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Technology Stocks : Zenith - One and Only -- Ignore unavailable to you. Want to Upgrade?

To: stilts who wrote (6341)	10/6/1999 9:13:00 AM
From: Robert Utne	Respond to of 6570

According to the S-4, three groups of bondholders claim to own or control more than 50% of the bonds. As I recall, they were listed as Loomis Sayles, Mariner Investment Group and Caspian Capital Partners. Another entity, GrowpW Partners has tendered to buy the bonds at 11 cents on the face value dollar with a closing date of October 18, 1999. The bonds are trading at 22 cents currently. What appeared very peculiar to me is that the bonds were being solicited, at premium-rate bids, reportedly by the Pennsylvania Merchant Group and others in late 1997. This was the same period when there was a massive short attack on the stock, reportedly by Goldman Sachs and others (about 15 million shares of short interest, virtually the entire float of the common stock held in street name). I have no idea if the SEC has looked into these irregularities. If they haven't they should.

To: stilts who wrote (6341)	10/6/1999 11:04:00 PM
From: NRugg	Read Replies (2) \| Respond to of 6570

The bondholders are not a monolithic group as one would think from reading the publicity. I can speak only about the 6.25% convertible debentures from personal experience. I am a bond holder that voted against the bankruptcy proposal. I own only 90 bonds, so I didn't have much impact on the vote. These bonds are really sinking fund convertible debentures and have a 6.25 % interest rate. They were being traded on the NYSE when I bought them about 10 years ago. Since Zenith was not regarded as a great credit risk even in those days they were trading at about 65 cents on each dollar of face value when I bought them. But for about 8 years they paid interest, and I even had 5 or 6 redeemed by the sinking fund, which is by a random drawing . They actually reached par value of 100 during a flurry of optimism when Zenith was involved with US Robotics and cable modems. Clearly I wish now I had gotten out then. Now my broker quotes 22 cents on the dollar but there is little trading. LG is offering about $50 million face of 8.19% debentures to replace $103 million face of 6.25% debentures in its proposal . This sounds like your are getting about half of your money back, but they will not be traded on any exchange,and they will be backed only by LG Electronics. So the 11 cents per dollar offer by "Growp W" that Bob mentions in post 6342 may be a reasonable estimate of what they will bring on the market if LG is successful in its takeover. Despite my small holdings, I am one of the people mentioned by Bob who were solicited by a representative of the Pennsylvania Merchant Group. In 1997 one called me saying he wanted to buy my debentures. He knew how many I had in my brokers name, which surprised me a little. The debentures were then trading on the NYSE at about 74, as I recall. He said that he could offer me a premium of 2 above what they were selling for on the exchange. He said he represented the "sinker" and that they wanted to reduce the number of debentures that they would ultimately have to redeem. I was a bit suspicious of this and did not take the offer. I don't regret this as much as missing the first chance. This one might not have been legal. I reported the incident to the SEC, and got a form letter in reply. The same person called me again in 1998 after the bankruptcy proceedings were started. This time he said he represented "a group of people who were short the stock" He again offered a price above that they were trading for on the market. I don't think he remembered talking to me before. In the conversation, he mentioned that many of the people he had been calling were elderly, they did not even know Zenith was in bankruptcy. Again I declined the offer, I wrote again to the SEC, and got another form letter in reply. The puzzle to me that there were apparently people who were making a considerable effort to obtain these debentures quietly, paying a premium price, then using them to vote to accept the LG offer. I am sure that they realized that if they were successful in their effort, the debentures would drop very sharply in value. There is nothing inherently wrong with buying a convertible and selling the stock short. But this seems to go beyond that. Both the stock and the debenture get crushed. I have kept Bob Utne informed of these events as they went along. He is very energetic and I admire his efforts to help the stockholders and what I think are the true interest of the small debenture holders. I wish him well, but I am not hopeful. I apologize for the paragraph structure, I typed this off-line and had to revise the returns. Norman