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Author: muffinXL One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2302  
Subject: so at last the word is out; commons are dead? Date: 5/22/2003 4:00 AM
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One sentence draws the attention:

"Current common stockholders wouldn't receive any distribution under the company's Chapter 11 reorganization plan, and their shares would be canceled, according to the disclosure statement."

so we are officially dead, I assume. The end of a long process....
any reactions?
MuffinXL





Metromedia Fiber Sees Enterprise Value Of $230M-$330M
Wednesday, May 21, 2003 04:43 PM ET Printer-friendly version

WASHINGTON (Dow Jones)--Metromedia Fiber Network Inc. (MFNXQ, news) said it estimates the enterprise value of the company will be between $230 million and $ 330 million once it emerges from bankruptcy protection.


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According to the disclosure statement the company filed explaining its Chapter 11 plan, the estimate doesn't include remaining cash for operating the business.

Should its plan be confirmed, Metromedia Fiber would continue providing fiber- optic infrastructure and high-bandwidth Internet connectivity services and would make improvements to its systems and networks, court papers obtained recently by Dow Jones Newswires said.

Financial projections included in the disclosure statement said Metromedia Fiber expects revenue of $238 million and a net loss of $55.1 million for 2003.

The court filing said that for 2004, the company sees revenue of $276.6 million and net income of $35.1 million; for 2005, revenue of $330 million and net income of $49.8 million; and for 2006, revenue of $386.6 million and net income of $67.6 million.

Metromedia Fiber filed a motion May 9 with the U.S. Bankruptcy Court in Manhattan seeking to set July 2 as the hearing date for approval of the disclosure statement. The fiber-optic network company has asked that objections and responses to the disclosure statement be filed by June 23. A hearing on the motion is scheduled for Thursday.

The proposed disclosure statement, filed May 14, lists eight classes and several subsets of creditors with claims against the company. It lists five of the classes as impaired. Current common stockholders wouldn't receive any distribution under the company's Chapter 11 reorganization plan, and their shares would be canceled, according to the disclosure statement.

Lawrence Gottlieb, an attorney representing Metromedia Fiber in the case, said Wednesday that the company negotiated the disclosure statement extensively. Discussions with creditors are continuing and changes could result, but "this is about what it will look like," he said.

Separately, the court issued an order providing Metromedia more exclusivity to obtain votes for its plan, extending the deadline to Sept. 15 from July 16.

The company's reorganization plan provides for payment in full of administrative, professional and indenture trustee fees and certain tax claims.

For creditors with general secured claims of $10 million, Metromedia would return collateral securing the claims or make cash payments over time to settle them, the disclosure statement said.

Metromedia plans to exchange a new secured note for secured claims from Citicorp as agent for existing notes, the disclosure statement said. It also reached an agreement with a trust established by company insider John Kluge through which, if the plan is approved, it will issue 944,737 shares of new common stock in exchange for the release of the trust's claims and its participation in a $50 million rights offering when it emerges.

Unsecured claims against Metromedia, which total about $1.74 billion according to the disclosure statement, would see a return of about 2% through new stock, and also will receive warrants. Unsecured claims against Metromedia subsidiaries totaling about $730 million, would be treated differently, but also would receive new equity, court papers said.

Creditors with subordinated claims - totaling about $975 million - and equity holders aren't slated to receive any distribution under the plan, the disclosure statement said.

The reorganized company's new stock isn't expected to be listed on a national exchange, and likely won't be eligible for such a listing until the company catches up on its regulatory filings with the Securities and Exchange Commission, court papers said. Metromedia said it expects to renew its SEC reporting in the second half of the year, but likely won't be caught up until the latter part of 2004.

Metromedia Fiber, White Plains, N.Y., filed for bankruptcy protection in May 2002, saying it had overbuilt its communications network.


-By Christopher Scinta, Dow Jones Newswires; 202-628-7699; chris.scinta@ dowjones.com


Dow Jones Newswires
05-21-03 1643ET


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Author: hildy Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2298 of 2302
Subject: Re: so at last the word is out; commons are dead Date: 5/22/2003 1:05 PM
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"Current common stockholders wouldn't receive any distribution under the company's Chapter 11 reorganization plan, and their shares would be canceled, according to the disclosure statement."

and then this;

...it will issue 944,737 shares of new common stock in exchange for the release of the trust's claims and its participation in a $50 million rights offering when it emerges.

