Aleritas Capital Corporation (fka ARTA)

[temp luvs amy]

The normal scheme of Chapt 11 is when a large debtor comes in, and converts his bonds to stock at a much higher price than the stock is trading at, but in the process takes over the company. That could be anywhere from 25-95% of the outstanding stock. He might wish to maintain the preference of a portion of his bonds based on his evaluation of the actual business model and the ability to take over without owning a lot of the stock.

Various forms of preffered stocks and options are typically introduced in the better schemes. Many schemes are introduced which simply represent something like pulling pants down and opening a bottle of vaseline for the shareholders. It really depends on the social responsibility of the major players and the process of win-win negotiations and whether they wish to simply make money, or would rather develop future business relationships.

The more the shareholder gets screwed, the closer we come to the end of the stock market as a valid concept for capitalization and investment.