I received the transcript today for the Autoinfo bankruptcy hearing that took place on April 6th 2000 and let me emphasize here that I AM NOT AN ATTORNY. I do not possess ANY legal training or education that qualifies me to give any opinion on any of the legal issues that were raised there. I just want you to be clear on that.
There were several things I was hoping to learn from hearing, more or less exactly, what went on in the courtroom. First, I was curious as to the general tone of the hearing.. Was everyone there just to go through the motions because it was required?....was there any strong feelings held by anyone there concerning a particular issue? Second, as the hearing failed, that day, in its goal to reach an agreement on the debtor's disclosure statement, I was curious as to what the stumbling blocks were and where the objections were coming from. Was it the SEC....the US Trustee....or the judge himself? All in all, I was hoping to get a better feel for Autoinfo's future as I have, what is for me, a fair amount of money riding on the outcome of the bankruptcy proceedings and AUTO's future stock performance.
The transcript answered most of my questions and provided me with more information than I ever hoped for.
First, starting on about page three and then for the next 25 or so pages the judge criticized AUTO's disclosure plan for being verbose, redundant (repeatedly redundant even), having extraneous/useless information and being just plain hard to read. It was clear very early on that the judge is a firm believer in the KISS principal....Keep It Simple Stupid and the disclosure plan, at eighty some odd pages long, was anything but simple.
After the judge's lengthy critique of Mr. Goldberg's writing style (Goldberg is AUTO's bankruptcy attorney) the real issues began to surface.
The strongest objection appeared to me to come from the SEC, represented by Nathan Fewkes, Esq.. The SEC's objection was not so much aimed at Autoinfo in particular but at reverse mergers in general, which is AUTO's ultimate goal. The SEC would like to delay the disclousure plan until AFTER AUTO has found a merger partner so the plan would include the partner's financial information in addition to AUTO's. The impression I received is the SEC feels that in most reverse merger situations the acquiring company's true financial situation is never fully disclosed to the public before the reverse merger actually takes place, a fact the SEC is NOT happy with.
Then came the real gem in the transcript, the thing which made what I paid for it seem like money well spent, page 42.
On page 42 Mr. Fewkes was discussing a section of AUTO's plan that dealt with a financial projection based on an acquisition by a hypothetical company when he was interrupted by the judge, and I quote;
"THE COURT: That doesn't belong in here. The Commencement - - has the company commenced preliminary discussion? [with a merger partner]
MR. GOLDBERG: Yes"
A few pages later, page 49 to be exact, the judge is talking about the new, simple, disclosure statement that he has asked Mr. Goldberg to produce, and I quote;
"THE COURT: It seems to me that what we're going to wind up with is a disclousure statement which will bear practically no resemblance to the one that we have here.
MR. GOLDBERG: Well, it certainly appears that way.
THE COURT: It will be in thing of beauty. It will be short and sweet.
MR. GOLDBERG: Your Honor, might I [unintelligible].
THE COURT: We will be able to read it without going to sleep.
MR. GLODBERG: My Mom read this and she loved it.
THE COURT: She's an exceptional Mon. All right, how long will it take?
MR. ROSE (AUTO's corporate attorney): Sunday [unintelligible].
THE COURT: If it were up to you, he would have to do it by Sunday.
MR. ROSE: How long before we get this transcript?
THE CLERK: When do you want it? Within a day we can get it. If it goes upstate, you can get it tomorrow night.
THE COURT: Oh, there's one other big, big topic in Mr. Fewkes recommendation. That is, if the facts were that you're sitting there trembling, Mr. Wonderling (AUTO's President/CEO), to get this done because you have a deal in your pocket, then I would say I would be very put out if we did this in its present form and then, hey, suddenly we've got a deal.
Now, that, yes, is to Mr. Fewkes's basic question here. Why are we - why is it necessary to confirm anything now? Why do we need a disclosure statement now? Your're doing what you're doing. They're - you know, you're embarked on your negotiations. I won't even ask how long you think it might take because you probably don't know but let's suppose that it's reasonable to think by the end of the year you'll have a deal. Why don't we wait for it and then have a real disclosure statement and have a real business plan and something where these creditors will really know. Why did it have to be done now when the really important thing that's going to happen to this company hasn't happened yet? So, that's my question."
What the above tells me is there is ALREADY someone who want our dear little AUTO and would like to have it AS SOON AS POSSIBLE. Also, because the only real asset of AUTO is the $26 million tax loss, that would suggest that the interested company is not a "development stage company" but rather a going concern with enough profits to be able to use AUTO's tax loss now
In My Humble Opinion, we stock holders are sitting on a volcano ready to erupt, assuming of course, that AUTO successfully gets through the court hearings.
The next hearing will be May 11th........I for one can't hardly wait!!
Paul
PS: Please remember, all of the above, except direct quotes from the transcript, is my own opinion. You may purchase your very own transcript from TypeWrite and no, I do not work for TypeWrite (just in case you think that all I'm doing here is trying to sell transcripts).
TypeWrite Word Processing Service
356 Eltingville Blvd.
Staten Island, NY 10312
718/966-1401
Autoinfo hearing of April 6th. Case # 00-10368 |
