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

Minority Shareholders Update

[15Stanmore]

Hello Flynorth,

Legal counsel has reviewed the actions of Clairvest and other insiders and has made a number of recommendations as to how best to proceed. We have a meeting tomorrow to go over these options, from the perspective of the minority common shareholders.

From the debenture holder position, there is no question that Clairvest and senior Discovery Air management have defaulted on the indenture provisions and have left themselves vunerable to a vote by debenture holders to force the Company to redeem the debentures immediately.  Steps are underway to communicate with all beneficial holders of the unsecured debentures to secure the 25% of issued and outstanding face value needed to initiate this contractual remedy set out in the indenture.

In addition, the debenture holders can seek a court injunction to delay the proposed buy out of the minority shareholders until the redemption of the unsecured debentures has been addressed and completed. Legal counsel is preparing the injunction and can secure a judges order prior to the scheduled shareholder meeting in May.

While a number of issues have been raised by minority shareholders in communications with the Ontario Securities Commission, they will not react within the timeframe of the proposed buyout and privatization, although they may investigate after the fact (which I do not believe would be of a whole lot of help to the screwed minority shareholders).

That's all for now. Stay tuned for further updates as they become available.

[pennylane101]

What are the options/recommendations or it hush hush confidential?

[pennylane101]

I assume this isn't a class action lawsuit?  If it were, there would be some kind of public announcement by the law firm.  On the other hand, if you are filing a lawsuit against the company, then its basically your interests that are being addressed, right?  Furthermore,  how do we know you're not a company spy and this isn't a delay tactic by the company to lull us

[15Stanmore]

Hello Pennylane, There is, as far as my inquiries have determined, currently no basis for a class action law suit against Discovery Air, current or past executives, or current or past board members. The first step in a class action is to seek court approval for the action to go forward, and this is where you would read a news release from the legal firm attempting to get the action certified.

[menoalittle]

Evidently the "distribution" you made medtion of didn't make it out last week, eh?

[Flynorth1]

I did receive the mailing just a few days ago it is posted to sedar if you have yet to receive it

[menoalittle]

It is not posted to sedar, and I did not receive it.

[menoalittle]

and, it's not in the mail today. what a joke...

[Alejaho]

i did not receive any proxy voting material.  i called my broker who contacted discovery air which says that debenture holders cannot vote on this proxity, only common and prefered shareholders can.  so we debenture holders are getting the shaft.

[menoalittle]

Contrary to what some have posted here, I've seen nothing to persuade me this deal is bad for debenture holders.   And also contradry to what some have posted here, I also don't believe that anything has been sent to deb holders specifically asking them to complain about the deal.

[Alejaho]

I bought debentures that were convertable, after this going private they no longer will be and therefore the fundamental nature of this instrument has change, like a change in ownership control, and i want my money back. Quite frankly i dont trust this management group nor clairvest. This company was at one time profitable, now it seems to be run by carpetbaggers. Want my money back.

[menoalittle]

Given the convertible nature of the debs, the company has always had the option to give you stock instead of your money back at maturity (regardless of how you think the company is run.)  Going private removes the option to give you stock instead of "your money back."  So, to put it bluntly, you sound like a fruitcake.

[Alejaho]

You sound like a paid for troll.

[menoalittle]

really? Post a serious, well thought through rebuttal to the logic of my last post (if you can,) and I might change my mind. Problem is, no one here has. (Probably because they can't.)

[Alejaho]

I already gave my logic, menolittle. Removing the ability to convert the debentures into shares also removes the ability for the instrument to gain value. Its like changing a common share to a preferred. This is a fundamental change to the nature of the instrument. If there is nothing prohibiting it from happening in the debenture trust indenture then there should be. Also, the way that clairvest

[menoalittle]

Sure it's a risk, which is why debs are trading at half the price the might be otherwise.  But what government in the world do you suppose is going to risk awarding a multi-year, megabuck contract to a company going through BK?  If the intent is to push DA into BK, then Clairvest might as well pull a gun out and shoot themselves in the foot.   By owning the whole thing, there

[Alejaho]

Whatever the excuses are, DA is running big losses. The company could go bankrupt and still have its core assets, like the military division, bought out of bankruptcy intact, name included. Clairvest could be the imaginary 'white knight' coming to the rescue, assuring DA customers that all is safe. Meanwhile the original shareholders and debenture holders get nothing, or next to it. This

[menoalittle]

>>The company could go bankrupt... Yes, they could. Perhaps you should just sell your debs and continue to ignore the reason (the rhetorical question) why I think not.

[Alejaho]

Or we could see if we can force them to redeem them as stanmore suggests.

[menoalittle]

And how is it that you suppose bondholders would ever see or know about said possibility, much less support such a deal?

[Alejaho]

I thought stanmore was onto something, but maybe he wasnt. He indicated that something like a proxy vote was on the way, but apparently not, so perhaps this waits until next year when DA tries to extend the due date of these debentures. I would prefer to have some action taken now. I have called DA twice about this and been able to talk to no one. They are avoiding scrutiny. They come across as

[menoalittle]

No relationship whatsover, and only began looking it over after it had been taken to the woodshed, beaten, and left for dead. bought a few debs as a lottery ticket, and began following it.  even bought a few shares later with some pin money (but blew those out - for a very small gain - rather quick following the news of the buyout.) If they win the CATS contract, it's a gamechanger.  

[Alejaho]

So you ask this, menolittle: "If you owned Clairvest, and knew that you were going to have to risk bankrolling DA (which means, keeping it solvent and out of BK) until landing the CATS contract, what would you do in the current situation?". Clairvest doesnt appear to be putting their own money into DA, other than buying undervalued stock to write-off. So i dont think your question has

[menoalittle]

I take it you've never owned or run a company...

[Alejaho]

What's that got to do with anything?

[Flynorth1]

That's great! look forward to hearing their recommendations. there seems to be no lack of evidence of Clairvest  working to improve their position at others expense 

[Flynorth1]

Will you be providing those recommendations to this forum Stanmore? re minority protection?