PRXI - Premier Exhibitions

[OracleofCarolina]

it took awhile, but they finally went bankrupt!

 

http://www.sec.gov/Archives/edgar/data/796764/000117184316010644/exh_991.htm

 

[bskptkl]

Anybody else feel like equity is a speculative buy here?

 

9.4 million shares after reverse split and conversion of 13.5 million of debt, maybe 25ish million in liabilities now? Had 32 mm back in August, added 3 mm additional debt, but converted 13.5 mm into equity.

 

Not a huge claims hurdle until equity in the money. Assets were valued at over 100 million at one point.

 

Maybe they reorganize around a rights offering considering they are half owned by majority shareholder.

 

Pacer is not showing anything relevant yet.

 

 

[BeerBBQ]

How much will it cost to get out of Times Square Lease?

[bskptkl]

google says:

http://bankruptcy.cooley.com/2006/10/articles/business-bankruptcy-issues/commercial-real-estate-leases-how-are-they-treated-in-bankruptcy/

 

not sure details of lease in this particular case

[bskptkl]

google says:

http://bankruptcy.cooley.com/2006/10/articles/business-bankruptcy-issues/commercial-real-estate-leases-how-are-they-treated-in-bankruptcy/

 

not sure details of lease in this particular case

 

Looks like lease was 10 years and they owed $45.8 mm on it on May 2014.

 

On April 9, 2014, the Company entered into a 130-month lease agreement for exhibition and retail space with 417 Fifth Avenue Real Estate, LLC in New York City, New York. This lease includes approximately 51,000 square feet of space at 417 Fifth Avenue between 37th and 38th streets in the Grand Central district and is near Bryant Park, the Empire State Building and only a few blocks east of Times Square.  Specific information about the exhibitions that will be opening in the space will be released at a later date.  In the first fiscal quarter of fiscal 2015, we purchased a $800 thousand certificate of deposit and pledged it as collateral for this lease.  An additional $900 thousand in collateral is due in the first fiscal quarter of 2016.  The lease commenced in July 2014 and we expect to begin presenting exhibitions in the leased space during the fiscal fourth quarter of 2015. Total future minimum payments under this lease are approximately $45.8 million.

 

So they would reject it in bankruptcy and landlord would be capped at 15% of remaining or roughly $5 million.

[bskptkl]

Does anybody own shares and have an interest in forming an equity committee?

I have been contacted by a large shareholder who is writing letter to the US Trustee.

[bskptkl]

Anybody else feel like equity is a speculative buy here?

 

9.4 million shares after reverse split and conversion of 13.5 million of debt, maybe 25ish million in liabilities now? Had 32 mm back in August, added 3 mm additional debt, but converted 13.5 mm into equity.

 

Not a huge claims hurdle until equity in the money. Assets were valued at over 100 million at one point.

 

Maybe they reorganize around a rights offering considering they are half owned by majority shareholder.

 

Pacer is not showing anything relevant yet.

I may just be talking to myself but...

 

So case management summary was posted on Pacer 6/14.

Relevant bits:

25-30mm revenue per year, 1Q was 6.3mm

Secured debt 3mm

Trade debt 12mm

Asset value (unaudited) 36mm of which half is Titanic related

Shares out:

7.94mm plus 1.43mm exchange shares

 

Stock already up 7 fold from first day, but bk looks like a catalyst to unlock value as I see they have filed a motion to sell some titanic assets. There will probably be a conflict between bk court and that other court that gave them "salver in possession" rights.

[maybe4less]

Assuming the BK court allows the Titanic collection to be broken up, do the company's claims about the values of individual pieces seem credible? They say just four artifacts could go for $10M. I mean, I guess if a cracker sold last year for $23k...

 

http://blogs.wsj.com/bankruptcy/2016/06/22/premier-exhibitions-floats-sale-of-titanic-items/

[bskptkl]

Stock is up 18x or so from day they filed.

Maybe all my value traps should file bankruptcy...

 

 

[Haasje]

What is today's+78% about? Did I overlook a filing or news item?

[bskptkl]

What is today's+78% about? Did I overlook a filing or news item?

They had a hearing yesterday about the motion to sell "French Artifacts" free and clear. Objections were filed by US Trustee and Commerce department claiming improper notice to French government, no description of sales procedure or items to be sold, no filing of schedules hence Trustee can't rule on appropriateness of appointing equity committee (who should have say in matter). In addition, there were pledges by company to the French to use artifacts for cultural purposes and not to sell them in addition to an agreement with US to keep all artifacts together as much as possible. So Trustee says they should settle those matters in a lawsuit, not at a bankruptcy hearing.

