Replies to post #30697 on Integrated Freight Corp (fka IFCR)

[eddy2]

If the lease to purchase obligations are not met then the seller often ends up with both companies. Today's share holders then become the lease seller. There is about ten years for three quarters of the process to take place and another to transfer the reverse agreement back. Depending were they are in the process it could be an advantage too sell the buyers equity and purchase the sellers i.e. Prefered shares.

I would like to point out that a purchase of prefered shares is often known as acquiring annuity position in the seller. Those positions are often what a mutual fund will purchase for there clients.

Can an annuity position default? Well they can if the obligations are not met by the purchaser. The positive is that after bank debt, asset depreciation obligations there is always something in the pot but never more then the original equity position stated on the balance sheet.

The tax obligation i.e. "Treasury stock collateral " is the obligation of the buyer.

So what is the bottom line? Assets minus treasury stock valuation minus (liability minus equity i.e. " sellers collateral " is the trading share holders value relative to the market cap of the company at the time.

Now you do have the professional market makers weighing in to ensure a balance trade. Today they use very fast computers that for all the years that I have spent crunching numbers have never bought a stock with more the a ten percent up side unless of course there is a huge private equity offer for all the sellers shares i.e. Collateral Position.

Due keep in mind that the collateral debt is often the responsibility of the seller not the buyer. The buyer is the intrinsic asset often behind a good portion of the collateral offered.

This intrinsic value paid to the seller often covers the depreciation of the leased to purchase position between the buyer and the seller.

It is to this that depreciation then becomes income to both the seller and the buyer purchasing the rival company.

Stay tune for the fall program coming up on deferred collateral tax obligations and how and why fifty percent of the treasury tax obligations will fall back to the seller unless the buyer is behind in its obligation of purchase to the seller.