Because public safety is involved, the operating
business has no hope of winning contracts unless it is in
sound financial condition. Bankruptcy is not a viable
option. A large equity investment is necessary. The only
concerns should be whether the terms are fair and provide
a basis for the company to restructure its
operations and return to profitability.
shareholder vote provides some leverage. It's very difficult
to collect votes from retail shareholders. If a few
institutions threaten to abstain or vote against the current
deal then it will be unlikely to receive the necessary
majority (although rejection of this deal without another
deal lined up would leave the company and the stock in
worse shape than now). I would like to see
Blackstone is currently paying $350 million and then
offering existing shareholders $35 million of their paper.
I would like to see existing shareholders given the
right to buy up to $100 million of the Blackstone
paper. This would:
1) significantly reduce the
dilution (as long as you subscribe)
2) require very
little modification of the existing deal and therefore
not impede the company from addressing its operating
3) more closely align the interests of existing
shareholders with Blackstone.
negotiated for a $250 million investment. Keep them at that
level and let existing shareholders make up the
First, the expense of defending the lawsuits will
not be paid by insurance. They will be paid by the
corporation. Second, Doc, the other officers, and the board
will be protected by an indemnity agreement providing
that their expenses and damages will be paid by the
In order to prove fraud in a civil case,
the case would have to proceed to trial (unlikely)
and would have to meet the heavy burden of proof for
fraud. It is very unlikely that the corporation would
let the cases go that far. A settlement short of
trial would leave the issue of fraud undecided, and Doc
would be indemnified.
The Pac Life deal will
also help get Doc off the hook, though I would hope
that Pac Life will take charge enough to make sure
that Doc isn't given a platinum parachute, and that
new management is required.
The insurance companies only pay if there's"no
fraud" ...Doc and Jr. and who ever else they catch in
the "fraud" (and IMO,it is)will have to pay their own
legal bills in the end.
Plus, they will have to come
up with there share of the damages...not just the
shareholders....The worst is yet to come for those 2
DUMP THE DEAL!
PZN paid the dividends when it didn't have the
real income to afford them. It paid until it became
evident that it could no longer do so. By then, it was
too late to undo the damage done by paying the
The problem I see is that there
is no really reliable information available about
the real economic position of the
Everyone keeps writing about Doc like he is going to have
to pay his own legal expenses. The company will be
paying his expenses, under a standard indemnity
agreement. That means that the shareholders will pay his
Now, don't that shake the rag
off'n the bush?
Strong support underneath the market today.
The drop seems to have cleared out nervous holders
and also thinned out the pessimists on this
Predictions that it will go to $2 don't make economic sense.
Even an orderly liquidation of company assets would
bring more than the current share price.
guess is that the stock will float between 3 1/2 and 5
over the next 3 months.
Just checking the board and the latest price
moves since my last month self
Someone said at the time I was too negative and should
say something positive, well I am sorry but I have
nothing good to say. LAst month I was looking for a price
rebound from potential new unexpected developments. Not
anymore. The technicals have degraded further and some of
you may still laught but I am still sticking to the
penny stock valuation from what I see.
What i do not
understand is why some of you spend so much effort trying to
understand such a lousy and messy situation where nothing is
to be gained one way or the other. As I said in
December, I moved on network backbones and electronic
chips. I already made up my PZN losses with CS, RMBS and
HLIT. I did miss NN.
It is still not too late and it
easier than trying to figure the details of this
nightmare were it is so obvious that shareholders are the
Many of you want the Crants punished. It will not
happened. It never does. These guys have "financial
diplomatic immunity". They always have it setup to get the
cash. Everyone inside gets to benefit, no matter what.
They are insiders. Instead fo being very wealthy they
will just be wealthy (no private jets).
with it and move on for your own good.
The only way
to get vindication is a lawyer who fights solely for
the rights of shareholders and not for profits. You
show me such lawyers and I'll hire him/her for my own
the way it stands is :
1) Deal approved:
shareholders are screwed and price upside is limited to short
term profits that Blackstone considers ok for
Shareholder loses long term.
is shot and everyone will play hardball. Shareholder
loses short and long term since no one knows how bad
the crooks will make it to get their way. Shareholder
will lose and price is graranteed to take further
From what I see so far, option 2 is in. Therefore at
$4 the stock is a short for making money.
options 1 makes it, the stock goes nowhere.
won't trade PZN anymore even as a short because I do
not want to contribute to this stupid game run by the
PZN crooks. Anyone can make better money elsewhere,
even in bonds. Its easier.
"the stock is still going down
market is afraid the
Blackstone deal WON'T be
There's no other explanation for a 20% yield on the
But the technical and liquidity factors are still
important. Somebody posted earlier that all the growth
investors were driven from the stock byt the REIT
conversion. Now all of the yield investors (individual and
institutional) are leaving the stock. Who's left to
I think the price per bed is the best indication
that the stock has reached an attractive level. The
stock should not trade under $3.
I would be
happy to see an increase in the size of the rights
offering as a way to add slightly more value to the
existing common and to more closely align the interests of
common and preferred shareholders.
that it's an issue of "timing." That's the fundamental
problem: the timing gap between the building of beds and
the arrival of heads. New equity will allow the
company to fund its operations until this gap is filled,
occupancy rises, and the company returns to profitability.
going on. I walked away from this deal at $5+
because it was/is clear to me that NOBODY was at the
table representing the common shareholders. Still feel
that way. Blackstone's trying to get the best deal
they can for their investors, as they should. The
Investment Bankers simply want any deal to consumate so they
make their fees. The Line Bankers and Bondholders want
any deal that protects their interests. OPCO
threatens to poison the well if they aren't made whole and
Doc appears willing to give away the store if
Blackstone is willing to cover his Liability
So, there we sit hoping that Dreman's going to
somehow stand up for our rights. Trouble is, Dreman can
do only what we can do - vote no and hope there is
something standing afterwards.
MK, I think the
collective wisdom of the markets sees it how I do in that
the common holders are getting hurt so badly that
they might vote NO. The Market also sees your point
and really fears that we'll ge a NO vote.
had all of these concerns when I threw in the towel.
Unfortunately, that call was the only correct one I made in this
process. Earlier, I posted that it's "all about
Occupancy". Well, there's one other factor that has come into
play and that is "Timing" and I suspect we may be
One other thing the market might be
telling us. Since I have no ownership position I stopped
reading the documents so I don't know if it's possible,
but perhaps there is concern that Blackstone can
claim things are worse than they thought and they might
want to renegotiate the deal one more time. Again, I
don't know if they left themselves an out in regards to
I don't know what I'd do if I was
holding the common. If I owned a small # of shares I'd
probably take the prevailing attitude of "screw 'em", I'll
risk going down with the ship and vote NO but If I
owned a large amount (large for me) discretion would
probably rule and at this point I'd see a Yes vote as my
Yes, this could all be bluster
from doc but if it's not, this thing's going to zero
with a NO vote because there simply MAY not be time to
pursue another option. Remember, Doc isn't going to
sponsor any plan that only brings in cash from existing
shareholders because he needs the liability protection that