Important News - Must readWe have heard some details from the EC.
There were two possibilities:
1) A valuable company was being taken cheaply from us for resale at a markup, or
2) The value of the company had been massively overstated.
The auction told us that the second possibility was closer to reality. Recent rigs sales glutted the market, and many of TID's rigs are in Brazil, a horrible place to drill right now. Transportation costs knocked away most of the rigs' value, and the auction turned over very little.
Bankruptcy law is clear: lenders are paid first, shareholders split what is left over. It's the risk we take in return for higher potential profits. And CS, it turns out, was burned bad and will be losing a lot of money. In addition, any claims brought against the executives on behalf of the shareholders as a group would be counted as part of the estate, and would have to pay off the rest of the debt before we saw a penny.
After negociations, it was decided that a trust will be formed, for the purpose of pursuing legal action along fraud lines. As noted, money generated in this way would normally belong to the lender until they are paid off, but they were willing to do a split between us and them. The first $ generated will go 100% to us. The trust will be funded by CS and we get to name the trustee.
Also, the EC pressed for the $15,000 initial retainer, and was successful in having this refunded. So somewhere not too far down the road, we’ll be able to start refunding that money to those who contributed, less what Indiegogo charged and a few necessary wire fees. It was important that no one feel they were “throwing good money after bad”. This money served a definite purpose, and needs to go back to those who were willing to stand up. Specifics to follow on this.
Many thanks to all members of the OEC, without whom we would not have accomplished nearly this much. We may not have been dealt a great hand, but the EC played it as strongly as it could possibly be played. Thus ends round one. Now we enter round two, which we have speculated upon and planned for quite a while. With the formation of the trust, we enter this round atop a strong war machine.
Even walling off the treasury stock and holdings of insiders, there will be a lot of shares between which to divide a judgment or settlement amount. This will be more along the lines of “lessening the sting.” But it is more that we would have received under the original plan, and we hope that we have done all that could be done in this situation.