IBI Group Inc T.IBG.DB.E

RE:RE:RE:headed to bankruptcy?

[patenright]

Company is generating positive cashflow and servicing debt so I don't see bankruptcy.  Normally I would say yes as good way for company to reduce debt in a CCAA and come out less leveraged but the problem with CCAA in this case is Mgt owns a big chunk of the company , like over 30% so that will be worthless if they file CCAA so it is in best interests of Mgt to not file and again there is no real need to as they are still generating positive cashflow.  If things get worse, then yes they might be forced to whether they want to or not but right now it is not that dire. 

I bought this at $2.6 and will hold but I just bought the 2014 bonds rather than more stock as I believe the Bonds offer the best risk reward at 32 cents with possible 200% upside and zero  to limited downside as at the very least in a CCAA  bondholders would get equity in a newly capitlized company that would in all liklihood equal their 32 cents on the dollar and worst case 20-30 cents.  Shareholders of old company would be wiped out clean.  Of course equity has more upside than bonds if IBG can turn it around which I think they can but also has worse downside of $0 in a CCAA scenario.