of the announced agreement besides the obvious numbers is that the lenders realized that the something they received now is more than what they would get in a bankruptcy. The real question is if/when the highly paid managers of a phantom company can re-start some business or play their non-zero sum game until the marketplace(rates) changes their employment status.
Now if you want to be in this stock you need to open yourself an IRA through a discount broker.
If your are under 50 years old you may contribute up to $5000.00 annually and take the contributions you made off your taxable income. You may still contribute to an IRA for 2011 until April 15th, 2012. If you are 50 and older you may contribute up to $6000.00 annually.
A question to consider here (and I bring this up because I don't know the answer) is what the tax impact of the income mentioned in the announcement will be. The announcement says that shareholder equity--on a GAAP (book) basis--will increase over the terms of the debentures. There will be income in the amount of the increase in equity, of course.
If the timing of the income on a tax basis is the same as the GAAP timing (i.e., over about 22 years), then the impact to shareholders will be a few pennies of phantom income a year. But if the $15 million in debt cancellation income is recognized for tax purposes in 2012, then that's 38 cents or so of phantom income this year. (Perhaps another reason to own this only in a tax-exempt account.)
(I don't have a position in this stock and haven't for several years now.)
it's a good question. THe 8-K says the debt was issued by MMA FInancial Holdings, Inc. which would suggest that a taxable subsidiary (since corporation other than S corporations are not flow-through entities for tax purposes) of MMAB. So the income should not be flowing through to the public unit holders of MMAB. The income would be recognizable immediately (not like it is for financial reporting purposes) and would be eligible for exclusion to the extent of insolvency. Alternatively they may have NOLs that can shelter the income,
They didn't mention any tax effects of the transaction in the 8-K so they either haven't figured it out or there aren't any.