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  • texasbroker2000 texasbroker2000 Mar 25, 2009 2:40 PM Flag

    Hopefully an agreement will be met soon. This is how I see it..

    You know the no BK argument is interesting given the new guarantee rollout.

    How does a bankrupt entity guarantee anything?

    You might be on to something there....

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    • waterlaw1 Mar 25, 2009 3:14 PM Flag

      Finally, somebody on this Board can see the simple point: bankruptcy is impossible, and this management has no intention to cancel the common stock ownership. All the attacks are by persons unfriendly to the company itself.

      • 1 Reply to waterlaw1
      • Here is what Klein said in the last earnings release:

        At December 31, 2008, the Company was in compliance with its quarterly leverage ratio covenant. However, based on current forecasts, the Company anticipates that it may be noncompliant with this covenant sometime in the first half of 2009. Additionally, because the December 31, 2008 financial statements the Company will provide to its lenders includes a report of its independent registered public accounting firm that contains an explanatory paragraph expressing doubt as to Idearc’s ability to continue as a going concern, the Company will be noncompliant with a second covenant. Noncompliance with this covenant is considered an event of default under the senior secured facilities thirty days following notice of such default from the lenders. Upon an event of default, absent other potential remedies, the lenders may declare the total secured debt outstanding to be due and payable and upon acceleration, the Company’s unsecured notes would also become due and payable.

        Idearc has evaluated various options for restructuring its capitalization and debt service obligations to alleviate these covenant issues and to create a capital structure that will permit the Company to remain a going concern. Idearc and its advisors have considered various alternatives to strengthen its balance sheet and financial risk profile. Among these alternatives, the Company is currently considering a restructuring through a “pre-packaged,” “pre-negotiated,” or similar plan of reorganization under federal bankruptcy laws. Idearc and its advisors continue to work with representatives of holders of both the senior secured facilities and the senior unsecured notes in this regard. If the Company is unable to achieve a “pre-packaged,” “pre-negotiated,” or similar plan of reorganization, it would likely be necessary that the Company file for reorganization under federal bankruptcy laws in any event.

        “Simply stated, restructuring our capitalization and debt obligations to a more appropriate level will provide us with the opportunity to prosper and grow in the years ahead,” Klein said.

        Waterlaw, how on Earth can you read Klein's above statement and come to the conclusion that "bankruptcy is impossible" and "management has no intention of cancelling the common stock ownership"?