RCC Holdings Corp fka RCCH

[mcokpba]

Corporate Bankruptcy Mythology by the Securities and Exchange Commission.

Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.

The BOLD is by the SEC not mcokpba.

http://www.sec.gov/investor/pubs/bankrupt.htm

My turn, frogdreaming can you please explain what "cancel the existing equity shares" means?

Hint - The naked short sellers NEVER have to cover Federal Bankruptcy Court cancelled shares.

Note - I am still limited to only one post a day.