The latest news from Bloomberg put a damper on my plans to play point guard for the Warriors.
As loyal readers know, in a previous post on One Call I alluded to the company’s survivability having the same chance as me playing point guard for that esteemed NBA franchise.
Alas my hoops career appears stillborn.
We are now 10 days past the date One Call failed to make a $15 million debt payment, and it appears little progress is being made. Some have pinned their hopes on the company‘s future on One Call’s debt holders all getting together, joining hands and singing Kumbaya. Somehow I don’t think that’s likely.
Why would the most senior debt holders agree to take a haircut to help more Junior debt holders? The senior debt holders accepted a lower interest rate in return for their seniority in the event of a default. I doubt the senior debt holders are going to give up anything to help junior debt holders, who got higher interest payments in return for less security. However it’s possible – if some of the senior debt holders also own some of the more junior debt, they could work something out – if all the other debt holders agree.
IF they somehow manage to convince ALL debt holders to do this it’s possible a restructuring could occur. Notice the emphasis on ALL.
There’s also been a lot of talk about some sort of a debt-for-equity swap.
Again, I just don’t see this happening. The debt holders will end up owning the company if it enters bankruptcy, so (Sorry to repeat myself here) why would the senior debt holders agree to give up some of their ownership – – when they probably don’t have – to just to be nice to the junior debt holders? All debt holders would have to agree and that’s pretty unlikely.
Far more likely is the worst case scenario; the company runs out of money, defaults, and ends up going into bankruptcy.
I just don’t see how the company makes it given its huge debt load and cash flow problems, coupled with client losses and I would argue, feckless and far-less-than-forthcoming management.
I’ve heard from several colleagues that One Call management has repeatedly characterized my efforts to shed light on the problems at OCCM in pretty insulting terms. Those still undecided on who is right and who has been telling tales may want to reflect back on management’s multiple “all-is sunshine-and-puppies” pronouncements given today’s Bloomberg piece.
For the mid-level managers and other workers who have stock or stock options, this slow-motion train wreck must be beyond painful. While there are certainly some who contributed to this debacle, I’m sure there are many talented and hard-working folks in Jacksonville who deserve another chance.