Neither SEC or anyone else can presume an outcome.
While a cancellation of shares may seem the most likely outcome, SEC and/or FINRA will not take any action until an official outcome is realized. Obviously, anyone holding SHLDQ shares will lose everything once shares are cancelled. However, by then, presumably most investors will have sold their shares to the MMs. The MMs will have to take whatever losses they may have for buying those shares. But you can bet your bottom dollar that the MMs will minimize their losses as much as they can. Can't tell you how they do that, but I'm sure they have their ways in such situations.
Judge has many things to consider and must follow the rules in the Bankruptcy Code. I'm guessing that worrying about common shareholders will be one of the least of his worries. He already knows that Sears Holdings has proposed a cancellation of SHLDQ common shares in their Chap 11 plan. I don't think he's going to feel sorry for those who might hold on to their shares until the bitter end.
SHLDQ price action these past 4 days (down ~38%) seems to indicate that retail investors are starting to come to grips with an outcome that looks more and more likely to be a share cancellation.
If the Disclosure Statement (DS) SHC has filed is accepted by the court after the scheduled DS hearing on May 29, then the fate of SHLDQ shares will be practically sealed. Only a non-confirmation of the Chap 11 plan and an effective date would stand between the DS approval and cancellation of shares.
I will share more later as the Court proceedings continue to play out.
AI
