First and second lien notes due

Rotechs first and second lien notes are due,some in april 2015 and some in oct 2015,and heres the worse part,they are NON-AMORTIZING LOANS=meaning they only pay on interest till the loan is due than they pay the princple in one lumpsum,someone tell me how theyre going to pull that off?

 

the people that hold the loans own the company

 

Looks like the note holders will end up with the company.

 

That dont sound to promising.

 

Exactly. Good luck with that with only six months left. Considering the revenues they have after losing the VA contracts I am guessing we may yet again have new owners here soon! And, I am guessing if it is heavily under water they may more then likely just liquidate. They should have never done the bankruptcy in the first place and forced the second tier to take an equity position less then 100% or close it down with chapter 7. If that was the case I think the second tier noteholders who are now stockholders would have been forced to worked it out or lose their shirts with liquidation. But of course, hind sight is 20/20. And now those new stockholders are paying for it just like they did to the stockholders before them. Sad part is, the past executives who made all those decisions to go down the chapter 11 road are now gone and how would they ever be held accountable for those decisions? They wont. Just the world we live in these days...does not make people trustful of our stock market in general or large corporations when things like this happen way to much these days to the little main street stockholder guy.

 

lets stick with the facts please.

 

LOL...lack of understanding that the old second debt holders(there were still first left in place after the bankruptcy) traded their hundreds of millions in debt for the entire companies common stock equity. The first positions(secured) debt still stood after this and now they have new second tier lines of credit with new creditors. So, ultimately, if the first tier notes when they become due(as the orig. OP pointed out) think that the whole thing looks like it is going down the toilet, they will foreclose and liquidate. Or, they can be replaced with a new line of credit from somewhere or someone else to pay those first tier notes in full. But, if the company is losing money and has lost all those revenues with the VA contracts it could make it very hard to find new financing. Especially if a valuation of the company currently is much less then it was at the point of Bankruptcy due to the massive reduction in revenues.

Unfortunately, people do not just give 100s of millions in credit if they do not believe it is a good investment on Wallstreet. Either way, I could be right or wrong on this but this is a basic analysis of the situation as I understand it. BTW, want to say very good thread. Thank you for posting this. This actually may be the most important issue the company is currently dealing with to continue.

 

Thank you,i thought it needed to be shared as i to think this is one very important issue,that could affect a very lot of people,even more so than the fight they are in trying to win bid protests that can never be won.

 

Makes me wonder if this was a scam on the old stock holders.

 

Just makes me wonder why would silver point ever give them a forebarance loan ,where they just pay interest and expect them to be able to pay the principle in two payments,seems crazy.

 

Well, IMHO, the old stockholders were mostly a ton of joe six pack non insider main street people. The new stockholders are mostly wallstreet guys I would guess. No idea and not sure since I do not know who held most of the second tier debt.(they do not have to disclose which I think is a loophole the .gov needs to fix reflecting when there is large accumulation of debt at discounted prices right before something like the BK happens) And of course, it is now a private company so there is no insider filings. However, that would be my guess even though could be totally wrong. That most of the second tier debt was bought up and held prior to the BK by some major players.

 

I could not agree with you more about millions in credit being issued again.Smells an awful lot like a chapter 7 to me.

 

Looked good at the point they made the loan I am guessing and thought they were going to make a killing off this and hijack the company from the public stockholders. However, it seems to have backfired in a big way since they did not do their homework enough to see that all those huge VA contracts would be taken away. But, either way, Silverpoint in reading that agreement since it was public at the time will get paid either way I am guessing along with the first tier notes. I am almost guessing that maybe even as a DIP funding they might even go ahead of the first tier. I am not an expert on that but it did appear they were ironclad to get their money back whatever happened post discharge based on the way it was worded.

 

Iunderstand thid all seems very confusing to most,but i bet you can all guess who comes out of this smelling like a rose.

 

Finally! An interesting thread worth reading! Much more important to discuss this stuff considering the situation with the company then how someone is driving a van with 400k on it and bald tires. In the end, none of the rest of it exists without this stuff we are discussing.

 

Ya your probly right,investment companys seldome lose.

 

6 months (oh i get it ,your being kind) some of its due next week.

 

It has been said before. Carma. If they would not have hurt all those Joe Six Packers....they would have had a win win all around. It just comes down to greed...and God rights all wrongs. Most Joe six packs do not have the resources to fight that battle. But considering the way this went down with the VA contracts you have to wonder about some devine intervention. Still think, as another poster said on another thread, to bad they can not just undo the bankruptcy. Obviously it is to late for that.

 

Thanks,but this is the reason someones driving a van with 400,000 miles

 

Ya, without those VA revs going away and the second tier debt totally removed...this puppy would have been totally solid if the it was reorganized with that deal. Plus everyone would have made tons because I could have seen this becoming a 20 to 30 dollar a share company again after that restructure like it was in the past due to the massive reduction in debt in the deal. Would have also been easily able to get a new credit line and refinance also once the secon tier gave up the couple hundred million in debt for maybe 75% equity. Do not forget also the 25-30m they would have saved in bankruptcy fees. Sometimes people make mistakes I suppose.