i started looking at this company about 2 weeks ago. My biggest problem with buying shares is concern that without unanimous approval from the creditors the exchange offer will not be successful. I have not been able to identify the full creditor group. What are your views on this risk? If the deal does go to bankruptcy court, I think value will be eaten away quickly. What do you think will be the outcome via BK?
I think it's a done deal. If the minority of the debt holders vote it down then the case goes to the judge. XRM lawyers will present the agreement to the judge and state that it was negotiated by a third party and the majority of debt holders are for it. Judge will enforce the agreement and that's the end of the BK. Debt holders or management don't want to drag this through court like a regular BK. The company is restricted from raising new cash or using their revolving credit and debt holders have a stay order on them, which prevent them from collecting interest. So debt holders will be holding dead money and paying millions for lawyers. Actually, te lawyers are the only ones that win if a BK gets dragged out in court. So I think the vote is in the bag. This deal sounds fair from both sides. If the company starts turning around with the economy to the positive, then the debt holders ca sell their shares to institutional investors at a huge profit.