trying to find something positive, page-3

What I didn't specify in my original proposal is that the equity plus warrant solution would need to keep the initial holding stake of hedge funds below 50%. Warrants would exercise at higher prices, so they would have return on investment if BBI thrives going forward, but they would not have control. It's an important detail because we don't want the new equity holders to have any ability to gut the company.

The big winner out of my proposal is the BEPPA holder, who becomes in effect the new common, in a streamlined structure with much less debt. It's existing BBI common that lose big, not BEPPA. In my proposal, the post-dilution and post-equity-financing BBI common would soar (albeit from a diluted starting place) and the BEPPA holders would quickly be trading at twice their current effective value or higher.

Any proposal that keeps BEPPA intact and adds more debt to replace old debt is simply not realistic. The company cannot sustain these debt levels, and the first Bumblebee proposal is simply about postponing a day of reckoning. The BEPPA shares will continue to trade sideways 8 to 20 cents for the next two years, and then we are back to square one again.

Ultimately, no one should care whether you prefer a tax writeoff. Management is fighting for any solution that offers a future for the company, not fighting to maximize gains for any one type of stakeholder.

At this point I guess there are a group of us who have run the numbers and realize that this is a real life or death situation and those who just want to rely on instincts that because the assets are worth something that therefore the financial structure of the company must be viable, or that their stock or hybrid must be viable. I guess no amount of reasoning or number crunching is going to convince people who want to rely on instincts alone.

For me, I have spent about 30 hours building pretty elaborate spreadsheet models, and I've looked at this thing every way possible. BBI just is not sustainable with this much debt, period. Anyone who believes BBI is sustainable with this much debt is simply engaging in fantasy and is probably dangerous to both the company and their own pocketbook. At this point management has to take tough decisions, and I certainly sympathize with their hints in today's announcements that the cornerstone proposal is the only one that addresses their long term problems. I just want them to find a way to structure that solution with someone who won't gut the company's assets, and who won't be allowed to take control.

It's probably too late for even my wishful version of the deal, but I do see a small window here where BBI could negotiate a much better deal with the Bumblebee investors.