ABSTRACT
Prior to the bankruptcy-supervised restructuring, Texas International, Inc. (TEI) reported having approximately $37 million of assets, $195 million of debt, 80 million common shares, and a net book value of negative $158 million. Drexel had been a financial adviser to TEI in connection with the issuance of bonds and debt restructurings and had owned and traded TEI securities since 1977. The equity committee representing TEI’s stockholders accused Drexel of engaging in activities that resulted in multimillion-dollar damages. The Phoenix Resource Companies bore little resemblance to TEI. The company’s value is impeded by an inability to produce and sell all the natural gas on the concession. The company stated that its objective was to “reduce the Company’s interest costs” but equally important was a desire to permanently abrogate the onerous covenant provisions of the senior notes that related to corporate existence, sale of assets, cancellation of indebtedness, and capital structure.
