Fructivore Investments

As you may recall, I recommended Chiquita Brands a couple of months ago, and since then it has gone down from 15.17 to 13.58 today, or down about 10%. So, not really my best work, I suppose, but an economic crisis in Europe, where Chiquita Brands performs 40% of  its operations, would naturally dampen enthusiasm for the share price. However, Chiquita did reiterate its $100-120 million estimate for next year’s earnings during their latest conference call, which at current prices translates to a P/E ratio of 5, although to be fair that projection was before the sovereign debt panic and the Euro hitting 1.2o. But, even if the company misses that estimate by a full 50% an investor at these prices would acquire a kosher 10% return on his or her money.

This view was echoed in an interview published by The Wall Street Transcript, where Scott Mushkin, a senior research analyst at Jeffries & Company, concluded that, based on current prices, “you are getting the company for the value of the salads business, and so you’re getting the banana business for free right now,” and that the euro situation has largely been priced into the company.

http://finance.yahoo.com/news/Chiquita-Brands-International-twst-2469784650.html?x=0&.v=1

Now, value investors are noted for being able to operate independently of Wall Street opinion, but it is still gratifying to me to receive some confirmation.

Furthermore, Chiquita has been paying down debt at a fairly rapid rate, as total liabilities shrank $160 million in 2009 and $240 million in 2008, which is acting to improve their interest coverage ratio, which improves their credit rating and cost of borrowing and also enhances the safety of equity holders. They are also benefiting from Europe’s liberalizing of their banana tariff scheme.

And, as a final recommendation of Chiquita Brands, on June 3rd the company’s CEO, Fernando Aguirre, announced that he had acquired 40,905 shares of Chiquita Brands, and the transaction code on the announcement was “P”. “P” is what you want to see; it stands for “purchase”, as opposed to a grant from the company or some other method of acquisition. “P” means that the CEO purchased the stock with his own money. And as Peter Lynch noted:”  There are many reasons why insiders sell, but only one reason insiders buy.”

I am frequently surprised by the places where I find promising looking stocks, but really I shouldn’t be. Value can theoretically be found in any sector, although the newer and developing sectors are unlikely to hold much in the way of reliably underpriced stocks, since there is so much unpredictability in the future course of sector developments. Very often highly fragmented sectors resolve themselves into an oligopoly, with all the other firms either bankrupt or acquired by the winners, and without any indication of which companies will eventually land on top, it is often better to look for a more established industry. And what could be more established in American society than greeting cards?

Anyway, last Mother’s Day I recall being struck by the price of greeting cards these days. I didn’t look into it immediately, but I was flipping through the Value Line Investment Survey, as I sometimes do, and I ran across a promising company called American Greetings Corp (AM), which is the largest publicly traded greeting card company in the US. They also do a line of gift wrap and other products, and presently control the Strawberry Shortcake and Care Bears properties, although I should mention they were attempting to sell their interests in these properties before the economic collapse. These deals seem to have fallen apart, spawning a couple of lawsuits in their wake, one of which has been settled fairly recently.

In terms of numbers, it has a P/E ratio of about 10, and earnings have remained fairly robust over the last few years, although in 2009 they took a large goodwill writeoff. They also recently sold off their retail operations, while retaining the rights to supply these stores, which should lower their operating expenditures in future. The firm has recently engaged in several acquisitions, which seem to have gone well so far, but it does mean that their spending on new capital acquisitions has often exceeded their depreciation and amortization charges, although this trend was reversed last year.

One of their more impressive acquisitions, at least to me, was buying out Recycled Paper Greetings by purchasing their bonds at a large discount and then taking control of the company as a result of Chapter 11 proceedings, a bold move but one out of Moyer’s most excellent Distressed Debt Investing.

In the last three years, the firm has managed to buy back over $250 million in stock, which is nearly 1/3 of the current market cap. In terms of balance sheet, the firm has a price/book ratio of 1.35, but because they use LIFO inventory, which tends to understate inventory value, so the real situation might be a bit better. However, their balance sheet does indicate more than $400 million of “other,” and one hopes to see something a little less opaque.

I’m not sure that I see much growth potential in the company, barring an acquisition (although the company’s management seems to show the right degree of opportunism in acquisitions), but the firm’s income is stable, reliable, and above all, large enough to produce an adequate return on an investment, and as such it seems like a reliable long term holding. And I don’t see the greeting card becoming obsolete anytime soon.

