PlanMaestro

Hilarious, probably the result of a committee. An individual would not put his name on that..

Has anyone run AIG's total outstanding shares after the government conversion?

Well, at this price I am starting to check TRXAQ again. Even without an OEC plan there is still the possibility of a valuation battle like CEMJQ's. TRXAQ has been raising prices and the whole sector has better multiples. The incentives are not aligned, but the warrant should provide some margin of safety. Am I reading this right Josh?

MMPIQ: getting the details, but it seems that Charlestown/Hartland increased their buyout offer from $0.16 to $0.35 per share

I remember taking a look at it like 4 months ago. The remaining European operations were priced very cheap but I would not expect much growth. It might be interesting for Hellenic.

First of all, thanks Alex! Regarding Pabrai's comments on the Japanese Coca Cola bottlers, cola drinks have a relatively small market share in the very innovative Japanese market where tea and coffee drinks in vending machines take a large share. Another very peculiar thing is how fragmented is the Coca Cola bottling system, something like 8-9 bottlers but neither of them is a star bottler so they have not been part of the global consolidation. They do not seem like a target either with Hellenic and Femsa having their eyes in Emerging Markets where they do not have to deal with Wal Mart or these new age drinks. I have been following Coca Cola West, but their sales and operating profits plummeted in the recession. It is priced at like 10x peak EBIT but with shrinking demographics. Does anyone know what he may have found interesting?

Exactly. Remember that equity would emerge mostly unimpaired under the debtors plan . The Watermarke secured loan is only $15 million and is payable in kind at $0.5/share only at the DEBTORS choice. I do not want to sound promotional, so you may discount that MMPI IPOed in 2007 at $10 per share and that it was above $2 right before Lehman. But still, under conservative assumptions I think it could be liquidated at $1 per share. The debt structure is also favorable with several properties unencumbered... for example the ones being used for the Watermarke loan. Chapter 11 is an uncertain process but it seems that the incentives are aligned, there is liquid equity, and the judge has showed a legitimate concern about the recovery for equity holders. I think there is no dispute now that common equity is the fulcrum security. The Debtors have obtained a commitment from Watermarke Properties, Inc. (or its designated affiliate) for a $15 million secured loan (the "Loan") for the Debtors use in funding operations and payments under the Plan. The Loan will be made as of the Effective Date and will bear interest at the rate of 5% per annum. The Loan will be secured by a first priority deed of trust on two of the Debtors' real properties, (i) 1211 East Washington Boulevard (ii) 230 W Ave. 26 and 129 W. College Street owned by affiliated Debtor, Chinatown. The Loan has a maturity date of the fifth anniversary after the date of closing and funding (the “Loan Date”). The principal amount of the Loan is due at the maturity date. Interest is payable quarterly; however, interest may be paid "in kind" by adding the interest to the principal if approved by the Lender. The Loan is convertible into 30 million shares of MMPI Existing Common Stock (which amount shall be increased pro rata in the event interest is paid in kind) with the conversion right being exercisable between the fourth anniversary and the fifth anniversary of the Loan Date. This Plan shall constitute a motion for approval of the Loan and the Confirmation Order shall provide that the Loan is approved.

It looks like the Charlestown plan was amended today to give access to the non accredited investors in their rights offering (not bad). Still reading it.

FIRST> If someone has Pacer, can you please send me a data dump of the last month? I am still small fish so paying for each document is making a dent . I have had to pick and choose and so I may be missing some details. Buyer beware. does this effectively create a 25 cent downside for MMPIQ given that its the DEBTORS plan. Also is there still time for the other groups to up the ante for the stock? Yes and no. The previous plan already left equity unimpaired so it was a best case scenario for equity... much better than the $0.25. It was even better than liquidation, that I estimate at $1 per share, given MMPI's value as an operating company. It is a pity that we have to endure R. Meruelo but at least he will be pressured by his new partner (Watermarke Properties) to make things happen. Also the Official Equity Committee (OEC) gets 3 of the 7 new board directors. I see this extra $0.25 proposal as a preemptive move to avoid a cash counter offer by the other plans that could confuse equity voters. And if you can finance that $0.25 buyback with a partner accepting debt at 5% interest convertible at $0.5, what is not to like. About MMPIQ - I have been trying to follow this story. At the moment, this appears to be the best plan for equity holders, however I am not sure if creditors will react well to this plan. My impression is that most people are not likely to support this debtor, as management has proven to be selfish and rather inept. I think the various parties have until Friday to file amendments? My understanding is also that the disclosure hearings end today, so this is going to be the plan approved by equity holders. I imagine that the almost 66% of settled secured creditors will vote for it and Legendary/East West will most probably disent. And given that they are being paid in full over time and they are retaining the liens securing their claims I suppose they will be crammed down. I do not like R. Meruelo but it has its advantages to have a debtors fighting for equityholders given their substantial equity share.

The question is and has always been "su casa es mi casa" Stein. It looks cheap but he worries me. It is a model that works 2 years every 20, so it is a concern when the Rothman IPO is done at the pick of that 20 year cycle and you have an over promotional CEO. It looks just cashing out and a story stock. Are real the stories that he is buying again?

How is your general impression of commercial real estate in Texas, specifically in the Houston area? I am analyzing a distressed bank there. My understanding is that prices rebounded sooner and stronger than other parts of the country.

