when you say:
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"Fact - regardless of commons owned they have the ability to put up a 4 billion offer. I that includes wiping out the 40% retained you don't think based on history he will be just fine with creating preferred's for himself in the New entity."
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if the most recent proposal by esl mirrors the last in respect of their credit holdings, then esl is offering to cancel their bonds (a credit bid) as part of their total offer.
if esl's bonds are cancelled, the only thing they have left is their 40+% common stock position. they didn't offer to cancel their common stock.
that would be one reason i could imagine why lampert/esl would want to preserve the existing common shareholders.
as i have maintained all along, i have no idea whether or not the common stock will survive a reorganization but there are reasons to think it might if esl is successful in its bid to acquire the company and its remaining assets.
generally, preferred stock is purchased. if lampert were to attempt to award himself preferred stock in a new company, it would first have to be authorized, provided for in a corporate charter, approved by a board of directors, and filed with the sec. based on the potential litigation lampert/esl might be facing over their seritage and loan/credit deals, that might be a hard sell for him. not saying impossible, but he has a much clearer path to majority control maintaining the existing shareholders.
his bid still has to be qualified, approved by sears holdings, and then agreed to by the judge. potentially still weeks away from knowing anything definitive which means a lot of uncertainty and volatility for this stock.
