Pacific Sunwear of California Inc fka PSUNQ

[1manband]

Yes that 10Q lists what was stated may or may not happen

The 10-Q disclosed what may happen if certain events did happen. Those events happened, which is why they went bankrupt. It was all disclosed adequately as of the date of the 10-Q.

Given the impression that the company would continue 2016, which they still are

Not exactly. They reorganized under bankruptcy, which allowed them to continue. If they had not filed bankruptcy, they would not have been able to continue because of the debt and lack of liquidity. When they went bankrupt, the debt holders took the assets and provided additional cash, which eliminated much of the crushing debt burden. No bankruptcy and reorganization, no survival.

analyzing your statements about the last 10Q they would have and the April BK already planned way in advance 2015, and not a spur of the moment decision made early 2016

No, that claim is inaccurate and unfair. Bankruptcy was a very real possibility in late 2015, as disclosed in the 10-Q. After the dismal Christmas selling season and continued (and rapid) decline in their retail sector, their ability to continue as a going concern absent of reorganization eventually became zero. They held out as long as they could and almost certainly did their best to try to find alternative financing, but industry conditions were such that it was ultimately impossible. They filed bankruptcy when it was their only option left.

He stated in an article the lease problems and focusing in on shoes was the main reason for the company's downfall. Not mentioning anything about their loan covenants with Wells Fargo and Golden Gate.

That is like saying that what killed a person was their heart stopped beating. That is true for everyone, but something happening first always results in the heart stopping. In this case, PSUN made poor merchandising decisions (focusing on shoes) and had expensive leases in a declining market for retail space. That led to fewer shoppers and higher costs, which reduced their cash flow and cash position, which led to violation of the loan covenants with their lenders, which means they could not obtain any additional financing and the lack of liquidity led to the bankruptcy. So the loan covenant issue ultimately killed PSUN, but it the CEO statements about the other issues certainly contributed to the ultimate death of the Company.

I really do not understand the issue about the Company continuing to operate. Common shareholders have no right to the Company's assets when there is no shareholders' equity. The lenders and debtors do. It is like mortgage on a house. A person borrows money from a bank and buys (or builds) a house. If they miss the payments, the bank takes the house because they paid for it. The same is true of PSUN and the lenders. They loaned the Company money which purchased (and operated) the assets. When PSUN couldn't pay them back, the debtors got the assets, which in this case was the entire company. A bank doesn't demolish a house when they foreclose and repossess it, so why should the debtors do the same with PSUN?