Securities Commission calls Dorchester recapitalisation plan biased

The regulator said the comparison between the recapitalisation plan and a potential receivership contained "significant bias," and suggested Dorchester's forecasts assumed an improvement in the financial markets and demand for the firm's products, while the receivership's assessment was based on "rapid sales of assets at fire sale prices" and a deterioration in the market.

 Dorchester outlined, what it called, the regulator's principal concerns in an appendix to chairman Barry Graham's letter to debenture holders, and offered a rebuttal to the commission's issues.

Dorchester said its own forecasts were based on "no material change in economic conditions" and that its receivership scenario assumed the same market conditions as those under its offer. Still, it said "the board believes that a sale of distressed assets which occurs in a receivership is likely to result in lower sale prices than would be achieved in a situation where there is a willing seller."