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A group of Chesapeake (CHK +0.7%) bondholders challenge the company's authority to redeem $1.3B...

A group of Chesapeake (CHK +0.7%) bondholders challenge the company's authority to redeem $1.3B of notes, saying the plan is improper and would shortchange them. They say that in seeking a preliminary injunction against bond trustee BNY Mellon, CHK is trying to renege on its contractual obligations by seeking authority to buy back the notes at par rather than at a premium.
Comments (5)
  • westelk
    , contributor
    Comments (231) | Send Message
     
    And you should expect anything else once Icahn gets his claws into a company? He may enrich himself, but he leaves behind broken companies.

     

    Icahn, being Icahn, will sell off enough CHK assets to eventually take a huge chunk of money out of CHK for himself. What will be left behind will be a shell of a company and a lot of employees with broken careers.

     

    I was not a fan of the way AM treated shareholders, but he built a company. Icahn destroys them. I personally hope Ackman eats Icahn alive at Herbalife. There are Buffetts and Mungers who build, and then there are the Wall Street ripoff artists like Icahn who destroy.
    12 Mar 2013, 11:16 AM Reply Like
  • NatGasGHshale
    , contributor
    Comments (90) | Send Message
     
    IMO...ICahn and AM are cut from the same cloth... They just start at opposite ends... One builds for self consumption... One buys for self consumption...
    No difference...
    12 Mar 2013, 12:30 PM Reply Like
  • wiley 66
    , contributor
    Comments (25) | Send Message
     
    I am still holding but Icahn may change my plans???
    12 Mar 2013, 02:18 PM Reply Like
  • pauliene
    , contributor
    Comments (146) | Send Message
     
    I see a different path.
    Carl ICANN had the right to buy shares. and, he did so.
    I also could buy or sell shares as well.
    due to his participation to get Chesapeake on the correct path to higher value he got the shares from 16 to 17 area to 21 area.
    in that short time frame from November to , say march, many of us players made a lot of money with options and shares.
    this bond issue is a tremendous plus but no one writes about it.
    if they redeem the bonds, forget the savings which are important, its the fact that they are redeeming debt to pay down the debt.
    we all wanted them to pay down debt and suddenly, no one seems to understand what they are trying to accomplish.
    if they do not buy these bonds back, they will probably buy back other bonds.
    I do not believe this buy of these bonds is motivated by the idea to save 400 million over 6 years. the savings is only if they redeem early. if they just pay them off as due they do not pay this 400 million.
    however, by paying off these bonds it does create the idea that if they were to get a buy out, the bonds if redeemed now saves the new buyer 400 million, as opposed to other debt
    12 Mar 2013, 07:20 PM Reply Like
  • westelk
    , contributor
    Comments (231) | Send Message
     
    You don't understand Icahn. The redeemed debt will be replaced by as much, if not more, debt. The "benefit" will be sold as lower interest rate expense. Icahn's goal is always to build a large amount of cash in a company and then get a special dividend declared. Then he is gone, and what is left is a shell of a company. It has been his mode since TWA.

     

    There may be a short term ride for a trader, but a long term investor will probably come to grief.

     

    I follow CHK because, given proper long-term oriented management, there could be a 4-5X runup in the stock over a period of a few years, and eventually a stable dividend paying company like XOM or CVX. That kind of investing is not an Icahn specialty.
    13 Mar 2013, 11:18 AM Reply Like
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