Nelson Peltz, who at one point had held high hopes for flame retardant plastics maker Chemtura, has had enough. His proxy on Chemtura's board, Ed Garden, a Vice Chairman of Peltz's Trian Fund Management, announced on Friday he was resigning from the Board of Directors. While the departure was not the "result of a disagreement", clues to why Peltz is abdicating Chemtura's "value proposition" may have to do with its CDS (over 19,000 bps in running spread) and its share price (another all time low today of $0.12).
While the company is scraping day by day without filing for bankruptcy, based on the capital market's vote of confidence (CDS implied default probability is 99%), it is just a matter of days. And Trian's 10 million shares, purchased at about $12/share, are likely to be considered a total loss at this point.
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