Read this below...it does not state
about C-corp even being an option...this is from press
release. Also, PZN showed dividends
payable on their
balance sheet. I don't honestly know how they could
string us along
for this long then drop that kind of
The Company and CCA also
announced that they have engaged Merrill Lynch &
(``Merrill Lynch'') as their respective financial advisors.
Merrill Lynch was engaged in
connection with the
requirement in the Company's credit facility that the
complete a sale of equity and/or debt securities in order
for the Company to make its
payment in cash. As part of this process, both companies
Lynch have evaluated the Company's and
CCA's financial conditions and results of
and are considering a broad range of financing and
strategic alternatives to
address the liquidity needs of
both companies. The companies and Merrill Lynch are in
process of evaluating proposals received with respect to
these financing and strategic
assurance can be given that any transaction will ultimately
consummated. In addition, no assurance can be given as to the
exact timing of the payment
of the special dividend,
whether paid in cash and/or in securities. The Company
update its review and negotiation of
financing and strategic alternative proposals until
process has been completed.
I thought I understood the problem before. Income
from the old entity forced PZN to pay a special
dividend that had to be borrowed. The REIT structure,
requiring payout of 95%, prevented the accumulation of
capital. Accounting "mistakes" in the PZN/Opco
relationship made lenders leary to issue PZN new debt at
anything but usurious rates, if at all. And the OPCO/PZN
relationship was frought with conflicts of
But assuming the Special and ordinary will be paid
because of time constraints and the desire to avoid
litigation, why would Blackstone be interested in Dereiting
afterward? Retention requirements are dropping to 90%. The
special will never have to be paid again. The conflict of
interest/accounting error issue will have been put to rest with the
departure of the Crants Family. Capital will be there to
finish projects (at least 300 million investment, could
be 500, that is probably 100 to 300 available to
finish projects). Further, relationship with Blackstone
is a deep pocket IF in the future projects present
themselves that are clear money-makers, not specs.
But the board seems to feel it is inevitable that we
go C-Corp and buy back OPCO, an entity with negative
equity (from what I understand from other posters). Why?
I thought I understood why it was a bad idea to go
REIT in the first place, but the piper will have been
paid already, so why go back?
Best - - - ST
With Blackrock we didn't get Richard Rainwater.
We didn't get someone who plans to personally run
the business and still be here in 5 years.
we got the two things we needed most:
Co. will be replaced with professional business
managers courtesy of Blackrock and Fortress. You will no
longer have a CEO saying "CA. needs us more than we need
them". You think this group is gonna build alot of spec
2)A second chance. They immediately fix the balance
sheet and solve liquidity concerns.
Now, am I
concerned that somehow I get bought out for $12 in nine
months? I guess so but it sure beats where we were
From National Real Estate Investor
Fortress Investment Group is born
from former Wall Streeters.
Several Wall Street
veterans who have worked together since 1994 have come
together to launch Fortress Investment Group. The company,
which is based in New York, with offices in London and
Toronto, was formed to invest in opportunistic real estate
assets on a global basis.
The four former executives
of UBS Securities are Wesley R. Edens, who will
serve as CEO and chairman, Robert I. Kauffman as
president, Randal A. Nardone as COO and Erik P Nygaard as
Anyone have comments?
I am very optimistic. Most of my holdings are in
an IRA but I screwed up and bought additional shares
at $13 in a taxable account so I'm sitting on a
$30,000 unrealized loss that I had intended to take
because I have offsetting capital gains. Now, I'm
probably going to just ride with my high cost-basis
position because if I sell at $6 I'm going to want to buy
back at $9 in January.
I have no idea what sort
of time frame its going to take for the stock price
to climb back up but the important thing is that
Blackrock fixes what is broken.
It's important to
remember that the core business has continued to grow and
do well through this whole period. We dropped in
capacity utilization because prison additions come in big
chunks that, when built on spec, are hard to fill on a
Point is, the business was never
broken. Management (Doc) was broken. He knew occupancy in
Q4 1998 was slightly off and he covered it up. In Q1
1999 he had to increase payments to OPCO and he tried
to conceal that and then gave a bumbling explanation
to Analysts ("The payments don't effect
No question, Doc's antics have done severe damage to
the Balance Sheet but Blackrock fixes that
Also, despite Litt's concerns over upcoming dilution,
ask yourself this - Wherever Blackrock is buying in-
$6,8, wherever...do you think they would get involved
in such a murky area unless they were confident they
could double their investment in less than 2
Now, the screaming idiots who spend more time on this
board than me and don't even own any stock will say
"Great, getting back to $12 in 2 years; big deal". Well,
to me and other shareholders doubling the share
price in 2 years is good. I can't do anything about the
fact that I road this thing down from 21 to 13 and
then to $6. I have to unemotionally look forward not
backward and I think PZN has a great chance of being a $12
stock in 1-2 years and a $20 stock in 3. Perhaps even
better. We'll see - at least I'll be around to see.
