Carson Block appears on Bloomberg for a victory lap after Sino-Forest which he accused of being a fraud is forced to file for creditor protection. Sino-Forest is down 93% since Muddy Waters recommended going short on June 1, 2011
Block’s observations:
- Block compares Sino-Forest blaming him for this bankruptcy to Enron blaming Jim Chanos for the collapse of Enron.
- If you build a house of cards and the wind blows it over you can’t blame the wind.
- Bankruptcy filing is only the latest point to confirm Sino-Forest’s fraud. Previously the stock market regulators suspended them, their auditors refused to offer an opinion on the financials, etc.
- Sino-Forest bondholders are now going to own the company and it is very hard to determine exactly what value they will own.
- You would think that Sino-Forest could liquidate the timber assets; however, it seems that they can’t because they are of questionable value.
- Sino-Forest is suing Muddy Waters, but he has not interest in settling with them as he believes Muddy Waters acted appropriately.
Block’s observations:
- Block compares Sino-Forest blaming him for this bankruptcy to Enron blaming Jim Chanos for the collapse of Enron.
- If you build a house of cards and the wind blows it over you can’t blame the wind.
- Bankruptcy filing is only the latest point to confirm Sino-Forest’s fraud. Previously the stock market regulators suspended them, their auditors refused to offer an opinion on the financials, etc.
- Sino-Forest bondholders are now going to own the company and it is very hard to determine exactly what value they will own.
- You would think that Sino-Forest could liquidate the timber assets; however, it seems that they can’t because they are of questionable value.
- Sino-Forest is suing Muddy Waters, but he has not interest in settling with them as he believes Muddy Waters acted appropriately.
