Crowdsource this idea
For this deal to pass, the MTNs must acknowledge that their notes are worth Par Value. How do I come to that conclusion?
I can prove that if this is not true, then this vote will not pass. I can show that if this is not true, at least 44% of the debt will vote no.
$369M Credit Facility – If they vote no, they get their $369M back.
$255M 2013 MTNs – If they vote no, they get their $255M back at par.
$184M convertible debentures – These will surely vote no because they get the worst end of the entire deal.
So you have $808M of the entire debt vote, that would vote NO, unless they have reason to expect that voting YES means that they will get back more than par.
$808/$1800 = 44% of the vote, set to vote no unless they can get more than 100% of par value.
So, this plan will not be approved unless the debt holders get more than what they are owed at par.
That’s the logic. This is why this is a breach of fiduciary responsibility.