DYN has gained an unfair competitive advantage by manipulating the souring of this deal...
...I'd say the maneuvers of DYN to kill ENE and thereby gain a competitive edge not only smells of bad faith in negotiations, but also might have antitrust implications.
The spin from Watson sounds like damage control to defend his pulling out. Obviously, the downgrade to junk would come once people learned that Watson pulled out. Everyone knew if the deal did not go through that it would likely be the end of ENE. That is the nature of this business: contacts, trust and continuity. DYN knew this and took advantage of it, apparently unfairly. Because if they were close to a deal before, there can't be that much difference now, or at least certainly not "material." I guess this guy has little understanding of the legal shark pool his decision will now cause both ENE and DYN.
Also, loaning ENE money, then impairing the lucrative collateral and seeking to divest this from ENE by undoing a deal that the setup required to be made for the deal to work is likely going to head to litigation, akin to lender liability for control-type issues and/or unreasonable impairment of collateral issues. Unless, Watson can show there really was a "material" change (usually a very subjective concept), DYN is toast too.
Watson's statements demonstrate he's worried about the results of DYN's pull out and he is trying to reverse spin (like Bill and Hillery we all know). Using legal buzzwords like "material change" all sounds like CYA for the impending lawsuits. Proving a "material change" is a lot harder than saying those words.
Sorry, the litigation vultures will swirl around him like a dead carcass soon enough. Unless DYN comes back to the table or something good happens. In fact, this will be a DUTY of any bankruptcy trustee to investigate and pursue DYN if there is anything to this obvious tactic that has resulted in the ruin of a competitor.
I wonder if ENE is seeing if there is any last chance for an amicable way to bring these two together or if they start going ballistic soon with the lawsuits head on. It appears inevitable anyway either by the company outside BR or by the receiver/trustee in BR.
In any event, DYN must not know the realities of this kind of poker stakes. It may soon enough...the ball is in the air. Who will come down with it...? |
