please read - hypothetical scenario, page-10

The fallacy in your thinking is the implied premise that a new investor is willing to play fair on either a valuation or on his target ownership percentage. That's not the way it works.

The new investor will simply decide how much of the company they want to own and then argue for a valuation that gives them that percentage. The new investor will determine a low-ball value for the company based on some EBITDA multiple minus the debt, plus the cash and there usually isn't much negotiating room for the distressed company.

So - for example - they might low ball a value of $1.55B for the company and then propose to put in $1.5B. That leaves $50M for shareholders. And remember that's a $50M figure that is POST-DILUTION by EPS. BBI common would walk away with nothing, and EPS (assuming full conversion) would end up with the equivalent of maybe 6-to-8 cents equivalent using current EPS pricing.

While no one will agree with the valuation, the new investor won't care and probably won't be very flexible.

That's why I am saying that EPS must resist all attempts to convert to common before the terms of the financing are known. EPS need to insert themselves into the negotiation to get a better deal.

Having said that, EPS isn't going to get much. Forget getting 20 cents on the dollar. That's gone now. I think if large EPS holders have good lawyers, the best you could hope for is to get 10 to 15 cents. That would be based on the investor agreeing to let them dilute his share a little in order to win EPS agreement.

This all assumes that management will not just have an ironclad reason to do a full conversion of EPS without any EPS vote. If they do the full conversion without any requirement for EPS to vote, EPS is screwed. 6 to 8 cents is where I think it would fall.