School Specialty, Inc (fka SCHSQ)

[east600]

The debtors-in-possession (DIP financiers - old bondholders) have thrown a bomb here.

Basically, they want to continue as a "going concern", but we want the benefits of that going concern at fire sale prices. So they get a liquidation valuation that strips an additional $300 million off of an already stripped-down balance sheet PLUS they ignore $25 million for the make whole payment (unsettled at this point but already booked as a loss in FULL)PLUS they ignore $30 mil minimum in tax benefits that were taken off the books due to sale that is not contemplated at this point.

Imo, this whole thing gets tossed. Docket #837 lays out the lousy deal. Docket #847 explains why it is a lousy deal and objecting to the lateness, inadequacy, and unfairness of the filing.

"...Throughout this case, the Committee has maintained that there is substantial value for the unsecured creditors...however, the Blacklines of the Plan and Disclosure Statement do not reflect consideration for that value, nor do the recoveries afforded to general unsecured creditors (both Trade Creditors and other general unsecured creditors) reflect the intrinsic value of the Debtors. The Committee will not consent to such unfair treatment."