Posted by: Soapy Bubbles
In reply to: None Date:3/14/2008 5:56:49 PM
Post #of 144507
LB is touching on something important here.
When KK and TS dumped the shell (GSCR) into TS's lap, TS was given two important responsibilities:
1) Use the shell as a dilutive measure and give KK/TS time to deal GS a new life with YA. GSCR (our beloved SWVC) was the vehicle that gave them time to hash it out with Cornell (via the thick COES document) and to partially pay YA off. In turn, when YA took over GS as it recently did, TS's pref Cs would be cashed out and would be used to salvage GSCR (now SWVC). Thus, by servicing GS's debt using GSCR, GS decided to help us mop the resulant mess up with cash. Basically KK gave us a thank you -- albeit in a rather strange way.
2) GSCR (whenever you see this, just thing SWVC -- I am an old timer in this one) was to be handed over to YA when the CDs were finally converted. Although this was supposed to happen rather quickly, Highgate took their sweet time and held up the final CD dumps we're experiencing at this time. Upon completion, the company would be resturctured and cooperate with YA just like GS does with YA. Unlike GS (who owes YA so much money it's not even funny -- good job there KK!), GSCR will cooperate w/ YA, and not just pay YA like GS does.
Over time the plan evolved:
3) GSCR will be compartmentalized into various holding companies. As BBB pointed out about 1000 times, we now have a real estate holding w/ YA as to house Hacks and other REAL ESTATE purchases associated with a retail empire. Such materials will go into holding by YA and GSCR as to generate money for both during their restructuring. As "places" are M&A'd using restricted CDs, they will be linked to such a holding.
And when the credit industry collapsed in the US, it was no longer practical to use ONLY bank finance for SWVC. So, TS and YA hammered out the restricted CDs as to provide a form of "revolving credit" without the 20% interest rate GS was offered. Although it's (I think) 12% (better than a lot of CDs) the shares were to be restricted -- forming a strange sort of "bond" in which CDs could behave like a bond -- pay interest and then the load at the end. This will prevent dilution and afford a LARGE line of credit we can slowly payoff as M&A generates more revenue.
The key thing to keep in mind is the fact that this credit will expand MULTIPLE holding "shells" in SWVC/YA. We know about the Retail and Real Estate "shell" for our current M&A'd properties. Just keep in mind that other "shells" for holdings will soon fill -- each addressing a different sector of the economy. IF TS and YA can make their holdings diverse enough, you're looking at a particular kind of FUND in our future.
And what about GS? Well, GS is in a YA holding? What if YA maintains a percentage of GS in holding after they pay off their debt? (Assume KK isn't a total idiot and will pay the bills.) Well, that's one nice way to start an energy holding portfolio for YA.
Anyways, that's enough of my rambling for now.
Soapy
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