The original plan of reorg valued CTDB at $1.6b. Now yesterday, in response to the Aurelius objection, the management has revised to say it is worth $2.05b. Higher but still without the equity in the money. There are a few potential points that could be argued.
The catch 22 for the debtors is this: They solicited votes on a plan on one valuation and now are looking to confirm that plan on another valuation that is 28% higher. This can be argued that it was done in bad faith.
By answering that "bad faith" objection, the debtors will have to admit that they were unaware of the value of the business 90 days ago. (off by 28%). It can then be argued that they are incapable of providing an accurate valuation model. The Aurelius objection points out that Citadel has revised their valuation projections 9 times in the last 12 months - and the industry continues to improve.
Is this enough to sway the judge? Hopefully it is enough for the judge to consider further diligence. Every day is a better day for the broadcast industry and the line now only needs to be moved by about 10% for the valuation to be at the level that triples the current trading range of the equity. And $2.5b gets you to $1.20 per share.
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