Is MLFC Reorganization Plan really been approved?

edited January 2007 in General
I heard the news...Micronesia Longline Fishing Company and the FSM Supreme Court have approved the confirmed the MLFC's bankruptcy reorganization plan. How good is this new reorganization and how is it different form the previous one? ..... just curious....


  • taxman,

    Yeah, it is ture and it will work.

    Here is the news handed to me from a government official.

    MLFC creditors, bankruptcy court approved reorganization plan

    [MLFC Press Release: Kolonia, Pohnpei, FSM] Creditors for Micronesia Longline Fishing Company (MLFC) as well as the FSM Supreme Court have approved and confirmed the MLFC’s bankruptcy reorganization plan. MLFC Bankruptcy Case is the first case under the new FSM bankruptcy law ever filed in the FSM Supreme Court.
    As part of the reorganization plan, MLFC creditors will either receive shares of the renamed MLFC common stock or receive partial cash payment of their claims. The company will offer two classes of stocks, Class A for governmental entities and Class B for private entities or individuals. The equity structure is set up to ensure private sector-control at all times. All of the MLFC's existing preferred and common stock will be canceled, and holders of that stock will receive no money for it. The FSM National Government, which is the major creditor and equity security holder, has made some loan concessions and agreed to give MLFC some start-up capital. MLFC will have a new name, Oceania Fishing Venture (OFV), to ward off the negative stigma associated with MLFC, and will enter into a management joint venture with Luen Thai Fishing Venture (LTFV) for a period of 5 years. LTFV will match the fund provided by the Government.
    “LTFV has been selected among a number of unaffiliated foreign and local fishing companies because it has demonstrable management, financial, operational, and marketing capabilities in fisheries as evident with its continued success throughout the Pacific. Moreover, it has secured a long-term arrangement to operate PFC processing plant, which is crucial to the joint venture, especially with respect to low and medium-grade tuna for MLFC, which are now going to add value as they will be processed to prolong their shelf-life, ensure product quality, and yield competitive price in the Japanese and US market. Moreover, the processed tuna can be containerized and shipped to major international markets via cargo vessels to keep costs low,” stated Fabian Sitan Nimea, who is the court-appointed trustee for MLFC and currently the CEO of FFGI Consulting Group. Nimea stated that the reorganization process was lengthy and methodically carried out, being the first case. It took into account a multiplicity of options to ensure MFLC will emerge from financial distress not only for its own benefits and those of its creditors, but also for the reorganized MLFC to spear-head the revival of the fizzled fisheries industry, spur productivity growth in the private sector, and contribute to sustaining the FSM economy for years to come. “It would be a disservice to our great country, MLFC, and its creditors and prospective suppliers and customers, to entrust the management of MLFC to just any company or individual without demonstrable management capability, financial wherewithal, and the operational logistical support to effect success for the reorganized MLFC. I am confident in the management of LTFV and most appreciative for their good faith and willingness to work with us in getting MLFC out of its financial woes,” he said.
    "We are very pleased that our plan of reorganization has been confirmed by the FSM Supreme Court," said Nimea. "We appreciate the strong support of our plan by creditors, especially the FSM National Government, and are grateful to our former crew from Indonesia and Philippines for their understanding and patience without which the reorganization would have been extremely difficult. I also want to acknowledge in particular the FSM President Joseph Urusemal, Attorney General Maristella Jack, Assistant Attorney General Matthew Olmsted, Secretaries Nick Andon and Akilino Susaia, Speaker Peter Christian, FSM Congress, FSM Supreme Court, MLFC/Trustee Attorney Andrea Hillyer, and past and present MLFC board, employees, and vendors, and the Pohnpei community for their continued support during the reorganization."
    "Bankruptcy is a difficult process because a company must confront those institutions and individuals who lost substantial sums of money while it tries to maintain its vision for an enhanced operation in the future. It also requires a turnaround mentality and a process of continuous improvement to keep the company in the peak of health. That is not to suggest that the company be in a crisis mode at all times. That would be destabilizing and would yield diminishing returns. Instead, companies should continuously assess its external environment (target market, economy, infrastructure, etc.) and internal structure—functional units, operational productivity, cash flow, liquidity, and management—for a productive fit that might benefit from the laser-sharp focus of turnaround mentality. Think of continuous improvement not only as a way to strengthen a healthy company's position, but also as a practice drill or training for dealing with significant challenges that may come some day. I am pleased, however, that MLFC foreign crew was well and composed, had been repatriated, and its core earning assets, fishing vessels, are secured and in tact even for nearly a year of extensive negotiations with major creditors and joint venture partner. That is a testament to the months of hard work that went into formulating the reorganization plan. MLFC will emerge from bankruptcy with a good strategic and business plan and solid opportunities for growth," says Nimea.
    In April 2005, MLFC filed for bankruptcy protection, listing about $2.4 million in assets and $6.5 million in estimated debts, all of which are unsecured.

