Replies to post #111 on Mirant

[Joe Stocks]

Evaluation Hearing, Day One, pt 6
by: shallow_explorer 04/18/05 10:57 pm
Msg: 56104 of 56342

Mr. W noted that since January, Mirant has increased its estimated claims by $0.6B. This has increased the gap that the SH have to overcome from $2.5B to $3.2B. In contrast to Mirant’s $8B EV, our experts have a range of $10.5-$13.6B. SH need to bridge $3B gap +/-, how are they going to do it?

Here’s how:

1. Project “Falcon” –
a. unbeknownst to Examiner
b. unbeknownst to MAGI Committee
c. unbeknownst to SHC
d. unbeknownst to Debtor(?)
NRG made a merger proposal to the Corp. Committee. 1st proposal was in 7/2004. NRG hired as counsel the “dream team” of corporate bankruptcy attorneys. Showed that Corp seriously evaluated this offer. Outside reports were prepared in 08/2004, 09/2004, 10/2004 and there was a status report dated 01/2005. In these documents consultants agree with NRG view of synergies.

Supposed synergy value = $1.6B using Mirant’s consultant’s lower multiple evaluation. Consultants value of NRG merger = $17B minus NRG value = Mirant EV of $13B.

Mr. W wondered how/why this info was kept secret from all the parties. Stated that NRG was not the only company interested in MIRs assets. Brought up CitiCorps attempt to steal the international assets.

Mr. W then went through an item by item exposure of the Debtors/Creditors cabal. Mirant is undervaluing the estate in the following ways:

1. Evaluation Errors in their methodology
a. Roll forwards
b. Exclusion of Dynegy correction
c. Backout Longterm notes receivable
d. Correct Calpine exclusion