Wet Seal Inc.(fka WTSLQ)

[Value_Investor]

Buyer Beware: Why anyone would buy a soon-be-canceled stock?

Wet Seal Plan Filed on 02/12/2015.

Wet Seal filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for the payment in full of all Administrative Claims, the satisfaction of all Allowed Secured Claims, and the payment in full of all Allowed Priority Tax Claims and Non-Tax Priority Claims, consistent with section 1129 of the Bankruptcy Code. The Plan also provides for the cancellation of all of the Debtors' existing equity interests and the issuance of new common stock in Reorganized WSI (the 'New Equity'), (i) 80% of which New Equity will be purchased by B. Riley Financial, Inc., as Plan Sponsor and DIP Lender, in exchange for an aggregate amount of $25 million in the form of (x) conversion of the principal amount under the DIP Facility into equity and (y) cash; and (ii) the remaining portion of which New Equity will be issued to Holders of Allowed General Unsecured Claims whose Claims are not otherwise cashed out, settled or resolved under the terms of the Plan. The Plan further provides for Cash payment to Holders of Allowed Convenience Claims (Unsecured Claims which are less or equal to $30,000 in the aggregate) and Holders of Allowed General Unsecured Claims that make the Cash Payment Election. Such Holders will receive, in full satisfaction, settlement, release, and discharge of and in exchange for such Allowed Claims, a Cash payment equal to [5]% of such Allowed Claims unless the Holder of such Allowed General Unsecured Claim agrees in writing with the Debtor or the Reorganized Debtor, and with the Plan Sponsor, to accept some less favorable treatment of its Allowed General Unsecured Claim. The New Equity that would have been issued to a Holder of an Allowed General Unsecured Claim that makes the Cash Payment Election shall instead remain unissued." The Court scheduled a March 18, 2015 Disclosure Statement hearing, with objections due by March 11, 2015.