 

I take it the judge did not rule either way yesterday and took matter under advisement. But with only 10 million shares out and 25 or so million claims hurdle the stock is a pretty levered bet. Bankruptcy may be an efficient/clever way to clear up title to artifacts and allow company to auction them off.

[HH2010]

Extremely frustrating that I specifically asked management on a conference call 12-18 months ago whether the Titanic assets would be sold in a bankruptcy, and they told me no the company would not have rights to the asset.

[bskptkl]

Extremely frustrating that I specifically asked management on a conference call 12-18 months ago whether the Titanic assets would be sold in a bankruptcy, and they told me no the company would not have rights to the asset.

Well I think that is still in dispute! No sure thing they can sell assets free and clear at this point.

[bskptkl]

Order on Sale Motion attached.

Court orders PRXI to bring adversary procedure to determine whether French Government has interests in artifacts. Good background and summary in document.

PRXI_Doc102_07222016.pdf

[Haasje]

Thnx

[bskptkl]

Equity committee appointed today 8/24.

They also filed adversary proceedings against French on 8/17 to sell French artifacts free and clear of liens.

[bskptkl]

Equity committee appointed today 8/24.

They also filed adversary proceedings against French on 8/17 to sell French artifacts free and clear of liens.

PRXIQ_Adversary_Complaint_081716_.pdf

[bskptkl]

Equity committee put up a website http://www.jndla.com/cases/premiercommittee?r=1

Has links to both the bankruptcy docket and the civil docket where the lawsuit against French was filed.

So no need to spend Pacer money.

 

Apparently the French never responded to being served in the civil case and the way is clear to sell all assets free and clear.

 

Explains stock rise to $4 perhaps.

 

Traded $0.25 the day they filed...

[bskptkl]

Equity committee laid out road map and timeline to sale of assets yesterday:

 

EQUITY COMMITTEE ENTERS CHAPTER 11 PLAN SUPPORT AGREEMENT

 

    On May 18, 2017, Premier Exhibitions, Inc. (the “Debtor”) filed a Motion for an Order Authorizing the Debtors, the Official Committee Of Unsecured Creditors and the Official Committee of Equity Security Holders to Enter Into and Perform Their Obligations Under A Plan Support Agreement (the “PSA Motion”). [Docket No. 587].  That Motion has attached to it an agreement (the “Plan Support Agreement”) among the Debtors, the Equity Committee, and the Creditors Committee to support a Chapter 11 Plan that will include the sale all of the Debtors’ assets, including the entire Titanic Artifacts Collection either as assets of the estate or through the sale of the company that holds the Titanic Artifacts, RMS Titanic Inc.  The remaining Debtors and their assets likewise will be sold.  Further details of the contemplated Chapter 11 Plan may be found in the Complete Sale Term Sheet that is attached to the PSA Motion as Exhibit A.

 

    The Debtors and the Committees now will turn to drafting the Chapter 11 Plan that will put into effect that sale process. The Chapter 11 Plan that the Equity Committee expects will result from these efforts will be distributed together with a Disclosure Statement after approval by the Bankruptcy Court.

 

    No solicitation of votes or support for a Chapter 11 plan may be made until after the Court has approved the Disclosure Statement.  This notice from the Equity Committee does not constitute an offer of securities or a solicitation or offer to purchase securities, nor is it an offer or solicitation for any chapter 11 plan, and is being presented solely to advise of the filing of the PSA Motion.

 

    The PSA Motion has been entered onto the Bankruptcy Court’s Docket as Docket No. 587 and may be found elsewhere on this website under “Court Docket.”  The Plan Support Agreement is attached to the PSA Motion and is summarized below:

 

Summary of the material terms of the PSA1:

Milestones

The following deadlines are established by the PSA. In the event that the Debtors fail to meet such deadlines, the Supporting Committees may terminate the PSA.

