Zenith is currently trading at 57 cents a share. Only a few months ago, in March 1998, LG Electronics purchased, from LG Semicon, 2 million shares of Zenith @ $6.33 per share giving LG Electronics about 12 million shares of Zenith and leaving LG Semicon with about 26 million shares. Total float is about 66 million shares.
In May, Zenith announced a restructuring plan which would turn over all equity to LG Electronics leaving all other Share Owners, including LG Semicon, with zero interest. The restructuring plan requires bankruptcy court approval.
In August, Zenith sent a S-4 to the SEC, the necessary prelude to the restructuring of Zenith's outstanding bonds and required by the SEC for their review and approval prior to Zenith contacting the bond holders for their vote on the restructuring.
To date, the SEC has withheld approval of the S-4 application. The most likely reason being that there have been numerous allegations of corporate governance fraud sent to the SEC by Zenith Share Owners and bondholders and the need for the SEC to investigate these allegations.
The perception of Zenith as a "basket case" requiring bankruptcy protection is far from reality. Zenith has a relatively clean balance sheet and, we estimate, will earn upwards to $10 BILLION from its VSB-related patents, during the next decade.
LGE made a serious mistake in attempting to grab all of Zenith's assets in bankruptcy court. A very well organized Zenith Share Owners Committee, which includes membership from two of the top institutional investors in the land, is mounting a vigorous battle to bring all the facts to light including scores of examples of corporate-governance, alleged, fraud.
My read is that LGE can not afford the scrutiny of public light, for a very wide variety of reasons, and will withdraw its Zenith bankruptcy plan. When this is announced, Zenith should become a stock well outside of the "$5 and Under" range......
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