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Foamex International Inc. (FMXI) Message Board

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  • foamtruth foamtruth Aug 11, 2005 1:19 PM Flag

    qualifying for bkrptcy.

    There are earlier postings that give clairvoyance to the August 15 negotiations on the bonds. That said if management is looking for a way into bnkrptcy this is a qualifying event. I just don't see the short term advantage unless they are going to be making foam toys for Burger King/Texas Pacific and they want to buy Foamex cleaned up and low.

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    • Foamtruth, would the lender have released the carpet cushion collateral and allowed the sale if there were no assurances that the bond payment would be met?

      • 1 Reply to texasbroker2000
      • Having worked for two .coms now I know a little about bankruptcy proceedings, and neither had over $1B in revenues and tangible assets like plants and inventory.

        The bank and mgmt do not win anything by declaring bankruptcy. They risk losing customers and suppliers in bankruptcy, which hurts the banks ability to ensure they will get the money they lended. Neither win.

        Additionally a bank will have all kinds of triggers for liquidity in a lending agreement that force customers to take actions before bankruptcy.

        So, on 8/15 when the bond payment is due, if they have worked out their next round of financing terms, and surprise, surprise, they have not declared bankruptcy, then where does the stock head? hmmm....

        the shorts are having a field day with all the panicky sellers on this board.

 

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