RE:Just wondering outloud..With 9 million needed in funding, Ned is getting all his people on board, is it possible that he can not get the financing, let the company defunct like many others on the venture,and buy the entire thing for peanuts(like the previous Oriental Minreals). I think he would profit way more if he went in that direction.
I don't think that will happen, I think this will eventually be a huge success story. I was just wondering if that could even be a possibility.
Chizzles
Hi Chizzles. If WOF lapsed into insolvency (for any reason) and a forced dissolution occurred (rather than a reorganization), assets would be liquidated to pay, in order: administration costs, bond holders, secured creditors, prioitized debts, and then general creditors. Anything left over would be divided amongst equity security holders like you, me, and Dundee.
In such sale of WOF assets, Dundee could be a bidder with "new money" in what would be an open market world "auction." Dundee would not receive any type of monetary "credit" for its existing shares in this bidding process. In essence, Dundee would have to forfeit its existing equity security investment and provide new money for the purchase. This money would then be applied to pay existing creditors and security holders in the order noted above to the extent of the sale proceeds. If anything remained, Dundee would allocably share this amount with all existing shareholders, and then get free and clear title to WOF assets.
If Dundee was not the successful bidder and the sale proceeds were inadequate to provide any funds to existing equity security holders, Dundee would lose its entire shareholder investment and be left out in the cold and a new owner would take title free and clear. Dundee's benefit if it allowed insolvency would be to eliminate all existing shareholder interests, including its own to "start over." Of course, anything is possible. But, due to the financial costs and risks of such a strategy, I would be shocked to see Dundee allow WOF to lapse into insolvency for any reason (where Dundee could potentially lose control of WOF destiny in world bidding for the assets) absent the determination that the mine is simply not potentially viable. I think Dundee is long past this conclusion, hence, Dundee's continued investment and company involvement in WOF's new business plan. This is a reason I continue to invest in WOF for the long term. Cheers. Seg