iTalk Inc. (fka TALK)

[1manband]

This is the most basic portion of bankruptcy law. Debtors and creditors are entitled to 100% of what they are owed. Equity holders (first preferred, then common) only get what is left after all classes in front of them are satisfied 100%. Asking that question is like asking me to prove the sky is blue.

Here is what another bankrupt public company (which also happens to be an LLC, like UMS) says about the law. It sums it up as well as I could:

"Under the Bankruptcy Code, unless creditors agree otherwise, prepetition liabilities and postpetition liabilities must be satisfied in full before the holders of the Company’s existing common units representing limited liability company interests (“units”) are entitled to receive any settlement or retain any property under a plan of reorganization."

https://www.sec.gov/Archives/edgar/data/1373444/000149315216008988/form10-k.htm

I could post the Federal Bankruptcy code in full, but you can find it at:

https://www.law.cornell.edu/uscode/text/11

The Judge is this case is following the law to the letter. Debtors and Creditors are ENTITLED to 100% of what they are owed. But if the amounts available are less than those amounts, they get what they can get. That includes the equity of the bankrupt. Which is what his happening in UMS.