 

    (a) The Debtors and their professionals shall prepare marketing materials for use in connection with the Marketing Process, which materials shall be subject to the review and approval of the Supporting Committees and their professionals, on or prior to May 19, 2017;

 

    (b) Following approval of such materials, the Debtors’ and Supporting Committees’ financial advisors shall commence the Marketing Process, which process shall establish a deadline of July 21, 2017 for interested parties to submit letters of intent (each, a “LOI”) to the Debtors (the “LOI Deadline”).  On receipt of any LOI, the Debtors shall provide copies to the Supporting Committees and their professionals;

 

    © On expiration of the LOI Deadline, the Debtors and Supporting Committees shall evaluate any LOIs received, and no later than seven (7) calendar days from the LOI Deadline, the Debtors and Supporting Committees shall select candidates for management visits and further negotiations;

 

    (d) On or prior to the later of  September 25, 2017, or two (2) weeks following the LOI Deadline (the “Stalking Horse Designation Deadline”), the Debtors shall, with the consent of the Supporting Committees (such consent not to be unreasonably withheld), designate one or more Stalking Horse Bidders committed to purchase interests in and/or assets of the Debtors, negotiate and enter into one or more Asset Purchase Agreements for such interests and/or assets of the Debtors with any designated Stalking Horse Bidders, and file a Sale Motion;

 

    (e) On or prior to the later of October 23, 2017, or four (4) weeks from the filing of the Sale Motion, the Company shall obtain entry of the Sale Procedures Order;

 

    (f) In the event that the Auction is to be conducted, such Auction shall occur on or prior to the later November 20, 2017, or five (5) weeks from the entry of the Sale Procedures Order;

 

    (g) On or prior to the later of October 20, 2017, or three (3) weeks from the Stalking Horse Designation Deadline, the Company will file the Complete Sale Plan and Complete Sale Disclosure Statement (providing, among other things, for the consummation of the sale of substantially all of the interests in and assets of the Debtors through the Complete Sale Plan);

 

    (h) On or prior to the later of October 27, 2017, or five (5) business days from the filing of the Complete Sale Plan and Complete Sale Disclosure Statement, the Company will file a motion for approval of the Complete Sale Disclosure Statement;

 

    (i) On or prior to the later of December 7, 2017, or six (6) weeks from the filing of the Complete Sale Plan and Complete Sale Disclosure Statement, the Company shall obtain entry of an order approving the Complete Sale Disclosure Statement;

 

    (j) On or prior to the later of January 12, 2018, or seven (7) weeks from the hearing on the Complete Sale Disclosure Statement, the Company shall obtain entry of the Confirmation Order confirming the Complete Sale Plan;

 

    (k) On or prior to the later of January 26, 2018 or thirteen (13) business days from the entry of the Confirmation Order confirming the Complete Sale Plan, all conditions precedent to the Effective Date of the Complete Sale Plan (with the exception of an order of the Eastern District of Virginia approving the sale to a Winning Bidder of any portion of the artifact collection held by RMST over which the Eastern District of Virginia has jurisdiction) shall have occurred.

 

 

[chesko182]

Found this investment by reading Artko Capital Annual Letter, excerpt below:

“We added a 2% position in the equity of Premier Exhibitions Inc, the owner and operator of popular exhibitions in the United States and internationally. The company is currently in bankruptcy and its approximate $50mm equity value (vs $13mm in liabilities) is backed by its ownership in incredibly valuable Titanic and Bodies exhibition assets. The company owns over 5,500 pieces recovered from arguably the world’s most famous shipwreck, as well as salvage and movie rights, which as recently as 2014 have been valued at $218 mm/$23 per share by a reputable collections house. The company has turned around operations and is now profitable generating approximately $2-3mm in annual EBITDA. While the previous asset auction was somewhat mismanaged and has now been cancelled, we believe the recent involvement of Apollo on the equity committee and an increase in the number of global billionaires who may be interest in the vanity purchase of these assets increases the probability that significant value may be realized in the next 12-24 months. We view this investment as an option with very favorable risk/reward probabilities, where our downside scenario is $3-4 per share valued as a straight cash flow asset at low double digit multiples versus $25-45 per share upside should the assets be sold based on their value as a timeless collectible.”

 

Spent the better part of the day doing some research on this, and man what an interesting story. Finally ran into this post and amazing to see some people have been following/trading around this story for many years. Seems like an interesting risk/reward at this point assuming they're able to sell the artifacts at a decent price. With the recent DaVinci auction grabbing 4X the estimated value you may even see a crazy good outcome.

 

A couple of questions I have in case anyone is still following it:

1) do they really only have $13mm in liabilities? what is the actual document that shows this?

2) couldn't find anywhere that they're generating 2-3mm in EBITDA

3) is there any update on the legal issue behind the french collection assets, and what an actual buyer could do with them? Would he have to show them or can he keep it in his mansion? No way a billionaire will buy this if it has to be exhibited to the public

4) they had set a date for an actual bidding on February 2018 but they cancelled it last month given that they have ongoing discussions with stakeholders and are trying to find the best path going forward...why has it been so hard for them to sell these assets?

