PRXI - Premier Exhibitions

[SnarkyPuppy]

Equity committee filed a disclosure statement http://upshotservices.s3.amazonaws.com/files/497d5a77-fff2-49a9-98f0-c32110ea0410/5133b6e7-1d14-4883-81ad-58b7cfa72559.pdf

 

Financial analysis on p 106.

They used an estimate for French artifacts value of 40-60 million.

American artifacts value is TBD.

Yields equity price of $0.59 to $3.52.

 

"The American Artifacts are held by RMST in trust as salvor-in-possession subject to

Covenants and Conditions (“Covenants”) as ordered by the District Court in 2010.  The District Court granted RMST a salvage award of $110,859,200, which the Court found to be the appropriate approximate value of the American Artifact Collection. Id. Any transfer of RMST’s rights in the American Artifacts is subject to the Covenants and the approval of the District Court. "

[chesko182]

Had some time to read through some of the disclosure statement.

 

From page 42 of the disclosure statement:

 

The Equity Committee has determined that confirmation of the Plan will provide each

Holder of a Claim or Class 4 Equity Interest with a recovery that is not less than that which it

would receive pursuant to a liquidation of the Debtors’ Estates under Chapter 7 of the Bankruptcy

Code. This determination is based upon a consideration of the effects that a Chapter 7 liquidation

would have on the ultimate proceeds available for distribution to such Holders. See Liquidation

Analysis attached hereto as Exhibit 2.

 

The liquidation analysis is an estimate of what equity holders would receive in a Chapter 7 liquidation (also look at pg 106, the estimates include a Chapter 7 trustee fee) which is not what is being proposed. The equity committee believes that the Chapter 11 reorg plan they are proposing through a liquidation trust would provide higher value.

 

This is a positive catalyst.

 

[bskptkl]

 

does the debtor have a say on this? I thought equity and debt holders would be the only ones to vote (page 4 of the disclosure statement). I assume the debt holders would vote for...

 

Before a vote, the plan has to be confirmed by the court. If it is opposed by debtors or the creditor committee, it stands to reason confirmation will be harder to achieve. Let's watch the docket to see if either object to or support the EC plan.

 

See this link regarding competing plans in bk http://www.distressed-debt-investing.com/2012/05/competing-plans-in-bankruptcy.html

[bskptkl]

Premier files an 8k

They propose to sell assets to group led by Apollo (and insiders) for the whopping total of $17.5 mm

Explains selloff...it stinks.

 

"Asset Purchase Agreement

 

The Debtors have negotiated the proposed sale of substantially all of their assets as a going concern to an acquisition vehicle formed by Apollo, Alta, PacBridge Capital Partners (HK) Ltd., and the Debtors’ secured lenders (Haiping Zou, Jihe Zhang, and Lange Feng) (collectively, the “Stalking Horse Purchaser”), on the terms and conditions outlined in that certain Stalking Horse Purchaser Term Sheet for Sale of Substantially All Assets of Premier Exhibitions, Inc. and its Debtor and Non-Debtor Affiliates, attached hereto as Exhibit A (the “Term Sheet”).

 

The material terms of the Term Sheet are as follows: $17.5 million purchase price; due diligence completed by June 5, 2018; proposed break-up fee of the greater of $500,000 or 3% of the purchase price, plus expense reimbursement (collectively subject to a cap of $1 million); the buyer’s payment of all cure costs associated with the assumption and assignment of purchased contracts and real property leases; and proposed bidding procedures that contemplate a public auction for higher and better offers."

[chesko182]

seems like a counter to the Ch11 plan the official equity committee proposed a few days ago, led by the secured creditors and the ad-hoc equity committee.

[701 LV]

So does anyone know what follows next? Haven't been in a situation like this one before. Thanks for all the help everyone!

[DukeCrow]

Looks like mediation is still ongoing to resolve a few issues. The good thing is that the AdHoc Equity Group took part in the mediation, as well.

I'm not so sure the AdHoc group isn't trying to surpress an auction in order to win a low ball bid. They ain't the little guy in this drama.

I think the formal EC is more in favor of an auction at Christie's or Sotheby's for example.

You were 100% right on this. I should have listened to you.

[DukeCrow]

Unsecured Creditor Committee also submitted a plan to sell to NMM for $19M.

The court will hear motions for all the differing plans on July 25. Not sure what kind of a ruling will be made then or if a ruling will be pushed to get the parties to mediate further.

