Replies to post #9536 on Octave Specialty Group Inc (OSG)

[andy e]

He read that in the filing...ABK "expects" to emerge from BK in June 2013 at which time original common shares will be cancelled.

[VortMax]

Where did you find the april 18th hearing? Can you post a link.

From what I can ascertain ABK is turning around so quickly that they will need to pivot and reorganize differently.

From the last PR on 3/7/13, the IRS, which has not approved their POR, has until June 12 to decide. ABK and the IRS are in a dispute over how ABK claimed losses.

I'm assuming ABK is going to try and appease the IRS by modifying how it claimed those losses.

The positive for shareholders is that if ABK overstated its losses, then they have put too much money away in their loss reserves, meaning their may be extra liquidity for the company and it could return to normal, or pay out shareholders. You have several analysts arguing that there is anything from $6.65 to $15.00 in shareholder equity out there.

Chapman yesterday overruled objections from shareholders, who said the plan will improperly give them nothing while potentially paying creditors more than the company’s actual debt. Edward Hosinger, one shareholder who is a former analyst, told Chapman that he believes there is still around $6.65 a share in value for equity holders because Ambac overstated its loss reserves.

“The excess amount of monies placed into the loss reserve belongs to stockholders,” Hosinger told Chapman.
Valuation Estimate

Chapman said that given the company’s debt of about $1.7 billion, it would need to have made an error of $1.5 billion to $1.6 billion in its valuation estimate for there to be value for shareholders.