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Municipal Mortgage & Equity, LLC Message Board

beginvestor 3 posts  |  Last Activity: Jul 14, 2014 10:40 AM Member since: Oct 31, 1999
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  • Wipeout: It's The End Of Crumbs Bake Shop As Common Shareholders Know It
    Jul. 14, 2014 9:58 AM ET | 2 comments | About: Crumbs Bake Shop, Inc (CRMB)
    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
    Summary

    Crumbs Bake Shop filed for bankruptcy.
    The financing news is of no use to shareholders.
    Shareholders will be wiped out.
    Don't fall for the hype. Crumbs Bake Shop (NASDAQ:CRMB) has filed for bankruptcy and shareholders will be wiped out. Some investors are mistakenly excited because a company called Lemonis Fischer Acquisition Company is providing DIP financing and seeking to acquire the assets.

    The key phrase here is "seeking to acquire the assets." Think of it like a foreclosed home that is auctioning off what is left. The previous owner, which is the shareholders in this metaphor, doesn't see a dime. Any proceeds go to the creditors. And the senior most creditor is now Lemonis. As the provider of the DIP financing, Lemonis is entitled to get paid ahead of all other creditors as it funds Crumbs' ongoing losses.

    In a release after hours on Friday, Edward M. Slezak, Crumbs Chief Executive Officer and General Counsel, stated,

    "The steps we are taking today will allow us to continue to execute our business strategy, expand our licensing business and position ourselves to move toward a franchise store model. We remain saddened that we were forced to cease operations before this agreement was reached, but we strongly believe that pursuing this sale through the chapter 11 process is ultimately in the best interest of the Company and its stakeholders."

    By "stakeholders" he's not talking shareholders. He's talking creditors. In another release, it was stated Lemonis "intends to acquire Crumbs' assets, form a new privately held company and re-open its locations." A new "private company" means a new company that excludes existing shareholders. There is no plan for salvation for them. The plan is to get rid of them.

    Sentiment: Strong Sell

  • Reply to

    Bloodbath On Monday

    by jfjf666 Jul 11, 2014 8:53 PM
    beginvestor beginvestor Jul 11, 2014 10:24 PM Flag

    This reminds me of DOLN.

  • beginvestor beginvestor Jun 15, 2014 8:59 AM Flag

    paymentdatarules, thanks for posting the SA article. Positive indeed.

    Sentiment: Strong Buy

MMAB
1.92+0.02(+1.05%)Jul 23 3:34 PMEDT

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