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PENN OCTANE CP Message Board

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  • rrb1981 rrb1981 Dec 5, 2003 1:10 PM Flag

    Management Raping Shareholders

    Of course, the MLP has to grow substantially for the GP's incentive distribution rights to kick in. That being said, yes management appears to be low life crooks posing as business execs. I think anyone who knows anything about MLP's would realize the GP is the real cash cow especially when the distribution grows...but thats why POCC is a cellar dwellar, poor management team...or rather unethical management team. So they are screwing POCC holders but what do they care, they are simply fleecing the company...

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    • The company is currently going through a transition to a Master Limited
      Partnership, which will allow it to distribute earnings in a more tax
      efficient manner. I believe the future will become clearer once the
      transaction is completed. Let's not give the company a bad rap (right now) and wait until all the pecans have fallen off the tree.
      Dave W

      • 1 Reply to davew6115
      • Yes I am quite aware that the company is forming an MLP. The MLP will be spun off of the c-corp, the c-corp will then own 50% of the GP(General Partner). For those that don't know about MLP's, the GP is far more valuable than the limited partner shares(units). By the nature of MLP's, the GP can't be within the same entity, thus the spin-off rather than a straight transition. The GP becomes very very very valuable as the distributions grow at the MLP level. this happens because the GP is entitled to a dispraportionately larger share of the distributable cash as it increases. In other words, in the first tier, they get 2% of all of the MLP's cash. After the distribution increases past a certain point, the GP then gets 15% of all cash past that point, then after passing the next target, they receive 25% and finally after the last target they split all cash 50-50. So in essence, they have to fund 2% of all acquisitions but are entitled to after some time, roughly(weighted) about 25% of all the MLP's cash. So, yes they are screwing the shareholders over.