Another post that should be stickied, but your post is also deserving:
1manband Sunday, 08/11/19 10:17:40 PM
Re: Koan post# 81991 0
Post #
81994
No, this is basic bankruptcy 101. Anyone investing in a bankrupt stock should already know this.
Except for the secured creditors, which actually have a ranking based on their security, all the unsecured creditors, preferred shareholders, and common shareholders are ranked equally. The entire class is treated equally. Therefore, the amount the receive in any bankruptcy is given as a percentage. Not a dollar amount.
For example, say there is exactly $100 million in unsecured claims. Under the bankruptcy, there is $30 million to pay the unsecured claims. That would mean unsecured creditors are 70% impaired (or, they will receive 30% of their claim, or 30 cents on the dollar) as each claim receives a pro rata amount of the pool.
The same is true of the common shares. It is always a percentage, not a dollar amount, as each shareholder will own a different amount of stock but will receive exactly the same percentage amount of their claim.
Thus, the idea that it is a dollar amount and not a percentage is false. It is always given as a percentage in bankruptcy cases.
And in the case of BioAmber, common shareholders are 100% impaired. They receive NOTHING, and anyone holding BIOAQ common shares will lose 100% of their investment.