 

This whole situation is ugly. Wish I never got involved. But since I am, does anyone have a read into what could/might happen?

 

To throw another wrench into the situation, if the federal judge doesn't like what the plan is for the American artifacts, they can strip them from the company, since they are in bankruptcy.

 

Only thing that is a positive is that the bankruptcy judge seems to be siding with the Equity Committee on most of its motions. Really hope that trend continues.

[JanSvenda]

Unsecured Creditor Committee also submitted a plan to sell to NMM for $19M.

The court will hear motions for all the differing plans on July 25. Not sure what kind of a ruling will be made then or if a ruling will be pushed to get the parties to mediate further.

 

This whole situation is ugly. Wish I never got involved. But since I am, does anyone have a read into what could/might happen?

 

To throw another wrench into the situation, if the federal judge doesn't like what the plan is for the American artifacts, they can strip them from the company, since they are in bankruptcy.

 

Only thing that is a positive is that the bankruptcy judge seems to be siding with the Equity Committee on most of its motions. Really hope that trend continues.

 

Fellow sinking 'shareholder' here. I would note that the US Agency NOAA is likely the biggest issue here now. I believed that in the worst case they can sell the French part (which should on its own fetch a nice value because of the hot auction market). The NOAA apparently believes that the whole set should be kept as one and would contest the sale (as per both plans of unsecured and insiders). This certainly complicates things and the troubles with the auction become more understandable. I am not sure about the strength of NOAA's point of view, but if litigation was to really ensue, the buyer would have to be comfortable with it.

 

We will see if a more rigorous bidding starts (and if the initial bids were just low-balling it), but I am not too sure about it. I see no appeal in taking the artifacts and setting up an exhibition out of them (apart from doing 'public good' which is why the unsecured are probably favourites here). The cash flow is unlikely to be attractive to command a high price (certainly nowhere near $200 million+). I thought that this would be offset by the French part which would put a sort of downside risk protection. Now that this is not the case, I believe zero should be regard as a clear possibility.

 

My main learning point from PRXIQ is likely the following; When scrutinizing a legal play, map out all possible players and understand their incentive. I missed NOAA and did not pay too much attention to it because of the French rulings.

[DukeCrow]

Unsecured Creditor Committee also submitted a plan to sell to NMM for $19M.

The court will hear motions for all the differing plans on July 25. Not sure what kind of a ruling will be made then or if a ruling will be pushed to get the parties to mediate further.

 

This whole situation is ugly. Wish I never got involved. But since I am, does anyone have a read into what could/might happen?

 

To throw another wrench into the situation, if the federal judge doesn't like what the plan is for the American artifacts, they can strip them from the company, since they are in bankruptcy.

 

Only thing that is a positive is that the bankruptcy judge seems to be siding with the Equity Committee on most of its motions. Really hope that trend continues.

 

Fellow sinking 'shareholder' here. I would note that the US Agency NOAA is likely the biggest issue here now. I believed that in the worst case they can sell the French part (which should on its own fetch a nice value because of the hot auction market). The NOAA apparently believes that the whole set should be kept as one and would contest the sale (as per both plans of unsecured and insiders). This certainly complicates things and the troubles with the auction become more understandable. I am not sure about the strength of NOAA's point of view, but if litigation was to really ensue, the buyer would have to be comfortable with it.

 

We will see if a more rigorous bidding starts (and if the initial bids were just low-balling it), but I am not too sure about it. I see no appeal in taking the artifacts and setting up an exhibition out of them (apart from doing 'public good' which is why the unsecured are probably favourites here). The cash flow is unlikely to be attractive to command a high price (certainly nowhere near $200 million+). I thought that this would be offset by the French part which would put a sort of downside risk protection. Now that this is not the case, I believe zero should be regard as a clear possibility.

 

My main learning point from PRXIQ is likely the following; When scrutinizing a legal play, map out all possible players and understand their incentive. I missed NOAA and did not pay too much attention to it because of the French rulings.

Great points. The NOAA could tie things up in litigation, but I fail to see how they really have a LEGAL standing to their claims. The Federal court in VA has already stated that they don't have jurisdiction over the French artifacts. And there have been one off sales of Titanic artifacts here and there by individuals that no one tried to block. Also, Congress never passed any laws that would bind bankruptcy (or any) courts to enforce UNESCO. I guess potential buyers could be scared into staying away from bidding if they lived in Europe/UK, though.

