It is evident that the appointment of the Investigative Accountant is to derive value of the assets so the ABW is able to trade (which requires a value to be ascribed to the convertible notes).
Note since the time of posting the above, AZZ have offered a 4-1 conversion, so it affects the equation as follows (in bold and italics)
1. If the value of the assets would likely result in a value of over $0.50 per share (4-1 conversion) (ie circa US$120M) then it is in the Trustee's interest to delay liquidation in favor of the sale as it would return noteholders more than $2.00 per note.
2. If the value of the assets is less than US$120M, but more than US$35M then it is indifferent if liquidation begins as the noteholders will get paid out regardless of whether it is a distressed asset sale or not.
3. If the value of the assets is less than US$35M, then the Trustee would likely negotiate some form of extension as it would be in their best interest to delay the liquidation and hope for a recovery in the value of the assets (though AZZ would also require funding to be able to continue operating).
I still believe we are looking at scenario 2, in which the Investigative Accountant comes up with a valuation of between US$35M and US$120M
Unless there is very strong evidence of value upwards of US$125M and with high probability, why would noteholders vote in favour of resolution 1. Their payout would be the same for deals under US$125M and they have to wait.
Overall, this is a poor offer to entice noteholders to stay on, but we have come to learn that AZZ aren't the best at negotiating deals, so this isn't really a surprise anymore.... perhaps they should consider engaging external consultants...
