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Message: StanCaplan / Re: Of Course, There's Concern
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Mar 15, 2011 12:58PM
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Mar 15, 2011 05:11PM

There may be some court direction regarding revenues, but PTSC has filed with the SEC that PDS pays money to TPL based on a percentage of the working capital fund balance. I don't know that any additional court oversight is required if PTSC is saying this is true well after legal action was initiated and even partially resolved. Depending on the specifics of what "substantial increase" means, and the formula that prescribes what amount between $500K and $1M (or is it now higher based on the "substantial increase") is paid to TPL based on working capital fund balance, it could mean an extra $500K per quarter ($2M per year) to TPL based on the current arrangement or potentially much more based on whether the agreement was revised as well as the working capital fund balance.

I don't rule out that all of this is perfectly on the up and up, and that it could be warranted, but IMO it's akin to the Federal Government saying they need more taxes to close the deficit, before they assure that they've cut wasteful and unnecessary spending, and controlled required spending. I think based on history, this arrangement opens the door to more of the same. On the other hand, if steps were taken to first prove the leak was fixed, before stuffing the bucket with more money, then it would be a lot less suspect, at least to me.

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