In September, two New York law firms, The Basile Law Firm P.C. and Phillipson & Uretsky, LLP announced that they have opened an investigation into a potential class action lawsuit against New York based lenders of short-term loans to microcap companies trading on the OTC Market. We checked in with Mark Basile, Esq. (of The Basile Law Firm P.C.)
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Guest Post By: Mike Starkweather The term toxic debt gets tossed around regularly in the micro-cap space, and yet most people don’t understand what it means or why a CEO would accept a loan with such volatile terms. First, it is important to understand what the term toxic debt indicates before we can break down how debt becomes toxic and why
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Today, two New York law firms, The Basile Law Firm P.C. and Phillipson & Uretsky, LLP announced that they have opened an investigation into a potential class action lawsuit against New York based lenders of short-term loans to microcap companies trading on the OTC Market. The class action being investigated and considered is on behalf of OTC Market public microcap
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In a recent post on LinkedIn, Tom Allinder discussed “Why an Alternative to Litigation is better for Lenders and Funders.” Allinder says the primary reason a funder should choose restructuring over litigation is because, through a restructure, funders have a much greater chance of receiving a return of capital (and a profit). For direct microcap investors, Allinder says restructures are
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Toxic debt is a very important topic for microcap professionals but it is seemingly taboo to discuss microcap toxic debt in public (on the internet). There are few reliable sources of information on microcap toxic debt online. We have compiled some of our best content on the topic and will continue to add links to this post as we add more to our website.
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Critical Questions MicroCap Issuers Should Ask Regarding Irrevocable Transfer Agent Instruction Letters
Read moreIn an article on OTCWorkouts.com, Tom Allinder discusses how market makers understand microcap toxic debt. According to Allinder, “one of the fundamentals they look at which is the deciding factor on how they trade the stock is how much debt a company is carrying. Specifically, how much convertible debt, who owns the debt and who owns preferred shares in the company.“ The
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Could The End of MicroCap Toxic Convertible Notes With Huge Discounts Be In Sight?
Read moreIn the OTC Markets’ most recent blog, Matt Fuchs (EVP of Market Data at OTC Markets Group) explored “Stock Promotion – Context, Concerns & Potential Solutions“. Fuchs discusses the negative effect ‘stock promotions’ and ‘toxic financing’ can have on small public companies. According to the post, the 2016 dollar volume trading for promoted securities (466 securities) was only 2.04% of total
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Guest Post By: Mark R. Basile, Esq. By the time small cap OTC/PINK SHEET Company CEO’s realize they can’t raise any more money, many try fighting an uphill battle, or simply close the doors. The ones most hurt by this are the shareholders. Toxic Convertible Debt, unless it’s managed correctly, could be the death knell of a company and it doesn’t matter
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