Large Cap / Bankruptcy/Chapter 11 / Diversified Financials
Lehman Brothers Holdings Plan Confirmed
The U.S. Bankruptcy Court confirmed Lehman Brothers Holdings’ Third Amended Joint Chapter 11 Plan. According to documents filed with the Court, “The Plan includes economic resolutions of a myriad of issues including, but not limited to: (i) the potential substantive consolidation of the Debtors and certain of their Affiliates; (ii) the characterization of intercompany balances owed to LBHI by Subsidiary Debtors; (iii) the Allowed Amount of certain Affiliate Claims;(iv) the ownership and rights of various Debtors and their Affiliates with respect to certain assets; and (v) the allocation of costs and expenses among Debtors. The Creditors’ Committee supports the Plan as the best means to fairly and efficiently resolve the Debtors’ Chapter 11 Cases.” As previously reported, the Plan was supported by the creditors’ committee; members of the ad hoc group of senior bondholders; virtually all of the proponents of the non-consolidation Chapter 11 Plan; numerous holders of notes issued by Lehman Brothers Treasury Co. B.V. who asserted substantial guarantee claims against the Company; eight foreign administrators managing 87 foreign affiliates and most other significant creditors. Lehman Brothers Holdings filed for Chapter 11 protection on September 15, 2008, listing $691 billion in pre-petition assets--making this the largest historic bankruptcy filing of all time.
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More on Lehman Brother's bankruptcy
Identify & Profit from Distressed Investing
Turnaround Investing Blog
In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.
EV/EBITDA: What Is It & Why Are We Using It More?
In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple. We thought it might be useful to describe this measure and why we like it.
Turnaround Letter Stock Pick Named Top Performer of 2017
What Last Year's Top Stock Pickers Are Buying in 2018
This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.
George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."
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