Impulse buying a carrot-julienning gadget from a late-night TV infomercial can easily end in disappointment. Some backers of shopping channel QVC must similarly wish they had spent their money elsewhere. Its bankruptcy case risks leaving them with, at best, a sliver of their original investment.
Once a household name, QVC filed for protection from its $6bn of debts in a Houston court last month. Its reorganised enterprise value is about $2bn. The company had hoped a judge would approve its restructuring plan in fewer than two months; that ought to have been possible given the months of negotiations that preceded its Chapter 11 filing.
One stakeholder group, though, was apparently not in the loop: holders of $1.4bn worth of QVC preferred stock, currently set to get wiped out. These investors have duly lodged a protest, asking the court for their own formal bankruptcy committee. The preferred shares have recently tripled in price to $6, although that’s still 94 per cent less than their face value.