SEVA share price jumped 108.33% up and closed the session at $0.025 on a trading volume of 8.21 million shares. The lack of current material information about the company makes its stock a good candidate for speculating profits, but it seems that at the end of last week some trading alerts were the main reason for the captured traders’ interest.
On Friday, a publication concerning SEVA subsidiary Patrick Hackett provided for discussions. It looks like certain of the subsidiary’s unsecured creditors are objecting its reorganization plan filed with the U.S. Bankruptcy Court. Under the plan, Seaway Valley has to pay back the unsecured Hackett creditors in full through stock offerings and through cash flows from operations. Though, the creditors claim that the company’s projections are too optimistic and its operations are projected to be unprofitable. On Tuesday, also a motion has been filed to convert Hackett’s bankruptcy from a Chapter 11 to a Chapter 7 proceedings, in which case the company’s assets will have to be sold out to pay the creditors.
It is not so obvious what exactly made the market raise SEVA from the bottom it hit on Wednesday. The company is not filing its financial reports with the SEC since the end of last year and is currently not disclosing any information about its current financial condition.
The latest financial results available are for the three and six months ended June 2009 and they show that at that time the holdings of the company were making huge losses, were in default on a credit facility and Seaway Valley’s further existence was dependent on raising additional funds and on closing some of the retail stores.
