RE:RE:RE:RE:RE:RE:RE:RE:Chapter 11 Update?...Here is cut and paste from the trustee's response in court - please excuse the formatting errors - tired cleaning it up but not taking.
The Waterton Transacti on
W
aterton’s Reply
asserts that the transaction may
not be avoided because the Debtor
o
btained a fairness opinion by
Roth Capital Partners (“Roth”).
Exhibit 8, DE 72.
However, a t first look, Roth does not appear to be disinterested and relied only
upon information
p
rovided by
Gry
phon manag ement with no independent verification. The heavily
qualified
o
pinion does not address the merits of the transaction, as compared to alternative business
strateg
ies, nor does it address the underly ing
valuation, future performance or long
-term
v
iability of Debtor. B ecause the opinion does not address solvency
issues that may
arise as a
r esult of the transaction, Trustee believes that additional investig a tion of the W aterton
transaction is needed to determine whether an avoidance action should be pursued on behalf
o
f the estate.
Additionally
, Trustee has no information reg arding
the special committee formed to
investig ate the F ebruary
2013 W
aterton transaction referred to in its Reply .
F
urther, Trustee
d
oes not y e t have access to financial records related to the financing
received from W
a terton
a
nd Debtor’s accounting
for the disposition of those funds.
C
onclusion
The Trustee is advised by
counsel for B
ockhold-Dawson that up to $500,000 in post-
p
etition unsecured financing
is available to assist the Trustee in conducting
an investig
ation
into the assets and liabiliti
es of the Debtor. W hile the Trustee understands W aterton’s
p
osition, i.e., that there are insufficient assets available to pay
even its secured claim, and the
B
ockhold-Dawson shareholder faction asserts that the resource owned by
B
orealis is more
than sufficient to pay
creditor claims and provide a return to shareholders, the Trustee is
looking
first to determine whether there are potential assets available to pay
unsecured
c
reditors.
B
ased upon the foreg oing , the Trustee requests the Court continue hearing
on the
Motion for a period of 60
to 90 day
s to allow sufficient time to perform an analy sis of this
c
ase.
Dated: December 16, 2013.