YOUR SHARES HAVE VALUE 5-Apr-11 09:10 pm
Ignore George Hechtman (aka last3post) trying to convince you that your shares are now worthless and the NOL's carry no value; they do. First, this is a reorganization plan under Chapter 11, not merely a 363 asset sale. The company does not simply vanish after the sale. That would be a chapter 7 liquidation. So what is the difference between a 363 asset sale where all of the assets are sold and a liquidation? Well, the big difference is the equity lives on. Ok, but who wants the equity, why not just take the good stuff and let the equity get cancelled? The answer is because the equity offsets about $250 million in tax. Looked at another way, the equity that we all hold is just another asset of the company. Best of all, its a really cheap asset because of the tireless work of paid dumpers like Bloaq, Pipel, and Hechtman.
The tax works like this: the NOL is about 630M. If BBI cancels jr. debt at 100% it has income of 400M -- ouch! Apply the NOL AT THE TIME OF PURCHASE and save 160M off the bat (400 million at a 40% tax rate). With income going forward DEBT FREE the remaining 230 million would be used in year one giving another 92 million in tax savings. So, the NOL's have a cash equivalence of $250 million. That is very significant -- 250 million in cash is a lot of money.
The tricky part is how to get transfer ownership of the company and retain the benefit of the NOL's. I think if Icahn is the buyer he will use a holding company to run the business since he already controls the board. Then, I believe he will simply buy from his minions, the Bloaqs, Pipels, Hechtman' the stock they have been diligently purchasing for some time at a predetermined price (after all their as thick as thieves) and/or issue a warrant to expire after the NOL's are used. Alternately, the buyer can simply use the NOL's over a longer time. Nothing in the Code says that they dissapear if not used in a safe harbor.
Hold tight