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CIT Sees $0.06-$0.37 Recovery On Unsecured Claims If It Files For Bankruptcy
Some Mutual Assured Destruction, Friday edition, courtesy of CIT: $35 billion in estimated General Unsecured Claims recovering between $2 and $13 billion if company is "forced" to file for bankruptcy.
Without an approved restructuring plan, the Company will likely file for bankruptcy without the benefit of a plan of reorganization and stakeholders will lose significant value.
Impacts include:
- Substantial damage to the franchise
- Inability to insulate valuable operating businesses from the proceedings
- Increased risk of seizure of CIT Bank
- Uncertainty and constraints with respect to liquidity
- Significant bankruptcy related expenses
- Lengthy process in court
- Estimated recovery value for general unsecured claims in a accelerated liquidation is between 6 - 37 cents per $1.00
Full CIT Management presentation below:
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And why would the equity trade at more than $0.00?
Because if they should somehow miraculously avoid said bankruptcy and then miraculously return to a fabulous level of profitability due to a miraculous recovery in the 'real' economy, there migh be some residual value in the equity?
And the price of this W-A-A-A-Y out-of-the-money call option is worth how much more than $0.00?
why would amzn trade at about 120 p/e?
Because we are all going to be giving each other Kindles for Christmas/Chanukah/Kwanzaa/Festivus?
I think the upcoming crash in the stock market might appropriately be called "the Kindle Crash".
The FED/Government went "all in" last fall.
They will try every trick in the book if there's even a hint of an equity market collapse.
One dreads to think what trading rules/regs they will impose to prevent a melt down.
This game will unfortunately go on for a while...
The few remaining shoots garner ever increased attention of the thundering herd.
It would be higher, but I think Netflix is drawing too many day traders away. I think they discovered the cure for cancer or something like that.
The prospect of failure? Of course, now that the corpse has been properly prepared.
Is that a powerpoint presentation? LOL If these corporate idiots were on the Titanic they would be doing a powerpoint.
FREE T.I. FREE LIL' WAYNE FREE PLAXICO
Absolve The Chief, Frank Addy
Is there something about black guys going to jail on gun charges that you find particularly offensive or unfair? Either way, Plaxico and Wayne shoulda known you do NOT walk around strapped in NYC. Plaxico was stupid and shot himself...Wayne was smoking a joint on the street with his gun on him, which is equally stupid.
T.I. actually had people trying to kill him. His best friend took a bullet meant for him less than a year before the weapons charges. At the time of the drive by, T.I. and his crew did not have any weapons, thus the impetus to strap up for protection afterwords. And T.I.'s guns were for his bodyguards to carry, not him.
"It just seems like as long as I can remember, he was there," T.I. said of his friend. "As long as I can remember, his mama and my mama were partners. His cousin and my uncle were partners. His auntie and my grandmama stayed up the street from one another. And we just always knew each other, and it was cool."
http://www.mtv.com/news/articles/1530402/20060508/t_i_.jhtml
Actually Lil' Wayne's gun was found in a Louis Vuitton bag on the tour bus. The evidence that he was in possession of it was a DNA test that got nano skin cells off the gun. A very controversial use of DNA testing, but it is done in NYC. Plaxico's gun went off when he grabbed it because it slipped through a hole in his pocket and he shot himself in the leg. So why don't they bother to get a gun permit in NYC? Well because they are impossible to get unless the mayor personally gives you one. The Supreme Court is currently considering a case that could recognize gun permits that are issued in one state to be honored in another. Did you know that NYC doesn't even recognize a gun permit issued in other parts of New York State? People have a right to lawfully protect themselves.
I was not aware of much you mentioned...thank you for illuminating those situations further...tho really Plaxico, its called a safety for a reason.
Not if it was a Glock and he keeps one chambered.
The idiot Plaxico evidently "had one chambered" AND had the hammer cocked. That is like ASKING for an accidental discharge.
I always keep one in the chamber (M1911 .45 and 9mm Walther PPK/s) but NEVER cock the hammer. Even on the .45 Auto which is single-action, it takes all of 1/4 of a second to cock the hammer while aiming.
