Daniel, I like your analysis. Makes sense to me. Maybe 5-10% is too high. Maybe 1-2% is more likely as you suggested. As a bondholder you decide (your class). The first impaired class has the ultimate decision, according to law. However, I believe that the reorganization plan is going to be so complex that all players(classes) will figure in the plan. Also, according to bankruptcy law, absolute rule, you can decide (your class) that the common gets nothing. Question is, is it in your best long term interest to give the commons nothing? Remember the company still has to have marketable securities. If the company defaults completely on the common, preferred, and MIPS, to the benefit of the upper classes, what is that going to do for the marketability of the new equity? Other ramifications?
I foresee a plan similar to what you outlined, although the distribution may be weighted in favor of the upper classes.
What is SWAG?
Thanks for running the numbers and presenting your analysis
Roger |
