Regarding questions on trading of our new shares, from the Disclosure Letter
"In reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and of state and local securities laws afforded by Section 1145 of the Bankruptcy Code, except for the shares of New Common Stock to be issued to the Litigation Trustee for the CK Litigation Trust, New Common Stock to be issued pursuant to the Plan on and after the Effective Date need not be registered under the Securities Act or any state or local securities laws. Reorganized CK’s common stock will not be subject to any statutory restrictions on transferability and may be resold by any holder without registration under the Securities Act or other federal securities laws pursuant to the exemption provided by section 4(1) of the Securities Act, unless the holder is an “underwriter” with respect to such securities, as that term is defined in Section 1145(b) of the Code. Entities who believe they may be “underwriters” under the definition contained in Section 1145 of the Code are advised to consult their own counsel with respect to the availability of the exemption provided by Section 1145."
As you guys know, the DTC currently has a "chill" on the shares and they are not trading. This first came about when the SEC filed the complaint against
the Company and Wilf Blum etc for selling improperly registered shares. The Company settled with the SEC long ago, they just had to agree not to violate the law anymore, the SEC has fined Blum 3 million or so, but the "chill" remains.
The shares that are subject to the “chill” will be canceled and will cease to exist. The new shares that will be issued will, for all legal purposes, be for a new company and should not be subject to the same “chill.” The purpose of Section 1145 is to ensure that the new shares will be able to be traded without the “chill” or other restrictions on the old shares.
