Wednesday, August 19, 2009

South of Ridiculous: Metaldyne Press Announcement

I mentioned the Metaldyne Chapter 11 filing earlier on and was just doing some more research on the bankruptcy proceedings. Apparently, the company issued a press announcement that included the following line:

“We are also pleased
Metaldyne is moving through the bankruptcy process swiftly and
on plan. The highly competitive sale process in this challenging market is a testament to the
strength of our businesses, technology and the commitment of our employees.”

Yes, they were so strong and so committed that they had to file for bankruptcy.

Now that's south of ridiculous (original phrase coined by Lawrence G. McDonald).

On a more somber note, if Carlyle Group is involved, I fear that Metaldyne bondholders may have to be very cautious. It could be a double-edged sword.

For anyone else wanting to follow the Metaldyne bankruptcy, visit
http://www.metaldynerestructuring.com/.


2 comments:

dadams said...

What do you mean when you said "if Carlyle Group is involved, I fear that Metaldyne bondholders may have to be very cautious. It could be a double-edged sword".

ForexDiva said...

I'm just exercising my First Amendment rights here, but I've found that when hedge funds and private equity groups are involved, there could be divergent interests at play. Depending on whether the hedge fund / private equity group holds the same bond issue as you do, the smaller bondholder could find himself / herself either inadvertently benefitting from steps that the hedge fund / private equity investors take during the bankruptcy proceedings - or in a precarious situation. A case in point is the Tribune Company bankruptcy, where senior and junior bondholders are battling each other on seemingly minor details. See this link: http://amlawdaily.typepad.com/amlawdaily/2009/08/zuckerman-wants-in-on-tribune-bankruptcy.html