Judge Okays Lehman Brothers’ Navigator Sale To Wilbur Ross

Wilbur RossImage source: Video Screenshot

Wilbur Ross is one of the few investment managers who is bullish about natural gas prospects. Last month the hedge fund expanded its stake in Navigator Holdings (PINK:NVIGF)  to 56 percent of the company’s stock. Yesterday, the auction was approved by the bankruptcy judge. Navigator is overseen by bankruptcy trustee James Gidden. The transaction would pay $ 110.2 million for the share of Lehman Brothers Holdings in Navigator.  Judge Peck opened the hearing with “Happy anniversary”, while noting that the decision on the clearance of sale was made in the same courtroom, where four years ago Barclays PLC (LON:BARC) (NYSE:BCS) bought Lehman’s U.S. business.

Judge Okays Lehman Brothers' Navigator Sale To Wilbur Ross

The hedge fund manager thinks that the natural gas future is bright, the decline in price bodes well for the business, as it will direct consumption of this fuel into other industries. He particularly likes natural gas because of the lesser health and environment risks  associated with it.

Among those who opposed the sale to Ross’s WL Ross & Co., was another hedge fund, Elliott Management. The argument was that the $25/share price was too low, and other investors and bidders were threatened by Navigator ‘s “poison pill”, whereby board approval for sale is required whenever an outside group bids, or buys more than 15 percent of Navigator’s Holdings (PINK:NVIGF) shares. The judge was also concerned that efforts were not made to invite more bids, but he was assured that offers were requested before the auction.

Elliott’s concern about undervalued sale were squashed by the Judge, who said that the $25/share bid is the only offer that was raised.

Elliot also asked for a ruling on speedy distribution of cash to banks and hedge funds that have stakes in Lehman’s brokerage business. This motion was also denied by Judge Peck, he said that he could understand the frustration of creditors, due to delay in payment, but the trustee needs more time to smooth out the outstanding issues. Negotiations were underway between Giddens and Lehman affiliates over how the their claims will be settled. Giddens said that payments will begin in the first quarter of the next year, as he looks into claims from the Lehman parent and U.K. affiliate, Lehman Brothers International Europe. Gidden’s lawyer said that a deal is expected in the next few weeks.

Navigator Holdings (PINK:NVIGF) has a gas tanker business, and commands a 15% market share in the handy sized LPG sector. The company filed for bankruptcy  in 2008 under its parent, Lehman Brothers Holdings.


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About the Author

Tabinda Hussain
Tabi covers hedge funds for ValueWalk. Although Tabi is an expert in hedge funds, her academic background is in Biology. Follow her on twitter @tabihussain

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