Take A Look At The 12b-25 Ext: What Does It Reveal?

Homer, I agree that any BK is for the whole not just XM... too intertwined, Sats, Subs, License, Shareholder Equity, etc... messy stuff...

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Originally Posted by homer985

No. The default would be for the parent company with the recent refinancing.

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My problem is as follows:

This is all about the year ending 2008. If they are doubting their ability to continue based on current economic conditions, bear in mind that January and February auto sales will play a major role in the decision to continue as is.

When the company speaks of doing an assessment, it must conclude that the economy will not turn around in time to make the business viable for any reasonable period of time.

Conclusion: BK prior to the 17th. You heard it here first.

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Originally Posted by cos1000

here is on explanation of "going concern" and it appears in this definition they can use all information available in making their assessment

International Accounting Standard 1 (revised 1997), "Presentation of Financial Statements" sets out management's responsibility for assessing going concern as follows:

"When preparing financial statements, management should make an assessment of an enterprise's ability to continue as a going concern. Financial statements should be prepared on a going concern basis unless management either intends to liquidate the enterprise or to cease trading, or has no realistic alternative but to do so. When management is aware … of material uncertainties … which may cast significant doubt upon the enterprise's ability to continue as a going concern, those uncertainties should be disclosed. When the financial statements are not prepared on a going concern basis, that fact should be disclosed, together with the basis on which the financial statements are prepared and the reason why the enterprise is not considered to be a going concern.

In assessing whether the going concern assumption is appropriate, management takes into account all available information for the foreseeable future, which should be at least, but is not limited to, twelve months from the balance sheet date.”

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That, is a big deal...

Could sirius xm decide at this point to use COH to pay off the remainder of the may debt? Seems like a good idea. This short delay could be giving them the time to gather the cash and make the deals.

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Originally Posted by FoolNHisMoney

It seems to me the Going Concern clause is a chicken and egg situation. The auditors are saying that they have to include the clause if the May debt is not extended, and the Liberty agreement to buy the May debt is contingent on the auditors not including the clause . . . which comes first? The answer has to be BOTH!

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This is exactly what I've been thinking -- which means there has to be a meeting/negotiation between the banks, Liberty and KPMG to work it out.

The fact is, if the KPMG going concern note is included and Sirius goes into default -- then Liberty gets barely anything. They have a small amount of Senior Notes and that's it. But if they work with Sirius to finish the second portion of the refinancing, then Liberty is much more control of the company to seize it in event of bankruptcy at that point.

I think that Liberty knows this. I see no reason for them to purposely allow them to default and get very little out of the deal. Even their CFO stated on their conference call last week that he was fairly confident that the second portion of the financing gets done.

While the wording in the extension concerns me -- I don't think anything is imminent.


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Originally Posted by Brandon Matthews

My problem is as follows:

This is all about the year ending 2008. If they are doubting their ability to continue based on current economic conditions, bear in mind that January and February auto sales will play a major role in the decision to continue as is.

When the company speaks of doing an assessment, it must conclude that the economy will not turn around in time to make the business viable for any reasonable period of time.

Conclusion: BK prior to the 17th. You heard it here first.

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No, BK anytime before the May debt is due. There's no need to rush things...

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Originally Posted by Shawn

Could XM goes bankrupt and Sirius prosper? Isn't XM a wholly owned subsidiary of Sirius? Couldn't they let XM go belly up? Wouldn't that be extraordinarily beneficial for Sirius? Or am I misreading this?

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Yes, but no. The Sirius XM financial statements are consolidated from XM and Satellite CD Radio... and a significant amount of the Sirius XM assets are made up of XM assets.

Bankruptcy of XM would be devestating for the Sirius XM common holders.



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Hi, The company has over 2 months of revenue before May debt. The going concern clause has to say they don't think their revenue intake can pay operating expense, debt due, from March 17 2009 through March 17 2010

I disagree, May $250M is the only problem IMHO.... They already made a deal with Malone / Liberty to take care of economic downturn to some recovery by end of 2009 and now debt due now in 2010. The only thing in the way is Moving out or Paying off the $250M. Malone agreed to pay the $100M and have Liberty take it on as part of phase II. So what does that leave????

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Originally Posted by JohnnyIrishXM

May debt is not the problem right now,it is that with oem and car sales crashing,hence rev's are going down faster than forcasted,it is the expenses that must be cut GOING FORWARD,as that is the concern for staying in bussiness right now..The auditors can see that plain as day..

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For future use. When looking at a stock to buy you want the company to have at least 2 years operating expense COH.

(edit saves us high school dropouts from looking like bad spellers)

In the end is all speculation, same as before... No need to kill yourselves over it. Y'all made the decision to be with SIRIUS until it dies right ? Cheers !