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Non-Tech : Boston Market (BOSTQ)

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To: paul goldstein who wrote (1457)	10/6/1998 3:36:00 AM
From: PaperChase	Read Replies (1) of 1567

>>will bond holders accept shares for stock.i think they would... it would clean off the debt, create a clean company going foward<< Paul, this is highly unlikely. You are essentially saying that debt holders will alleviate the Chap. 11 situation by converting their senior secured position into common shares in a new organization. This would let the new BOST go out and take on new debt at a later date which the new common holders (formerly debt holders) will be subordinate to. This doesn't make sense. The debt is not the problem as much as it is the symptom of the problem. The REAL problem is that BOST store sales are very poor and their stores are collectively cash flow negative BEFORE debt service. The debt holders will look for a solution to the REAL problem rather than convert to some hoky common stock conversion formula that would wipe out their secured position. At best, the debt holders would look at some preferred stock position that pays future dividends but even this would be a long shot. BOST common stock is probably trading at 50 cents since a good many shorts are now covering. Once the covering is over I would expect the stock to trade down.

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