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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (20665)	12/29/2000 4:38:03 PM
From: pcstel	Respond to of 29987

Art: <As I have noted in several earlier posts, it is likely that Schwartz would not be in favor of bankruptcy because then his own Loral ownership suffers, since Loral owns about 40 percent of G* equity. Likewise, but to a lesser extent, QUALCOMM would also be forced to write off its approx. 6 percent investment in G* equity. Thus, bankruptcy is not a foregone conclusion here, as it might be for other companies where the Chairman may have less financial interest in the outcome.> Art, I believe you greatly underestimate the damage that Loral ownership and contiuned funding of Globalstar has inflicted on the Loral shareholders!! I own "a lot" of LORAL.. And I can tell you that I would go outside "and skip down the street" if Globlalstar filed Bankruptcy!! The only affect that a Globalstar Bankruptcy would have on LORAL equity price is that it would probably double in short order!! Loral has been punished to what I call "Skunk Value"... In other words, I think I could put the Assets of Loral on EBAY and take the proceeds and pay off the debt and still have more than 3 bucks a share left over.. Many of us that hold LORAL are actually praying for the day that Globastar files Bankruptcy!! Look at BLS's recent 1,000,000 share buy of Loral off the open market.. and the rest of the upper management of Loral.. Do you think these people would buy Loral equity, if they knew Loral would continue to fund Globalstar?? My point is that normally.. A company files Bankruptcy due to non-payment on bond payments.. Usually, the CEO of the company is trying to convince the bond holders not to force the Bankruptcy.. "We are trying to get some money.. We are talking to some Banks..etc." In this case.. Loral holds the gun to Globalstar and the Bondholders.. Loral has every legal right to send Globalstar into Involuntary Bankruptcy.. There is nothing the Bondholders can do to stop it.. And since all the debt is held by only 3 parties.. Qualcomm, Loral, and the Bondholders.. It makes working a deal even easier.. There are no other Third Parties to try and convince to a deal.. In my scenario.. There is no Bankruptcy.. Just an exchange of Cash Bond Payments for Equity for a period of time.. After all, this is how the Dividends on the Preferred are now being paid!! The Bondholders have no control to keep Loral from calling the 500 million Credit Facility.. Yet, If the Bondholder's agreed to a 2 year exchange of equity for cash payments.. The whole nasty Bankruptcy can be avoided.. If you think the Bondholders would walk away from a G* Bankruptcy with a value of more than .10 on the dollar.. I believe you are fooling yourself.. The Iridium bondholders felt the same way.. AND THEY GOT NADA!! The way the regulatory approvals are structured, and the Gateway ownership is set.. The assets that GLP owns have NO VALUE in Bankruptcy!! If you don't believe me.. Go look at Iridium as a case study.. Their structure was very similar to that of G*!! And the bondholders got ZIP!! PCSTEL

To: Art Bechhoefer who wrote (20665)	12/29/2000 4:54:30 PM
From: KyrosL	Read Replies (1) \| Respond to of 29987

<it is likely that Schwartz would not be in favor of bankruptcy because then his own Loral ownership suffers, since Loral owns about 40 percent of G* equity. > Art, I disagree. BLS, may not want bankruptcy for G* because it's his baby, not because of Loral's equity ownership. Loral is a substantial G* debt owner as well. IMO, a bankruptcy that eliminates G* debt and replaces it with equity in a new debt-free G* will result in a much better chance that Loral will recover its G* investment. Although Loral's share of the new G* will be less than its share of the current G, the new G will have a much better chance of success because it will be able to price its voice and data minutes much lower than it can today, and in fact be truly competitive with falling terrestrial rates.