Allen-Vanguard Rescue Board Message Board

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Technology Stocks : Allen-Vanguard Rescue Board

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From: kidl	10/10/2009 4:27:37 PM
	of 724

Now is a good time to ask the VRS lending syndicate, with The Royal Bank of Canada (RBC) being the lead lender (as far as I know), a few questions. (I know it’s a long weekend and everyone is busy but the turkey in their oven isn’t the only turkey which needs to be “cooked” and the VRS turkey is WAY more expensive than the one in everyone’s oven.) My suggestion: Let’s send some emails and let’s get some answers from RBC as they are the entity with the largest exposure to the old and the new deal. I know a few have done so already. Many more need to do the same. I won’t “script” an email but I can think of the following questions RBC should be asked. Everyone ... Feel free to add to or correct. How is it possible or justifiable to increase lending to a new owner of a company where the old company claims to be unable to service the existing debt? Simple calculation as per disclosed information: Current debt: $232 Mil minus Forgiven debt: $14 Mil plus New revolver: $30 Mil plus New LOC facility: $10 Mil plus New total debt: $258 Mil plus Interim funding: $14.5 Mil equals Total post deal debt of $272.5 Mil which is $40.5 Mil or 17.5% higher than the current VRS debt. Mr. Luxton also stated that the new loan terms are more favourable that the existing ones. Why would RBC not simply extend the more favourable terms to VRS as it is today? Why would RBC be part of a deal which is clearly designed to circumvent normal Canadian insolvency proceedings as in avoiding a Chapter 11 reorg or a simple bankruptcy? Let a receiver decide what the pieces are worth! While RBC has a duty to protect their own public shareholders, don’t they also have a duty to protect those who are their retail clients and also are VRS shareholders? Boils down to: Is RBC acting responsibly and are they following their own code of conduct by being part of this “deal”? Send an email and ask: Dawn Chan dawn.chan@rbc.com Stephanie Lu stephanie.lu@rbc.com Matthew Gierasimczuk matthew.gierasimczuk@rbc.com And CC: Ombudsman for Banking Services & Investments JoAnne Olafson, ombudsman@obsi.ca Happy Turkey Day and let’s bring each one of them “turkeys” to the (dinner) table. Got a sharp knife? :-)

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