Windup ValueI was surprised Kramer abandoned his offer after getting 59%. Now it really is a lottery ticket on the outcome of the arbitration hearing. And then if we succeed in arbitration, can we ever collect the award?
If the Board sells off the assets in the meantime, its difficult to figure out what that will yield. At March 31, 2010, the financial statements show US$5690K in cash, plus $1971K in A/R minus $2607 A/P and current accrued liabilities. If you sell Kirby and close Palladium, you have to pay off the remaining building lease for Palladium. Total lease obligation was $2663K to end of lease. We'll assume half belongs to Palladium. Then deduct non-controlling interest of 40% (Kirby partner-doctors) and that leaves you $2400K of net cash. Then deduct termination fees to lay-off the headquarters employees, including the CEO eventually, and add the proceeds from the sale of the Kirby business.
There is also the $5 million receivable from the non-paying insurance company. The Directors never disclosed whether it has been paid or not. They just mentioned a bunch of stuff about insurance company clawbacks from doctors, which I never understood.
What does all that add up to in cents per share? $2400K is 17 cents/share. Employee termination fees and proceeds from sale of Kirby is anyone's guess. Plus the lottery ticket on the arbitration settlement.
I made my first purchase at $7 a share. Where did it all go? This has been a very expensive lesson.