These shares may become worthless. In fact, in the majority of bankruptcies, common shares are excluded from any monetary payout and therefore become worthless when the company emerges from bankruptcy.
Beacon just declared BK, so at the least, you'll probably have numerous times to "play" the peaks and valleys that typically occur during the process.
Eventually, a Plan of Reorganization (POR)be filed with the court, and this document, along with the Disclosure Statement (DS), will lay out who gets paid and the amount they'll get. For example, the creditors are always the first to get paid, and in some cases they get 100 cents on the dollar, in other cases, they agree to take a haircut so that the company can emerge with a reorganized, leaner company that can once again be competitive. At least this is the theory behind filing for BK...often it becomes a shell game where assets are hidden or overlooked, so that the amount to pay everyone off is less than there should be. Commons are always the last to be paid.
There are some examples of companies that emerge from BK with commons not only intact, but in superb shape (look at Pilgrim's Pride). There are many more where despite the DS laying out the reality, investors/traders refuse to believe...Blockbuster is the most recent one that comes to mind.
There are others, like Washington Mutual, where shareholders fought for and got an Equity Committee (not a usual occurrence) and have a place at the settlement table. Since that case is still ongoing, there is no idea at this point what any settlement might provide for shareholders, but even there, the DS specifically says commons get nothing...the Judge in that case has twice declined to approve the POR presented to the court and Wamu is currently in mediation to try and bring all sides to an agreement.
Hope this helps...
Ilene