5) his downside of $3-4 p/share sounds too good to be true to me... what is different now vs. 1-2 years ago when this was trading at much less than $1?

 

Any thoughts appreciated

 

[eclecticvalue]

 

1) do they really only have $13mm in liabilities? what is the actual document that shows this?

3) is there any update on the legal issue behind the french collection assets, and what an actual buyer could do with them? Would he have to show them or can he keep it in his mansion? No way a billionaire will buy this if it has to be exhibited to the public

4) they had set a date for an actual bidding on February 2018 but they cancelled it last month given that they have ongoing discussions with stakeholders and are trying to find the best path going forward...why has it been so hard for them to sell these assets?

 

 

1. It is probably in a bankruptcy document or check the past filings.

3. The buyer would have to show them. That was the main problem when they tried to auction off the assets years ago.

4. The reason why I mentioned above. The buyer will have to showcase the assets and can't hide it from the public. For some reason, the people running the auctions have had a hard time finding buyers.

[Fowci]

Found this investment by reading Artko Capital Annual Letter, excerpt below:

“We added a 2% position in the equity of Premier Exhibitions Inc, the owner and operator of popular exhibitions in the United States and internationally. The company is currently in bankruptcy and its approximate $50mm equity value (vs $13mm in liabilities) is backed by its ownership in incredibly valuable Titanic and Bodies exhibition assets. The company owns over 5,500 pieces recovered from arguably the world’s most famous shipwreck, as well as salvage and movie rights, which as recently as 2014 have been valued at $218 mm/$23 per share by a reputable collections house. The company has turned around operations and is now profitable generating approximately $2-3mm in annual EBITDA. While the previous asset auction was somewhat mismanaged and has now been cancelled, we believe the recent involvement of Apollo on the equity committee and an increase in the number of global billionaires who may be interest in the vanity purchase of these assets increases the probability that significant value may be realized in the next 12-24 months. We view this investment as an option with very favorable risk/reward probabilities, where our downside scenario is $3-4 per share valued as a straight cash flow asset at low double digit multiples versus $25-45 per share upside should the assets be sold based on their value as a timeless collectible.”

 

Spent the better part of the day doing some research on this, and man what an interesting story. Finally ran into this post and amazing to see some people have been following/trading around this story for many years. Seems like an interesting risk/reward at this point assuming they're able to sell the artifacts at a decent price. With the recent DaVinci auction grabbing 4X the estimated value you may even see a crazy good outcome.

 

A couple of questions I have in case anyone is still following it:

1) do they really only have $13mm in liabilities? what is the actual document that shows this?

2) couldn't find anywhere that they're generating 2-3mm in EBITDA

3) is there any update on the legal issue behind the french collection assets, and what an actual buyer could do with them? Would he have to show them or can he keep it in his mansion? No way a billionaire will buy this if it has to be exhibited to the public

4) they had set a date for an actual bidding on February 2018 but they cancelled it last month given that they have ongoing discussions with stakeholders and are trying to find the best path going forward...why has it been so hard for them to sell these assets?

5) his downside of $3-4 p/share sounds too good to be true to me... what is different now vs. 1-2 years ago when this was trading at much less than $1?

 

Any thoughts appreciated

 

 

Main thing is that it is impossible to make money buying PRXI. Never do it. Never.

[chesko182]

Seems like so many people have gotten burned with this that there's very little interest. But I'm coming in with a fresh mind, so I'm trying to be flexible even after all the horror stories.

 

I read some of the documents filed with the Bankruptcy courts and found some useful information. What has changed in the past year? The French Collection assets have a clean title, clear of any claims, liens etc. This was a major obstacle for the sale of artifacts before, and it seems to have been part of the strategy of filing for a voluntary bankruptcy. Second, the Ad Hoc equity committee (which includes Apollo) filed a motion to block the bidding process that was going to take place in February as they described it like a fire sale. I read through their explanation and most of it seemed logical to me. They are working with the Support Committee (equity holders and creditors) to come up with a solution that maximizes the value of the estate, management's incompetence is being dealt with in some way at least.

