I'm posting the following private reply to me by Zeev, in response to my questions re HLSH back on 8/2. Sorry that I forgot to post it when received~
HTH,
JohnD
Note: I am posting this with Zeev's permission.
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Sent By: Zeev Hed Date: 8/2/2003 9:03:54 AM
John, I really cannot put my hands on their accounting. HLSH seems to have defaulted on a convertible bond, and until that and other debt is resolved, who knows. Joe Stocks is very positive and is sure they will earn $.70 per year. If they do, they may very well pay all these earnings and then some to:
a. Stock holders that bought high and sold after the delisting and of course, their lawyers
b. Patients that were operated on just to generate cash, with no valid medical reason (each such patient could easily demand between $1 to $10 MM, insurance companies do not cover losses due to fraud). I have no way to estimate that but even if it is only 1,000 patients, it is a potential liability of $10 B which they cannot pay, thus they will have to file for protection.
c. The IRS is after them with both hands.
d. The bond holders may force conversion at ridiculously low prices.
I think you should ask Joe stocks about these potential problems on the thread and see why he thinks all these potential liabilities are naught. Frankly, with 12 executives already indicted and 11 having plead guilty it will be extremely easy for civil suits to be won. This is a man made asbestos case and worse, greed got physicians and executives to perform unnecessary operations, some of which resulted with the loss of life. I would not touch it until it is cleaned up and "reowned", namely current stock holders essentially wiped out and debt (including new debt from law suits) holders get their stake.
Zeev
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