Philidor investigation is holding the 10-K To me, this comment by Parke Shall, on Seeking Alpha, is the most probable cause of what is going on now :
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"We think the accounting has already been looked at and taken care of. We think the Philidor investigation is the only thing holding the company up at this point.
We say this for a couple reasons. This investigation absolutely has to get done before the Board of Directors will sign off on the 10-K. There is an order of operations to these things and the 10-K is not going to get signed off on by board members who are actively investigating potential deception at the company.
What does this mean? We think it means two things.
First, we think that it means that investors' fears about there being some sort of major accounting scheme may be overdone and misguided at this point.
Second, we think it means that the board may try to act expeditiously in order to try and wrap up their investigation or draw some conclusions before pushing the company close to default on its bank covenants. The Board of Directors has a fiduciary obligation to shareholders and it is top priority for them to ensure the integrity of the business by thoroughly investigating and completing their investigation into Philidor. Having said that, we refuse to believe that this internal investigation does not have one eye on the clock and does not know that the further delaying of the 10-K past April could have catastrophic consequences for the company.
Philidor has been wound down, the specialty pharma card looks to be completely off the table. Moving forward, how much more is Valeant's investigatory committee going to want to stir up?
When we analyze, we try to use common sense. We have to say that there is a chance we could very well be wrong in our prognostication regarding the 10-K. It could very well be the auditor or something having to do with the financials holding them up. But to us, it just doesn't seem to make sense. We believe that if there was an egregious problem with the financials that the company would not have drawn conclusions about it already. Unless you want to play conspiracy theorist and assume that more accounting problems have popped up since then, which of course with this company is not out of the scope of what is possible, we think accounting may be in the rear view mirror at this point.
But just looking at the order in which things have occurred, we believe that the internal investigation on Philidor is what is really holding up the 10-K filing. If that is the truth, we believe that the board may potentially have one eye on how long their investigation is taking. It's human nature.
Again, it is this committee's responsibility to ensure the integrity of the business and do it in a thorough way, so you would not think that they would be beholden to any time limits. On the other hand, we realize the reality of the situation is that the 10-K for VRX right now is the missing link for the business. They file that prior to the late April deadline, and you can expect a surge in VRX shares. They take it out longer than late April, and VRX is going to be forced to extend their financing terms or risk defaulting on their debt.
Again, we have positioned ourselves with a very small speculative long position in VRX, based on our anticipation of the company not going bankrupt and the value in the company's cash flow streams and underlying assets."