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alstry (36.00)

Does SPF's mgt KNOW its going BK?

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March 06, 2008 – Comments (7)

At the early part of this year, mangement gave themselves million in cash bonuses.  MILLIONS IN CASH BONUSES.

At the time the CASH bonuses were given, SPF just came off a year where it lost the most money in the company's history.  Not only that, the current environment and current outlook is for even more challenging conditions.

Just to add a little hot sauce to the hot sauce, at the time the CASH bonuses were given, the company was in violation of its debt covenants knowing that it was going to have to beg for forgiveness in just a few short weeks. 

Let's think about this for a second.  Why would CASH bonuses be offered when this company owes its creditors billions and billions of dollars of CASH.  Why wouldn't they simply have given themselves  STOCK options if they had a positive perspective of the future......especially at a time when they will need CASH to pay their creditors.

If these guys know they are going BK, why havn't they informed their shareholders?  Instead they cut the shareholders off from their CASH dividend to preserve cash and and bonus that CASH to themselves?

My friends, these are crazy times.  Evil triumphs when the good do nothing.

7 Comments – Post Your Own

#1) On March 06, 2008 at 12:40 PM, StKitt (29.56) wrote:

SPF BK seems very likely... as does some jail time for those putting their own interests before those of shareholders.

What interests me is how the Justice Dept. will have enough resources to prosecute all the executives perpetrating this sort of crime across the nation.

Anarchy bubbles close to the surface.

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#2) On March 06, 2008 at 1:04 PM, PDTBiotech (86.25) wrote:

"Evil triumphs when the good do nothing."

Much like elections, good and bad have nothing to do with it, nor does performance.  Executives are paid well come hell or high water, period, and if investors haven't figured this out for themselves they have a bleak future in the market.  The question management is asking themselves isn't why they haven't informed shareholders that they're going BK, it's whether anyone could prove in a court of law that they knew they were going BK.  Investing in companies that make/distribute paper shredders would be a nice hedge.

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#3) On March 06, 2008 at 1:14 PM, dude59 (25.98) wrote:

1. The regulators (SEC, ect.) are in the pockets of the Corporations. They are 'off duty', and not doing their jobs.

2. I expect that we will see many more civil lawsuits due to corporate malfesence (fraud).

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#4) On March 06, 2008 at 1:29 PM, alstry (36.00) wrote:

Can CAPS become a conglomeration of the "little" people bringing awareness to improper behavior in corporate America?

Time will tell.

Go Little CAPPERS.

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#5) On March 06, 2008 at 2:35 PM, alstry (36.00) wrote:

Can CAPS become a conglomeration of the "little" people bringing awareness to improper behavior in corporate America?

Time will tell.

Go Little CAPPERS.

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#6) On March 06, 2008 at 2:38 PM, floridabuilder2 (99.33) wrote:

no that is why i bought a boat load this afternoon on caps and the real portfolio....  everybody is watching what the banks are going to do month end... this is just a trade

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#7) On March 06, 2008 at 2:53 PM, alstry (36.00) wrote:

FB,

That is what is fun about you.....you like to play and back it up.

You say WCI is in worse shape than SPF.  I think you are nuts. 

If SPF fairly valued its land assets, it is my opinion it would have a very very negative net worth.  SPF has hundreds of millions of dollars it MUST spend where as WCI has already constructed most of its towers its now liquidating. 

Yes SPF will sell down a bunch of inventory this quarter, and generate some cash.  But it also has a bunch of spend obligations through the quarter that is going to eat up a big chunk of that cash.  At the end of the quarter, SPF will be sitting there with not much vertical inventory and a whole bunch of dirt and even more debt.  Good luck trying to generate cash out of dirt in the current environment.

What is really funny, if you look at their specs, they are having serious trouble selling their Million plus houses.  They are doing an excellent job selling the under $300K stuff...especially in low margin Texas.

If you look at the distribution of Specs under construction, most will be completed this quarter then it lags to late Spring/Summer.  Why do you think that is and how do you think they are going to generate much cash in Q2?  You think their lenders see this?

Your horsie is WCI.  Mine is SPF.  Will it be a photo finish?  To bad we can't play the trifecta.

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