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Fires in the peninsula... Arson or an accident?

Juliet Dervill reports
Inland Southern Peninsula According to the authorities, at 1:00 PM yesterday, fire crews finally started gaining the upper hand on several wildfires that burned more than 20 square miles over the past three days. There were no civilian casualties, but warehousing and production facilities of Watson Green Co. and Papercut Co., at the Los Santos industrial park suffered great losses in terms of manufactured goods and factories, as both were destroyed. Two wildfires that burned 17 Square miles at the base of the Bernard Mountains in the community of Marny were completely contained by 1:00 AM, fire officials said. More than 200 firefighters battled fires that broke out simultaneously near Greypot Woods and Blixx forest bordering Los Santos. Another incident near Highway 10 was 90% contained by 1:30 AM after additional squads of 155 out-of-state firefighters were called in to fight the blaze. According to Captain Huan Hall of the Peninsula Police Force, the official cause for

both incidents has yet to be determined. Employees leaving Papercut Co. two days ago after the night shift called local police reporting human activity in the woods 30 minutes before the first fire broke out. According to local sources, the forest had not been cleared of growth that served as fuel ladder for ground level fire to spread into the trees and into the industrial Park. This is the 12th incident in Blixx forest in the past 5 years but the most destructive one

by far. Neither Mark Chu, CEO of Watson Green Co., nor Oscar de la Torre, CEO of Papercut Co. was available for comment.

Juliet Dervill jdevill@universecitynews.com

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Devastating Fire 750 Miles Away Brings Local Start-up to its Knees
By Austin M.Tobin
Chaos Theory Applied to Green Economy Entrepreneurs in green energies are both environment friendly and motivated by the prospective benefits offered. Although switching to Green is not a smooth ride from the outset, it usually turns out to be extremely useful to the community of users. No matter how Green they are, these companies face financial issues similar to all other corporations. One deadly issue is the risk of going bankrupt from events and decisions outside the companys walls. This situation arises when, for example, a firm is unable to gather liquid assets - cash and marketable securities - to face its short-term liabilities. It can pay neither its stakeholders, suppliers, non-residual claimants, nor employees accordingly. A severe liquidity crisis may push such firms to the dangerous zone of bankruptcy. Solaris Omni Co., John MacKenzies newly launched corporation, is about to experience such a critical situation due to one of his suppliers liquidity problem. Watson Green Co.s warehouse, which endured a devastative fire two days ago, is Solaris Omni Co.s main supplier in the peninsula. Unfortunately, all ordered goods that were ready for delivery to Solaris Omni Co. by the end of the week were destroyed. Having lost its entire inventory of solar panels and undulators, Watson Green Co. is facing the risk of financial distress if it does not find help over the short-term to resume its production and deliver to Solaris Omni Co. on time. Repayment by insurance companies usually takes up to six months. Without an immediate injection of cash or short-term financing solutions, Watson Green Co. is about to experience a severe liquidity problem, which may lead to bankruptcy. If such financial sources are not provided, the firm is going probably to exit the industry with dreadful consequences to Solaris Omni Co. the firm is unable to meet its financial obligations. Accounting insolvency: from an accounting perspective, the firm is insolvent when its net worth is negative, which could be seen through the reading that the short- and long-term liabilities exceed the firms assets. In the case of Watson Green Co., it may go bankrupt if the value of its assets equals the value of its debt. In such a case, it is certain that the value of its equity converges to zero and its stockholders may lose the control on their firm, which will be controlled by the non-residual claimants. If Mrs. Sarah Walter, the CFO of Watson Green Co., does not manage the liquidity crisis, it may effectively go bankrupt. In such a case, there are two kinds of bankruptcy costs. First, direct bankruptcy costs are directly linked to the bankruptcy procedure such as the legal and administrative expenses. Second, indirect bankruptcy costs are associated with avoiding the bankruptcy filing. In the extreme case of bankruptcy, Watson Green Co. may pay these two kinds of costs that are commonly known as financial distress costs. Broadly speaking, these costs are estimated to be equal to 8 to 12 percent of the total firm value for retailers and 16 percent for industrial firms. A firm is in financial distress when its generated cash flow is not sufficient to cover its current financial obligations. Although this situation is very dangerous, when it occurs

The direct consequence of being in the dangerous zone of bankruptcy has a variety of consequences: Business failure: the firm terminates its business activities with a loss toward its stakeholders. Legal bankruptcy: means that the firms stakeholders file a claim for bankruptcy through the courts. This legal process aims at either liquidating or reorganizing the business. Technical insolvency: is an obvious state of affairs when

N1288 the firm does not necessarily go bankrupt. Nonetheless, the creditors may go to the court to invoke the bankruptcy procedure. To avoid going bankrupt, there are several ways to deal with the situation of financial distress. The most important ones are: asset restructuring and financial restructuring. In the first case (asset restructuring), the firm manages to improve its cash flows, either by selling its assets or by merging. It may also reduce its labor force or reduce its expenses on soft capital and R&D. In the second case, financial restructuring leads to the reorganization of the firm under bankruptcy laws. In both cases, the asset and financial restructuring could be very useful to free up cash flows and pay out the senior debt holders. In the extreme case of bankruptcy, an important rule is inevitably taken into account, namely the Absolute Priority Rule (APR). It consists of a redistribution of wealth after the liquidation of the firm. In compliance with this rule, the junior claimants (including equity) may only receive financial consideration when most senior creditors are paid in full. The seniority of claims, as written in financial contracts, must be honored in the case of a bankruptcy. If these contract terms were not held up in bankruptcy, then junior claimants would have an incentive to use the bankruptcy procedure to expropriate wealth from senior creditors. The reason for this expropriation lies in the formal procedure that gives junior claimants bargaining power over senior creditors. However, all parties know before they enter into a financial contract what to expect in bankruptcy, and credit terms are set accordingly.

