Value prospects getting too strong to resist: $0.70 for a stock with a $5.21 book value. The company has a strong brand, remains a major player in its industry and has solid opportunities for future business. Bankruptcy is not a realistic scenario here, despite what the shorts may say.
See the CBK one year chart for a good example of what is shaping up here.
Bankruptcy is a possibility, but Michael Lavelle entertained a forbearance agreement so that he could try to raise enough liquidity to meet the $20m minimum liquidity test required by the end of the forbearance agreement (Feb. 1st).
When a forbearance agreement is arranged, a borrower is temporarily relieved from making payments to the loan. This means he is pocketing more cash into SCHS' balance sheets, increasing chances of meeting the minimum liquidity debt covenant.
Michael Lavelle needs to have $20m in cash and cash equivalents on his balance sheet by February 1st. If he doesn't, the company will either default on the loan or another sticksave will happen (refinance, covenant waiver, extended forbearance, etc.)
Shorts pointed out the same thing about CBK last spring and since then it's tripled in value.
Bottom line here is that banks are willing to work with companies that are market leaders in their segment, have a solid brand and a quality management team. SCHS fits that description.