Asyst Technologies, Inc. (fka ASYTQ)

[Sharktnk]

A revisit ...

Expert: Tad Borek - 10/24/2010


Question
Hi, can you help me out on this question. Well I have a "Q" stock that's in BK. This stock play ASYTQ went into BK last April 2009, by January 2010 they have a CH.11 Liquidation Plan that was approved by the courts. Now in this plan it states this, "On the Effective Date, all shares of stock in ATI will be cancelled and will forever cease trading on the NASDAQ OTC Bulletin Board (“ OTCBB ”) or any other securities exchange or market." Also in the plan it states that thy will file a form 15 on or prior to the effective date. It was actually filed after the effective date and the form 15 says that they suspended registration of the stock with the SEC. Form 15 was file in March 2010. Yet in the last 8K March 2010 it states this, "Asyst’s common stock was cancelled and has no future value in connection with the bankruptcy proceeding" Here is my question: Is this stock going to be canceled when they come out of BK or if a R/M is offered? Or is that wording that just put into the plan identifying when they first went into BK in 2009? Because this stock is still trading right now and I'm looking for a new inside look at this. Thanks for any help!

Answer
Hi Sammie-
Thanks for your question - believe it or not questions about stocks in bankruptcy are some of the most frequent ones I get on this site.

Based just on what you've written (I haven't verified any of this) it sounds like your stock was officially toast as of March 2010. It couldn't really be much clearer than "common stock was canceled and has no future value."

Given that this is a Chapter 11 reorg, you may eventually see new shares of stock in the company trade on an exchange. But those shares might as well be in a completely different company - in effect, it is a different company and they have nothing to do with the canceled shares. Canceled means...well, canceled. Kaput, toast, gone, etc. Fundamental to bankruptcy is that the equity shareholders are wiped out when the BK plan includes cancellation (as it almost always does).

It's common to see those original shares continue to trade for a variety of technical reasons, including the large number of people who for whatever reason buy them despite the fact that they're worthless. A big example of this was the special stock for the bankruptcy assets of GM which were clearly described as having no value...including a special notice by the SEC:
http://www.sec.gov/investor/alerts/bankruptcygmalert.htm

So a BK company's shares can bop around for pennies or nickels a share for quite some time. At a certain point they simply won't be tradeable anywhere though. It would surprise me if that isn't the case already for a stock whose registration as a security was suspended in March.

-Tad


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