Corrections Corporation of America Message Board

Raugars $2.00 likely. . . .
Prison Realty,
which is fighting several shareholder lawsuits, states
that its own auditors have taken the highly unusual
step of questioning whether the firm and CCA can each
continue as a "going concern."
Put into English, that
means the bean counters are wondering whether this
company is headed for death row or is a candidate for
rehabilation


�"It sends up a variety of red flags,"
said Milwaukee corporate attorney Rick Bliss, who
noted that he wasn't familiar with the Prison Realty
situation but is an expert on the kind of financial
language used with the regulators. "Somebody is warning
you that either there is an impairment of capital or
that there are other problems that are calling into
question the future survivability of the
company."

Wall Street analysts who track the firm say the news
out of Nashville is increasingly bleak.

"The
major news is the deteriorating financial condition of
CCA," analyst Jerry Doctrow told The Tennessean
newspaper in Nashville. "That puts additional pressure on
shareholders to choose between this equity investor or the
risk of bankruptcy."

Prison Realty is urging
shareholders to approve a massive restructuring deal that
would infuse $350 million into a new company that would
merge CCA, Prison Realty and other entities.

The
proxy statement sent to Prison Realty shareholders
appears "to be painting a pretty bleak picture in order
to get this deal approved," said analyst James
Macdonald, who said the company isn't in danger of shutting
down.

This would be the second major shake-up of the firm in
the just two years. Some shareholders charge that the
first one simply enriched corporate insiders and
created the very problems that now dog the cash-strapped
company.

So do Wisconsin authorities have anything to worry
about? Is it time for the state to put the company on
probation? Wisconsin, after all, has about 3,300 inmates in
CCA prisons in Oklahoma, Minnesota and
Tennessee.

"Management of the company is clearly in turmoil and clearly
has other things to worry about than managing the
prisons that have Wisconsin prisoners," Macdonald said.
"It's a situation for Wisconsin to monitor."

At
least one state agency, the State of Wisconsin
Investment Board, was keeping tabs on the situation. SWIB
sold its final 200,000 shares of Prison Realty stock
last week, resulting in a $7 million loss. That's on
top of an $11 million loss it posted on the stock in
1998.