I'm thinking we have a little leverage in the Lehman situation
4Kids filed their claim to go to arbitration many months before Lehman filed Bankruptcy. So, there were two disputes in the pipeline, one against the individual brokers, and the big one against Lehman. Even during bankruptcy, in 2011, in order to avoid going to arbitration, the brokers settled for 489K.
Now, 4Kids considered their claim to be secured claim, though they are listing it as an unsecured general creditor claim. I'm not so sure that this particular designation is final. It could be final, but maybe the Trustee made an initial determination that it was an unsecured claim. However, 4Kids/4Licensingstill has the right to go to arbitration for the whole enchilada, so if Giddens (Lehman Trustee) doesn't offer enough in the form of a settlement then 4Licensing management could take it to arbitration (15 million minimum). Remember, it will be the exact same set of facts that caused the brokers to settle.
In any event, my guess is that the absolute worst case scenario is 20 cents on the dollar as a general unsecured claim. That is equal to the current market cap now of 6-7 million. Plus, we are likely getting close to the point where the window for 5 percent holders closes, which means that insiders could buy, assuming that they had no other material non-public information (like settlement progress with Lehman).
There are still a handful of small claims to settle in the next month that management is looking to have the Judge expunge for various reasons (see recent filings). Once those are clear, then I expect an announcement of a Lehman settlement/payout. Things are setting up nicely here, as the overall market is in a very dangerous positions, with lots of companies at all time highs. This should be the slingshot move that is the holy grail of investing........an extreme up move for FOUR holders, while the rest of the market tanks. That is a high possibility as we hit the half way point of 2013.
"assuming that they had no other material non-public information (like settlement progress with Lehman)." someone on here was trying to argue that having this info wouldn't be MNPI.. anyone with any knowledge of any facet of those negotiations ($ amounts, timing, etc) that the public didn't have would be strung up if they executed a trade while that was the case.
- If investors are currently buying billions of dollars of LBHI's general unsecured claims against LBI for 45% of face, those investors are obviously expecting the ultimate payout to be NORTH of 45%;
- I came across a FINRA auction rate securities arbitration case in which the arbitration panel ordered UBS to pay the claimant (Kajeet, Inc.) 10x the amount of money the claimant actually had invested in the ARS;
- It appears the big boys (e.g., Citgroup) are generally now trying to get these cases away from FINRA arbitration and into the courts (see news stories from early May 2013). Guess they don't like the ARS arbitration awards that have come out in the past few years. :).
thanks.. i'll have to check the finra/ARS stuff out when i get a chance. and i saw where WGM auctioned off those LBI claims (and it being hailed as 'groundbreaking' - an affiliated debtor selling claims against another to free up capital). we're in some new territory and it's hard to say how it pans out.. the buyers may be expecting much more than 45 COTD but distressed can be a tough racket sometimes :) 'tis interesting, though.
My eyeballs just popped out of my head. 10x the invested amount?!!!
4LC can use that case as leverage when they negotiate with the trustee. If he tries to low-ball, they can push for arbitration via FINRA (as initially stipulated at time of lehman account formation). I don't know if that is allowed under bankruptcy stay though. Do you, by chance know, bones?
One downside though. They'd exhaust the entire NOL in one sitting. Hahaha.