RE:RE:RE:RE:RE:RE:RE:RE:Tuscany International Drilling Inc. Announces Forbearance..
Buying enough shares to force through unpopular votes would give a lender lots of the very asset they would be making less valuable. It's not a commonly pursued strategy. I find it interesting that some lenders are accumulating shares while others are divesting. I wouldn't be surprised to see Chapter 11 used as a tool for a few lenders to buy debt from the others. Allows the more conservative firms to withdraw with their funds regardless of existing covenants, while CS and others consolidate their lending positions along a more rational schedule. In addition to lender arrangements, Chapter 11 allows renegotiation of vendor and supplier contracts. In essence, Chapter 11 provides legal muscle to put through the changes management has been formulating for the past several months. After just selling two rigs, it is unlikely that Tuscany is pursuing this course merely to make the immediate payment, but rather to implement changes which will allow avoidance of cash crunches at their next several payment dates. And streamline operations at the same time. You know, while they're up . . .