This Canadian pet food manufacturer, whose product recently killed scores of pet cats and dogs around the US because of rat poison contamination in its product, has an income trust that trades on the TX and is available to US investors as an ADR on the pink sheets. It price got creamed last week. I have no idea of the company's investing merits or about the circumstances of the trust, but it occurs to me that where there is fire there might be potential reward as well once the smoke clears. Is there anyone knowledgeable about Menu and its income trust who could provide some insight?
I've located the IR webpage for Menu: http://www.menufoods.com/ir/financial_reports.htmlManagement's discussion in the most recent quarterly report indicates that Menu hasn't been paying out distibutions recently, instead opting to use cash flows to pay down debt; however the debt paydown has reached the point where the re-initiation of the dividend appeared to be close at hand prior to last weeks events. Menu reported distributable income through the first nine months of fiscal 2006 of C$.66 versus C$.42 in '05. Menu's share price on TSX closed at C$5.10 on Friday.
Wouldn't the legal liability leave this company unlikely to survive?
Perhaps. Major legal liability doesn't necessarily equate with bankruptcy.
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