What "distribution"? I understand common stock is a "claim" on net assets, but I am confused about the word; distribution. (see the following definition)


common stock noun
Ordinary capital shares of a corporation that have exclusive residual claim on the net assets and net income of the corporation after all prior claims have been paid.

Excerpted from The American Heritage Dictionary of the English Language, Third Edition Copyright © 1992 by Houghton Mifflin Company. Electronic version licensed from Lernout & Hauspie Speech Products N.V., further reproduction and distribution restricted in accordance with the Copyright Law of the United States. All rights reserved.

As far as the issuance of NEW shares, this seems to be a common practice when a company exits bankruptcy, but I don't know all the technical parts to this process... I suppose this is where I (we) ask my (our) broker to interpret this 'legaleze' and put it in plain english, i.e.; "do I have any stock of MFN which is worth any money" ?!

Keep your ear on the 'tracks' muffinXL, stay tuned... and I will let you know what else I find out over the next little bit of time.

~hildy

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Author: Samalik One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2299 of 2302
Subject: Re: so at last the word is out; commons are dead Date: 7/29/2003 10:44 PM
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Well, I received my Notice of Common Stock Equity Interests and Claims from the bankruptcy court today. It was nice to think we commons would get something out of the deal, but it looks like it is the end of the line. At least I can take my losses here and apply them to my gains and not have to pay anything in taxes. LOL


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Author: hildy Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2300 of 2302
Subject: Re: so at last the word is out; commons are dead Date: 7/30/2003 11:45 AM
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Thanks for the interpretation of the Notice of Common Stock Equity Interests and Claims Samalik. I rec'd the same notice on Monday, but not having experienced anything like this before -and- not being literate in understanding the 'legaleze' of this notice, I was looking for someone to explain to me just what my next move might be.

I only wish I could use it to some tax advantage, such as you mention, but unfortunately, I'm retired (read; no earned income) and my portfolio is 'under water'.

I read your profile, and I'd appreciate if you would expound on some of the techniques on how a retired person might apply this information.

TIA; Alex

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Author: Samalik One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2301 of 2302
Subject: Re: so at last the word is out; commons are dead Date: 7/31/2003 12:56 AM
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Alex:

The Notice is really a notice to all interested parties who belong to the specific classes listed. (There are 2 classes listed in the Notice with common stockholders being one of them, and the only one I am writing about.) The notice says that the bankruptcy judge has already approved MFNXQ's Summary of Plan Distribution ("Summary") and that there will be a hearing on August 21, 2003 concerning objections that any common stockholders have to the Summary. From past experience, this hearing is only a technicality and the judge's approval of the Summary proceeds. From what I remember of the Summary MFNXQ filed, the common stockholders lose out.

As to the rest of your message, sorry but I'm not a tax attorney and cannot provide advise as to what to do or how to do it. I just know that in the past I foolishly (with a small 'f') invested in PSINet that also went bankrupt. After everything was said and done, my stockbroker purchased all my worthless shares for $1.00. I then was able to offset the loss dollar for dollar against any gain I had in the sale of other stocks.

Again, since I do not practice in this area of law and am no expert but a fellow Fool who is learning day in and day out, I suggest that instead of relying on my word that you contact your stockbroker/tax accountant/tax attorney and find out what you can do in your situation. There are also probably a few good articles by TMF concerning when companies go bankrupt. Lastly, you can check out the SEC's website that has a section about bankruptcies at http://www.sec.gov/investor/pubs/bankrupt.htm.

Good luck in your future investing and remain Foolish. Remember, always do your own DD and don't rely on what someone else says.


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Author: hildy Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2302 of 2302
Subject: Re: so at last the word is out; commons are dead Date: 7/31/2003 1:28 PM
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Good luck in your future investing and remain Foolish. Remember, always do your own DD and don't rely on what someone else says.

Thanks again Samalik; and most definitely, (I forgot to include my/the disclaimer; "Fool to Fool") I certainly do my own DD... afterall, "the investments one makes is entirely his/her own."

I much appreciated your reply.

Sincerely; Alex

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