NXP's court filing Link gets to the crux. This is probably the reason why Trident and Entropic did not want a sale to happen outside of chapter 11. So even though sale outside the court would have addressed liquidity needs for at least 3 quarters, it would not have addressed issues related to sale being free of liens/encumbrances. Also, note NXP is alleging breach and claims Trident owes approx 22m. See below quotes from this court document.
Also, today the stock was de-listed from nasdaq. It will be interesting to see price action tomorrow. There maybe huge dumping from mutual funds. There were 2 distressed equity funds in the court: Contrarian capital and Mohawk capital.
"........between January 1, 2012 through June 30, 2012, the Trident Group must source a volume of NXP's products and manufacturing services.
"...Trident is in material breach of the MSA based on their failure to make payments due and owing to NXP in the approximate amount of $22 million".
"In addition to selling substantially all of the STB Business' assets, the Stalking Horse APA requires the Stalking Horse Bidder to have entered into a new MSA with NXP, so that NXP will continue to provide goods and services to the Stalking Horse Bidder"
"As of the date hereof, NXP, the Debtors and the Stalking Horse Bidder have yet to reach an agreement with respect to either a new MSA or a Modified MSA"
Here are key dates. Cure dates is for agreeing on cure amounts on the above disputed executory contract. Trident has to propose the cure amount by Feb 3rd.
Disclosure: At this time, neither long or short. But that can change any time.Caution: Special situation investing is ridden with significant uncertainties and is highly risky.