If you are a unitholder (LINE, not LNCO) when the debt gets cancelled, you will get hit with CODI (reported as ordinary income on schedule K1). Worst part is when you sell the stock, you can increase your basis by the CODI amount, but it is a capital loss, and we all know you can only claim a maximum total capital loss for all investments of $3000 per year. If you have a big capital gain, then you can potentially cancel out all the CODI by selling your stock to offset captial gains.
May option expiration. If the market isn't liquid enough to close long put positions, then someone has to buy stock to sell.
May put holders had to close their positions today. If there is insufficient liquidity in the market to handle closing all the long put positions, then the put holders must buy stock so they have something to sell when the puts get exercised. This drives up demand for the stock and hence the stock price. Look for the stock price to head back down Monday.
Interesting article on Sandridge BK by Fortune (posted by yahoo under their ticker). It basically makes the case that many shale players are robbing the unitholders to shore up their balance sheets, because they can. It seems like they all have to do it to keep up with the competition. Only the BK judges can put a stop to this.
I believe you are wrong. No CODI to a company in Chapter 11, but unless the unitholder (shareholder) is BK, CODI applies.
Noteholders likely to become new equity holders, so price of oil going forward will determine how much they recover on their investment.
If I was the judge, I would order them to pay the interest on the notes because they have the cash. They have no reason to claim BK until the results of the redetermination are known.
Not yet. It will trade for another 6 months or more until the BK process is complete. I really don't care, as I am a noteholder.
The only justification I see in the 8K is that they defaulted on paying the interest on the notes and now don't have the funds to pay back the principal that is immediately due. I am amazed they can get away with this. We will see when it gets to court.
Go to LINE's headlines and read the article about their first day in BK court. Sounds like lots of push back by the unsecured noteholders. I hope BBEP management is paying attention that a restructuring is not going to be an easy task.
Who would of ever thought that LINE would be bankrupt before WPRT. Just saying.