 

This may be an overly simplistic approach, but I think it's the right way to look at this and I'm considering a small position given the expected value I'm coming up with:

-Scenario 1: Equity is worthless, creditors are desperate to get paid back and equity is wiped out via debt-equity conversion or something of that sort, management refuses to sell the assets or there is no appetite whatsoever. 10% probability, $0 p/share

-Scenario 2: No sale of the titanic assets, or maybe just enough to payback creditors and equity is untouched. Company emerges from bankruptcy and remains in operation and equity trades on a cash flow basis, ignoring value of titanic assets. 20% probability, $3 p/share

-Scenario 3: Titanic assets sold below appraisal value, call it $50-70mm, creditors get paid, equity gets special dividend/return of capital. 30% probability, $6-7 p/share

-Scenario 4: Titanic asset sold around appraisal value. There have been different appraisals at different times, but let's use the lower estimates around $150mm. Probability 20%, $12-13 p/share

-Scenario 5: Blue sky, Titanic assets sold for more than the appraised value (not unrealistic considering how the art world works and what we have seen recently) Call it $300mm, not too far above appraised value. Probability of 20%, roughly $26 p/share

EXPECTED VALUE: $10.4 p/share vs 5.40 currently Pretty good margin of safety to me...

 

I tried to be conservative in my assumptions (mostly focusing on the value of the assets, not the business or intangibles/IP/rights etc), but also balanced by including a draconian scenario as well as the possibility of a very good outcome which cannot be taken off the table.

 

Given this is a special situation I think this is the right way to look at this trade.

 

Thoughts are encouraged and appreciated.

[bskptkl]

Seems like so many people have gotten burned with this that there's very little interest. But I'm coming in with a fresh mind, so I'm trying to be flexible even after all the horror stories.

 

I read some of the documents filed with the Bankruptcy courts and found some useful information. What has changed in the past year? The French Collection assets have a clean title, clear of any claims, liens etc. This was a major obstacle for the sale of artifacts before, and it seems to have been part of the strategy of filing for a voluntary bankruptcy. Second, the Ad Hoc equity committee (which includes Apollo) filed a motion to block the bidding process that was going to take place in February as they described it like a fire sale. I read through their explanation and most of it seemed logical to me. They are working with the Support Committee (equity holders and creditors) to come up with a solution that maximizes the value of the estate, management's incompetence is being dealt with in some way at least.

 

This may be an overly simplistic approach, but I think it's the right way to look at this and I'm considering a small position given the expected value I'm coming up with:

-Scenario 1: Equity is worthless, creditors are desperate to get paid back and equity is wiped out via debt-equity conversion or something of that sort, management refuses to sell the assets or there is no appetite whatsoever. 10% probability, $0 p/share

-Scenario 2: No sale of the titanic assets, or maybe just enough to payback creditors and equity is untouched. Company emerges from bankruptcy and remains in operation and equity trades on a cash flow basis, ignoring value of titanic assets. 20% probability, $3 p/share

-Scenario 3: Titanic assets sold below appraisal value, call it $50-70mm, creditors get paid, equity gets special dividend/return of capital. 30% probability, $6-7 p/share

-Scenario 4: Titanic asset sold around appraisal value. There have been different appraisals at different times, but let's use the lower estimates around $150mm. Probability 20%, $12-13 p/share

-Scenario 5: Blue sky, Titanic assets sold for more than the appraised value (not unrealistic considering how the art world works and what we have seen recently) Call it $300mm, not too far above appraised value. Probability of 20%, roughly $26 p/share

EXPECTED VALUE: $10.4 p/share vs 5.40 currently Pretty good margin of safety to me...

 

I tried to be conservative in my assumptions (mostly focusing on the value of the assets, not the business or intangibles/IP/rights etc), but also balanced by including a draconian scenario as well as the possibility of a very good outcome which cannot be taken off the table.

 

Given this is a special situation I think this is the right way to look at this trade.

 

Thoughts are encouraged and appreciated.

I'm still interested - holding 75% of what I bought post bk.

A few thoughts:

Doc#900 says "debts are less than 20 million", doc#850 says "biz is stable and appears cash flow positive".

Only French artifacts are owned "free and clear" and able to be sold with no restrictions.

Debtors seem incompetent and actively screw up repeatedly in everything they do.

Clock is ticking on exclusivity - lasts until 2/14/18, at which point anyone can propose a plan.

[DukeCrow]

Mediation occurred earlier this week. The mediator's report should be out sometime next week.

 

Hopefully, it provides good details on what took place. Debtors exclusivity has expired, so I'm looking forward to what comes out of the mediation and/or what plans are put forth by Alta/Apollo/etc.