Thursday, March 6, 2014

"USEC Judge Questions Company's Need for 'Life Support'"

At the hearing today,

U.S. Bankruptcy Judge Christopher Sontchi said today that USEC has no financial projections and falling sales because of an oversupply of enriched uranium, raising the question of why it would bother to reorganize its balance sheet in bankruptcy. “What’s the point?” Sontchi asked D.J. Baker, a lawyer for USEC, at a hearing in Wilmington, Delaware. A reorganization might only “keep the company on life support for the next six to 10 years,” Sontchi said.

1 comment:

Anonymous said...

The bankruptcy plan says the existing equity will be cancelled and holders will be issued newly issued shares in the reorg co. This dilution is likely to make these worth a small fraction of current price of current NYSE listed shares. Defies logic. The question I have though is if a short in these shares will liquidate at zero when the shares (ticker USU) are cancelled and the pre-petition holders get their minimal value replacement stock. It may matter if the shares stay so irrationally over priced relative to value.