operation. The following is from 4/19/99 Real
Estate Advisory News:
Berkshire Realty Co. has agreed
to sell itself for about $1.3 billion (US) in cash
and assumed debt to investors led by its chairman,
Douglas Krupp, and real estate funds managed by
BLACKSTONE GROUP INC. and Goldman Sachs & Co. The group will
pay about $660 million (US) in cash and assume about
$600 (US) million in debt to acquire the Boston-based
REIT, which owns 82 properties with 24,287 apartments
in Florida, Texas, the mid-Atlantic states, and the
Berkshire is the second REIT this year to agree to go
private by selling out to a management-led group. The
other deal involved California-based Irvine Apartment
Communities Inc. The Krupp group�s bid for Berkshire topped
three other bids and the sale is subject to shareholder
These guys aren't managers, they are holders.
Jr. may not walk, if a scenario anything like this
plays out. They may be making a play for the whole bag
of marbles and a low stock share price would be of
benefit to them. I just hope that the funds that bought
into this at $9 to $10 a share knew what they were
doing, because I followed their lead.
If I understand what is transpiring, we are going
to get back the "old CCA" that was
This whole issue is complicated and confusing, but
remember that PZN does not currently own CCA so it's not
ours to spin off. Doc and Jr. took CCA off our hands
when they created the New PZN.
It now looks
like we're going to get CCA back; otherwise Blackrock
wouldn't be interested. However, it is going to cost us a
pretty penney to pay Doc to go away and give us back
I'm guessing Doc walks away with a $20 million check.
The interesting part will be how much we have to pay
to get OPCO back. That's all already been decided;
otherwise today's Bloomberg article wouldn't have been
leaked. We just don't know the numbers yet.
the $20 million is going to sicken shareholders, they
should keep in mind that Doc was spending this much
every 2-3 months on wastefull banking related expenses.
Losing Doc for $20 is a bargain.
hasn't figured out what's going on yet. Still alot of
questions to be answered. However there are alot of
positives out there. With a new management team and dressed
up financials, we'll probably be able to refinance
the ridiculous rates of interest on our credit line.
Also, future borrowings will be at much better terms
and availability will expand.
Before it's all
over I suspect we'll have ML picking up coverage and
saying we're a Buy. Who knows, perhaps a focus stock of
the week! I think we'll even bring Litt around. He's
taken this thing to a personal level, for good reason.
I suspect he'll soon take his foot off our throat.
All the Analysts will soon turn from mad/deceived to
wanting our IB business.
I suspect we might even
have a happy cleo before it's all over. I'm looking
for $7 tomorrow. And that's a good start.
I don't believe they had to specifically spell
out every possible option, however, I would group "C
Corp" under "...considering a broad range of financial
and STRATEGIC alternatives to address the liquidity
Anyway, it appears that the management group that made
those statements won't be there 1/1/00.
Quadrophile said, he's not a lawyer and I'm not a lawyer
either but I suspect Blackstone has 1 or 2 around their
organization and they've probably looked at this deal. If the
number is $300mm and if it is Blackstone, that's alot of
money, even for them.
All in all, I feel a hell
of alot better now than I did six hours ago. There's
a good chance we saw the low today. All the signs
were there including the lowest downgrade you can get
from the best Analyst, heavy blow-off type volume, and
a strong intra-day turnaround due to strong rumors
of fundmental news.
It may seem incredible to you, the small group of
regular posters who populate this board, that the pained,
death dance performed by this stock could actually
attract a lurker to its BB, but you would be amazed by
how educational it is to watch the way a group of
investors react when a company sh*ts the bed, and the share
price does a death spiral. I am not mocking any of you,
and you who have held and suffered have my
compassion, small consolation that it is. I was looking for
high yield when I became attracted to this stock back
in the $20's, before the infamous CC in May. What
saved me was I had learned that I don't have what it
takes to bite the bullet and take my medicine by
nailing in a stop with railroad spikes. With all due
respect to the long time posters here, especially flipper
who recently revealed that he is anything but a loser
in the markets ( congrats on your IPO successes),
anyone who rode this thing all the way down needs to
re-evaluate their investing methods. I am certainly not
suggesting anyone sell down here, hell the damage has been
done, might as well take a flyer on it now, but people
need to think about bringing a parachute before the
next time they fly. Just presenting a lurkers point of
view. (Never was long or short this stock, not once)
P.S. I also realize that some of you have forgotten
more about trading than I'll ever learn, no offense