The noteholders have wanted Fung and current board gone for a long time. I believe at least one of the noteholders is also a major shareholder.

This could be as simple as management wanting to protect us shareholders or it could be management are trying to protect themselves.

I'll give a hypothetical situation that may tie into the delay in the DIP.

The noteholders don't want a DIP that prevents them from getting a large piece of the award and the way things have gone for them in court it looks like they may have to wait until arbitration plays out before collecting their $100 million plus interest.

The 2 DIP proposals that Fung has picked as first and second choice don't belong to the noteholders. The noteholders in an effort to get some of the award make a DIP offer that doesn't call for repayment of the outstanding loan and supplies the cash to see us through arbitration. For this they get 30% of the award plus interest on the loan.

Sounds like a good deal for us except I'm betting their is a clause to replace the board.

Would the judge approve what Fung wants or see the value in the noteholders proposal.

What would be better for us?

Lets add to this the noteholders saying they are prepared to buy us out and handle the arbitration themselves. Lets say an offer of .50 a share. This would cost them less than $200 million and they would get the whole award.

How many would take .50 right now to get the hell out? For many who have averaged down I'm sure they would be very happy to sell. Does management who have very few shares see this as a good thing. I doubt they would want the offer to go through.

This is all what if's on my part with no facts or even a suggestion it could be possible. So far Fung has shown me he does want to protect the shareholders thus he hasn't sold us down the river.

JJ