Member Info for ElvisRocks

Hexam, I nearly thought that over several days and had to think it over in terms of traditional balance sheet terminology…

So in bankruptcy law the terminology goes the other way round … DIP are of course CINEs creditor, but in the case they are “Debtor in Possession” or “Debtors” ie secured lenders in their own rights are “debtors” because they are expecting money to be paid to them in the normal course … this is where the phrase “Debtor in Possession” (of Cines debts / creditors) comes from and why DIP are in control of how Cines loan / secured “creditors” will be paid.

It’s quite a nuanced interpretation but one that is used throughout, it took me a couple of gos to get this straight in my mind

Here here Hexam, I’m here to help you and others likewise, which you are also doing. We are both looking at the financials in some detail so come from the same arena in that respect.

Hexam, there is a difference between CINE (the company and its management who are not in control) and DIP (the secured lenders to CINE who are in control here). That’s the difference I was drawing out.

Hexam, it’s about the only thing Wolff is partly correct on, the DIP control the show here with the judge monitoring proceedings, it is not CINE or Mooky making an offer to themselves… the DIP will propose the Motion through the courts

Wolff, shut up you goon, it is the lawyers bill as direction of travel and this is a DIP led Motion, it’s how you get old co shareholders out to allow exit from bankruptcy…

Admit defeat when you know it, you are well and truly sunk with the crap that comes out of your mouth!

Hexam, I thought you counted yourself out last night!

DIP propose this Motion, it then goes to DIP (the secured lenders) and Unsecured Creditors Committee to raise objections. By this time, DIP will have a good idea what price they need to offer, to buy the 100% shareholders out, all of which will be synchronised with a Takeover Panel statement most probably, plus Investec and FCA in there somewhere

If you trail back through the lawyers bill, you will see all this being rehe****d (through the Takeover Panel and FCA in writing no less).

The “tax losses” argument is the one needed to get the hook to initiate a new co structure and shareholder “compromise” with the bankruptcy argument being there is no open market for equity shares if the old co is allowed to continue, ie an inability to come out of bankruptcy

Get it now?

Not that I need mr Wolffs say so or agreement, it will shut him up on his dilution diatribe .. of course there will be a dilution but as it is the DIP who are proposing this motion, it is in their interests to make their offer sufficiently north of 5p to make it worth their while ceding rights to “old co” …

What Wolff and his tunnel vision didn’t get is that it is DIP who propose this Motion under bankruptcy law!

No problem Bulls, I did a little jig last night when the logic dropped on NOL Motions, ie why the tax losses were important…. which drives the “no open market for equity shares in a bankruptcy situation … which drives a need to do a NOL to change the corporate structure…

Could u do me a favour pls and just have a read of the General Motors one, the second Para on Page 1 that this is how it works and Para 4 and 5 on the following pages that it is only the Debtors (DIP) and Creditors Committee who can raise objections on this and that the effective date is when this Motion is agreed by the courts (which in my view will be synchronised with the Takeover Panel / FCA stuff and suspension of shares)

http://bankrupt.com/misc/gm_ipn.pdf

Bulls, in answer to your question last night I’m an accountant as you’ve probably seen, which group does not sit comfortably or have much in common with traders and day traders. I have little knowledge in trading philosophies but I’ve invested a lot of time in trying to understand this scenario and I’m pretty sure I’ve got the logic right but it’s gonna take time for that DIP motion to be submitted by the courts.

The reason that this share is so sensitive is it only seems to respond to RNS, media news or a judge order my prediction that this particular transaction will happen will be sometime in 2023. There is also the influence of these auto bots and high frequency traders that care not one jot what’s happening the company and are programmed in the way that they are.

I once was following the mining company that went through a rights issue and was still struggling thereafter and noticed that they appointed a M&A expert lawyer as an non executive director to the board (but never publicised it) but it was obvious what was going to happen from that point and it duly entered into an M&A transaction about three months later.

Hope that helps but in short it is auto trader bots, RNS, media news and the judge orders that will influence short-term price, when the company is ready it will do this DIP transaction in the manner that I set out last night from looking at the General Motors similar scenario back in the financial crisis and the other (official) material I highlighted

Bulls I had typed up a reply to your Q, my iPad went clunk, I’ll reply to your post tomorrow (have answers)

Or listen to Elvis Wolff and try unpicking / disproving the veracity of a DIP NOL Motion Wolff

EY have done tax compliance stuff on US tax losses … docket 669 …. and are now taking this to the next level (UK where the listing is based and the Proposed Reorg) and getting clearance for a probable UK shareholder prospectus

Unsecured creditors will get zilch unless shareholders agree to NOL Motion … read the GM Motion small print legalese … it’s the DIP who are proposing this you goon …

No Wolff you are a Quack, you quack like a duck, walk like a duck, in fact you area duck.

Go read the GM NOL Motion, Lawyers bills which matches this up and now the EY Tax Letter.

Quack, quack, quack Wolff, just cos u didn’t think about it (or have seen it before) … the camera does not lie Wolff

Re your other points Wolff

Senior lenders DIP are proposing this Motion - they have to get the new co up and running, need shareholders to “agree this compromise” to give up old co

That’s why today Cine came out and said no parts are for sale, it’s the whole lot going through a reorg

It’s not my little scheme, it’s the scheme going through the courts based on available evidence, I’ve just taken the time to understand it and join the dots

Will answer tomorrow Wolff, equity shareholders get paid from the unsecured creditors pot - via a carefully rehe****d DIP Motion through the bankruptcy courts - HMRC approval is pre-sought (it’s in EY Tax work Phase 2 letter to get this).

You need to review a couple of clauses in the GM NOL Motion to confirm exactly that we are protected.

No worries jefff, u have to get cosy with some of the legalese in the GM NOL Motion, not much, only a couple of sentences, the rest of the stuff comes from the (now infamous) legal bills I’ve been banging on about …

http://bankrupt.com/misc/gm_ipn.pdf

Investec are the “proposer” to the transaction not a lender…

It would probably also be set out in a prospectus to shareholders…

How does this grab you jefff in layman’s terms (using the General Motors NOL Motion as precedent). In short, sometime in 2023 FCA and Takeover Panel will suspend the shares “at an agreed price”.

This is because beneficial holders of equity shares have to fill a form in (to say they are entitled to the shares) and so they go into the pot with everything else. Unsecured creditors committee get the chance to confirm / reject equity submissions

However because they (unsecured creditors want the company to continue) they approve the NOL Motion. They also want the tax losses protected. EY have done the hard yards in clearing this “transaction” with HMRC. Shareholders get paid out a few weeks later (or there is a 14 day period to trade until delisting).

I’ve now twigged why nominee shareholders like us lot, totally 25%, is a bit of a pain the a..s to administer. We would have to give consent via our brokers.

Hexam .. somebody (Investec) is going to trigger an NOL Motion which under bankruptcy law effectively states “we can’t access the tax losses” (and therefore can’t change structure to a newco because the equity shareholders own the old o) so you “offer” shareholders a price to buy them out, all done under bankruptcy law

What price?

I’ve stabbed at 35p as it’s linked to mookys warrants and options taking him above 30% where he has to make a mandatory offer to all shareholders and current tax losses are about 6-7 times current market cap.