Replies to post #24071 on AbitibiBowater, Inc. (fka ABWTQ)

[Straight]

I spent some time thinking about that statement, "solely for the purposes of the plan" some time ago and was curious. I do believe that we will see substantial deviation from those projections in the years to come.

But, my more pressing question on that point: Any insight as to how Mgmts 2010-2014 projection stands up to that of, say, Smurfit?

[McDee]

I find that the greateast irony of all

Is that valuation method of TEV (total enterprise value) only incorporates asset values insofar as they are recognized in the company's Market Capitalization. But that is the main flaw here. Market capitalization is not a good indicator of value in a fear-based setting like those of a company under BK proceedings. Pier One had a market cap of about $12 Mil in March 2009 when BK was a possibility but about a year later when the credit markets calmed it had a market cap of over $1 Billion. The value of its assets were not recognized in its TEV in 2090 but were recognized by the market a year later.

Similarily, on April 16, 2009, the ABI reported assets of $9.94 Billion. Now those assets are reportedly worth less than $3.8 Billion??? Did $6 Billion of value just vanish into thin air? It seems that the judge does not clearly see the problem surrounding a TEV valuation model.

How in the world could Judge Carey justify the loss of $6 Billion of value of ABI in an improving economy? It just blows the mind.