Saturday, December 15, 2007

Calpine Shareholders Say "Bunk" to San Jose


70% of Shareholders Reject Proposed Calpine Plan.........
Calpine Ad Hoc Committee
Press Announcement
For Immediate Release..Contact: Elias Felluss
Telephone: 631.262.1876

Equity holders overwhelming rejected the plan of reorganization (POR) Calpine management presented to both creditors and shareholders in a referendum that concluded November 27, 2007 with tabulated results reported just days ago. In addition, 6 of the 11 groups of interest casting a ballot also rejected the plan.

Shareholders of recovering Calpine, now set to emerge from bankruptcy, are in an uproar over what they view, as an apparent theft of their equity by banking and hedge fund interests.
Stockholders remain confident that the court will take a fair approach, as was done in the Mirant bankruptcy case and grant the shareholders between $4 and $10 for their shares.

A group called the Calpine Ad Hoc Committee has been speaking out against what they view as a travesty (editors option:" rape of") "On Main Street," where the investor is gamed by large investment institutions whose access to markets and massive capital puts the average investor at a distinct disadvantage.

"Because of the facilities the internet provides," says Elias Felluss, a spokesman for the group, "we have been able to pool our resources and unite in an effort to make the public aware of the injustices served to investors by corporations whose only interests are their own."

"I find it especially galling that we get bludgeoned with our own money," says Mike Jasper, " where the company has the ability to hire unlimited attorneys, squander what resources we have, pay themselves very handsomely while they are 'shafting us with our own stick'"

As Calpine enters the final stages of it's recovery to solvency, shareholders are learning they can expect to receive less for their share in the company.
Emotions run high within the ad hoc shareholder group as the company's management continues to margin the equity in favor of creditor recoveries.
At one time Calpine management reported a possible share recovery of over $3.00. After ballots were cast, Calpine revised their last estimate to .41 cents. No fewer than five (5) separate valuations have been presented, two (2) of which were trotted out by the Debtor management after the balloting referendum had concluded.
"How dare the company re-evaluate 3 times AFTER the proxy's were sent out and twice after the votes were being counted!" adds Cheri Stinson, Bay Area, California.

"Makes you wonder who these guys are working for? ...The banks or the lenders?" says Calpine shareholder Erick Frick of Zurich, Switzerland.

It would seem the truth is they are working for themselves. Awarding insiders huge incentive awards as they short change investors has enriched Calpine's management.

"I don't think investors want what isn't theirs," reminds shareholder Merle Root of Colorado, "but we do expect a fair shake. Judge Burton Lifland and the Official Shareholder Committee are our only chance of getting it.

Felluss added, "this company and the people behind this fraud are masters of deception".

"The press coverage has been appalling, says Kurt Giehler, Prospect Heights, IL, "seems they are giving very little chance for much recovery to shareholders, but we as a group believe Judge Lifland is a fair man and want to do the right thing when he determines the company's value."

Giehler continues, "He has gone to great lengths to have the parties in interest come to an agreement, and if they don't he will create one for them."

Bankers like Goldman Sachs stand to reap rich rewards as does hedge fund, Harbinger LLC, who intends to gain a controlling interest in the emerging power company, so their FERC filing reports.

"We understand the company is bankrupt," says Tom Christiansen of Tennessee, "and has the interests of the estate as its first priority. But that doesn't eliminate the responsibility of management to make an effort to maximize Calpine's assets rather than to minimize them.... Which is apparently what they are doing and at the expense of all investors. Shareholders have a reasonable expectation to see their assets maximized so both creditors and shareholders receive a fair settlement."

"It is really unnerving to see Mr. May who is a proxy for Deutsche Bank leading our company through this morass." continued Felluss, "Deutsche Bank was the lead banker for the "death spiral financing scheme that brought Calpine to the bankruptcy court in the first place"

"In the Enron implosion, the theft of equity occurred prior to bankruptcy," says John Clements, Poway, California, in the instance of Calpine, the thievery is occurring through the bankruptcy process. In many ways the Calpine bankruptcy strategy of obscuring assets is similar to the KMART bankruptcy fiasco."

Essentially, for the last two years, shareholders have been told by the current Debtor management to sit in the corner, do as you are told and shut up! If you are nice, you might get something to nibble on at dinner.

Well, many say bunk to that!

-30-

2 comments:

FiveO said...

Nice article. I'm a current shareholder and was wondering if you had any insight into the latest ruling regarding existing shareholders getting warrants to purchase up to 10% of the new shares. How does this work?

"Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan approved the plan that sets Calpine's postbankruptcy value at $18.95 billion and would repay unsecured creditors more than 90% on their claims. Calpine's current shareholders will receive warrants to buy up to 10% of shares in the reorganized company."

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