I have no idea if a company can cancel all of their shares simply because their liabilities are greater than assets. I know this has been mentioned a few times on this board and on the old SH board, but I still cannot comprehend how any company under any circumstance can just cancel all the common shares.
However, let's assume a couple of things:
1) if liab. are greater than assets, the shares can be canceled.
2) All assets could be sold, except for goodwill
As of the Q3 statements, total assets were $264M. Subtract $67M of goodwill, you're left with $197M.
Liabilities at Q3 were $315M. That leaves liab. $118M in excess of assets.
Here is where it gets interesting. In the Q3 earnings, there was a write-down of intangible assets (NOT goodwill) of exactly $118M. If that writedown did not occur, then at Q3, assets and liabilities would be about even. Add back some part of the $67M of goodwill that may have some value, and all of the sudden total assets exceeds total liabilities.
It is also interesting that the writedown in intangible assets that occurred in 2008 was in Q4, not Q3 like this year. Impairment tests are supposed to occur at the same time each year, unless there is a 'trigger' event causing them to be revalued.
I don't know what to make of any of this. The whole thing is disturbing, and I am following it closely. |