    Now is that ok? Any juris doctor specializing in bankruptcy law around to explain to us what is going on? Where is that juris doctor guy in here.
  • Hey Rebel..that is great....I hope down the road the whole thing will materialized. I can't wait to see and hear that one of the sister state can export tuna in cans. This would jump start of one of the best source of revenue to FSM and her people.

    My best regards to Mr. Nimea...I hope this is the same old good friend from Mabuchi hill....or is he?...LOL
  • taxman,

    What a great job by Mr. Nimea. Let me share the good news with the Palau Internationa Traders, Inc. and Kuniyoshi Fishing Company and also Palau Marine Industries Corp. about this one. Maybe the companies might haul their catch and bring them to FSM.
  • Taxman and Uperem,

    Yes that is the man from Mabuchi. Unfortunately, he has been stolen by the Rastafarian movement to spear head their psychological warfare department in eh eh. Lol.
  • The Press Release does sound like it achieves its immediate purpose. Put something out for public consumption.

    The real question now is if the Reorganization will carry the sunken boat above water. The first investors lost their initial investment. The FSM Government that is has lost its what $1 or $3 millions investment. Creditors are now being turned into investors with their claims turned into stocks. But the Plan seems silent on the operations side.

    How is the revived entity going to maintain operations? The Plan does not seem to show infusion of new working capital to carry the operations to profitable levels. If existing debts (creditors' claims) are turned into stocks, that does not show any new influx of new capital. Is the business supposed to continue its present operation which caused the bakruptcy in the first place, or are there new working capital that the Press Release does not mention.

    Ok, so at least the FSM's new Bankruptcy system has actually come into action. And the Bankruptcy Trustee in place. But while the Trustee may be in place to collect his administrative costs, the Reorganization Plan needs to show a new business plan with which to raise new revenue for the Business or it will just keep going south. The Plan sounds more like a Liquidation Plan than a reorganized business operation.
  • Rebel,

    I wonder if your usage of the term 'psychological warfare' is accidental or does it have anything to do with the last rebellion in 2005... I am wondering out loud, because if you are whom I think you are, then I must add that the Rastafarian movement now really missed your input this time around. A difference the Movement made, if you know how much you role greatly contributed to the Movement!!! And I am sure the man from Mabuchi will agree... Carry on the Cause...

  • Joker,

    Stop psychoanalyzing me. I am menatally stable and spiritually calm despite my political insanity. Joker, yeah I came out of the rebellion with an acquired brain injury caused by red liquid chemical which was popular during the hey day of the rebellion. I joined the Rastafarian movement when I realized that the Mabuchiman headed the psychological warfare department. He gave me electeric shock to confess about my mental state and luckily I was accepted under his wing.

    The red liquid chemical has been dried under the sun and as a result came the new movement called the " Red Rasta Movement" based on John Adam's philosophy to carry on the cause. Greetings to you Joker and the rest of the men from the inner circle or am I on the outer ring now?
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