It has been observed by me, and possibly other people, that free cash flow, more than earnings, is a correct measure of an equity investor’s true returns (free cash flow is earnings plus depreciation minus capital expenditures). The logic behind this goes back to Benjamin Graham’s notion of calculating true earnings; he said that before a corporation should be deemed to have earned money, it has to maintain its own earnings power. Depreciation is a convenient proxy for loss of earnings power, but the linear decline of depreciation does not take into account the definitely nonlinear rate that most  capital assets wear out and there is definitely some degree of kurtosis in the data, as large capital expenditures tend to be made all at once. Of course, the free cash flow approach does not deal with the real problem of sudden obsolescence, but neither does the linear depreciation model.

It therefore follows that if the cost of maintaining the old earnings power of the capital has gone up, owing to, perhaps, more stringent environmental regulation, an increase in the cost of materials in making the machines, etc., then the old depreciation figures do not fully reflect the cost of replacing the capital in order to replicate earnings power. Likewise, if technological progress has made the capital assets cheaper, as often happens, then depreciation comes to be overstated.

However, there is a difference between capital expenditures intended to maintain earnings power and those intended to expand the business. This is the difficulty in valuing the domestically-focused Chinese firms that have interested me in the past, as has been observed by American Lorain‘s own CFO, who cited as an excuse for his firm’s negative free cash flow, “this past year we have been building out the factory lines for the expansion into the convenience food segment.” Unfortunately, few firms are willing to provide information sufficient to divide maintenance capital from expansion capital, which is baffling since American Lorain itself can state the problem in a single sentence.

So, when we have a company like Qwest that has maintained its earnings at roughly the current level for the last few years despite the fact that depreciation has exceeded capital expenditures, we may conclude that the firm, owing to lower replacement costs, historical overinvestment, or a changing strategic focus, does not need to replace the full amount of its depreciated capital in order to maintain earnings power, and thus its free cash flow is really free.

But, does free cash flow apply only to depreciation and amortization? What about other noncash expenses, like the depletion of mines and oilfields? After due consideration, I have had to conclude that depletion is not free cash flow. The point of free cash flow is that it is distributable, but depletion is meant to indiate the loss of reserves from a given property. Even if the firm earns an excellent profits on its resource extraction, if it distributes the depletion allowance as well it will have nothing to acquire new properties when the old ones are exhausted.

Therefore, in assessing whether a firm’s distributable income is actually free cash flow, watch out for excess depreciation coupled with loss of earnings power, or distributed depletion allowances in any event.

I suppose that my loyal readers are tired of hearing me going on about cheap Chinese stocks, but value investors have to go where the value is. Some Chinese stocks, small and overlooked, seem to show up on my screens more often than I would expect considering the China cult, and although HQ Sustainable Maritime (HQS) doesn’t have quite the built-in bet on China’s floating its currency, it has some compensating factors. At any rate, recent events have made China floating its currency a little less likely.

I suppose the currency situation merits a digression. The basic thesis of the Chinese currency bet, as I’ve stated, is that China’s currency is being kept artificially weak so that they can boost their export trade, and that international pressure is on them to let their currency float. Unpegging China’s currency to the dollar will mean it takes fewer yuan to produce the same number of dollars, so an American receiver of Chinese cash flows will benefit. However, because of the Europe situation, the dollar, and consequently the yuan, are already stronger, without China having to unpeg a thing. Since China’s economy is so export-based, the internal pressure not to unpeg the yuan, or even to further weaken it, will be fairly intense and therefore the possibility of a floating yuan has been made more remote. Still, I guess we could always run the price of oil up to $140/barrel to shake them off again.

Anyway, HQ Sustainable Maritime Industries raises tilapia and other seafood for export to Europe, Japan, and the US, and they also make health products out of shark cartilage and other marine materials for the domestic Chinese market. Approximately 2/3 of their income is from exporting tilapia, and 1/3 from their health products, which means that they have some exposure to a floating yuan. They also have a P/E ratio of about 9, which considering the higher equity risk premium in China, is reasonable but not screamingly cheap, although they are looking forward to future growth.

