DISCOVERY AIR INC 8.375 PCT DEBS T.DA.DB.A

Is DADS still wholly owned

[15Stanmore]

As of September 14th release of the quarterly statements, I stand corrected and the company remains 100% with DA.A. I have called Discovery and have asked for an update as their November 8 material adjustment report is still stating that the DADS subsidiary is 100% owned.

Given the awarding of the CATS contract to DADS, the value of the DADS common shares has materially increased from what might have been claimed prior to October 31st. If DADS is still 100% owned, then we have the basis to challenge the valuation that was addressed in the August 2 news release.  The outstanding debts to Clairvest can be settled today with many fewer common shares than those that would have been required prior to the October 31 announcement.

This is in fact great news for the debenture holders in my opinion, and I am grateful to have been wrong about the timing of the transaction. If Clairvest did not consumate the deal prior to October 31, then they have just messed up big time IMHO.