For those of you looking for a explosive Q with downside protection, you might want to check MMPIQ. It is very illiquid and small for a fund. I am not trying to take over this thread. However, this article published today was too great a summary on the Meruelo Maddux situation not to share. What it does not say is the percentage of the new shares that current shareholders would keep with each plan. For that, I recommend to go directly to the source... Pacer. Lots of recent information. http://www.labusinessjournal.com/news/2010/sep/20/investor-courts-creditor-clash/ The Background The release is just the latest in what has become a bitter dispute over the future of the largest land owner in downtown Los Angeles. Meruelo Maddux filed for Chapter 11 bankruptcy protection in March 2009 when it was unable to make payments on $266 million in debt. At the time, the company had amassed a portfolio of 4 million square feet, about 3.4 million of which was in the downtown area, mostly in eastern industrial neighborhoods. The company planned to develop much of its property into residential and mixed-use projects but was hit hard by the real estate bust. Meruelo Maddux’s efforts to restructure have been complicated by two rival reorganization plans – one from note holders East West and Legendary Investors Group No. 1 LLC, and another from shareholders Charlestown Capital Advisors LLC and Hartland Asset Management Corp. The Plans of Reorganization As part of its joint reorganization plan with East West, Legendary would give the newly formed company a $5 million cash infusion and $65 million in debt would be converted to equity in the form of stock. Krause said that the bank would own less than one-third of the stock of the new company and would sell the shares “to obtain repayment of our loans.” “We are just collecting a loan and are not seeking to own other companies or speculate in real estate,” he said. Schechter said debt-to-equity conversions are a fairly common tactic in corporate bankruptcies. “They are essentially seeking debt repayment in the form of stock ownership hoping for an upside at the end of the day. Otherwise, what will they get?” he said. Meanwhile, Meruelo Maddux’s own plan calls for selling some assets and refinancing others to pay back its debts. Secured creditors, such as banks, would be paid in full after five years. Some unsecured creditors would get paid in full almost immediately, though others would get paid after five years. The company has already reached settlements with some of its creditors. The third plan, by Charlestown and Hartland, includes a cash infusion of about $30 million. Hartland is a White Plains, N.Y.-based asset manager that invests in real estate and renewable energy. Charlestown, based in New York, is a private merchant banking company that specializes in financial advisory services to emerging companies. Hartland founder Lee Smith declined comment.

Thanks for the update manualofideas, you know I am fan of your work.

Whitman and Diz, I have also heard good things of Stephen Moyer's but I can not testify for it

Parsad, is there anything on John Hempton's story? I read some allegations about him but his blog for the most part is fantastic.

Premfan, ask me in the blog and I'll answer (actually I posted about it recently). I do not want to clutter the board with a completely unrelated subject.

ManualofIdeas, as always jumping the gun on great obscure small caps (GRVY and STC before). No need to share watchlist ideas so soon ;)

TRXAQ: Debtors still have exclusivity and their offer basically wipes out equity. Contrary to GGP, there is no alignment of interest between debtors, that want to reduce the debt, and equity. For those of you looking for a explosive Q with downside protection, you might want to check MMPIQ. It is very illiquid and small for a fund. However, The exclusivity period was ended for some selected parties Debtors settled already two thirds of their secured lending There are three PORs all of them giving return to equity at valuations higher than the current market price. And actually the debtors POR gives full recovery to equity. MMPIQ has substantial land in downtown Los Angeles for residential use and cash flow positive industrial properties (less than 5% excess capacity in LA according to several real estate consultants) that are financing the residential development keeping the cash burnt low. Every way I cut it, the liquidation value should be at least $90M. The OEC is playing hard to get so it has not supported any of the PORs yet. The problem is that all parties involved, non settling secured creditors and minority shareholders, want Richard Meruelo out but he controls with John Maddux more than 50% of the shares. And that is the fight. Some risks: American Apparel is a large tenant, no clear CEO for the reorganized company (R. Meruelo has not been the best), R. Meruelo has been playing hardball through out the whole process. Market Cap: $15M Equity: $155M ($340 pre- recent write-offs) http://variantperceptions.wordpress.com/2010/03/04/meruelo-maddux-properties-a-cautionary-tale/ http://www.sec.gov/Archives/edgar/data/1375083/000137508310000014/form10k.htm http://investorshub.advfn.com/boards/board.aspx?board_id=15242

I think he did answer it, at least for the banks: - In shrink mode is almost impossible to hide bad news - Loans last 2-5 years so the problem 2005-2007 vintages are mostly behind - The new vintages with solid LTVs and good pricing because of the lack of competition start to ramp up - You can check the cash yields of the whole portfolio and nonperforming loan portfolio to check how conservative is the accounting - Capital ratios and reserves are OK - For some of them, you have Sheila Blair on their back ... not the most reasonable of regulators Al companies are black boxes, investing is an exercise of bayesian speculation. And it is very difficult today to reject the large banks based on credit issues. Maybe reject them for the potential of a financial meltdown, but what would trigger it?

You mean Japan 1992-2002, or Japan 2002-2007? Both periods were deflationary but they are very different in every other aspect, and the consequence for banks too.

Looks like this turkey got the presidential pardon (smile). Greetings, love the board.