The game for Orbis now is more likely to be about how they sell...

The game for Orbis now is more likely to be about how they sell their investment methodology and actions to their clients in the wake of whatever outcome comes to pass.

In terms of their funds under management, this would be called a 'legacy' position. Two things often happen with legacy positions - a bitter fight to realise value (gets brownie points if it works out), or a throwing in of the towel so they can move on and stop directing resources to such a small portfolio position.

There's too much focus on these forums on who owns the hybrids and stock, but the issue is one of principle, specifically the risk/return/power dynamic between the groups on the financing side of PaperlinX's balance sheet.

In a normal company without Hybrids, once the equity is wiped out, the company becomes insolvent and the debt becomes equity. Until that point, the debtholders have no voting rights.

The same principle applies in Paperlinx's structure, except the debtholders have two buffers that need to be wiped out before they take control of the company (PPX, then PXUPA) - but the problem for the piggy in the middle (excuse the pun) is that the rule does not cascade. I.e. if PPX is wiped out, PXUPA do not have recourse to sieze control and can do nothing to stop their capital being eroded, as this right is reserved for debtholders.

Now, if we look at the interests of all three groups, the debtholders are unlikely to see a liqiudation as optional because that creates uncertainty for the carried value of their loans, they may have to make write-downs, and it is a time consuming process. The PPX holders obviously have an interest in keeping the company solvent. Both of these groups can be elegantly catered for by withholding distributions on the hybrids and appropriating value from PXUPA because they can't do anything about it.

Mr Berger got ducked, but PXUPA holders are getting something that ryhmes with that.