I think we should all give a standing applause to Tony Reyes for the great service he has performed for us, the shareholders. He is the attorney who got involved in the CCAA proceedings on our behalf. I suppose there are several things we could worry about as we wait for justice, but the only item I choose to worry about is whether we will suffer more dilution. As to that matter, Tony would remind us of an important provision in the MIP document which is most helpful to the shareholders. That provision states that the MIP Pool cannot exceed 25% of the amount available to shareholders. See a summary of this in the 3rd Monitors report at paragraph #74. Thus, if the shareholders end up getting nothing then Management will end up getting 25% of nothing, which ain't alot. Do you think for a minute that Management will steer this in a direction where they get nothing? Doubt it. Here is how this would work. Let's say we end up with an Award or Settlement where the net proceeds are 2 billion dollars. If the shareholders have been diluted down to say 10% (we are now at 40%) then we would only get $200 million. If we get $200 million then Management cannot get more than 25% of that figure, which in this example would be $50 million. However, if we were entitled to a higher percentage of the award (say 20%) then we would get $400 million and Management would get $96 million ($70 million for the first $700 million and $26 million for the next $1.3 billion). Thus, in this example Management would stand to get $50 million with 10% for shareholders, but would stand to get $96 million ($46 million more) with 20% for shareholders. Thus we can see where Management has some incentives to keep shareholders at a higher percentage of the award.
