BREAKING: Fitch WITHDRAWS Solo's Debt Ratings!

Citing the Form 8-K filing I mentioned right here (first of any media outlet, worldwide) last week, Fitch has -- on its own initiative -- affirmed but withdrawn all its ratings on Solo Cup debt. Per a just-issued newswire account -- do go read it all, as it explains the potential debt covenant issues I've been pointing to, as well:

. . .Fitch has withdrawn the aforementioned ratings for business reasons. The rating affirmation is a result of a recent 8-K filing by the company. Solo Cup's board of directors has approved the payment of retention bonuses to key senior level management only in the event upon the completion of a transaction involving a change in control of the company occurring prior to June 1, 2012. . . .

A decision would also need to be made on the longer-term ownership position of Vestar Capital Partners (Vestar). Vestar owns approximately 33% of Solo Cup Investment Corp (SCIC) and controls the board of directors. In 2015, SCIC is required to redeem the $240 million of convertible participating preferred stock owned by Vestar, including all accrued and unpaid dividends, on the eleventh anniversary of its issuance. By maturity, Fitch estimates the total preferred stock obligation in excess of $600 million. Fitch believes the company would likely need to address the ownership issue before any refinancing of existing debt occurs within Solo Cup's capital structure. Solo Cup's ABL revolver (June) and secured notes (November) mature in 2013.

Additional information is available at www.fitchratings.com . The ratings above were unsolicited and have been provided by Fitch as a service to investors. . . .

Fascinating. Now its going to be a dash -- to handle this potentially-melting ice cream cone of an auction. My personal opinion is that this one doesn't look particularly well-thought out, at the executive officer/board of directors level -- at least thus far into the game.