AFR Street Talk article just out, page-47

Seems to me likely that something along the lines of the following has happened:

(a) AG and the board have been playing hardball with NAB and WBC over the scheme of arrangement, D4E etc, and the banks have decided no reasonable deal can be done. They've got to the stage where they would prefer to be out if someone's prepared to pay a reasonable price for the debt.
or
(b) Issues involved with a receivership of a listed law firm operating in both Aus and UK are proving too much of a headache for the banks to manage, and again they're prepared to sell the debt to avoid that.

Either way - these things seem evident:

- if the above turns out to be correct, there seems to be a major question mark over whether AG and the board are acting in anyone's best interests - unless it's their own. I would have thought at this stage they would accept the game is up, and be prepared to co-operate in the best way forward to protect staff, clients and the lenders.

- as Grant has pointed out, this loss by the banks will probably affect the way banks in Australia evaluate loan applications from Law firms and probably accounting firms. Likely that bank lending manuals will now be re-written to discount the value of any sort of charge over a law firm's assets to just the realisable value of property plant and equipment. All other assets on the balance sheet will be regarded as worthless.

If NAB and WBC do sell, and if the eventual holder of a majority of the debt is a company like Anchorage Capital, it's all likely to end in a short and brutal pre-packaged receivership. Needless to say current SH will not be included at all.

Also worth noting - the level of wealth destruction which AG and the board have been responsible for is up there with the best in terms of Aussie listed company history.

Even with the sharp drop of share price that had ocurred by 30 Jun 2015, the Enterprise Value of SGH was still around $1.87B at that time:

As at 30/6/15:
350m shares at $3.56 $1.246B
Market value of borrowings $0.720B
Less Cash $0.097B
= $1.869B

Now, the current EV of SGH would appear to be about $0.136B - as follows
352m shares at 0.09 $0.031B
$736m debt at 22c per $ $0.162B
Less cash $0.057B
= $0.136B

So a reduction of more than $1.7B (93%) in a bit over a year and a half following Jun 2015.