Right to the point here, and it is this. In Order to "Qualify" under L5 Ownership Exception "The Debt must have been owned 18 months prior to filing And Must Have Been Acquired as an ORDINARY COURSE OF DOING BUSINESS. The Debt to get over the +50% threshold was well more then half of the debt owned in total by the Committee....And that Threshold Debit ( which still not amount to 50%+) was Acquired in a Rush as GS and Paulson had already started their short positions...So the debt was not Acquired AS AN ORDINARY COURSE OF BUSINESS for the purpose of writing new policies, or NORMAL COURSE OF BUSINESS But Rather the CREDITORS WERE BUYING DISTRESSED DEBIT WHICH IS EXPRESSLY DISQUALIFIED...This Is Easily Correlated to The Rise In Policy Claims And Common Stock Declines coincident to The Acquisition of Debt, In other words The Creditors Were Buying DISTRESSED DEBT ALL THE WAY UP THEIR STAKE HOLDINGS...THAT IS A DISQUALIFYER.
That's why a court order to prevent "L5 ownership qualify" bonds from trading was issued right after bankruptcy...That condition has been meet and was never in doubt, so stop beating a dead horse. The delay in bankruptcy filing has more to do with how and what amount of NOL can be retained post bankruptcy, an approved audit must be meet by IRS in order for NOL to be formalized and accepted by both IRS and bankruptcy court.
Exactly:what amount of NOL can be retained post bankruptcy, an approved audit must be meet by IRS in order for NOL to be formalized and accepted by both IRS and bankruptcy court. SO THEN THE COMMONS HAVE REASON AND VALUE
The L5 / L6 exception is probably the issue here, but not due to ordinary course alone. The equally important qualifier is the "old and cold" designation.
Stock transferred to such creditors counts only if it is transferred with respect to “old and cold” indebtedness; that is, if the indebtedness
(1) was held by the creditor for at least 18 months before the date of the filing of the Title 11 case, or (2) arose in the ordinary course of the trade or business of the old corporation and is held by the person who at all times held a beneficial interest in that debt. This last rule prevents debtor corporations who have a significant portion of their outstanding debt acquired by vulture funds within 18 months of the bankruptcy petition date from making use of the Section 382(l)(5) protection.
This is almost guaranteed to be where the problem lies, I agree. Who is holding up consummation?
The IRS probably won't agree to giving the all clear on the ownership change. Without that, the L5 exception isn't available. And there would need to be at least 50% owned by current shareholders. The creditors need shares, I say.