Man it even gets better, remember the 12/31/2012 filing by the Ad Hoc Second Lien Committee # 1127.
Remember the following verbiage from the filing as the Ad Hoc Second Lien Committee was jockeying to get court approval to develop a reorganization plan?
“The first 120 days of this case have not gone well. When the case began, the Debtor’s Second Lien Notes, with a face amount of $1.5 billion, were trading in the market at approximately 30 cents on the dollar. The Second Lien Notes are now trading at approximately 10 cents on the dollar, and the Debtor’s debtor-in-possession financing is likewise trading well below par. Unsecured claims and common stock have no meaningful market value.”
I love the part about the, Unsecured claims and common stock have no meaningful market value. At least they stated “market value” and not “real value”.
These folks opened the door for value assessment and I believe this judge wants to help those who have dollars at risk, see a return of their money or some of their money. I also believe the judge has no real interest in protecting the investment “speculator”. Remember the Diamond McCarty “payment” concerns and look at all those advisors, hired by the parties, getting checks. This advisor group got this much and that advisor group got that much. Maybe just maybe someone is keeping tabs on which group got what when the final numbers are approved by the court.
But the Ad Hoc Second Lien Committee and this filing 12/31 filing; you have to love it! Do you think all of the original holders of $1.5 billion in bonds still have the value of their original investment at risk? Do you think just maybe Bondholder “A” who had a sizable investment sees his value eroding and cashes out only losing twenty percent? So now he has 80% of his investment back. The price continues to erode and he gets back in, knowing this is a bad investment, buys back his “Face Value Position” at 20 cents on the dollar and still has some of his original investment in his pocket.
And now working for Bondholder “A” you have the Ad Hoc Second Lien Committee trying to recover 1.5 billion dollars. The bondholder that really lost can’t file a claim because he is “long gone” from the process and more than likely held a very small position.
And of course everyone understands the real value here as the Ad Hoc Second Lien Committee states in the filing;
“the Debtor’s motion to sell its deep water assets must be filed by January 22, 2013, and the auction of those assets is to occur by March 26, 2013, subject to an extension of no longer than four weeks. This schedule leaves precious little time for holders of Second Lien Notes, who are owed $1.5 billion plus interest, to determine whether they want to own the Debtor’s equity or assets and, if so, how to deal with the claims of the DIP Lenders, ORRI and NPI holders, and other secured creditors.”
Do you think the court just might have a problem with bondholders like Bondholder “A”? Kind of makes you think about how many Bondholder “A’s” are out there and there total ownership position in this 1.5 billion of debt. Man I can see these folks being identified in court and the judge saying to these folks, gentlemen please take a seat in the back of the bus.
Don’t you think it would be interesting if the court ordered a detailed accounting of just who these bondholders are and a transaction history of these folks ownership position to establish the “real financial loss” of this group. Surely the equity committee can make this request of the court as the Ad Hoc Second Lien Committee appears to be jockeying for the Debtor’s equity and or assets.
And these folks think the “Unsecured claims and common stock have no meaningful market value.” The common stock holders are the owners of the company and the ATP current management holds a 13% position in the company. Maybe just maybe the equity committee should request the court to require the current bondholders to identify themselves and supply a transaction history to support their claims, along with the bond “ownership” transaction logs from day one.
Do you think maybe just maybe the Ad Hoc Second Lien Committee might see the value in a 20 cents on the dollar settlement. Do you think the bankruptcy court gives a hoot about the “wall street bond speculators” trying to make a buck, when the investors who really “lost their money” are out of the process.
I would be surprised if 1% of the original bondholders that invested the $1.5 billion still retained their “original” investment. But I would suspect those bondholders selling their positions early in the process are back in the game, trying to make money on the face value of the bonds.
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