Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Energy

Valence Technology Plan Confirmed

The U.S. Bankruptcy Court confirmed Valence Technology’s Plan of Reorganization, which provides for the resolution of outstanding claims against, and equity interests in, the Debtor. Among other things, the Plan provides that “(i) each holder of an allowed Priority Non-Tax Claim (as defined in the Plan), an allowed DIP Claim (as defined in the Plan), an allowed Convenience Claim (as defined in the Plan) or an allowed general unsecured claim of $500 or less will be paid in full; (ii) Berg & Berg Enterprises, LLC (the ‘Pre-petition Secured Lender’), the holder of pre-petition secured indebtedness of the Debtor, will extend the maturity date of part of its pre-petition secured claim under a new promissory note secured by a first priority lien against all of the reorganized Debtor’s assets, and receive, in exchange for its remaining pre-petition secured claim in the amount of $50 million, 100% of the shares of New Valence Stock (as defined in the Plan, ‘New Valence Stock’), representing 100% of the reorganized Debtor’s issued and outstanding shares of capital stock on the effective date, (iii) holders of certain classes of unsecured claims will receive payment in full over time, (iv) holders of pre-petition equity interests in the Debtor, including, without limitation, any shares of the Debtor’s preferred stock, common stock, and any option, warrant or right to acquire any ownership interest in the Debtor, will receive no distribution, and (v) all pre-petition equity interests in the Debtor will be canceled on the effective date of the Plan.” Under the Plan, the pre-petition secured lender will provide exit financing by entering into a new $20 million loan agreement on the effective date of the Plan. The new loan will have a five-year term and simple accrued interest at the rate of 5% per annum and will be secured by a first priority lien against all of the reorganized Debtor’s assets. Payment of the new loan will be subordinated to payment of claims of a number of junior classes, including, without limitation, the general unsecured creditors; and its proceeds will be used to pay claims under the Plan and to fund the reorganized Debtor’s working capital and general corporate needs. This phosphate-based lithium-ion technology provider filed for Chapter 11 protection on July 12, 2012, listing $32 million in pre-petition assets.

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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

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.

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Turnaround Letter Stock Pick Named Top Performer of 2017

 

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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."