West Palm Beach June 25, 2021 Mina Mar Group www.minamargroup.com a mergers and acquisitions firm (M&A) who amongst other things provides financing and corporate relations to OTC Markets issuers has announced an exit from Chapter 11 financing for OTC Issuers. A company spokesman said “Our intention was to breathe new life into these handicapped companies crippled with toxic financing. The idea was to create a win-win scenario for all shareholders stake holders and all concerned.
Our understanding of Chapter 11 is as following (Source uscourts.gov) A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money. A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements.
In theory the above as aforementioned described generally applies, however when it comes to toxic financing these toxic financiers claim fall “outside of the estate” and is immune from any creditor relief. The law of relief for toxic financiers rests in a gray area. We have spoken to several different lawyers and we typically receive several different responses or opinions on this matter. The regulators (SEC) has taken notice of this abuse in the marketplace and our understanding is that new rules are being drafted and considered to stop the abuse and exploitation of the retail common shareholder. On Dec. 22, 2020, the U.S. Securities and Exchange Commission (SEC) proposed rule changes that would require the mandatory six-month holding period under Rule 144 to begin at the time of conversion or exchange of a security rather than at the time the convertible or exchangeable security was originally acquired. We have witnessed many cases the toxic creditor has clearly abused and continues to abuse the legal loopholes. Source https://www.sec.gov/rules/proposed/2020/33-10911.pdf
MMG spokesperson added “We believe that the issuers (our clients) currently in Chapter 11 received very little benefit from Chapter11. Yes, the toxic financiers do benefit at the cost of the retail shareholders. These toxic creditors are not happy receiving 70% or 100% of the monies back but will not release their interest until every single penny is extracted in which case this may represent a 500% to 1,500% o more return on their initial investment. In our opinion, this is just unsustainable. Other than spawning a speculation and huge 1500% to 3,000% share price increase which translated in “theoretically” the company having to issue “less shares” there is very little or no relief for a company saddled with toxic financing.
As a preferred shareholder and stake holder in many of these issuers, we do remain committed to these companies and their followers. We welcome the new SEC rules and we already have several viable merger candidates who may be willing to assume the toxic overhang with the new SEC rules soon to be implemented. With the new SEC rules, we can see an orderly transformation of these companies that will return the maximum growth for its shareholders.
The current motions in court and noticed being filed which are the FAQ of many shareholders are just legal process and proceedings and formalities every company must go through during the Chapter 11 proceedings. Until these companies are released by the Chapter 11 Trustee
We will provide any further updates on these issuers via our Fridays Tips e mail alerts which a reader must subscribe to receive. www.minamargroup.net
About Mina Mar Group:
Mina Mar Marketing Group Inc. (MMMG) http://www.minamargroup.net/ is a privately held company offering Investor Relations (IR) services and a full-service media solution marketing group with strategy and in advertising, broadcasting and financial industries while delivering everyday values via creative and targeted solutions through many aspects of the industry. Mina Mar Group (MMG) http://www.minamargroup.com/ a full range of Mergers and Acquisitions (M&A) and Investor Relations (IR) services for companies quoted on OTC Markets, NASDAQ and NYSE. Mina Mar Group’s services range from full service Investor Communication, Investor Relations, Awareness, Strategic Consulting, Performance Improvement’s and more. To find out more about MMG’s presence and our focus on OTC based companies please visit our website http://www.minamargroup.com/
