RE:RE:RE:Are all the court cases concluded before the deadline?Some very good points in the two last posts, 2 things that have been on my mind for a while. I have to believe (or perhaps want to believe) that there is (are) some rational reasoning for the current liability delays (employee litigation) on any potential transaction. I just can't figure out why and what it is.
1) Why is the transaction being held up by a few outstanding employee claims? I've worked on a number of deals in the private sector and it was easy to put part of the purchase price into an escrow fund for 12-24 months pending and adjusted for potential working capital material changes, and pay out the withholded amounts to shareholders after this period. In public companies, it's more difficult but there must be alternatives (ie. an adjustment for the issuance of additional shares to the buyer after a stated period or when the liabilities are known and material, thereby diluted existing shareholders by the amount of the adjustment, etc).
2) Given that previous information indicated that a large chunk of the employee litigations have been settled, why haven't these current ones been settled outside of court? The amounts are not that large. And legal fees would be high. What is the cost-benefit of this decision to shareholders value - I hope they have a good reason or this will haunt them down the line.
3) Why aren't these litigious employees agreeing to a fair settlement? They're cutting their own throat. If this plant ever gets up running again, it's pretty well guaranteed they will never be employed by MBAC, nor with any other company that simply googles their name. I don't get it. Help?
4) MBAC is/was/maybe will be in the business of producing fertilizer. Why the heck did they use bank funds to buy equipment? That's not their business to own and repair fleets of equipment, other companies do this and do it well. Why did they not lease their trucks, ambulances, bulldozers, etc.? Makes no sense to me unless leasing rates were much much higher than bank interest rates. I admit I haven't gone through the financials in detail.
4) I still think it's good news that the core of the management and BOD are still with MBAC. Some have expensive shares. Most would have left if the transaction is expected to be very poor, particular the CEO and BOD advisory team. Does this signal an expectation for something hostile? Or at least a fair deal for shareholders? Don't know.
If they expect to get my vote, my position hasn't changed. Given the time this has taken with very little transparency, part of me would be totally fine to go to Court Approved Creditor Protection if that's a possibility. And if shareholders get hit, then so do the creditors. Maybe that's what a potential hostile is banking on if shareholders don't approve the deal on the table. But they (hostile) need to take into account the consequences of being too late to the table. Tough call for sure.
Normal Guy