week. There are 3 or 4 things that could go in our favor.
