RE:RE:RE:RE:Expedited to Facilitate Theft from ShareholdersBASTILLEDAY4U wrote: Scottie99 wrote: But who would bell the cat and bring the matter before the Judge? Maybe the Council to the Adhoc Committee can do that and request for a Stay of Proceeding or the denial of the Receiver application to approve the sale because of the tainting of the process by Peters & Co in awarding the company for cheap to an entity with questionable links to the former Board members that threw the company into receivership! Or a group of shareholders can request a lawyer to make the claim in court....
BASTILLEDAY4U wrote:
This may come down to a lawyer for the stakeholders demanding a stay of proceedings, provided he or she can get a word in edgeways during the hearing.
Good question, it's going to take a lawyer who knows how the system works, to stop this. Hopefully the Ad Hock group or someone else who had their bid denied, will be allowed to be heard. The first judge in the 1st report, worked as a lawyer for McCarthy Ttrault before becoming a judge, if my research is correct. She should be no pushover, then again, we have seen everything so far.
I am not saying that 40 cents on the dollar for debentures, shouldn't be accepted, but I am just questioning "what is a substantial payment?" It would be good to get clarity on what that is, but that is being kept confidential, until they get the deal approved.
Anything done to take over a company in a credit bid, requires actual credit, to deal with the secured debt. Clearly the National Bank has cut banking lines all over Calgary, so credit funds would have to come from somewhere else. A company making an offer, doesn't need to have all the cash, as some of the cash can be borrowed against the operating cashflow. These are all big decisions, that need time to sort out.
The problem with shareholder's groups, is we haven't seen any emerge. Our chatter on Stockhouse is all fine, but we need a gorilla shareholder, that is prepared to recoup some value. The investment funds dumped their stock very quickly, at the start of 2016, and were the last big investors. Management only owned less than 4%, so they clearly weren't too indebted to the company. However, certain management did buy in at high amounts, so have lost money on the company, too. But overall, I'd say the previous board wasn't helping to save the company, since they actually let it slide into receivership, with little fuss.
The original Ad Hoc plan, required time to discuss matters with certain bidders, to try and sell off parts of the company. As the latest report said, there were "21 offers to purchase various individual packages of the Assets". Ad Hoc group wanted time to sort through offers, that may have allowed them to then re-cap the company, after some debt was shed. Understandable that the Ad Hoc group didn't have the capacity to put down a $20 million deposit, as part of a bid to purchase the assets: it takes time to arrange financing.
The asset value is very sensitive to oil price: a few more dollars, and the cashflow would be there. Unfortunately, the price collapse has dragged on and on. A serious increase in price, and there is good longterm value. But the receiver's report, doesn't show alot of cashflow, although operating costs look a bit high. I suspect some wells were reactivated on operating costs, making the assets look even better, when the new buyer gets them. But that is all part of operating an oil company. (Actually, revenue was higher on a per month basis, than it was in the second quarter, so the cashflow was skewed down, by higher than normal operating costs.)
Basically, it is up to the Ad Hoc group now, if they want to argue points in court, and it would depend if they have a gorilla financial backer, that thinks there is more value to be had. They might be able to argue that a small group, requires time to get financing, and to properly organize. But at a certain point, it all depends on the value that gets assigned to the unsecured creditors, which would dictate if it is worth fighting for or not.
Too bad shareholders didn't have a more organized group, with access to funding.