 

Biggest issues for me are whether the bankruptcy judge takes the NOAA's and NMM's objections (and UNESCO) into account in deciding what reorg plan to approve. He doesn't have to put those thoughts on the record. He could just state that he believes the Debtors or Unsecured Creditors Plans remove lengthy potential legal challenges and pay creditors the most quickly, while the Equity Committee's plan adds uncertainty which could damage recovery for creditors. In addition, the Federal VA court could frown upon the French artifacts sale and subsequently decide to strip the company of the American artifacts (which they have a right to do in bankruptcy) -- so shareholders would only recover as much as the auction of the French artifacts would allow.

 

On the other hand, the bankruptcy judge approved the pending lawsuit the Equity Committee brought against PRXI insiders and has approved additional subpoenas surrounding the communication between NMM, Ad Hoc Equity Committee, the Debtors, etc. It's obvious to me that there is some collusion and insider dealing with the debtors plan (mostly between the Ad Hoc Equity Committee and the creditors that put forth the bid). As bskptkl previously wrote, the Ad Hoc Equity Committee was just looking for a way to get the artifacts in a lowball bid. They should have been competing with the stalking horse bid not establishing it, but they were smart enough to go in together so they weren't bidding against each other and driving up the price. No way they're all in it to keep the company going. If they buy the artifacts, they'll just turn around and do exactly what the Equity Committee is doing but only to their benefit instead of to the benefit of ALL shareholders. So they'll fiercely argue against the feasibility of the Equity Committee plan, but then just turn around and do it. I have no doubt about that.

 

Really wish James Cameron and Robert Ballard would just swoop in and throw a $100M bid on the table and end this mess, lol. There were multiple articles a year or two ago about them doing it. I'm guessing they're standing behind the NMM bid ready to provide financing, but the NMM wants to keep the cost as low as possible (naturally). If the Ad Hoc Equity Committee group and the NMM had to bid head-to-head against each other, I wonder who would blink first. Pretty sure it'd be the Ad Hoc group, but I wonder what their limit is (probably a discount to what they think the NMM max bid is...but how much of a discount)?

 

Sorry for the long post. Just thinking out loud.

[paologorgo]

https://relay.nationalgeographic.com/proxy/distribution/public/amp/science/2018/07/news-rms-titanic-artifacts-shipwrecks-bankruptcy-archaeology?__twitter_impression=true

 

Titanic Artifacts Caught in International Tug-of-War

British museums face off against private investors to "bring the Titanic home."

 

HT:

 

There is follow up conversation on twitter by ArtkoCapital:

 

 

A status conference was held in court on July 25, 2018.

 

 

[DukeCrow]

Not the best result coming out of the status conference. Judge didn't rule out the debtors sale of the company, Said specifically that debtors get a lot of leeway, and it is okay to sell the company before confirmation of a plan. No combination of all plans into a single one. Next hearing is August 30 to rule on the sale and the 2 competing plans.

[bskptkl]

Premier files an 8k

They propose to sell assets to group led by Apollo (and insiders) for the whopping total of $17.5 mm

Explains selloff...it stinks.

 

"Asset Purchase Agreement

 

The Debtors have negotiated the proposed sale of substantially all of their assets as a going concern to an acquisition vehicle formed by Apollo, Alta, PacBridge Capital Partners (HK) Ltd., and the Debtors’ secured lenders (Haiping Zou, Jihe Zhang, and Lange Feng) (collectively, the “Stalking Horse Purchaser”), on the terms and conditions outlined in that certain Stalking Horse Purchaser Term Sheet for Sale of Substantially All Assets of Premier Exhibitions, Inc. and its Debtor and Non-Debtor Affiliates, attached hereto as Exhibit A (the “Term Sheet”).

 

The material terms of the Term Sheet are as follows: $17.5 million purchase price; due diligence completed by June 5, 2018; proposed break-up fee of the greater of $500,000 or 3% of the purchase price, plus expense reimbursement (collectively subject to a cap of $1 million); the buyer’s payment of all cure costs associated with the assumption and assignment of purchased contracts and real property leases; and proposed bidding procedures that contemplate a public auction for higher and better offers."

I see the Debtor's Plan was approved yesterday - bid raised to $21 million, qualified bids due by 10/5, and if there are any, auction to take place 10/11.

And the court shoots down the equity committee plan saying it is a plan that cannot be confirmed.