Lanesborough Real Estate Investment Trust V.LRT.UN

RE:Will debentureholders take the poisoned bait?

[quicksilver545]

I understand your position. Let me explain why I voted yes.

Liabilities far exceed assets, and without improvement in real estate market in Fort Mac, this company will for sure go into receivership. In receivership, the mortgages and other secured debt will be preferentially treated when the company is liquidated. As the debentures are unsecured, there will be nothing left to distribute. I'm not sure of the countless other options you mention, but would like to hear them. 

At least with this option to convert to units, we have hope of recovering some capital. At current debenture trading levels ($1.75 per debenture unti), the total amount of debentures is valued at 420,000. If that were converted to units, at 1 cent, those units would be worth $6.5 million. 

Yes, the massive dilution will put pressure on the stock price, but the relief from the debenture payments will also help the balance sheet. 

I voted yes as I feel it is the most likely way of receiving some capital from debenture investments, even if significantly reduced to the original amount. That said, I purchased the majority of my debentures between 1 and 10 cents, so I do have a bias to other long term holders who have lost a lot. 

Interested to hear your thoughts on what the other possible arrangements could be.