Just another example to prove that guns and idiots don't mix.
The main punch line is at about 2:44.
http://www.youtube.com/watch?v=upvZdVK913I&feature=player_embedded
Didn't get a hurrumph outta him gov...
http://www.youtube.com/watch?v=P-cje17OGnQ
Hello boys, have a good night's rest? I missed you. LOL
Anyone have the over/under line on bank failure friday?
you wretched little caterpillar, don't you ever wanna become a butterfly, spread your wings and flap your way to glory!
http://www.youtube.com/watch?v=xGdY4jfhKRM&feature=related
Just a thought.. in passing.
For the love of Christ already. How long are they going to drag this out. Don't they realize its game over. There BROKE.
Estimated recovery value for general unsecured claims in a accelerated liquidation is between 6 - 37 cents per $1.00
Talk about missing the broad side of a barn, look at the range of the recovery estimate. Looks like this qualifies as a wild ass guess to me. But then again I don't own a calculator and thus I need to rely on my fingers and toes.
It's real tough going for me once I pass 20 so don't listen to me about mathematical accuracy. How about everyone here at ZH put their fingers and toes into the pot so I can come up with a better estimate?
Okay, here's my ten digits in the pot.
Icahn reportedly said that an orderly dissolution of assets will bring 80-85 cents. That looks like a wild ass guess to me, too.
The point of the low end of the range is to scare holders into voting for the prepack/exchange offer and represents draconian, chaper 7 asumptions.
The only documents I've seen more optimistic than that are Federal budget projections claiming a balanced budget by 2012. Are the bondholders insane? The realistic ones would just gamble with a forced BK and get their 30 cents on the dollar and be pleased. There is an assumption by the CIT management that we will see "normalized" growth in our economy over the next 2-4 years past 2010 when the future indicators show nothing of the sort unless Benron and the boys elect to inflate like a mother. These clowns actually are projecting improvements in credit quality when in reality it is deteriorating faster and deeper than every public projection known to man.
CIT management really puts the 'ass' into assume. In particular CEO Jeff Peek (or peak, can't recall exactly).
So it's Bank Bust Friday. I noticed that the failures haven't been coming as fast and furiously as they normally do since the FDIC announced it was broke a couple weeks back. Coincidence?
I am Chumbawamba.
I wouldn't be surprised to hear that the FDIC is just waiting for Timmy and TARP to clean up the mess by handing out more free money to the smaller banks to keep them drifting along.
No coincidence at all in my book. Bank Failure Friday has been quiet for 2 weeks with only one little bank saved from themselves last week using spare change found between the sofa cushions in Blair's office. Thank God they looked or we might have all been lost over the waterfall.
I heard that this week the FDIC will come up with additional funds by bushwhacking little girls and boys carrying piggy banks on the way to their local banks.
Desperate (wo)men will do desperate things.
Wow... unreal...
OTE with Max Keiser, Paul Craig Roberts & the new Welfare Queens
http://maxkeiser.com/
All this fear in lieu of a lousy $6 billion loan?
You gotta love how they drag out the drama before a knight of indeterminate colour comes to the "last minute" rescue.
NBC Nightly news is running a series called "A Woman's Nation" as that is indeed what we have become.
The potential heroes are lined up around the block, even a hedge fund called Logi Energy!
Calgone, take me away!
Claims recovery between 2 and 13 Billion. What? They have no idea how to price their holdings in the current market.
I suspect this gives us some insight to the off balance sheet asset price unknown phenomena at other institutions. To engage in activities involving the inability to establish true worth, is not an investment, it is unacceptable risk for any company looking to divest its holdings.
Accelerated liquidation, translated = why not let us extend and pretend like the other bailout boys. Its just not fair!
Going into the general market to liquidate, and not on the Government dime, is a vast wasteland of no buyers.
CIT = RIP.
Goddammit - CIT management needs to pay themselves some bonuses already - every other insolvent financial institution is doing it!
What executives will do to keep their jobs.
W
The CIT recovery range should be seen for what it is...a draconian, chapter 7 scenario more designed to scare bond holders into approving the exchange/prepack deal than an true economic recovery analysis.