Replies to post #236381 on Winning Brands Corporation (WNBD)

[satter]

Obviously not and this is what bothers me. When I read what Eric wrote, I really was not thinking of bankruptcy as he made it sound like it was a bank thing and nothing to do with the company. Says the trusteeship was unnecessary and not a reflection of the company. Even said he intervened to organize bridge financing. Well maybe I or we are missing something, but this does not fit. Trusteeship is absolute necessary for bankruptcy, no bridge financing is going to help and unfortunately it is a reflection of the company. He said he went to acquire items in trusteeship so sure sounds like the bankruptcy was already filed. Like what is going on here. As said maybe missing something but its just not adding up to me right now. Just the other day I decided to search bankruptcy records but would you or anyone think to base on his communication below ?

Background to Current Process

Winning Brands is acquiring valuable intellectual property, as well as physical assets, personnel and goodwill of a technology company in North America that was put into trusteeship when a bank withdrew a line of credit in a manner that created a domino effect. A crisis ensued. On behalf of Winning Brands in the capacity of consultant, I intervened to organize bridge financing for that entity while the negotiations began with the trustee for Winning Brands to acquire the items in trusteeship within a new WNBD subsidiary, free and clear of the institutional liens that caused the difficulty. I know for a fact that the trusteeship was unnecessary, and not a reflection of the quality of the company. The trusteeship, in essence, arose as a technical consequence of the fact that the company did not meet the bank’s acid test ratio during a periodic review. Ironically, the “excessive” debt to asset ratio arose from friendly, foundational, shareholder loans that would never jeopardize the company. But to the bank, it was all about the ratio. (https://en.wikipedia.org/wiki/Quick_ratio)

Such decisions are often made in the “ivory towers” of bank headquarters without much flexibility. If a company does not fit new profile criteria, the company becomes a square peg for a round hole. Banks don’t like that. No one in bank management gets kudos for being flexible. They get criticism for not following the rules. In this case, the bank’s action precipitated a sequence of events that was too complex to stop simply.

My intervention gave the company a lifeline that, to my reckoning, could be beneficial for all parties concerned, if the rescued operation could join us as part of our public company team.