VLNC: Valence Technology, Inc.(fka VLNCQ)

[finbar99]

>>I dont see what keeps them from reorganizing?

That's the 64 million dollar question - there aren't many good reasons that this case did not wrap up completely by end of 2012 as originally telegraphed by the company in September of last year. The one scenario that does make a lot of sense to me is external to Valence - namely what happened with Aone. On multiple levels it surely had to change some thinking - for one, JCI tipped it's hand a little in showing that it is indeed very interested in Li-on IP. But with Wanxiang taking the IP, and this would have been true if JCI had one - the competitive landscape that Berg would otherwise emerge Valence back into has also changed. It was tough enough going up against the large AONE - now Valence has to go compete against the infinitely deeper pockets of Wanxiang - that's a tall order. So does JCI now. And the IP game also changes once the IP is in deeper pockets who can afford to litigate. All that I believe makes it far more logical to explore a sale - and that's about the only reason I can see for hiring investment banks 7 months into the case - clearly this was not the original plan, and it's not like Berg is short of cash to fund the original exit plan. I also suspect it may have something to do with preserving the NOLs - there have been changes in the 5% holders - and the NOLs are probably in the neighborhood of 500 million - if Valence can't exit with them largely intact under code section 382 due to ownership changes (the rules under 382 are difficult), a well structured sale might be needed to unlock the value of the NOLS. I noticed on the most recent motion practice between debtor and UCC that they've stipulated to postpone a deposition out to June - there is no hurry to get Valence out and I'm sure there is a very good reason for that.