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Southern Company Message Board

  • r650 r650 Dec 16, 2005 11:31 AM Flag

    litigation plan trust per 8K

    The 8K released yesterday contains a very comprehensive summary of the Plan Trust and how it will function in Article IX 9.1 Creation of Plan Trust and appointment of Plan Trustees and 10.1 Distribution Provisions.

    10.10 relates to Special Distribution Provisions for Equity Interests. It fairly clearly states that the only equity holders entitled to receive anything will be those who own mirkq at the close of business on the effective date. There is no mention of tradable securities related to the right to collect from the proceeds.

    Paragraph 10.13 is a very comprehensive summary of the Designated Net Litigation Distributions.

    If you run the numbers I think you will find that at least 200MM has to be received and distributed by the Plan Trust for mirkq to be a better buy right now when compared to mirpq or the bonds. This 200MM would provide about .20 per share in value per mirkq share in excess of the distribution to mirpq. While holders of mirkq and the bonds do receive their share of any proceeds, the relative value of the litigation proceeds is far greater on a per share basis for mirkq than mirpq or per bond.

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    • ...ouch!!!!

    • The 8-K has a formula for it which I have not studied. I think you would just get the differnce between strike price and current price in shares.

    • ..cashless exercise...a one for one swap???
      ..having never experienced non transferability, (even on a temp basis) I am at a loss for an answer...

    • ..non-transferability of warrants was baci in my subconcious all night...
      ..I must say that I am not at all happy with non transferability...
      ..we have..yet we have not...
      ..cautiously i view this as a well designed trap by the mir group..
      ..we in fact have something we cnnot sell on the open market...
      ..my question at this point is "will mirant buy back this paper"??
      ..if not, then I must presume it a trojan horse and perhaps illegal...
      ..normally trading rights follow all paper of this type...and we assumed a value of the warrants based on the strike price....
      ..in final analysis, our warrants were a lure..we can do nothing with them ...

      ..I believe this issue must be brought back inf front of judge Lynn...

    • You need to read the 8-K. It says they will use their best efforts to list the warrants on an exchange, so I would presume they will be transferable after that. There is also provision for cashless exercise.

    • That is what I really was trying to say that you have to shell out the full strike price before you can get the shares in your name instead of warrants, if the warrants are non transferable.

      Only time value you have then is not to come up with the money until the holder feels the time is there to convert and sell for up to five years.

      Other thing is to get $1.45 (without litigation included), at the time of exit from bankruptcy, the share price must be around 35% more which is close to $30 and current MRNTV is not showing that price.

      Any thoughts by anyone?

    • That is precisely what I was trying to say that you have to shell out the full strike price before you can get the shares in your name instead of warrants, if the warrants are non transferable.
      Only time value benefit you have then is, you have to put up the money when you feel is the right time in next 5 years.

      Other thing I believe is to get $1.45 (without litigation included), at the time of exit from bankruptcy, the share price must be around 35% more which is close to $30 and MRNTV is not showing that.

      Any thoughts from anyone?

    • If that is their DD, I wonder how this was agrreed by all without all the conditions properly clarified.
      I hope there is something more that is not in print yet or may be is omitted !!

      Time is very short to make a decision. No wonder some here already have decided what they should do and did it or have decided they do not want to do it conciensiously (sic).

    • It seems that is what is inteneded as of today as you say.
      But what price sellers would have to pay to convert them. It would be a lot of money at market price which would be higher than the strike price; as then and then you might want to buy it at any future point.

      Wheat I am really trying to understand is how you can get your money except putting up a large sum of money up front?

      Only other alternative is to hold until they sell the company or you come up with the money before expiration, naturally assuming market price for common is higher than the strike price.

    • key word is "normally"...
      ..bear in mind that this is well thought out...
      ..the strike price is $22...the warrant gives you the right to buy the stock for $22...
      ..remember that it is only a right to purchase a stock at a set price...
      ..should the stock go to 15...you have a piece of paper that you cannot transfer to anyone...(perhaps not even the company)..since you are $6 under water...

      ..but ..should the stock trade at $30, then you only need pay $22 for the stock and send in your warrant ...(in this case it acts like a stock discount coupon)...

      ..now..if you do not have $22, but your dirt poor daughter is pregnant again, and you decide to sell the warrants ...then in this case you receive the difference between the strike price and the price of the stock or..$22 - $30 = $7...

      ..if you have a sinking feeling about this do not feel alone...

      ..as I mentioned...they did their DD very well...

      ..our only way of making money on the warrants is for the company to succeed in fashion unprescedented....

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