Why? Hollister subsidiary was put in BK. In US BK courts, common shareholders seldom recover anything. More likely some 3rd party buys BK sub out of BK and all the money goes to Hollister creditors. In that event, the Hollister property becomes total loss to GBGLF shareholders leaving them with only the closed down problem Burnstone mine.
Chance of any recovery for GBGLF shareholders was has been significantly reduced as also is chance of buyout by any other miner- except those who might want the problems of Burnstone.
Delays by GBGLF management and directors once again has FAILED shareholders.
March 02, 2013 6:00 am • By MARIANNE KOBAK McKOWN Free Press Mining Editor
ELKO — Despite the company filing for Chapter 11, it should be business as usual for the employees of Rodeo Creek Gold and three of its affiliates.
Rodeo Creek, the operator of the Hollister Mine in Elko County, filed for Chapter 11 Monday in U.S. Bankruptcy Court.
The company expects to continue operating while it works to resolve its financial challenges, said Joe Driscoll, Great Basin Gold vice president of Nevada operations. Rodeo Creek is a subsidiary of Great Basin Gold.
The debtors listed in the case include Rodeo Creek, Hollister Venture Corp., Touchstone Resources Co. and Antler Peak Gold Inc., according to court documents.
“We took this action in order to maximize the sale of our company and strengthen our business so we can compete successfully in the mining industry,” Driscoll said. “The Chapter 11 process will allow us to gain immediate liquidity, continue our operations in the ordinary course, and focus on maximizing the value of the business.
“After careful consideration of all available alternatives, we determined that a Chapter 11 filing was a necessary and prudent step and the best way to maintain regular operations and allow for a successful sale as a going concern.”
The Monday filing came after the parent company and a South African affiliate filed for protections.
The company’s South African affiliate, Southgold Exploration Ltd., filed Sept. 14 for business rescue under Chapter 6 of the South African Companies Act of 2008, and Great Basin Gold applied for protection from its creditors Sept. 19 in Canada. Southgold and Great Basin are not included in the Chapter 11 filings, according to court documents.
Rodeo Creek listed estimated assets of $50 million to $100 million and an estimated debt of $100 million to $500 million, according to the filing. The company estimated the number of creditors at 100 to 199.
March 02, 2013 6:00 am • By MARIANNE KOBAK McKOW
My concern is that prospects for common shareholders are not good in US bankruptcy courts because shareholders usually get wiped out with all going to satisfy creditors who often cancel their debt in exchange for new common stock.
Article states assets of $50-$100M and debt of $100-$500 M. Using the upper range of assets and lower range of debt implies zero for shareholders. Creditors will pressure BK court to sell off Hollister (auction as stated in Mining Weekly) to pay off the debt. In that scenario, GBGLF shareholders have no recovery in the value of Hollister which reduces GBGLF value and opportunities for a positive bid for company with only the problem Burnstone mine.
Due to the lengthy process of selecting advisors and possible bidders that need to
do proper due diligence of the company, the deadline of 15 January 2013 for
submission of the business rescue plan could not be met and therefore the
request for an extension which was granted by the majority of creditors. The new
BRPlan publication date has been set to 31 May 2013. Peter gave comprehensive
feedback regarding all the steps that need to be taken towards getting a proper bid
for the asset or the company. The target date for binding offers is end of March