But HQ Maritime has the advantage on its balance sheet of being a net-net stock on an unadjusted basis; as of this writing the market cap is $80 million, and the company has $38 million in cash, $57 million in receivables, and $2 million in inventory against $8 million in liabilities, totaling $91 million in current assets. However, those receivables ought to be discounted for the possibility of uncollectability, particularly since receivables have been increasing dramatically over the last year. It is also not clear how the firm has $23 million in quarterly sales from $2 million in inventory; they may be pulling the GM trick in reverse (GM always paid their dealers bonuses the day after the end of the quarter to make their cash balances look bigger, so perhaps HQ makes a huge push to sell their inventory before the end of the quarter to perform a similar form of window dressing). Or it could be the natural effect of last in, first out inventory accounting coupled with a high turnover rate, I suppose Even so, the balance sheet is fairly attractive.

The firm also has 100,000 shares of preferred stock that is largely in the hands of the firm’s management. The preferred stock is convertible into half as many shares of common stock, so from a purely accounting standpoint it knocks about $275 thousand off the price. However, the preferred stock is entitled to 1000 votes per share, giving the holders of the preferreds unassailable control of the company. This arrangement is not unusual outside of the first world, or among certain new companies, and although it sounds less than ideal, Damodaran reminds us that the value of control depends on how well the company is run; if management is generally competent the minority shareholders do not suffer because the management is entrenched because throwing management out and then running the company exactly the same way produces no change in the company’s value. However, it must be admitted that the management seems to be more willing to make convertible debt offerings and other dilutive financing arrangements.

On balance, and assuming that the accounting for receivables and inventory is reliable, it seems to me that HQ Sustainable Maritime is a desirable company, reasonably priced under pessimistic assumptions, and with both growth potential and partial exposure to a floating yuan in its favor.

You may recall that cheap and Chinese is starting to become a theme on this blog, and today is not an exception. This one, however, has nothing to do with food: it is China Security & Surveillance (CSR), which trades at an exciting P/E ratio of 5.44, although they did pay an unusually low amount of taxes last year, and if China’s statutory rate of 25% were applied it would be around 8. Like our other Chinese companies, this also has a short but very impressive growth history (and presumably one that is hardly sustainable at its present rate).

China Security & Surveillance is in the business of manufacturing, installing, and servicing surveillance products. Unfortunately, much of their sales comes from installations so it is difficult for them to get repeat business. But on the plus side, they are expanding into software and their servicing and maintenance operations. Furthermore, China instituted in 2004 an initiative that required 660 cities in China to have street surveillance, and they are a recommended vendor. Being on a government-approved list is always something you want to hear, but on the other hand they are highly dependent on their local government customers. For what it’s worth they have nearly a $200 million backlog as of the end of the last fiscal year.

Installation represented 3/4 of their total revenue last year. 15% of their income was from manufactured products that were not bundled in with installation.  The firm has a distribution network that covers all of the inhabited regions of China.

Turning to the balance sheet, the company is almost in a net-net situation; their current assets as of their last 10-Q came to $605 million, and their total liabilities were $345 million, producing a current asset value of $265 million. or 74% of the market cap of $356 million. Total shareholders’ equity is $491 million, but $133 million of that is intangible assets and goodwill.

Sadly, they have an offering of 15 million shares that has recently been amended to allow for an oversubscription to a total of 17.25 million. Their historical return on capital has been a reasonable 11.8% last year, but the offering price may well off below their current price of $5.07, and as stated above they have a price/book ratio of less than 1 so the dilution is going to be significant.

On balance, I do think the upside of a cheap Chinese firm that has the government stamp of approval outweighs the risk of an unattractive share offering, and I do think this is another cheap stock with a built in bet on the strengthening of the yuan.

I have gone over the details of Capstead Mortgage previously: that their exclusive concentration on adjustable rate mortgages insulates them almost completely from interest rate movements, and the blank check that Fannie and Freddie got from the government makes their loans absolutely safe, so the only thing to worry about is what premium to book value the current share price represents.

Apparently, no one has been listening to me, because lately the stock’s price has been dropping precipitously, perhaps owing to the lowering interest rate spreads or the anticipation of rising interest rates, or the fact that the company announced recently that Fannie and Freddie are buying out seriously delinquent loans and as a result the firm is receiving a great deal of cash back which, under the current market uncertainties, they are unable to prudently toss back into the market, causing the firm’s leverage ratio to decline. The issue with delinquencies is that, like prepayments, they result in the return of principal to the bondholder, which means that if the bondholder paid higher than face value for the mortgages, as would happen when dealing with guaranteed securities in a time of meltdown of the mortgage market, that premium evaporates.

As a result of this tendency, the market cap of Capstead Mortgage as of today’s close was $760 million at a price of $10.83, set against a book value of $1.008 billion according to their latest 10-Q. Capstead marks their mortgages to market, but fortunately for its investors, also discloses its principal value. The principal value of Capstead’s holdings is $7.287 billion, which are carried at a price of $7.560 billion. The difference is $273 million, which is only $33 million dollars more than the present discount to book value.

This means that right now there is a fairly small premium to principal value of their mortgages, and another 50 cent drop in the share price will eliminate it entirely. It’s not that simple; sadly; there is also preferred stock that has a $183 million liquidation preference, but it is nonetheless the case that the shares of Capstead Mortgage are less risky now than they ever have been, as the premium over book value is the only real risk that an investor takes, and that is nearly dealt with. So, despite the high prepayment rate, the diminished leverage, and the possibility of a sudden rise in interest rates, I see a bright future for taking a (larger) position in Capstead Mortgage right now.

I have recommended cheap Chinese stocks as desirable as a way to bet on the possibility that China will be forced to let the yuan float against the dollar, and of course, a cheap stock anywhere is a cheap stock, although markets outside of the first world should be given a higher equity risk premium. The ideal company would do all of its business in China but be listed on an American exchange and therefore subject to American accounting rules, which, AIG aside, are reasonably accurate. And I think I’ve just about found a good company, and a thematically appropriate one, with Skypeople Fruit Juice (SPU).

Skypeople is a company that prepares fruit juice concentrates and fruit drinks from specialty crops like kiwi, as well as pears and apples. They operate out of the fruit-growing regions of China, and last year 78% of their sales were to Chinese purchasers either for consumption in China or for export. This figure is up from 65% the year before, although they attribute some of that to the slowing global economy. The firm states that according to market research, consumption of fruit drinks is on the rise the world over, but China has historically lagged. The company views China as somewhat of an untapped market to develop. The firm also owns or has applied for several patents for fruit processing technology, and has made research and development expenditures to improve its operations.

The firm’s financial history has been a little murky; like American Lorain it started off as a US holding company that had bought and sold a couple of other companies beforehand, starting in the 90s. They acquired the firm that owns Skypeople in 2008 and changed the name. Their capital structure betrays some sign of their chaotic history; according to the latest SEC filings they have outstanding 3.21 million warrants at $2.55 a share, plus 1.32 million shares of preferred stock that is convertible into 880 thousand shares of common stock on top of 19.77 million shares of common stock. The firm is also considering making an additional offering of $40 million, or 6.5 million shares based on today’s closing price, in order to expand their sales range and product offerings in China.

At any rate, without taking into account the conversion privilege and the warrants, the firm has a market cap of $121 million, which works out to a P/E ratio of 8. The firm has a price/book ratio of about 1.8, so the share offering, if it proceeds at approximately the current price, will technically not be dilutive, and the firm’s historical return on assets of over 15% is promising as well so the equity offering might not be a negative for existing shareholders.

The major variable in their operations is the cost of fruit, which cannot easily be hedged, and because the firm focuses on specialty crops like kiwi and mulberry. But the firm claims to have excellent gross margins on its products, perhaps owing to their patents–Skypeople is apparently very proud of its ability to clarify juices–and so there is room to absorb some price volatility. And although a P/E ratio of 8 is adequate, not definitely cheap, because of China’s higher risk premium, the growth potential and the built in bet on the yuan makes this company highly desirable.

It was announced today that CenturyTel will buy Qwest Communications, subject to shareholder and regulatory approval, for $10.6 billion, or $6.02 per share, in an all stock deal. If you’ll recall, way back in June I recommended Qwest as a company with an ample free cash flow in excess of its reported earnings. At the time, Qwest was at $4.32, and so a $6.02 merger price looks not too bad.

But you may also recall that I think Qwest is worth upwards of $6.02, merger or not. Their free cash flow last year was $1.564 billion, and the year before that was 1.229 billion. In 2007 their income was distorted by a tax refund from net operating loss carryforwards, but taking that out their free cash flow was $1.454 billion. In 2006, $1.731 billion, and in 2005 , $673 million. So, the five year average was $1.330 billion, which capitalized at 10% would be $13.3 billion, or $7.55 per share.

Of course, it’s not that simple; the land line market is said to be in a decline that has been diagnosed as terminal, forcing these companies to pursue the broadband market. But Qwest seems to have been managing this decline gamely, and the large gap between depreciation and new capital expenditures was spinning off enough money for them to perform an orderly capital restructuring, such as the recent early redemption of $1.2 billion in debt and they do operate largely in rural areas where cell phone coverage isn’t that good anyway. So, even if their free cash flow is not entirely sustainable, they were in a position to whittle away at their debt burden enough to produce a stable long-term company.

Now, let us look at the acquirer, which has free cash flows of $867 million in 2009, $601 million in 2008, $610 million in 2007, $579 in 2006, and $451 million in 2005. Century Tel is an acquisitive company, having acquired Embarq less than a year ago, and the gap between depreciation and capital expenditures is smaller in absolute terms, but on a percentage basis is similar. This undercuts the possibility that Qwest was short-changing its capital expenditures in order to make itself more attractive to acquirers. But it has to be admitted that in terms of free cash flow Century Tel is is a much smaller company, and the same is true of its operating cash flows ($3.3 billion in 2009 for Qwest, 1.6 billion for CenturyTel) and even for the number of employees (30 thousand for Qwest, 20 thousand for CenturyTel).

To be fair, CenturyTel’s balance sheet looks a lot cleaner. On paper Qwest has negative equity (but without $10 billion in goodwill CenturyTel would have negative equity too), and moreover Qwest has covered its interest requirements a little less than twice while CenturyTel has covered it three times, but as I said above, an ongoing capital restructuring at Qwest could address that.

CenturyTel’s apparent financial strength has given them better multiples–price/free cash flow of 12.25 as opposed to 6 for Qwest even after the merger announcement–or perhaps the average analyst isn’t quite clear on the concept of free cash flow. However, this has resulted in CenturyTel’s market cap being higher, allowing it to eat a company that is larger than itself. Call it the AOL/Time Warner effect. Under the terms of the deal, CenturyTel shareholders would own 50.5% of the combined company, and Qwest shareholders 49.5%, when it is obvious from the above that Qwest is a much larger company and should be entitled to a much larger share.

Accordingly, I call on CenturyTel to bump up the purchase price, and I have rude things to say about Qwest’s board’s acceptance of this offer.

Much of the issues surrounding executive compensation is a concern that the manager’s interests should be aligned with the shareholders’. We have seen large cash salaries giving way to stock and options grants, and now the concern is that CEOs will do whatever they can to juice the price of the stock when their options vest or their sale restrictions end, and then let the price of the stock collapse as they retire or move on. In fact, the latest round of the shareholder arms race is a proposal to extend the restriction period for several years after the executive leaves the company.

Management pay packages are certanily the most public face of this issue, and it does lead to interesting bits of trivia, such as Jeff Bezos’ ownership of approximately 20% of Amazon, given the company’s P/E ratio of 70, means that he would actually lose money by paying himself more. However, this is only part of the issue, and the great Benjamin Graham himself noted that practically speaking, it is almost impossible to overpay good management, although it is trivially easy to overpay bad management, although the solution is not to cut to pay, but to fire them. A bigger issue is empire-building to feed the corporate ego, engaging in questionable mergers to make the company bigger but not better, and uneasonably witholding dividends to keep more assets under management.

But all this business of making managers “think like owners” might run into difficulties when they actually are. I have already talked about CCA Industries, run by the two old men who will not cough up their excessive cash holdings, and now I will point out Hallwood Group, a nifty little holding company that is 66% owned by Anthony Gumbiner. Hallwood Group’s only current subsidiary is a textile manufacturer that produces a line of breathable waterproof nylon fabric that is currently very popular with the US military. The Berry Amendment, which requires military procurement to give preference to domestic firms, is definitely an advantage in their business. The firm has previously been in the commercial property business and owned an oil and natural gas company that went bankrupt last year. The firm faces some lingering liability from a funding commitment to the energy company, but I don’t see that their liability is enough to explain the company’s P/E ratio which is an inconceivable 4.34, and that level of earnings is in theory sustainable, although when we do finally put out of Iraq and Afghanistan the military can be expected to go through a lot less cloth.

However, in the depths of despair in March and April of 2009, the company was selling for less than $10 a share, which is a forward P/E ratio of less than 1. Mr. Gumbiner saw an exciting opportunity to steal the company, offering a $12 buyout. He was forced to abandon this offer in June after the price moved to well above $14. He also proposed in 2007 to liquidate the company. But, even though the tender offer in 2009 would have been stealing the company, it was Gumbiner thinking like an owner, and an owner who wanted to own more. United States law protects majority shareholders from taking unfair advantage of minority shareholders, which presumably prevented him from just voting for the company to sell itself, but it is a perfectly natural instinct on his part that could be prevented only by the actual value of the company being perceived by the other shareholders. But these tricks do lead us to consider the nefarious possibility that he is intentionally trying to not maximize shareholder value because he has another tender offer up his sleeve. So, curiously, most managers should be made to think like owners, but people who are actually owners should be made to think like managers.

And if the P/E ratio has led you to run out and buy this company, be careful. Daily volume is on average 4500 shares, so purchases will have to be especially small and careful or the stock will shoot up. The share price is volatile enough as it is, thank you.

And don’t turn your back on Anthony Gumbiner.

As my loyal readers may recall, my verdict on Chiquita brands was “Cheap, but evil.” It turns out that the law firm of Boies Schiller agrees with me, since they have recently filed a class action on behalf of 242 Colombians who were the victims of a Colombian paramilitary group that was running a protection racket around Chiquita’s plantations. Damages sought are $1 billion, or roughly $4 million each. Perhaps Boies Schiller was emboldened by a similar lawsuit filed last week.

Not the kind of thing you want to see when you’re quietly accumulating a position, certainly, but let us consider what was actually going on. Unless Chiquita Brands is more evil than I thought, their payments to various rebel groups was not specifically so that the groups would go around murdering and kidnapping. As far as Chiquita was concerned, the paramilitary groups in question were a bunch of thugs demanding protection money, and Chiquita was paying them in order that their banana fields would not be burned down. Of course, the Colombian government and the US government has identified these groups as terrorists, but it seems to me that if the Colombians cannot keep a region of their own country free from rebels, they don’t really have grounds to complain when a company has to make their own arrangements, and why any of this is the business of the US government is beyond me.

But turning to the merits of the lawsuit itself, it seems to me that the plaintiffs are hoping to play the terrorism card and hope things go well, because under traditional tort law I believe these claims to be a non-starter. First of all, Chiquita brands was not complicit in any actions taken by the Colombian paramilitary groups, so any claim based on intent would be ineffective, which leaves us with a negligence claim. Negligence consists of duty, breach, causation and damages. Duty and breach are fairly simple; arguably Chiquita Brands has a duty not to pay protection money to terrorists and they breached that duty  (or so their settlement with the US government would seem to indicate).

But the question is one of causation. The customary test here is the but-for test: But for Chiquita’s paying protection money, would all of these kidnappings and murders have occurred? I would deem that rather a hard sell; paramilitary rebels don’t tend to keep audited financial statements, and although money is fungible it is virtually impossible to prove that Chiquita’s protection payments facilitated the acts in question.

I suppose the closest analogy would be a negligent entrustment situation, where, say, a defendant who lends a motor vehicle to someone he knows to be an unsafe driver may be held liable if the driver takes out a farmer’s market, but in this situation the but-for analysis is stronger; the unsafe driver would not have had the car without being lent it by the defendant, but here, again, it is not clear that the Colombian rebels would not have had the means to engage in their terrorism without Chiquita’s money.

This lawsuit also sets off a slippery slope that anyone who gets shaken down by a criminal is on the hook for any unrelated crimes committed by that criminal, as though by paying the money he becomes a conspirator. I don’t know of any cases that have reached that conclusion, and gangsters have been running protection rackets for centuries, at least since Alaric agreed to lift his siege of Rome for one and a half tons of pepper.  But is that really appropriate, where the connection between the purchases and the criminal activity is so attenuated? Are people who use petroleum products liable for Saudi Arabia’s human rights abuses? Some ethicists would say yes, but the law disagrees, and wisely so in my opinion. Chiquita wasn’t signing up on the side of the terrorists; the terrorists’ interests were actually hostile to those of Chiquita’s, and it seems a bit unfair that Chiquita should be in this kind of trouble for simply wanting their banana plantations not to be burned down.

Chiquita Brands no longer has any operations in Colombia, and considering the fallout from these events, I’m not surprised. The Colombian government, if it wanted Chiquita’s business, could have provided security for the banana plantations, and now Chiquita is expected to pay for the government’s failure. But I doubt that even a firm like Boies Schiller will be successful in making them do it.