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Stone Energy: 'Project Edison' Has Failed (Video)

Summary

Stone Energy has updated investors that its first and second round of out-of-court restructuring talks with an "'Ad Hoc' Group" of investors have failed.

These talks have progressively moved in greater and greater favor toward increased security and increased overall recovery for the Ad Hoc Group and away from recovery for the equity class.

I anticipate eventual, ultimate transfer of value for the equity class to be substantially lower than the 7% just rejected by the Ad Hoc Group.

In fact, I believe the equity class will see between a 0% and 1% transfer of value in any out-of-court restructuring.

The following screencast is a breakout of my thoughts regarding Project Edison, its latest iteration failure, and what this means for all tranches of the cap structure.

Stone Energy (NYSE:SGY) has updated investors that its first and second round of out-of-court restructuring talks with an "'Ad Hoc' Group" of...


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