It's Simple Math People "Each Debentureholder's pro rata share of the aggregate cost of the Ad Hoc Committee's legal and financial advisory services, is approximately $26 per $1,000 face value Debenture to $37 per $1,000 face value Debenture (including estimated fees to conclusion)"
If there are $81.1 million of debentures outstanding (what is that exact amount, anyways?), then the total estimated legal and financial advisory fees, will be between $2.108 and $3.001 million.
Assuming 65 cents on the dollar, the total debenture value would be $52.7 million. That is better than the $11.35 million, initially offerred. The gain is $41.35 million, making the total estimate fees up to 7.25%. But since we don't know the exact amount that will be paid out, we can't calculate the exact fees.
Fees are a bit high, but not totally out of line with any other new share deal that might have a 7% commission paid to a broker.
My only regret was that there wasn't stronger backing from Macquarie, for a credit bid, where the Debenture Holders, would just take the whole company private, and keep it till the oil prices rose. But to do that, we'd all have to kick in some cash, to clear out some of the bank debt.
While I was ready to borrow on my line of credit, to take out some of that whiny National Bank debt and salvage my investment, we'd have to get every debenture owner, to also agree to kick in some credit. But we have a varied group, that can barely agree to pay fees, let alone kick in serious capital.
One thing that did surprise me was how low the Bennett Jones fees were, in comparison to the work they did. Well not really that low, but still something that had any shareholders tried to mount some defence, they might have been able to get a retainer organized amongst people. (Consider that when people start thinking about suing to collect the director's insurance, based on incompetent decisions.)
I was initially hoping for a proxy fight, where some shareholders would try and save the company, and vote the board of directors out, to then properly sit down with debenture holders, and try and work around things with the banks. But no shareholders groups emerged, to try and save their investments.
Ultimately, the low oil prices are still the reason that this didn't gain more value in the auction process. Our industry isn't set up to run for years at a low price, after everything was developed at high prices, only to see the cashflow disappear when the prices crashed.