So we have 28% of combined entity going to LCC shareholders, 69% going to creditors, AMR employees and other claims and 3% going to old AMR shareholders.
At LCC=15 AMR claimants are made whole, meaning they have received shares in combined entity for the amount of claim which stands at 7.565 billion.
As LCC price rises above 15, if the new AMR shareholders do not sell, it is their gain on the top of $15 base conversion price. So how does any gains above 15 flow to old AMR shareholders? Do they get more shares issued? Wouldn't that dilute LCC and new AMR shareholders and bring their ownership under agreed 28/69 division?
Yes I have I just dont understand how " incremental deal value flows disproportionately to holders of AAMRQ" I thought claim pool is going to get min. guaranteed proportion of combined equity (68.5%) not variable equity based on LCC stock price. In his logic, if AAMRQ get the incremental value, it would have to come out of 7.565B AMR claims
I think your focus is misdirected - the key point in those assumptions is : LCC = 18.50.
BTW this is not a one way street now - the more valuable AMR is than it makes LCC more attractive. And of course vice versa in Jamie's example. I am NOW rooting for both companies to blow the doors off of any or all estimates. Aren't you?