{ "docId": "019dd923-622c-750b-8b9b-38d8804ef6d4", "docSlug": "7d738951d1e5", "documentTitle": "General Growth Properties (GGWPQ)", "authorId": "01_Pershing_Square", "authorName": "Pershing Square", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2009-05-27 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 46, "pageCount": 68, "prevPage": 45, "nextPage": 47, "slideType": "cite_precedent", "function": "cite_precedent", "density": "dense", "nDataPoints": 4, "notes": "The slide uses a court ruling to justify a specific interest rate methodology, contrasting it with a creditor's higher market rate claim.", "elementsJson": [ "headline_text", "callout_box", "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9b-38d8804ef6d4/46", "deckHref": "/decks/019dd923-622c-750b-8b9b-38d8804ef6d4", "deckJsonHref": "/decks/019dd923-622c-750b-8b9b-38d8804ef6d4.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9b-38d8804ef6d4#slide-46", "components": [ { "bbox": { "h": 0.25, "w": 0.15, "x": 0.77, "y": 0.38 }, "kind": "callout", "text": "We note that GGP is a higher quality, lower risk business than Prussia Associates, which owns one hotel, the Valley Forge Hilton", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72a45ed8-ca73-4b3b-813e-dbd82e76b4b2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.84, "x": 0.08, "y": 0.22 }, "kind": "callout", "text": "The Court ruled that the appropriate mortgage rate should be set at Prime + 1.5% (7.25%), despite the Creditor's contention that the “market rate” was 9.72%", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9ccfc4ae-5c00-44d8-8e03-01898f589a78", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.47, "y": 0.84 }, "kind": "paragraph", "text": "Opinion of Judge Raslavich\nUnited States Bankruptcy Court, E.D. Pennsylvania\nIn re Prussia Associates\nApril 5, 2005", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2f14b6ca-22cf-440c-bdd0-5747ddb36fd2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.65, "x": 0.08, "y": 0.38 }, "kind": "paragraph", "text": "The prime rate as of today is 5.75%. This rate, therefore, will be the applicable base rate. The risk premium, per Till, will normally fluctuate between 1% and 3%. The appropriate size of the adjustment, per Till, will depend on factors such as the circumstances of the estate, the nature of the security and the duration and feasibility of the reorganization plan. The creditor bears the burden of proof on this issue. In this instance, [the Creditor] has raised certain legitimate questions as to the feasibility of the Debtor's plan; however it has done little to overcome the evidence which indicates both that the Debtor's operations are improving apace, and that the value of Fremont's collateral is appreciating steadily. The Court thus views the risks attendant to the proposed loan as neither negligible nor extreme. Based upon this, the Court will require the addition of a 1.5% risk premium to the aforesaid prime rate for the recast [Creditor] loan.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a30de9f9-cbb0-4a32-ba47-f3eb07a04345", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "The prime rate as of today is 5.75%. This rate, therefore, will be the applicable base rate. The risk premium, per Till, will normally fluctuate between 1% and 3%. The appropriate size of the adjustment, per Till, will depend on factors such as the circumstances of the estate, the nature of the security and the duration and feasibility of the reorganization plan. The creditor bears the burden of proof on this issue. In this instance, [the Creditor] has raised certain legitimate questions as to the feasibility of the Debtor's plan; however it has done little to overcome the evidence which indicates both that the Debtor's operations are improving apace, and that the value of Fremont's collateral is appreciating steadily. The Court thus views the risks attendant to the proposed loan as neither negligible nor extreme. Based upon this, the Court will require the addition of a 1.5% risk premium to the aforesaid prime rate for the recast [Creditor] loan. — Opinion of Judge Raslavich, United States Bankruptcy Court, E.D. Pennsylvania, In re Prussia Associates, April 5, 2005", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-14d7-73fd-9f52-743749ef45c4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.45, "x": 0.08, "y": 0.13 }, "kind": "title", "text": "In re Prussia Associates (Cont'd)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "43cb0093-2759-4d2e-8f3f-a62e0f6ac02f", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "2afa6a47-5743-4fc9-a031-63e0f50517b3", "evidence": "Citing legal precedent to support a financial argument", "confidence": 0.9 } ], "arcBeats": [ { "to": 68, "from": 35, "beatId": "169e941d-9840-4b8e-a722-5cc6448c842f", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution (Provide relief)", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The presentation proposes a solution for reorganization, providing relief for secured creditors.", "position": 2, "confidence": 0.9, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 50, "from": 36, "name": "Hypothesis Test", "slug": "42-hypothesis-test", "bestFor": "Strategy validation, due diligence, research presentations", "matchId": "e2c1c744-9c7e-466a-b9b5-c6482f4a63d4", "evidence": "The presentation tests the hypothesis that re-pricing GGP's debt to Till-mandated rates would allow for a more favorable reorganization.", "position": 1, "objective": "What if GGP's debt were re-priced to Till-mandated rates?", "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)", "confidence": 0.7, "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }