Existing Stock

[LGA / 037]

If and when the company does file another chapter 11, what happens to the current existing stock that has been issued including the distributed employee shares ? Is it cancelled, or can the company protect it ?

 

[phillyguy]

will become essentially worthless

 

[KCFlyer]

will become essentially worthless

[post="175943"][/post]​

What about the stock and options held by the executives....think they'll find a creative way to "bend the rules" to "make them whole" as a "reward" for the great job they have done??

 

[phillyguy]

same

shareholders fall to the bottom of the list of creditors.

 

[KCFlyer]

same

shareholders fall to the bottom of the list of creditors.

[post="175987"][/post]​

I'm well aware of that, but one has to wonder if there isn't some plan in place that will "cover" the losses in the stock value. My guess is...there is.

 

[javaboy]

companies regularly buy back options, stock grants ect at any price approved by board. just because UAIR is trading at what 2.35 doesnt mean the exec cant be offered more by the company (usually in his/her employment contract)

another way which companies think they are " putting one past" the assute investors is by granting loans for the "face value" amount of the stock/options. then they (the company) simply forgive the loan, and write it off much the way if someone buys something with a credit card and never pays the bill the credit card company writes it off as a bad debt

of course ask bernie ebbers about this method. while generally accepted and not exactly illegal although on the fringe, it would take a shareholder to sue for recovery to get the $$ back.

Calling Elliot Spitzer.


thus the short answer is if any of the top execs were promised say 100,000 options (then issued at say 7.34) the company would either give a loan at 734,000 or simply pay cash (if written in contract that way) if the company was intending on re RE issuing stock yet a 3rd time they would be able to convert those shares for the new ones probably at a premium.