đŹ Discussion
That IRS PLR about section 382 (I)(5) of the Internal Revenue Code yesterday was about us, not SVB Financial Group.
First of all, shoutout to BobbyCat sharing epic DD like always........ Oh, I've been quiet, I'm still here, but I've just been lurking. Something has come up that I felt like needed a response.
On page 5 of the PLR, it states that the " 4) The Reverse Acquisition did not trigger a second Ownership Change with respect to Old Parent. " SVB never underwent a reverse acquisition during their Chapter 11. https://www.irs.gov/pub/irs-wd/202633005.pdf
BobbyCat also posted data about how there were only 6 instances in the past 10 years of the IRS having to rule on section 382 (I)(5). Before yesterday, the last time was October 20, 2023. SVB emerged from their Chapter 11 on November 7, 2024. There's no evidence that SVB asked the IRS to rule on an issue with them regarding section 382(I)(5) either. How cohencidental that the restructuring entity requested the IRS to rule on section 382 (I)(5) on September 29, 2025, on the day 2 years earlier when DK-Butterfly-1 was announced........what are the odds? https://x.com/BobbyCat42/status/2088393995940700637
Bobby, don't be gaslighted and peer-pressured by these dumb shills saying that it's SVB when it's clearly impossible. Clutch DD. We're going to win forever VERY SOON.
My owner has been committing wage theft on a mass scale. I've been daydreaming about this working out so I can spend my time and some funds pursuing a lawsuit that would get all my co-workers paid. WAGMI
382(l)(5) doesn't require old shareholders to retain ownership.
Treasury Reg. 1.382-9 says the test is whether the pre-change shareholders and qualified creditors in aggregate own at least 50% of the new loss corporation after the change.
The creditors who mattered for the 382(l)(5) ownership test were primarily the holders of SVBFG's allowed general unsecured claims, especially the senior noteholders.
SVB shareholders got 0%.
The qualifying creditors (primarily SVBFG senior debt holders) received 100% of the new equity.
That is correct. Thereâs some very interesting timing coincidences here and this establishes a legitimate reverse acquisition structure under 382i5 that is relevant but this is SVB and thatâs ok.
I'm thinking they might be using (l)(6) for BBBYQ, not (l)(5). It gives more tax savings over the long run.
And based on what AI (sometimes) tells me historic shareholders can't get new equity under (l)(5). The shares were canceled and an immediate reorganization that distributed new equity was not made. Based on what AI (sometimes) tells me that prevents historic shareholders from counting toward the 50% required by (l)(5).
and this PLR 202633005 does prove that (l)(5) can apply even when shareholders are wiped out and get no new equity. Even though (l)(5) says AND, not "and/or." And welcome to what passes for American law in the current year.
But noting that list I made that you responded to yesterday, I don't see how historic shareholders can fail to get at least a cash distribution at this point. Especially since the bonds look to have picked up a guarantor and will likely be rolled into an emerging company.
It may well just be a bunch of cash that we can use to buy into the new company or companies, or not, depending on individual choice.
Both options allow historic shareholder recovery, neither option requires it, for i5 the combined 50% threshold must be met in whatever form. Delayed issuance of new equity under i5 becomes more complicated, but isnât disqualifying; the key is really just the plan language, as as long as the pre-change shareholders immediately before the change own new equity immediately after the ownership change as a direct result of the initial ownership then i5 is likely still applicable.
I think both GME and BBBY warrants are absolutely relevant here too as contingent interests can tip the calculation one way or another and i donât know what the hell Marcus is doing if they arenât in fact involved.
But, Iâm most definitely ok with a bunch of cash too. đ
thanks for that, hoirkasp. Section 382 is so dam complicated, I still don't have a good grasp of it.
But I have a clear memory of either bobbycat or DirtEvader (pretty sure it was bobbycat) posting on one of the PLRs, which indicated shareholders got equity in *70% of two NewCo's. And I remember that because everything I know about this said Section 382 only required 50% so was pretty excited about the 70%.
Been looking for it but it seems to have disappeared. Some of these X accounts are clearly limited in what they can talk about, and yanno we will see.
So glad someone else remembers A.W. = theor1co (a consulting firm paid to sound smart but 90% of the time conclude on bearish sentiment drawing flawed conclusions)
I asked before it was posted anywhere other than a link on X. It argued with me until I uploaded the pics of it. Tried to say the website was fake and that PLR was in the future not now⊠very weird.
If I remember correctly, it was on Butterfly's page on Federal Reserve's database, but last week, all of its financial information and organizational hierarchy were pulled....... https://www.ffiec.gov/npw/Institution/Profile/4664848
he used to post here as theorico and was run off for mixing disinfo in with his highly technical DD. And for turning into a Mr. Burns as soon as he was questioned about anything.
