News 
Market Data 
Discover
Replies to post #184647 on Mr Cooper Group Inc (COOP)
Mirant's contentious bankruptcy case was marked by a rare victory for shareholders after Lynn forced Mirant to immediately ramp up its valuation by $450 million. Investment house Blackstone Group LP calculated the initial valuation. The revision led to negotiations with shareholders and a second reorganization plan that enabled them to carve out a 3.75% recovery.
The shareholders were due to be wiped out under the first plan before Lynn made his revision ruling after a record 27 days of valuation hearings. Shareholders won their uncharacteristic victory when Mirant was told to update its value by using current natural gas prices after the equity holders argued that the utility was using outdated data in their valuation.
Unsecured creditors will reap the 96.25% balance while the shareholders also receive half of the proceeds from pending litigation upon Mirant's exit.
Edward Weisfelner was equity committee counsel in New York from Brown Rudnick Berlack Israels LLP, while Eric Taube was Austin, Texas-based co-counsel at Hohmann, Taube & Summers LLP. Anders Maxwell was financial adviser to the equity committee from New York investment bank Peter J. Solomon Co.
"It's not as simple as 'Gas moved into our favor,' " Maxwell says. "Clearly, [we] benefited, but if you go back and look at our valuation analysis and 27 days of court hearings, there were a lot of issues that had to do with errors and biased analysis that were detrimental to the interests of the common stock holders. And the judge more or less concurred with our conclusion, and subsequently the market has borne out the efficacy of the analysis."
...The deal is a gamble on the bankrupt flatware maker and is the kind of transaction that professionals say is representative of where some hedge funds are seeking returns. Some point out that while the most risk is at the equity level, today's market also gives it, as one lawyer says, "the most bounce." "How much gain can you make on a bond taking out at par"? says Maxwell. "In this market, where there's so much money chasing securities, in many cases there's nowhere else to go to look for a real substantial gain [than equity]."
