People suffering from a morbid obsession with titanium dioxide and its principal producer, Tronox Inc., are frantically clicking refresh on Pacer to see the moment the company files for Chapter 11 in Southern District of NY on this cold evening. Reuters cites sources that the filing should come any moment. Of course this will come as no surprise to holders of the company's $350 million of 9.5% Notes due 2012 which recently traded at 10 cents on the dollar, and whose semi-annual interest payment from December 1 got lost with the paperwork. The Company's Third Waiver Extension on its credit facility expired January 9, after which lead arrangers Lehman (or in this case probably Barclays but most likely neither) and Credit Suisses can enforce their rights to push the company into bankruptcy. The rumored $125 million DIP will be provided by CS thanks to the hard work of Rothschild analysts who have presented the CS loan committee with numerous memoranda showing the hockeystick demand curve for artifical coloring agent E171 which makes skim milk look white (as opposed to what? purple?) and SR-71 jet planes, and will probably prime existing secured lenders although since it is the same lender group, not many tears will likely be shed there.
We struck F5 gold at 2.29 am on Jan 29 (or rather our intern in Bangalore) when Trinox posted this on their website: http://www.tronox.com/NewsReleaseFiles/news_20090111.htm. Looks like a bankruptcy judge is to be assigned still, but with Peck's head still spinning from the "almost trillion" in doodoo he has found himself in with Lehman, all signs point to Drain. Now for the abnormally morbid out there, wouldn't it be amusing if Chris Cox and Judge Robert Drain started Cox Drain Capital LLC? This could easily compete with David Blood and Al Gore's attempt at asset management if the latter two didn't pussy out and call their venture Generation Investment Management.
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