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What: Shares of office supply chain OfficeMax
So what: It’s a little confusing, but in 2004, OfficeMax received an $871.5 million Lehman-backed note in connection with a timberlands sale. OfficeMax turned around and monetized the note by issuing securitization notes through a special purpose entity that was backed by Lehman Brothers. Lehman’s bankruptcy in 2008 constituted a default under the terms of the note, and a U.S. Bankruptcy Court order will finally allow the extinguishment of the debt from OfficeMax’s books. OfficeMax expects to report a one-time gain of $671.1 million in the third-quarter, and anticipates the increased balance sheet clarity will help investors better understand the company.
Now what: That’s definitely great news from a clarity perspective, but it does little to cure the fact that OfficeMax is potentially the worst of breed in the office supplies sector. The company has attempted to do what its larger rival Staples
Craving more input? Start by adding OfficeMax to your free and personalized Watchlist, so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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