I'm Still a Very Concerned ShareholderI don't even know where to start really. Anyone who thinks that recent events are a positive sign is only fooling themselves; or perhaps attempting to fool others on this board.
I'll be honest, I have no idea what the intentions of the CS group are, so I won't pretent to. I can't say with absolute certainty that they their intentions are untoward, but no longer can I say with any sort of confidence what so ever, that they have our best interest in mind. What I do know is, and what I can say is that, for whatever reason (legal fatigue, personal interests/incentives etc.)...for whatever reason, the cause has been abandoned; the rest of us are back in the dark shadows of this convoluted mess that Amber and Paulson have manufactured, with the asistance of Anna and the board; Our white knight CS groups are now in bed with the enemy; We've received no further communication from the CS groups to help clarify the current state of affairs and why this arrangement is a good idea since they jumped in bed; They reinstated the cone of silence; and full true and plain dislosure is as lacking now as it ever has been. Yes, we technically won a vote in favour of the CS and things were looking up, but where did it get us? Nowhere! It gave the CS some leverage though, and then.....they settled. Settled for what? Nothing that the rest of us should be very pleased about, I can tell you that. The only thing we're getting, is a chance to put up additional money for a fraction of the return we should get. And as usual, we get to do it blindly having to completely speculate on what we think we might be entitled to for that investment. In the end, its all window dressing and stall tactics.
I said this a long long time ago, and I'll say it again now; the end game here from the get go was to take the assets private; to steal from the many for the benefit of the few. They will stop at nothing until they achieve that. Now they'll just have a few more mouths to feed when its all said and done with the involvement of the CS.
The rest of us still get next to nothing, even if we do pony up the extra dough to participate in this BS CVR deal. We don't even know what they're planning to claim in arbitration yet, let alone how to interpret the legal mess they've deliberately created.
A few other alarming concerns I'd like to point out:
- The participants in the original Tranche 2, received a larger cut of the CVR for lesser cost, and also received secured convertible debentures as a bonus. We're getting a smaller cut of the CVR on who knows what terms, for a higher cost and no secured convertible debenture;
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- The legal fees on both sides of this dog and pony show were astronomical and extremely excessive by any stretch of the imagination. I guess we should thank the CS right? Hells no! Who pays for that? who pays for all of the legal costs incurred by both sides? Oh wait, we do! They either get paid direclty out of arbitration, convert them the shares diluting the rest of us, or receive a larger chunk of the private entity, if they are successful in carrying that out. Either way, it comes out of our share. It didn't cost anyone a dime but us. Sure they invested in the D & P show but with a guaranteed return as fate would have it. They should be thanking us profusely for getting them this far and in bed with the enemy. Without us, they were just like us and now they're treating us as the others always have.
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- Anna is still there. This demonstrates that Amber and Paulson are firmly in control. If the CS had the majority leverage in this settlement, she would be gone. Keeping her was a demonstration of their strength and resilience. Anna did their bidding and they protected her for it. Why?....because they can.
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- Anna is now Trexs nominee on the board. I mentioned this in a previous post a while back. I firmly believe (but admitedly have no evidence to prove it) that the indirect beneficial owners of what Trexs is entiteld to is Paulson, Amber, or most likely both. I've seen this in the industry before when someone with deep pockets wants to exact a hostile takeover of a company. The investor (e.g. Paulson/Amber) engages a company with the legal expertise and experience in such matters (e.g. Tenor). The investor engages in some sort of bridge loan contract or LP investment with the expert and the expert in turn enters the investment with the issuer. In some cases they may set up a separate entitty to carry out this specific objective, as it makes it cleaner and easier to convert to the private entity when restructured (e.g. Trexs a company "managed by Tenor"). The contracts or investments made between the expert and the issuer come in a number of different shapes and sizes but will almost always give them priority over the companies assets in the event of default. They also try to obtain control over when and how a default may occur. Our experts have really gone over the top in this regard, riddling EOM with default triggers at every corner. Going back to my point on Anna; inconceivably she remains on the board. Strangely enough, she had been a board member doing Amber and Paulson's bidding for a number of years before Tenor even came in the picture. Yet strangely enough, there she sits as Tenor's nominee to the board now.
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- Another 4million invested by Tenor. More debt = more entitement. While this one was done so on an unsecured bases, under a restructuring they would have enough control to convert that to ownership under whatever terms they want. Plus the loan serves as another potential default trigger in the event they are unable to service it. What do we get for that $4million investment? Nothing.
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- We're running out of time. Unfortunately for us, if this gets delisted, things will progress very fast and we will very quickly be stripped of our investent. Those of us that decide to participate in the CVR will do so blindly, having no idea what we are entitled to and still being subject to the massive dilution from the debt EOM is carrying that is conincidentally owed to the CS and Paulson's gang.
Our only hope in all of this was regulatory intervention at an early stage or successfully voting out the board. We needed to have both Tranche 1 and 2 unwound and Tenor removed from the picture. Unfortunately for us, the regulators move very slowly, if at all. If they do intervene in any meaningful way, which I doubt they will, I fear it will be too late to unscramble the eggs. The most they will be able to do is try to sanction the corrupt board, who will be riding off into the sunset with some deep and heavy pockets.
I'm honestly at a loss. As much as he's been ridiculed of late, I do agree with Schiff that everyone not in bed with these guys should continue to voice their concern to the regulators. While I'm not sure what good it will do, there is no harm in voicing your concern and they are the only ones that might potentially look out for our interests.
BH