Amon Tobin atobin@universecitynews.com

Local champion unlikely to defend his title

After a few days of intensive physical training at Kabo Tia training camp, Stephen Lagari was admitted late yesterday to the American Hospital in Haloon. He underwent several tests including an MRI that revealed a dreadful tearing of both the posterior cruciate ligament (PCL) and lateral collateral ligament (LCL) of his left knee. I was doing a fully geared orientation training exercise with the armed forces at the Kawasan Kabo Park earlier this morning. I had been running for about 10 miles when my foot got stuck in the roots of a Banyan tree. Trying to get it out, I lost my balance, the weight of my backpack sent me sideways. I heard a loud pop and my knee started swelling immediately. According to our experts, Stephens injury is severe and will require immediate surgery. Optimistic scenarios could see him return to the circuit in 8 to 10 months. Pessimistic ones require at least a year to see the player back on a tennis court. 2012 was crucial year for Lagari. He was poised to settle in the ATPs top 50. Last year he won 4 Challenger Tournaments (Tashkent, Ljubljana, Sacramento and Aguas Calientes) and 2 ATP 250 World Tour including Universe Citys JH Brother Grand Prix after clinching five successive matches in 3 sets. The 19-year-old had just secured two important advertising contracts with international corporations and we fear this accident might have consequences beyond physical recovery. Neither his father Frank Lagari nor his coach Magnus Thorvalsson was willing to comment. We wish Stephen a swift recovery and hope to see him soon.
ewatts@universecitynews.com

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What is Wrong With Modern?

Our reporter Frank Payne meets seventies tennis legend John Miltovic
Those interested in the history of tennis are sure to remember John Miltovic. He was the first non-American player to be honored at the National Lawn Tennis Hall of Fame in 1976. John was born in Skopje, Yugoslavia (now Republic of Macedonia) in 1944 to a family of accomplished sportsmen and women. He captured 4 Grand Slam titles and won 7 Championship Series titles (the precursors to the current ATP Masters 1000). He left the game in 1983 to join the International Tennis Federation Board of Directors until 1997. He moved to Universe City in 1999 and became a citizen in 2004. As always, John holds no punches when it comes to...everything! First things first... Happy Birthday Mr. Miltovic. How are you these days? JM: Thank you. Its nice to see that some people remember your birthday while others beg for your help and forget about you the minute they meet the media. I am doing well considering my age. At 67, I still get up at 7:00 AM every day and run at least 5 miles to keep in shape. I try to be useful to this community with projects I deem important and spend the rest of my time playing golf with my true friends. Are you talking about Universe City BNP Paribas WTA Challenge? JM: I sure am. When I was young there was a form of respect towards older, experienced people and the team. Today these qualities have vanished and have been

replaced by an egoistic PR competition promoting individual effort above teamwork, the one above the many, and image above substance. It is happening everywhere, in society, in politics, in business. Why would tennis be any different? It is happening everywhere, in society, in politics, in business. Although everyone believes John MacKenzie did it all by himself, I was there and I know things happened differently. What do you think of tennis today? According to you, what are the main differences between tennis in the seventies and today? JM: I am appalled at the incompetence of most media socalled experts and coaches who get much airtime explaining how modern tennis relates to hitting with topspin, hitting with an open stance, wrapping the follow through around or loading the body

weight on the outside foot and exploding into the shot. J. Parmly Parets books called Mechanics of The Game of Lawn Tennis developed the exact same theories in 1926! Are you saying there hasnt been anything new in tennis since 1926? JM: I did not say that! When it comes to the game, differences are related to equipment, over intensive training conditions imposed by idiotic coaches and a playing season that shows minuscule respect for the athletes physical integrity. Outside the game, both media and greedy sponsors keep sending bad signals to children who sell their souls to the devil to get very rich, very famous, very fast. In the seventies the most important muscle needed to manage a professional career was located between your ears. Today its either your fingers or your mouth with Twitter, Facebook, and late-night TV shows.

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What can players do to change things? JM: Playing for 11 months per year and travelling for 30 000 miles with the time differences is a complete nonsense. But instead of rejecting the idea as a whole, players try to change their morphologies. Regardless of their age and sex, the past two generations of tennis players look like wrestling clowns with oversized shoulders and arms. Following the single thought cult, they lift more weights every year. They even believe that training with the military will make them better.

Since when did playing a tennis match and going to war amount to the same thing? Last time I checked there are no tournaments played in the mud or desert sand with a 70-pound backpack at 4:00 AM. The pundits hammering such messages are thieves looking after their own profits. What do you think about Stephen Lagaris injury? JM: I am both sad and mad. Another wasted talent! I blame his father Franck and his hot air Lagari Tennis Force.Before appointing Thorvalsson, I would have

checked his credentials as a player and as a coach. Hes bad at both. There are excellent coaches in Universe City! Why go to Europe and pay a fortune for something that exists here? I coached MacKenzie from 1993 to 1998 and our credentials speak for themselves. Stephen has twice the talent MacKenzie ever had. Lets pray he is able to play tennis again. There are many things at stake here. He is not even 20 and could lose much more than a few ATP points.

Franck Payne franckpayne@universecitynews.com