When it comes to Tronox, I think that understanding the judges frame of mind speaks volumes. Lets face it, our fate lies in the hands of the Judge. I am in favor of always reading between the lines on what the judge is telling us.
1. He was annoyed at the onset regarding the legal fees accruing in this case (as documented in March of 2009.) This is not a typical position for a judge, as the "Old Boys Club" is always in favor of attorneys making out well.
2. He put the EC together in the first place for a reason. The TRX ship was knee deep in Rats.
3. When Tronox brought the PSA to court, the EC had some very specific things they wanted modified:
From section 26
"Specifically, the Equity Committee respectfully requests that
this Court delete the following language from the order approving the Plan Support Agreement:
The entry into the Plan Support Agreement by the Parties, and the
performance and fulfillment of their obligations thereunder, does not violate any law, including the Bankruptcy Code, and does not give rise to any claim or remedy against any of the Parties under section 1125(e) of the Bankruptcy Code, including the designation of the voteof any Party under section 1126(e) of the Bankruptcy Code, on account of entering into the Plan Support Agreement and the performance and fulfillment of their obligations thereunder."
The Equity Committee further requests that the order include the following additional language:
To the extent that a competing plan is developed and/or the
Debtors’ exclusive periods are terminated, nothing herein or in the Plan Support Agreement shall limit the ability of any of the parties-ininterest to discuss and/or negotiate the terms of such competing plan with the plan proponents of such competing plan, or to vote in favor of such competing plan.
Obviously, this was the EC allowing this plan to be used as a place holder, and the language that they requested be modified was to put the court on notice that they had a substantially better plan coming.
Evidence of this is seen here:
Section 5:
5. The Equity Committee’s efforts to develop and receive commitments for financing a plan alternative have been hampered by the pending auction and potential sale of the business.
The cancelation of the pending sale to Huntsman Corp. has eliminated the most significant obstacle to securing financing for an alternative to the Ad Hoc Bondholders’ Plan. Thus, should future negotiations with the parties to the Plan Support Agreement fail to produce a fully consensual plan based on the current structure, the Equity Committee is confident that a fully
funded alternative to the Ad Hoc Bondholders’ Plan can soon be achieved.
Section 27:
The Equity Committee continues to support efforts to reorganize Tronox and is hopeful that the Ad Hoc Bondholders’ Plan can be consensually modified to include the interests of the shareholders. However, the Equity Committee is confident that a fully funded alternative to the Ad Hoc Bondholders’ Plan may soon be achieved, and such plan should be permitted to gain the support of unsecured creditors, the EPA, and the lenders with respect to the Replacement Facility.
Not only did the judge agree with the EC, he made the attorneys involved make changes to the PSA in the hallway with a word for word change that was requested by the EC before he would sign the PSA in to motion.
I believe that the EC already has agreements in place but with the auction keeping them from getting deals inked. It wouldn't surprise me at this point to see them skip the current PSA all together, and introduce their own plan turn key...lock stock and barrel.
When that happens, remember what the judges state of mind has always been. He seems to agree with the logic demonstrated by the EC. The AdHoc Bondholders Agreement is going to look like smoking pile of manure. The judge may even take offense to the outright low balling of the companies value in exchange for 70 percent ownership and completely screwing the share holders.
It is THIS deal that we need from the EC. When it hits, I believe the judge will fast track it so quick it will make your head spin and your wallet grin.
Newtech, Uhl, Titanium...did I miss anything?
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