Replies to post #180 on W2007 Grace Acquisition I, Inc. (fka WGCBP)

[56Chevy]

Ok great..you're on record.

TY

[Hank Moody]

Your theory implies that Goldman is going to keep the remaining portion of the public's share of $2bil for itself. I think that it is one thing to delay paying us for many years, but it is much more serious to cash us out at less than we are owed and keep it for themselves. In America, this is called stealing.

[Enterprising Investor]

The preferred stock issues could be dealt with in a two-step approach upon closing of the sale transaction in your scenario.

The company could announce payment of all accumulated, undeclared preferred stock dividends in cash and redemption of preferred shares in either cash or new ARC Hospitality preferred shares.

Public shareholders would, of course, take the money and run. PFD Holdings, LLC, which owns at least 58.8 percent of the outstanding shares, would opt for ARC Hospitality preferred shares.

Why?

PFD Holdings, LLC and any investor who bought at huge discounts from par will pay capital gains tax. [I no longer have this issue. I sold my taxable holdings and bought a like amount in my IRA about 18 months ago.] By exchanging WGCBP and WGCCP for ARC Hospitality preferred shares, PFD Holdings, LLC would be able to defer the gain until redeemed (unless exchanged for something else down the line). In addition, the new preferred stock will generate a much greater cash return on investment on PFD's cost basis.

Another option would be for PFD to take the entire liquidation value in new preferred.

Then again, what do I know?