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Non-Tech : FTL- Fruit of the Loom -- Ignore unavailable to you. Want to Upgrade?

To: Clement who wrote (118)	8/13/2001 12:47:04 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 161

Now that we agreed on the banks' position; we can look at the equity position. The stockholders are at the mercy of the management. If management owns stock then all stockholders will get a small portion of the new equity created under chapter 11 reorganization plan. Today in cram downs the management often has no stock and will not give stockholders any value back. This of course is on their record and will have troubles raising equity money in the future on Wall street. Banks sometimes got greedy and tries to take all the new equity and got stuck with the new equity. Management who does not honor stockholders' value will leave the bankers hanging on to valueless equity too, later. Seen it too often lately. On the other hand, I have gotten new equity from bankruptcy firms and came out ok. Many years ago, Storagetec and TSX(ARRS now), both treated stockholders fairly. Their concept is that the unsecured creditors and stockholders will all get some stock so that each and everyone will get their investment back later. So, with all their help, the stock value will go up on the street. The company will continue to get support from the unsecured creditors. Enough said, FTL does not have good management who understands business which is more than their own necks. You treat people fairly and give them a chance to make their money back, then they will give you all the backing. No one is an island.