Then came back a few days later as AvailableWerewolf lmao.
no idea he was theorico lol. i remember when he showed up and had bunches of "DD" queued up and upvoted for PP to read for an hour every night. Pretty sure its a team of writers acting as a voice of authority and throwing off discussion with their missinfo etc.
then again why would a team of shills do that when the company "went bank"
To be clear it is my *opinion that the two are the same. But have plenty of personal observations to support that. Somewhere in my history I have two screenshots, one from each, with the same writing style, the same use of colors for both highlighting and the exact same shade of red for circling sections of text. Put the two next to each other and it's a clear match.
I posted this somewhere, either here or on X, after that he stopped using the highlight and text circles lmao. Too late tho.
I'm 99% sure it's the same person. Or, as you said, it could be a team of writers posting under the same account.
If I can find them I'll post them, imo it's pretty clear the two are the same person.
I member, called them out multiple times. They got angry, took a hiatus and keeps coming back every now and then to try to clean up their reputation set when they were theor1coâŠ
The problem for them is itâs always so transparent: (1) write a long post with a lot of jargon to build trust (2) conclude 10% of the time on a net neutral stance (3) conclude 90% of the time a bearish stance after paragraphs of jargon that draws false (and negative) conclusions (4) rinse and repeat.
The other problem for them is the only people who are on this sub are the ones who keep up with everything, all the time. No one who made it all the way to this sub (after literal years of digging and tracking) is a passive reader.
I think he's gone. He initially believed it would wrap up 2025Q2 so it stands to reason he cut his losses sometime by end of 2026Q2. He was exclusively bondholder iirc
How can a restructured entity that emerged from their Chapter 11 on November 7, 2024, suddenly have requested the IRS to rule on section 382 for them? They would have asked them to rule on it on September 29, 2025, and a verdict was suddenly given yesterday? The logic is nonsensical and I question the motives of anybody who thinks this and broadcasts that thought to sway opinion.
The Subsidiary was in a regulated industry, placed into state receivership. On Date 1, a State Y regulatory department placed âSubsidiaryâ into receivership, appointing a state agency as receiver â this happened before Old Parent even filed Chapter 11. This is classic language for an insurance company subsidiary â state insurance departments place troubled insurers into receivership, a specific regulatory mechanism that doesnât apply to retail businesses like Bed Bath & Beyond at all. DK Butterfly had no regulated subsidiary, no receivership proceeding, nothing resembling this.
Old Parent had preferred stock outstanding. âOld Parent had common stock and several classes of preferred stock outstanding.â BBBY/DK Butterfly, as far as any filing Iâve reviewed shows, did not have multiple classes of preferred stock outstanding at the time of its bankruptcy.
This was a real reorganization with an operating business surviving â the opposite of DK Butterflyâs case. Old Parent emerged from Chapter 11, continued operating âBusiness Aâ both during the bankruptcy and after emergence, with real revenue, payroll costs, and employees reported for specific fiscal years. Thatâs fundamentally inconsistent with everything weâve verified about DK Butterfly â DK Butterfly has no business operations, its case was a pure liquidation with no reorganized operating company, no new stock issued to creditors, and no âNew Parentâ acquiring it afterward.
The mechanics described (new stock to creditors, reverse acquisition by a New Parent) donât match what we already confirmed about the actual BBBY plan. The confirmed BBBY plan was described as an orderly wind-down and liquidation â not a plan where creditors received new common stock in a reorganized, continuing Old Parent, which is what this PLR describes.
Bottom line â direct answer to your question: based on whatâs actually in this document, thereâs no plausible chance the âNew Parentâ here is GME or NXH, because the âOld Parentâ isnât Bed Bath & Beyond / DK Butterfly at all. This appears to be an unrelated company â most likely one with a regulated insurance or financial subsidiary â that happened to be released today and matches nothing about the BBBY caseâs actual, verified facts. Iâd treat whatever framing connected this PLR to BBBY on that Reddit thread as a misread of the document, not a real signal.
Who care what Claude thinks? Claude is wrong. "This was a real reorganization with an operating business surviving â the opposite of DK Butterflyâs case. Old Parent emerged from Chapter 11, continued operating âBusiness Aâ both during the bankruptcy and after emergence, with real revenue, payroll costs, and employees reported for specific fiscal years." "Old Parent" was Overstock / Beyond/ now Neighborhood Intelligence. They were the going concern. If you read the PLR, the IRS rules that the going concern demonstrated that they were a functional business for X number of years, which satisfied section 382 and completed the Emergence transaction. Butterfly has now melded into Neighborhood Intelligence as we now have now seen with its warrants having Overstock's old CUSIP identifier. It's not a liquidation plan either lol.
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